INVESTORSERVE

Gen X Collecting -- Mint, Vintage BMX Bikes

So called Generation X certainly had its members who as young lads collected baseball cards or comic books or autographed sports memorabilia, etc much as did there fathers before them.

But this age group also grew up with a lot of new things to watch, new toys to beg Mom/Dad for and even new sports to compete in such as BMX and Skateboarding

Its the nostalgia for these Gen X sports that has had me interested as of late.  The collecting of mint or high-quality copies of the early, ground-breaking BMX hardware designs has become increasingly difficult.

One reason is scarcity.  Though a lot of these BMX bikes and their respective OEM or After-Market parts were manufactured, most were beat to absolute hell by their respective riders/owners.  Then those bikes/parts were understandably neglected and/or tossed out once the young owner gained a driver's license.

Needless to say finding, say a vintage Mongoose BMX bike from the 70s (Note:  see this cool site, vintagemongoose.com for a little more history on the early years of the Mongoose brand) that is in mint condition is near well impossible. There are a few original copies out there but these require considerable restoration.  And even these neglected copies have been going up in value as of late.  

Do I see things like restored 70s era BMX bikes ascending in value from say a few thousand to several tens of thousands in subsequent years?  Depends on the condition, depends on serial numbers, depends on availibility and perhaps even who the previous owner was (a famous competitor, bmx company owner?)  

Same with other items like Mongoose's original MotoMag wheels -- BMW wheels manufactured by the Cragar Automotive Wheel Company in Chatsworth, Ca.  They are cheap now, but I've noticed their design on a lot of modern T-Shirts and Hoodie Sweatshirts as well as Tattoos as of late!   I'd say you'll see appreciation of these items, items under the radar for the average investor who dabbles in collecting.

FINRA Is A Farce

Its a good thing that FINRA or the Financial Industry Regulatory Authority was established in July 1997 through the sage "consolidation of NASD and the member regulation, enforcement and arbitration functions of the NYSE."  

FINRA's establishment more than 12 years ago thankfully protected legions of equity investors who otherwise would have been severely crushed in the market bubbles of the 90s and 00s.  

How did FINRA achieve this?  Simple:  FINRA believed "investor protection begins with education." 

Let's, for example, recall how FINRA took the strong educational stand during the Dot Com run-up between '94-'00? When it said: "Hey investors, these Dot Com companies that the major investment banks have underwritten are entirely profitless, they are taking companies public in a manner entirely unprecedented since the years prior to The Great Depression, it's all a bubble, the Federal Reserve is loosening interest rates under the auspices of a certain horny President and the I-Banks are going Hog Wild!..."  

And let's recall how, as a result of it's criticism of Dotcom public issues,  investors sold off their shares of Pets.com and EToys.com and a hundred others of similar issues until all said companies were delisted from the NASDAQ in 1998.  

Let's also recall the early part of this first decade of the 2000s how FINRA seemingly sat astrode a "great white horse", a veritable Lone Ranger versus the deluge of I-Bank plays in financial instruments built on packages of "liar loans."  

Thankfully FINRA educated us all again this decade, telling us that we the investors of the U.S. shouldn't invest in financial instruments built on loans floated to people who couldn't even verify their own alleged income...

And finally let's recall how FINRA protected us year after year since 1997 against the legions of ultra-sophisticated marauders -- rogue stock brokers -- plaguing investors across the land!

If you haven't figured it out yet, I'm "putting you on" about FINRA in a number of ways:

• In reality, FINRA wasn't started in July 1997.  It was started in July 2007.
• Has FINRA has ever educated anybody on anything?  Oh of course; its "education" of investors started two years ago -- right at the end of a nearly 15 year long string of market bubbles that gutted 401Ks across the country!  Ok but maybe FINRA's forebear, the NASD did a decent job during that 15 year stretch?  Give me a break!
• But here's the best part about FINRA, at least if you work in investment banking: Just like the NASD of old, FINRA indirectly educates the general public that it is effectively a few rogue stock brokers (not bankers) who are the bad guys in the financial community. Right, stock brokers -- ultra-sophisticated guys and gals who are allowed to sell you securities if they have at least a high school education, passed a few relatively lightweight exams (70% on the Series 7 exam and a couple of others), and talked the branch manager of a local brokerage office in to recruiting them from the finance department at the KIA dealership up the road!   

In conclusion, I say FINRA is at best a PR "front" sheltering the U.S. investment banking community.  Call me bi-polar for saying so, especially since I so recently gave Goldman Sachs a pass in the post, "Bucking the Norm Puts you Between a Rock And a Hard-Place."

But the conceptual idiocy of FINRA in light of the present day financial climate is just too obnoxious to let slide-by investorserve.com unnoticed.

   

Money In The New Business Of Education

Ok, so big news is kids are graduating from Harvard and they are not taking jobs in NYC at Morgan Stanley or Goldman Sachs.  No, they are taking teaching jobs of all things.

Are these young people insane?  Have they lost their minds?  They've decided to bypass a life where they can make a fortune and retire at age 37 in favor of a life in which they spend their best years baby-sitting a bunch of Spliff-smoking teens?

"Why their sudden aversion to money?"  you might ask. 

I say these young people don't have any aversion to money, that's for sure.  They are just a bit ahead of the curve when it comes to recognizing where the money's going to be in the future.  

Yeah, believe it or not, you should look at Education. 

Here's why:

1) Unlike the 90s when the Internet "concrete" was still wet and residential connection speeds were generally dial-up slow, today in 2009, fast broadband residential connections are ubiquitous in most mid to large sized urban locales. This very high speed broadband means one can watch high quality video on-line.  It also means one can watch high quality video of live, remote academic lectures on-line.  And one can also utilize high-quality video conferencing to engage in academic question/answer sessions on-line in said lectures.  So effectively, the technology is in place to allow a student to attend graduate school or professional school or practically any type of academic course of study without ever leaving his/her residence. 

2) Traditional go-to-Prep-School, go to Parochial-School, Go-to-Private-College.  All of this has become extremely expensive in the last 20 years.  The cost of post secondary education has, in fact, far out-paced cost of living adjustments.  Frankly, I believe the market is going to be looking for alternatives to paying $50,000 for a year worth half-that at a private college.   

3) On-line education is (theoretically) easily profitable without a lot of monumental technological breakthroughs.  If students want to take a course of study on-line, they pay in advance -- and I'm talking thousands of dollars per credit hour, not "Ohh, I hope these students will be willing to pay $12.95 a month for our service?!"  Also, the overhead involved with the service is surprisingly low; compensate the teachers and professors, make sure you have facilities to use or a bricks & mortar school or university to align with, make sure you have good camera gear and a crew who can do the shoot and start teaching once all your new students have the syllabus. Repeat!

Ok, so maybe there is some money in this new business of education.  Maybe the Harvard youths are in early on something sizable.  

In the next post I will talk about how these education companies will likely take on investment and expand and how they may never see a reason to go-public.     

Bucking the Norm Puts You Between a Rock and a Hard-Place...

I just got through reading an article in Rolling Stone Magazine, by Matt Taibbi, titled "The Great American Bubble Machine."   Here's the link

The piece attempts to support the following theory:   "From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression -- and they're about to do it again."

I say, "hey, if Goldman managed to pull all that off, then good for them. Frankly, i'm glad they did and I hope they 'Keep on Truckin." (To quote a popular phrase and tatoo from the 1970s).  And no I don't own any shares of Goldman or any investments in which Goldman Sachs might have a stake.  

I should, however, also say that I never bought or sold any shares of "tech" stocks or "dotcom" stocks or their derivatives in the 90s.  And I never bough or sold shares of financial instruments created from sub-prime mortgages in the 00s or obtained any "liar-loan"-type mortgages that were so commonly available simultaneously.  And I never made any investments in oil or commodities this decade either. (I can't use youth and lack of financial resources as excuses either -- I was of adult age and working starting in 1993).  

As such, Goldman's alleged nefarious, though likely not entirely illegal, business over the last 15 years was no skin directly off my back.  

But I must also add the following personal insight:  You end up paying a steep, nearly always hidden "price" when you do as I did and stay clear of the financial norms of the day.  You pay in social ridicule.  And you pay in -- I presume - "stress" for losing the potential of (extreme) capital appreciation you may have experienced otherwise.    

Bucking the norm puts you between a rock and a hard-place.  But in the end, you don't look back and wonder how all that capital appreciation you may have achieved suddenly evaporated; you don't look back and second-guess your own judgement.

   

South LA has a Real-Estate Revival, Part 2

Wait, what happened to "Part 1" you might ask?  Well, I didn't write Part 1; Forbes magazine effectively did in their March, 2006 "Boom" piece, Best and Worst Neighborhoods to Buy a Home

I will quote from it in regards to the neighborhood of Watts/Willowbrook, Zip Code 90059: 

"Watts has long struggled with poverty, crime and racial tension. But rising real estate prices around Los Angeles and an influx of artists due to a revitalization program have caused home values to nearly double in the past two years." 

Great, but that was Spring 2006 when median prices in Watts 90059 had spiked to around $384,000 before topping out at near $400,000 in 2007.  Today, late June 2009 they are sitting at $259,000.  

Since prices today have fallen in Watts like most everywhere else in LA, why do I think South LA is in for some kind of Real Estate "Revival" now?  

Because vs. 2006 and probably anytime in the last half century, crime, today, in LA and in Watts has taken a comparative"vacation," (no joke).  In L.A., we're at 1950s crime levels and falling apparently.

Reasonable people in Beverly Hills are now looking to commit crime like it was an act of community service -- You know, to keep L.A.'s Rep up. In fact I am seriously considering driving to Watts to steal something just to give LAPD guys somebody to arrest and their "bean-counters" something to tabulate... (ok I'm joking)  

What i'm saying is that Watts is now looking like a fair-priced, nicely-located community for commercial enterprises to develop properties in or otherwise setup shop.   I've also heard certain rumors that "some" plan to make it a center for California's green industry.  

I believe that significant appreciation will occur in the commercial and residential real estate sectors in Watts and elsewhere in South LA over the next 10 years. So in my mind, Watts and South LA have a Real Estate Revival, Part 2 on their hands.  (And no I don't currently own anything in South LA... but I might look in to it)