Landmark Links January 29th – Debbie Downer

Debbie Downer

Lead Story… Historically, it has paid off to be an optimist.  In 1974, the S&P 500 index was at 61, today it’s at 1,905.  In 1975, the Case-Shiller US National Home Price Index was at 25, today it’s at 176.  To take things even further, real GDP per capita in 1790 was just a bit over $1,000.  Today, it’s about $55,000.  When you live in a world with a growing population and ever-advancing technology breakthroughs it generally pays to be an optimist (unless of course you are talking about investing in buggy whips…..or BlackBerries).  Why is it then that pessimism typically sounds more intelligent than optimism?  Morgan Housel of The Motely Fool takes a fascinating look.

Economy

A Giant Fracking Mess: Despite the continuous decline in oil prices, the Saudis have continues to pump oil at a breakneck pace.  Conventional wisdom is that this will A) Punish Iran – their regional adversary with a higher extraction price; and B) Put the US frackers out of business and limit future supply.  The first goal is coming to fruition but the second will be much tougher to achieve.  A lot of deep-pocket investors have capital ready to snatch up distressed domestic drilling assets when the opportunity arises.  See Also: Small refiners in North Dakota known as “tea pots” are in a world of hurt.

Rise of the Machines: How the proliferation of industrial robots could lead to even lower interest rates.

Commercial

Ghost Town: The Houston office market is looking increasingly abandoned with vacant spaces piling up as a result of the oil bust.

Residential

Super Size Me: Home sizes continue to expand, leading to higher prices as the nation’s unit mix becomes larger.

Showing Some Love for the Entry Level: DR Horton has been killing it with their “Express” product which seeks to capitalize on the oft-ignored entry level market segment.  America’s largest home builder is now making a big push into high-priced Southern California and other builders are taking note.  There is a huge demand for this type of product and almost no one is building it.  This seems like a great move if Horton can make it work.

A Look on the Bright Side: There are still reasons to be optimistic about housing in 2016 despite looming mortgage rate increases, a roller coaster stock market and dicey foreign economies.  See Also: New home sales hit a 10-month high in December.

Profiles

Can You Spot the Irony? Instability and new reporting regulations in traditional tax havens have wealthy investors reeling.  So where are the wealthy sending their billions to avoid taxes and preserve secrecy?  Ironically, the US which is becoming the world’s largest offshore tax haven for foreign investors despite criticizing other havens like Bermuda, The Cayman Islands and Switzerland.

Hot Mess: Twitter is looking more and more like a train wreck as executives jump ship with the stock down 75% from it’s peak.  Part of the problem is that it’s really not all that easy to use.  See Also: How Facebook continues to eat Twitter’s lunch.

Caveat Emptor: How drone startup Zano raised millions of dollars on Kickstarter, squandered it and left their backers with nothing to show for it.

Stop Counting: The early versions of fitness wearable devices like Fitbit and Vivofit focus largely on monitoring a user’s step count.  However, heart rate is a superior indicator of health and the next generation of wearables will feature it prominently.

Chart of the Day

Rgdp

WTF

Freak Show: Meet the woman who believes that she is a cat born in a human’s body.  She hisses at dogs, hates water, and claims that she can see better at night.  Also, she is single.

Video of the Day: I could watch this video of a garbage truck exploding “like a missile” all day.

Friendly Rivalry: A Broncos fan (allegedly) tipped over a porta-potty with a Patriots fan inside after last weekend’s AFC title game.

Passive Aggressive:Snow Shaming” is now a thing in NY as some residents and businesses are slow to clean up after last week’s epic blizzard.  See Also: Someone built an igloo in Brooklyn and listed it on AirBnb for $200/ night.

Landmark Links – A candid look at the economy, real estate, and other things sometimes related.

Visit us at Landmarkcapitaladvisors.com

Landmark Links January 29th – Debbie Downer

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