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  • On 18 Sep 2014 in Thoughts on the Alibaba IPO?, SFace said:

    BABA options wont be written until things settle in a week or two. Those are Yahoo premiums for Sep 20th which expects a huge move.

    The 10% (Yhoo) out of money next day call is a whopping 25 cents. 20X normal as they are 1 in 100 longshots or around a penny normally.

  • On 16 Sep 2014 in Thoughts on the Alibaba IPO?, SFace said:

    buy Yahoo. Options pricing it like 48 by Friday

  • On 14 Sep 2014 in Average Profit for a Rental?, SFace said:

    The averrage net worth of a homeowner is anywhere from 30x to 40x more than a renter. Landlords are rich, renters are poor. If there is a chance to own, own. It does not matter anywhere. Cap rates are high or low for obvious reasons.

    Like any business, understand permanent, fixed cost is the key. Texas, a state with high property tax and high maintenance as a % of rent is bad, and that is reflected in the lower price. Ca, a sate with low prop tax and maintence as a % of rent is good and that is also reflected in the price. Low fixed cost to maintain an asset and easy source of customer is the key to own it forever which drives value long term.

    Housing is the only business in the world that a mom and pop can kick reits ass or large enterprises. No need for scaling or any special expertise.

    Instead of asking a question on patnet, all you need to do is read the 10k from Avalon bay, equity one, or even silver bay. A mom and pop beats their return by 100%

  • On 13 Sep 2014 in Nevada gives $1.3 billion to Tesla but can't afford a medical school, SFace said:

    States and county competing with each other. You would think govt should not compete with another govt. Guess not. Only in the USA.

  • On 12 Sep 2014 in Dear iPhone 6 users, welcome to 2012!, SFace said:

    IPhone 6 will sell well due to a long overdue size bump.
    It's i7 that's problamatic. The products are becoming a commodity. There's just little difference now so those lofty industry leading margins will surely come down from here. The iPhone6 is the exact same shit as all the fagship phone now. The finish is no different than the htc m8. It's worst than any of the android flagship as far as resolution and specs.

    This is the first time I feel bearish for apple as this may be it for product pipeline. It's getting gimmicky to grab revenue with beats by Dre, etc. Att, Verizon may finally have some levergage. Iwog is right. The i6 has nothing. It will sell amazing but in 6 months, it would be pretty clear there is no difference. Or worst, a cheaper built phone than the rest. All signs point to it.

  • On 11 Sep 2014 in $1 million for a parking spot?!!!!, SFace said:

    parking space is no different than a home. It is actually better, it is just concrete with no kitchen, flooring. nothing to maintain. It makes a lot of sense to buy parking spaces.

    Here in San Francisco. A parking space in SOMA can easily rent for 400-500 a month, say 450. Let's say the profit is 5000. @ 4% return (which is reasonable since there is nothing to maintain and rents will go way up), the parking space is worth 125K.

    There is no doubt in my mind that parking spaces will be appreciating as rent for these will be in tremendous demand.

    If I can buy a couple for 125K a piece, I would, but there is no separate deed to just buy a space or in all likelihood, it would be sold separate with the condo in the future. lol

    patrick should develop an App for people to lease out idle parking space. Airbnb of parking.

  • On 10 Sep 2014 in $1 million for a parking spot?!!!!, SFace said:

    That's how it works in high density space with massive dollar pet square feet. Parking spots are 200k or so.

    Pretty good roi too. A parking spot has nothing to maintain to get an easy 3%. Parking rates will easily outpace rent in NYC.

  • On 9 Sep 2014 in Somebody please enlighten me about AAPL, SFace said:

    "Why on earth is AAPL stock so fucking high? They have proven once again the inability to innovate. They are quite simply behind in everything and not catching up. The iPhone 6 is a joke. And some of you think stocks are going to continue climbing? For what? What is apple innovating or producing that is worth the money? I realize people buy it, but at the same time their stock is doubling annually, they are continuing to lose ground to their competitors."

    The short answer is they made 40B net of tax and have $100B+ in the banks net of debt. That puts the PE around 12 or 13 net of cash.

    I would not buy APPL shares now as I do think cell phones will be comoditized and Apple will struggle to maintain margins. All phones look the same now. The Iphone 6 is no different the the HTC one M8 with the aluminum chassis and the Apple watch pricetag is absurd. Ipad sales are struggling.

  • On 5 Sep 2014 in And what's dumb becomes smart again., SFace said:

    All IT does is allow your phone to access the company mail server.

    No one is asking for their blackberry back as the numbers convincingly proofs out.

  • On 2 Sep 2014 in PG&E faces a chance of a $1.4 Billion fine, SFace said:

    does it matter, the costs passes to the users anyway. lol

    It's gas and electricty so there is absolutely nowhere to go. You are kidding yourself if you don't think the ratepayer don't eat it all. It seems like a good way to increase 1.4B in revenues for the government agency and let the taxpayer eat it in disguise.

  • On 2 Sep 2014 in Patrick wants to open a competitive wine bar, SFace said:

    Patrick says

    David9 says

    Ventura, California has a successful venue similar to as you have described.

    But not actually trying to guess the variety and keeping score.

    Unless it is a chateau lafite or similar, does anyone give a damn?

  • On 1 Sep 2014 in Patrick wants to open a competitive wine bar, SFace said:

    High fixed cost. Heavy capex and inventory commitment makes this a no go. Just how are u going to secure good inventory at favorable price in high ass rent san Francisco. What's your edge. Competitive advantage, industry expereience, insider knowledge?

    There is such a bar, it is located in treasure island in a warehouse type facility.

    You can count in the fingers of your hand the actual amount of people that actually care about variety or that type of knowledge. If they do, the wineries come to them.

  • On 27 Aug 2014 in My first real estate bear thread (ever), SFace said:

    This is the freakin fed, it will choose inflation over deflation.

    The fed is as predictable as the morning sun, you can forget about any deflation scenario.

  • On 25 Aug 2014 in Why your house is a terrible investment, SFace said:

    hanera says

    e-man, sface, icloud15, strategist...

    Buy this scenario or think is BS? Pse don't talk about 2009-2012, we're in Aug 2014. Should buy or rent now? Should we be leveraged or not?

    If you are staying for 10+ years and get prime rates, then there is little risk to buying.

    If you are looking to flip or rent, better make sure the cash flow supports it long term.

    I look at WFB HOI index. locally, we are in the more unaffordable range bewteen 6% and 32%. It is around 12% now. Nationally is more affordable and in the middle range so it is damn if you do and damn if you don't.

    The economy is just starting to heat up as can be discerned from job gains recently. The damn thing is the interest rate is priced like a recession and depending on local, it can be hot or cold. So in the bay area, we have a hot economy but interest rate like a recession. Inflation is starting to pick up and wage increase will be demanded in the next3 years.

    There is an interest rate risk, as q quick prime rate increase will damage housing locally. But this is the fed which is as predictable as the morning sun, it'll be pushed back just as usual.

    housing has been underbuilt since 2010 which works in favor of owning land. In 2004, some 2M homes were consructed, now it is half of that for a medium period. I don't see a slash and burn scenerio like 2006 as none of the elements applicabel then are even remotely visible now. the homebuilders has decided to pursue margins over volume which is disasterous to a prospective buyer and that will not change the rest of this decade.

  • On 22 Aug 2014 in Why your house is a terrible investment, SFace said:

    bubblesitter says

    SFace says

    becuase it is split adjusted. your 4.68M is more like 700K. There was no 26 bagger in Apple in the last 5 years, more like a 5 bagger (with dividends)

    Yo need to revisit your math basics!

    Who cares, Apple is no 26 bagger the last 5 year. It was 180 ish back then, or 25 or so split adjusted + lots of divdends the last 2. don;t need to count the dividends. It is a 4 bagger with cash dividends banked.

  • On 22 Aug 2014 in Why your house is a terrible investment, SFace said:

    bubblesitter says

    SFace says

    500K line of credit.

    SFace says

    you made $3.4M.

    why the longer route? let's see. Stock went 26x to $645 from $25 in 2009. so 180K x 26 = 4.68M? 4.68M > 3.4M. So, you work more but still get less? Does not sound like a deal to me.

    becuase it is split adjusted. your 4.68M is more like 700K. There was no 26 bagger in Apple in the last 5 years, more like a 5 bagger (with dividends)

  • On 22 Aug 2014 in Why your house is a terrible investment, SFace said:

    bubblesitter says

    Now, Imagine if that 25% down was used to buy AAPL stock in 2009 at $25 a share when our famous bull was calling out the bottom loudly? but hey what do I know about money? cuz I am not a housing bull.

    Or imagine if you use 20%or (180K) down buy a house say 800M. The price goes to 1.3M on paper in 2011 and you open a 500K line of credit. You then use it to but Tesla @ $36 bucks or 13,888 shares which is now worth 3.6M.

    So in 2009 - 2014, you made $3.4M.

    Homeowners have all the money to buy stocks and benefit even more from S&P500.

  • On 22 Aug 2014 in Start-ups leaving San Francisco, SFace said:

    let me know how many start-ups go from zero to hero in NC.

    Saving money does squat when you have no product. Youtube went from 0 to $50B in 6 years, you think a little salary saving is more important than $50,000,000,000?

  • On 22 Aug 2014 in Why your house is a terrible investment, SFace said:

    Reit returns beat stock returns long term. Just need to look it up. Reit index kicks ass.

    Real estate is the best business in this world and the number one source of millionaires. The index of real estate companies tell you that. The thing is real estate can be as small as 100k or 100b and the smaller business will do better. It does not need to scale which makes it the perfect business for mom and pops.

    And if you are living instead of renting to someone else, you just have a guaranteed tenant, you. Not paying rent is less cash out which acts the same as a dividend. And of course if you borrow the money, the bank have the risk in exchange for interest and you get the benefit of leveraged return.

    Stocks get double taxed, even tripled taxed. Real estate can be zero taxed.

    If stocks tank, you are a bagholder, if real estate tank, the bank is the bagholder with smart planning.

  • On 21 Aug 2014 in Why your house is a terrible investment, SFace said:

    FunTime says

    tatupu70 says

    I wouldn't call that overpriced. It means you can't afford it, but it doesn't mean it's overpriced.

    Right and similarly many people would call it "affordable."

    The market doesn't care about how any one or even many people thinks.

    If 1M is so overpriced, you would think there would be more than 600 or in the market.

    In any case, the whole point of my thesis is expensive and overpriced are completely separate concepts.

  • On 21 Aug 2014 in Why your house is a terrible investment, SFace said:

    Quigley says

    The SFBA seems like one of the most artificial and wierd markets in the country. There are no fundamentals. There's only greed and speculation. Sort of like the stock market. You can win big or lose big, it all depends on where you get on the ride.

    of course there are fundamentals, the most basic one. demand/supply.

    The median price in SF is what 1M, yet there are only 600 in the market for a city of 330K households.

    I never understand the argument that just because it is expensive means its overpriced. Freakin Aulani resort in Oahu is expensive, yet the kids love it and the price is right. That ignores the basic principle of supply and demand.

  • On 20 Aug 2014 in Rising Inventory & Low Rates Hasn't Created More Housing Demand, SFace said:

    I am a Keep it simple stupid (KISS) economist.

    If you want gray hair, do it the Logan way,

    If you want to just get the bottom line answer, all I need to do is look at consumer confidence. It is 100 factors all wrapped up in one little package and all you need to know about where the economy is. yes, that simple.

  • On 20 Aug 2014 in The stock market is not going to crash and will soon make new highs, SFace said:

    PE ratios ignores the balance sheet or book value.

    PE ratios can be impacted by outside factors, what are the alternatives? If 10 year fed bonds are yielding 2.4%, then damn, you are forced to buy equity which raise the ratio everything else being equal.

    and lastly, PE is based on GAAP concepts. It has flaws. The major flaws are things like impairement and writedowns (vs. not) that make looking at a PE ratio stupid. For example, BBRY sold Z10 phones at launch and made a profit in Q1 I think, in Q and Q3, a 3B dollar+ writedown smacked them to extraordinary loss. I'll throw PE ratio out the window and look at it more from totality.

  • On 19 Aug 2014 in Why your house is a terrible investment, SFace said:

    E-man says

    FunTime says



    http://www.nbcnews.com/business/real-estate/nation-renters-fewer-americans-now-own-their-own-homes-n167776


    The reason less Americans owning homes is because they couldn't afford to buy. Wait until they and their kids are renting from the Chinese and Indians and don't understand why.

    The reason is quite simple.

    Homewownership is painful in the first 10 years for everyone who has a mortgage. After the first 10, the home is an asset.

    Some take the approach that you have to scrap, work extra jobs, borrow and do what it takes. If my kids need a house at age 25, I'll write them the downpayment check, not have them wait and save for the DP.

    Some look at it like I don't want to be tied down to this debt, save cash, rent ratio is not good, income % is too low, the Patrick way.

    The US will be more competitive not less, so me thinks there is no choice but to compete or go to South Dakota. Basic demand and supply tells you things people covet will cost more, me thinks people will be even more demanding and pay even more money for things people like. A premium paid today is superpremium tommorow.

  • On 19 Aug 2014 in Why do Americans pay so much more for data plans, SFace said:

    How else do you get a new iPhone for $199 every 20 months and resell it for $500 used.

    You're buying the data as well as the $700 phone.

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