Making new lows and I type this :)
So....Happy New Year!
filled up momma's ride at $1.71 yesterday for regular unleaded. Filling up my truck today and gas cans....with my $1 off Kroger discount it should put me a bit under what I paid when I first drove a car bwahaha.
Oil mid 52s as I type. According to Zillow my house value is still going up, but I'm seeing houses going up for sale all around me....Houston RE market is a big ? mark right now but I haven't seen a fall in prices according to a RE friend and the computer.
UCO once this WTI bottom comes is going to be spectacular. I'm looking for mid 40s before this settles. Tempting now, but going to wait until the thin trading stops with the holidays. UCO was low 40s when oil was 100ish a few months back...now it's 10...I'm guessing about 8 is where I buy the first long layer.
I've found my comfort level to re establish a stacking position. Much lower than my last, but was lucky enough to take some profits from those purchases. I don't have the purchasing power to get the 'bare bottom" price, but it looks like I'll be taking some 10 oz A Marks for 170 per. I do believe we'll see lower prices in 2015 and hope to be in a position to take advantage.
I nixed the numismatic play and decided instead upon some art rounds. Low mintage and recognizable 2 and 5 ozs that I'll sit on. The premiums are a bit elevated, but found them for a much better price than Ebay where they're absolutely out of hand. I believe they've got a pretty nice upside over time.
I spent 9 years in west Houston and the brother is in Katy area, so I'm plenty interested in how things play out there. Still have plenty of peeps (most of whom are asleep) who could find tough sledding ahead. Are lower gas prices equating to more traffic? Yikes!!
Wishing everyone well, and thanks once again for the guidance and insight.
I haven't been to Houston since 2006. Found the traffic to be rather horrible then. Now can only be worse, yeah? And that Sam Houston highway thing was new to me (having last driven around there in the late 80s!) Got caught on a toll road without cash or a transponder thingie. That was fun! Guess what? I cheated hard, just blasted through the transponder line with a rental and said eff it :)
Never going to be a Houston RE buyer again, that humidity. I do not miss it. But Dallas...still love that greater area (and down to Waco too) but prices need to get right, not there yet but maybe in another 12-18 months? Right now it's all trashed and abandoned repos or trailers under 80k. I need nice clean 1500 sqft single family for that. I'll wait :) :)
What sectors are short term reaping the windfall? Here's what I can think of: Logistics, plastics and anything made of plastic. Which can translate to plastic bottle manufacture for instance.
I imagine that the integrated oil companies are doing OK short term with nimble bookwork to manage the accounting of profit and loss along with controlling some markup on refining.
Yes it sucks for the people/companies who pull this stuff out of the ground and the economy local to that but otherwise its gotta be good for Wall St which will keep the key indices chugging along and supporting the dollar magic.
Houston has done very well considering the state of the rest of the country the last five years. A big part of that was simply based upon Houston not participating in the go-go RE run up that much of the country had. The 80s hurt bad...downtown was full of empty skyscrapers, the home market was devastated with foreclosure rates that make what has happened in the last 5ish years for the rest of the country look like childs play. It was a running joke here that that last one out was to turn off the lights. Back then I was a young mechanic...it was tough to make any money...cars were not on the priority list for most folks after the oil bust. Houston eventually recovered to norms and slowly appreciated while the rest of the country was on go-go RE juice. We dipped a little in 08/09 with everyone else, but it was minor and didn't last long...thats when I bought my home.
Houston has been a magnet for those who wanted jobs during the Great Recession. We've grown alot here. Lots of new building, schools, infrastructure, etc. Traffic is bad, always has been. The Sam Houston tollway (beltway 8 as the locals call it) is now like the 610 loop used to be...another ring is being built even farther out. West Houston has always done well, Katy included.
The thing that I am watching close is what oil does if anything to Houston's RE market. Oil should have an impact. How much, unknown. So far I don't see any evidence, other than the increase in homes on the market....my guess is those homes are going on the market by veterans of Houston's last oil crash in the 80s but I have no way to research that.
Thank you Pailin and everyone else for the information shared here.
Wishing everyone a happy and prosperous New Year.
This is a good one to read from Karl Denninger.
However with NIRP already out there, let's not ignore it. (And I'm looking at this from an individual pov not corporate, banker, government.) How will the next extend-pretend play out? ZIRP and NIRP are meant to eliminate (and even punish) savings in service to consumption. Going further down that road (deeper NIRP rates) means..? I don't know. Isn't the system already at work to loosen credit standards, effectively expanding credit access and warding off price deflation? Does NIRP do that more quickly or effectively? Maybe it's not a discussion for the little guy anyway, after all the statistics say the little guy is already buried in debt, has no net worth or savings (to hang onto for rate return). Right? Is this all just big banker games amongst themselves? I'm not seeing through the smoke on this one...
Actually I'm starting to lose sight of the whole End Game as we all heard it described and more or less subscribe to ('round here anyway). You know the one where the banks end up with everything and we nothing. So they're buried in 'assets' (credit lent out) that we're all making payments (barely) on. And if we stop making payments, we either keep the overpriced junk (bankruptcy) or they take it back (repo). But the cashflow is dead. Don't see a clear winner there. Why are we still talking about credit games...er more importantly why are They, when for Them to keep collecting from us, we need to be paid more and more often, so we can pass it on to Them? It's still a question of jobs and quality of jobs. Yeah???
I mean, really, does anybody actually care if -due to lack of liquid motivated buyers- Boomer stock , real estate, and Chinese porcelain portfolios tank? I sure don't. Eff 'em. Shoulda bought paintings :)
Valuation: You Got Problems
The pump-monkey crap is out on full display today. Don't be fooled -- you're fixing to take a terrible beating if you don't pay attention.
Here's reality: Paper gains, that is, the balance in your account when it is comprised of stocks or other securities, are not real any more than your claimed "value" in your house is. Your "holdings" of such assets are worth exactly zero until a willing buyer shows up and exchanges that holding for cash.
I know, you'll protest, the prices are shown every single day on your TeeVee. Uh huh. Sure they are, and they're valid at that instant in time too. But that instant in time is of no value to you because you're not selling at that instant in time. That is, you're seeing what someone else exchanged for similar kind and quantity, not what you will receive.
There is no way to know the latter other than to actually make that exchange. The market rises because people believe that when they desire to make the exchange that same value, or more, will be given.
That belief has no foundation in fact; it is nothing more than faith.
The problem with such faith is that it relies on continuation of the conditions that have made the past happen. As this article points out there's a demographic problem staring us in the face -- the next generation, which must buy those assets in order for prices to continue to rise, have had their cash flow severely damaged by "pull forward" game such as college debt.
So as far as that article goes, it's good. But it, like most of the others, miss the biggest issue of all -- the secular trend in interest rates that has now ended.
eyeswideopen wrote: I nixed the numismatic play and decided instead upon some art rounds. Low mintage and recognizable 2 and 5 ozs that I'll sit on. The premiums are a bit elevated, but found them for a much better price than Ebay where they're absolutely out of hand. I believe they've got a pretty nice upside over time.
Found this out too myself. First on the Chris Duane stuff from a coupla years back, which I'm sold out of (heh heh), pretty much tripled my money on those within 12 months. Unreal. But also recently a so-called Dragon bar from 2012. So I paid low spot over good prices for 2012. Which are awful today. That ten ouncer very much underwater. But you can't get the Dragon today. That was a 2012 only thing. So I sold that -to somebody that wanted it- for enough over current spot to replace it with a 2015 Horse bar (yeah whatever to that), but also take my "profit" in the form of an extra oz and $7 net. So I dunno, a nothing special transaction...but that single buffalo round...something really sweet holding it in my hand, knowing it was 'free', even on an ill-timed buy from two years ago!
I think the key to these plays, of whatever ilk, is to stop buying somewhere on the way up and be pretty good at spotting the last train leaving and making sure you're sold out. Otherwise you get stuck with something that goes back to spot (intrinsic) value. And spot may even be a lot lower than what it was when you originally bought!
We're back to summer 2010 level. As I type this. Guess 2015 will be fun after all :)
So our friends in the EU...they're working just as hard today as they did last year and the year before (assuming they were and are employed :) but...they just get paid less in dollars. Something to think about.
EUR is now under 2012 bottom and may be playing with the 2010 bottom of 118.7 soon. Hooboy.
Remember there was a grassroots move afoot (barely, mind you) to be paid in real money, you know...gold and/or silver? It didn't really go farther than basic barter economy stuff (so off-book black market which can and will get you in trouble with the IRS! Cuz guess what? Swapping rounds for a milking cow, a tractor, or acreage...ain't "in kind" :) But imagine that movement did gain ground, at least enough that potential employers (and their HR donkeys) didn't laugh you right back to the unemployment line?
So...like our poor friends in the EU...if you took a new job in late 2010 or early 2011...imagine being the smartest guy in the room and demanding your salary be denominated in ounces. Awesome yeah. Till you paid taxes on those "earnings" the following year. And had to sell some "salary ounces" to buy dollars to pay your taxes (the only way you can do it, buddy :) But even worse...today, if you still had the same job and salary (or thereabouts) without any re-negotiation of terms, you'd still be getting paid in ounces and, aside from recent moves in gasoline prices, be facing record price inflation! Since the goods we regularly buy, the bills we regularly pay, are all denominated in dollars, you'd have to convert something out of every paycheck to make your monthly nut...or be really good at selling the highs and living below your means:) Sucks. Just like our EU, UK, and Russian friends. Something to think about. For sure :)
We really are blessed in America. Not just because we have the World's Reserve Currency. Not just because we have the most powerful (evil?) Central Bank of them all. But because everybody else -in power- goes along with this, and when push comes to shove, we export inflation and import real stuff paid for with fake stuff (handshakes with our fingers crossed). And the more we want, the more we get. Unreal. Feel for your brothers by another currency in this New Year. They don't even have a choice in this.
Got our 119 handle now. If ya'll aren't taking this seriously, yet, you will when silver follows down :)
Good stuff to end the year. Normally I would write my own end of year "reflections" type of post, but think P's been on a roll so I hate to clutter.
Briefly, I will say that I could have done a lot better had I been prudent this year. (that means taking profits while you got 'em and cutting losses short)
Some trades were killer:
Long EXK and MUX from Dec '13/Jan '14 for a double and near-double.
China Mobile longs gave me over 30%.
Good, but bad due to being poorly managed:
Long Gazprom at the beginning of the year and I was up almost 30%. Should have taken some profits in the summer. Now that position is very underwater...not a huge deal since it is a long-term investment, but I failed to manage the "trading" position of the longs around the core. Oh well.
My biggest contrarian/value call for next year is still Russia. Maybe Armstrong's right about emerging market's "trial-by-fire" but F it..I'm looking to create some wealth here and that ain't gonna happen if I'm letting the "gurus" and/or analysts F with my head. I intend to keep adding to longs for longer-term/retirement.
I still think WTI gets a bounce soon...perhaps we get some movement next week. But I'm already long as much as I'm comfortable being and am pretty close to stopping out for a loss. Nov/Dec WTI seasonal low looking like it may not happen...then again, everyone on CNBS is just getting more and more bearish. Buddy of mine (perma-bear on fossil fuels) is calling for sub-$20 WTI and that makes me want to be bullish..just hard to see the light at the end of the tunnel right now.
My immediate goals for 2015 are shoring up my balance sheet. I keep a very light amount of credit card debt (usually enough to pay all off within a few paychecks) and want to knock it out right away so I'm super liquid this year.
I didn't hedge my PM's in 2014, so I will also reconsider this come April.
Happy New Year and GLTA.
csquared13 wrote: My biggest contrarian/value call for next year is still Russia. Maybe Armstrong's right about emerging market's "trial-by-fire" but F it..I'm looking to create some wealth here and that ain't gonna happen if I'm letting the "gurus" and/or analysts F with my head. I intend to keep adding to longs for longer-term/retirement.
You're definitely bucking Armstrong. He had something out a week ago that if WTI closed the year under 57, it meant long-term weakness for all 2015, and a range of 40 down to 20 iirc. Make of that what you will. He can be a moving target, though I haven't seen him with outright egg on his face this century. He's also moved talking from about 2020 ceaselessly to more of 2032 big picture stuff. Which is all fine and dandy, but does smack of adding time to the backend in case dire predictions (never more popular than year end it seems) take longer to play out :) I try to be a healthy skeptic of everybody, and I agree that you won't make the good money following well-trod path of others. Not every contrarian play is a winner just cuz though, so you have to choose your battles...
I'm sure you'll do fine, seems you have figured out personal risk-reward and as long as you're coming out better than you went in (this year, next, five years out, ten years out, etc) then you only need to benchmark against others so much. One of my big mistakes was not accepting my successes as being such by my own metrics, instead discounting them (too much) to benchmark metrics of others.
Example (a famous one actually for me personally!) - I bought a raggedy Amazing Fantasy #15 in 1990 for $15. A dog took a big bite out of the lower spine-side corner, 1/2" circumference maybe? All the way through, not just the cover. Yeah. But otherwise decent and intact. For those not up on it, that book is Spider-Man's first appearance from 1962, before Amazing Spider-Man #1. Pretty big deal in 1990, and always since too. $15 was a good price. $30-$50 about right, but a tougher sell. Anyway, I came home all proud of that one and showed it to my Dad. By researching my market I saw that value proposition and "saved" $15-$35 and according to the Price Guide, it was worth more than I paid. Well he immediately gave me The Truth, that I was wasting my money on that crp, going nowhere in life, self-deluding that I was "investing" when I was really just consuming larger and larger amounts for a stupid hobby (ha ha) and I needed to get serious about investing for my future, identifying full cost basis (so including gas money and "time" to go get the book from 40 miles away), ROI, blahblahblah, to accurately gauge a good investment. Oh and pay my capital gains taxes like a good citizen. All this so easily and professionally accomplished through a traditional brokerage. Why, they even send out nice statements quarterly showing you how rich you are! Gee, thanks Dad!! And that Price Guide I was referring to, well he let me know that the rubber meets the road when you actually get cash in hand, not what's on a piece of paper in a book (funny, how that same logic didn't apply to the vaunted paper brokerage statements though??)
Dearest Dad told me I'd be lucky to get my $15 back on that uglyass dog-bite comic.
So that's the setup. Here's the punchline: I sold that book about four months later for $60 cash. To a dealer at a show. Raced home to brag about my 400% return (1200% annualized), how right I had been, etc, and was promptly told...anybody can get lucky once. Wanna be an investor, wanna prove something, do it hundreds, thousands of times and with ever larger amounts of money (scalability) cuz nobody is cheering for a $45 net win. It's barely lunch money. So why don't you take me out to lunch with your big profits for once (instead of the usual other way around.) Okay. Thanks a lot Dad!
There were actually a lot of really valuable lessons in that story. And Dad gave a tutorial every day of my years (yes, dreadful, painful years) with him, without really meaning to. Mostly I think he liked knocking me down. Over and over. Somewhere in there I stopped fighting it and started applying it all holistically vs piecemeal one-offs. But you know, he was sort of a d.ck too, call it tough love if you want, but I'm not sure?
Anyway, I did just what he suggested, put more and more money "in", treated it all like an investment, and sold the quick highs. And really screwed myself. Yes. Because I had known very early on and always have since, that the good stuff never goes out of style and they ain't making them anymore either. Basic fixed/declining supply and rising demand. Nobody knew there would be two sets of Spider-Man movies in the last fifteen years. Nobody knew Disney would buy Marvel. Nobody knew any of that. But I knew that comic was worth more than $15. The second I saw it. And when I sold it, only to "prove" something, I knew it was "worth" more than $60 too (down the road). Because you should never sell a good idea unless you have a better idea that needs funding. That's the one lesson Dad never told me. Had to figure that out myself through costly trial-and-error (many of them, over the next decade, ugh). And the proof of it? That same dog-bite Spidey comic, that exact copy, sold two years ago for $5500. Turning $15 into $60 in four months wasn't so impressive, but turning $15 into $5500 in twenty-five years...I think any of us would be okay with that. The ROI doesn't even matter, it's the $5500 that does (real money, where $45 profit wasn't) and the fact that I didn't need the $15 I spent or the $60 I cashed out at. $5500 I can always use :) I had no better idea at the time, and I wouldn't have guessed $5500 but I knew it was a winner deal to hang onto. And that's the real skill, separating those out from the trades, and hanging onto them regardless of what the gurus and mentors are saying, until it's the "right" time to sell.
So I support your stuffing your life portfolio with stuff that may not make much sense in 2015 or even 2025. Chasing quick returns only on somebody else's advice (or fear-mongering), costs them nothing, and may cost you quite a bit indeed!
And to be fair to Dad, tough as he was, he told me things I wasn't hearing anywhere else -including at college where I ended up with a minor in Business Administration. Those academic textbook guys really are as weak -on the ground- as they're made out to be. That ground-level analytical approach to the business of making money on money, took a while to set in, but I can really look back over where I've been the last twenty-five years, the path of my life and I do owe all the foundational stuff to him. But I take all the credit for the risk/reward of uncovering value in my chosen category (art) where he never saw anything but wasted money (starting with comics and branching out). And even more so for growing out of trying to prove things to him that he would never acknowledge anyway (trust me on this), to stop selling early for short-term gains, when it wasn't right and I didn't have a better idea. Again, there are riches to be had blazing your own trail too :)
(Funny thing - that better idea stuff - that was at a time when you could get 3-5% from the bank on checking/savings, and a bit more in a money market or cd. That "opportunity cost" is now ZERO. And comparing the ZH-type "noise" on economic destruction to my own personal present and historical opportunity cost decisions...and erosion of the dollar/purchasing power...it really helps to "prove" to me in a personal way how bad the Fed really is screwing things up long-term for short-term extend/pretend garbage. It's real. And ZH-thinking is correct. There is just no opportunity cost now, it's all -ephemeral- reward nominally. We are long-term toast.)
Finally, because I've had some fun writing this and remembering...I'll share a bit more. Back 1980s and early 90s I was pretty hot 'n heavy on the comics thing. All the new stuff and plenty of vintage too. Had my first taste as a volume speculator even, by opening a retailer account with a major distributor of new books and buying 300 book cases right off the truck. And flipping them at shows. Long story short, made some good money but like tulip mania (some things never change!) got stuck with a lot more inventory than what my real profits can rationally explain (or make even on). Again another lesson here. A really good one. I still have thousands of comics, yes thousands, maybe 15,000?, boxed up in a spare room, just dead space. And I know most of them are worthless, maybe a dime apiece at flea markets. And maybe when I'm really really retired I'll even sell them that way, maybe, if making $20 in a day makes sense at some point?? But because I was buying everything new then in bulk, I also still have several hundred each of New Mutants #87 and #98 (among others) that I got for sixty-five cents each net (plus, um, gas money :) eBay tells me they're selling for hundreds each now. Just recently bumped into those online and sorta fell outta my chair. Probably have a few other good ones as well. Quick pencil math tells me those two winners alone make up for all the other dead stuff, plenty of that, and a big stack of real profit besides. So this lesson is you don't win every battle but you have to be in it to win it (the war). If you're playing penny stocks (or value, or momentum, et al) you may lose nine out of ten tries, but if the tenth pays 1000:1...YOU WIN.
Hope somebody gets something out of all this (very) early morning yammering...going back to bed now myself :)
csquared13 wrote: My immediate goals for 2015 are shoring up my balance sheet. I keep a very light amount of credit card debt (usually enough to pay all off within a few paychecks) and want to knock it out right away so I'm super liquid this year.
Well. Ended up on Netfix instead :) So I'm here with one more thought re: ZOC (Zero Opportunity Cost).
You have to be your own risk/reward analyst, since the market isn't providing you a baseline, a floor. Even if your credit card debt is being carried at ZIRP (as mine is) or can be bounced around from one bank to the next at zero or near-zero transfer "fees", it's still a real risk. Loss of job, loss of hours, pay cut, sickness, unexpected other expenses. Etc etc etc. Life happens. Typically bad news coupled with bad timing :) And of course, the worst being having to pass on really good opportunities due to a lack of immediate liquidity. That one will stick with you forever (like I'll never forget my AF#15 story), while the others tend to be temporary conditions. Debt carry is a moving target, not necessarily a bad thing, but never a good thing either.
Palin on a roll !!! Good points all of them.
I was able to get some garage time in. Good therapy for hands and mind. Picked up another car and am working out the kinks to flip it, listing end of next weekend hopefully. Rule is I pay for my car projects by flipping other's project cars...can't take money out of the household for playtoys.
WTI...hmph... Just don't know what to make of its effect on Houston real estate if any. Computer searches all say Houston RE is set to go in '15 and continue the appreciation we've seen the last 2 years. But yet WTI keeps hitting fresh lows. ??? My wife and I have talked about selling since the dip in WTI started. Just not sure which way to go right now. I do know this much: losing equity is NOT an option...I've worked too hard for it. But the readying for possible sale will continue.
UCO is in my future...
EDIT: 52teens??? Whoa
Happy 2015! Who's ready to lose some more money on precious metals?
Count me in.
great way to start off the new year. pearls right there. to pile on i spent my adolescence in the sports card market. i thank GOD often i was playing with my kid money. still it took my every allowance. i would skip on icecream to buy a pack of paper w/ overpaid mens pictures on them. grrrr. my first packs were in a box of 84 topps at price club from my grandpa. i was a sports nut and tony gwynn was my guy. i still remember the feeling that day as we sorted through the cards, and the first time i saw that TG pop up and can taste the cheek full of bad bubble gum it took to get there. i road the '89 UD and '90 Leaf crazy to the top and sold my fair share of KGJ and big hurts then i got stuck w/ '92 fleer ultra! oh man i thought that was going to be the one, it was. at that time, the summer before high school how could i have possibly know how far that 500 bucks, i worked all summer for, could have taken me in high school...quickly my focus turned away from glossy doods in tights and to the sports, parties and ladies of high school. anyway, i still have a few boxes of those FU's sitting in bottom of the closet in my old bedroom at my parents. Every once in a while my mom will ask me about what to do with those things, i always ask here to leave them be. always there to remind me about when i think i have figured it all out.
my favorite line from your latest contributions has to be
' Because you should never sell a good idea unless you have a better idea that needs funding.'
and to that i would like to add...but you should sell a previously good idea as soon as possible once you think it is a bad idea. during these times i think i could have stashed a tube of ag oz instead of a box of FU. exactly. fleer freaking ultra. the signs were everywhere, but i kept stacking that paper...i think when i can find someone to trade me ONE ASE for a box of these i will take it.
the less of something special there is, the more people with everything will want it. that is my new model when it comes to my collections.
i would be remise to dismiss the SSK. happy new year my man. DYOD dood. it is only digital.
last one: netflix ~ zero to sixty the lakey peterson story. great biovideo IMHO. she is my pick to win the 1st ever WSL women's world title in 2015, and i am not afraid to say, if i was 21 instead of 37 i would go make that happen.
SSK wrote: Who's ready to lose some more money on precious metals?
Who's ready to lose some more money on precious metals?
Go short with me this year and you'll probably make some more money :)
Wti 51 this morning...
local news had the first oil patch layoff story I've seen last night, late as usual but "bust cycle" was repeated many times. That'll get the attention of those who've been sleeping. Said 100k jobs to be lost...where'd they get that number I wonder. Hmph...