Archive for May, 2007

Housing market balmed for slow economic growth

Thursday, May 31st, 2007

The housing market is being blamed for the sluggish US economy despite relatively strong consumer spending (strongest in a year). Clearly something is wrong with this picture. Economic growth slows, the value of our homes (for most people their most valuable posession) declines, and we continue spending…

Real estate in Brazil

Tuesday, May 22nd, 2007

Brazil is one of the better real estate markets for foreign investment right now, competing with Germany, Japan, and China according to this article.

This article says that buying real estate in Brazil is not too tough. You’ll need a CPF (taxpayer number) and should hire a real estate attorney to do a title search.

Brazilian real estate has a lot of things going for it. It’s drawing more attention from international investors which should drive prices up. It can be rented out to vacationers since Brazil has a good climate and great culture and scenery. Brazil’s economy in general is looking good.

It would be great to have a vacation home on the beach in Brazil, wouldn’t it? Maybe you could rent it out when you’re not using it and maybe you’ll see real estate prices go up. But you would definitely enjoy that beach…

Taxing private jets more and large airlines less

Wednesday, May 16th, 2007

I just read an interesting article on Bush’s plan to increase taxes on provate jets and decrease them on commercial airliners.

I’m all for paying less tax and have no trouble passing the bill onto corporations, but there are economic concerns, particularly the effect this will have on rural areas which depend on provate jets.

Warren Buffet’s NetJets and similar companies would also be adversely affected. The new taxes for private jets would be substantial:

Under current law, the government collects $2,015 in taxes every time a full Boeing Co. 757-200 jet flies between New York and Florida, according to the Federal Aviation Administration. A General Dynamics Corp. Gulfstream 4 business jet flying a similar route — and requiring the same amount of attention from air-traffic controllers — pays $236, agency figures show.

Under Bush’s plan, the operators of the Boeing jet would pay $1,298, and owners of the Gulfstream would pay $837.

Considering that each jet receives the same attention from air traffic controllers, it makes sense to me. And when I think of people flying around in private jets I don’t think of people who can’t afford to pay a little extra tax. My only concern would be the effects on rural states but I haven’t seen any estimates on that one.

Overpriced and not too overpriced US real estate markets from Forbes

Saturday, May 12th, 2007

Here’s an article on overpriced real estate markets. The authors calculated a P/E ratio for each market involving home prices and rental income. Low affordability, low income growth and a high cost of living are also issues here.

Starting with the most overpriced:

1. San Diego
2. Miami
3. Sacramento
4. San Francisco
5. Washington
6. Honolulu
7. New York
8. Los Angeles
9. Boston
10. San Jose

We also have the least overpriced real estate markets:

1. Charlotte, N.C.
2. Austin
3. Raleigh, N.C.
4. Detroit
5. St. Louis
6. Pittsburgh
7. Orlando
8. Philadelphia
9. Indianapolis
10. El Paso

Keep in mind that these listing don’t necessarily talk about which cities are good real estate investments. The article warns agains investing in Detroit, and I’ve blogged about the same thing here. Philadelphia has economic concerns that are hurting areas outside of Center City. Pittsburgh does look good to many investors, however.

Site about blue chip stock options and other information

Thursday, May 10th, 2007

I’m not an options expert, but I did find an interesting options site for you. Foe example if you look at this page on blue chip stock options, you’ll see they recommend day traders look to the OEX, an index fund designed for day trading the top 100 blue chips at once.

If you’re like me, you’re not sure what to do with this information but if you have time to invest (unlike me) that website does offer “option training education through our stock option trading system.”

The online trading homepage explains a bit more. You can get some free information via email and if you register with them they send you “a complete Pre-Market Alert that provides the trader with all the tools and resources they need to make smart financial option decisions” every trading day.

The sample Pre-Market Alert does contain some technical language so this service seems more appropriate for educated investors who know the jargon. This makes sense since day trading in general is for investors who have been around long enough to talk about pivot points, average true ranges, signal count strength, etc.

Personally I’ll stick to my regular system, which isn’t technical or creative. I buy index funds, including ETFs and trade online with Ameritrade or directly with Vanguard. I’ve never tried options and I’ve never day traded so options day trading is too big a leap for me.

OEX Options does offer a 15 day free trial, but I couldn’t find any more about the “option training education” – perhaps you’re supposed to learn by trial and error (or by reading the reports and recording what you would have done if you had real money at stake).

Still, the site is interesting if you’re ready to experiment and learn. If you have the time to invest why wouldn’t you fo for a free trial. You don’t have to put real money down to see if you can make this system work.

Killadelphia real estate

Monday, May 7th, 2007

The better real estate prices in Philadlphia (compared to declining markets like Vegas and Boston) haven’t reached a lot of neighborhoods outside of Center City. So many philadelphians in these areas live in poverty that a lack of jobs (plus easy access to guns) is being blamed for a quickly increasing murder rate and an unfortunate new nickname, Killadelphia.

Carlyle Asia Growth Group investing $20 million in Korean hagwon

Friday, May 4th, 2007

The Carlyle Group is a global equity fund. A private equity fund, Carlyle Asia Growth Capital Partners III, chose Topia because of all the Korean hagwons (privately owned cram schools that are more numerous than public schools), Topia is the most transparent according to Wayne Tsou (managin director of Carlyle Asia Growth Group).

Topia specializes in English teaching and made about $32 million last year and is expecting 50% groth this year.

This is a summary of a May 4, 2007 JoongAng Daily article by Hwang Young-jin. I’m afraid I don’t have a link for you.

Open skies accord = opportunity for Ryanair and Boeing

Wednesday, May 2nd, 2007

I’ve written before about airline stocks and how outside of index funds I currently don’t own any. I think some like JAL and Korean Air are potentially good investments but even my favorites in the industry carry some risk.

Korean Air gets much higher prices than other airlines since many Koreans are willing to pay more for the service and since once the few less expensive carriers are sold out, Korean travelers have nowhere else to go. They have a good niche; if you want to fly direct from New York to Seoul, you have 2 choices. Korean Air and Asiana.

I don’t know how JAL does it, but they have the best prices and the best service on the New York to Seoul flight. Flight attendants have told me that the flights from Tokyo to New York and then New York to Sao Paolo, Brazil are noramlly full. Full planes ought to indicate good business…

Anyway, this article indicates a major change coming to the airline industry as restrictions on flights between America and Europe will be removed. This should result in lower fares and more competition. But it also means new opportunities for some airlines.

I suspect the big winner here will by Ryanair if they are able to add low-cost transatlantic flights. I can’t imagine these not being extremely popular.

It also looks like Boeing will continue outperforming Airbus thanks the the 787 Dreamliner which is expected to see increased demand due to the new America – Europe routes.