patrick.net

DinOR - I believe they have already diluted the shares (without issuing any extra to those that held some already), but it kept the company afloat - I told hubby that there's no point rocking the boat, because the major investors are the ones who are going to call the shots anyway.

Hope the in-laws "plan" works ....... for happy families sake.

O.K… I give up. What IS…. the difference between good and great sushi knives!?

The edge. No not the guitarist from U2. The way the edge is ground. That and the steel. Folded many many times to form a discontinuous carbide network, low carbon center with a high carbon martensite edge. You are looking for a single bevel edge not a double bevel, think right triangle.

So now you know, and knowin is half the battle*

*GI Joe

DinOR

I tend to freak out when they have rights to issue more shares (which can dilute shareholder value).

They always have those rights. No VC will invest otherwise. The early round investors will often reserve the right to participate in later rounds, sometimes with various restrictions or clauses. But they pretty much always have a way to protect dilution. The founders many times do not. The option pool is never protected from dilution, but instead is sometimes expanded if deemed necessary. Many times expansion of the option pool comes at the expense of the founders, depending upon the strength of the founders versus investors.

Randy H - thanks, I may email you. Hubby has some founders stock and some options, but as a lesser worker bee, he is excluded from selling his shares until 6 months after IPO - at which point it won't matter what the offering price is, it will be decided by the market!

DAiryQUeen Says:

> I knew a renter who rented for 5 years at $2,000/yr. He
> spent $120,000 on after tax money on rent, and guess
> what his return is? Negative 100%, while property prices
> went up 20%.
> There’s a great, simple saying “You can’t get rich renting.”

A man on a business trip back in 1966 who was about to rent a Shelby GT350H from Hertz for $17 a day but then he remembered “You can’t get rich renting” so he bought the car for $3,700 and just sold it at auction for $150K…

http://tinyurl.com/2xpatx

P.S. Things must be REAL slow at the open houses these days since we are getting a lot of posts from DQ/MP/CR (who forgot that DQ was a new name when she mentioned knowing that the same people have been posting over the years)…

Randy H,

Thanks for clearing that up. I haven't often been involved in that so it's nice to get up to speed a little.

DAQU says to FAB,

You can’t get rich renting.

Oh so true. DAQU, you are the font of knowledge.

By the way, FAB, was that you I saw driving your Aston Martin DB9 down Bay St. a couple weeks ago?

SFBB,

Now that "Steve" finds himself back looking for a job (the worst part of working) it hardly qualifies as "retirement" at least not in my book.

These people are the poster children for "Never Saw it Coming" (Karen Cerulo) which I couldn't find btw. Even though their retirement accounts are being depleted to the tune of 15K a month feeding gators down in FL they are still RE believers! In-f@cking-credible.

As their story unfolds you could see several junctions where they could've gotten off (or at least gotten reasonable) but NO.....!!! They were going to be FL RE MOGULS! 3,700 s/f for two people? Totally reasonable.

Surfer X,

I know all about discontinuous carbide networks and low carbon centers and martensite and all that! I mean.... doesn't everybody? :(

"DAQU says to FAB,
You can’t get rich renting."

There's no faster way to poverty than buying wrong.

Randy H Says:

> By the way, FAB, was that you I saw driving your
> Aston Martin DB9 down Bay St. a couple weeks ago?

I’ve only driven a DB9 once (and it wasn’t on Bay Street). With the money I’ve been saving renting in SF I could be driving a Vanquish S (the Big brother of the DB9). I’m not going to rush out and buy a new one but you may see me in one of the new little Vantage Volantes in a few years as depreciation works its magic…

http://tinyurl.com/3yoj5e

DinOR,

Yah, that's why I put quotes around retirement. They managed to leverage their retirement 'nest egg' quite a bit, but at least they could sell all the houses except their primary and still have money in the bank, so they're not as hard up as, say, Casey.

@Malcom,

Obviously DQ can't be bothered with the facts (and has been particularly desperate of late) but SFBB shared this,

http://tinyurl.com/2dcu8y

and it well describes how an entire lifetime of 'doing the right thing' can unravel in less than 2 years by selecting the wrong entry point. This couple is SO stupid I can't believe they allowed their real names to be used!

DAiryQUeen Says:

> Malcolm - Tell that (“You can’t get rich renting”) to
> anybody buying over the past 30 years! And tell
> that to any renter renting over the past 30 years!
> lol Ouch.

Didn’t Casey buy within the past 30 years?

I bet the 46,760 CA homedebtors that got NODs in the first quarter (a 148% increase from 2006) of this year were just trying to get even richer by not paying the bank…

http://www.dqnews.com/RRFor0407.shtm

SFBB,

Additionally... at the rate Mr. and Mrs. PUTZ are raiding the IRA (all) of that will be added as regular income creating TAX HELL! I don't believe the article mentioned that?

With the money I’ve been saving renting in SF I could be driving a Vanquish S (the Big brother of the DB9). I’m not going to rush out and buy a new one but you may see me in one of the new little Vantage Volantes in a few years as depreciation works its magic…

With any luck, thanks to money saved renting in Marin and the magic of successful startup liquidity, around the same time I'll be able to finally afford the Alpina Z8 I always wanted.

"I can't quit my job, I am unemployed..."

You uh... still finding that "funny" do ya? Jeff?

Oh and check the date. August 2005. That's going to be on a lot of tombstones.

Jeff Putz

12 April 1966- 10 August 2005

(Officially died from severe complications of negative cash flow 3 January 2008 but had been on "life support" since 8/10/2005)

Surfer-x:

Whilst the folding of the steel allows the creation of a very pretty grain, I would think it's only necessary from a practical standpoint if you were using the traditional tamahagane instead of modern alloys.

requiem, I used steel to avoid lengthy explanations to the heathen round eyes.

Person,

......... (hmmm).....?

Yeah SURE! WTF? Can you imagine being that couples "financial advisor"? I mean it looks like by the time they sought ANY kind of outside opinion they were so b@lls deep in it what can be done but damage control?

The truth is, firms HATE these kind of "clients". They are nothing but a liability. Frantic and constantly behind the eight ball, generating ZIP revenue yet constantly demanding things yesterday! They said every thing they had is now in a money mkt. (apparently to have it liquid and ready to further feed gators) so they've missed out on some decent upside there. Which equals... MORE liability.

From what I've read on the extensive coverage of the FL market these people are toast. If Muggy were here he would say "All your flip for profit beach properties are belong to Muggy" (I'm sure).

DAiryQUeen,

It's quite possible to do a DCF (discounted cash flow analysis) on renting vs buying which is much more informative than talking about returns on investments made decades ago. I've done them for myself. Considering it would cost me at around $1500/month (after tax) extra to own there's significant opportunity cost.

$1500/month, in 30 years at 10% a year compounded monthly (low end of historical stock market returns) is $3,380,000.

How am I not getting rich renting?

MiC

DAiryIdiot,

What you're missing is that everybody on this board is saying "Don't buy a crashing housing asset" and not "Don't buy housing."

When renting and buying are roughly equivilant in pricing, and you plan on not moving for at least 5 years, it's a gimmie.

When buying is over twice as expensive, especially after a retarded run up like we've seen, buying now vs. buying in 5 years makes a lot more sense.

Buy now at 1.2 million, or spend 120,000 on rent and buy in 5 years at 800,000.

Who comes out on top in that scenario? (Hint, it's not the buyer.)

If you don't believe there's going to be a decline in prices, fine, go buy a shitload of houses and rent them out until you cash in on that sweet, sweet equity. And please, start a blog about how it goes.

SP - I think you hit the nail on the head about the trade off between salary and shares. Up until now, the hubby has been sticking it out in the expectation of a nice reward from the shares, now it seems that isn't going to happen and his salary sucks for what he does! So he is pissed off, with not a lot he can do about it.

Also, mathematically, although initially it seems the same amount of money with the reverse split, if you make some assumptions (guesses) it seems to me he would be better off with a lower share price, i.e $4, because if they go up from $4 to $8, then selling 100,000 shares grosses $800,000, whereas if they go on the market for $20, go up $4, but you only have 20,000 shares then you only gross $480,000 - the shares would have to go up to $40 a share to get the same return - realistically, which would be easier to do -to go up $4 a share or to go up $20 a share? As we all know that share price is not entirely connected to the fundamentals anymore.

Although I guess that works both ways, if the shares go down in value by the same amount then you make more with the reverse split option - I just don't know this kind of stuff too well.

Claire:

The percentage increase is the same in both cases.

(Deliberately not answering, because I don't know if there's a traditional correlation between share price and volatility outside of the penny-stock range. I doubt it would be significant though.)

Saw that couple in the Money magazine, I guess they must have gone to some get quick rich seminar and lost their heads.

SFBB,

It was worth a shot. WTH?

Oh btw Person* credited the "Mr. and Mrs. Stanley Johnson X 5" link to me incorrectly, I simply bumped it.

The article is actually a fast forward to what Stanley Johnson's retirement will look like! 20 years later and he's STILL living way beyond his means and barely able to pay his finance charges! Somebody help me.... :(

You guys and your dream cars. So silly. That’s why you guys are still renting, and not building wealth. You don’t focus on building assets first, just splurging.

I have a couple cars, just a tad cheaper than the Vanquish… and both were paid in cash by some huge profits i had in other properties.

DAQU,

Nice example of internal contradiction/hypocrisy. You start by dissing Randy and FAB for liking expensive cars, then you boast about your "couple cars, just a tad cheaper than the Vanquish..."

Every post you make only further erodes any shred of credibility you ever had. Go back to your Realtor (TM) work - and stop blogging during those open house showings!

Claire

The price the shares go out at is set at market by the underwriters. They have a very strong incentive to get the pricing right as that's how they earn their money. So the actual $ put to the float is generally pretty accurate.

The problem is you're locked up for 6 months, so your price is automatically t+6, by which point the stock has usually been thoroughly bought-up, talked-down and arbitraged.

But a solid company will hold its true market value, relative to market.

Your only real concern is how much dilution there will be in your husband's founders equity before the IPO. Dilution is a direct taxing away of implied value. It affects a $4 stock the same as a $400 stock.

See... actual business opportunities don't get talked up like this. Trying to get the herd to invest in a commodity, homes/stocks/futures/junk bonds/etc because the value is skyrocketing is entirely a ponzi scheme. Business deals are based on fundamentals. Unfortunately, business decisions get turned into manias pretty easily. So tech booms, housing booms, tulip bulb booms, etc happen. So people saying "Whoa, with low mortgage rates, I can buy a decent amount of property w/o getting eaten alive by mortgage costs, and cover the nut with the income from the properties" quickly turns into Jeff of SCDIA's "I should buy as much property as possible, regardless of whether or not I can cover the nuts."

And if you can't cover your nuts... you get hit right in said nuts.

This is obviously the tail end of a mania. It's happened before in housing, it's happened in the BA before in housing, it's happened in SF before in housing, it's happened in the Marina before in SF. It's happening again.

Now is the wrong time to buy. If you do need to buy now for non business choices, now is the time to lowball like crazy so you don't get burned too much.

DQ - Say it with me, PRICE, PRICE, PRICE.

(Isn't that what the 2 qualified buyers out there are saying?)

Half the reason I'm more hacked off than ever is b/c the "seller's realtor" (getting a stipend for handling an unadvertised in house deal) calls me yesterday saying that the gal that bought the unit below us (yes also a realtor) really wanted the top (our) unit AND paid the "full asking price" of 220K ALREADY has her appraisal done! Well whoop-de-f@cking do! She works in your RE office, remember? I don't have appraise-whores eating out of my hand for fear of being black balled, remember?

Additionally the realtor that bought the lower unit is "allowing" the nice older couple below to stay on and rent for another 6 months. (Wish "I" could've gotten that deal). Isn't that "generousity" another way of saying I'll need at least 6 months to sell my existing home? And she's buying a condo. How bullish of a statement is that?

SFBB,

Also note the couple in the FL article had almost all of their specuvestment activity occur from 2005 on! That's shocking to me b/c FL was really the first mkt. to show cracks in the seams, yet their daughter (Suzzanne) researched this?

Jonestown meets All in the Family.

DinOR - sounds like the realtor is making sure you don't back out - someone's after your unit - quick finalize that deal!

Did you folks see the news about the big accident on 101?

http://tinyurl.com/35pr24

Of course, some are already saying that it's no mere big rig accident, but rather a coordinated missile attack:

http://www.429truth.com/

The price the shares go out at is set at market by the underwriters. They have a very strong incentive to get the pricing right as that’s how they earn their money. So the actual $ put to the float is generally pretty accurate.

And then there was Vonage. :)

Woof! Woof!

Claire,

Thanks. What additionally hacks me off is that earlier in the year I told my wife we had best be ready to move or take some sort of drastic action. I just got the sense the seller would get tired of his paltry (if any) return and sure enough within 2 weeks of getting his taxes back, BAM! Bombshell, I'm selling!

Do they even know that the median has gone up 666.666 % since last Friday?

Wow - the number of the beast on BOTH sides of the decimal! Now I know for sure that this bubble is the work of the devil...

Guys,

you've gotta play with propertyshark more, too bad that they only let me get 15 free reports a day, this thing is so addictive that I am playing my Second Life on propertyshark. Propertyshark also has far more detailed transaction records dating further back than Zillow. Sorry that I almost sound like a salesperson for propertyshark. This is just so much fun, it is like playing SIMS for the first time.

Now I have ventured into the habit of randomly clicking highly priced properties in zillow and figuring out the stories behind them on propertyshark. I have encountered at least 7 properties that were bought for $350-800K more in 2000 than their transaction price in 2005-2006, they were all in the price range of $2-3M. And then you cross check the owner names with the internet searches, and the foreclosure reports, voila, Real Life is more exciting than the Second Life. Somebody should design a game around this.