- On 20 May 2013
in
Do You Reinvest Your Dividends?,
swebb said:
I used to always say "no" and manage it myself. The novelty / hobby factor of managing my investments has worn off, and I find I give it less time. It depends on the investment, but I find that I'm a lot more likely to say "yes" now. As Dan points out, it helps to automatically keep your investments balanced.
Also, the dividend reinvestment doesn't cost anything to execute. If you later want to buy shares of the same stock and do so with a normal brokerage transaction, you pay a fee.
I don't think it's a mistake either way, though.
- On 10 May 2013
in
bmwman91's Buying Adventure Log,
swebb said:
f you are actually interested I can find out more about it.
Only if it's not too much trouble.
Brand
Approximate filter angle (I noticed that they appear significantly off horizontal)
Width
Is it loud?
Any idea how large the duct diameter is?
The wire rack on the backsplash. Is it part of the back splash, or something that is separate? Is it a fixed rack or does it fold up out of the way. Where can I get one.I know, a lot of questions...but I have been researching hoods for a while and....well, I need to know. :)
- On 9 May 2013
in
bmwman91's Buying Adventure Log,
swebb said:
First speakers I built
Wow -- you did a really nice job on the speakers. I'm more interested in the vent hood in the background -- what can you tell me about it?
- On 4 May 2013
in
Food inflation: Forget it,
swebb said:
The CPI is a measurement of the average. Accepting this and not pretending there is some massive government conspiracy to hide inflation is the first step in rejoining the real world.
Do you think the CPI accurately tracks "same quality" experience, or "same expectation" experience? I think it's arguable that we are, today, more or less as satisfied with what we end up with as we would have been in the 60s, but it's not because the quality has stayed the same, but rather because we have come to accept a lower standard.
You always hear old people talking about how "meat just isn't the same as it used to be..." I always wonder if it's really their taste buds that have changed? I read and hear about it enough, though, that I have to wonder if a dozen eggs today is actually the same thing as a dozen eggs in 1955. I suspect that it, along with a host of other things in the basket, are lower quality today.
Plenty has gotten better (cars, computers, televisions), but I'm not sure that the food we eat, which I gather makes up a good part of the CPI, is the same as what our parents and grandparents ate.
Also, if things get cheaper because of efficiencies in production / distribution, can you apply the discount against inflation? If it gets 50% cheaper to produce a widget (without loss of quality) because of some innovation, does that mean we experienced 50% deflation? Or does it just mean that it got less expensive in real terms to produce the widget?
- On 3 May 2013
in
Food inflation: Forget it,
swebb said:
Wrong. I had a hard time finding a food product that I could document over a 30-year period or more
OK, so can you go to Denny's and buy and eat a super bird -- then report back if it is the same, better, or worse quality than it was when you were a wee one...?
- On 26 Apr 2013
in
Think twice before entering into bidding war in SFBA.,
swebb said:
Flipping doesn't seem non-productive to me. Most
People don't want to buy a house and update it. They either can't tolerate the risk, don't have the skills/desire to deal with the process, or can't afford to pay for it.I'm doing a minor renovation on the house I bought, and I'm doing most of the work myself. It's obvious to me that most people couldn't do it. I have a pretty flexible work situation, so running over to meet the plumber or flooring guy isn't a big deal. Paying rent and a mortgage at the same time is tough, too...try getting a loan for that. Not to mention the $thousands in tools, endless nights and weekends spent working, and the time away from family...all of that is worth something, so if someone takes on the risk, work and financial burden and delivers the same thing, aren't they adding value?
- On 24 Apr 2013
in
Is it better to buy or rent?,
swebb said:
I didn't buy until late 2012. I started looking in earnest in late 2011 because I had recently moved to Denver, had uncertainty with my job / long term plans, and didn't really have the down payment money to spare given my other priorities.
I missed the boat in some ways, but was fortunate enough to find something that ticked most of our boxes and was pretty inexpensive. I'm waist deep in plaster dust and swimming in cabinets, but it will be a good thing when we are done. We bought 3 months ago and have kept a close eye on the market -- we couldn't come close to repeating our purchase. Denver is on fire. We missed the boat, but got lucky anyway.
- On 17 Apr 2013
in
case shiller up 8.1%,
swebb said:
Real Estate is a transaction between two individuals, some may over pay, other may under pay. The seller can sell, if they don't have a mortgage for wahtever price they choose. I, as a cash buyer can pay as much, or as little as I choose.
Market conditions may have an influence, but they don't make the transaction.
That's fair when describing buyers and sellers not compelled to buy/sell. The thing is, there are plenty of transactions where the buyer or seller is compelled in some sense. Bankruptcy, divorce, relocation, new house purchase, job loss, etc. Of course it's usually not black and white, but I suspect quite often a seller is financially able to hold a house but sells it for convenience, financial planning, opportunity cost or whatever reasons. In that case they are going to (most likely) sell it at the market price, even if it's below (or above) what they think it's worth. Similarly there are buyers who could opt to rent in their new city for a year (a great idea) but due to internal or external pressures are going to buy a house in the short term. It doesn't really matter if they think the market is overpriced if they have already mentally committed to buying a house...they are going to, most likely, have to pay market price, not what they think something is worth. Happens every day. Similarly they aren't going to pay more for a house than what the market dictates just because it's worth more.
How else do you assign a value to the house? You can start with the equivalent rent, and take into account maintenance, insurance, taxes, tax deduction, uncertainty, fixed costs vs variable rent, appreciation / depreciation, etc...but that involves a lot of assumptions. Then you have to attach some value to the "I own it and can paint it whatever color I want" train of thought (even if you think it's pure idiocy to place any value on that, others do)...If people value something, they are going to pay more for it, that's the way the world works. What is a Prada handbag worth? The raw materials + labor + fair markup? The functional utility of the handbag? What someone is willing to pay for it?
Sure, things can get out of whack when people believe prices only go up, buy over their head because the bank lets them, starts buying second and third houses speculatively...but you have to at least give a nod to the idea that if multiple someones are willing to pay $X for a house, that $X has some relation to the value of the house. Not necessarily intrinsic value, not necessarily the "right" value, but I don't see how you can ignore it.
The thing is, Americans on the whole make enough money to meet their basic needs and have excess to spend. Since they aren't going to save or invest, it's going to go somewhere...given the nature of housing (fixed location, scarcity, status), it seems reasonable that the excess $ is going to go, at least in part, to housing prices.
So, how do you assign value to a house?
- On 4 Apr 2013
in
U.S. losing techology workers, who are job creators,
swebb said:
Yeah right, there are no talented Americans who are willing to work for peanuts, so bring in more people from other countries.
I'm a technology worker and I enjoy good pay, etc...but I have never been able to wrap my head around the idea that I somehow deserve to get paid more because I happen to be a citizen of the US. If there is some Russian (or Chinese, or Bolivian) who can do my job as well as I can at a lower cost, why shouldn't he get it? What real claim do I have?
The best thing I can come up with is that this special right is conferred to me by my ancestors who have worked hard (and risked their lives in some cases) to help build the country...their bounty is preferential treatment and protection for many things, good paying jobs being a big one...and this gets passed down to me by virtue of being their descendant.
That's the best I can do, and it gets me about 40% of the way to justifying why I deserve to get a cushy job. Anyone care to bridge the gap for me?
- On 4 Apr 2013
in
Ever wonder why people are flipping out over GMOs?,
swebb said:
"If someone is still unsure about GMO's they should have access to correct information to make an educated decision, not bullshit propaganda."
I think there are a wide variety or reasons people don't like GMO foods, some more valid than others. One of the big issues I have is the IP protection they are granted coupled with the aggressive lawsuits (often successful) associated with them. Monsanto is easy to hate. If I plant soy beans that I intentionally pollinate with GMO plants, I might accept that I'm violating laws or property rights (might)....but if it's incidental and out of my control, I should have no liability for it...and in fact I think Monsanto should have liability if their GMO pollen ends up rendering my seeds sterile.
GMO to add beta carotene to rice, arguably good. GMO to make plants pest or herbicide resistant, maybe a good thing. GMO that infects the natural food supply so the company can use legal channels to compel me to buy their shit...starting to sound evil to me. It's fucked up that I even have to say this.
Would we be better off without GMO? Maybe, but probably not...are there negative aspects - most definitely.
- On 4 Apr 2013
in
Ever wonder why people are flipping out over GMOs?,
swebb said:
I did put it here because I am 50/50 on it. I acknowledge that it is possible, but like all things possible, it is improbable. Right now, storing your genome variations (all regions that differ from the control genome) takes 1GB
The diff is only 1 gig? Shit, gmail gives me 10 gigs for free. Completely and totally within reach today for them to archive the genomes, and considering the growth of storage I think it will be laughably trivial in a decade. In less than 30 years I have seen hard drives go from 10 megabyte being standard (if you had one at all) to 1 terabyte being fairly normal. 5 orders of magnitude. The data storage isn't going to get in the way.
Even if the data storage problem was a real issue, they don't have to archive it in order to make it valuable. When you apply for life insurance, they get your genome, review it for known problems, assess risk based on what they know today and price accordingly. No need to archive it.
I'm not saying they shouldn't do this or be allowed to do this (I don't have a well formed opinion, really), and with my business hat on I would say they absolutely should take it into account. The point is, this is what people are afraid of, and I think the fear is totally founded.
- On 4 Apr 2013
in
Ever wonder why people are flipping out over GMOs?,
swebb said:
All they have to do is plant the idea that an employer, insurance company, or even your daughters preschool, will get their hands on your genetic profile and perform a determination if you are unfit for employment, or if you are a risk to expensive health care, or if your daughter has enough focus to be a good learner.
I don't think this is some nutjob idea, I think it's a real concern. If I were an insurance company and I had a way to predict risk of future health problems, I would want to use it to price my premiums. That's good business. The core competency of an insurance company (other than marketing, I guess) is to accurately model the likelihood of negative future occurrences. Of course they want the data in your genome, and of course they want to charge more if you are predisposed to cancer or heart disease. Just like they charge more if you are a smoker, habitual DUI offender or whatever.
So, I don't think the fear is irrational or overblown. When I apply for life insurance, I am compelled to release my "private as I want it to be" medical records to the underwriters, or they won't "play ball". Why would this be any different with my genome sequence? Now I have to decide if I want to forego the genome sequence until I secure life insurance, not disclose it when I apply for insurance (fraud), or hope for a law that prohibits insurance companies from requesting it.
It's sticky.
- On 31 Mar 2013
in
Spot The Housing Recovery,
swebb said:
1. Your chart is missing half of 2012 and all of 2013.
Learn to read a chart, it has all of 2012, jackass!
Yup, you really are incredibly stupid aren't you.
The time period between hash marks is 2 years and 58 pixels. The span from the last hash mark to the end of the graph is 29 pixels, so it looks like it covers all of 2012, minus the data collection/reporting lag.
Even so, the conclusion (prices are flat) is still wrong. If the OP would use the most recent CS report, I think they would find a ~8-9 % YOY price change, with or without the "distortions" from the SFBA market.
- On 29 Mar 2013
in
House Sales to Barely Budge in Spring,
swebb said:
or it could be the smart money sees massive inflation coming and they want to get in before rents go up 3X like they did between 1970 and 1990.
That seems a whole lot more likely, to me.
- On 29 Mar 2013
in
case shiller up 8.1%,
swebb said:
People may pay $450K for a rusty nail, but it doesn't give it value.
I'm going to be a billionaire by the end of the week!
- On 28 Mar 2013
in
Median (not Mean) Household income in the US...Where is it headed?,
swebb said:
* median anything is useless if you don't think about what the median even represents and the deviation (25%, 75% tile).
I don't understand this. The median definitely doesn't tell the whole picture, but it's pretty useful for giving a sense of what the typical person / family earns. It's a lot more robust to skewed distributions (like the super rich, or the recently unemployed) than the mean. And for relative comparisons over time it does a fairly good job of showing trends...unless the distribution is changing drastically. Am I missing something?
- On 27 Mar 2013
in
US home prices surge. Will it hold on,
swebb said:
After comments like this, how can anyone think that we're not in a bubble?
One anonymous post on a web forum leads you to conclude that we are in a bubble?
Until sales volumes increase, or price to rent ratios get out of whack, I don't think anyone should spend too much time worrying about a crash.
- On 27 Mar 2013
in
US home prices surge. Will it hold on,
swebb said:
what if it's not a new bubble, but sort of the last hurrah of the BIG bubble that peaked in 2006 ?
That is, what if the lowest mortgage rates of the past 60 years
Yeah, what if.
What if I ignored logic and didn't buy a house that costs literally half as much monthly as my current rent.
What if I waited just a few more years 5 more times only to realize that the bubble isn't popping, and all the rent increases that I absorbed over the years aren't coming back.
What if I just waited for the inevitable flood of inventory to hit the market, and that coincides with interest rate increase...
You can what if yourself well into old age...I'm not saying you should rush in to bad decision, and I'm not saying bad shit can't happen in the future....but you don't live in the future, and you can't predict the future, so you have to make good safe decisions today, with the information you have today. Sure, sometimes that means sitting tight...but don't get too comfortable, else you may find yourself at 70 years old wondering what you didn't do with your life, and asking yourself what if..
- On 27 Mar 2013
in
case shiller up 8.1%,
swebb said:
Now I'm not saying that RE is not a good investment. However, when you state "worth 100K today" you lose all credibility.
Why does someone lose credibility if the numbers they are quoting are accurate? If they would have to pay 30% more today to get the same property, with the same monthly rental income, isn't that data point meaningful?
If I bought for $100k last year, and was pulling in $1,000 per month, but could buy the same thing for $50k today, wouldn't people (rightly) point out that I would have been better to wait and buy a year later?
Sure, you have to actually sell the property to realize your gains...but the point is that he could sell the property for more, and that's a meaningful indicator that his decision to buy wasn't bad. His decision to not sell today might end up being terrible, and I'm sure people will point it out if that happens.
I don't know, it seems entirely reasonable to me to use current market values compared to purchase price to gauge a buying decision.
- On 27 Mar 2013
in
House Sales to Barely Budge in Spring,
swebb said:
If people with mortgages buy a house, without easy money, they have to use the comps. Prices would not go up. Cash buyers are breaking the comps on purpose to save the banks. That was what they were commissioned to do.
Please explain how this works to me. I sounds like you are saying prices are escalating artificially due to cash buyers (not subject to underwriting approval) paying higher than market rates, not because it makes financial sense, but because they are in some agreement that compels them to. Who commissioned them? Why is it in their interest to pay more than the houses are worth?
A second issue is how you would expect houses prices to increase under normal / stable / non-manipulated situations. If prices have to follow comps, then how can prices increase ever? Only when there are some cash buyers in the market to "set the pace"....?
Finally, if it's true that cash buyers are manipulating the market, wouldn't lenders be wise to this and adjust their underwriting standards to prevent using comps from cash sales in appraisals?
Maybe you are on to something, but at first glance it sounds like you are coocoo for cocoa puffs...
http://www.youtube.com/watch?feature=player_detailpage&v=G2iel7z38Cc
- On 27 Mar 2013
in
Check this BS out...,
swebb said:
Apparently you listened to the Patrick crowd so you didn't like a buyer's market. That was Fall 2008-Fall 2011.
That happened to me too, to an extent. I started coming around in early / mid 2011, but wasn't really in a position to buy a house until later that year. I finally bought early this year (still with some reservations) -- in taking a look at the big picture I think I got lucky with what I bought, and I dodged a bullet. Maybe I'm just rationalizing, but I don't think so. I think the bearish attitudes around here (along with some convincing arguments) kept me a bit too conservative for a bit too long. It almost cost me.
- On 26 Mar 2013
in
case shiller up 8.1%,
swebb said:
Smells more like currency devaluation then organic, wealth producing growth,
If there is currency devaluation going on, what would be a good way to protect the wealth you have, or to capitalize on the devaluation? I think a tax advantaged, leveraged, low fixed rate loan to buy something that everyone needs (has intrinsic value) makes sense to me.
- On 24 Mar 2013
in
449 Roberts Road D-1,
swebb said:
445 HOA seemed very high in there were few amenities.
http://www.redfin.com/CA/Pacifica/449-Roberts-Rd-94044/home/1788619
Nice views, but otherwise unimpressive. The price seemed very high to me.
I know nothing about the area, but the price doesn't surprise me at all. People pay for views. What does the HOA cover?
- On 24 Mar 2013
in
I just bought a house and it will cost half as much to own vs rent same house,
swebb said:
I like Real Estate. I've been in the Real Estate business my entire career. I'm just saying that we have a very screwed up market place today, with way too many people paying way too much for properties. I can see a quick flip, but not a long term hold.
I think that's going to vary a lot from market to market, and where you think things are headed. I think the flip vs buy and hold question varies not just with the market but also on individual situation -- some people are better equipped / connected / situated to flip, for others the buy and hold strategy is a better fit.
I'm not in the buy-hold-rent situation, but I did buy a place so I could live in it. The analysis isn't exactly the same as a pure financial investment, but it's similar. My net "rent" (less maintenance) is in the $900-$1000/month range. Similar property would cost me $1800/month to rent. For Denver, for my situation, for this particular house...it's a no brainer, and would also make a nice rental...I bought well and the market is improving...whether or not it makes more sense to hold or sell is a tougher call. Both are good. I don't know that I could "step and repeat" even 3 months later -- market is "improving" too quickly. Maybe Denver will look more like Seattle in the coming quarters.
- On 24 Mar 2013
in
The other Transfer Payments,
swebb said:
I think this is being presented in a way that is meant to mislead people into thinking that your taxes are being skimmed by the employer, and "if you only knew" you could just not pay them at all. What's going on is that the company gets a tax credit, probably tied to job creation or employment numbers. From an accounting/implementation standpoint it's pretty straightforward to "short circuit" the whole process and have the company just keep whatever taxes they collected on the eligible employees. The alternative is to pay the tax, then file a report on how much tax credit they are due, and then have the government write a check back to the company. To the employee it's really no different, though.
I think there is a discussion to be had about using tax incentives to attract/retain companies, or maybe the implementation of it (transparency, audit concerns, etc)...but from the standpoint of the taxpayer / citizen. I don't think the employee has a whole lot at stake, as I understand it.
Nothing is really any different for the employee -- just some accounting efficiencies on the back end, no?