How Good Was Oleg Uritsky’s Bet Against Boston Taxi Medallion Prices?

Oleg, your recent comment on the post I wrote about you inspired me to write another one.

Your bet looks pretty smart evidenced by my recent post:

Boston Taxi Medallion Price Takes a Dive, Market Thins

If you sold your medallions for an average of $600,000 you avoided a much lower price had you sold this fall. The last two medallions by those who waited sold for $561,000 and $500,000. So compared to selling now you cashed out at approximately $3 million more by selling when you did.

Of course selling 45 medallions when the market had thinned to one sale per month this summer would have been a challenge!

It appears you invested your approximately $27 million in proceeds into Boston residential real estate and venture capital deals.

Let’s simplify with a hypothetical scenario:

Rather than dropping in price, Boston single family real estate increased by 15% between December 2012 and August 2014 according to the S&P/Case-Shiller Boston Home Price Index.

If all of the $27 million was invested in Boston real estate with no debt, then your investment would have increased by about $4 million.

Boosting your net worth by $4 million, rather than slashing your net worth by $3 million sounds like a good move.

Of course, that’s just one scenario. Maybe your venture capital investments will yield a higher return than Boston real estate.

As you know, Oleg, the best way for the rest of us to have profited from anticipating a drop in New York, Boston and Cambridge taxi medallion prices was to short Medallion Financial (TAXI) a year ago at its peak price before it dropped 36% as of this month.

I wish I shorted TAXI in November 2013…..Did you?

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