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Archive for January, 2009

25 random things

Recently on Facebook there has been an application running around where people post 25 random things that you may not know about them.  I’m not going to post my list here but I will comment a bit on the concept.

What happens is you write 25 things and then you tag 20-25 of your friends with the idea that they will also write something.  Somebody tagged me so I figured I’d do my own list.  I tagged 20 other people but then removed the tags because I thought twice about forwarding chain mail.  As a spam analyst, it made me feel dirty.  Removing the tags made me feel clean.

I really like reading lists like these about other people.  I will usually read through each person’s list a couple of times and try to make mental notes about some of the line items.  They are definitely things I never would have known about them and learning interesting tidbits about others is a hobby of mine.  Maybe I can bring it up in a conversation and allude to it later on, or maybe I can ask them about an experience that was particularly important about it.

So rest assured, if you’re on Facebook and you make one of these lists, I will read it.  And remember it.

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With regards to my currently empty condo, all sorts of people keep giving me free advice.  It’s been sitting empty for a while now, and everyone has solutions for me:

  1. Move into it myself.  This is the most common one, I should move into it myself and live there for a few years.  Furthermore, I should take in a roommate and save money (so that I can buy a nicer place later on).

    As I have explained on this blog over and over and over again, I am not going to this except as a last resort.  I started investing in real estate in order to learn how to invest in real estate.  If I move into the place, how does that bring me closer to achieving my goal?  It just means I’m living in a place that I bought.  Furthermore, it’s in a location that had I decided to buy a place for myself, it wouldn’t have been my first choice.  That’s another piece of advice people give me (unsolicited advice, of course) – I should have bought the place such that I would want to move in there.

    So assuming I did move in, like I explain, I am still not being a real estate investor.  I’m just a homeowner.  The idea was to start a real estate investing business and have it produce passive income.  That goal is not going to pan out, it’s kind of like the US going into Iraq and not finding WMDs so they shifted the focus to spreading freedom and democracy in the middle east.  I would still have to eventually find another place to invest in which would bring me closer to my goal of producing passive income.  I admit that I made some mistakes by paying too much for this place, but moving into it myself is only a fail-safe backup plan.

  2. Take in a roommate.  Uh, no.  I like living on my own.  It’s private, I can watch TV as late as I want and other than the idiot neighbors living beneath me, it’s quiet.  I don’t have to worry about anyone else and living alone is nice (perhaps that explains why I am single?  Hmm…).  As I have said to others, if I were to get someone else to live it, it’d be a cat.  They’re quiet and create only small messes.  And they don’t whine a lot, either (except for my former cat from back in Winnipeg).
  3. Fix it up with tons of little things.  It’s been suggested to me to put in granite counter tops, replace the lights, do a sweeping overhaul… I estimate the cost of that between $5000-$10,000.  For a place where I am charging less than $1000/month, the additional expense of this doesn’t make sense.  If I make $50/month cash flow (which I won’t), it would take me forever to recoup that.  Doesn’t make sense financially.
  4. Cut the rental price.  This one makes the most sense and it comes from my property manager.  If I cut the rental price to $850 per month, I estimate that over the course of a year I would lose a little less than $10,000 (for 2010; for 2009 it would be $7500).  Now, that sounds like a lot, and it is.  But with some of my tax deductions it would be less than that.  The advantage of this is that I can price it in to my costs and figure out the budge.  Yes, it’ll suck but over time with capital appreciation I’ll gradually start making it back.  I think that if I can hang in for a couple of years and absorb the losses, then I can refinance later on and get a lower interest rate.

    I figure I’d have to hold onto it for about 8 years to start making money.  By that time I’d be 38.  But I figure that with this lousy option, at least I’d have a plan that is closer in alignment to my long-term goals – learning how to invest in real estate.

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Markets update

On this blog, I used to post a lot about the stock market.  This is because at the time, I was doing a lot of stock research and I enjoyed putting my thoughts down on cyber-paper.  I’ve been writing about the market since I first started trading in 2004.  Below is a chart of the SP-500:

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The market is in a clear downtrend, but it looks like it may be bottoming.  But I digress, the reason I haven’t been posting about the market is because I haven’t been in the market since September and actively trading since early 2008.  In trading, I have three goals:

  1. Protect capital.
  2. Consistently make money.
  3. Hit the occasional home run.

That first bullet point is the most important one.  I have (had) fairly tight stops and I get out of the stock when it goes against me too far.  But not only that, the current market is very difficult to make money in for me.

Back when I did piles of research, I made some calculations.  During bull markets, the market is up 60% of the time and down 40% of the time.  During bear markets, the reverse is not true.  The market is up 45% of the time and down 55% of the time.  In other words, the market is choppier and less predictable.  It is much easier to make money during a bull market because the historical patterns work better.  In bear markets, they don’t work as well and getting into positions is more difficult in terms of timing and the jerky market motions shake me out.

Worse still, the current market is extremely volatile.  The market moved 15% in two weeks.  It used to be unusual to move 15% in a year.  Furthermore, 5% swings are not unusual these days and violent contramovements are the norm.  The market doesn’t trend very nicely and whipsaws are to be expected.  The market is not conforming to historical market conditions and therefore any research I may have done in the past to make money in a bear market is not reliable.

Thus, the volatility and unpredictability of the current market environment makes it too difficult for me to achieve goal number 1.  Thus, I have opted to stay out of the market until stops acting crazy.

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As I reflect on my upcoming dance performance next month, I thought I’d reflect a bit on my choice of dance.

I didn’t pick the dance I wanted to do and then select the music.  Instead, I selected the music and then figured out what dance would fit with it.  Many of the people down at the dance studio recognize the music as the soundtrack from my Dancing at Microsoft video.  They initially think that the reason I want this music is because I work at Microsoft and I’d like to translate the experience over to an actual performance.  That’s not the reason; in fact, I wasn’t even planning on using that song from my Microsoft video.  It was actually my backup song.  That video had no influence on my decision.

No, the reason I selected that song goes much deeper than that.  For you see, nearly three years ago I stumbled across the website http://www.wherethehellismatt.com.  It’s a site where a guy by the name of Matt Harding made a video where he traveled around the world doing a goofy dance (if you go to that site, it’s his 2005 video).  I thought it was one of the best videos I had ever seen on the web and I really, really enjoyed it.

Later that year, I planned my own trip to Australia and Fiji.  I thought to myself "Hey, I should make my own funny dancing video!"  And so I did.  On my tour, I got various people on my tour to shoot a video of me dancing in various locales.  It was a humorous video and it was a video memento of my trip down under.  And, it’s also the trip that inspired me to get into actual ballroom dancing.

After I completed the video, I said to myself "That was fun, but one day I’d like to learn to dance for real."  So, the video and the accompanying song is where I first got the idea to learn how to dance.  So, that’s the reason I picked this song to do a performance to — it’s what first got me started in ballroom dancing.  The song has an emotional context for me.  I think it only natural that I select the song from my first dancing video it for my first performance.

That’s what I tell people down at the studio when they ask why I picked the particular dance I am doing (Samba) or the song.  But there’s one more reason I selected it, and I haven’t revealed it to anyone down at the studio.  You, my readers, should feel lucky because unless anyone were to ask me directly I’d probably never say anything.  This isn’t a secret or anything, I just don’t bring it up.

In my Australia video, right near the end of the video there are three clips of me in Fiji.  One is in Malomalo village, and right after that is a clip of me in a river in the Namosi Highlands.  30 minutes after I shot that scene, I had my accident and nearly died. 

In the time since that accident, I have had hip surgery.  I had to take time off from dancing to recover from it and quite frankly, I still haven’t completely recovered.  I still have pain in my hip and I wonder some days whether or not I will ever get better.  But I have decided not to let it keep me back.  For you see, I guess in a way, this performance is kind of like my comeback special.  Consider the irony:

  • I create a video and there is a scene that I associate with nearly dying.
  • I add a soundtrack to the video that has meaning to me.
  • I need to go in for surgery to correct a problem that originally occurred "in" that first video.  I return to dancing (albeit with some discomfort) several weeks later.
  • Rather than letting the results of the incident "in" first video stop me, I take that very soundtrack and perform my first choreographed routine to it.

I kind of feel like it’s my own Hollywood feel-good movie, overcoming odds.  And that is the real reason why I selected this particular song.  It has a particularly special meaning that really has context only to myself.

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I wasn’t going to listen to the inauguration of the 44th President of the United States, Barack Obama.  I cynically said "History making election?  Pfft, you know what’ll be history making… when I get elected president!" because since I am a Canadian citizen, I am ineligible to run for the United States’s highest office.

Yet I went into physical therapy today and they had it tuned on the radio.  I found myself so intrigued that I couldn’t help but listen to the speech.  I have always had an interest in politics, ever since I was 10 years old.  I have no idea whether or not President Obama will be able to accomplish anything that he set out to accomplish, but I wish him nothing but the best of luck and will support him.

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Magic and meaning

One of the themes I sometimes explore during my magic acts is that of fate vs free will.  What is the nature of the future?  What is it about the future that we find so intriguing?  Is it the opportunity for riches and fortune?  Is it the desire to learn our destinies and our attempts to change them?  Or is it simply the fear of the unknown?

What if the future were knowable, how could we go about determining it?  What type of person would be able to peer into the future and then report back on it?  And would reporting the future change it?

These are the themes I like to explore.  If we believe in free will, then the ability to see the future is impossible because while there are a fixed (near-infinite?) number of possible futures, none of them are pre-determined.  By definition, free will means that the future cannot be determined because our choices will change the outcome of what happens next.  Free will requires that our wills be unconstrained from outside sources and a fixed outcome would therefore mean that our wills are, in fact, constrained to an actual outcome rather than merely a selection of possible ones.

But if the future were fixed, then it would be possible to foresee the future.  All one would have to do is peer into it and report back the events.  However, consider the conundrum: would reporting back the events give the people who heard the results the ability to change them?

This is one of my favorite philosophical themes, and it is this theme that every once in a while I like to wrap into the magic that I perform.

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I remember last year, President Bush pushed through Congress and the Senate an approximately $200 billion economic stimulus package.  At the time, many people criticized the move saying it wouldn’t work or do anything to stimulate the economy.  It was not nearly enough money, or it was going to the wrong people in society, or people would only be paying off bills and not spending money in the sectors it was needed, or some other excuse.

The President’s opponents (naturally) were criticizing the move.  Of course, in politics, that’s what you do.  In public, you criticize your opponents but privately you readily agree to spending taxpayer money.  At the time, we all thought that it was a lot of money.  But at the same time, it was a year ago.  It was before every financial company on Wall Street went under.

Now that Senator Barack Obama is about to take office, we’re now talking about an $825 billion stimulus package!  That’s quadruple the original!  I’m starting to get a little concerned about where all this money is coming from, and worse still, where all this money is going.

AIG, Freddie Mac, Fannie Mae, Bear Stearns, Merrill Lynch, Citigroup, and now Bank of America… everyone needs a bailout.  GM and Ford… they need one, too.  Will it ever end?

I remember a few years ago, a friend of mine in the financial industry was telling his views about why investing for the long term was a good idea.  "The Great Depression can never happen again," he said.  "There are mechanisms in place to prevent that."  Now, I don’t think that we’re going to go into a depression.  That sounds too extreme because at its height, there was 25% unemployment during the depression.  However, we are certainly seeing wealth eroded at a rate worse than any we have seen since then.  I think that this market crash is probably worse than the 2000-2003 bear market.  Think that one sucked?  This one is worse.

I have been out of the market in my personal trading account for 4 months.  I haven’t been actively trading for over a year (just buy-and-watch-and-finally-sell).  The markets are just too crazy right now.  We see 5% swings in a single day.  In years past, 5% swings in a month were considered big months.  Eventually, though, the market will finish correcting, things will get back to normal, and I can get back into the market.  I hope it’s soon, I’m starting to get bored.

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