patrick.net

indigenous says

Oh My God!
I thought it was Pepsi.

Strategist says

Things are about to boom, just wait and see.

I make money but there is no boom!
Actually, I am in the running for top 40 under the age of 40 for housing in America for different reasons. People always ask me how are you having your best years now and not the housing bubble years.

Answer is simple.

None of my own clients ever did sup prime purchase loans and only 1 client did a option arm in 2003 and that was an extreme high income net worth buyer

Logan Mohtashami says

Answer is simple.

None of my own clients ever did sup prime purchase loans and only 1 client did a option arm in 2003 and that was an extreme high income net worth buyer

1. Your outlook on US real estate stems from your experiences in OC, which may not always be comparable to the rest of the country.
2. You probably have a large Iranian American clientele, who tend to do much better than the average American.
3. The bubble era had a lot more competition with everyone including grandma scrambling to get a real estate license.
By the way, if you unnecessarily discouraged someone from taking an option arm, you could be doing them and yourself a disservice. Option Arms are perfect for many self employed who have uneven cash flow. My very first home was with an Option Arm loan, and lied through my teeth to get.

Strategist says

1. Your outlook on US real estate stems from your experiences in OC, which may not always be comparable to the rest of the country.

Actually I only talk about national data, I never use my own city or county as reference, this is why you don't here me mention it much on any work that I have done Strategist says

2. You probably have a large Iranian American clientele, who tend to do much better than the average American.

I have zero clients that are Persian

Strategist says

3. The bubble era had a lot more competition with everyone including grandma scrambling to get a real estate license.

Not really on that sense, I just simply refused to do exotic loans on my book, none of my clients have ever had their home foreclosed on

Strategist says

Option Arms are perfect for many self employed who have uneven cash flow. My very first home was with an Option Arm loan, and lied through my teeth to get.

Option arm loans had a 84% default ratio in California it was so bad that every lender had to terminate the loan and offer a 30 year fix

Logan Mohtashami says

Strategist says

Option Arms are perfect for many self employed who have uneven cash flow. My very first home was with an Option Arm loan, and lied through my teeth to get.

Option arm loans had a 84% default ratio in California it was so bad that every lender had to terminate the loan and offer a 30 year fix

Not all, Only Option Arm loans made during the bubble with low downs and trashy credit. I got that home in 1986, which had a start rate of 7.95%. The minimum down was 25%, which my parents helped me with.

Anyway Logan, I'm willing to bet your income will double in the next 3 years. What will you do with all that money?

Strategist says

Not all, Only Option Arm loans made during the bubble with low downs and trashy credit. I got that home in 1986, which had a start rate of 7.95%. The minimum down was 25%, which my parents helped me with.

I was 12 when that loan was done and those days were long gone,
The teaser rate of 1.25% 10% down came .. but even those who put 20% had trouble because they kept on paying the teaser rate

Strategist says

Anyway Logan, I'm willing to bet your income will double in the next 3 years. What will you do with all that money?

Invest each month, never buy another home again and pay down my home as fast as possible.

It's also impossible to triple incomes because the refinance cycle is dead. Let me give you an example

2014 was my best year ever, in the first 30 days of 2015 I got all the production I did in 2014, that was majority of refinances. A 10 year above 2.25% kills almost all refiannces in America barring a cash out or a FHA streamline. That market has ran it's course.

You would need rates to rise much higher have a duration period time and then the next recession have rates come lower.

However, we are still at Emergency Interest rate policy today and the 10 year is still below 2% in year 7 of the economic cycle

Logan Mohtashami says

never buy another home again

You just lost your invite to the NAR convention.

Strategist says

never buy another home again

2 Bedroom Condo enough for 2 people with no kids

There is a Dunkin Donuts now in the O.C.

The lines are crazy for this so I am looking at it as an investment idea

EPS 1.67
Div Yield 2.15%
Trailing 12 month 29.74%

Next leg up on west coast expansion

Logan Mohtashami says

Div Yield 2.15%

No

indigenous says

Div Yield 2.15%

No

No? 0.265 quarterly div.

No to anything below 4%

indigenous says

No to anything below 4%

ok, now I understand

Logan Mohtashami says

The lines are crazy for this so I am looking at it as an investment idea

Did you forget Krispy Cream lines in the late 90s and early 2000s? Southern Cal is the ultimate fad destination. That did not pan out so well when they expanded too fast.

I think that Krispy Cream is way better to Dunkin Donuts which is kind of like a bad McDonalds.

tr6 says

Did you forget Krispy Cream lines in the late 90s and early 2000s? Southern Cal is the ultimate fad destination.

Those are 2 different companies, KK was small and over valued when it came public, DD is more established and 3 year run is more in line with reality. I never thought of it as an investment idea until I saw this store open up

Call it Crazy says

Logan Mohtashami says

The lines are crazy for this so I am looking at it as an investment idea

Do it!! D.D. kicks butt to any other coffee/ doughnut place out here in the East.

If you eat enough of those donuts you will kick the bucket.

Logan Mohtashami says

indigenous says

No to anything below 4%

ok, now I understand

No to donuts.

Strategist says

No to donuts.

It is spelled know your donuts, Krispy Kreme taste better. But they over saturated the market and they lost their novelty.

Strategist says

No to donuts.

70% of what I eat in my life since 1996 are protein shakes, I do allow myself to get all food on the weekends.
DD
Coffee, I liked
Donuts, not as good as my local place. However, I'm not a donut guy so I'm not an expert on this
Food items, good enough, but not good enough to wait 20 minutes for.

DAXK doing well this year,

bgamall4 says

Looks like that model could fail if the ECB buys all the debt.

Italian economic numbers look dreadful. One thing I noticed when Italian 10 year debt got to 6% Germany felt compelled to play nice. I don't believe they really fear Greece but don't want Italy or Spain to follow in their footsteps

Logan Mohtashami says

DD is more established and 3 year run is more in line with reality

DNKN - market cap. 4.8B on on 750M in sales = 6.4 ratio. That's pretty high valuation even in comparison to Starbucks which is 72B valuation on 16B in sales. = 4.5 ratio.

DNKN has 1.8B in debt. Why? Starbucks debt is only 2B as well.

tr6 says

DNKN - market cap. 4.8B on on 750M in sales = 6.4 ratio. That's pretty high valuation even in comparison to Starbucks which is 72B valuation on 16B in sales. = 4.5 ratio.

DNKN has 1.8B in debt. Why? Starbucks debt is only 2B as well.

So the 2 1/2 year run was not justified? My only thing that I am trying to get is that if this expansion does happen and it has legs since the 3 year run in the stock price is adjusting it self would it be enough to get another leg up from here into the 60's since it's early in there expansion plan

So does this mean that you have a banded your thesis that the actions doesn't impact an economic cycle?

Logan Mohtashami says

tr6 says

DNKN - market cap. 4.8B on on 750M in sales = 6.4 ratio. That's pretty high valuation even in comparison to Starbucks which is 72B valuation on 16B in sales. = 4.5 ratio.

DNKN has 1.8B in debt. Why? Starbucks debt is only 2B as well.

So the 2 1/2 year run was not justified? My only thing that I am trying to get is that if this expansion does happen and it has legs since the 3 year run in the stock price is adjusting it self would it be enough to get another leg up from here into the 60's since it's early in there expansion plan

But why Dunkin Donuts? I agree they taste good, the coffee is good, but why a product that the younger generations shun? It's not gonna be the next Chipotle.
I would like to see some demographics on who eats the most donuts.

Strategist says

But why Dunkin Donuts?

lack of west coast expansion, legs for a move to the 60's on the stock, I believe this is just there first run out here

bgamall4 says

So, Logan, what is your opinion about the shortage of treasuries? How does that impact your economic forecasting or was this a secret that should not be revealed to the masses?

The 10 year breaks 2.25% and has follow through we could test up the range scale of 2.45% then 2.66% then 3.04%
If the 10 year can break under 1.60% we can see all time low in this cycle print of 1.34%

Liquidity is being talked about now

bgamall4 says

Ok so what is the impact of lack of liquidity?

From my eyes I see a lack of faith in bond yields really rising. Once the Fed starts raising rates I will keep an eye on this topic.

However, for now only my key numbers
2.25%
1.87%
1.64%

bgamall4 says

Strategist says

So a doubling of the total debt is no big deal. With the super low rates, it could be argued that total debt today is more affordable than in 2000.


Basically, all or most of the money printing has been absorbed by the economy.

The achilles heal to all this is a lack of pristine collateral, ie Treasury bonds. They are necessary to making the deals. I am interested how the lack of liquidity, ie the shortage of treasuries, will affect treasury bonds. My thinking is that it will drive down the yields. But I am open to other opinions.

What the hell are you talking about?
There is an excess of liquidity, and lots of Treasury Bonds. Why do you think the rates are close to zero?

`The velocity of money?

indigenous says

`The velocity of money?

OK. That would indicate even more liquidity than we need.

No the money is not going any where, so we do not have an excess of liquidity.

Strategist says

The GDP has almost doubled since then too. (80%)

So a doubling of the total debt is no big deal. With the super low rates, it could be argued that total debt today is more affordable than in 2000

In 2000, the GDP was 10.15T and debt was 5.65T
In 2014, the GDP was 17.25T and debt was 17,8T

I believe that nominally debt is still growing faster than GDP.

The debt game on the federal side of the equation is over gentlemen.
Demographics have taken their hold and after 2022 we will have an expanded debt profile for 30 years after that and since so much of it is mandatory any recession from 2022-2052 will just make the nominal number bigger

I don't see this as much as a concern as others because I believe all government debt is just a ponzi scam so we will get A plus status in the bond market because we have the biggest economy and biggest military

Rates can stay low for a long time as history has shown us

Logan Mohtashami says

The debt game on the federal side of the equation is over gentlemen.

Demographics have taken their hold and after 2022 we will have an expanded debt profile for 30 years after that and since so much of it is mandatory any recession from 2022-2052 will just make the nominal number bigger

I read this is going to become acute at 2030. But that it will be over in about 2040.

The interest rates cannot stay low if inflation gets overheated.

The real problem is that government did not let the market reset.

Even with interest rates low there is no business investment primarily because of the above.

indigenous says

I read this is going to become acute at 2030

Right now if everything stays constant, by 2024-2027 time frame, all mandatory payments will exceed government revenue basing it on a 3% GDP model

The laws math are just taking hold, I remember thinking back in the late 1990's how these optimistic predictions weren't going to come true but then we always have to
add the factor model of politics into the equation.

With that I don't believe we will ever see any meaningful entitlement reform nor any major increases in taxes in general. Certainly the Bush Middle class tax cuts will stay put for a very long time.

It is what it is. I try to sympathize with the MMT crowd but the way the explain currency model borrowing just won't take hold to the general public. They need a more charismatic spokesperson to try to explain their thesis

Logan Mohtashami says

It is what it is. I try to sympathize with the MMT crowd but the way the explain currency model borrowing just won't take hold to the general public. They need a more charismatic spokesperson to try to explain their thesis

Yup, the MMTs in large part are responsible because of the floating exchange rate and targeted 2-3% inflation started by Nixon.

But it is irrelevant because it really is just a case of tyranny by the majority.