[spdrun]

“Surely You’re Joking, Mr. Feynmann” — actually ghost-written by someone else, but still a pretty fun and interesting read.

[spdrun]

^^^

Maybe at 2009-2010 stock market levels — there’s next to no risk at late 2012/early 2013 levels unless we’re dealing with profoundly stupid investment managers.

Secondly, L.A. is too geographically large to govern efficiently — a split up of L.A. and ability to let the corrupt, inept and overpaid go might actually be a good thing in the long run.

[spdrun]

No way — even a 25% haircut on stocks would just take us back a year. I didn’t see very many local governments (other than those who had been profligately stupid and/or corrupt) folding in 2012-2013.

Not that local BK would be a BAD thing. It would allow cities to let overpaid and/or corrupt employees go without too many consequences.

[spdrun]

Things will likely rebound eventually. On the micro scale, if you understand psychology, you’ll understand that some people will always buy on dips, and any path down (or up) isn’t a straight slope.

So, if the markets fall 3-4% in a week, a leg up of 1-2% is expected, at least for the short term. Macroscopically, even if you get a 20-30% dip, it will eventually rebound. Maybe in a year, maybe in five, maybe in ten. If you’re willing to buy and hold quality stocks, you’ll be OK.

Lastly, not all stocks move with the markets — the right stocks can even be undervalued in the mother of all bull markets.

[spdrun]

10% from peak brings us back to September 2013 on the Dow and October 2013 on the NASDAQ. Basically, a non-event that pension funds should be able to weather.

Remember that the last Dow correction in 2011 was down a bit over 20% before anything happened.

[spdrun]

Exactly — and they’d rather have a 20% correction this year than 50% in 2017. 20% down from the Dow peak of 16,650 would take us to 13,320. NASDAQ would take us from 4,250 to 3,400.

Still very nicely high by historical standards — 13,320 is only 1,000 points off the 2007 peak. 3,400 on NASDAQ is higher than 2007, higher than any time from the dot.bomb crash till May 2013, in fact!

[spdrun]

5% (what we have now), 10%, or even 20% correction is routine when coming off an overheated market. This correction has been engineered by the Fed in the first place, make no mistake. Asset values were getting out of whack with the real economy, and the higher they went, the worse the damage a future correction would do.

Let some water out now, or let half the county be flooded when the dam breaks in a month. If you’re talking about property tax revenues, they’re not a problem nationally, since most states don’t have Prop 13 and taxes are quite often not based on last sale price.

[spdrun]

I’m not loving it, but it was expected. Few things go on forever in one direction.

[spdrun]

^^^

Exactly right. Not really surprising to have another opportunity — dot.bomb to 2008 was about seven years, 2008 to 2015 is another seven.

[spdrun]

Repeat of the tax-credit-driven mini-bubble of 2009-10, with a more dramatic rise (3.5% vs 4.5% interest rates had more of an effect on monthly payment than a max. $8000 credit ever did) and possibly a less dramatic slowdown (owing to the economy being in slightly better shape than in 2010).

[spdrun]

^^^

News at 11 — Main Street has been in a recession (or at least a stagnation) since 2008, whether or not Wall Street chooses to recognise it.

[spdrun]

At the higher end, private education abroad (up to secondary level) is just as good, and less expensive, as in the good ‘ol US of A. One doesn’t need to go to an “American School” in a capital city to get a decent education — in fact, being part of the American ghetto and being poisoned by American prejudices and hangups would likely be harmful.

[spdrun]

From the people I spent time with I could see there would be a lot of pressure to come back to the United States with any future family or live in two countries…I really didn’t have a plan for all that and it seemed potentially complicated with no better matrimonial risk factors than staying here.

If you stayed there, you could have married locally to someone who was comfy with staying, though.

[spdrun]

Still can — if he has that kind of cash and can spend $600k on a house with HOA fees, Mello-Roos, and higher taxes, he can also spend $300k on a condo in a decently run (read: strong finances thus low HOA) complex and the other $300k on 2-3 investment properties within driving distance. Not necessarily 3/2’s in Vegas 😀

He may not get filthy rich doing this in SD, but he won’t have a monthly payment and will have something left over off the side as well.

Other option is a duplex or triplex.

[spdrun]

I’m not talking about Vegas — I have no interest in the place and honestly don’t want to know. I’m talking about the US in general. This is definitely possible in some college towns in PA, for example, some parts of NJ, maybe even in Phoenix or Florida.

(Someone was complaining that average cap rates in a part of FL fell from 11% to 9.5%, poor babies.)

BTW, personally, as far as condos, 1/1’s are probably better than 3/2’s. Harder to find a family than a professional singleton, and if you end up with 2-3 roomies sharing the place, you can end up in the middle of a messy “breakup.”

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