David's Macro Blog

British humor we can all understand.

Somehow this seems to explain the situation better than CNBC. Why is that?

Jon Stewart, one of the most astute and insightful commentators of our time, explains the May 6th 2010 Flash Crash in this video from the Daily Show: A Nightmare on Wall Street

If you are a day, swing, or momentum trader, how would you trade in this market? Did trading on May 6th blow through all the sell stops on the order books?

Well, I have one friend who is an accomplished trader and he related his strategy regarding this issue. He refrains from trading if the market moves too violently or if there isn’t a clear reason for the market movement (e.g. a war, terrorist attack, major corporate bankruptcy, etc.)

One supposed benefit of an electronic marketplace and program trading by black box algorithms (algos) is market liquidity that would prevent just this type of collapse. The October 19th 1987 Black Monday crash was supposedly caused by computer program trading. It happened again this time — did we learn anything?

Or, as the saying goes:

History is the same events happening to new people who experience it for the first time as though it never happened before.

Last week I interviewed John Ray, the largest buyer of foreclosed homes at the Maricopa County (Phoenix area) trustee sale auction.  Through his company, Bid AZ Foreclosures, he currently buys around 100 homes a month on behalf of his clients.

Listen as he shares his knowledge and experience on topics such as: getting a good deal on a foreclosure, the amount of research it takes to compete, the old boys’ network (main players) at the auction, and much more.

Note: there are 4 parts/videos of this interview, about 36 min. total.

Original post for your reference: Interview with John Ray: How to Get a Good Deal on a Foreclosed Property at the Trustee Sale Auction and Avoid Common Mistakes

Here’s a video of live bidding at the Phoenix auction:

Biz Kids is a public TV series where kids teach kids about money and business by experimenting and solving real world business problems.

http://www.bizkids.com/show.aspx

ht – AS

Our current school system is woefully inadequate at teaching kids about the basics of money, business, entrepreneurship, and how the real economy works (hint: it isn’t an equation with greek symbols).

One thing I noticed was that most of the kids involved had these 2 characteristics:

1. They didn’t give up when one method didn’t work.  Being kids, they just tried something else without getting stuck in failure.
2. They learned to plan, budget, and value the money they earned and spent.

Now that we are in the Great Recession caused by excessive debt and poor financial planning, wouldn’t those skills have been good to learn?

“I like running my own business because it helps me learn what business is really like.” – Zoe Stewart (age ~8)

Now this is a class I would have loved to take in school!  In fact, I’d like to see entrepreneurship taught at all grade levels in our schools.  Why do our schools need to end at 2:15pm everyday when we are competing in a real-time global economy where a good or (virtual service) can be produced in any country?

A few of my favorite episodes below.  All of these are a MUST watch, so enjoy!

• 103 – How Do I Get Money – Kelsey Angel Chocolates & Young Americans’ Bank
• 105 – Money Moves – Kitsap Credit Union (buying a piglet, raising it, and selling for 4x!)
• 106 – Bea’s Beauty Bars (hand made soap; she uses QuickBooks to track her business!!! Sounds like the next Burt’s Bees)
• 122 – Sell, Sell, Sell – Alex sells over 1000 Girl Scout Cookies per year
• 201 – Have a Plan, Stan! - Zephry Productions
• 207- The World is a Risky Place – Serve it Up (tennis lesson profits)
• 210 – Secrets to Success – Circestreem (performing pays for college!)
• 211 – Marketing Mix – Stocked Skateboards ($250,000/year selling skateboards online!)

Do you think kids would learn supply and demand better from a textbook or their own business?

Comment below and let me know what you think about this show and any of these episodes.

Purchasing homes at the trustee sale auction has become increasingly popular throughout 2009 as the real estate markets have firmed. 

When there is a big enough discount in the purchase price of a home at the auction vs. its full retail price on MLS, real estate investors will buy the home to either flip (resale) or hold for greater appreciation down the road.

Jim Klinge (aka “Jim the Realtor”) of San Diego interviews Adam Rappoport (aka “SD Realtor”), a realtor and active flipper of trustee sale homes.  This is a very frank and honest discussion about the risks and process of investing in trustee sale homes.

Adam Rappoport Interview – Part 1 of 3

Adam Rappoport Interview – Part 2 of 3

Adam Rappoport Interview – Part 3 of 3

There is a lot of mystery and uncertainty about buying a home at the trustee sale: there’s no inspection period, deep pocketed buyers pay all cash to buy the property “as is” and “where is”.

The interview really gets into some insightful and insider details in parts 2 and 3 so make sure to watch all of the videos.

What surprised me the most was how the margins have shrunk this year. Notice Adam mentioned that his target margin was 20% per deal but now it’s down to 15% and the current deal was at 9%.

Another interesting thing is that every property he’s resold this year has had multiple offers because his group priced the home right.

What do you think about this interview? Please comment below.