Monday, December 17, 2007

Tracking Home Price Trends with S&P/Case-Shiller

The S&P/Case-Shiller Home Price Indices keep track of home prices in 20 major metropolitan areas. Data go back as far as 20 years for some markets.

I wanted to compare a couple of markets, one that is experiencing a bubble and one that isn’t. Los Angeles is a good example of a bubble while Atlanta shows no bubble whatsoever.

By placing a 10-year moving average on the charts, you can see how far prices in Los Angeles have moved from the average. For the past year and a half or so, prices have started to decrease, forming a clear downtrend. Because of this I would not be a buyer in the Los Angeles market. Granted, some neighborhood in Los Angeles might still be doing ok. But overall it is not an attractive market yet, not until prices have bottomed out and resumed an upward trend.

Atlanta home prices on the contrary are keeping steady with their 10-year moving average. The trend has been up for as far as the data go (January 91). For this reason I would consider being a buyer in the Atlanta market, but a cautious buyer. Considering that home price trends can differ greatly from one neighborhood to the next, I would check whether or not the neighborhood has experienced a healthy, unbubbly growth over the past 10 years.

Does anyone know any website with reliable historic home price data at the neighborhood level?

Friday, December 7, 2007

Company Health Insurance Costs up 50%

It was a long time coming. After many years of very affordable health insurance, my company finally decided to share the cost with its employees. The health insurance premium for 2008 goes up 50% (from $600/year to $900/year). The deductible and out-of-pocket max also increases to $300/family member and $1,000/family member respectively while coverage decreases by 10% to 90% in-network and 70% out-of-network.

The company is offering a second plan at no premium cost, but with lower coverage (80% in-network, 60% out-of-network) and hefty deductible ($500/family member) and out-of-pocket max ($1,500/family member). This plan will cost me less if my family stays healthy, but a lot more if we have a major medical event.

These costs are probably still well within the national average. But it is a bit of a wake-up call after having been spoiled for so long. On the plus side, the company offers a gym membership free of charge. So there is no excuse not to stay healthy!

Monday, December 3, 2007

Daytrade SOLF Long

What did I see? An orderly retracement with narrow range bars on decreasing volume.

Entry on the break of 6th bar high with a 17.25 limit order at 11:08am. Initial stop below 6th bar low at 17.02. After the PnL exceeded +1R, I entered a 0.50 trailing stop. Stopped out at 19.34 at 12:19pm.

Risk (R) = 0.23, 1000 shares, $250
PnL = +8.29R, $2073.70

Sunday, December 2, 2007

Net Worth Update as of Nov 30, 2007

The stock market had a bad month which is reflected in my net worth down 3.45% compared to a month ago. It now stands at $369,200. There were some signs of relief though towards the end of the month as the Fed hinted that there might be another rate cut in mid-December after all. At the last Fed meeting on Oct 31st, they hinted the exact opposite. Since then the S&P 500 has reached correction territory (-10% from last high) in November.

2012 Net Worth Goal Achieved – Drops from 38% to 37%
2007 Net Worth Goal Achieved – Drops from 97% to 93%

I will now need a Christmas miracle to reach my goal for 2007.