A moment to stereotype

I've been thinking about politics lately and various political groups, and how there are pretty much two sides that stick together like rabid wolves. They will back up their respective side no matter what usually, and I find it odd because the interests of the group are usually so diverse. So I'm going to take a moment to make some stereotypes, becauses judging people is cool. I'll start with conservatives because they have the biggest ideology gaps.

The Redneck: These are the guys who still think/talk about the civil war. The most important thing to them is having guns. I don't believe they're particularly religious, nor are they really moral (note the 70% of country songs are about your cheating heart. The other 30%? Flat-bed pick up trucks of course). Characterized by low intelligence, low income, and the aforementioned gun zeal, this group votes against their economic self-interest by voting republican.

The Self-Serving Businessman: This is the corporate guy, who was socially liberal in college (and probably still is) but years of work life have dulled his sense of social responsibility and focused his politics on one issue: taxes. Conservatives typically slash taxes so the businessman is happy. He often dominates his wife and kids to have the same view. The hero of the conservative businessman is vice president Darth Cheney, seen to the right.


The Religious Right: Religious fanatics that have a stranglehold on the south, and probably the midwest which is basically the same thing. Being right is more important to this group than anything. If you don't agree with them, then you are wrong and will burn in a magical place for bad people. One of their prime activities is ostracizing others and creating conflict and hate. So what does a group that purports to follow a 1st century peaceful bearded middle eastern man have in common with Republican ideology? Only one issue really: anti-abortion. The "right to life" is the single issue the two groups have in common. You would figure that caring for the poor would be a stronger issue and thus they would side with Democrats (as they did up until the 1950s), but the religious right has somehow taken over the Republican party.

Seeing these three groups, it is no wonder that W. is president. He is a blue-blood born into a rich New England oil family, moved to Texas at a young age and became an ignorant redneck, and became 'born again' and obsessed with religion sometime after several drunk driving accidents and arrests for cocaine use. He is part hick, part fanatic, and part evil businessman. He is the ultimate conservative.

Coming soon, I'll do a similar write up on the various liberal groups, but it probably won't be as interesting.

Apples to Oranges

Yes, the whole saying "it's like comparing apples to oranges!" is overused like our friends "what haaaappens in Cancun, staaaaaays in Cancun" and "I can sense when people are gay, I call it Gaydar" but I need this saying now to help make my point.

I just read another article comparing stocks to real estate, this time by Forbes. The headline reads something like "Stocks or Real Estate? Which one is a better investment??" Real estate has become the new 'chic' investment of choice. I blame Trading Spaces and its clones. My problem with such articles is that they cater to these dumb trendy people who want a simple answer as to which is better, using simple numbers. The article provides that much coveted useless simplicity.

The article claims real estate is better in the short term because housing prices rose 56% in past 5 years while the S&P 500 went down 6%. It then goes on to say "But if you take a longer view - say, 25 years - you'll find that the S&P 500 has actually stomped the real estate market, from Boston to Detroit to Dallas. From the start of 1980 to the end of 2004, home sales prices increased 247%. A pretty sweet deal, it would seem. Over the same period, however, the S&P 500 shot up more than 1,000%."

Aw, simple easy numbers. 1,000 is better than 247, so stocks are better than real estate. Look at that orchard of apples to apples. No. Let me ask you Mr. Forbes, how many people pay 100% of the price of their homes? Maybe like one out of every 500? Most people get a thing called a mortgage, where you put down 10% of your own money and leverage the rest. And it's relatively easy to get a mortgage because it's a reasonably safe investment. Try to get a bank to lend you $300,000 so you can buy a bunch of stocks, no one will do it. Why? Because any particular stock can be worth zero tomorrow. Not so with houses.

So if these MBA's at Forbes use this difficult concept of leverage, they'll see that the guy who puts down $10,000 on a $100,000 house in 1980, his house will be worth $247,000 (247% increase) in 2004. Assuming he rented it out and broke even with mortgage payments etc, he can sell the house at a gain of $212,000 (consult an amortization table to see how I came up with that number). His investment has increased 2,120%, not 247%. You pay 10% of the price but get all the profit. 2,120 is better than 1,000.

But that's ok. As I said earlier, there are too many people playing around in real estate right now. I hope stocks do well so people forget about real estate and I can swoop right in. Stay tuned for details.