The No-Car Garage

  • Jim Lee
Future Car
This year, I've been doing a lot of "thinking out loud" about the future of cities and real estate.  The technology that seems to have the greatest buzz (and there are several) appears to be autonomous vehicles.
So, let's have some fun with this and spin the wheel of implications. 
Urban Landscape:  Today, cars are parked 95% of the time.  Smart cars have places to go and things to do.  They could be out moonlighting and generating additional income while they are waiting for your evening commute.  Life gets complicated when cars have an agenda of their own.
Winners:  urban redevelopers, walkable cities 
Losers:  parking attendants, meter maids.
Car Sharing:  Why own a single vehicle, when you could have the right car for any occasion?  A mini-van for soccer practice, an energy-efficient commuter car, or a pick-up truck for weekends at Home Depot?  The average car costs a total $8,500 per year (or, $25 per day) for insurance, maintenance, payments, and fuel.  Autonomous vehicles could shift the paradigm from ownership to access by repositioning transportation as a service. 
Winners: teenagers, the poor
Losers: public transportation systems 
Automotive Design:  What if you could order a car as easily as a pizza?  Would you always want pepperoni, or would get a little crazy and ask for chicken teriyaki barbeque?  Cars have been boring for the past 30 years because they attempt to do everything and keep everyone happy.  As cars are ordered on-demand and ownership declines, we may see whole new classifications of vehicles, including single-person commuting pods, sleeper cars (for long-distance travel), business class vehicles (with workspaces and mobile wi-fi), and party shuttles (which encourage drinking, not driving).  
Winners:  creatives, recreational vehicle manufacturers
Losers:  automotive dealerships
Shortened Product Cycles:  What if cars wore out as quickly as laptops or cell phones?  If cars are shared and utilized 8 hours a day, we'll need a fraction of the current number of vehicles in use.  It also might be quite possible that these cars will be putting on 30,000 - 50,000 miles per year.  As a result, cars will need to be replaced (and upgraded) much more quickly.  They also might consume more energy, not less, for the trips that they are running with no passengers.    
Winners: progress, energy providers, recycling?
Losers:  business-as-usual
Liability Coverage:  What happens when an autonomous vehicle crashes?  Today, 85% of all accidents result from human error and 36,000 deaths are caused per year.  If there is no human involved, who do you blame?  There is a good chance that manufacturers will be forced to provide their own warranty coverage, covering liability in the event of an accident due to vehicle malfunction.  This will be paid for by car sharing fees.
Winners:  public safetyauto companies
Losers: traditional property-casualty insurers, lawyers
Hyper-Commuters and Long-Distance Travel:  Long-distance commuters everywhere will rejoice if they can get to work refreshed and nap on their way home.  Cars might become so comfortable that we could almost live in them.  What if that happens?   
Winners:  fitness clubs (gotta shower somewhere)
Losers:  hotels, airports, aviation industry
From an investment perspective, we believe that manufacturers of recreational vehicles (including Winnebago, Thor Industries), automotive suppliers (Magna, Harmon), companies involved in the Internet of Things (NXP Semiconductors, Mobileye, Nvidia), and the supply chain of rechargeable batteries (Albemarle, FMC, LithiumX) could be well-positioned for the emerging future. Cars may soon become the 6th screen, and provide enormous amounts of consumer information to be processed and stored (Google, Facebook).
So, what kind of time frames are we looking at here?  Social barriers to adoption aside (regulations, etc. - a very big "if"), most automotive companies are estimating that they will have technology ready for mass production by 2023-2025.  It could easily take 13-15 years for old cars to wear out and new cars to be placed into circulation.  That would put us out to 2036 for 50% deployment, or 25-30 years to 2048 and beyond for 90% deployment.
Jim Lee, CFA, CMT, CFP®
Founder, StratFI 
Disclosures: Information contained herein is for educational purposes only and is not to be considered a recommendation to buy or sell any security or investment advice. Securities listed herein are for illustrative purposes only and are not to be considered a recommendation. As of 10/18/2017, StratFI may hold shares of NXPI, MGA,THO, ALB, LIXXF, GOOGL, and FB within client accounts.

Finding the Sweet Spot in Your Life

  • Jim Lee
In the last blog post, we covered the five stages of successful retirement.  It all begins with a (sometimes) optional step of personal reinvention.  This would be any time in your life when you might ask yourself, "who do I want to be want to be when I grow up?"
It can happen in your twenties, your forties, or your sixties.  Think of reinvention as your own personal "do-over".  
In Japan, there is this wonderful and useful concept of  ikigai .  In a broad sense, this means "reason for being".  More specifically, it is comprised of two words, "iki" (life, being), and gai (fruit, worth, use).  Everyone has an ikigai.  Finding it requires a journey of self-discovery.   
Ikigai illustrated
Jim Lee, CFA, CMT, CFP®
Founder, StratFI

The Five Stages of Successful Retirement

  • Jim H. Lee

I'll confess that I was a probably little too young to be coaching people on their retirement back in the early 1990's. Frankly, it is remarkable that I was able to be of any help at all, given my own somewhat minimal experience with personal finance.

A popular misconception that advisors held at the time was that retirement is a singular "event" that could be completely planned for.

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Deciphering Cryptocurrency

  • James H. Lee

Deciphering-CryptocurrencyOne of my life's great regrets was not buying Bitcoin in 2011, when it was worth just 40 cents. I knew about Bitcoin early on and the idea seemed fascinating. It was the world's first crypto-currency, backed by computational power, limited supply, and an unbreakable code.

If I had made a minimal $1,000 purchase, that speculation would now be worth... $2.5 million dollars.

The problem was this: Bitcoin felt "sketchy". Still does. And the SEC seems to agree on this point, as it recently dismissed an application for the world's first Bitcoin ETF.

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Real Estate Disappears

  • James H. Lee

3FuturecityFutures come in many shapes and sizes. There are possible futures, probable futures, and preferred futures. Each of these comes with a different set of tools from the futurist's workshop.

The thing is... there isn't just ONE future. We get to choose.

So, I found it difficult to give a straight answer when asked about the future of real estate earlier this month. Anyone who gives predictions won't last long as a futurist. Among the occupational hazards of this work includes the fact that any statement made about the future may, in hindsight, appear to be obvious, wrong, or worse yet, obviously wrong.

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Where did money goThere are some things that we all enjoy buying. These are the "fun" purchases that motivate, bring us joy, satisfaction, and a sense of well-being. For some people, it might be a morning cup of coffee, or going out to dinner for "date night" once a week.

Other bills we pay a little less enthusiastically. Here are a few power-tips for saving money on regular expenses that nobody gets excited about:

Student Loans: Few people realize that student loans can be refinanced. Everyone gets the same high interest rates when they apply for a student loan, because we all start without a credit history. After spending a few years successfully navigating the working world, college graduates may qualify for a better deal. Rates for refinanced student loans can be as low as 2.2%. Check out

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