By: Eddie Galvez

THE LAST FEW WEEKS have seen investors flocking to the safest havens they can find. Ask any banker for advice and the answer is the same: preserve your capital. Every one is anticipating rough times before things get better.

So where does that put an industry like club shares that is not considered an absolute necessity during these times? If people want to preserve their cash but still want to avail of the benefits of membership what are they to do? At the end of the day, life goes on and you cannot just put your cash under your pillow and stay inside the house. As they say you can either be part of the problem or you can choose to ac responsibly and continue to enjoy life but just practice more financial prudence.

To begin with the market niche that this industry caters to are the A-B and the corporate market. Although they are the ones who are affected the most with the financial crisis, being the sector that has the money to invest, they are also the ones that mostly have the resources to withstand and ride out the crisis.

And for those that don’t care to bur right now and saddle their portfolio with more assets, there are playing rights. As mentioned in past articles playing right actually make up 48% of our transactions. And you do not get burdened with the costs of ownership while enjoying exactly the same privileges of a regular member.

Below we have provided some data on the actual cost of the most demanded playing rights versus the cost of owning them:

Top 15 most leased club shares

Because of the high membership fees in some clubs some playing rights run as high as 40% of the cost of actually buying a share. In the instance where the costs of renting is as high as 30% versus buying it might make more sense to just purchase the share.

3-Year Historical Lease Prices of the Top 15 Most Leased Club Shares

On an over-all basis prices of the most demanded playing rights have not really changed much over the last 3 years, averaging less than a 1% increase. This is a very viable option, especially during this time, to make sure you are making the right play!

This entry was posted on Wednesday, December 10th, 2008 at 5:51 am and is filed under Foresight. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.