House Values

An example of the relative cost of living versus places outside of California:

In Ohio, you can buy a house for $150K.

In California, the average cost of a house is around $600K.

The rule of thumb for total wages in California in comparison to
places outside of state is that you earn twice as much in California. So, if you make $100K/yr. in California, the rule of thumb is that you would make $50K/yr. out of state.

So, even though you would only make half as much outside of California, houses only cost a quarter as much. So, in a sense, only making $50K/yr. out of state is virtually the same as making $100K/yr within California.

Just think of what the difference would be if you were able to buy the house outright out of state. The amount needed for a 20% downpayment for a house in California would do that for many places outside of California.

Taking Stock

Consensus is that we are at the beginning of the next economic cycle. That is good to know, and it makes me smile. I'm glad to see the speculators bail out of commodities the way they did, and especially crude oil. With a little luck, gasoline prices will take a break between now and the end of summer.

An Article To Share

I read an interesting article recently in the March 2008 issue of Scientific American, which started on page 54. The focus of my interest in the article was myelination, and it being a correlation between things such as ADD/ADHD, Depression, and Schizophrenia. A brain cell consists of dendrites, a cell body, a nucleus, an axon, and axon terminals. The myelin sheath surrounds the axon and acts as an insulator, to help prevent the electro-chemical pulses from shorting out from one adjacent cell to another. The outer gray matter of a brain is said to be the cell body and dendrites of brain cells, and the white matter within is said to be myelin and axons.

I saw a TV show on a PBS channel by the author of the book, "Change Your Brain, Change Your Life". One of the things that he mentioned was the use of fish oil supplements for the health of your brain. He said that brain matter is essentially a lump of fatty tissues. I had already read from another source that fish oil (an omega-3 fatty acid) can be used as an aid to treat ADD/ADHD. Does the omega-3 fatty acid contribute to myelination?

I'm interested in as to if there is a possibility of brain cells and/or myelin being degraded from the prolonged release of adrenal cortisol (stress).

Taking Stock

I should have put in some stop limit orders last night. Nuts. I still have quite a bit of cash left, and most of my buy points are decent, except for Pan American Silver Corp. (PAAS). We are having a modest slide in commodities prices, which isn't necessarily all bad, especially for oil. Some power companies are switching to natural gas, which is one of the catalysts for the price of the commodity.

Taking Stock

Very nice day today, but the overall market has yet to bottom. The consensus is that the market indexes have to crash before we get a true bottom. I think some trimming is in order with the nice short-term gains I got today. The one thing that I can say for tomorrow is the Visa IPO.

An Indicator for Percentage of Income

I wonder if it would be possible to create a fairly accurate number or percentage, based on the average income and house prices, to indicate the amount of income that would be required to live in a given area. I haven't given it much thought, but I think it is a good idea. It also might be a relatively simple indicator to show if it would be cheaper to rent an apartment or to own a house.

Q: Margin Calls?

What are Margin Calls, and how do they work? Who uses them, and why?