patrick.net

There are a lot of condos being built in Cupertino. I do not know how it will affect the SFH market. We will see.

It will be interesting to see how the new "poorer" condo purhcasers and their kids affect the touted Crapatino schools. I'll be the SFR owners are not all that happy with this.

It will be interesting to see how the new “poorer” condo purhcasers and their kids affect the touted Crapatino schools. I’ll be the SFR owners are not all that happy with this.

Well, "poorer" condo purhcasers are still better than jealous bitter renters, right? ;)

"Keep your stinking kids off our school you damn dirty renter."

TN,

A bit sloppy on my part, but I lump in 0-3 month swing traders in with daytraders.

I agree that "day-traders" are more than just those who close out their position every day. My own definition is even a bit sloppier than yours. For me whether one is a daytrader depends upon their intent, discipline, and knowledge of their chosen strategy.

For example, a true daytrader scalper who just sits there all day playing twitch on spreads is one extreme. The mutual fund trader is the other. But somewhere in between you have private, semi-private, family, investment circle, and upstart hedge fund types who may fall into either group depending. There are hedge fund traders who are not better than a 3/5 swing trader, only with more money for protective puts/calls. There are individuals investing for themselves and their families who are more knowledgeable, more disciplined and more successful than some reckless hedge funds.

“Keep your stinking kids off our school you damn dirty renter.”

:lol: When I read that, I heard it in Charlton Heston's voice.

Conor,

I bought the LEAPS because I was reasonably confident that DHI would not fall much further than $20 and that there was a reasonably good chance that DHI would be above $30 at some point in the next 2.5 years.
I was willing to wait the 2.5 years, if necessary. And I was willing to lose 100% of my investment if I was wrong. (Note to other micro-investors: I'm pretty sure you can deduct up to $3K in capital losses to offset ordinary income. So if you lose out on a small bet on options, your after tax losses should be less than your pre-tax loss. To some extent you can time the market to take advantage of this by selling your loser LEAPs and holding your winners.)

I took profits because it is rare that I can make 25%, after expenses, in less than 2 weeks. But I'm still reasonably confident that the company will do well in the long term. If the stock drops back below my entry point ($20), I will seriously consider getting back into the LEAPS.

Overall, my investments have done fairly well relative to the market. The only reason I'm experimenting with options at all is that I am tired of my 100% long only portfolio of value stocks and I wanted to try to juice my returns a little by using a manageable amount of leverage. Options are really the only meaningful way I know of (other than homeownership, which is unappealing to me in the current market) for a little guy to get some serious leverage.

King_Cobra,

Great. Now serial refinancers can go almost indefintely without having to make a payment! I'm all for streamlining and implementing technology that makes sense but can you imagine how much "churn" a system like this can create? It's the equivelant of having your "Equity Liberator" tied to an ETrade account. With "margin pre-approval"!

King Cobra,

Interesting article. The NAR cartel is in jeopardy. I wish Redfin was a publicly traded company because I suspect that they will take massive market share from traditional brokers. RE brokers will go the way of the travel agents.

The new technology should eventually bring down the cost of buying a home. Once house listings are universally available online, buyers and sellers will have better information. And this availability of information may mean that the correction we are all waiting for could happen a lot quicker than previous downturns as buyers realize how many options they have in the current market and sellers are forced to lower prices in order to compete.

Glen,

I know I've mentioned these guys before but if you are interested in leverage Rydex Funds offers long and "inverse" funds that offer 2 to 1 leverage. This is especially nice for IRA's b/c they some how meet the IRC acid test. If you want to short the S+P 500, NASDAQ, Long Bond or even the Yankee Dollar they have something for you. When you get a chance check them out. www.rydexfunds.com.

*Not a paid endorsement/NIA

Bill C Says:

I’m Asian and I’ve never wanted to live in Cupertino and don’t even know where Monta Vista is. Your sarcasm’s often funny, but I don’t find any humor in your racial comments.

I am an Asian too. From India. All my Asian friends and me, live in Cupertino. All live there for the same reason. Schools. The difference is, I am the only renter.

There wasn't much humor in my comments anyways. It's actually sad. These are very bright engineers. I ask them - or used to ask them long time ago, not now - you pay 1M$ for what ? Elementary education for your kids. Where will you get money for their college ? Answer: The house will appreciate, as it has been all these years. Then I asked, what if it didn't ? That's it. They didn't really enjoy that discussion. I quickly realized to keep quiet, as I didn't want to loose friends. Now years later, I found this blog and I vent out here.

So it is sad but true. I did not imply ALL Asians to be desperate to live there. Not at all. But go to the open houses in Monta Vista. See the arrogance of RE agents, and notice the desperation of the mostly Asian buyers. (That HAS changed - very very recently.) Look up the sales history, appreciation and price per sqft change. You will realize what I am saying. We Asians put a lot of importance on good school education, all for good reasons IMO. Hey, that's why I rent in Cupertino. But saying it's worth the financial suicide, IMO is idiotic.

Where will you get money for their college ? Answer: The house will appreciate, as it has been all these years. Then I asked, what if it didn’t ? That’s it.

Then they will send out resume with Monta Vista High prominently listed as the primary achievement. Or perhaps there will be Voodoo student loans that take souls as the collateral?

We Asians put a lot of importance on good school education, all for good reasons IMO.

What is the point of a good high school?

One can always just go to a community college, transfer to a UC, and get a master degree from Stanford.

# skibum Says:

It will be interesting to see how the new “poorer” condo purhcasers and their kids affect the touted Crapatino schools. I’ll be the SFR owners are not all that happy with this.

Oh, the current residents don't like it a bit. Not even an insy winsy tiny bit. "The schools are going to get crowded. The SCHOOLS, damn it.". What is Cupertino if not the schools ? Take those away, and it's nothing special. What happens to their home prices, if school ratings don't remain where they are ?

I was surprised that the projects got the permissions. I remember the angry discussions in parties and offices, during and after the votes.

Welcome to Condotino.

I was surprised that the projects got the permissions. I remember the angry discussions in parties and offices, during and after the votes.

They can always vote to increase property tax to 3% if they worry about school crowding.

They can always vote to increase property tax to 3% if they worry about school crowding.

Awesome ! 3% of 1M every year ? I love it.

What is the point of a good high school?

One can always just go to a community college, transfer to a UC, and get a master degree from Stanford.

Excellent point. I have long questioned the Realtor "common wisdom" about buying into the best school district you can afford. Once you get out into the adult workforce, nobody gives a shit about where you went to high school. In fact, most of the time they don't even care where you got your degree from, unless you work in an academic, medical or research field. Employers primarily care about experience, skills and political connections --not necessarily in that order.

There is definitely value in buying a house in a safe school district, though. Especially if you don't want little Johnny joing the local chapter of MS-13 or getting knifed over his lunch money.

DinOR,

Thanks for the tip, but I'm not that bullish on the overall market. Just trying to pick my spots.

I have considered the Rydex funds and/or certain leveraged ETFs and closed end funds for my IRA. I like the idea of buying a leveraged international bond fund as a dollar crash hedge. I used to own AWF (leveraged international bond fund) for the high yield and dollar hedge, but I sold it last year. My problem with the Rydex funds is that the expense ratios are a little too high for my liking. Vanguard should come out with a low cost leveraged index fund.

Most of my money is in my IRA, so I can only buy LEAPs in my (small) taxable account. But I like using leverage only on carefully selected investments, not on the overall market (I might change my view if the S&P really tanks).

Yet another reason NOT to buy a house from a flipper:
http://www.msnbc.msn.com/id/14171265/

Asian parents seem to want their kids to become the perfect employees. So they want the right schools in the right field. However, in real life, doing the "right" thing will not get a person too far. A rat race is a rat race.

Unless you have a whole mess of kids, it is not worth paying a premium to send your kid to an elite public school. Even if you have a whole mess of kids, you could move to an elite school district in Texas much more cheaply than trying to buy in CA.

If your kid is motivated, s/he can get a good enough high school level education in most school districts.

HARM,

For elementary schools, I completely agree. I myself went to a crappy school for most of my education. No one cares about it, no one even knows about it.

The graduate school is another story. It has definitely helped me in being called for interviews. What happens afterwards is solely dependent on an individual. But an ivy league school does help to some extent.

Also, when it's a question of being part of a "network" - which is definitely needed for many jobs, the right grad school helps in "getting in".

These are all factors, neither necessary nor sufficient. They do have a perceived value, and definitely not worthless. Everyone puts a different importance to them.

Does anyone think that second-generation Asians will have different attitudes about education than their parents?

I live in a predominantly Asian community and to be honest, I am a little leery about sending my kids to school there. My kids seem smart, and I'm sure they'll do well. But I grew up with several Asian kids and was a little put off by their families' attitudes toward education. For example, my buddy James (from Vietnam) had exactly three career choices: doctor, accountant, or engineer. If he didn't actually want to go into one of those fields -- that was irrelevant. And I went to law school with a girl (Korean) whose dad didn't speak to her for six months after he learned that she hadn't gotten into Harvard law school. She said she had a roomate at Harvard (undergrad) whose father beat her every time she got less than an "A." Even in college! That seemed kind of harsh to me. I think the importance Asians place on education is great, I just think they often take it too far and turn school into a hellish pressure cooker situation.

The Asian communities near me have all of the usual stuff -- after-school "tutorial centers", SAT prep classes that begin in the 9th grade, etc.

But here's the thing -- the Asian communties near me are mostly populated by first-generation immigrants. They are basically importing the educational practices of their own country.

But my kids are quite young, and I suspect that by the time they start school, most of the kids will be the children of Asians (if our area is still predominantly Asian) who grew up and went to school here.

I am sure that Asians who were born here will continue to place a high value on education, just like any other highly educated person would. But I can't imagine anyone who was born and raised here doing the whole forced overachievement/cram school/freakish stress thing. My guess is that the schools will change when the second-generation kids arrive.

Joe,

I definitely hope so. The second generation will be different. This country offers such wade ranging endless opportunities, that one can actually do what s/he loves to do and still earn a decent living. Also, there is enough open mindedness in the society, that most people feel free to say, "I will do it my way".

doctor, accountant, or engineer

Why?

Doctors save people. This I understand. Engineer? I rather have my kids flipping condos. :)

StuckInBA,

I agree on the grad school, though it seems to matter most at the entry level (fresh out of college with no job experience). I think that was Peter P's & SQT's point as well: elementary & H.S., or even where you START college doesn't matter nearly as much as the college or university that inks your diploma. However, the importance of any college diploma tend to diminish gradually over with time, as job experience and connections tend to increase in importance.

Engineer? I rather have my kids flipping condos

Heh. Watch it there fella' ;-) .

She said she had a roomate at Harvard (undergrad) whose father beat her every time she got less than an “A.” Even in college!

Why are some parents so addicted to the pride from their kids? Is pride so important. Perhaps I am just incapable of pride.

Of course I just hired a 1st generation 35 yo Chinese dude that still does everything his parent’s tell him, including getting married this year due to the “double happiness” Chinese calendar thing.

Date selection is very important. Do not laugh. :)

However, one should try to use a more specific method for date selection.

If I knew then what I know now I have skipped grad school and leveraged myself to the hilt using IO, Neg-Am and whatever else they would give me back in the late '90s. Then I would have sold out in the spring of '05 and retired.

Sometimes I kick myself for missing two of the biggest boom/bubbles in recent history. I lived in the BA right before the boom. Graduated from UCB in '93. Back then, there was a very cool BBS called "SFNet" which was wired into a lot of the cafes. Granted, my degree was in the social sciences, but I bet I could have made some bucks if I kept hanging around with the SF geek squad and hooked up with a fledgling dot-com in the late '90s.

Then I moved to LA in '94 to start law school and graduated, heavily in debt, in '97. But I had too much student loan debt to buy a house. Then the huge run-up came.

Not often can you be in the right place at the right time twice in one decade and still fail to capitalize. Oh well... at least I missed the downside too.

Peter P,

Please do not take my comments in the wrong way. I have no intention to offend you.

In India, people believe BIG time in Astrology. I never did, and I won't. So I took perverse pleasure in doing the wrong things on wrong days etc. and announcing my disbelief in a loud obnoxious way.

Then I come to BA - the area of cutting age technology, and here is a guy from Stanford advocating planetary alignments as a key to happiness.

I find it bit surrealistic. I do not know how to handle it ;-)

Please do not take my comments in the wrong way. I have no intention to offend you.

It is not easy to offend me.

In India, people believe BIG time in Astrology. I never did, and I won’t. So I took perverse pleasure in doing the wrong things on wrong days etc. and announcing my disbelief in a loud obnoxious way.

If you wish. I do not know anything about Vedic Astrology but I heard that it is amazingly accurate if you have an accurate birth time.

I don't generally subscribe to belief systems that are no more accurate than the binomial distribution set.

Is the birth date/time on a birth certificate considered accurate enough?

Not necessarily. That may be the time your birth was recorded, which can be up to 30 minutes off.

I doubt nurses care too much about recording the birth time accurately when the safety of the mother and the child is at stake.

"Of course I just hired a 1st generation 35 yo Chinese dude that still does everything his parent’s tell him, including getting married this year due to the “double happiness” Chinese calendar thing. Still, there’s hope…"

Given that some people are paying for professional matchmaking services, I don't think complying with parental wishes is such a bad thing. It's no more medieval than the idea that a bride's "big day" must involve a year of grueling planning and tens of thousands of dollars to be a success.

Is the birth date/time on a birth certificate considered accurate enough?

Aah ! For that to be possible, there first needs to be a birth certificate ;-) Many Indians born in my generation, simply do not have a birth certificate. Especially if that person was not born in a major city.

For them, the birth date and time is what is recorded on the passport. Which is what was recorded while getting admission to the elementary school. Which is what the parent made up while filling up the form.

Date and time ? For some of my friends, even the year is not accurate.

I'm under the impression that birth times are fugeable. Thus, if you have a major clash with your intended spouse, you could do stuff to ameliorate it.

Glen,

"Not often can you be in the right place at the right time twice in one decade and still fail to capitalize. Oh well… at least I missed the downside too."

I still have half a mind to think these two "opportunities" are a sign of economic end times of some sort. Both are essentially irrational bubbles that never ought to be. That fact doesn't change simply because the bubbles got huge and provided the winning lottery ticket for a small number of people.

I don't think SBA is being racist, I am Asian and I totally understand what he is saying, and concur with his observation. I'd say the school thingy is centered around Cupertino, but such a culture is enroaching Saratoga and Los Altos as well, since more and more Asians are moving into neighbording suburbs. Saratoga High is not much different from Monta Vista these days.

I personally don't like East Cupertino, it is just San Jose with good school scores. West Cupertino foothill is nice, so I like it regardless of the schools.

But honestly I will shun away from schools with too many kids from first generation Asians although I am a first gen. Chinese in particular are extremely competitive against each other along ONE single dimension, scores at school, money once you graduate. Parents compete with each other using their kids' academic performance as leverage, if your kid gets into Harvard, you are golden in the community and you will be referred to as the Chan that has a Harvard son. If your kid goes to a community college, then people start to talk behind your back as if you were the biggest failure they've ever met. It's just too much pressure on the kids.

I'd like my kids to grow up in a more culturally diverse school where score is not the only thing to care about, getting a B- from time to time is not socially disgraceful. As long as there are no drugs, no random gunshots, I am ok with sending kids to a less academically demanding place where they can be happy.

Bill C Says:

Any insight out there?

Can only really give an insight from the other side of the Pond.

Back when I was a kid in London, almost no one from the working/middle class owned thier own homes. After the Blitz, large portions of London were basically bomb craters.
After the war almost all 'normal' people (ie not insanely rich and/or landed gentry) rented from their local London Council.
Huge amounts of housing was constructed - from apartment blocks, terrace houses (like a townhouse) and small semi-detatched houses (duplexes) and even some detached houses were built and rented out at reasonable rents.

Actually, the Blitz in many ways was a good thing, especially for the very poor. It razed some of the most miserable, dilapidated, vermin-infested slums ever. The 'council' came and built affordable housing, and improved the lives of lots of Londoners. Running hot and cold water, inside toilets, electricity...

Up until the 80's it was quite common for people to rent Council Housing for decades. It was common for leases to be handed down for generations.

Then, Margaret Thatcher took a leaf out of Ronald Reagan's book, and the whole thing changed.

During the great 'Privatisation' of Britain, councils were forced to sell off their rental stock, and all of a sudden the new rallying cry was "own your own home!" . Council stock went from being affordable rental housing to being flipped in much the same way as today.

Not surprising, then, at the end of the 80's that UK housing prices skyrocketed and then plummeted in the space of a year. Its still possbile to get a 'Council flat', but its not the affordable housing it was before Maggie.

Now, London has some of the most expensive Real Estate on the planet. I'm in the process of selling my Mum's flat in a suburb of London (Putney, to those that know it) and its going for as much as a 2b/2b SFH in Encino!

As for Europe...my French frends tell me that its common to rent, sometimes for life. In Paris especially, families will rent the same place for a pittance for years. Real Estate tended to be own by old families who didn't sell, but just rented out in perpetuity.

Same in Germany, although people did eventually buy, but not normally until near retirement age. They saved up during their working lives and could then buy outright (or almost outright) when they got older.

Anyway, the gist of it being that renting has never been seen as a second-class way of living. In old cities its unfeasable to have the kind of SFH properties you have over here, simply because there isin't room for it. Many people live and rent apartments all thier lives and it attracts no social stigma at all.

BTW: Peter P...don't know much about Vedic Astology either, but is it not true that the Mayan calendar actually ends in 2012?

The perfect match of birth time of the couple must be calculated based on Lunar Calendar, and the calculation is quite detailed so the birth time makes a difference too, at a 2-hour interval.

If your birth time doesn't quite match your potential spouse', there are also ways around it, for example, changing your name, changing his/her name, wearing a special kind of jade, etc.

More often than not, the birth date matching is used by the parents to reject a woman/man they don't like their kid to marry.

If your kid goes to a community college, then people start to talk behind your back as if you were the biggest failure they’ve ever met. It’s just too much pressure on the kids.

So what, success and failure are relative. The richest person in the world is a dropout.

Peter P,

But Chinese don't quite like leave things to chances. The fact that they do all these superstitious things like wearing a jade, fengshui, etc. is because they want to have the maximum control over nature. Going to Harvard definitely will open more doors than going to Foothill College, so why not go to Harvard? They don't like blazing the trail, perhaps because it is such an old culture that it starts to get stale, and frankly within China, after thousands of years of settlement, there aren't that many trails left unexplored.

Population density certainly has an impact on the thinking. If you have to compete with another billion population for very limited food and water, you'd better make sure you take the most proven path, because the price of failure will be huge.