INVESTORSERVE

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)