Wednesday, October 31, 2007

Upgrade the memory on your MacBook

How much RAM do you have on your MacBook? You should have 2GB.

I went to upgrade my computer and at Apple it cost $300 for the memory (2 chips with 1GB each). At Fry's Electronics - $75. It takes about 10 minutes (instructions here) and it really makes a difference.

Note: I have left over the old 2 chips of 512MB each, if anyone wants them (it would be a significant upgrade from 512MB total, for instance). First come first served, you can have them.

Addendum: the memory has been claimed.

Monday, October 29, 2007

Lenders being lenders

Just found this info from a real estate listing in Tucson. I wonder which company owns it?
Lender Owned Property sold AS-IS, NO WARRANTIES. Great location, close to shopping and bus lines and the Mountain Avenue Bike Path. Seller requires LSR from Countrywide Home Loans w/ all finance offers.


Sunday, October 28, 2007

My friends know cool stuff: Matt Stone

Today we turn to an interview with Matt Stone, a friend and fellow columnist from when we were at the University of Arizona. I wanted to get his opinion because he's turning into an energy expert, especially with regards to international security. He has a good bio of himself here, at his excellent site The Global Buzz.


What variables will most likely influence oil prices going forward?

Like any commodity market, oil prices are determined first and foremost by supply and demand. It's stunning to see how often people forget that basic tenet of economics, assuming instead that prices are dictated by greedy oil executives (implausible) or Middle Eastern dictators (somewhat implausible). Today's market is primarily fueled by growth in demand, hardly price gouging by international oil companies (IOCs) like ExxonMobil, BP or Royal Dutch Shell or production quotas from OPEC, which are consistently violated by the cartel members.

On the demand side, growth in demand from the developing world, most notably China and India, is sure to provide long-term upward pressure on the price of oil. Moreover, domestic subsidies for petrol consumption in oil-producing countries are taking increasingly more oil off the global market. Most analysts expect Iran to be a net oil importer by 2012 and the introduction of petrol rationing by the Iranian president this past year is an indication that the regime fears the loss of the export-revenue flow. In the developed world, the United States continually fails to show leadership on climate change, first by not signing the Kyoto Protocol or at least negotiating a better treaty, more recently by failing to increase gas-mileage standards for domestic vehicles. While the political momentum on this issue may change in the States in 2008, it is taking an unacceptable amount of time to do so and American energy demand continues to grow. Frankly, the world market is not about to see an aggregate reduction in demand for hydrocarbons anytime soon, no matter how much nuclear power, ethanol, hydrogen fuel-cells or renewable energy is pushed by opportunistic politicians as the next energy panacea.

On the supply side, things are a bit more promising. High oil prices have pushed oil companies, including national oil companies (NOCs) like Brazil's Petrobras, to invest in new technological innovation. Deep-sea exploration and production looks better and better – though not from an environmentalist's standpoint – and new deposits may be found soon. Companies are developing new techniques to exploit the tar sands of Canada and Venezuela, which collectively contain more oil than all of Saudi Arabia. There is certainly enough oil to satiate demand in the long-term, but it will require prices to go even higher before production becomes profitable for these unconventional sources. Nevertheless, short-term disruptions of supply could throw the oil market into a crisis every now and then (more below).

Now to prices: How much of a price premium is built in for geopolitical risk? How do you see potential events affecting the oil price?

Geopolitical risk is never far from the minds of oil traders or the companies that produce hydrocarbons. We have been transitioning in the past decade or so into a new bout of hydrocarbon nationalism, wherein national oil companies (NOCs) gain majority equity stakes in a variety of projects at the expense of the IOCs, who are desperate at this point for access to acreage (note the massive amounts of cash IOCs are sitting on; they have nothing to invest it in). While the NOCs are increasingly technically competent, they are still less effective at optimally exploiting resources than the IOCs, meaning more oil gets locked in the ground due to ham-fisted production efforts. This has especially been the case in Russia, where state-controlled Gazprom and Rosneft still can't quite produce oil and gas as effectively as the private oil companies operating there, and yet the Kremlin seeks to push out those private companies to create large state-controlled national champions.

In this environment of increasing resource nationalism (in Russia, Kazakhstan, Bolivia, Venezuela, Chad, Ecuador, even Peru), we have to take into account the threat of isolated attacks on energy infrastructure as we have observed with MEND in the Niger delta, Ogaden rebels in Ethiopia (interestingly, against oil exploration and development by a Chinese oil company) and even al-Qaeda in Saudi Arabia in 2005. The right attack in the right place – say the Ras Tanura oil terminal of Saudi or the Baku-Tbilisi-Ceyhan (BTC) oil pipeline by Kurdish guerillas in Turkey – could immediately reinvigorate the "fear premium" in the oil market, even if the actual barrels of oil taken off the world market is small. But, as is normal in economics, we have to think on the margin, and even a small amount of barrels off the market can have huge effects, especially those of the psychological variety.

Thus, right now, I do believe the price premium for geopolitical risk or the "fear premium" is on the order of $5-10 per barrel, a bit lower than in the past few years. One headline-making attack, however, and that premium could rocket up to $20-25 per barrel in a matter of minutes. Supply is constrained, demand is growing, and taking marginal amount of barrels off the market will have serious price and psychological effects.

The money question: if you were a betting man, where would you place your money on where oil prices will be 1, 5, 10, and 25 years from now?

Oil prices are notoriously impossible to predict. The 1998 price collapse was not widely predicted, nor was the run-up in prices since 2004. Instead, analysts tend to notice the trends that are pushing prices in whichever direction only after the prices start moving in that direction. Thus, I will hazard a guess, but don't bet on me, in the same way that I won't put my money where my mouth is on this topic.

One to five years from now, prices will likely go up. By my estimation, technological innovation in oil-producing technology and other forms of energy (ethanol, hydrogen, nuclear, etc.) will not offset for the growth in demand from the economies in Asia. Even if the Chinese or Indian economies overheat, which is increasingly likely in India, demand growth will most certainly continue, though at a reduced rate.

Ten years from now and 25 years from now are much harder to predict because we may start transitioning away from petroleum-based economies by that time. Substitutes for oil, including natural gas, will become increasingly available and scalable. I would personally put my money on natural gas as a long-term substitute to oil for a number of reasons: (1) it's cleaner-burning than oil, which pleases the environmentalist in all of us; (2) the costs of liquification technology, which allow the natural gas market to go global as opposed to the present disjointed regional markets, are decreasing rapidly; and (3) it already has a track record for being marketable, which most current energy fads do not. On the negative side, natural gas reserves are concentrated primarily in Russia, Iran, Qatar and Algeria (not exactly the developed world's best friends) and the substance is incredibly flammable, meaning that a terrorist attack on a liquefied natural gas plant or tanker could be absolutely devastating for the surrounding areas – and the entire market for natural gas.

Thus, 10 to 25 years from now, the price of oil may be significantly lower as our economies transition to other forms of energy – or significantly higher if we do not do so.

How should a stock investor act with regard to energy stocks?

Since NOCs are taking more and more of the world's energy reserves, it might be a safe bet to invest in them, but know what you're getting into. Brazil's Petrobras continues to evolve into a world-class company whereas Venezuela's PDVSA or Russia's Gazprom are bloated bureaucracies aimed at increasing the prestige of the state rather than maximizing return to their shareholders.

Instead of the NOCs, it might be smart investing in the service companies that provide technical expertise to oil companies. Companies like Schlumberger or Halliburton will be increasingly called upon to provide the technology and know-how for NOCs.

Investing in the IOCs has historically been a good bet, but the nature of the market is now changing fundamentally. The IOCs must adapt to a new reality where they play second fiddle to the NOCs, taking on less than majority stakes in projects, acting more like the service companies that they are not. Investing in an IOC means you expect the IOC to "book" new reserves quarterly, the share price being based on such figures. Most IOCs are not "booking" new reserves at a rate that merits significant investment. Instead, IOCs need to decouple their share price from the amount of oil reserves on their books by diversifying into a whole new range of energy technologies. If you believe the company is truly responding to the changing market and diversifying, BP would be a buy recommendation and ExxonMobil would be a sell.

In other areas of energy, investing in nuclear power producers like GE or Areva might be smart. The uranium mining sector is currently booming and should continue to do so over the next few years, especially if the United States goes forward with new nuclear power plant construction.

And like I said before, I do believe natural gas has the best chance as a growth sector over the next decade, even more so than nuclear.

Thursday, October 25, 2007

The good news about being away from Brazil

They have had major rains. The worst part: the rains caused the closing of the major tunnel between the north and the south part of the city, causing major chaos in the transportation system.

Would have been interesting to see how the informal vs. formal systems reacted (hint: I'll bet the informal reacted faster and better).

Management Consulting Training in One Word

Structure.

Management consulting training in 2 words: structure everything.


Seriously, it's amazing. When you interview it sounds like just a concept but now it's a philosophy.

Tuesday, October 23, 2007

On Poverty Action lab, where Jeff works

Of the 28 people at this training for my company, one has worked for PAL and another spent major time in Busia. Both rave about what it does.

Am I the only person that realizes what a badass organization Jeff works for......

Drought

There's a big drought in the south right now. I'm in Atlanta and today on the dinner table there was a fancy note that said "Atlanta is in the midst of a severe drought. In order to conserve water please ask if you would like water."

Things wrong with this statement:

•There was ice tea on the table, which is almost entirely water......
•Each person in the room used more water taking a shower that morning than all the water the group could possibly drink....
•Policy option.....why not just temporarily raise the price of water and put a moratorium on the sales tax in exchange....

Seriously it was bizarre. Why is price never an option? Now let me go take a shower.

Sunday, October 21, 2007

New feature: My friends know cool stuff

Over the last few weeks I've asked a few friends to do some Q & A about things they know a lot about. Jeff Berens in the first. Jeff, who was my roommate senior year, is living in Kenya working for Poverty Action Lab. PAL is an innovative organization run by top flight academics that aims to discover which methods of poverty alleviation work best. It uses data and experiments to compare different methods of, for example, providing clean drinking water. This is just the type of research more academics should be doing, and over time PAL will help uncover best practices for how to have the maximum effect in the fight against poverty.

He lives in Busia, in rural Kenya. His job is basically to implement the experiments, which is no easy task. His job involves statistics, management, and survival (malaria, theft, and homesickness, to name a few challenges).

I envy his experience.....


Being in Africa, what do you see that is not accounted for in the typical debate about development?

Poverty isn't anywhere near as terrible as civil conflict.


What role can experiments play in improving development?
I can't say enough good things about randomized trials of development interventions ("experiments"). The donor community is starting to demand more rigorous evaluation of development projects, and randomized trials are the most powerful method available. Hopefully a shift toward evidence based allocation of funds won't be too far behind (though I wouldn't bet on it).


How can people looking for productive experiences in Africa go about looking for opportunities?

The most productive personal experience you can have in Africa is to work here.

After graduating from college I was in a position to volunteer in Africa, but I opted for a four month backpacking trip instead. I wouldn't recommend that for everyone, but it was an incredible experience for me.

Visiting a friend or family member who is working/volunteering in Africa and seeing what they do is a far better (and completely different) experience than doing any normal tourist activity.


You wrote your senior thesis on microfinance. How much have you encountered it in Africa? What other innovations will soon have the buzz that microfinance has had recently?
Most of my time in Africa has been in a rural setting, and my impression is that microsavings has much more to offer here than microcredit.

Mobile phones are acquiring a lot of buzz. As a means of fast, inexpensive, and reliable communication they've already made a huge impact. As a platform - especially for banking and group level information collection and dissemination – their value is going to explode over the next five years.

Saturday, October 20, 2007

Now Officially Employed

...for 8 days before I take a leave of absense until my permanent return from Brazil.

My first day was excellent. Saw the gorgeous office, met my (amazing) coworkers, saw Dallas.

I seriously can't believe how lucky I am to have a job at this place. And Dallas is looking to be not bad at all, either.

Leaving for Atlanta, tomorrow.

Thursday, October 18, 2007

What I'll be doing starting next year, part of a series

On the eve of my orientation in Dallas, Stone sends me the best article I've posted yet on what I'll be doing next year.

“We like it when clients push us hard, and we push them hard too,” he says. “Working together should be an experience that helps develop thinking on both sides.” When clients have worked out what they want to achieve but are open to new ideas, there is a much greater chance of a successful outcome, Mr Ott says. In this way, clients will be thinking more like consultants, while good consultants are able to put themselves into the shoes of their clients.

Wednesday, October 17, 2007

Random Basketball Idea

Why don't the LA Clippers play like 10 games a year in Beijing? They would have a major recruiting tool for top Chinese players, and would be the most popular team in China.

I thought of this while watching ESPN and it said 300 million people play basketball in China. The possibilities.....

Depression

Today I came to Dallas, but also today was the first time the Brazilian national team played in Rio since 2000. And they have all their best players playing. When you're front line is Ronaldinho, Kaka, and Robinho, your team is amazing.

Anyway of course Brazil put on a show de bola and beat Ecuador 5-0.

Really wish I could have been there.

Dallas

Got to Dallas today. A hotel bed compared to my 4 inch foam mattress in Rocinha or a plane seat.....excellent.

They have light rail here, which I will be exploring tomorrow. Went to a band called Boys like Girls tonight.....liked them.

Tuesday, October 16, 2007

other frustrating moment of the day

In Portuguese, the ñ sound of Spanish is nh. You never see the sound hn, as in Johnson. So it is very hard to spell my name because I know that even if I spell it out, the person is VERY likely to spell it Jonhson anyway.

So a friend found out about a cool transportation presentation and had sent me details. I never got the email and missed the presentation. Today I was at his house to pick up a package to deliver in the US. At his house he showed the email to me to prove that he had sent me the details of the presentation.

You guessed it......... ryanmjonhson@gmail........

coming to America

coming home tonight for two weeks. First training in Dallas and then Atlanta, then a week in Arizona!

Annoying moment today: I had a bunch of stuff in Leblon at my old digs because I had paid rent up until now. Now that I'm finally moving to Rocinha, I had a bunch of stuff. Too much for the bus. I tried hard, but couldn't find a single cab driver willing to drive me to my street. They would only leave me outside the favela. Que pena.

Monday, October 15, 2007

Funny story

Met with a transport lady today. She had tons of insight and good info, but I loved this story about a railway in Rio that will long from now be the site of an elevated subway.

The rail line is basically not used not, and runs through lots of low-income areas, borderline favelas. To make sure that people don't literally build over the tracks, they send a mostly empty train across it twice per day.

Sunday, October 14, 2007

Renting is not for losers!

As Danilo Pelletiere, research director at the National Low Income Housing Coalition in Washington, put it: “If you weren’t owning in 2006, there’s a reason,” and that reason wasn’t pretty. “The stigma of renting was raised to a really high level,” he said. “If you were renting you were a loser.”
Renters that rent to save money are looking pretty smart these days. Article.

36 Hours in Sao Paulo

IT may be the ugliest, most dangerous city you'll ever love. Gray high-rises stretch to the horizon, graffiti blankets downtown, where those who can afford it drive bulletproof cars, and power lines form a wire mesh that seems to block out the sun. But São Paulo, Brazil's biggest and most modern city, also has plenty of flair. Sip caipirinhas at a glamorous bar surrounded by the city's upper crust, accessorized with $10,000 Panerai watches on one arm and a fashion model on the other. Shop at obscenely luxurious stores like Daslu, a boutique so exclusive that customers often arrive by helicopter.

here.

Friday, October 12, 2007

A story before I forget it.....


A while back I had just been to my friend Breno's concert. I sometimes go on Sundays because I like the music and several friends are usually there.

Anyway so afterwards I hopped in a van to go back home. The van was about half full with all males. Then all of a sudden a scantily clad woman, probably 25, gets on. She had the kind of skirt where we're talking less than an inch between the butt and the skirt. She had on lots of makeup and stripper boots. Clearly a prostitute.

In Rio the prostitutes congregate in Copacabana. This is partly why Copacabana has really deteriorated. There's a place called HELP which is supposed to be just 100% prostitutes and guys looking for them.

Anyway the van was approaching HELP and the driver asked her, "HELP?" Obviously she was going there.

She said, "No, leave me at the Othon (one of the nicest hotels in Rio, which happens to be right next to HELP)."

So he did, she got out and all the guys in the van were laughing. "She expects us to believe that's she's staying at the Othon?"

Still, it was at least possible. She started walking toward it. The driver lingered. She approached the door, and sure enough, at the last second she darted to the left. An uproar of laughter in the bus.

Sad, but still funny.

Thursday, October 11, 2007

Random Brazil fact of the day

When Brazilians alphabetize names, they do it by first names. This may be because they have so many total names and unlike Spanish you don´t know just by looking which is the "last" name. Even within families people use different names. For example, each of my professor´s daughters uses a different one of their last names as the primary last name.

Tuesday, October 09, 2007

The bright side of a colostomy

Research shows that waiting for uncertain outcomes can be more uncomfortable than adjusting to the worst of them, which explains why impending mergers and reorganizations drive people mad. In a paper to be presented later this month, George Loewenstein, a professor of economics and psychology at Carnegie Mellon University, studied people who underwent colostomies, or intestinal bypasses. Half of them had the possibility of having it reversed; for the others it was permanent.

Measuring their life satisfaction, the researchers found that those with permanent colostomies very rapidly improved whereas those who could ultimately reverse them stayed relatively unsatisfied. "Hope impedes adaptation," says Prof. Loewenstein.

here.

Monday, October 08, 2007

Old Entertainers Welcome in Brazil


One thing I've repeatedly noticed in Brazil is that lots of entertainers bridge generations. While in the US generally the young have their groups and the old have theirs, here it's not like that.

Eighteen year olds like 60 old musicians, and those same 60 year old musicians can sell out concerts to mostly under 25 year olds.

I previously mentioned going to 63 year old Caetano Veloso's concert. I've also been to 61 year old Beth Carvalho's concert (pictured). Most people were under 25, yet sang along the words as if they remember when she first sang the songs.

Moreover, even young performers aren't held back by not being gorgeous. And when it's the music that matters, shouldn't it be that way?

Makes it great to be an aging singer, and I'd say a good trend overall.

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Portions

I frequently eat with a group of friends here in Rocinha. They all know how to cook, and like to make huge portions. Today there were 8 people, so they brought out an even bigger amount then normal and put a huge dish of spagetti on the table. I thought, "wow that's a lot of food."

Then they brought out another dish just as big.

Brutal Honesty

Grace send me this hilarious piece on a Craig's list posting from an honest gold digger.
Are there any guys who make 500K or more on this board? Any wives? Could you send me some tips? I dated a business man who makes average around 200 - 250. But that’s where I seem to hit a roadblock. 250,000 won’t get me to central park west. I know a woman in my yoga class who was married to an investment banker and lives in Tribeca, and she’s not as pretty as I am, nor is she a great genius. So what is she doing right? How do I get to her level?
And then an equally honest response from a rich guy, in business terms.
Your offer, from the prospective of a guy like me, is plain and simple a crappy business deal. Here’s why. Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party and I bring my money. Fine, simple. But here’s the rub, your looks will fade and my money will likely continue into perpetuity…in fact, it is very likely that my income increases but it is an absolute certainty that you won’t be getting any more beautiful!
Maybe some things are better left unsaid.

Sunday, October 07, 2007

Berkshire Hathaway (B) above $4,000 per share

Thank you, Warren Buffett! The stock had hovered just under $4,000 per B share a few times, but not until Friday did it close above the magic number. That is up from under $3000 last summer.

I bought as much brk.b as I could last summer, and had my family and some friends do the same. It is extremely rewarding to see everyone doing so well off of that advice. Giving advice on stocks is super nerve-wrecking because you feel personally responsible for it all. And for the record I don't recommend selling it. It offers a nice upside if the economy does well and there aren't disasters, but it offers lots of downside protection if things go wrong. Even at this higher price, it's just a great place to have your money. And for those following everything Warren Buffett like I do, he has been sending a very strong signal for Berlington Northern Santa Fe (BNI) for months now (as I mentioned) . Again myself, family and some friends have bought stakes recently, and despite the 6% increase on Friday, I don't think it's too late for this train....

Note that $4,000 is over $1,000 per share above where it was after he announced his massive charitable donation. My opinion was that he announced the donation then because he knew the stock was undervalued, and that way any negativity surrounding the donation would be negated by a rising share price. Many were worried that will the charities selling the stock, it would create downward pressure, which is hogwash to begin with, but Buffett I'm sure at least payed attention to those concerns because he always cares about the shareholders, and indeed has made working for the shareholders his lifelong pursuit.

Rambling "don't sue me" disclosure I always see at the bottom on stock sites/blogs....I don't know if it's needed and maybe one of my friends in law school can tell me....

Times I wish I had brought my camera

A friend invited me to the Teatro Municipal yesterday for a symphony. Their family knows the president of the Rio legislature, and he gave them the tickets for his suite, which was so close I would literally hit my head on a bass if I leaned forward. Very cool.

Scalping is not evil

In addition, New York this year joined states such as Florida and Illinois in dropping the so-called anti-scalping laws that attempted to prohibit the resale of tickets for more than a nominal increase over face value.

The laws were among the most worthless on the books. If anything, they drove ticket prices higher by limiting supply as the laws made some potential sellers reluctant to put tickets up for sale. Numerous studies have shown ticket resale prices drop once anti-scalping laws disappear.

here

Scalping benefits basically everyone. It's due time this is recognized, and teams would benefit by allowing a more fluid market to develop.

Oh and congrats Dbacks! Here come the fair-weather fans.

Saturday, October 06, 2007

My street in Rocinha


Always tons of stuff going on. Not sure if you can tell, but in the far distance they have a string between two poles to play futevolei, and then there are people playing checkers with Coke and Pepsi bottlecaps. The place is just so packed, but it means people are always socializing. Compare this to how rarely we talk to people in our neighbhorhood.

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Friday, October 05, 2007

Another sign real estate agents are overpaid

Jim Perry, an agent in St. Helena, Calif., spent most of an afternoon vacuuming up thousands of flies from one client's guest house. Mary Hartley, in Albany, Ore., organized a garage sale for one seller, spent 10 hours painting the side of the house for another and recently enlisted her grandchildren to help clean out the debris in a crawl space for a third. And to help Sandra Le Buhn sell her $1.2 million, four-bedroom home in Mill Valley, Calif., Mr. Marks agreed to board her nine-year-old daughter's cherished brown-and-white rats, Zack and Cody, who had been living in a cage in the bathtub.
here. Real estate agents are so overpaid that of course clients can ask for these services. A $500,000 house will net the agent $15k to $30k for minimal work otherwise. Rather than complain about having to do these services, agents should realize they're simply charging too much.

When real estate agents can get their license in less than a month with no education and then get 3% or 6% off the sale of a single house, it's clear there's something wrong. If you're a real estate agent, here's a better idea- discount your price.....a lot.

Futevolei

It's like soccer and volleyball combined. Same rules as volleyball, but you can only use your feet, shoulders, chest, and head. It looks very difficult and most people playing it rarely keep it going for long, but you'd be surprised how well some of them can play it.

(Facebook readers click through to my site to see my YouTube video)

Thursday, October 04, 2007

Rio for the Olympics!

With two years before the vote for the 2016 host, Chicago is third or fourth on the list of favorites, U.S. Olympic Committee chairman Peter Ueberroth said Thursday. Ahead of Chicago are Madrid, Spain; Tokyo; and Rio de Janeiro, Brazil.
here. Madrid? Europe had the 2004 summer games, and Spain had the 92 games (Barcelona). Japan had the 98 winter games in Nagano. Come on people give it to Rio! They just kicked ass with the Pan-American games with no incidents, as I predicted.

So it's an exciting time for Brazilian sports. They're just awesome at soccer, with only more talent in the pipeline (wait for Robinho at the 2010 World Cup). Plus Brazil is likely to get the 2014 World Cup, and a chance at the 2016 Olympics. Go!

Wednesday, October 03, 2007

Yikes


Today I went to my usual place for lunch. It was pretty full, which is a bit unusual. I never know what to order, so as I was coming up I was looking at this guy's plate. He looked at me suspiciously. It looked like carne asada, but I wasn't sure, so I stared a bit. There was another table of guys laughing and drinking. Probably about 20 years old on average.

I had been waiting for a friend to come to Rocinha (more on that in a post soon) and he was a bit late, so I called to see if I had time to eat first. The guys looked at me suspiciously while I called. I hung up, ordered, and sat down. Then I saw that every last one of them had a gun in their lap. How did I not notice that? Big guns, too.

I had already ordered, but I considered leaving. But after a few tense moments, I noticed that nobody else in the restaurant was alarmed. The restaurant owner and waiter were totally okay with it. Nobody batted an eye as they walked bye, either. So I figured just go with it.

No problems, but one funny instance. The news was on the television, and nobody was paying attention except me. The group of guys with guns were just joking around and enjoying themselves. Then all of a sudden a story about a big drug bust in Sao Paulo came up, and they all stared at the TV and stopped talking. I avoid even eye contact with the guys with guns, but now for the first time I saw an emotion out of them - fear.

We're doomed

REPUBLICAN VOTERS BELIEVE free trade is bad for the U.S. economy, a shift in opinion that mirrors Democratic views, a new WSJ/NBC poll found.

Why income producing properties are still good to have

My (our) guiding principle in buying houses is that you should be able to easily get rents above your mortgage payment. As long as you have that, even if home prices go down you have a profit each month, plus the fact that you do have a profitable property means you likely won't see depreciation on that property. Remember the statistics are for the whole city, and you only buy one property at a time (Okay, well sometimes 6, but that's a story for another day).

Plus as is happening in housing markets across the country, rents can actually rise as fewer people can get a mortgage and foreclosures increase the number of renters.

The data is now starting to back that up. Rents increased 1.3% nationwide just in the third quarter. And that sounds like a small amount but a couple points. One we're talking about just 3 months. Also, 1.3% is the absolute level, but you need to think on the margin.

Here's an example:

Purchase price: $200,000 (downpayment: $40,000)
Mortgage Payment (includes taxes and insurance): $1000/month
Expenses (repairs, management, etc): $100/month

Old Revenue: $1300/month

So before you have $200 profit per month, so about $2,400 per year, or 6% of your investment (your down payment).

New Revenue (after 1.3% increase): $1317

Your expenses haven't changed, so now you're making $217 per month, or about $2600 per year, which is 6.5% per year on your down payment.

So this property owner saw his profit increase from 6% to 6.5% per year. In percentage terms, his annual profit went up about 8% in three months. Now keep in mind that we're talking about 3 months.... so 1.3% isn't small at all. And you expect incremental increases over time, while your expenses go up at a much slower rate if at all. (though over the very long term rents can only go up as much as income, so hopefully we'll get to see some income increases in the country).

This varies by city of course. New York and San Fran rents were up more than 3% in the third quarter, so those landlords are really smiling (one big plus of New York is that unlike expensive markets across the world, New York rents are just as high as the prices (though it's still probably difficult to find a profitable property to rent out in that city).

And there are markets such as Phoenix (mentioned in this article here) where rents are simply down or going up very slowly (keep renting, Phoenix friends and family!)

Addendum: I love to see the economic adjustment apparent in the comments on the above linked article from a NY renter.
I wish it was only (the average NY rent increase of) 3.6%-my rent went up over 6% this year, and that was after talking him down from over 10%. (Last year was a little over 4%) Buying looks better than before…

Hilarious take on the future of video games


Doug sent me this article, which offers a half-serious, half-comedic look at the future of video games. It's funny and interesting at the same time.

An example of the style of writing:
Imagine it. In your lifetime, a magical world where you can actually meet that Burger King mascot, and smell him and feel his robes. As for the porn, well, is it even porn at that stage? It's pretty much just sex. You have sex with the porn lady and when you roll over, there's the Burger King guy to hand you a Whopper in person.

Tuesday, October 02, 2007

WalMart hits swirly bulb milestone


If you haven't made all of the non-decorative bulbs in your house swirly bulbs, you're missing out on helping the environment in a way that also helps your pocket book. It's really a win-win. We talk about the big ideas with tradeoffs, but there are still lots of good ideas without tradeoffs that we can exploit.

here.

Hang Gliding

Camera mounted on the wing. The glides are much bigger than I thought they were. They are probably 20 feet wide total.
Waiting for the launch pad. It was really backed up because there wasn't very much wind. It's counterintuitive, but for hang gliding having wind is good (as long as there's not too much).

Random: all about hang gliding. Equipment costs $3600 to $5000 to get started. Or you can buy a flight to Rio ($800-1200) and pay $75 and get the photos to boot.......

Brazil's Cerrado

Embrapa owes much of its reputation to its pioneering work here in the cerrado, the vast savannah that stretches for more than 1,000 miles across central Brazil. Written off as useless for centuries, the region has been transformed in less than a generation into Brazil’s grain belt, thanks to the discovery that soils could be made fertile by dousing them with phosphorus and lime, whose optimum mixture was established by Embrapa scientists.

When the annual World Food Prize was awarded last year to two Brazilians affiliated with Embrapa, the citation called the emergence of the cerrado “one of the greatest achievements of agricultural science in the 20th century.”
here.

To me what's most interesting about this is that the Brazilian government really helped Embrapa by allowing it to profit from public-private partnerships. That model could be used in other places in the world.

Monday, October 01, 2007

Mangueira

Mangueira is the most famous of the samba schools, which collectively present the famous parade in Rio at the Sambadrome each year at Carnaval (my post from there earlier this year).

Since the theme (northeastern Brazil history and culture) was announced in August, the samba schools have been having "ensaios" each Saturday. These serve a dual purpose - they teach the songs that that school might perform at Carnaval (they're still deciding between a handful) and they are a big party.

Mangueira is a favela next to Maracana, the famous soccer stadium in Rio, and their "Palacio do Samba" is at the base of the favela. So with Devin in town wanting to go, we headed out. It was quite a sight.



The dumline on the balcony in front is called the "bateria" and includes the powerful "surdo um." They play to all the songs but to me it's even cooler when they just do their thing by themselves.
(Facebook readers you have to click through to my site to see the video)

The banners, dancers, and giant puppets change with each song.

The "Palacio do Samba" is a large partially enclosed building with a huge floor and balconies on all sides. The samba schools are multimillion dollar organizations, with fancy sponsors that help pay the typical $3 million each samba school spends on Carnaval each year.

Mangueira's colors are pink and green. Crazy outfits are encouraged.
Zachari, myself, and Devin
I guess once you retire from performing, you wear a bright pink shirt and blow whistles.


This video, which I obviously didn't take, shows how dramatic the final product is. This is Mangueira at the 2003 Carnaval (despite the video title).

Big Jesus

This might be really cool

note: I will soon have pics up of hang gliding and Mangueira, the Arizona Diamondbacks (congrats on the playoffs) of samba schools.


If you are a property manager you might have a solid online tool in iiproperty.com. I spent some time fooling around on it today and it looks mighty promising. Think Google Docs meets property management. Online access, organization, email and mailing integration, oh my.