Intelligent, Innovative Investing™

Pathfinder Report – March 2016

Pathfinder Report – March 2016

CHARTING THE COURSE

No March Rate Hike. (Surprise, Surprise, Surprise.)

By Mitch Siegler, Senior Managing Director

Mitch SieglerThat was the signature line of Gomer Pyle (Jim Nabors), the good-natured, naïve fellow from Mayberry, North Carolina in the 1960s television program, The Andy Griffith Show.

Nothing really worked for Gomer the way he thought it would and nothing now is really working the way most of us thought it would. (And we’re not just talking about the Bern, Trump and the rest of the merry band.)

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FINDING YOUR PATH

Harrowing Tales of Business Travel and Observations of Life

By Lorne Polger, Senior Managing Director

Lorne PolgerMonday. Zero Dark Thirty. Leave the house exactly 58 minutes before scheduled departure. The traffic pattern of every cab and Uber driver on the freeway at 0620 is imbedded in my memory like the birth of my kids. I know that it takes a minimum of 17 minutes, 35 seconds and a maximum of 20 minutes, 14 seconds to get to my secret parking space. The TSA line snakes around the terminal like the endless line for a popular Disneyland ride on a summer day. There is no prize at the end of the TSA line.

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GUEST FEATURE

Why Real Estate Can Be Attractive When the Stock Market is Volatile

By Scot Eisendrath, Managing Director

Scot EisendrathThe financial markets have been marked by volatility for the past six months – volatility to the downside at the end of 2015 and into the beginning of 2016, and volatility to the upside more recently. A common gauge of stock market volatility is the CBOE Volatility Index (the VIX). The VIX measures the market’s expectation of near-term volatility, and is known to reflect investors’ fears. As the graph below indicates, 12-month volatility and investors’ fears peaked at above 40 in September 2015 and still remain at elevated levels. (The VIX reached 80 during the heart of the 2008 financial crisis.)

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ZEITGEIST – SIGN OF THE TIMES

California’s Housing Crisis

PriceA recent analyses by Los Angeles-based Beacon Economics makes the case that California’s rapidly rising housing prices threaten to make much of the state unaffordable – think Malibu or Palo Alto – and is forcing working class folks to move east or out of state. Migration data from 2007-2014 suggests this trend is already occurring with 563,000 families making less than $50,000/year moving out of state and 80,000 families making greater than $150,000/year moving into the state. According to New Census Bureau, California is officially America’s poverty capital with one in four residents barely able or unable to pay their bills.

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TRAILBLAZING: SKY LAS VEGAS

Repositioning Luxury Condominiums in Las Vegas

Sky Las VegasIn the past several years, the glittering lights of Las Vegas have brightened, as a resurgence in tourism has driven strong economic recovery. In 2015, the city welcomed a record-breaking 42 million visitors, an all-time high. With job and population growth outpacing national rates and driving housing demand, Las Vegas ranked fifth in the most recent Ten-X® (formerly Auction.com) Top Single-Family Housing Markets report, which ranks the nation’s 50 largest housing markets. Of the top five markets, Las Vegas was unmatched in year-over-year home sales growth of 22.6%; its nearest competitor, Portland, saw an 11.2% increase. Home prices in Las Vegas also grew 8.3% over this same period. Pathfinder has been tracking various real estate opportunities in the city since 2009 and the recent economic improvement coupled with our discovery of Sky Condominiums created the perfect occasion to make our first investment (we have since acquired a second property in Sin City).

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NOTABLES AND QUOTABLES

Possibilities

“When you have exhausted all possibilities, remember this: you haven’t.”
– Thomas Edison

“To dare is to lose one’s footing momentarily. To not dare is to lose oneself.”
– Soren Kierkegaard, Danish philosopher

“In the beginner’s mind there are many possibilities, but in the expert’s mind there are few.”
– Shunryu Suzuki, Zen monk

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