patrick.net

Nomograph says

It's easy to say that you sold a house at the height and bought gold at a low. Based on how you carry yourself, I'm guessing you actually did neither.

And, as usual, I challenge you to eat your hat, about 10 years from now, when house prices do fall to 1975 levels.

Nomograph says

It's easy to say that you sold a house at the height and bought gold at a low. Based on how you carry yourself, I'm guessing you actually did neither.

Yes, and I bet you were among one of those people who would have laughed me out of town, back in '06, if I had mentioned even a 20% decline, back then. That's why it's so hard for you to believe that somebody could sell their "HOME" and buy a worthless piece of a "barberous relic" back in '06.

Nomograph says

In 10 years I will have blissfully forgotten all about you.

Probably, because you'll be long-time dead, having eaten so many hats!

tatupu70 says

Just because someone puts down 3.5 doesn't mean they didn't have 20% if they had to put it down

Exactly. We ended up using 20%, I just hated the idea of $300/month PMI...but at some point we almost went with 3.5 down FHA. If we did, dunross would assume that we NEEDED to go that route.

dunnross says

Yes, and I bet you were among one of those people who would have laughed me out of town, back in '06, if I had mentioned even a 20% decline, back then

Just because you were right then (in hindsight), does not mean you are right now. Every broken clock is right twice a day...

If we were to go back to 1975 prices, you wouldn't buy a house then because you would have lost all your money, have no job and things would be very ugly - be careful what you wish for...it may work against you.

I also don't "buy" that you sold a house in 2006 and bought Gold with the proceeds. I got that feeling. Just like I had that feeling in 2006 houses were too expensive...I was right then, so I am right now. (applying your logic)

Nomograph says

You can't compose a grammatically correct sentence, and you want us to believe you are some kind of financial genius?

Oh, BTW, remember goldboy back from 2006. Yes, the same one who told you to sell your house and buy gold back then at $500/oz. Well, why do think you can still read about him in my history. That's because he and I are the same people.

Nomograph says

Probably, because you'll be long-time dead, having eaten so many hats!

Neither could Henry Kissinger.

dunnross says

you would still be able to buy that house in Palo Alto with just 30 of your gold coins, no matter how low the price of gold gets

Now, let me explain to all you multi-cell organisms out there, how far-sighted my calculations really were, back in '06:

House Price in Palo Alto in 2001: $750,000
Price of Gold in '01: $250
PA/Gold Ration: 3000

House Price in Palo Alto in 2006: $1,200,000
Price of Gold in '06: $500
PA/Gold Ratio: 2400

House Price in Palo Alto in 2012: $1,000,000
Price of Gold in '12: $2000
PA/Gold Ratio: 500 (notice the trend already)

House Price in Palo Alto in 2020: $300,000
Price of Gold in '20: $10,000
PA/Gold Ration: 30 (as predicted by goldboy (alias dunnross) in '06)

dunnross says

You can't compose a grammatically correct sentence, and you want us to believe you are some kind of financial genius?

Actually, I am not the financial genius. All my ideas came from my friend, Kondratieff, who lived over 100 years ago.

Depending on where you live if you sold in 06 you are still down a significant amount

toothfairy says

Depending on where you live if you sold in 06 you are still down a significant amount

Not if you traded your greenback for gold & silver, like I did.

toothfairy says

Depending on where you live if you sold in 06 you are still down a significant amount

Oh really? I thought we were at the bottom?

Nomograph says

If you don't mind me asking, how much did you lose, dunnross?

Ha, Ha, Ha. Gold prices are up 300% since '06, and you are asking me how much did I lose? For a guy who has 4x as many comments, with less than 1/2 of my seniority on patrick, who is the real loser here?

Nomo, get a life! Because, you don't have one right now, and if you don't care about me 10 years from now, I'll definitely know that you lost the miserable one that you had.

Nomograph says

dunnross says

Probably, because you'll be long-time dead, having eaten so many hats!

You can't compose a grammatically correct sentence, and you want us to believe you are some kind of financial genius?

Nomo,
A financial genius does not pay 3500/mo. to rent in San Jose. 'Nuff said.

You pay 3k per month do you realize you've spent 216k in rent money since you sold in 06?

toothfairy says

You pay 3k per month do you realize you've spent 216k in rent money since you sold in 06?

Yes, but I made over $2M in gold, because I didn't have my money tied up in some dead asset like housing.

toothfairy says

You pay 3k per month do you realize you've spent 216k in rent money since you sold in 06?

And how much would I have paid in interest and taxes to a state which takes all my money and gives me nothing in return?

dunnross says

And how much would I have paid in interest and taxes to a state which takes all my money and gives me nothing in return?

Plus, to tell you the truth, I never counted on inhabitants of Bay Area to be that stupid.
While the whole country has already seen the light, these so-called PhD's in the Bay Area are still living in their dream-world.

dunnross says

Plus, to tell you the truth, I never counted on inhabitants of Bay Area to be that stupid.
While the whole country has already seen the light, these so-called PhD's in the Bay Area are still living in their dream-world.

But, it should be no question to anybody on this blog, that, now the Fortress is finally starting to buckle. Nobody, can be that STUPID!

Nomograph says

I made over $2M in gold

Like I said, I believe my bank account a lot more than you. If you don't believe, me, I don't give a shit, because, you are a 2-bit speculator, which can't even read history. If you have read my blogs from 5 years ago, you would have known what I did.

toothfairy says

You pay 3k per month do you realize you've spent 216k in rent money since you sold in 06?

That kinda financial genius.

B.A.C.A.H. says

toothfairy says

You pay 3k per month do you realize you've spent 216k in rent money since you sold in 06?

That kinda financial genius.

And the ironic part - lets say he did buy gold...as he believes that gold is going to be $10,000 an ounce = he will ride it all the way back to 500/ounce = lost house, lost his gold :)

Genius!

SubOink says

And the ironic part - lets say he did buy gold...as he believes that gold is going to be $10,000 an ounce = he will ride it all the way back to 500/ounce = lost house, lost his gold :)

Genius!

This can only be determined in retrospective, not based on some idiotic predictions that you make.

dunnross says

SubOink says

And the ironic part - lets say he did buy gold...as he believes that gold is going to be $10,000 an ounce = he will ride it all the way back to 500/ounce = lost house, lost his gold :)

Genius!

This can only be determined in retrospective, not based on some idiotic predictions that you make.

You are the one predicting 1975 prices...

SubOink says

You are the one predicting 1975 prices...

Yes, but I am not saying that any of you will lose your investments based on my predictions which haven't yet come to fruition. Predictions, are just that, predictions. But basing somebody elses life's savings on something that hasn't yet happened, is, at best, presumptuous.

SubOink says

And the ironic part - lets say he did buy gold...as he believes that gold is going to be $10,000 an ounce = he will ride it all the way back to 500/ounce = lost house, lost his gold :)

Also, just because I am predicting that gold will go to $10,000, doesn't mean that I intend to ride it out to $10,000. I have never sold anything at the very top, nor did I buy anything at the very bottom. That's not how financial geniuses operate.

dunnross says

SubOink says

You are the one predicting 1975 prices...

Yes, but I am not saying that any of you will lose your investments based on my predictions which haven't yet come to fruition. Predictions, are just that, predictions. But basing somebody elses life's savings on something that hasn't yet happened, is, at best, presumptuous.

Ok.

Re: your gold profit

You have spend 216k in rent since you sold. You say that you made 2mill with gold but in fact you haven't because you have not sold your position, have you? So you have been paying 216k out of pocket? Now, if you clocked out and take the profit, I'd give you cheers for your gold move from 500 - 1600...even though...there are many ways you could have made a lot more money in 5 years. (look where oil was at some point, look where OIH was, look where Apple was in the crash etc etc etc) - so if you are the super smart genius here that can make great predictions, I am surprised you put all your eggs in one basket and became a gold bug. Sounds crazy to me, even if you hit a lucky streak (thats all it is).

The future will tell us (and you) who's right and who's wrong. It will be interesting...

SubOink says

so if you are the super smart genius here that can make great predictions, I am surprised you put all your eggs in one basket and became a gold bug.

I wanted to leave some profits for other people. Even the smartest financial genius in the world, cannot predict everything 100%. However, I believe, that in a Kondtratieff Winter, buying Apple, OIH and other stocks, is not diversifying at all, but putting more of your eggs into one basket. Only gold doesn't correlate well with the S&P, but all those other investments do.

dunross,

the Bay Area is not some podunk backwater sh*thole compared to Chicago. The weather is not better in Chicago than it is here. You are voting with your feet by being here.

SFH's in The Fortress are not going back to 1975 prices.

Gold pays no income. But rentals at $3K per month in San Jose do.

K-12 API do not guarantee any single kid, nor your kids a meal ticket for life.

San Jose at $3000 per month rent is no reasonable valuable proposition.

B.A.C.A.H. says

the Bay Area is not some podunk backwater sh*thole compared to Chicago.

Yes, why don't we compare the main street in Chicago to the main street in San Jose, and let the rest of the members of this blog judge for themselves.

B.A.C.A.H. says

Gold pays no income.

Gold pays no income. But it doesn't call you in the middle of the night and ask you to pay the mortgage, every month, either. Neither, does it leak rain water on your head, when it rains for 3 weeks in a row.

B.A.C.A.H. says

SFH's in The Fortress are not going back to 1975 prices.

Stops being the Fortress, when others have more to offer.

Santa Clara County school board votes to approve 20 new Rocketship charter schools

http://www.mercurynews.com/education/ci_19550940

"Rocketship has shown what works," San Jose Mayor Chuck Reed told the board. "Let's take it, let's replicate it."

Rocketship operates five schools in San Jose, California, serving 2,500 students and plans to open two additional schools
in San Jose in 2012. Among 2,000 low-income elementary schools in California, these first three Rocketship schools are
all in the top 5% statewide and are the top performing low-income elementary schools in San Jose and Santa Clara
County.

Rocketship schools have results rivaling wealthy school districts (such as Palo Alto) while serving 80%+ lowincome
students and 70%+ English Language Learners. In 2013, Rocketship will open its first school outside of
California in a city to be announced in March, 2012.

BTW - Good luck trying to find a good Pho resturant in the Fortress.

We tried to put up massive towers in San Jose, but it never worked out... Gold Building in 1987 went belly up, and more recent Sobrato Towers in 2000 has had low occupancy.

http://en.wikipedia.org/wiki/Sobrato_Tower

B.A.C.A.H. says

K-12 API do not guarantee any single kid, nor your kids a meal ticket for life.

Then why do we have this concept called "The Fortress" at all?

B.A.C.A.H. says

San Jose at $3000 per month rent is no reasonable valuable proposition.

A $3000 per month rent is what keeps the wife from wanting to buy a house.

dunnross says

B.A.C.A.H. says

San Jose at $3000 per month rent is no reasonable valuable proposition.

A $3000 per month rent is what keeps the wife from wanting to buy a house.

Rule #1 : Always do what the wife wants

Rule #2 : Always do what the wife wants

:)

dunnross says

why do we have this concept called "The Fortress" at all?

An immigrant who used to post here with the handle "OO" referred to West County and parts of the Peninsula as a fortress because those neighborhoods were immune from the crash in house prices that the overall region experienced. His "fortress" was a fortress against depreciating home prices.

I like to use Big Names for Big Concepts so I added the "The" and capitalized it to Fortress. Kinda like in The Bible, the people genuflecting to The Lord.

In your society in The Fortress, people are genuflecting to Their Lord, that lord being The Privilege of Being a HomeOwner inside of The Fortress.

E-man says

Btw, the last person paid all cash for that $500k property or u didn't catch that?

How do you figure this out? Is there a listing of the mortgages somewhere?

Oliver

dunnross says

Yes, why don't we compare the main street in Chicago to the main street in San Jose, and let the rest of the members of this blog judge for themselves

Having lived in the South bay, I am always entertained at how many people think it is the greatest place on earth. In practice, outside of jobs and decent weather, there is not that much to recommend for it. Or as I joke, never has a place generated so little culture with so much money.

A lot of people don't even have the 3.5% to put down. I frequently lend to people who are borrowing for their FHA down payment.

Despite what SubOink thinks, when you get into people's actual balance sheets they almost always have close to no cash. If someone tells you "I have over $100k saved" what they mean is that they have $101,000 in their 401k. This money has little relevance because it is usually in at-risk investments and it has very poor liquidity. Unless you are willing to destroy your retirement to buy a house this money does not exist.

If 20% came back in LA the market in the middle to the bottom would almost literally stop.

m1ckey6 says

A lot of people don't even have the 3.5% to put down.

And in that case, they shouldn't buy a house. How are they going to afford a mortgage if they can't even save 3.5%?

Once again, not everybody can buy and own a house.

This is little change to the past, as a lot of people have not been able to buy homes in the last 100 years - It took my parents until they were mid 50's to buy their first (and last) house. And this is pre- bubble 1 and 2.

If you don't have $15k saved even, no drop in housing will help you. You are simply not in the market for a house and gotta keep renting cheaply, live below your means and save money - that's how we did it.