Rent or Buy?

The Fiscal Times had a short post noting that rents in many large US cities has skyrocketed. Los Angeles had the highest rental burden, with residents spending a staggering 49 percent of monthly income on rent. San Francisco was close behind with 47 percent. Renters paid 45 percent of their income in Miami, and 41 percent in the New York metro area. The post also noted that mortgages now consume only 15% of income. Zillow was cited as the source and while the rent numbers make intuitive sense I would not be surprised if the 15% number might be a little low but who knows. Long time blogging acquaintance James Altucher has for many years been very vocal about why he will never own a house again. Here is one link here and another here to read where he is coming from.  Reasons from those two links include how much money is likely tied up in the down payment, the lack of liquidity and although I did not see it one the two posts I linked to I believe another reason he cites is lack of mobility if you want to take a job somewhere else. Reasons he cites for renting include no maintenance costs (that is up to the landlord), no property tax which he said sometimes goes up fast than inflation and the opportunity to deploy the cash that would have otherwise gone into the down payment. Also embedded in James’ argument against home ownership is that there is no guarantee of price appreciation which is of course correct.   I really enjoy reading James’ commentary even...

Putting Adaptability To Work

My latest for Alpha Baskets is a follow up to a post from a couple of weeks ago about the need to be able to adapt to life circumstances and now in this post, market circumstances. From today’s post; While of course he could turn out to be correct, the line of thinking relies more on the past than I would be comfortable with. I don’t believe there is anything different with the stock market cycle. We are more than six years into a bull market for equities. That bull will end at some point, there will then be a bear market followed by the next bull. Please click though to read the entire post. In Glacier National Park, just a spot along the Going to the Sun Road. Another spot in Glacier where we just pulled over for some scenery. My wife patiently endured a lot of fire related pictures including a visit to the Whitefish Fire...

Investors Don’t Want Their MTV

Last week was very busy including an unrighteous rocking of the media group. The weekly Market Update also looks at a CEO during the week/NASCAR driver on the weekend. From the update; The Wall Street Journal noted that Chinese officials have spent $1.3 trillion, an amount equivalent to 10% of GDP, propping up their stock market. For some perspective that is greater than the $700 billion the US spent on TARP to salvage an economy that is 70% larger than China’s. We would also note that the ASX 200 fell 3.7% on the week which includes a 2.41% drop on Friday which the WSJ reports is the largest one day drop for that market since May, 2012 which is an interesting comment on that market’s volatility or lack thereof. Please click through to read the entire update. The first picture is from the Weeping Wall in Glacier National Park.   The second picture is the Reynolds Creek Fire from the view point of a medical vehicle standing by. And the last one for now is what I thought was a neat sign in Downtown...

A Deceptively Volatile Week

This week’s Market Update is posted at Alpha Baskets and includes the following; The ink may not quite be dry on that bailout for Greece from the IMF. In a shocking development it turns out Greece has a lot of debt. Technically,Greece doesn’t qualify for a bailout but the IMF may be willing to overlook the technicality if it can get “explicit assurances over debt sustainability.” We hope you enjoyed the two week break from thinking about Greece but the country is back on the front burner again. The equity market in Athens reopened for trading Monday after being closed since June with an initial 30% drop but recovered half of that decline as of the US open. Please click through to read the entire update. Lake McDonald at Glacier National Park   Many Glacier at Glacier National...