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Deo (won't make the Ronny James Dio comment I swear), what is a good hypothetical mix for a 401k, my company is using Fidelity and they offer about 45 different funds.

Face Reality, now I know why you are so bullish about Bay Area real estates. People tend to generalize according to his surroundings and experience. Since you are an entrepreneur and deal with innovations on a daily basis, it is easy for you to think that the entire Bay Area is full of opportunities.

You are more successful than me at this point and I admire you. However, using your own experience to judge the economic outlook of a region is not necessarily fruitful.

You offer opinion as fact. Bell Labs? Give me a fucking break, Bell Labs hasn't truly existed for 20+ years. Research in the US is done solely at research Universities and guberment labs. Decent research in limited areas, blow me. Your odd statements are wonderful, research comes in two flavors, applied or fundamental. Now research in itself is concerned with the discovery of knowledge, primarily for knowledges sake, applied research is concerned with making more money, therefore, it isn't really research at all. I have found your comments offer no value whatsoever, they are based on your biased outlook and for the large part do not pass any rigor. At least I've got humor value, what the fuck exactly do you bring to the table again? Oh, that's right, encouraging people to face reality, which in your world essentially equates to being a fucking slave.

Sorry to keep ranting, given that I've never posted b4 today. I guess this has just been too cathartic for me. Or maybe it's just all that ex-lax I took. What was it that they called it when Francisco Franco died, el gran destape?

SQT: Right on! All asset classes become over valued, and then they become undervalued. No one investment system works all the time. If people come to believe that have a guaranteed path to riches, they pile in like sheep. Once the bubble pops, they run like hell and abandon the asset to the vultures. Doesn't matter if it is stocks, bonds, real estate, tulip bulbs, or beannie babies. It's as old as dirt. It's never different. The only way to make money in anything long term is to evaluate the fundamentals of an asset class and particular investment opportunity in that asset class. If the numbers don't work, don't buy it. If they do work, jump for joy, but don't bet more than you can afford to lose. RE is a bubble, the bond market is a bubble, and the broad equity market is a bubble.

I personally never rant.

Deo Vindice: excellent post.

Model of Restraints? While the BDSM scene intrigues me, I've never actually modeled restraints.

Note: not investment advice.

No, in my world it means taking some initiative and becoming part of what makes this area unique. Living a passive life waiting for some big crash is “being a fucking slave” (not to mention lazy).

I guess it is good to be optimistic all the time...

There is nothing wrong with passivity. One should attack (be active) only when the conditions are prime.

You have to play the game - be entrepreneurial, invest, take risks, send the wife to work, etc. Sure, luck helps, but it doesn’t tend to favor people who aren’t in the game. Just sitting there collecting even a $100K salary doesn’t cut it here anymore. That’s reality, and you have to face it. How? Either move or work on making more money.

A troll is a troll is a troll, what makes the Bay Area intollerable is money above all else, something you subscribe wholeheartedly to. As far as pearls of wisdom go, how about this one, Universities are very allergic to old PhDs trying to get in - not much hope there. The right way to do it is to get a PhD from a top-notch department when you’re young, get a tenure-track job, get tenure, and then you’re fine as an old-geezer PhD with tenure.

What exactly do Trolls code in again? Let me guess, Bridge++?

FR, if you aren't just some fatty at home swilling MtDew and hoovering doritios, I'd watch the fuck out, because based on your comments which indicate your attitudes, your employee's likely want to kill you.

Money above all else, right? If you aren't willing to work 80+ hrs a week, or can't seem to make 500K a year, Face Reality and move on. Reality is what you make of it asshole and you seem to have a rather bleak one. As far as praying for a crash, I don't believe in a God, as far as "belief" in a crash, doesn't take belief, it's already happening. This area did in fact used to be great, before assholes like you moved in and made it so everyone has to either face reality and make more and more money or move away.

http://tinyurl.com/72j5s

“applied research is concerned with making more money, therefore, it isn’t really research at all.”

I won’t even touch these pearls of wisdom.

Evidently the NSF disagrees with you. Again, kindly shut the fuck up about topics you clearly know nothing about.

Wow, I didn’t realize I was such a mover and shaker. Still, I’m sure “assholes like me” aren’t everywhere, so you should be able to find a place to build your surfing utopia where no one works too hard and there’s a house for everyone (if it is indeed a viable model in today’s global economy).

FR, looks like you really care what people say about you.

Again, why is real estate investing the only way to “take action?” Why are other types of investments considered passive?

Yes. I consider real estate very passive. If you want action, you will be looking at 3-min charts. ;)

"Wow, I didn’t realize I was such a mover and shaker."

Sure you did, or at least that's how you think of yourself. The only reason you've come to this blog is to piss on the little people, because in your world only the peasantry would ever be so silly as to "complain" about this housing situation. After all, they're just jealous because they're not so smart and ingenious as you were to buy real estate before the boom. You're a PhD holding, small business owing elitist cocksucker who thinks the rest of the world needs to "face reality" and be more like you. You have no clue how the real world works outside of your insulated little "reality" of other elitist old boomers.

You have no clue how the real world works outside of your insulated little “reality” of other elitist old boomers.

I love it. Too funny. Won't it be great when every baby boomer who loses his/her ass buying insanely over valued real estate ends up flipping burgers until they're in their late seventies? won't it be great when the baby boomers in the alpha cities like SF, LA, SD, Boston, DC, and Chicago find out that there aren't enough multi-millionaire 35 year olds to buy their McMansions? Won't it be great when the communist states find out that raising taxes to pay for baby boomer rertirement only sends young workers to low tax red states. Oh yeah, Stocks return 12% over the long haul. Yeah, the baby boomers are going to reinvent retirement all right.

LMFAO

I believe in taking the initiative to improve your situation by being more active and working harder IF YOU CAN.

What initiative can I take to lower the housing P/E ratio? Even if I make more money, buying will still be relative unaffordable compared to renting.

Initiative? Try patience. You're going to get the best buying opportunity for Bay Area real estate EVER in 5-7 years. Don't forget to low ball and go after funky properties that the market can't price efficiently. Don't be emotional. It's not a home, it's a house. And make the seller bake YOU cookies.

But whatever you do, please, please, please, do not make the same mistake that I did with home ownership and "Try to make it happen". A wise friend of mine once told me, "Don't pursue wealth. Attract it." The vaginal strategy is definitely the lowest risk and most fun.

SQT,

I have a buddy with a great house in Marin and a Ferrari who made over 700k flipping ocean front houses. I'm sure he'll flip the Marin house too. How did he do it? He low balled on a dozen properties per buy. He found an exploitable market inefficiency. I call it "The rich man's wife is picky" inefficiency. If an owner bought CA ocean front real estate in the '70s or 80's, his cost basis is low. The property was never built with the high end finishes (Brazilian walnut floors, high-end kitchens, marble master suites, etc.). Often times, they did not bother to build the decks that take advantage of the views (like off the Master Suite, for example). Most long time owners don't want to put a penny in it to sell it, much less go through the hassel and delay. So it goes on the market either with decay and blight, or even just the modest trim and finishes that you would find in an apartment complex. Cheap finishes are especially common if the house was built on spec in the 80s. Construction margins are razor thin, so builders can be outrageously cheap and have every incentive to put in the cheapest carpets and trim. If the rich man's wife walks in as sees rot or it looks like her daughter's college apartment, she's out of there. You can forget about the rich man's wife saying, "wow this my oppty to redo the whole thing". The rich man's wife won't, and certainly not for the sake of saving money. Such women burn money as needed. If you were to put in every bit of high end finish you could, she might say, "Wow, you've done such a nice job. It gives me great ideas for when I gut and start over". That I've seen. But people who are truly willing and able to buy high end real estate will flee if the property doesn't live up to their expectations. This is not a theory; my buddy has gotten rich doing it. I plan to do it myself. I even did it once, just not intentionally. HOWEVER: Do not try and catch a falling knife. This market is dangerous. Your time will come, just not for several years. If you jump in, the risk is just too high. Remember Warren Buffet's number one rule of investing, "Don't lose money!"

Deo Vindice

Deo, Deo, Deo,

401K's were, and still are designed for "working" people. Please not the emphasis on working. I'm running a business let's just say for instance, we make cardboard boxes. I don't need my employees trading options, hedging currency bets, doing strips, straddles, butterflies, shorting stocks, covering margin calls and telling me how they are smarter than Ben Bernanke. I want them making and shipping cardboard boxes. If you still don't get it, then we'll call it a "Savings Plan" not a "Git Rich and Git Gone Plan". Every Man a King! We make boxes here people!

401K’s were, and still are designed for “working” people. Please not the emphasis on working. I’m running a business let’s just say for instance, we make cardboard boxes. I don’t need my employees trading options, hedging currency bets, doing strips, straddles, butterflies, shorting stocks, covering margin calls and telling me how they are smarter than Ben Bernanke.

There are IRAs for Futures though. Personally, I have no faith in such retirement accounts. Money that cannot be easily moved overseas and/or converted to another hard foreign currency is not real money.

ppp

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