I believe the housing bear market that started in 2007 is still with us despite the recent big increase of 10% to 25% in various local markets. Yes, I just bought 4 homes, but that’s going to be just a trade. Economy will continue to be tepid, due to state/city government cut back and international bond market instability. I don’t know what all these talks on QE ending this year are about. As I see it, Fed won’t be raising interest rate nor ending QE this year, possibly the entire 2014. The earliest that I can see is early 2015, and it will be baby steps. I think no more than 3 steps will be applied before the end of 2016. Eventually bond market vigilantes will be back, and Fed will lose the control of the interest rates (if not already).

I have been so insanely busy with everything. It takes so much more than just cold cash to get the homes. Markets are hot, and the listing agents are kings. Most of the time, if I can get a return call from the listing agent, I call that a good success already.

I will detail the housing market strategy in the second part of my eBook, but for now, I’m just too busy to write it up.

All of the homes that I bought are basically in-the-money on the first day, if not a good 15% profit. I actually only bought “3″ homes, because two of the four homes that I bought, I got a 50:50 partner who was lucky to ride up the housing market with more than $70K profit with me already. I had to get a partner because I didn’t have 1.5 million cash in the bank to bid on every terrific deal without financing.

I used to dislike housing flippers, but I will become one by buying these homes. After seeing how this lawless country is, with all the Wallstreet people not even indicted, and all those “home” owners or rather loan mowers who signed with perjury on their loan docs, still squatting in homes for free, I have to say that I’m disappointed about ethics in general. For now, I’m just going to grab the profits if they exist.

I have a lofty goal of donating at least half a million in my lifetime for charitable causes. I really would love to donate one million, but I will be realistic for now, and set my goal to $500K. It’s a lot of money, and I wish I could reach my goal. And there is no other way to reach my goal besides by becoming rich. Actually, let me take it back. It’s not me donating any money, but rather I’m just “re-distributing” the money from God to the poor.

1. 2% social security tax cut is reverted. This affects everyone who has an income. You will see payroll tax increases (or rather reverted back) by 2%.

2. The Bush tax cuts expire for income higher than $400K on individual filing, and $450K for filing jointly. Marginal bracket rises back to 39.6% from 35%. Most people including me get to keep the same brackets from Bush tax cut.

3. AMT (alternative minimum tax) exemption amount is now $78750. Without the fix, it would have been reverted back to $45000 which has never been indexed to inflation. Going forward, this exemption amount will be indexed to inflation. With this change, some tens of millions of US households won’t be hit by AMT. Because it’s indexed to inflation now, it would reduce my federal tax by a couple of hundred dollars (while paying $2000 more in social security tax).

Essentially, there has been no changes, except the 2% social security tax reversion for everyone. The additional 3.8% medicare tax on capital gain will only apply to income higher than $400K/$450K for single/joint filing I believe.

For more details, you can follow this link for original text.

The stock market probably hit a tradable low point already less than 2 weeks ago. I will be a gradual buyer here and scale in. The fiscal talk may continue to linger at the headline through December, creating more volatility throughout. However, I expect an okay-to-good first quarter next year. Two to three years out from now, I expect the stock market to break the high point since rising from 2009 low, while at the same time, the bond markets may trade lower. Mortgage yields may bottom this year or next year. Once it starts to rise, it will no longer serve the housing market by lowering monthly cost.

The world economy sucks right now, but US will be the last domino to fall. It will fall nevertheless, but not just yet. The stocks will always reach the high and low points without the headline news people knowing. If it’s in the headline news everywhere, you can be sure NOT to bet on it (but the opposite trade is not guaranteed until it reaches the max swing).

Best luck trading.

Frugal at 1stMillionAt33.com

With Fed buying 40 billions of MBS mortgage securities every month thru QE3, which will tend to close the spread between treasury bonds and mortgage bonds, it is possible that mortgage rates may go even further down. FHA also may waive the 3-year waiting period after short sale/foreclosure. If that happens, in conjunction with even lower mortgage rate, the housing markets can easily go up by another 20%. FHA down payment is only 3.5%. That is basically nothing, and won’t even cover the transaction cost of buying and selling. Taxpapers are essentially subsidizing all the future defaults (again)!

So where do we go from here? I’m a long-term bear on the housing market, and I have called the short-term bottom five months ago this year. I’m not changing my view (yet). But it is surprising that how much intervention can do to the housing markets. I expect the next short-term peak at about 2016, and the next bottom to come at about 2018 to 2020, but that is at least 6 years away from now. If you need a home, but you cannot wait for 6 years, it may still be better to buy now rather than later. I think the prices at the next bottom may be slightly higher than the bottom that was made in 2011/2012. But you would have saved on rents for sure. Given the current pricing, with the exceptions of being right at the center of metropolitan area, it is certainly cheaper buying than renting.

Best luck on your housing hunting trip, because you will need A LOT of that.

Frankly I find that items at Walmart are usually cheaper, even after considering the tax factor. This year I bought just $50 from Amazon, and that is after many hours of searching just to try to put myself over the $25 for free shipping. Besides books & music which I don’t buy much these days, I often find that more than 50% of the 9% California sales tax goes into Amazon’s bottomline, while the buyers gain less than 50%.

The stock of Amazon is at all time high, due to its new Kindle release. From that aspect, I believe Amazon has a very good chance in competing against Apple products. After all, people want to access content (music/video/books/games). A platform that allows you to access the greatest content at the cheapest cost will be the winner. Long battery life & easy access to any of your Cloud storage also counts. Cheaper price of $199 also goes a long way. A heated competition is always better for consumers.

All the people who are expecting Euro problem to continue are probably right, but being right doesn’t make you money. I’m holding my core positions at this point, and hesitate to chase this market further with VIX being so low. September/October is typically a season of higher volatility. Expect violent swings in both ways. Buying both calls & puts (or volatility) will be a good play.

My portfolio has gone up by 11.7% in the last 30 days. Risky assets are back into play.

With this announcement out, and possibly other related companies (PGH, PWE, PVX, etc) to follow, I think it’s worth to take a look at them now. The summer/fall is seasonally bad for stocks, so you don’t want to get too aggressive, but stay patient.

High dividends (or high potential return) always equal to high risks. This is one of the very few golden rules in investing. Tread carefully.

Based on the current conservative valuation of my second property, I’m already at least $40K in positive territory. I always marked everything including real estate to market prices, but in this case, I will choose to be conservative due to my long-term bearish view on housing market. My first real estate property which gained me $300K at the housing peak has been marked down by about 45% to the current market price, including a 5% off that I would need to pay real estate agents if I ever decide to sell it. I obviously should have sold it near the peak, but let’s not go there because it involved some unpleasant family feuds. Sometimes, you not only need to out-smart the market, but also need to convince your family as well.

I have been extremely busy lately, due to publishing of my Kindle book, and also becoming a landlord for the first time. Running through credit checks on various applicants, I shake my head on how financially fragile these potential tenants are. I wish more people would take my advice and live under their means.

My property is rented out already, and I’m only about cash flow even on a 30-year mortgage, due to the fact that I have cashed out before and refinanced several times. My tenants will be paying down the principal for me, and so the net profit would grow as the principal is paid down.

If you’re still sitting on the sideline, at least you should wait till the slower winter season. Hopefully, prices will pull back somewhat at that time. Have patience. Housing market won’t come back before year 2026 (or 2006+20 years for a bubble to deflate). Every time I say this, people won’t believe in me, and would shout at me, but we will see. If you buy any houses, make sure you are positive monthly in respect to equivalent rental.

Of course, the lowest bottom of the housing market in the nominal price will be different from the bottom priced in the inflation-adjusted price, and will be different as well as in the bottom in terms of monthly payment. Ideally, when you buy your home at mortgage rate of 8% instead of 4% now, your housing price should be low, while your monthly payment will be high (assuming that you can still get a mortgage).

I don’t understand why some pundits calling to get into energy and precious metal shares simultaneously. On an intermediate term basis, the two sectors would be out-of-sync more often than not. If you are bullish on energy sector, then you are bullish on the economy. If you are bullish on the precious metal shares, then you are bearish on the economy. On a longer term basis, one can be bullish on both, if one is bearish on the US dollar.

I have not been touching much of the energy sector shares, precisely because I have been bearish on the economy on the longer term horizon. It’s interesting to observe how these two sectors going out of phase with each other. In this environment, I believe that precious metal (PM) sector serves as a leading indicator on the way up. It gives you an early hint on QE3.

The previous market cycle seems to have completed. We will have a new up cycle, with today’s hints from PM sector. Now the only question is how low will this market go. But I sure don’t want to catch a falling knife here.

If you ask me, my best guess is that market may short-term bottom here with a climatic sell-off. It would rally back towards moving average. However, starting in mid-August for many about two months, it’s best to stay on the sideline. Euro crisis is simply not going away. Remember sub-prime contagion? The finale may not come for another two years (2014), and in the meanwhile, markets will go yo-yo before things get resolved if at all.

Since the average number of books sold per title is less than 200, my expected revenue from my book will be 35% royalty of $0.99 x 150 copies = $52.50. My tax is about 47% (CA + Federal + AMT). Out of the remaining after-tax profit of $27.83, I have committed 25% to go to charity (see book for details). So I would net $20.87 at the end.

I’m obviously not motivated by a potential $21 profit. But if I can change just a few people’s lives in how they manage their personal finance, it’s truly worth all of my time putting into the book. The amount of wealth within your reach or for any other readers is truly in hundreds of thousands, if not a million.

Thanks for any PF bloggers to put this news out. I have an OnlineResource page in the e-book that I can try to reciprocate your promotions.

Here is the table of contents for Part I:

Preface
Chapter 1: My 1st Million At 33 – Reader’s Guide

• Profile of a Frugal Millionaire
• How I Got My 1st Million At 33
• Reader’s Guide to the Book

Chapter 2: Understand How Wealth is Created – The secret to making big money

• Becoming rich is extra-ordinary
• Your time vs. money
• The only secret to making big money
• Take on good debts & avoid bad debts
• My father’s business moto – How a business prospers
• Utility and Scarcity
• Attitude = Altitude

Chapter 3: Book-smart vs. Street-smart – Being lucky is a choice

• Difficulties are Opportunities
• Book-smart vs. street-smart
• A Tiger or a Dog – Finding a career path
• The true value of a brand-named college
• Consider free-lancing
• The three ingredients in starting your own business
• Being lucky is a choice
• Pursue what you love; love what you pursue

Chapter 4: Your Income vs. Expenses – Arbitrage the “geography”

• Are you the boss or the slave?
• Art & mechanics of budgeting – Running the saving marathon
• Know where to focus your energy
• Debit, credit, and cash management
• Choose a wealth-conducing location – Arbitrage the “geography”

Chapter 5: Why must you invest – Make your home as your best investment ever

• Nothing is certain but death, taxes, and the I-word
• Portfolio income is not a usable income
• Make your home as your best investment ever
• Avoid the scams and tricks from investment newsletters
• The biggest investment mistake that people make in following Warren Buffett
• Investment strategies by the size of portfolio
  • What to invest if you have only $10
  • What to invest if you have $100
  • How to invest if you have $1000 to $10K
  • How to invest if you have $10K to $100K
  • How to invest if you have $100K to one million dollar
• How much investment risk can you take?
• Finding a professional money manager: Things to know & ask

Chapter 12: Summary – Get your action plan together

• Summary – Yes, you can do it too!
• Becoming rich can be a certainty, not a dream
• Wealth is a (self-)responsibility – How I tithe
• Reference guide & resources

For those who are interested, here is the abridged table of content for Part II:
Chapter 1: My 1st Million At 33 – Reader’s Guide (Same as in Part I)
Chapter 6: Investment Theories – Active Investing vs Passive Allocation
Chapter 7: Dividend Investing – Untold secrets of legal tax shelters
Chapter 8: Treat Real Estate like a Business – Leverage & manage your cashflow
Chapter 9: Mega-trend Investing – Bubbles are troubles or Doubles!
Chapter 10: Stock Options – Risks vs. rewards in equity compensation
Chapter 11: Estate & Retirement Planning – Don’t tip Uncle Sam & others
Chapter 12: Summary – Get your action plan together (Same as in Part I)

The full book will go on sale along with Part II later. Part II is targeted for investors with more liquid asset. I split the book into two parts, so that you can buy just the first Part for $0.99. You will not pay more if you buy Part I first ($1), and Part II ($2) later. The price for the full book will be $3. Once the promotional pricing ends, the prices will be more expensive, and I may offer a slight discount on the full book.

1. Bank of America converting foreclosures to rentals to delinquent borrowers.

2. Fannie Mae implementing bulk sale of REO to investors to convert to rental.

The bottom line is that in majority of the US housing markets, it is becoming cheaper to own than to rent at the prevailing mortgage interest rate. This is bringing many big or mom-and-pop investors to invest in the housing market. However because of the low interest rate, I do NOT believe that this will be the final bottom before a sustainable rise. Eventually, the real bottom will be made near the peak of a bond market interest rate. With a rising stock market for the next several years, the mortgage interest rates will be rising as well, putting a cap over whatever advances that the housing prices can make.

If you want to invest, make sure that it is both net P&L positive and cash flow positive on a 30-year fixed rate financing. The action of mortgaging will reduce the potential impact from the downward pressures of the falling bond market and therefore the rising of interest rate. With a rising rental market everywhere, it is a good time to invest in real estate as long as you can make the math works.

The best thing to do is still to exercise your proper judgment, and go with a firm that doesn’t do any proprietary trading (usually against their own customers like many big Wallstreet firms). On paper, everything is “safe” until the money in the pot is just not enough for everyone.

I also suggest to move your assets to cash accounts if possible. When you get a dividend-in-lieu instead of a regular dividend from your stocks, or you don’t get any mails or emails about voting events for your owned stocks, you can be very sure that your “own” stocks have been sold short by someone against your own interests.

Also close any accounts at JP Morgan (or Chase bank), which has basically but “legally” confiscated MF Global customers’ funds for the failed trades by MF Global. Don’t ask me how it can be legal. Thanks to Federal Reserve for allowing this to happen.

Regardless, I think if MF Global customers cannot recover their funds and at the same time Corzine doesn’t go to jail, there is something deeply wrong in this country.

Actually, I highly suspect that Corzine is that stupid to buy up European debts using a leverage of more than 40-to-1. I suggest investigators to look into the counter-party of whom selling the European debts to MF Global. Maybe Corzine was to lead MF Global to pay up what Goldman Sachs bought previously (while leaving Morgan Stanley to burn and drop).

And the story doesn’t stop there. As with all futures market, there is no equivalent of FDIC nor SIPC insurance. MF Global even dared to use clients’ money of some 600 millions to mop up their mess. That is a serious crime. People should go to jail for this, but I doubt that would happen. And that was done under the helm of ex-Goldman.

After 3 years since 2008 financial crisis, nothing is learned, and nobody went to jail. Occupy Wallstreet will only get bigger.

The article at New York Times has the best coverage in my opinion. You do need to create a guest account to read it.

Where is the Volcker’s Rule? Yeah, and Goldman Sachs became a bank in the shortest amount of time ever in 2008, and still borrowing from Fed for nothing, trading the money from the subsidy by taxpayers into oblivion. If Federal Reserve didn’t save Goldman Sachs, it would be dead by now.

Frugal at 1stMillionAt33.com

Markets may continue to act volatile, but taking no risk equals to taking no returns. There is a good chance for the leading tech names like AAPL, GOOG, or INTC or CSCO could push for new 52-weeks highs. Financial & banks will turn up as well, although I prefer not to catch a falling knife even in a counter-rally.

For those who didn’t buy anything, maybe try early next week. The short covering will be strong today and Friday. I think it’s likely the good time will last for 1 month, but beyond that news on economy may dominate again.

Good luck in trading pits.

Frugal at 1stMillionAt33.com

By paying taxes from withholding your paycheck, they get treated as if they are paid evenly throughout the year. You won’t get hit by any quarterly assessment of tax penalties, just because you pay them closer to the end of year. If you run a business, this option is not available to you, and Uncle Sam wants you to pay up every quarter.

This year due to extra stock option sale earlier in the year (before stock markets crashed), I need to withhold all of my income for the next three months. It certainly doesn’t feel good to “work for free” especially after I have already paid so much in taxes. My combined state & federal marginal bracket is at about 50%. It is amazing how much government can take, and still manage to run a deficit year after year.

Oh, well. Certainly, paying taxes is far better than taking unemployment benefit checks. My best wishes to anybody who has been left behind by the rolling recessions in the economy.

The 3.5% must be in the form of closing costs, which you can use for any settlement costs, and buy down the (already-low) interest rates. You do have to buy one of the foreclosed property from Fannie Mae, and it’s pretty to search through their properties online.

You can find the details of home path program here.

Freddie Mac also has a “home steps” program for extra home warranty and $1500 condo association credit. But it’s most likely less than 3.5% unless the property is extremely cheap.

I still expect the home prices to drift down further, but if you are ready to buy for non-financial reasons, by all means, you should take advantage of this offer.

Going forward, gold-related investment (not silver) is still preferred. The next is agricultural investment. When markets turn around, I will put money into tech and energy (oil & natural gas, not solar yet but no nuclear) again.

Markets have been gyrating with huge volatility. The best thing to do is to stand aside now. After storms are over however, there will be very few people left who still have the stomach & nerve to buy. That will be the time to put in the majority of your cash.

Best luck.

While it is obvious that the markets are panicking, I think it is prudent to put cash on hold. I sold out my GOOG and AAPL right before the plunge, nibbled probably using 10% of my cash, and then stopped. Both GOOG and AAPL are still good companies, but markets do what they want to do.

It definitely feels like 2008/2009 again. After my positions took a big cut on Thursday, I realized one thing: I simply look too far into the future, while the market is extremely short-sighted. Of course, the economy is not so good, and the unemployment rates still suck. But markets “apparently” are quite oblivious to these facts.

Nevertheless, I still project the stock markets to rise into 2016 due to currency devaluation & inflation mainly, not due to a better economy. The fireworks in Web 2.0 may continue and grow into a bigger bubble. But that is 2016, not 2012. In this market, anything that is 1 minute later, is too far into the future.

Both GOOG and AAPL are dropping to previous support, and it should be a fairly good entry point. I’m preserving my cash pile of more than 20%, anticipating for the final short-term pop in physical precious metals. Buying on pullback on precious metals-related complex still works better than the general stock markets (in the short term as well as in the long term). However, the volatility in precious metals is 2X to 3X higher than the general stocks, and it truly takes nerves of steel to hold onto your positions.

For the first time in many years, I bought into GOOG, AAPL, and general market indexes. If it is not obvious to you, let me state it clearly: markets will be higher in two years.

I made further allocations into gold/silver mining stocks after realizing my last mistake. I would like to add more on a pullback, but I won’t be chasing prices at this level. I have quite a lot already, and much more than any “normal” portfolio. Further greed on my part could easily back-fire.

The next significant pullback will probably be in the month of September. But markets could steamroll ahead between now and then.

Best luck trading.

Here are the new targets based on previous ratios:
1. Gold bottoms at $1442, or $1393.
2. Silver bottoms at $30.x, or $26.x. It is preferred that silver doesn’t break below $26, or else the picture may be bearish (for 12 to 16 months).
3. If GDX already bottoms at $51.10 (as I have guessed in my previous post), the next short term low would be at $52.00. If not, it should bottom at $50.46. If GDX breaks $50, then the picture turns bearish (for 6 to 9 months). Timing-wise, It will still bottom if it breaks $50. However, you will need to sell all the counter-rallies, and wait for much longer to get back in.
4. GDXJ may still break the last bottom at $32.06. It’s bottom should roughly coincide with GDX within 1 day of difference. I hope it stays above $31. Breaking $30 will be bearish again just like GDX.

I arrived these targets by using the previous peak to bottom ratio and applied to the last peak (e.g. for gold at $1563.20). There is no magic tricks here.

I think there is still a significant possibility for gold-related complex to take an extended breather here, possibly until early next year. This risk is obviously due to the parabolic behavior in the recent silver bubble. Caution and patience are required here. I think it is still a trader’s market.

Gold however has never really corrected, and that really worries me. I am not sure how sustainable the rally will be. I have a feeling that it will see a price of less than $1400 before it can possibly hit $1850.

Putting everything together it seems that maybe this wave 2 of the major wave 3 in mining stocks could last much longer than anyone expects.

I think it is quite clear that the government authorities want commodities to have a bigger correction before they can afford putting QE3 into high gear. They also need the Congress to approve the increase of the debt ceilings first, before Fed can take the new debts onto their book. I expect that another major stimulus probably will come before the election of next year starts in earnest.

Currently stock markets probably need to go down further, so that Bernanke can rationalize the next round of money printing.

I will be buying just some more, but to go fully invested, patience is still required.

After reading a lot more about nuclear energies, I’m much less bullish now. I think Thorium would eventually take over Uranium in nuclear energies. The current nuclear energy companies may or may not be benefited from this switch, especially given that Thorium is much more abundant than Uranium. I have held onto two positions in uranium since 2005, and I have already liquidated them.

I don’t think nuclear energies will go away, especially given oil depletion. Uranium stocks may go up again 3 to 4 years from now, if economic recovery gains steam and overheats. However, that is too far out for any prediction to be reliable, nor do I want to take that risk now.

If you really like to own Uranium stocks, make sure that you stick to the big cap companies which have existing long term contracts, and will be less impacted by any shutdowns on outdated plants and new plant proposals.

If I’m investing in the general market, I probably would be more relaxed. However, I’m more into commodity/PM sectors, and the volatility in this sector is at least 3X to 4X of the normal market.

Better safe than sorry. I’m actually quite content with what I have achieved so far since 2008 crash. My net worth is at least 20% higher than the pre-2008 peak. If the markets unfold as I am expecting, taking a mid-summer dip, build a base, and then comes back, hopefully I should be way on my way to get to 50+% total return in another 2 years.

So far, all the MACD indicators on mining indexes, and precious metals have made the positive cross. I have a suspicion that this may be a head-fake. However, I still have a lot in the market, and plan to just ride it out for a potential 16% fall from here. If it does fall, it will be one of the most terrific buying opportunity. If not, and the markets zoom up and leave me in the dust, my potential return will be halved, but I’m already taking lots of risk anyway.

Let’s see if my mid-June target date for another big correction in commodity will materialize. On the general stock markets (SPY, DIA related), I will be a buyer on a 10% pull-back. Furthermore, I will be buying into higher beta stocks this time. It is about time to turn bullish for the intermediate/long term (~5 years out only). Only time will tell whether I’m right.

Have a good memorial holiday. Pre-holiday market is almost always good like today.

First of all, an important thing happened today. Gold appears to be entering a similar parabolic phase just like silver. The only things that haven’t joined the parties are the miners.

Let’s say that gold continues its parabolic trajectory, then I’m guessing that the following may happen:
1. Gold tops out at around $1680.
2. Silver tops out at around $56 to $59.
3. Miners (GDX) tops out at around $67.5.
The time-frame is probably within 2 weeks, until May 16th or so.

After silver mini-bubble crashes, my correction targets are
1. Silver may crash to $30, with $22 as my lower target.
2. Gold drops to $1250, with $1150 as my lower target.
3. Miners drop to $51.
Silver will enter its zig-zag Elliot wave 4 of bull market. The trading range will be from $30 to $60 for probably about 1.5 years or more to shake out both bulls & bears. In the meantime, I am guessing that miners will take lead the next phase in this PM bull market, with gold prices go to new high from about $1600 to $1850.

If the gold price doesn’t do a parabolic top, which seems to be more likely to me, then I’m guessing that the following may happen:
1. Gold tops out at $1600.
2. Silver tops out at $52 to $53.
3. Miners tops out just below $64.
The time-frame is possibly before next Tuesday or Wednesday.

After silver mini-bubble crashes, my correction targets are
1. Silver may go down to $30 to $34, with $25 as my lower target.
2. Gold drops to $1250 to $1300, with $1150 as my lower target.
3. Miners drop to $54, with $51 as my lower target.

Have fun poking the bubble! Don’t get the soapy water splashed onto your face.

Frugal at www.1stMillionAt33.com

I have been reading Cara’s trading blog at caracommunity.com, and Bob Hoye’s podcast on Howestreet.com every Friday. I am aware that rally of silver should be “exhausted” long time ago, but one needs to have his own opinion. The latest exhaustion signal from Bob Hoye should be at the end of this week at the latest. However, I think the market may be exuberant slightly longer than that.

Gold/silver have a tendency to make a parabolic top. In fact, I almost want to say that without a parabolic top, it is simply not a top. I would never go short on this market (or at least not yet). At every market, one must decide on the bias (bullish or bearish) first, and then only move between cash & long/short (depending on the bias). I think those advertisement about swing trading that goes between long/short is really a myth. For most normal human traders, that is just a fast ticket to poverty, not to the riches.

The next correction in silver & precious metal mining stocks may be quite big. I think a minimum of 20% is almost definitely in the cards. I wouldn’t rule out a 30+% fall. However, the fall will be respected to the peak prices, and we still don’t know what the peak prices will be achieved. I am looking for silver to possibly fall to low $30 range. Based on the ratio of the last rally (from $17.35 to $31.21), and the start of the current rally from $26.38, I think it’s possible for silver to go to $47.45. If silver price exceeds $47.45, then I think the coming correction may be more extended in time to wash out the excess in bullishness. I think $50 is possible, but I am not counting on it.

While silver is very extended, mining stocks in general are not. I would think that the correction in mining stocks would be less than silver, but I could be wrong. I would be looking for GDX to pull back to low 50 at the maximum.

For gold, I think the pullback could be from $1150 to $1250. I would deploy my capital starting at around $1250. I know all the shorts out there think that gold/silver are in the final stage of bubble. But I believe the next wave is the 2nd minor wave of 3rd major wave. Yes, it’s going to be painful when it falls, but when we reach 3rd of 3rd major wave, it’s when majority of shorts are literally destroyed. Frankly, I don’t know why anyone wants to be short in this market. For the sake of your own wealth, please don’t. But if you’d like to add to my wealth, you could go ahead.

The other phenomenon that I see is that between gold/silver/mining stocks, the sync of waves has been somewhat broken. You will never see this at the final top. At the final final top, all of them should be synced up together to the top, with very small time lag. However, currently only silver is acting crazy. Given that, I’m also quite confident to state that this is simply not the final top.

I wrote an investment advice series back in 2006, advising people to buy silver Eagle and Warren Buffet’s company(BRKB). If you had followed my advice, you would have returned 260% on your silver, and 31% on BRKB since August of 2006.

Here are the entire series of My Investing Advice. The series is also listed on my Site Map at the upper left corner of every page on my site.

1. My investing advice if you only have $10
2. My investing advice if you only have $100
3. My investing advice if you have $1000 to $10K
4. My investing advice if you have $10K to $100K
5. My investing advice if you have $100K to $1M

Best luck, Frugal at 1stMillionAt33.com

The biggest concern that I have on markets is still PIIGS in European region. I think the problem would turn worse before getting better. However, it is really hard to predict when PIIGS will hit the market, and my projected timeframe (was from Apr to Jul) appears to be pushed further into future (May/Jun to Sep/Oct).

Although everyone’s crystal balls are quite fuzzy (including Mish & Barry Ritholtz who is about 50/50 in stock/cash), two things from the Japan earthquake and the mini-crash in May 6th, 2010 has shown that there are (or were) many people who will head to exit in an instant at any signs of troubles. The good thing is that the more we get those mini-hits, the less people would sell out in the future. In fact, maybe the coming market surprise is that there is not going to be a surprise after all, and we stay sort of flat throughout the whole year (with occasional but very few ~10% pull-back or so).

Best luck,

Frugal at 1stMillionAt33.com

My mom certainly didn’t (need to) demand me as much in my academics because I was a self-motivator. I did well in my regular school curricula, and pretty much ranked top 3 in my class from grade 3 and up. However, it was that every long summer vacation that my mom really excelled in her Tiger Mom’s style of parenting. I can almost say that I was busier taking all kinds of classes during summer vacation than regular school sessions. I had to learn painting, piano, literary compositions, swimming, math, English, science, etc. when most of my classmates were out playing, having a real summer vacation. And of course, piano lessons were throughout the year and not just in summer.

What did I gain from all the extra-curricular lessons? Unfortunately, I have to say that except having mastered the basics of each subject, I didn’t excel in most of them at all. And I was certainly not happier due to all the extra stress from being asked to perform at the levels that were beyond my age. In fact, I actually cried from hours and hours of practicing piano. I didn’t like it.

Fortunately, my mom was sensible and didn’t push me for too many years. She even tried to help me learn more on the subject (science) that I was more interested in too. I was actually trying to learn college level physics (electromagnetics) when I was 11th grade through a tutor. But because my parents knew little about science, they couldn’t help me properly to follow a correct course of curriculum. You know, you just can’t learn electromagnetics without learning enough about Calculus. But my parents didn’t know, and nor did I.

From this personal experience, I think that unless the kids are interested themselves in the subject, there is no use of pushing kids to the extreme. Sure, some push are needed only because human nature is to lay back and being lazy, but going to extreme is simply not healthy. In fact, my wife’s nieces whom I personally tutored Calculus when they were still in high school got fed up by their Tiger Mom so much, such that the daughter swears to never go back home to see her parents (for many years now), and the son has a mental disorder from all the undue stress and dropped out from university. Both of them went to Stanford and Harvard, the best schools that you can ever hope for, but lives were literally destroyed from this process. Such can be the Tiger Mom’s “rewards”.

Therefore I must conclude that between Tiger Mom’s style of ruthlessly push and western style of praising mediocrity, there must be a subtle balance. Tiger Mom may or may not bring financial success, but it’s almost certain that it can easily bring unhappiness.

What should a investor do now? If you haven’t sold, I suggest not to panic. But I would sell the bounce at near 1290 level at S&P. As for Japanese stocks, I’m actually looking towards buying a little (EWJ). Japan as a country won’t be defeated by this earthquake. It will come back.

Tomorrow is also a Fed meeting day. Expect Fed to be lenient for sure. If Fed surprises positively, this correction could find a short-term bottom. However, I’m more worried about markets “expecting” the positive surprises, and yet finding not enough.

As I have said several times, I expect a mid-year stock market correction, and expect QEn to kick in working overdrive after that to arrest an economic slowdown. General inflation will rise after that, and bonds are on a short-term buy (till July), and long-term sell.

On Yahoo’s news, it listed 8 charities for donation. American Red Cross is one of them. However, after some research digging at CharityNavigator.org and google, I won’t be giving my money to American Red Cross.

Most of the American charities could be as corrupted as other big institutions. Majority of all big charities have a CEO that gets paid for $300K to $600K annually. If you find a charity CEO that is only paid at about $200K, it’s pretty good already. American Red Cross pays its CEO $446,867, with the highest salaried at $566,629. What bothers me the most is that the past poor handling of American Red Cross in Katrina and Haiti. In fact, there seems to be a consistent record of such at Red Cross.

While I don’t want to put any final words or judgment on American Red Cross, I plan to give my money to Americares or Convoy of Hope. All of the amount of my donated money is hard-earned, and I want to share it with the poor victims, not the highly salaried CEOs.

One day when I can retire from my day job, I hope to start a charity. I would not take any payment from doing it because that was how naive I have always thought how any charities should have been run.

The pricing of goods at AMZN is extremely (anti-)competitive. It actually changes real-time against ongoing sales at various stores. The moment that there is a sale at Target or Walmart for a particular item, Amazon will lower its price correspondingly. I have observed this phenomenon through my past shopping experiences on HD camcorders, camera, etc. Sounds like a good deal at Amazon?! NO, unfortunately. The price that they lowers to always ranges from about a tiny saving of 3% to actually spending more by 3% after adding shipping. This is after considering the no-sales-tax “benefit”. Am I going to save just $5 to $10 on a $350 to $500 item, just to fatten Amazon’s employees and shareholders wallet, and short-change my local state/city government? I’m sure that many people would, but I won’t.

Therefore, I’m not surprised at all hearing that Amazon will cut ties and move out of states that threaten to recover the sales tax. The fact of matter is that when you look at the financial income statements at Amazon (for example 2010), you will see that if Amazon starts to pay a 8% sales tax out of its revenues, there is absolutely no profits left. Instead of 1.15 billion profit, it would be 1.38 billion loss. Please note that taking out 8% sales tax from the revenue is obviously not the right approach. But if the pricing is 8% higher, consumers may choose not to transact at all. Likewise, if the cost is 8% higher for Amazon, Amazon may choose not to sell the goods at all. The end result is likely to be a lot less profitable sales and shrinking revenue.

I would like to see a fair playing ground for all companies versus the internet-only companies. And I am an advocate of a federal sales tax for a reduction in income tax. In this age, there is no longer any boundaries between states, and having different sales tax rate across states simply don’t work anymore. A flat sales tax to replace all income tax would encourage savings instead of spending. A fixed percentage of the collected sales tax should go to the local state, and each state can further impose different income tax structure to supplement any necessary shortfalls.

Although the day for a flat national sales tax may never come, I hesitate to buy the stock of a company that simply lives on sales tax. I think internet business is good for certain products, but not all. Making the market to be free from all anti-competitive practices would give consumers the best stores & final prices.

The two main negatives that have not been priced in by the current buyers are
1. Bond bubble bursting causing rise in interest/mortgage rates, AND shortening of the duration of the mortgage term. This will cause the domestic US buyers to decrease their offering prices.
2. Increasing deficits will most likely result in increase in property taxes. This will increase the holding cost of houses and therefore decrease the home ownership benefits.

The third negative that has not been priced in by the foreign cash buyers is that the current US housing price can possibly become 50%-off, once US dollar drop another 50% against the stronger Asian(Japan-excluded)/commodity currencies. These buyers will probably not flock into US after 50% off because the relative political/economical stability across regions can change in detriment to US, and that these “savvy” businessman and “corrupted” government officials won’t probably be throwing good money after bad.

Regardless, if the home ownership cost is way below the current rental cost, it obviously makes sense to buy. You could use my Rent vs Buy calculator to see if it would make sense.

Here are some precious lessons that I have learned from my experiences of over 10 successful transactions:

1. Privacy issues: most people would post their emails and/or contact phone number within the posting. If you care about your own privacy, don’t do that. Potential buyers can always email your registered craiglist email by clicking on your post. Once you post your email and phone numbers, they get copied to so many other craiglist copycat sites. Your posts will expire after 45 days on craiglist, but on other copycat sites, it could be forever. This way it reduce the chance of getting phone & email spams too. If you really have to post a phone number, use a Google Voice phone number.

2. Do your market research: For every item that you sell, you should always think as the potential buyer, and search briefly on Amazon, craiglist, ebay, Walmart/Target, etc. for the same item. That is the only way to determine your best pricing. A good price will always sell itself. You obviously want to undercut others a little. And you should post a couple of your search result in your own ad too to convince the buyer that indeed they are getting a better price from you.

3. Pricing: if the absolute price of your item is high, it will really take a bigger effort to sell (unless it’s highly popular like ipad, Wii, etc). You have to know that people who browse & buy from craiglist probably don’t have much spare money to begin with. If they have money, most of them are extreme price bargainers. I didn’t understand this initially, but after awhile, I realize that ALL people who actually buy from craiglist always expect a price cut from your original posting price, even if the posted price is dirt cheap already. To optimize on between getting more interests versus finishing off the transaction, my advice is to post a low enough price to stir interests, and then reserve a 5% to 10% discount for price negotiation. The room should not be more than 10%, or else you may not even get any replies to your post. And give the buyer your final 5% to 10% discount to sweeten the deal or fatten up your profit margin, depending on how things go.

4. Taking a firm stand on your pricing: If you ever want to be successful in any negotiation, the first thing that you need to understand is that you need to position yourself to walk away from the deal anytime mentally. So unless you simply want to throw away your item for sale, then you need to have an attitude of not being able to sell your item when the price is not right. Why is this even important? Because there are so many craiglist trolls who would low-ball your price extremely to almost insult your common sense. If you get those low-ball offers, just ignore them. And if anybody asks for your lowest price, don’t give away all of your padded 5% to 10% room all at once.

5. Price negotiation techniques: Because Craiglist is like a silent invisible auction, there is no way for the buyer to know how many people are bidding and at what price. In a way, it’s like selling/buying a home with a given listed price. Therefore, what you need to do is to guess the buyer’s willingness and create the image of invisible bidding frenzy if possible. So if you have only one offer, you may still want to state to that only buyer that you cannot give more discount to this only buyer because “the other buyer” has given you this price already. You could risk losing out this only buyer, but it would preserve your little amount of price margins.

6. Art of advertisement: Photos are a must. Always emphasize the good points, and disclose any necessary defects that the buyer should know in the ad. Your advertisement must be honest (so that you don’t waste your time & buyers’ time besides all the legal issues). And during the entire sale process, never tell your buyers anything that could discourage the sale. I was selling a big CRT TV with HD-input at a cheap price. Because of the low price & the HD confusion with the LCD, I got more than 10 inquiries. I was over-confident and told all of the buyers as my disclosure that if they get hurt in moving the 150+ pounds of CRT, I cannot be responsible. Well, that did it, and scared away ALL buyers. I actually needed to repost my ad to sell the TV. At the end, I was still able to sell my 30+ inch CRT for about $30.

7. Prompt response: especially if your item is hard to sell. The buyer sometimes has a sudden compulsive urge. And if you don’t continue this purchasing process promptly along with him or her, the deal will simply not go through once the buying urge is gone. So in the email exchanges, not only you should be prompt, but also you would recreate buyer’s urge repeatedly by how much you cherish this item of yours but only selling it because of …(some “unfortunate” or inconvenient reasons).

8. A Big handshake to finish off: In whatever business negotiations, you should learn that only by making your customers happy, then it’s a good business. I had repeat business on Craiglist from a customer because I made him “happy” in terms of quality and pricing. I didn’t need to negotiate much at all for the second & third time because he knows that I had already “given” him the best possible price. Well, of course, I was still making a tiny amount of money (even though he still thinks that he is getting the best possible deal from me).

9. Post at the optimal time: Based on my personal experiences, I think posting on Friday and Sunday/Monday night or Saturday and Monday/Tuesday early morning should be the best. Monday & Tuesday internet traffics are always the heaviest for almost all sites. However, since it’s an internet garage sale, I usually prefer posting for the weekend on Friday. Quite often, the sale is all done before Monday, if you have priced your item correctly.

10. Don’t post too often too fast: this is just a special “feature” on craiglist. If you post too frequently (like more than 2 posts in an hour), your account can be suspended, and/or your posts will never appear. Stick to craiglist rules carefully, and don’t re-post the same item. Otherwise, you may need to find a new IP address and create a new account to continue selling. I actually found that it was quite easy to trip on craiglist’s watch for spammers.

11. Xmas season helps A LOT: one third or more of the total retail sales happens from Thanksgiving to New Year. Be part of it and go with the flow. Your asking prices can also be higher during this time (simply due to more buyers).

I learned so much from selling on craiglist that I sort of went from being a total nerd to a semi-savvy salesman. The lessons were worth so much more than any amount of money that I was making on craiglist. When my kids grow bigger, I also want them to learn these invaluable lessons firsthand by selling on craiglist. It really takes practices to be a good negotiator, and selling on craiglist is the best prep for that.

So what did I sell on craiglist? I sold PSP, Nintendo DS, baby crib, Legos, TV, several baby & kid’s toys such as tricycles. If the items were new, I made 3% to 15%. If the items were used, I recovered 40% to 100% of the original price that I paid (except the TV of course). I would say that it was a pretty darn good record.

http://www.zerohedge.com/article/if-cme-hikes-gold-and-silver-margins-50-and-nobody-cared-did-tree-fall-central-banking-pm-pr

http://tfmetalsreport.blogspot.com/2011/02/wow.html

50% raise in margin requirement, and silver broke new high?!!

Why shouldn’t silver/gold be in backwardation? The reason is very simple (but many people don’t understand and deny it). The fact is both gold & silver have always been real MONEY in human history. Why would ever $10K cash up-front more expensive than $10K cash three or six months later from now, considering these kind of “cash” will never yield interest money? Three or six months from now, the same cold metals will stay as the same amount of cold metals. The only possible way for silver/gold to trade in backwardation in futures market is that they (COMEX) just DON’T have all the “cash” on hand.

There are about 60,000 open contracts into the March delivery date, and that is about 3X of the COMEX inventory on-hand.

Somebody will milk COMEX for extra premium in rolling over to the next delivery date, and I bet COMEX will demand a non-disclosure statement, but they won’t be able to get that from Sprott for sure.

Even though I’m often so busy that I don’t even have 1 hour to spare for blood donation, that one hour is probably the best relaxation time for me for months. I lie there, staring at the fluorescent lights, imagining how helpless the sick people must have been at the hospitals lying on the same beds. And I always make a prayer during the blood donation that whoever receives my blood can recover as soon as possible with God’s granted grace. Yeah, sometimes the donated blood won’t get used in the allowable time, but that is just part of the business.

To be able to donate blood, one obviously must be healthy. The last time I donated blood, Red Cross told me that if my diastolic blood pressure is more than 100, I won’t be able to continue to donate blood. I measured 100 exactly. She advised me to start taking my blood pressure medicine, and don’t delay anymore. When I came home, my 4 year old kept staring at the bandage around my elbow. Finally, his curiosity overcame him. He asked me what happened to me. I told him that I gave blood. And he couldn’t understand. Then I showed him a youtube on blood donation. He was a little scared, a little amazed, and somewhat confused. I hope one day when he grows up, he will understand and also donate blood for good.

I have always made it imperative to teach my children about charity. I want them to understand that how lucky they are to enjoy all the material things around them, and that if ever we own anything, it is given by God. We all come to this world with nothing, and we will leave this world with nothing. I am not sure if my kids will understand all of these one day, but I have great faith & hopes just by looking into their innocent eyes.

Reviewing the differences between the current budget versus my 2008 budget, there are several categories that have gone up. The income in this budget has increased by $25K, but I’m budgeting a lot taxes now to reflect the fact that my marginal bracket is basically 45% to 50% (even back in 2008). The other increases are the new $230 extra-curricular lessons for my sons and $140 extra in food & dining, and about $300 extra spending for my wife & kids on toys/clothes/electronics/etc. My charity contribution has increased by about 30% too. And traveling back home & vacation has gone up too by almost $800 a year.

Looking at this budget and the corresponding increases from 2008, I can identify that my kids are not frugal at all. They are basically getting every new lego boxes out there, and lots of Wii games too. I think it is time to put up some constraints. That is probably the only item that I can cut down because all other increases are due to inflation or are necessary. Looking forward, children’s educational cost will continue to go up as kids grow up.

From above, my total expenses (in white) are $6318, and my total taxes (in red) are $3893, and the savings (in green) are $3063. Assuming a household income of about $135K, or a monthly wage of $11250, my cashflow after deducting all the above items is negative $2024, which needs to be deducted from the above savings number. Please note that the above taxes are just the taxes that one might be paying at such income level. My marginal bracket is at about 50%, instead of just 24% from the above.

My net saving has dropped (again) from $45000 to $30400 in 2008 to now at about $16000 in 2011. This is after I account for the 15% discount in share purchases of my company ESPP plan. Unfortunately, I expect my saving levels to continue to dwindle, due to the increase in the child expenses going forward. My annual cashflow now is negative $24300 from above, and that is very observable in my bank’s balance. I need to constantly infuse more cash into my regular checking account to just pay all the expenses.

I’m drawing exactly the same conclusion as in my 2008 budget:

What’s the lesson here? I’m not becoming much less frugal, but my saving drops. Inflation accounts partially for the drop, but the main reason is as stages in life progress, your saving (if it is still positive) will be dropping to its LOWEST when your children start going to college. I’ve written an entire post (boring, but truth that you don’t want to hear) on this point to advise anyone out there to start SAVING NOW. The best time to accumulate your savings is before having any kids, especially before getting married (and after you just started working). The next best time to accumulate your savings is when your kids finish college, and before you retire. The rest of the time, one should consider oneself lucky to scrap away something left after all expenses are paid. If you have any doubts about my drawn conclusion, simply ask your parents.

I have arranged my spending on credit cards as follows:
1. Grocery, drugstore, and any gasoline purchases not at Costco for a flat 5% cashback on HSBC Platinum Cashback Card.
2. Restaurants for 3% cashback and travel related stuffs for 2% cashback on True Earnings American Express card.
3. Essentially 2% cashback on Citi’s Driver’s Edge Option credit card for everything else. It’s 1% + 1% via submitting mileage record. I just submit it for every oil change that I need to do for my car. On this card, it’s actually by point system. I only buy $100 Macy’s gift card using 10000 Thank You points so that I can get a conversion factor of 1 point for 1 cent. Unfortunately, this program is going away now.

I have searched on the internet for a better deal to replace the Citi’s Driver’s Edge card, but I can’t find anything. EmigrantDirect had a 1.4% cashback on everything but it’s gone too. The best thing that I could find is the 2% cashback on Fidelity Rewards American Express card, but the credits go into your Fidelity brokerage account.

I will need to think about this deal, since I’m a little wary of opening another brokerage account just for that. I have consolidated most of my accounts at WellsFargo (where I trade free through PMA account) and InteractiveBroker (for cheap options). I definitely don’t want to have my cash simply sitting in the Fidelity brokerage account doing nothing. Based on my past spending pattern, I can get about $275 just from 2% Citi Driver’s edge card. If I move that spending to any of my existing 1% cashback card, I would throw away $125 per year. Hmm. Something to think about.

In any case, if you don’t use any of the cashback credit card, you are definitely missing out BIG time. I got $362 back on my HSBC, $276 on my Citi Driver’s Edge, $250 on my True Earning AMEX for a total spending of about $34700 on these three cards. That’s $888 that you may be missing.

At the minimum, you should get yourself the True Earning AMEX (assuming you buy stuffs at Costco) and Chase Freedom card for basic 1% cashback & 5% cashback on rotating categories. That’s just a little effort to “earn” while you spend. It really adds up!

Frugal at 1stMillionAt33.com

Both gold & silver have made the MACD bullish crossover on the daily chart. GDX & GDXJ have both made the crossover by just about a couple of days earlier. The upturn has been quite sharp, and is subjected to sharp pullback. It’s going to take a lot more work to get this market back to bullish stand.

Based on my reading of the Elliot Wave Theory applying to gold & mining stocks, I believe that we should definitely be in major wave 3. Initially, I thought the 5 of 1 of 3rd major wave would be here. After the recent correction, I’m not sure if 2 of the 3rd major wave has begun. The second wave down is usually the most painful. GDX correct some 70% in its 2nd major wave in 2008/2009. Therefore, I would be cautious about the 2nd wave of the 3rd major Elliot wave too. The other disturbing trend for mining stocks is that oil prices are going up fast if not faster than gold. The gold to oil ratio must be carefully watched to decide on whether to over-weigh precious metal mining or oil drilling stocks.

I have been extremely busy with my day job & investment for the last month. Inevitably my blog suffers. After all, I’ve got only 24 hours a day. I’m going to make an effort to blog more regularly. Hope that my work schedule won’t get overwhelmingly busy again.

Notice the gradual increasingly slope with shortening timeframe. This is a typical behavior of a super-exponetial function that is destined to “collapse” in the future. The debt obviously won’t collapse due to payback, but possibly “collapse” through massive inflation or repudiation. This is the chart that any US citizens should keep an eye on. If the chart continues its own pattern of increasing slope with shortening timeframe for slope change. Then one definitely be prepared.

To put 20 trillion debt increase for perspective, the entire global stock market valued at $49.1 trillion in March 2010. When USA run out of other people’s money to use, the only way left is obviously to simply print more (as if USA hasn’t done it yet through two rounds of quantitative easing).

I’m not changing my current projection for a US debt/currency blow-up in 2016/2017, unless the above debt chart changes its super-exponential pattern, and/or that the time has gone beyond 2022 without any problems. Let’s see if Tea Party & Ron Paul who just took the helm of Domestic Monetary Policy Subcommittee can effect a direction change in the coming years.

Since I used my Chase Freedom card which has 5% off for all grocery purchase (upto the first $1500), and my old HSBC card which also has 5% off but no limit, I get a total of $25 back for every $100 purchased in gift cards. More people have Chase Freedom cards. So at least, you can get 25% off for your first $1500.

Also, a couple of restaurants are having gift card sales too. Souplantation (and Sweet Tomatoes) has 1 free meal pass for every $50 gift card. Since 1 dinner is about $9.50 plus tax, you are getting a little bit more than 20% off. Panda Express has a free two item entree for every $25 gift card purchased. That’s about $6.50 plus tax. For CA 9% tax, that will be a 28% off for every $25 Panda gift card.

So far I’ve bought up $500 in Shell gasoline gift cards at Albertson, $400 in Amazon gift cards which I will spend almost right away for a HD camcorder, and another $300 in various restaurants. That’s $1200 in gift cards, or $240 in free grocery at Albertson, plus $60 in cashback on Chase Freedom card. I figured that $500 gasoline will only last me 2 to 3 months, and I’m spending $200 to $300 on dining out anyway, these gift cards would go extremely quickly. In fact, if I could find more grocery to buy at Albertson, I could easily prepaid 3+ months of my expenses. The most tricky thing about the whole Albertson deal is that $20 grocery coupon cannot be combined, and so only $20 off per transaction. But you could go to a self-checkout and simply check stuffs out for every $20 that you have in the cart.

For a little inconvenience in managing to use various gift cards, you can get 25% off on almost everything. Not a bad deal at all. Certainly, for my marginal tax brackets at about 45%, a dollar saved is two dollars earned. With $300 already saved in my pocket, I’ve got myself a $600 “salary raise”. Maybe I should work on it some more.

25% off is quite a lot. I really wonder how these stores survive.