Monday, February 20, 2012
It's hard to picture him at that older age, forever preserved by time as the 27-year old singer with the often unintelligible lyrics. But I'm from a generation that actually remembers when MTV played great music. I lived the dull music boredom of the 1980s, the decade of big hair and heavy metal power ballads, and longed for the raw energy of the New Wave a generation past.
Hundreds of millions of us found new vitality in Nirvana. It's hard to describe the fury that captivated the world when NEVERMIND was released in 1991 and "Smells Like Teen Spirit" became a worldwide sensation. The video was everywhere, and so was Kurt Cobain. NEVERMIND sold more than ten million copies in the United States alone.
I live in Seattle, Washington in the very same neighborhood where Kurt Cobain played music, lived, and died. Even to this day it is hard to walk down a downtown Seattle street that does not have some connection to Cobain and Nirvana. The venues where they played, Kurt's favorite restaurants, even the notorious places where he bought and used drugs. Seattle still thrives on the residue of the grunge movement, whatever is left of it, and Nirvana trivia and nostalgia is everywhere.
You can even go to billionaire Paul Allen's EMP museum in Seattle and see possessions Kurt once used or held in glass cases, his notebook, guitar, and hairbrush displayed like religious icons for still adoring fans.
View Larger Map
For me, Kurt Cobain is not some dusty CD in the back of my collection not listened to in years. I routinely shop across the street from the venue where Nirvana played their first ever gig. I ate pizza the other night at Kurt's favorite pizza place. Perhaps I was sitting in the very same booth he used. Sorry, but I get an eerie feeling at the thought.
For years I have been intrigued at the idea of using real estate site analysis techniques as a vehicle for solving true crimes. After all, site analysis is used to deter crimes such as by analyzing lighting, traffic flows, pedestrian traffic, and other physical attributes of an area, why can't the same concepts be used to solve crimes? In part they already are---by the police. But I'm not a cop. Could my years of experience going to strange and unfamiliar locations and quickly analyzing "what's up" in some way add material new details to a mystery that previously not been solved?
The answer in the past was yes, and I was eager to give my theories another try.
Friends and I have played amateur detective many times before. As archeologists say "Sometimes the well-trodden stones can still tell tales." Going to the sites of battles, crimes, or other historic events both famous and infamous allows you to experience the surroundings that still exist as the participants actually did. Real estate investors seem to have that extra "Sixth Sense" about these types of site surveys. I often notice small things my friends do not, especially when distances are involved.
It's hard, for example, for most people to estimate what an acre looks like. Or forty yards. Height, width, and depth look different for some people than others.
View Larger Map
This past summer, I crossed paths with Kurt Cobain's ghost at an old apartment house in the Capitol Hill neighborhood of Seattle less than a mile from my home. A friend over coffee was interested in the location and gave me the building's name. I checked it out---and discovered Cobain was a regular there and not for the best of reasons. He routinely bought heroin and shot it up there. Not the type of information that my friend wanted but it got me thinking. And then I started acting all summer long.
Could visiting the last known sites Kurt Cobain visited before his suicide reveal anything new about his death? Or squelch the persistent and nasty rumors of his murder?
Why would a man worth millions of dollars with a brand new daughter he worshipped and adored go back to his lakefront mansion in the most exclusive neighborhood in Seattle and put a shotgun in his mouth? Could tracing Kurt Cobain's final days from a real estate analyst's perspective reveal anything about his death that others might have missed? And would have nearly twenty years since his death have added necessary perspective on these events or would time be an enemy, erasing details and hiding the truth from posterity?
I spent the summer of 2011 investigating the death of Kurt Cobain.
The next three posts in this blog will tell you what I found, including some never before reported facts I hope add some clarity and closure to this still sad drama.
MTV UNPLUGGED IN NEW YORK
To those of you who have forgotten the talent of Kurt Cobain, or who doubt it in the first place, I would suggest watching his live acoustic performance during the famous MTV UNPLUGGED IN NEW YORK set which took place on November 18, 1993.
Cobain's brilliance is obvious as a writer and performer. He did not use the UNPLUGGED format to do a "Greatest Hits" version of Nirvana songs but instead sang a wild and varied mix of tunes from David Bowie to blues legend Lead Belly. He sang a cover from the band The Vaselines, one of his favorites at the time, and invited brothers Cris and Curt Kirkwood (who tour together as Meat Puppets) to perform three of their songs with Cobain doing covers!
For days behind the scenes, it was unclear if Kurt was healthy enough to perform. His persistent battles with MTV executives over the show's details, his nervousness about performing live, and a maelstrom of personal demons left Cobain sick and vomiting one minute---and craving Kentucky Fried Chicken the next. And of course there were drugs.
But if you should watch MTV UNPLUGGED IN NEW YORK realize that Kurt Cobain did the entire performance in one uninterrupted take and everyone in the studio knew they were witnessing music history.
When MTV asked Cobain for an encore after he performed the old Lead Belly song "Where Did You Sleep Last Night" he refused because he felt he could not top that performance.
I agree. Watch the video below and you decide.
MTV UNPLUGGED IN NEW YORK is the last major public performance ever recorded of Kurt Cobain. There would be a short abbreviated European tour after this gig but this is the final memory most of the world has of him.
No one knew it at the time, but he had less than five months to live.
Just 106 days after this legendary performance, Kurt Cobain would try to kill himself in a Rome hotel room with his wife and child sleeping just feet away.
NEXT: The return to Seattle and the last attempt at rehab
Monday, February 13, 2012
And rising significantly. The real distinction between earned income and capital gains is lost on the general public and the tax break that prevents income from being taxed twice may be doomed.
Stock market investors can time buy and sell decisions with great ease. Real estate investors cannot. This paradigm assures that if you want to take a gain take it before a new U.S. President is sworn into office.
The simple fact is that the Federal government is broke but has the appetite for tax money that a teenage boy has for girls, fast cars, and pizza.
President Obama released his 2013 budget today. Read how he wants capital gains taxed at ordinary income rates and impose the "Buffett Rule" as a way of eliminating the hated Alternative Minimum Tax. Have you forgotten the upcoming 3.8% Medicare tax on net investment income that was passed as part of Mr. Obama's health care law and also begins in 2013?
Real estate investors, take notice.
You are the 1%. The 99% are coming after you, not with pitchforks and torches like the peasants in some old Frankenstein movie, but with higher tax rates and sanctimonious lessons on the need to "pay your fair share."
You are in the crosshairs of local, state, and Federal tax authorities that want more of your money starting January 1, 2013. No matter the winner, blue state or red, the public coffers are empty and need filling.
Act now to shelter income, make gifts, or sell what you can before higher rates hit.
Future investments in real estate should also consider higher taxes on rental income and capital gains when calculating expected yield. Current rates, or even inflation adjusted current rates, won't do it.
Thursday, February 2, 2012
I posted yesterday about the Facebook IPO but since they released their S-1 after the Bell I decided to revisit my analysis.
Facebook is not worth anywhere near $100 billion that the media is barking about with such glee. Nor with Mark Zuckerberg score anywhere near $28 billion. These are absurd numbers without any credible financial valuation. Using Facebook's own numbers (a HUGE assumption) and comparing valuations to companies like Google and Apple, you get an estimate of about $20 billion.
But even that is an overestimate. This is a bubble stock in a bubble industry, social media.
Facebook did report some nice revenue and earnings growth numbers. But their costs are rising faster than their sales---not a good sign. The company claims they need the money to grow and that's true. But it is also sign they are burning cash at a rate faster than the company is making it.
The most glaring weakness and, in my opinion, Facebook's fatal flaw is how it calculates what it calls "Monthly Active Users" and its shorter equivalent, "Daily Active Users."
I find the company's definition intentionally deceptive.
The company reports nearly 800 million "active users" and that's what lures in the media and advertisers. Nearly a billion people every month "ACTIVELY" using Facebook.
But what does this term really mean?
From Facebook's S-1:
We define a monthly active user as a registered Facebook user who logged in and visited Facebook through our website or a mobile device, or took an action to share content or activity with his or her Facebook friends or connections via a third-party website that is integrated with Facebook, in the last 30 days as of the date of measurement.
Notice the two part definition.
The first part is obvious and I agree with it. Being an active user of Facebook should mean actively engaging the website just as the company says "through our website or mobile device." It means looking at Facebook pages and actually seeing advertising.
The second part of the definition is disingenuous and how Facebook has accomplished much of its subscriber growth since 2009. The LIKE icon.
You can be considered a MONTHLY ACTIVE USERS if over the course of one month you click LIKE just one time.
Did you enjoy that newspaper article or movie review and click LIKE on someone else's website? If you click the LIKE button at the bottom of this blog post, Facebook will consider you an active user for the next 29 days. Visit Yelp.com and post a review. When you're done, did you send your post over to Facebook? Guess what? You were "actively using" Facebook but you never saw the site.
Facebook says you are "actively" using its site when you use the LIKE icon. And technically they are correct. You are adding content to your Facebook page for your friends, therefore you are engaging the site.
But what Facebook is doing is lumping all those once-a-month LIKE clickers with the people who live 24/7 on the site, actually looking at www.Facebook.com and seeing advertisements.
Facebook does not break down the numbers, but applies the same standard to DAILY ACTIVE USERS. If you spend one second each day clicking a LIKE icon on ANY SITE ON THE INTERNET you are considered to be a 24/7 Facebook user for advertising purposes.
If you sign into your Spotsify account using your Facebook info, guess what? You are an active Facebook user.
In theory, you can never visit www.Facebook.com again for the rest of your life but still be considered a daily active user by clicking LIKE icons on other sites!
This metric is phony and radically overstates the number of active users who use the site as common sense would describe. ACTIVE USERS should mean active users, and not someone who clicks a LIKE button once a month. You should actually have to look at a Facebook page to be an active user of Facebook.
I read that the IPO price will be around $45. If so, this stock is $10 within three years. I've never seen Wall Street hype a stock so much. When they need to play these games to sell shares, watch out.
By the way, Facebook also admits that now more than HALF of all daily active users visit Facebook through mobile devices. The company also admits it has no way to post ads on mobiles. So half of Facebook's most active users never see a single paid advertisement---EVER.
Nice deal for advertisers, NOT.