Master of 500 Hats

Finance. Finances. Financials.

Finance.  Finances.  Financials.  What is happening out there?

The Bay Area is still consumed with fear & loathing, near as I can tell.  Though i think i've weathered the storm of the past 3 years rather well, i'm also a bit shaky on the optimism.  I sold our condo in SF earlier this year and got out of the real estate market.  Although prices haven't fallen that much, i think that was the right decision.  We bought our condo in 98 so we made a decent amount on the increases since then, but i was getting concerned that the bay area real estate market is floating on thin air and unreasonably low interest rates that just won't hold forever.   Not that rates are likely to go back up anytime soon, but you just can't figure that with all the poor economic performance and downturns since 2000 that real estate prices will continue to diverge from incomes.  I mean, there's still a lot of people around here who had already made their money before things fell through the floor, but it just doesn't make sense that with the crash, all the layoffs, startups flaming out, and options going to hell that some of that doesn't bleed through into real estate prices.  Furthermore, commercial real estate prices have crashed, and consumer rental vacancies are way up.  Absolutely doesn't make sense that consumer real estate won't have its day of reckoning someday soon.  Perhaps it may take another year or two, but in the meantime I sleep a lot better at night being a renter these days.

On the other hand, i started doing a little stockpicking last summer and made a small amount betting on undervalued tech stocks for a bit.  I did ok, but a friend pointed out that even if I'm winning there, most of those bets aren't very diversified from my PayPal/eBay stock options -- and while I'm bullish on eBay, probably no need to double-up on that bet on other tech stocks that are likely quite correllated.  So recently I decided to get out of most of those positions, and keep some money in cash until I figure out what to do next.  I consider myself a student of finance, but i still have much to learn about bonds and derivatives and other alternative forms of investment.  And while 2% in a money market fund doesn't seem like much, i guess i'm just not smart enough yet to figure out a place that feels safer.  I do realize that latin and asian markets seem to have great growth opportunities, and i believe the dollar has further to fall against other currencies -- so if i believe those factors, i should be looking for something in emerging markets.   More homework required there.

I still feel like i should be buying real estate somewhere (tho not in California) in order to take advantage of tax breaks for mortgage interest, but if so i'd need to be renting it out or living there.  Probably only makes sense to be a landlord if another family member has time to manage it, so perhaps i could go in on something back in WV or MD.  But that might be a questionable move if i'm not around regularly to watch what's happening.  And I don't want another headache to worry about, so maybe it's just as well i sit tight for a bit.  Not a bad thing to have a little money in the bank, and do a little more studying before i try and jump into the next great investment opportunity.  If the right thing does come along i'll have time to evaluate and consider doing it without feeling like i'm locked into some other long-term scenario that i'm unsure of.

In hindsight, I have to count my blessings that we're doing ok in a tough market out here.   I have a great job with a great company that i really enjoy.  I still manage to play ultimate frisbee pretty regularly (albeit with a few more injuries and pounds than 10 years ago!)  I just purchased a new car that's practical but very comfortable and enjoyable.   Saya's music is going well, and her new CD comes out next month in Japan.  And summer in California is always worth smiling about.   I guess with all that I feel pretty lucky in the midst of one of the worst Silicon Valley depressions in the past 10-20 years.   Sometimes happiness and satisfaction is all about taking small victories where you can find them.

So for now it's nice just to pay rent on the 1st, enjoy the nice view of San Mateo from the balcony, and sleep easy :)

... but i'll be jumping back in for another run at the flag soon enough -- count on it!

Peter Rosberg is a friend

Peter Rosberg is a friend of mine who had oral cancer recently, and went through a pretty tough operation to remove it.   He seems to be doing better... hope so.  He's a good soul, and he deserves a long full life :)

I hadn't been in touch with him in awhile, but I had dinner with another friend Karen Marcelo and she gave me the skinny.  Karen and I used to work together with a bunch of other geek friends of mine at a company called Marathon Systems.   Karen is always a surprising person to spend time with.  She's never quite what you expect... and that makes it fun.

Back to Peter -- Peter and I met in Japan when we were both speaking at a conference, and we became friends.  He also helped me save my startup company once upon a time, so I probably owe him a favor or two.   I just read his blog tonight, and it was very sobering.

It's strange how sometimes you fall out of touch with people who have such an impact on your life.  You feel a bit guilty for not being in contact with them more often.  But then also as you get older you end up with a rather large number of people you've been friends with, and it can be a challenge to keep up with a few hundred folks.  I guess I just try to enjoy life and the time I get to spend with those people when you see them :)

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oh yeah.  i bought a new car today.  it's the first time i've ever bought a NEW car new.  a few times a bought a 1-year old car, but most of the time i've bought used cars with a few years and several thousand miles on them.  seems extravagant to buy a new car off the lot, but at least i did some homework and used this CarBargains service to get competitive bids.  worked out pretty well.  it's a material pleasure i know, but every once in a while it's ok to enjoy getting a new car :)

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also went to the SDForum Visionary event tonight.  it was really inspiring to hear these accomplished entrepreneurs, particularly when the valley is so gloomy these days.  and I was glad to see Kamran Elahian get an award -- he seems like such a great person.  also really said some powerful stuff about America and recent changes in how we deal with the rest of the world, our fear vs our leadership.   certainly makes you think... and makes you glad people like him are still here in Silicon Valley.