The Investment Thread

[Jimbo]

 

We bought ours for $130K and at one time could have gotten $170K just before the crash, where it dropped to $120K. Now, I could get $200K, if not more. A couple of months ago I mentioned to the wife that if the market starts to drop again, we're selling and cashing in on the profit. I won't make the same mistake twice. She wasn't too happy with the suggestion.

 

Why sell? I never understood that, but i hear people say it. Unless your plan is to sell now, rent or live with a relative, then wait to buy when the next market dip happens. If not, then you’re just selling your 200k house (that was 130) and buying another 200k house (that used to be 130) or buying a 130k house that used to be 100k. Which presumably is less house than you have currently. If the entire market is going up, unless your plan is to NOT buy a new home, your not really gaining anything besides the headache of moving.

 

OK, my bad. I left out that moving to a rental would be needed to make it pay off. That is why she scoffed at the thought. Plus, we are most likely within ten years of retirement, which means selling anyways and retiring to our TBD forever-city.

[wallus]

So is real estate overpriced or really overpriced?

 

I have been itching to pick up another property the last 6 months and just can't find anything decent. I had one opportunity that I just missed and another that would have been good. (I could have bought it for $175,000 less than what it sold for).

 

What are the real estate investors on here seeing out there?

 

I'm not a real estate expert, but I'd have probably moved on this deal...

 

Apparently I'm not either. I caught wind of this before it hit a Realtor and thought they were overpriced by about $100,000 so I passed. They hired a Realtor and got an extra $175,000 over what they wanted when they put the land out on bids. I think part of it was the total cost would have been my highest purchase to date by quite a bit so I was gunshy. Oh well, lesson learned.

[nate82]

 

OK, my bad. I left out that moving to a rental would be needed to make it pay off. That is why she scoffed at the thought. Plus, we are most likely within ten years of retirement, which means selling anyways and retiring to our TBD forever-city.

 

Have you thought about just buying an RV? Cheaper than a home and you have more mobility. Stay in WI during the summer and then AZ or FL in the winter.

 

This is basically what I am thinking if I ever retire. Get an RV and just live everywhere in the US.

[CheezWizHed]

A friend of mine owns several Papa Murphy's pizza stores. They are early/mid-50s and "retired" to AZ a few years ago - still worked the store's finances from AZ during the winter. Just recently, they sold their summer home on a golf course ($1M+?) and live full time in an RV now - AZ in the winter, MN in the summers.

[Baldkin]

Wondering what the Madison folks can tell me about the Madison housing market. I'll be moving (back) there sometime in the next six months, and just about everything I see is either pending or contingent. The only things I see that aren't under contract are either under construction or obviously do not need to sell and are listing a wishful price that would make it worthwhile to sell (as evidenced by the >150 days on the market). Not much even for rentals (and I have no desire to live in an apartment building downtown with a bunch of 20-something Epic employees). Ideally I'd like to be downtown because that's where the office is. There will likely be more inventory in a month or two when the weather gets better, but right now there is not much.

 

I don't think there will be much of a wave of foreclosures, at least not for ownership property. The industries that got crushed by the pandemic (travel/leisure, restaurants, retail, hospitality) have a relatively low percentage of jobs that can support ownership; most jobs in those industries are part-time or low-paying.

 

The market is absolutely nuts in and around Madison, the need for student housing and the explosion of the tech industry has caused a huge housing shortage - people keep buying up homes and renting them - and there's always push back when trying to build any sort of large apartment complexes to help alleviate the crunch.

 

Have two family members who looked for 6 months, one decided to just build a new house, the others are still looking and it's been nearly a year (they are waiting on the "right deal for the right place" They got an apartment in Waunakee instead of staying in the northwoods over the winter because places are up less than a few days usually. It's been that way for over a year now.

[owbc]

The market is absolutely nuts in and around Madison, the need for student housing and the explosion of the tech industry has caused a huge housing shortage - people keep buying up homes and renting them - and there's always push back when trying to build any sort of large apartment complexes to help alleviate the crunch.

 

Have two family members who looked for 6 months, one decided to just build a new house, the others are still looking and it's been nearly a year (they are waiting on the "right deal for the right place" They got an apartment in Waunakee instead of staying in the northwoods over the winter because places are up less than a few days usually. It's been that way for over a year now.

 

There are about 25 other 'hot' cities in the US that are going through the same thing as Madison and the story is always the same--huge pushback whenever any new development is proposed. Only a small percentage of demand gets met within city limits. Development ends up sprawling outward which puts additional pressure on highways/infrastructure to keep up. Lower quality of life for those that have to commute into the city (although COVID has reduced commuting which is a good thing).

 

At this point I think most people in urban planning recognize the downsides of restrictive zoning laws and more cities will follow the lead of Minneapolis in removing single-family zoning. I know I mentioned it earlier in the thread but I am now allowed to build 2 additional units on my lot in Seattle (although not everyone can do this, I'm allowed to because we are a block away from a bus route). My neighbor is putting a unit on top of their garage right now. So maybe that's how some of the housing pressure will get relieved in the long run. We looked into adding a unit but in the end we decided to put the renovation money into the master suite--not the best choice for ROI but certainly the best choice for our comfort.

[LouisEly]

The market is absolutely nuts in and around Madison, the need for student housing and the explosion of the tech industry has caused a huge housing shortage - people keep buying up homes and renting them - and there's always push back when trying to build any sort of large apartment complexes to help alleviate the crunch.

 

Have two family members who looked for 6 months, one decided to just build a new house, the others are still looking and it's been nearly a year (they are waiting on the "right deal for the right place" They got an apartment in Waunakee instead of staying in the northwoods over the winter because places are up less than a few days usually. It's been that way for over a year now.

When I was last in Madison (2012 to late 2015) they were in the midst of adding 5000 apartment units to the city. There certainly wasn't much pushback at that time; mid-rise apartments were going up all over downtown around campus.

 

From what I hear, there are plenty of apartment units available in the city but they overbuilt on small 1-bedrooms and there is a big demand for 2-bedrooms. But I am not looking to live in an apartment building with a bunch of 20-somethings. There hasn't been much building of ownership units in the city the last decade.

[Jimbo]

 

OK, my bad. I left out that moving to a rental would be needed to make it pay off. That is why she scoffed at the thought. Plus, we are most likely within ten years of retirement, which means selling anyways and retiring to our TBD forever-city.

 

Have you thought about just buying an RV? Cheaper than a home and you have more mobility. Stay in WI during the summer and then AZ or FL in the winter.

 

This is basically what I am thinking if I ever retire. Get an RV and just live everywhere in the US.

 

Sounds enticing, but doesn't match my personality. I enjoy exploring new places, but eventually need to return to a home base.

[GAME05]

Through my job I've known a few couples who managed to RV long-term, but it's very few. And a good-sized RV can be really expensive, too. And if you're thinking of camp-hosting in National Parks, get on that waiting list about 10 years in advance. I was told by a long-term RV couple that the key is to get a hobby or other regular activity and leave for good periods of the day.

[GAME05]

Oof. I'm down 11% yesterday and -13% so far today. BNGO got downgraded and that cost me. And then Elon Musk opens his big mouth and says crypto is high-priced.

[thebruce44]

Oh yeah, I'm down over 25% on my crypto portfolio, but about break even for the week. Fun times.

[superfly]

Started buying some Redfin today in the mid $80s. Hoping for a dump on earnings tomorrow to add more. HODLing

[homer]

If you didn't ditch your GME, you made some money back today.

[GAME05]

Sure glad I at least took some money out a few weeks ago to pay bills. Because yikes.

 

Pro-crypto folks are racing to point out that this drop is identical the the one that happened four years ago before it all really raced up in value. For whatever reason crypto is supposed to be on a four-year cycle, but still, all I could think watching those videos is "So you're telling me that past performance is indicative of future results?"

[thebruce44]

Sure glad I at least took some money out a few weeks ago to pay bills. Because yikes.

 

Pro-crypto folks are racing to point out that this drop is identical the the one that happened four years ago before it all really raced up in value. For whatever reason crypto is supposed to be on a four-year cycle, but still, all I could think watching those videos is "So you're telling me that past performance is indicative of future results?"

 

I haven't seen that. Rather I've seen people saying, myself included, this correction is similar to corrections that took place throughout the last run up in 2017 and is similar to a couple that have happened this cycle. I suspect we will have 1 or 2 more before the peak. ETH is 15% off its ATH and is actually up 6.25% for the last 30 days. In the last 3 months it is up 190%.

 

I actually just bought more since I finally got my Q4 2020 bonus. Hopefully back into price discovery in the next week or two.

[GAME05]

Sounds like we're talking about the same basic thing. This is the video which refers to it and that similar past correction:

 

Though I'm kinda souring on that channel as it's a lot of "100x gains!" and "parabolic" and such. And I think largely he pushes whatever new crypto daily because he's already purchased it and his viewers will give it that little bump. I've considered buying whatever he says, taking that little bump and then selling the next day, but it requires buying stuff not for sale on Coinbase and storage gets more complicated off that site.

 

I have a blockchain ETF that I bought at the exact wrong time, and have the Grayscale etherium ETF, but I'll have to compare Grayscale to the regular Coinbase version, as I suspect some of crypto's gains are depressed a little in the Grayscale ETF.

 

Planning on holding onto Vale, a big nickel miner out of Brazil. Mostly waiting on them getting some big contract with an EV company. Despite them recently allowing a dam to break and kill people, they've also been putting a lot of money into environmental standards, and compared to other nickel miners they seem to be the most environmentally friendly miner to capture contracts from EV companies which also want to promote the environmental nature of their product.

 

But crypto otherwise seems to be a good choice if one buys into the idea of coming inflation and a market correction. That or buy the dip in Apple, I guess.

[nodakfan17]

Can someone explain to me what a NFT is?

 

I think I understand, but I’m not sure why someone would pay $200,000 for a short video clip of LeBron James dunking.

[thebruce44]

Can someone explain to me what a NFT is?

 

I think I understand, but I’m not sure why someone would pay $200,000 for a short video clip of LeBron James dunking.

 

I can explain what an NFT is, but I can't explain why someone would pay that much for a video- they are two separate discussions.

 

NFT stands for Non-fungible Token. Fungible means mutually interchangeable. As an example, a Bitcoin is fungible. If you have a Bitcoin and I have a bitcoin, we could exchange them and each still have the same value. We could also break our Bitcoin down- I could sell you half of my Bitcoin for an agreed upon price.

 

NFTs code the token to remove those capabilities. Maybe I am not wording that right, but the way I think about it is that I could say "this one particular Bitcoin is equal to my car. It digitally represents my car." I could transfer that Bitcoin to you and it would convey transfer of ownership. Anyone in the world would be able to look on the blockchain and see that you now own that car. Of course, everyone has to agree to this system of ownership- but that is similar to how a paper deed or pink slip also conveys ownership even though it is just a paper.

 

So here is where NFTs get interesting and potentially disruptive. You can now transfer ownership in a much more efficient, decentralized, and secure fashion that previously possible. I hate buying concert tickets from Ticketmaster. $60 tickets end up costing $100 with a variety of markups. So someone could build a decentralized ticket exchange market. In fact, a band could issue their tickets through the decentralized exchange and put parameters on those tickets on how they can be purchased and transferred.

 

As to why someone would pay x amount for something- tokenizing something does create scarcity. Someone has decided that a video or some digital art is worth paying x amount, and so that is what it is selling for.

[nodakfan17]

I appreciate that explanation!

 

It’s helpful to understand the practical implications (like event tickets with significantly lower fees). Paying thousands for ‘limited edition’ video clips was not resonating with me.

[thebruce44]

I appreciate that explanation!

 

It’s helpful to understand the practical implications (like event tickets with significantly lower fees). Paying thousands for ‘limited edition’ video clips was not resonating with me.

 

No worries, I'm by no means an expert. This new craze is going to result in lots of new use cases and ultimately money coming into the crypto world. I thought this cycle would be driven mostly by decentralized finance, but if NFTs do it, that works too.

[thebruce44]

Sounds like we're talking about the same basic thing. This is the video which refers to it and that similar past correction:

 

Though I'm kinda souring on that channel as it's a lot of "100x gains!" and "parabolic" and such. And I think largely he pushes whatever new crypto daily because he's already purchased it and his viewers will give it that little bump. I've considered buying whatever he says, taking that little bump and then selling the next day, but it requires buying stuff not for sale on Coinbase and storage gets more complicated off that site.

 

I have a blockchain ETF that I bought at the exact wrong time, and have the Grayscale etherium ETF, but I'll have to compare Grayscale to the regular Coinbase version, as I suspect some of crypto's gains are depressed a little in the Grayscale ETF.

 

Planning on holding onto Vale, a big nickel miner out of Brazil. Mostly waiting on them getting some big contract with an EV company. Despite them recently allowing a dam to break and kill people, they've also been putting a lot of money into environmental standards, and compared to other nickel miners they seem to be the most environmentally friendly miner to capture contracts from EV companies which also want to promote the environmental nature of their product.

 

But crypto otherwise seems to be a good choice if one buys into the idea of coming inflation and a market correction. That or buy the dip in Apple, I guess.

 

I've litterally never watched a Youtube video on Crypto investing. I don't think I will be changing that anytime soon. Here is a copy and paste of the best advice I have seen on Reddit:

 

Timing the market is very hard. Do your best to DCA and not worry about entry price.

 

If you're investing because you believe in the project, you should look to development milestones and your faith that they're achieved. That takes patience and time. If you're investing because you wish to short term trade and turn a profit, it's nearly impossible to have a good understanding of market swings because it often makes no sense on a week to week basis.

[GAME05]

Grayscale has halted the sale of their bitcoin ETF because their shares are tracking at 15% below the value of actual Bitcoin. They haven't stopped their Ethereum yet but it's been about the same.

[GAME05]

Just pulled everything out of Coinbase and will be switching to Binance, but will need a lot of Youtube videos to figure out how Binance works. It also double-deposited, so I'm glad I started with test money.

 

Really hesitate to move things around on Fidelity for my real stocks. I'm really just selling low, as they've mostly all lost the big gains they made from January. But with two more money giveaways along with a likely increase to the corporate tax, I'd like to move into something more recession-resilient or betting on the downward trend. Just what that'll be, I don't know yet.

[nate82]

If you like risk then SPAK maybe something to look into. It is basically an ETF of new technology companies.

 

It is down right now but I think it will increase and should stabilize around $35-40.

[thebruce44]

Just pulled everything out of Coinbase and will be switching to Binance, but will need a lot of Youtube videos to figure out how Binance works. It also double-deposited, so I'm glad I started with test money.

 

Really hesitate to move things around on Fidelity for my real stocks. I'm really just selling low, as they've mostly all lost the big gains they made from January. But with two more money giveaways along with a likely increase to the corporate tax, I'd like to move into something more recession-resilient or betting on the downward trend. Just what that'll be, I don't know yet.

 

Why, what's wrong with Coinbase?