The stock market

[gunnarthor]

We got killed in 08 in the housing crisis.  I still occasionally stay up at night and try to figure exactly how much money we lost as opposed to just renting during that time.  It's depressing.  Since then, we've been a bit paranoid about it and we bought our last house with cash we had saved up and no mortgage.  

[Vanimal46]

 

Trying to convince my wife that we should reconsider not buying a house ever again (even though that was/is my idea). Prices continue to skyrocket here, and interest rates are going to go up for sure.....

 

OTOH, I really don't want to own a house....and holy cow it's expensive here.

Feeling your pain in Austin, TX as well... Median price for a single family house is $340,000 and continuing to increase. 

[Mike Sixel]

Houses that would be in neighborhoods I want, and don't require a complete tear down to the studs:

 

600K or more.....

[Vanimal46]

As much as I'd like to find a condo or smaller house so I can pay myself back instead of a property management company, I also love the neighborhood I live in... Hard to justify moving out when there's 50+ bars and restaurants within walking distance, and Top Golf across the street. 

[Willihammer]

I can't believe the number of condos that continue to be built. $200-400 / month in association fees for a lot of them.

[gunnarthor]

 

Houses that would be in neighborhoods I want, and don't require a complete tear down to the studs:

 

600K or more.....

Oh yeah, it helps if you're willing to live in a small shack on the outskirts of town without heat and rabbit ear antennas ...

[Brock Beauchamp]

My wife and I took a combination of a safe bet along with fortuitous timing and luck.

 

We bought in 2011, right as the market bottomed out. We bought a cheap house in North Minneapolis - coming from Long Beach, the idea of NoMi didn't worry me and my wife was born here - and should have the house paid off 10-12 years after we bought it.

 

I came damned close to buying not only during the housing peak but almost did it in Los Angeles. That would have been disastrous, as housing prices in CA literally dropped 50% within a one year period.

 

At first, we considered selling this house and upgrading to another house either on Victory Memorial Parkway or in Bryn Mawr but I doubt that will happen now. The allure of being mortgage-free in 5-6 years is too appealing to resist, I think. Instead, we'll just continue to upgrade this house. We have some additional room to expand in the basement so I doubt we'll outgrow this place, provided we stay somewhat frugal with our desire to buy all the stuffs.

[Vanimal46]

 

Oh yeah, it helps if you're willing to live in a small shack on the outskirts of town without heat and rabbit ear antennas ...

That's how it is down here... If you want space and value, you have to search in suburbs on the outskirts of town (Cedar Park, Round Rock, Pfluegerville) , or in the parts of the city that have not been gentrified.

In most desired neighborhoods, $500k and up is the going rate. 

[Mike Sixel]

I don't need space or good schools anymore, but we moved out here partly to live a more urban, walkable, life. We found a 'hood we love, but I think renting in year 1 is most likely. Plus cash is at a premium while we get the business up and running.....

[Willihammer]

 

well supposedly, a lot of those Mexican car plants are to build the smaller cars at a better price point, or so the official word is. The big thing, I suspect, with Trump is that if he has his way, imports are going to get more expensive while taxes on exports (which according to Trump is something we do) will hopefully drop.

 

The other note is he's been kind of trashing the dollar a bit.  Inflation is already creeping back into the market and the dollar is dropping, all of which will likely benefit exporters in the short term.  Companies that are heavily dependent on exports might get a nice bounce, even if the market takes a hit. It still looks like a major top is forming, so a 10-15% correction in the market in the next few months is another very real possibility. 

The tools available to Trump present a lot of complicated conflicts and tradeoffs. He pretty clearly doesn't understand all of the possible consequences. Plus no matter what he does, the Fed and other central banks will react to keep their currencies and inflation in check. If he and Congress do pass a huge import tax, for example, there *should* be upward pressure on the dollar to compensate for that. He's way out of his depth.

[diehardtwinsfan]

 

Trying to convince my wife that we should reconsider not buying a house ever again (even though that was/is my idea). Prices continue to skyrocket here, and interest rates are going to go up for sure.....

 

OTOH, I really don't want to own a house....and holy cow it's expensive here.

 

You're in Portland, right?  I was looking at relocating that way prior to 2008 and it was bad. Even after that, I'd think housing has caught up.

[diehardtwinsfan]

 

 

 

At first, we considered selling this house and upgrading to another house either on Victory Memorial Parkway or in Bryn Mawr but I doubt that will happen now. The allure of being mortgage-free in 5-6 years is too appealing to resist, I think. Instead, we'll just continue to upgrade this house. We have some additional room to expand in the basement so I doubt we'll outgrow this place, provided we stay somewhat frugal with our desire to buy all the stuffs.

 

Honestly, this is something people need to understand. On your standard 30 year fixed mortgage, you'll pay the price of the house in interest over the course of that loan. I get the need to live somewhere, and that a mortgage payment is cheaper than rent (or can be at least), but as soon as people get more stable they want to upgrade... banks of course want to loan you out about as much as you can possibly pay, leaving little room for everything else. Kudos.

 

 

As to Mike's comments on housing, I lost money in 2008. That also leads to opportunity if you have cash. I picked up a 3 bed rental property for 10k at auction around 2010. Paid a couple more K to fix it up and I've been renting it at 600/mo ever since. It's paid for itself and then some. My current place in Indy was at the exact bottom of the market. I got lucky there as timing is everything.

 

If you're concerned about buying and have cash, I'd wait until rates rise. Prices will drop when that happens and you can get a better price point. 

[diehardtwinsfan]

 

The tools available to Trump present a lot of complicated conflicts and tradeoffs. He pretty clearly doesn't understand all of the possible consequences. Plus no matter what he does, the Fed and other central banks will react to keep their currencies and inflation in check. If he and Congress do pass a huge import tax, for example, there *should* be upward pressure on the dollar to compensate for that. He's way out of his depth.

 

Well, he's already talked about dumping Yellen (which I agree with, it's her replacement that would concern me). 

 

I waffle on a lot of it. I agree it's complicated and there are tradeoffs. Then again, he's been in the business of international trade his entire life and may know a thing or two about it that I sure don't

 

This protectionism as I see it is going to cause the price of imports to rise. People who rely on them certainly won't like it.  The Walton family in particular is going to be hurt by it. On the other end, it may mean more jobs. He wants to stop outsourcing jobs to other countries. It's hard to argue with that (though I have no idea if it will work), and I'm a bit surprised of the negative reaction here given that this has been a constant talking (and not doing) point of the Democrats for decades now.

[Mike Sixel]

Not every democrat is anti outsourcing, where appropriate......if the rest of the world has no money and no jobs, imo, the unrest is worse. Some of us democrats used to be moderate republicans, when the world was very different....

[Willihammer]

 

Well, he's already talked about dumping Yellen (which I agree with, it's her replacement that would concern me). 

 

I waffle on a lot of it. I agree it's complicated and there are tradeoffs. Then again, he's been in the business of international trade his entire life and may know a thing or two about it that I sure don't

 

This protectionism as I see it is going to cause the price of imports to rise. People who rely on them certainly won't like it.  The Walton family in particular is going to be hurt by it. On the other end, it may mean more jobs. He wants to stop outsourcing jobs to other countries. It's hard to argue with that (though I have no idea if it will work), and I'm a bit surprised of the negative reaction here given that this has been a constant talking (and not doing) point of the Democrats for decades now.

I think Trump understands that a weak yuan and a strong dollar have been bad for US exporters. I don't think he understands much beyond that, either with forex markets, the Fed, deficits, or anything else economically speaking.

 

Like, he says Yellen created a bubble in the stock market. What does he want to do? Repeal Dodd-Frank.

 

He wants to rack up deficits because hey, money's cheap. But if he weakened the dollar, debt would get more expensive.

 

He wants China to free float its currency, but if it did that now, it would probably tank.

 

Etc. etc.

[diehardtwinsfan]

 

I think Trump understands that a weak yuan and a strong dollar have been bad for US exporters. I don't think he understands much beyond that, either with forex markets, the Fed, deficits, or anything else economically speaking.

 

Like, he says Yellen created a bubble in the stock market. What does he want to do? Repeal Dodd-Frank.

 

He wants to rack up deficits because hey, money's cheap. But if he weakened the dollar, debt would get more expensive.

 

He wants China to free float its currency, but if it did that now, it would probably tank.

 

Etc. etc.

 

I'm not disagreeing to be clear. It's a tough boat to be in. Things need to change and the Dem/Rep establishment wasn't  going to do it. I didn't vote for Trump, but I'm not going to argue thus far that he has no problems destroying sacred cows or upsetting the apple cart. To an extent, that's badly needed. I'm not quite sure he's as economically illiterate as you think. He's a billionaire real estate developer and has done so on a global scale. I think he knows a thing or two about things that happen behind the scenes.  The real question is whether or not he's draining the swamp or creating a new one.

 

I don't know about Dodd-Frank that much, so I don't know if that's responsible for said bubble or not, but the Fed has been creating Bubbles for some time.  The real estate bubble was largely engineered there, and you can argue some Fed responsibility in the dot com and current market bubbles as well. The worst might be the government bond bubble.  Look out when that one pops as there isn't enough money on the planet to fix that one.  I'm not sure if Trump is going to fix this stuff or quite possibly just accelerate the outcomes.

 

Personally, I'd like to see Glass-Steagle brought back. I know Trump talked about that one on the campaign trail.  That would be a nice start. Wall Street would hate it though.

[Brock Beauchamp]

 

Honestly, this is something people need to understand. On your standard 30 year fixed mortgage, you'll pay the price of the house in interest over the course of that loan. I get the need to live somewhere, and that a mortgage payment is cheaper than rent (or can be at least), but as soon as people get more stable they want to upgrade... banks of course want to loan you out about as much as you can possibly pay, leaving little room for everything else. Kudos.

Yeah, initially my wife wanted to look at a 30 year loan and after about five minutes on a calculator, I said "nopenopenope" and we decided to go with an affordable house on a 15 year loan.

 

Not only does it mean I pay about 60% of the interest of a 30 year, we got a .75% lower rate than a 30 year fixed. We're five years into the loan and last year, interest consumed just 17% of our payments. The other 83% went straight to principal (excluding taxes from those numbers, of course).

[Willihammer]

I'm looking at buying more CAKE before their Q4 earnings call on 2/22. Made a nice little gain when they beat expectations in Q3 with $.70 / share. Q4 consensus is only $0.672 so I'm thinking they should have no trouble meeting that, and could beat it again. Its not a flashy stock but they have good fundamentals, happy employees and anecdotally I know its really hard to get a table at their Edina location so I'm hopeful sales will be strong again. And, they do most business domestically so I'm also hopeful they'll be protected from Trump's trade craziness.

[Brock Beauchamp]

Well, I'm glad I waited out Apple. Their shares jumped over 6% after yesterday's report and I just sold half my shares (35).

 

Reinvested the money into AT&T (dividends, mainly), Microsoft (modest dividend and more growth than Apple, IMO), and Square (wanted to aim for a riskier growth stock with the remaining money).

[Mike Sixel]

As a small business owner, I'd not bet the farm on square, we get approached by competitors every week almost.....

[Brock Beauchamp]

 

As a small business owner, I'd not bet the farm on square, we get approached by competitors every week almost.....

Not even close to betting the farm on them. I have right around $2k into them and my initial $1k investment was bought around $10/share so I'm already up quite a bit on that investment.

 

I don't think they'll be a huge growth stock but they have the potential to become a fixture in the small business market. Not only are their point of sale systems better than most of the competition, their lending programs are pretty great.

 

If Square ever decides to move in this direction, they could decimate the restaurant business with a few software updates. I've set up traditional POS systems in restaurants. It's absurd what they cost to install, how outdated the hardware is out of the box, and how unnecessarily complex all of it is. A $15k restaurant system could be replaced with $5k of hardware and Square. All Square needs to do is change how they control communication between devices and add more complex printing options, really.

[Mike Sixel]

 

Not even close to betting the farm on them. I have right around $2k into them and my initial $1k investment was bought around $10/share so I'm already up quite a bit on that investment.

 

I don't think they'll be a huge growth stock but they have the potential to become a fixture in the small business market. Not only are their point of sale systems better than most of the competition, their lending programs are pretty great.

 

If Square ever decides to move in this direction, they could decimate the restaurant business with a few software updates. I've set up traditional POS systems in restaurants. It's absurd what they cost to install, how outdated the hardware is out of the box, and how unnecessarily complex all of it is. A $15k restaurant system could be replaced with $5k of hardware and Square. All Square needs to do is change how they control communication between devices and add more complex printing options, really.

 

Oh, well, the POS systems are definitely PoS.....and if they go there, I agree, they can make money. 

Edited February 1, 2017 by Mike Sixel

[DaveW]

Brock: Buy. Bitcoin.

[Mike Sixel]

You type that, and I type shopify .....someday they'll listen, Dave.

[Brock Beauchamp]

Hey, it's not like anyone listened to me when I screamed "Buy Facebook and T-Mobile!"

 

Or when I hung in there with Netflix.

[Mike Sixel]

 

Hey, it's not like anyone listened to me when I screamed "Buy Facebook and T-Mobile!"

 

Or when I hung in there with Netflix.

 

It is true, I dropped NFLX for NVIDA, which tripled in price last year....

 

edit: bragging while I can, since I usually suck at this.

Edited February 2, 2017 by Mike Sixel

[Mike Sixel]

Dave, how do you invest in bitcoin? I'm looking at gbtc, for example....

[Vanimal46]

Anyone looking to invest in SnapChat when it goes public?

http://money.cnn.com/2017/02/02/technology/snapchat-ipo-filing/index.html

[Mike Sixel]

 

Anyone looking to invest in SnapChat when it goes public?

http://money.cnn.com/2017/02/02/technology/snapchat-ipo-filing/index.html

 

Not me, but I can see why someone would want to. 

[Vanimal46]

SnapChat is uber popular with my generation and younger.... And most have stuck with them while others tried to copy their model like Instagram and Facebook. It does scare me that they have an issue making money and don't really have a plan to generate more revenues.