Fool’s gold

I was working in the stock market in 2001 when the dot com bomb took place. Back then people were saying you just couldn’t lose in the stock market. Then the worm turned and it was ugly. A friend of mine had a client who was heavily invested in Level 3. He was a minor executive and a true believer. He had all of his money in Level 3 stock and had margined it to build a house. He rode Level 3 all the way into the ground, and then they let him go. The talk on the street was buy precious metals. Gold was $300 an ounce. I thought it was a questionable investment strategy. Could I have predicted that terrorist would destroy the very building I had worked in that May? Could I have predicted that our government would spend what it has spent (rather than what it has) to not catch the guys who did this? Could I have predicted we would invade Iraq and be stuck there for now four years, probably much longer? Could I have predicted the mortgage meltdown, the foreclosure problem or the credit crunch? No, I couldn’t predict any of that. No one could. So no one could have predicted that gold would be $1010.80 an ounce today. Will it keep going up? Not forever. It will cycle like everything else.

There were some warning signs that the statement “It’ll just keep going up” was not an absolute in the housing market. The housing market has adjusted seriously at the beginning of the last four decades. 1971, 1981, 1991 and 2001? Oops, we missed a year. We kept missing that adjustment for six years. It was not going to keep going up. Business is cyclical. Would real estate continue to be a sound investment? With good investment principles absolutely yes. Those principles include buying in a solid area with a good infrastructure. Buying with a solid down payment allowing for a reasonable cash flow after five to seven years. Buying with the intent of holding. Flipping, while exciting is just as dangerous as day trading. If you’re a thrillseeker and can afford to monitor the market like that…knock yourself out. The average investor doesn’t have that sort of time. So it’s important to find a home that’s right for your family. It doesn’t matter what the market is doing, if the house works for your family and the principles are in place, your investment will be sound. In 1991 a lot of people bought at the top of the market. The market plunged and many walked away. The ones who toughed it out, found that in 1998 they had made up all the money they lost in the early 1990’s and then some. So choose for your family and the rest will follow.

Morning buzz

I stopped by Navlet’s in Pleasant Hill on Saturday.  There were two representatives from the Contra Costa Mosquito and Vector Control District working a table.  I stopped by just out of curiousity.  These guys deal with mosquitoes, which equals West Nile Virus, rats and mice, yellow jackets, ticks and bees.  (Bees are the good guys).  I had a friend who worked for them who used to come and pull down the yellow jacket nests for me at my old house.  Once you get them under control, it’s easy to knock them down when they’re little.  It’s the massive nests that are a problem.  I asked them if they were the people you called for dead birds and they gave me the Dead Bird Hotline number.  (1-866-537-BIRD)  Then I asked about squirrels.  I hate squirrels, they torment my dogs, I think that they are just cute rats with bushy tails.  In actuality, they are now seeing West Nile Virus in dead squirrels too and they should be reported as well. 

With the rains coming to an end, it’s time to find all the sitting water around the house and dump it out.  That’s where mosquitos lay their eggs and the larva live.  Besides carrying a plethora of diseases, mosquitos can also infect your dog with heartworm.  They are now seeing cases pretty regularly in this area.  Protect your family and your pets by making your home unwelcoming for mosquitos.

When it rains…

It’s a great time to catch a movie or see an exhibit.  There are a couple of great exhibits in the City right now.  I’m a huge Annie Leibovitz fan.  They have a large exhibit of her work at the Legion of Honor, through May 25th.  Few have photographed more influential people of our era.

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I don’t know if the Queen will be there, I just liked the example.

The San Francisco Museum of Art has an exhibit of the work of Friedlander from 1950 forward going on right now too.  This exhibit runs through May 18th.

And my pick if you just have to get outside this weekend the Kayak Surf Festival in Santa Cruz.

image20.jpgCowabunga baby!

And the tasteless pick of the weekend, a Peter Bogdanovich tribute at the Castro Theatre…fear not, you won’t be sitting through the Last Picture Show or  Paper Moon or What’s up Doc or Mask.  Nope, they’re showing movies that he didn’t even know were still available.  Read all about it here.  He will be there as will Miss Shepherd who will wind up her one woman show this weekend.  Sounds like a hoot.