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23 May, 2007

Tackling Inflation for Personal Investments

Filed under: houston — abs1nthe @ 3:09 am

One of the great long-term economic fears I have about the American economy is inflation. The Federal Reserve has done a fantastic job over the past 30 years at taming inflation, but the relevance of the Federal Reserve will decline over time. So many dollars are floating around outside of the United States that it is inevitable that a country will be able to crash the dollar despite any action by the Federal Reserve.

China has foreign currency reserves in excess of US$1 trillion. A huge trunk of that amount is in dollars. They have so much money that the country is determined to diversify their investments. The latest diversification was an investment in the Blackstone Group, leverage buyout firm. But China isn’t necessarily the country that will tank the dollar. There are other factors. As the dollar weakens against the Euro and other currencies, commodity-based economies who normally sell their commodities for dollars, are increasingly looking at non-dollar currencies to sell their goods. As non-dollar denominated contracts proliferate, the value of the dollar decreases.

What then, should a small-time investor do? Invest in foreign markets, invest in real estate, and invest in U.S. companies that large chunks of their revenues coming from foreign countries. But it’s easier said than done. Try buying stock in LG or Samsung. Try buying any stock in Vietnam. Try buying Russian oil stocks. There is a business to be had here… a brokerage that can help small investors invest internationally as easily as we invest domestically.

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11 May, 2007

LCA Vision (LCAV) - Why Headlines Mislead

Filed under: stocks, LCAV — abs1nthe @ 10:03 am

I really like LCA Vision. It’s a growth story without a lot of financial drama–though it has more than its fair share of family drama. Early this week, LCA Vision reported First Quarter results showing 18% revenue growth. Yet, Wall Street whacked the company by shaving about $3 off the then $44 stock. Why? Because of headlines like: “LCA Misses Estimates.”

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4 May, 2007

Antiplanner Loves Houston

Filed under: houston — abs1nthe @ 8:44 am

It seems rather remarkable, but someone has actually heralded Houston as a model of city planning, though I should really say, “unplanning.” the Antiplanner from Portland, Oregon, recently visited Houston and said, “I came to Houston last week prepared to like it, and in fact I loved it.“ Although I think the Antiplanner is wrong about the lack of need for planning, I think he is right that governments probably shouldn’t endorse multi-use developments with tax breaks or other economic incentives.

But the killer detail from the post is the following passage:

The money quote came from Michael Morgan, a local developer who was partnering with Trammel Crow, which has built several mixed-use developments in Portland (not all of which have been successful), to plan a 24-acre development in Houston. But after due consideration, they scaled back and probably will not do a true mixed-use development, just some apartments next to a big-box store.

After looking at other cities, says Morgan, “we discovered the ones that were economically successful were the ones that had government help.” Amen.

The area Morgan is talking about is the old HISD complex on Weslayan and Richmond. It was supposed to be a fantastic mixed-use development. Now, it looks like it will be apartments and a Costco in the middle of the city. This first picture shows a rendering of what the project was originally conceived as.

Weslayan and Richmond with Costco

The second picture shows the ugliness it will become.

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Westheimer Tower - Allen Bianchi Project

Filed under: houston, architecture — abs1nthe @ 7:07 am

The local architecture firm of Allen Bianchi has a very interesting project. It’s called the Westheimer Tower and construction is supposed to begin this year. According to the Houston Architecture Forum, the project is located next to Indika on Westheimer. For those of you who haven’t tried Indika, it is just East of Montrose. This 24-story tower will look odd in a residential neighborhood, but I do like the audacity and hope that it gets built. I give it a very low probability of success though.

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3 May, 2007

Harris County Per Capita Income Map

Filed under: financial, houston — abs1nthe @ 6:33 am

Lately, I’ve been obsessed with demographics. The obsession relates to my inquiry about the relative importance of population density to a city’s cultural vibrancy and impact on the world. So, when I saw a map showing Houston’s per capita income levels, I found it very exciting.

The map corresponds nicely to home prices. Not surprising, but the huge swaths of space with less than $20k in per capita income is surprising. Also surprising is the failure of Bellaire and West University to match the River Oaks per capita incomes. The dark green means per capita incomes greater than $120k. You’ll need to pull up the actual .pdf link to see the details. My .jpg’s are for a quick peek only.

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2 May, 2007

FRAMEwork House

Filed under: houston, architecture — abs1nthe @ 6:31 am

Cite’s Spring 2007 issue features a modern pre-fab dog-trot house called the FRAMEwork house. FRAMEwork Architecture’s members are the creative minds behind this daring design.

Finding Houston architects doing innovative design takes a bit of work in this cash-flow oriented city (compared to Austin), but there is compelling Houston architecture out there. The basic idea of the design is an open breezeway that cuts through the center of the house allowing wind to cool the area during the hot Texas summer. The breezeway makes the design modern–though the original design dates back to times before air-conditioning.

For about $138,000 you can buy a basic 1600 sf model with finishes and fixtures. The house just screams for a family looking for a second home in the country. If you’re that family, please invite me for a visit.

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1 May, 2007

1 in 12 Houston Households are Millionaires

Filed under: financial — abs1nthe @ 9:36 am

According to a CNN Money report, 99,504 Harris County household are millionaires. When I saw the figures, I thought they looked a bit high. I dug and found a government statistc that estimates Harris County’s number of households hovers just over 1.2 million. If you do the math, 8.25% of all households in Harris County are millionaire households. Incredible or unbelievable?

The median household net worth was $55,000 in 2000. In 2005, the average millionaire households had a net worth of $2.2 million. According to CNN’s previous survey, a millionaire must have in excess of a million dollars in net worth EXCLUDING the value of the household’s primary residence.

To put the wealth discrepancy in perspective, if the average family makes $55,000 a year and saves every penny of that income under their pillow, it wold take the family 40 years to accumulate the average millionaire’s net worth.

On the other hand, CNN talks about a new class of “Emerging Affluents”:

TNS defines “emerging affluent” as households with a net worth between $100,000 and $500,000, excluding primary residences. This year, they number 24.5 million, up from 23.9 million in 2004.

There are approximately 115 million households in the United States. Thus. about 1 in 5 households are emerging affluent.

Putting together all the statistics, about 1 in 3 households have a net worth of greater than $100,000. Yet, the average net worth is still only $55,000. I’m stunned by the wealth disparity.

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Why the Blog

Filed under: business — abs1nthe @ 2:32 am

I’ve started a second blog because the original idea for www.quoz.com remains unfulfilled: a place to put my thoughts out there for criticism and a place to force me to think critically. I had originally intended the quoz blog to talk about all sorts of things. But like any good plan, I changed it completely in the face of overwhelming success. So here is plan B. Enjoy!

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