Posts

August 6, 2018

Global Market Comments
August 6, 2018
Fiat Lux

Featured Trade:
(THE MARKET OUTLOOK FOR THE WEEK AHEAD, or FINDING A NEW GIG),
(FB), (TWTR), (INTC), (NFLX), (AAPL), (AMZN),
(RIGHTSIZING YOUR TRADING)

July 30, 2018

Global Market Comments
July 30, 2018
Fiat Lux

Featured Trade:
(THE MARKET OUTLOOK FOR THE WEEK AHEAD,
or POURING GASOLINE ON THE FIRE),
(MSFT), (AMZN), (FB), (NFLX), (TWTR),
(TESTIMONIAL)

June 11, 2018

Global Market Comments
June 11, 2018
Fiat Lux

Featured Trade:
(LAST CHANCE TO ATTEND THE WEDNESDAY, JUNE 13, 2018, PHILADELPHIA, PA, GLOBAL STRATEGY LUNCHEON),
(THE MARKET OUTLOOK FOR THE WEEK AHEAD, or WELCOME TO THE NEW WORLD ORDER),
(AAPL), (MU), (TWTR),
(I'M HITTING THE ROAD)

San Francisco?s Suffering Renters Take Another Hit

The San Francisco Bay area?s beleaguered renting class moaned again when the social media giant, Twitter (TWTR) finally went public a couple of years ago.

The deal immediately placed $1.82 billion into the pockets of early shareholders, almost all of whom live near the company?s San Francisco headquarters.

This is adding insult to injury to those in the region who are desperately seeking a home. San Francisco already has the most expensive rentals in the country.

The median rent for a modest two-bedroom apartment in a marginal neighborhood with poor access to public transit and no view is $4,500 a month.

Forget about it if you smoke, have a pet, or suffer from a poor credit rating. That compares to $3,150 a month in New York City, $2,300 in Boston, and $2,250 in Los Angeles.

This is just the latest tsunami of cash to hit the city?s torrid real estate market. Since 1998, Apple (AAPL) has created $700 billion in equity for shareholders, while Google (GOOG) has manufactured a further $450 billion.

In 2012 Facebook (FB) joined their ranks with a $100 billion IPO that quickly went sour. What is hoody wearing Mark Zukerberg?s creation worth today? A stunning $339 billion.

The first thing these newly enriched entrepreneurs do is buy a nice big house. This is not just limited to founding technology nerds and geeks wearing hoodies.

During the early start up days of these cash starved companies, shares are handed out to employees in lieu of better pay, all the way down to the secretary level. When they go public, thousands of millionaires are created and not a few billionaires.

Presto! A housing bubble!

Renters are getting creative in dealing with the high prices. Some are doubling up the use of bedrooms. Others rent out their beds during the day to programmers who often prefer working all night, much like hot sheet hotels of old.

Many have moved into the garage and sleep with the business they are trying to develop. Some homeowners with yards are leasing out spaces to pitch tents, while others are taking advantage of new services on the internet that allow them to rent spare rooms by the night.

There is no way of telling how far this will go. The last technology bubble popped when price earnings multiples hit 100. Most established tech firms are now trading in the 11-18 range, so the day of reckoning could be quite a ways off. Rentals could reach the astronomical levels now seen in London and Hong Kong.

In the meantime, I?m thinking of renting out my tool shed in the garden. My agent says that I could get at least $1,000 a month. The alternative is for home seekers to move to Las Vegas, where they can get a larger two bedroom without the need for heating for only $900 a month.

Do you think it is worth the commute?

Rental Ad
Bedroom

The Solar Road Revisited

?The Solar Road Revisited?. Somehow this modernized version of Bob Dylan?s epic folk album doesn?t quite ring true when couched in terms of our hyper accelerating 21st century technology. Perhaps a Millennial bard will improve on this in the future on iTunes, Pandora, and Beats, of course?

Yet, such a futuristic invention has already been created, is raising money through crowdfunding, and even landed a small Federal Highway Administration grant.

We live in an age of exploding technologies. So, when I find some that are especially interesting, offer a potential long term impact on the global economy, or present immediate investment opportunities, I am going to update you in this newsletter.

One common complaint I hear during my road shows is that we are moving into the future so fast, that it is getting increasingly hard to keep up. That is, unless you live within sight of Apple (AAPL), Google (GOOG), Twitter (TWTR), and Facebook (FB) headquarters, which I do. These companies all have venture capital arms, which fund many of these things.

Sandpoint, Idaho based engineers Julie and Scott Brusaw are the founders of Solar Roadways, a tiny engineering company that seeks to convert the American highway system from old fashioned asphalt and concrete to tempered glass and LED?s.

They have raised $2 million through the crowdsourcing website Indiegogo, which saw its amazing videos on the project go viral and attract 15 million views (https://www.indiegogo.com/projects/solar-roadways ).

Caution: conservatives may want to avert their eyes during all of the global warming, anti gasoline, and tree hugging references. But this stuff raises big bucks in California.

What can solar roads do? Obviously, the green hexagonal panels they are made of convert sunlight into electricity, heating roads so they can remain free of ice and snow all year. I could really use that up at Lake Tahoe.

Surplus power can be sold to local utilities to pay for it. Electric cars, like my Tesla Model S-1 (TSLA), can recharge their batteries just by parking on it, as my toothbrush already does in my bathroom.

You can program the LED?s to embed changeable road signs, borders, parking lots, and crosswalks. They can highlight crossing animals (200 deaths a year now in the US), or impending road obstructions.

They can even display layouts for every kind of sport (basketball, tennis, etc). The glass can be cast to give it a better grip than contemporary roads. Highway deaths would plunge, as would insurance costs.

Driving trucks on glass? The material is so strong that it can support the heaviest, or some 62 tons. My question, can handle steel caterpillar tractor treads used in road repair equipment?

Of course, it always comes down to cost with these new technologies, many of which remain pie in the sky forever. Estimates are that these roads cost 50%-300% more than existing ones. Large-scale construction would bring that down through economies of scale via mass production. The design is really quite simple.

The vision is big. It would probably cost over $1 trillion just to pave over the existing 48,000 miles of the interstate highway system. Tens of thousands of blue-collar jobs would be created. It all sounds like a massive public works project would be required, of Rooseveltian, CCC magnitude.

This just gives you a flavor of the incredibly interesting things going on here in the San Francisco Bay area, which I learn about on a daily basis. Check out the site, if only to see the future of start up funding.

You can contribute $5, or just buy a tote bag.

Electric Road

Moose

Solar Road PanelsSomehow, It?s Just Not the Same

?Bob Dylan