First Time To Sicily For Investment Research
Coming from Trapani airport we realized that money has left here 50 years ago…and hasn’t stopped since. I was genuinely happy to have left this island.
I had gone to Sicily for three main reasons
- Holiday, to see some history and beautiful beaches
- Say that I’ve been to “Italy” (I have another article arguing that I haven’t been to Italy or rather Italy hardly exists in reality)
- The most significant purpose of this trip was a serious “get a feel and research the local market and culture” for the purposes of long-term investing. With friends, I had been long discussing the prospects of Sicily being a long-term investment that weathers the storm of the EU collapse, WW3, massive genocides and famines and collapse of the Eurodollar system. The main proponents that no matter what happens, people are always going to love the nice breeze from the Mediterranean with beautiful views, Italian food, island privacy and all the better if we can use this as a lifestyle place to renovate throughout the years if the investment turns out to be poor. Anytime I had mentioned this, there was a significant curiosity to whether this could be an inexpensive play that could present tremendous upside. Who doesn’t love Italy, right? The major buzz of buying 1 euro homes also perked our interest, however we knew this was a government scheme largely worth avoiding.
Only a few countries have made me feel sketched out, Canada being one of them, and now I have a new one for the list
Good News
Upon arrival to this less than thrilling place that was abandoned (looking like since the war…) it was partly encouraging to find that everywhere we had been was very Italian–specific to the city of Trapani, we actually felt like we were showing up to a uniquely different country compared to the rest of heterogenous, multicultural, mingled melting pot called Europe now. It was nice to see coming from other areas in Europe that no longer recognized their reflection. Amidst everything, people were used to their routine with fellow Sicilians. And the cannoli’s were amazing (even though we struggled through Italian to order them).
In terms of investment, I think this is a place where solar panels make sense, given their constant powerful sunshine and many hills that could capture a lot of rays, currently being unused. Furthermore, after researching, there’s a lot of parcels of agriculture land that simply doesn’t have the soil or water to grow any longer–it could be repurposed for energy but logistically I don’t know the viability of this and my guess is that there’s massive regulatory hurdles to do this. Another idea from my research relates to water quality and treatment which is increasingly a concern for locals–but again, EU laws are so destructive it’s a difficult first move to take.
In terms of other renewable energies, windmills coat the island, which I think are more problematic than not, but still offers another energy sources without requiring gas imports.
Main production locally
Olive trees, lemon trees and vineyards. We have noted that while food was very tasty, it was very weak on protein servings. Perhaps don’t come from Uruguay before going to Sicily, you’ll feel malnourished.
We have noticed that buses and trains are very prompt on schedule, too, despite transport being generally uneasy to find. All of the transit workers were friendly. In fact, I recall one bus where every single seat on the bus was full plus one fellow seated on the stairs of the double decker bus. He had sore ass syndrome after that. This was chaotic as travel parties were forced to split up. More on this later.
Weather was undoubtedly fantastic and we have to say our highlight was the day-trip to Favignana using the ferry from Trapani. For the length of this article, I’ll write about Favignana in a separate post.
Mass migration to USA 100 years ago was hit with massive blowback, unfortunately, I understand why
Not So Nice
We had left Trapani/Favignana which were told was economically depressed and that all young people leave/older people are closing their restaurants and shops due to nobody having money to go around and tourist money drying up, too. It was obvious that the place is in its own depression. Thinking that the big city was going to be a major change and exciting change (where some on YouTube have alluded are ideal for real estate rentals…) we headed over to Palermo.
Outside of a few main streets that tourists reside or the high-end clothing stores sit, it was remarkably poor. It’s funny when you’re with someone born in the 3rd world and they say “not even in my country do we look like this”. Put bluntly, there is trash coated everywhere. So much so that it looks exactly like somebody were at a dump in North America, or at best, a grad or frat party leftovers–on every.single.street.
In Palermo, there was the smell of baking urine in the sun or feces around on every other street. Africans lay in the shade on their mattress in otherwise cute parks or heckle passers to buy their bracelet for a few euros. There’s no traffic lights, chaos in the streets and constant disorder. There’s constant yelling from children, mothers and an easy 50% of the locals look as though they came from or are about to go to prison. As a result, the melting pot was found once again–but it had poverty, alcohol and prescription medication to add.
Communist-style bloc apartments are everywhere. New builds are rare
Story of the Trip
Speaking of shit in the streets, we felt very dodgy leaving a super market in the evening (still light out) soon after our arrival. The market had very little on the shelves, had 3 security guards staring at us (and everyone else in the store), even following us and others as I presume robberies are so common there. We noted some sketchy characters enter and felt the need to head to the checkout and buy whatever we had in the cart at that moment (as did others in the store). The checkout was chaos with the cashier yelling at a man outside on one side and the woman in our line not advancing cause she wanted to show photos of her daughter to someone else in the other line. Meanwhile a young woman (covered in freaky tattoos, short hair asked in Italian to butt ahead of us). Like I said, chaos, everywhere. I had even caught a man trying to view my pin as I was putting it in to pay for the groceries.
The market was so hectic and seeing the characters running about our adrenaline was sparked. Upon returning home we noticed four young men, two of whom were shadow boxing (about 19 years old?) who began to follow us with urgency as we began to cross the road to our complex. We carried our bags (full of groceries) and they clearly sped up their walk as soon as they had noted us with bags. I made the judgment call to shut the already open front door locking them out, thinking they were going to attack us for whatever was in the bags.
In all likelihood, they lived within the complex and left the door ajar, but I made the call to keep my back to them and continue walking away. In this period, they violently banged the window for us to let them in but we said sorry and continued walking (not having any way of communicating with them anyway). We could hear their bangs rattle throughout the complex. Soon after heading up the stairs to the tower we stayed inside of, we heard curses and screams and it did give us a scare. Note: We could hear their bangs against the glass over the kids breaking wine bottles against the stone wall and setting off fireworks.
When we headed outside next time, we took a different route on our way to the trend touristy area (which was flooded with people). Getting there however, we had seen Africans on scooters talking to themselves, heard what could only be construed as domestic violence and some other homeless druggies sleeping in trailers full of sand/dirt like a pigeon. One had made a natural trash pillow for themselves as they slept on the sidewalk (which was all cracked and broken)
Nobody cares about the inefficiency of regulation, because they’ve never sought out to be efficient to begin with
I have heard excuses that the reason why we don’t have much in the South is because of the King of Spain from the 16th century…no joke.
Following this thrill, we alerted the landlord via AirBNB who was quick to respond and reach out to the building manager to see that all was well–Later telling me that if anything were to happen “he knows somebody who can take care of it”
Lack of Convenience
Absolutely nowhere did we find natural shelter or shade at bus stops, ferry stops, or stations of any sort, everybody was forced to cook in the sun while squinting.
Kids had approximately 120 seconds to enjoy their melting ice cream. Likewise, the only convenience stores we had resembled something from North Africa, Arabia or were 24 hour kiosks that only served basic vending machine items. Which very much highlighted that the island was completely deprived of everyday items that you and I would take for granted. Something like aloe vera, shaving lotion, glue for a bag, luggage, batteries, were genuinely difficult to find and reminded us we were on a struggling island.
When grabbing the bus, we noticed that the luggage situation on buses had nobody to place it in the under compartment and give you a tag unique to your bag. There were ladies who weighed the same as their bags forced to fend for themselves. It was a complete free for all to crouch down, throw your bag in a tiny cabin and drag it out later, hoping someone didn’t do the honors for you.
Another bit of convenience was that many internet sites had a block to them or disclaimers too (same as UK). Welcome to Europe.
Restaurants charge a fixed 10-30% service charge, for literally offering no service as you have to scan the menu yourself, order and pay at the front. An island used to extortion who will never compete on a high level for tourism
Beautiful fields but more to it
My untrained agriculture eye seemed to have noticed one thing while gazing upon the beautiful fields and tremendous abundance of growth on the island. It would seem that it is limited to vineyards, olive trees, some citrus fruit, tomatoes and some other crops + solar panels and windmills. I suppose Italians can survive on bruschetta or pizzette but for more ingredients, or stocking your shelf, this agricultural powerhouse is greatly limited and still reliant on imports from the North. This is a risk that while speaking to locals, they are completely unaware could materialize.
Services are simply not near any sort of anything you’d get inside of the Americas. Traveling with 30kg or more makes your life challenging for heavens sake.
Always nice when you’re out for a cute bike ride in the Mediterranean in the Egadi Islands and US fighter jets zip around the island to remind you who’s in charge (More on Favignana article)
I’ve also never heard so many men sniffing in my life–and not too many sweaters like this:
Back to about the bus ride through seeing all of those pretty foothills… there was a part where the field was on fire which was getting extremely close to the road. Our bus driver ploughed forward despite being entirely unable to see from the wicked smoke from the flame (we all smelled like smoke afterwards. Worse, we passed another truck that was entirely engulfed in flame (imagine some narco scene in a Mexican movie). We feel that a few sparks caught under the engine, but it was a horrible sight and we through the worst (being in the middle of known Mafia territory). From what we could tell, two German girls perked up with notice and 1 woman made an appoint to call the police, but everyone else, had an attitude of “Thursday in Sicily…”.
English is poor and about 95% of people who can speak it are extremely limited–this alone is a fundamental killer for it to receive a catalyst of capital
Notes
Checkout everywhere is 10AM for some reason (seeing how check in isn’t ready until 4pm normally)…which reminds me, there was an element of strictness amongst the disorder. Trash days and items were plentiful and had an intricate organization, even though literal piles of trash sat outside your window on the street. Check out was punctual, even though every service provided on the island is lax. Ensuring everything was for security and safety purposes in around buses and airports, despite times when we didn’t have anything about us checked (we simply got on the bus). It was an excellent proxy not only for Sicily, but for Europe. It had semblance of “trying” or of some sort of orderliness but it simply gave up on itself.
Operationally, Sicily is like a kid realizing he’ll never have the grades to be a professional in anything, so putting he shows up to sign his name on the test, fill out some answers –before he goes back to playing soccer in the street (or drink wine watching it).
Big Picture
Italy, believe it or not, is becoming a major recipient of Ultra High Net Worth Individuals with their new residency and tax benefit programs. It hasn’t changed all that much but the fact that other areas of Europe are collapsing much faster–it makes it a far more appealing option for wealthy families.
My understanding is that this is primarily in the North of Italy, arguably a different country entirely. In the South, people entertain themselves with cigarettes and lawn chairs in alley ways.
Research
Realizing that the majority of innovators, inventors, explorers, artists and noble names that we’ve grown up with actually come from the Northern states of unified Italy.
Both flights I was on to and from Sicily had Sicilian families who were standing on the plane just prior to landing and immediately following landing to the significant annoyance of the flight attendance. It was amazing to see the lack of civility and cooperation passed as normal.
Why Even Write This
I reiterate that I have been intrigued about the prospect of hunting for real estate that could be a 10-20 year play; something that could be used in the interim while renovations are being made with the idea that HNWI would be happy to take it off your hands or rent it themselves (since the views are still nice). Sicily, after their 1 euro homes received international coverage, was a thought we’ve had that could be a place (since there are already apartments for 10,000 euros and pieces of land similarly). I wanted to dispose of this idea for you as my reader that I have seen nothing to support such an investment case.
This has therefore come as a great disappointment for me. I don’t believe that this place has anything to offer except good olive oil, tomatoes and wines from the controlled violent actors. There are simply too many islands with too many nice views in the Mediterranean and to have to walk through trash, and walking through piss to get to your favorite gelato shop.
I can confidently say, after being in 11 states in Mexico, covering thousands of kilometers, every single one is much better than at least the South of Italy. It’s no comparison.
The middle of the island is terribly dry and barren, there’s few private enclaves that offer all the amenities. All the attention will be on the coasts. Our trip extended beyond Palermo to other coastal cities with similar results, poverty, poor infrastructure, garbage and filth
Closing
I had not approached Sicily with agnosticism, to the contrary, I had come with an interest to explore investment opportunities as a long-term play once Europe buffs through it’s inevitable crises one by one.
In Trapani, it was nice to see a unified people as opposed to just another melting pot, in addition to the great food, sceneries and historical buildings (that many tend to pass by without care). As they say, before investing in a place you actually have to get boots on the ground to see what the place is all about, how the market is, how the people are, what are the catalysts, get a feel for the place, etc. After a short few days of doing this, I realized that this place is genuinely uninvestable and crucially, I don’t see any catalysts that could occur to change that.
Some places just deserve to have low prices. I suspect those moving to European countries because of enticing immigration and tax benefits are going to be in for a rude awakening if this is on their list. There are simply far superior options in Europe still today, even for those without extended wallets.
Regardless of the city we were on this rather large island, this was a place where I went from being thrilled to see for the unique organized disorder with my own two eyes and spot a local culture still alive for once in Europe–to realizing that this was relegated to a small city I had been in upon arrival, growing tired of the inefficiency and realizing that Sicily, at best, had nothing to offer.
Unfortunately, European cities that were once regarded as world-famous has been reduced to a coastline, a museum for history, a garbage dump and a place where top criminals have orchestrated the most intricate and brutal means of theft & extortion (yes, the Mafia is alive and well and not free from crime), so much so, it contributes to them paying for the lives of millions of 3rd worlders day in, day out.
It didn’t take long for me to confirm to myself that Sicily was going to continue like the previous hundreds of years; a state of descent into chaos, destruction, filth, corruption and criminal networking which remains largely normalized. I’m afraid no amount of ships or aircraft are going to turn this island around. The Euro dollar homes are priced… just about right
