spring16roadtrip

At around 7:30 AM, I left Denver for Great Sand Dunes NP.  The first change of scenery occurred as I abruptly descended from a green, hilly Alpine landscape into a dry flat valley near the Fairplay, CO and Jefferson, CO area.  The area primarily consisted of large, privately owned ranches.

About an hour later, I descended into the Arkansas River Valley.  The upper Arkansas River Valley is bordered on one side by the Sawatch Range/Collegiate Peaks.  This portion of the Rocky Mountains is home to the highest peaks in the region including Mt. Princeton, Mt. Harvard, Mt. Columbia, and Mt. Yale.  What’s most interesting about the geography is the difference between the landscapes on each end of the valley.  On one side of the valley are the snow-covered 14,000 foot peaks, and on the other side is the dry, relatively short, desert mountains near Buena Vista, CO.

At the Northern edge of the Arkansas River Valley is Buena Vista, CO.  Like many rural cities in Colorado, Buena Vista was originally a mining town.  The town is located along the Arkansas River, with the town’s main commercial corridor running perpendicular to the river.  As I walked down the historical main street, I was a bit amused by the hip/specialized restaurants (breweries, ice cream, coffee shops)  and also the highly improved and modern infrastructure.   There were large new sidewalks, brand new riverfront parks, and a new road (“Main Street South”) running along the river. Many of the businesses (including Buena Vista Bakery) have been open for almost a century and are multi-generational family owned-businesses.

After walking along the river for 15 minutes, I arrived at a newer, partially built master-planned community along the river. The center of the town was a public park, surrounded by restaurants, a coffee shop, a hotel, mixed use properties, and residential properties.

On the first floor of one of the new mixed-use buildings, I noticed a real estate office. I stopped in and asked some general questions about the area to the broker, Andre Spino-Smith (andre@southmainstco.com).  It turns out that the 41 acre riverfront parcel on which the community is located is owned by a brother and sister who came up with a plan to create a resort community.  Their development company is called South Main St Company (http://www.southmainco.com/) (https://www.facebook.com/southmainco/?fref=ts)  The three-phase project has just completed its first phase, with the main infrastructure and commercial buildings up-and-running. As part of the three phase project, they are providing design/build services to people interested in building new homes in their community.

S. Main St. company is also in the process of opening up a new riverfront Hotel, which will be owned and operated by S. Main St. company. I wouldn’t be surprised if the commercial properties surrounding the central park are also owned by S. Main St. company. This business model is similar to the Santa Catalina Island company and their operation/ownership of Catalina Island. However, Catalina Island has a major advantage, being that Catalina Island is 99% controlled by the Santa Catalina Island company, whether through it’s the Santa Catalina Island Conservancy or whether through its business operating entity. On the other hand, Buena Vista is surrounded by hundreds of thousands of acres of vacant land private and privately owned homes. I’m interested to see how this community will come along in the next 10, 20, and 50 years.

Andre believes that most of the appeal for this investment will come from price appreciation over time. I highly doubt that will be the case.  Buena Vista’s location doesn’t seem to have the appeal,exclusivity, and limited land of other high-end resort towns in Colorado (Telluride, Breckenridge, etc.)

The next stop after Buena Vista was Salida, CO.  Salida prides itself as having the largest historical district in Colorado.  The photo most commonly associated with Salida is probably the city with a backdrop of “S Mountain” behind it.  Like Buena Vista, Salida also borders the Arkansas River and Railroad.  Today, its biggest draw is tourism and recreation. Upon entering the town, I stopped by the visitor center and they suggested a few short hikes across the river.  I decided on a 2 mile hike that ascends to “S Mountain” and provides a view overlooking Salida.  After the hike, I walked through a few streets in Downtown.   My favorite store was Spirit Mountain Furniture, a furniture store offering high-quality, hand-made, beautiful wooden furniture.

 

Continuing on toward Great Sand Dune NP, I stopped at a gas station/restaurant and ordered food once I realized this would be the last chance to have a meal.   The potato, salad, and waffle french fries were great.

Several miles away from Great Sand Dunes NP, there was a sign for Zapata Falls.  Thinking this would just be a short detour, I decided to visit the falls.  After turning off the main highway, I drove about 20 minutes up a rocky, gravel road until reaching the parking area and trailhead.  The hike would also end up being 1.5 miles round trip, but the scenery and experience were worth it.  Upon reaching the river near the end of the hike, I had to continue skipping rocks toward an opening in a large rock hillside.  Behind the opening is a partially frozen, yet flowing waterfall.  Considering the temperature was about 80 degrees, the cold air near the waterfall was especially refreshing.

Another freeway stop/distraction was the Scenic Vista Trail, a short loop trail located between Zapata Falls and Great Sand Dunes NP.  The short loop trail provides distant views of the Rockies and a natural drainage creek.  Afterwards, I continued on to Sand Dunes NP to spend the night.

 

 

This morning I spent a few hours at Starbucks catching up on work. At around 10AM I met with Howard and we drove to Downtown Denver.   We parked near the edge of Downtown and walked a few minutes to Confluence Park.  Confluence Park is a small park located at the confluence of South Platte River and Cherry Creek River.

Located along the river near Confluence Park is a century-old brick building which was the original railroad station in Denver.  The building has since been refurbished and now houses an impressive REI and Starbucks location.  The REI location is overflowing with character, with characteristics such as a fireplace, 50 feet open ceiling floor plan (with mezzanines, floor-to-ceiling rock wall, and floor-to-ceiling towering red brick walls.) The Starbucks is similarly character-filled and impressive.

After visiting Confluence Park, we decided to go out for lunch.  Parked between the Capitol Building and the City/County buildings, there was a street filled with over 20 food trucks, with foods ranging from Pizza, tacos, ribs, mediterranean food, ice cream, vegan food, ethiopian food, and more.  I ended up ordering a slice of Caprese Pizza and Ukrainian Dumplings.  After eating lunch on the lawn, Howard and I parted ways and said our goodbyes, as I walked across the street for a 1pm tour of the capitol building.

The tour of the Capitol building was very interesting, factual and inspiring.  Much of the credit should go to the tour guide who was very enthusiastic and knowledgeable about even the smallest details. The thorough tour ended at the dome on top of the Capitol Building.  From the dome, there are 360 degree views of Denver and the surrounding  Rockies/Mountain Peaks.

After the tour of the Capitol Building, I walked to the Museum of History, which contained exhibits including: Denver A-Z (Alphabetically-arranged exhibit), the dust bowl, Native American History in Colorado, Hispanic History in Colorado, African-American History in Colorado, the Rocky Mountains, homelessness in Colorado, history of Japanese Intermittent camps in Colorado and more.

It seems that the reasons people live in homelessness are primarily the following:

• Victims of domestic abuse
• Lost job
• Felony convention (tough to find a job)
• Addicted to drugs/alcohol
• Adventure/Free-spirit
• Death/sickness of family/supporter
• No family/friends
• Mental Issues (PTSD, bipolar, etc.)
• Too ashamed to ask for help from family/friends

The main point of the exhibit was to raise awareness about homelessness in Colorado.  Homelessness isn’t always due to bad decisions and laziness.  It may be due to situations outside of one’s control such as an abusive relationship, mental issues, death/sickness, addictions, or a bad decision from a while back which led to a felony conviction.  It’s a good idea not to judge homeless people, but rather to show them compassion, and strive to treat them with dignity.

However, I really didn’t like a phrase on one of the papers in the homeless exhibit:  “Panhandling is one choice people make to get by.  What they earn varies – it’s not a reliable source of income.” Really!?  Earning an income!?

 

Another exhibit at the museum described the “Dust Bowl” of the 1930s.

What was the dust bowl?

On a regular basis during the drought of the 1930s, loose soil in farming areas was blown by the wind, creating strong, darkness-creating dust storms in the midwest which ruined crops, killed cattle, and ruined the livelihood of many farmers and residents of the Midwest.

What are the conditions that led to the dust bowl situation?

• High wheat prices during WW1
• Invention of plows and other mechanisms for loosening up soil efficiently
• High Debt carried by farmers, thereby leading to high fixed costs of production, and forcing high levels of crop output
• Drought (Lack of water to utilize farmland efficiently)
• Boom and Bust commodities economy
• High winds

What are some interesting facts about dust bowls?

• Grasshoppers became very numerous, because none of grasshoppers’ predators were able to survive in the dust bowl region.  These grasshoppers ruined crops, clothes, and other materials
• The thickness of dust storms creates a thick darkness (similar to what I would imagine the plague of darkness was like).  It’s also interesting note that the Torah also has a grasshopper plague…Is there a connection?
• During the dust bowl, 60% of the population left the region
• The dust was moved through electrostatic energy.  The dust had a static charge that attracted more and more dusts at higher and higher speeds.  The dust clouds eventually reached 10,000 feet elevation and 65 miles per hour

How could the dust bowl have been prevented?

• Is it possible to disallow borrowing on business equipment/real estate?  Would that even be a good idea?  I think the real estate market would be much more fairly valued if all transactions were all-cash, un-leveraged transactions.   The prices of properties would be less susceptible to artificial swings that are caused by changing interest rates.
• Widespread scientific knowledge of dust storms and how they form
• Earlier government involvement in remediation efforts

How was the dustbowl situation resolved/fixed?

• Widespread scientific knowledge of dust storms and how they form
• Government intervention and promotion of remediation programs

Although the Salton Sea is only 250,000 acres compared to the 150 million acres which were affected by the dust storms of the 1930s, there can still huge dangers because of the toxic chemicals located in the dust underlying the Salton Sea.

http://www.desertsun.com/story/desert-magazine/2016/01/31/desert-magazine-turning-tides-salton-sea/79433474/

http://www.theatlantic.com/science/archive/2015/11/the-airborne-toxic-lake-event/414888/

What can be learned from the dustbowl situation of the 1930s and applied to the Salton sea situation?

• Early Government intervention into creating solutions (citizens and the private sector can’t be relied on to solve the problems)

 

Another exhibit at the museum paid homage to Ralph Carr, Colorado’s Governor during WW2.  Governor Carr went against public opinion and agreed to accept Japanese prisoners and house them in intermittent camps.  One of his speeches contained the following sentences: “An American citizen of Japanese descent has the same rights as any other citizen… If you harm them, you must first harm me. I was brought up in small towns where I knew the shame and dishonor of race hatred. I grew to despise it because it threatened [pointing to various audience members] the happiness of you and you and you.”  This may not seem like a big deal, but going against public opinion requires extraordinary levels of confidence and determination.

 

After spending a couple of hours at the History Museum, I walked to 16th Street Mall, an outdoor shopping district in Downtown Denver which has many similarities to third street promenade.  One of the main differences is that buses provide free rides up and down the center of 16th Street.  This is convenient but also very dangerous.  Because of the identical patterns of the sidewalks, road, and center median, it becomes very easily to wander in the middle of the road and directly into a bus’s path of travel, especially if someone is preoccupied with electronic devices or their own thoughts.

While walking on 16 Street, I ate a “linner” at The Protein Bar, a supposedly healthy fast-casual restaurant.  The meal was followed with a Cheesecake Caramel Apple from Rocky Mountain Chocolate Factory, which was delicious and sweet, although probably not worth spending $10 on.

(http://www.theproteinbar.com/location-details.html?loc=1600glenarm16thst.mall)

After, I walked to a bar on 16th Street where there was a Meetup event for 20 and 30 year olds.  I saw some of the same people as yesterday including Dana.  The millennial crowd in Denver is very interesting, hip and well-educated.  It has been great meeting people in the last couple of days.

While walking today, I came up with the quote, “If your personal slope is slippery, it will always be slippery.  It’s not possible to chase the short-term dopamine and maintain an easy balance of long-term moderation, because the same mechanisms that caused you to chase the initial dopamine reward will always be there trying to drag you deeper and deeper into the chase of short-term dopamine.  There’s no satisfying and quieting that urge. You’re either moving away from that addiction or closer to it”

This morning I woke up around 8AM and met Howard at around 9AM.  We drove up to Frisco, a working-class/tourist town which seems to serve as a commuter town for the workers in Breckenridge.  We ate lunch at Butterhorn Bakery, which had large portions and was very delicious. (http://www.yelp.com/biz/butterhorn-bakery-and-cafe-frisco).

Afterwards, we continued on to Breckenridge, the legendary ski resort town.  The ski-resort was founded in the 1960s when three Norwegian skiers convinced a businessman about the financial possibilities of opening up a ski resort in the Breckenridge area.  In its heyday in the mid-to-late 1800s, like many other Colorado Mountain towns, Breckenridge was a mining town, and has since become one of most upscale ski-resort towns in the Western United States.   A quaint, scenic river runs through town parallel to Main Street.  Main Street is filled with art galleries, boutique shops, restaurants, bars, and other speciality shops.  Apparently, during the month of May (AKA “Mud Season”) most of the businesses in town are closed.  During May, the ski slopes are shut down and the recreational possibilities are suspended as the snow melts thereby creating muddy slopes and trails.  Once June comes around, the trails are dry and ideal for hikers and mountain bikers.  At this point, most of the businesses reopen as tourists/visitors return to Breckenridge.

 

After walking up and down Main Street, we stopped for a drink at Starbucks.  Howard shared some photos that he’s taken over the years during his travels, which he airdropped onto my iPhone.  Here are some of the photos:

This morning, Dana Oy (https://www.couchsurfing.com/people/dana.oy), a young lady from Kazakhstan responded to one of my Couchsurfer postings asking whether I’d like to meet up for lunch or dinner in Downtown Denver.  I told her that I’d be heading to Boulder for a couchsurfing Meetup and we agreed to Carpool.  We arrived in Boulder at about 6PM, shared a pizza at a pub and then walked over to the Couchsurfing Meetup.  I enjoyed meeting people including a mailman, Au-pairs from Columbia (Laura), an engineer from India (Sri), and many more.  As always, it was a friendly crowd and another great experience.

Dana is an extremely intelligent, philosophical, introspective, individualistic, adventurous, free-thinking 27-year old.  We spoke about marriage, love, the purpose of life, and more.  She’s heavily involved in the EDM/rave scene and is living life for the moment.  Since graduating from college, she has been working as an intern for five years in five different countries.  Although on the surface that seems sort of unproductive and pointless, she’s been taking advantage of traveling, hasn’t gotten into debt, and has been covering her expenses.  Seems like she’s doing at least as well as most “working” college grads in the United States.

One of the topics we discussed was the differences between US culture and European culture.  She mentioned that if she had the opportunity to settle in one place for the rest of her life it would be Europe, not the United States.  Her insights were especially interesting on this topic:

• In the United States, people equate status/value with achievement.  There’s too much competition in school, wealth, family.  People always ask, “what school did you graduate from?” or “What do you do for a living?”  In Europe, people don’t ask this question
• In the United States, friendliness is only on the surface (it’s easier to talk to people but harder to make friends).  Germany is vice versa (Americans are like a peach) (Germans are like a coconut).
• In the United States, there is too much small talk.  In Europe, people are more straightforward
• In the United States, people are too materialistic (probably caused by capitalism,Government/media controls and brainwashes).
• In the United States, guys are more likely to  harass girls.  There is more objectifying, and this is likely caused by the movies/media.  In Europe, there are no college dorms
• The United States is a more individualistic country (every person for themselves), whereas Europe is more socialist/collectivism (free education, healthcare)

She also recommended I check out a banned Ted Talk about the role of drugs in increasing consciousness:

[youtube https://www.youtube.com/watch?v=Y0c5nIvJH7w&w=560&h=315]

And just because Vanessa Carlton is a timeless artist and this song seems relevant:

[youtube https://www.youtube.com/watch?v=77cFGvF_hms&w=420&h=315]

This morning I woke up around 6AM and read at Starbucks for a couple hours.  At 8AM, I walked over to Howard’s house for breakfast and for the day trip to Rocky Mountain National Park.  Howard prepared an oatmeal breakfast and played a 30-minute DVD about Rocky Mountain National Park to provide a preview of the day ahead.

After setting out on our day trip, we stopped at Oasis Marijuana Superstore (http://www.oasissuperstore.com/) The superstore is approximately 5,000 SF of space solely dedicated to recreational marijuana sales.  Legalized marijuana has had a huge effect on Colorado’s economy by attracting businesses, attracting residents, increasing tax revenue, and probably reducing prison expenses.  Howard purchased some Marijuana pills and gummy bears for personal consumption and for his family that he was planning on visiting in Nebraska.

After the Marijuana tourist attraction, we drove to Red Rock Amphitheater (http://redrocksonline.com/about/history-geology).  Red Rock Amphitheater is a legendary music venue and park.  The natural rock formations were created through geologic processes over millions of years into the current amphitheater-like setting.  The venue together with its natural surroundings makes this a truly special, unique and sentimental venue to experience a concert.  Especially with the acoustics and awe-inspiring views of the sunset and Denver city lights.  Since it’s opening in 1941, artists ranging from Vanessa Carlton, the Lumineers, the Beatles, Ed Sheeran, John Mayer, and many more artists have performed at the venue.

In the Red Rock Museum, the walls are decorated with a chronological list of each of the artists that have performed at this venue since it’s opening in 1910, and it’s eventual full capacity opening in 1941.

Today, there were people exercising (running, sit-ups, ab workouts) on the amphitheater benches, enjoying the beautiful sunny day which was following a rainy, cold weekend.

From Red Rock Amphitheater, we drove along the foothills of the Rockies toward Chautauqua Park in Boulder, CO (https://bouldercolorado.gov/parks-rec/chautauqua-park).  The park is located at the edge of Boulder with amazing close-up views of the Flatirons.  It was a beautiful scene, and after a few minutes of enjoying the scenery we continued on up another road in Boulder which quickly ascended the foothills.

After a few minutes of driving, we came to the entrance of a state recreation area with a lookout point offering great views of Downtown Boulder and Colorado State University.

After stopping for lunch in Estes Park (a gateway town to Rocky Mountain National Park), we continued driving up to Rocky Mountain National Park.  Because of the heavy snow in the past couple of days, Howard was saying that we had a rare opportunity to view the Rocky Mountain Range almost completely covered in fresh snow.

Although the snow provided great, unique views, we weren’t able to fully experience the park.  Many  of the roads above 10,000 feet were still closed due to the weather.  Also, most of the hiking trails were fully covered by snow.   However, we were able to take a short walk to Bear Lake.  Bear Lake was completely frozen and covered in snow but it was still a beautiful sight, especially with Harlette Peak towering in the background.

We also stopped to take in a view of Moraine Park, a glacial valley which now looks like a meadow and is used as a campground/picnic area.  The area of the relatively flat and barren glacial valley is vast and awe-inspiring.

Apparently, there are several ideal times to visit Rocky Mountain National Park.  My early-summer experience, provided accessible roads but still plenty of snow and very few hiking opportunities.  A late summer, August experience would provide a much more green landscape with full hiking and road access.  A fall visit would offer beautiful fall-foliage but limited hiking opportunities.  If I was to visit Denver again, I would probably want to visit during August so I could take full advantage of the greenery and hiking opportunities.

Howard and I had deep, philosophical, meaningful discussions about our upbringings, experiences, religion, and more.  I really admire the guts that he had to move to Colorado when he was 25 years old and live life on his own terms.  He seems to be doing a wonderful job at staying social and active, especially at the age of 65.  He is a perfect example of the potential of cohousing and couchsurfing for senior citizens.

On the way down through Estes Park, we also stopped for an exterior view of Stanley Hotel.  (https://en.wikipedia.org/wiki/The_Stanley_Hotel) The historical hotel has a similar exterior design theme to Hotel Del Coronado.

 

Heading down from Rocky Mountain National Park, we stopped at Runza Sandwich shop, a local Midwest sandwich chain which specializes in tasty (and extremely unhealthy) ground meat sandwiches.  I ordered a Runza Mushroom Swiss Sandwich with french fries and a cappuccino shake.  It was amazing, and I don’t feel too bad about how unhealthy and heavy the meal was, especially since I ended up staying up about 8 hours after I ate the huge meal.

After eating at Runza, we attended a Couchsurfing Meetup event at Bicycle Cafe in Denver.  Coincidentally, there was a real estate Bigger Pockets Meetup event taking place at the same time at the same bar.  It was a great experience meeting adventurous, free-spirited couchsurfers.  Also, I socialized with the real estate investors and learned a little bit about the types of deals they’re doing in the Denver area.  Apparently, there is 4,500 units of inventory on the market in the entire Denver area.  Any property that is listed received around 50 offers, and very few of the offers even receive counters.  It will be interesting to see how the supply/demand fundamentals affect the Denver real estate market over the next 10 years.

During the many hours of driving, we listened to some of Howard’s favorite songs about nature, friendship, and more specifically Colorado.  Here are some of his favorite songs:

 

[youtube https://www.youtube.com/watch?v=a5FkhFf4RUY&w=560&h=315]

[youtube https://www.youtube.com/watch?v=-Y1IF8A9XN4&w=420&h=315]

[youtube https://www.youtube.com/watch?v=-GaMBE7XEEo&w=560&h=315]

[youtube https://www.youtube.com/watch?v=LLWD2WIvRQk&w=560&h=315]

[youtube https://www.youtube.com/watch?v=zcUE0EZMswU&w=420&h=315]

This morning I woke up at around 9AM and drove toward Denver.  The drive ended up taking about 6 hours including minimal breaks.

Last night, I received a couchsurfing response from a local retired guy (Howard Cole https://www.couchsurfing.com/people/howard.cole)  living in Denver, CO. At first, I was a bit hesitant to join him but a quick look at his “references” and “reviews” immediately changed my perspective and I agreed to meet him and possibly do a day trip with him at 4PM today. Based on his reviews, he seems to be a nice guy, great conversationalist, and very knowledgeable about Denver.

After a quick shower at Anytime Fitness, I drove to his neighborhood around 4PM and walked into his home.  We had conversations about my travels so far, his life so far in Denver, and suggestions/planning for my upcoming 5-7 days in Colorado.  He was selfless and generous enough to bring out a physical map and highlight the route, so that I would have a physical map for the trip.

We also discussed that tomorrow we’ll be meeting at 8AM at his house for breakfast and leave at around 9AM to visit Rocky Mountain National Park, Boulder, Loveland, Fort Collins and Estes Park.  We should be back around 6pm or 7pm, at which time I’ll go to the Denver couchsurfing meetup at a local bar.

Howard lives in a “co-housing community” named Hearthstone Cohousing. (http://hearthstonecohousing.com/) (http://cohousing.org/what_is_cohousing) Cohousing is a community-oriented living style in which a community of 20-40 condominium residences is built, each one owned separately.  There is a community house which contains a kitchen, dining area, and many other communal rooms (similar to a college dorm facility or a summer camp).  The 20-40 households inside a cohousing community share occasional meals, events, and a more social lifestyle.  Today was a “clean-up day” where each person helped clean up the community house which was followed by a 5:30pm dinner, which was attended by about 30 people.

I asked questions to Howard about the cohousing set up (and he answered):

• What are some of the pitfalls of the coworking structure?  Sometimes people living in the neighborhood don’t understand what they’re getting themselves in to.  They need to be willing to clean up, cook, and be involved in the community
• How many of the original tenants (from 15 years ago) still live in the community?  Well over 50%
• Does the cohousing structure lead to these residences being worth more, the same, or less than they would be worth if they were conventional homes (without cohousing)? Same price, maybe even a little more

At about 5:15, we walked over to the cohousing community and met a large group for dinner.  During the dinner, I sat down with a few of the residents and we (perhaps a bit awkwardly) discussed the history of the community, how long they’ve lived in the community, how they enjoyed it, etc.  Most of the residents were extremely liberal, probably just as liberal as the residents of Berkeley.

 

After the dinner, we went back to Howard’s house and spoke for an hour or two about his upbringing, religion, and how/why he ended up moving to Denver.  He was born in Lincoln, Nebraska into a religious family, visited Denver when he was in high school, and loved it so much that he decided to move to Denver around the time he graduated.

The conversation became very deep, and he relayed a very moving/emotional story in his life:

One night at a bar, he met a man and became instant friends with him, partaking in hiking and other activities.  This man had recently become divorced from his wife and had two sons.  Since his wife was an alcoholic, he (Howard’s friend) retained custody of the children (boys aged 11 and 17).  A few years into their friendship, the father (an alcoholic, gambler, and prescription drug-abuser) committed suicide and the kids returned to the mom’s custody.  Not much after, the mom died through an alcohol overdose.  Howard then obtained custody of the kids, who eventually moved out.  The oldest son committed suicide and the youngest son died via an overdose of alcohol/heroine.  The youngest son’s death occurred in 2015 and Howard is still a bit emotional about it.

After hearing his story, I became much more appreciative and understanding of the benefits of the cohousing living structure.  Instead of Howard being a depressed, 65 year old lonely single man, he is living an active, social, independent lifestyle with a group of close friends/family who care about him and feel connected to him.  Regardless of the borderline socialist way of life, there might be something to be learned by the social/relationship aspects of the cohousing lifestyle.

Last night, after spending time at Starbucks I drove to the Harrah’s In Council Bluffs, IA, directly across the Missouri River from Omaha.  I played blackjack for a couple hours, which culminated in me making a $120 bet (double losses or break even) and luckily recouping the night’s losses . 

After leaving the casino, I slept in the parking lot of Harrah’s with the possible plan of waking up today and just walking across the Bob Kerrey Pedestrian Bridge to the CenturyLink Center.  It was raining in the morning, so I instead decided to drive the RV and park at one of the convention center parking lots. My concerns regarding a potential lack of parking didn’t end up materializing, possibly because I arrived at 7AM, about 90 minutes the start of the Berkshire Hathaway movie.

The BRK movie was a combination of short cartoons, commercials, and short skits displaying BRK’s culture, managers, and subsidiaries.

Afterwards, in front of an audience of 18,000, Questions were asked on topics ranging from Berkshire’s succession plans, BRK’s investment in Coca-Cola (in spite of Coca Cola’s role in obesity), questions about controversial issues about specific companies, lack of diversity among BRK staff, nuclear/biological attacks, Warren’s/Charlie’s personal stock portfolio, stock buybacks, the real estate market and more.

Warren provided lengthy, detailed, and verbose answers, which were usually followed and reaffirmed by Charlie’s blunt, metaphorical words/wise-cracks delivered in his dead-panned, expressionless manner.

Here are some ideas/quotes from the meeting:

• We’re not two fellows who think we can predict commodity prices (oil, sugar, cacao)., we don’t try hedging bets by placing bets or predicting.
• Jealousy is a huge problem when it comes to investing. You shouldn’t look at stories of people making money day trading or through IPOs.  For every one of those people, there are many who lost money and paid taxes in order for them to be able to make money.  You should have the mindset that you’re reading short term stock but rather buying an entire business to hold forever.  As with a business, you wouldn’t run around appraising your business every day.  So too, don’t worry about stock market fluctuations, just comfortable long-term value
• Widening the moat:  long-term approach for value preservation and creation
• When looking for someone to run a company, the person should have intelligence, be energetic, and have integrity.  Without integrity, make sure they don’t have the first two
• Size is the enemy of performance but Berkshire’s subsidiaries benefit greatly from being part of Berkshire in ways ranging from capital allocation, lack of distractions that come from being a public company,capital availability, bolt on acquisitions/synergies, and more.
• Longbets.org
• Seritage Real estate investment trust (warren buffett owns this stock personally)
• “Chemical/biological/nuclear/terrorist attacks are the only external threat to BKR” (just generally or because of BRK’s involvement in insurance).  If I could find a way to reduce the probability of an attack by 5%, all my money would go to that cause.”
• Charlie Munger:  “Microeconomics is what we do and Macroeconomics is what we put up with.”
• Charlie Munger:  “We really try to disprove our own ideas.”  
• Charlie’s reasons for why Berkshire is successful:
  • Patience and opportunism
  • Trying to behave well and fairly (not involved in tobacco, gambling)
• Charlie: “If you have a dumb incentive system, you get dumb outcomes.”  “People need to be motivated in a way that aligns them with the goals of the organization.”
• Everyone in a specific company is paid bonuses calculated that are specific to the particular businesses, it’s challenges, and more. (Calculated by a grid Of growth through policy AND ….)
  • Bad example of compensation is “% of profit approach” that is used in investment banking
• Buffet admitted that he paid a higher price for acquiring Precision Castparts because of the low interest rates.  If interest rates were higher, he said he wouldn’t have had to pay as much. (Sometimes in markets with lower interest rates and more attractive economics, you might need to pay more for an asset, which shouldn’t be a deal breaker)
• Warren about the real estate market: “Market isn’t what it was like in 2012 (not as attractive). Certainly properties that are being sold for low cap rates. I don’t see a nationwide bubble in residential real estate now at all.”
• Charlie Munger on his humor: “I think if you see the world accurately, it’s bound to be humorous, because it’s ridiculous”

After the Q&A session, there was an extra 45 minutes to review a shareholder proposition. The proposition requested that BRK conduct a risk analysis to fully understand the risk that global warming poses to Berkshire’s insurance business.

During the formal proposition, several shareholders (green activists) gave short speeches in favor of the proposition.  Once they began speaking, the absurdity of their proposal arose.  The activists suggested implementing carbon taxes, exiting from the crude business, and asking for Warren to make a public statement about the economy’s vulnerability to global warming.  It was a pathetic proposal/presentation, and if Charlie and Warren entertained these environmentalists for even a second, these activists/bullies would latch on and cause destruction/trouble for years to come, using their connection/validation with Berkshire to pursue extreme measures.  Charlie and Warren abruptly voted down the proposal and it was laid to rest on the spot.

 

This morning, I woke up at around 7:30 AM and drove to Omaha, NE. After showering at an Anytime Fitness, I decided to visit one of the previously-researched attractions: Bob Kerrey Pedestrian Bridge.  The bridge is rated very highly on Trip Advisor for good reason.  It spans about 3,000 feet across the Missouri River connecting Council Bluffs, IA and Omaha, NE.

After walking across to the Omaha side of the bridge, I stopped at a NPS visitor center, where a young lady suggested I visit the Lewis Clark Memorial and Hitchcock Nature Center.  She explained that “there are hills created from sand deposits which only exist in Omaha and China, nowhere else in the world.”  After walking back to the Council Bluffs side, I drove to Lewis and Clark Memorial which is a tribute that was created in 1935 to commemorate the Lewis and Clark Expedition.  The memorial had a nice, distant view overlooking Downtown Omaha.  While on the way to the Lewis and Clark Expedition, an older guy in a pickup truck began honking at me and I luckily realized why.  Within a few seconds, I would be passing under a bridge with a clearance of under 10 feet.  Passing under this bridge, would have destroyed the RV and caused thousands of dollars of damage.  He was nice enough to show me another way of reaching the Lewis and Clark Memorial.

After visiting the Lewis and Clark Memorial, I continued driving north to the Hitchcock Nature Center.  The Hitchcock Nature Center was a unique landscape with vegetated hills. As the lady at the NPS was saying, it’s almost as if I was walking on highly compacted, vegetated sand dunes.  In Southern California, we don’t have wet enough weather to have the vibrant, varying greens that the Midwest has.  The peace and solitude in the landscape was refreshing.  For the first time in the trip, I was immersed in the sounds, views, smell, and touch of nature.  After this brief experience with nature, I’m even more excited to visit Colorado, Utah, and Arizona.

On the way back from Hitchcock Nature Center, I decided to stop by the CenturyLink convention center to visit the BRK exhibition booths.  At the convention center, there were display/information/entertainment booths from all BRK subsidiaries including IMC (new parent company of Iscar), See’s Candies, Heinz, Dairy Queen, Clayton Homes, BNSF Railway, etc.

The reasons for the exhibition seems to be a mixture of information/entertainment/ sales/  public relations/increasing passion of shareholders.  It’s interesting to notice the wide variety of businesses that BRK is involved in, industries ranging from airplanes, industrial tools, railroads, condiments, beverages, home manufacturing, vacuums?, newspapers, shoes, and more.

The most important/unique of these items is Kirby Vacuum (a subsidiary of Scott Fetzer.)  Apparently 500,000 of these vacuums are sold each year through door-to-door demonstrations.  This is an interesting marketing method, especially nowadays with the prevalence of ecommerce, but I guess it makes sense with something that’s as expensive (upwards of $1,000) and performance-oriented such as a vacuum. Anyway, this company seems out of place but so do each and every one of Berkshire’s subsidiaries.  Now that I think about it, the main component of Berkshire wasn’t at that meeting.  Today, everyone at the convention center was looking at a few interesting companies.  But as Warren Buffett has repeatedly explained, the true magic and secret of BRK lies in the huge amount of profitable float generated by its insurance powerhouses.  The only one of these insurance companies present at the hall was Geico.  Separated from its insurance subsidiaries, the non-insurance BRK companies  displayed in the exhibition hall were simply a decent, impressive collection of companies.  It would be interesting if someone analyzed/calculated BRK’s annual returns of companies excluding the effects of insurance-related profits and float.  There’s a chance that there would be better-performing investors (Blackstone, Sam Zell, Carl Icahn) if solely non-insurance investments are considered.

After the exhibition hall, I drove to the legendary Nebraska Furniture Mart.  NFK is a huge, scattered campus of buildings and warehouses located on 77 acres of land.  The best way to describe it is a combination of Best Buy, Ikea (but higher quality) and Home Depot.  It’s amazing how an immigrant woman was able to grow a small furniture store into an operation of this size through sheer discipline and determination.  The prices didn’t seem to be bargain-basement low, but the products seem to be good quality and there is a huge selection.

This investment seems to fit into BRK’s strategy of having a large moat and a scalable business.  The overhead for NFM’s Omaha location is probably negligible, which means that it’s rent/sales ratio is also negligible.  It’s very hard for Ikea or a smaller furniture store to open up a location of any size, since they’ll be immediately disadvantaged by their smaller size or higher overhead.  Businesses such as BRK can sell close to a billion dollars per year at each one of these Mega-sized locations and can also draw customers from hundreds of miles away, especially in rural areas.  In a way, each one of these locations is like it’s own corporation and it’s not surprising that this business was and still remains attractive to Warren Buffett.  In a way, the fundamentals and characteristics of NFM are perfectly aligned with those of BRK and Warren Buffet.

At approximately 7AM, I woke up and began driving to Kansas City, MO.  The first stop in Kansas City was the WW1 Memorial and Museum.  It was an interesting tour, and what was most interesting/disturbing is that there wasn’t a definitive cause/reason that caused the war.  It seems that there was a lack of communication, egotistical/untrusting leaders, relatively small matters which were handled irresponsibly, abruptly leading to the First World War.

What were the events/circumstances leading up to WW1? All or some of the following reasons simultaneously (along with other factors):

• Assassination of Austrian Archduke Franz Ferdinand and his wife
  • Assassinated by a Serbian citizen named Gavrilo Princip
• Imperialism
  • Countries wanting to expand their land
• Arms Race
  • Britain, Germany, and other countries were producing warships, advanced combat weapons, and other weapons, and they were all paranoid/concerned about each other
• Divide Between Poor and Rich
  • The industrial revolution led to a huge amount of wealth being concentrated in the hands of a few. The vast majority of people weren’t achieving high levels of success, which led to resentment of the established upper class, and a desire for more equality and in some cases, even socialism in some cases. This led to there being fear of socialist ideologies spreading in countries

Interesting/sad facts about WW1:

• The war was originally planned to be under six months maximum (“Back home by Christmas”) but ended up taking several years
• 1 in 3 men between the age of 18 and 30 in France perished in the war
• 5,000,000 civilians were killed during the war
• Approximately 17 million total people were killed during the war
• At the  end of the war, Russia was $4 billion in debt (1917 dollars)
• The total daily cost of the war for European nations (in 1918 dollars) was $96 million

Important quote about World War 1 that can be applied to disputes in general:

• “Both sides believed that their cause was just, that they were defending their homelands and way of life.  Most imagined the war would be a glorious adventure, filled with colorful flags, flashing sabers, and heroic deeds.  They thought the conflict would be decisive and short and that they would all be home for Christmas.”

After a couple hours at the WW1 Memorial, I was hungry and decided to go to Joe’s Kansas City BBQ for lunch.  The line was about 30 minutes long but the atmosphere and experience were well worth it.  The restaurant has a very passionate following, but from the outside one would have no idea.  The restaurant is part of an existing gas station which makes it an even more unique experience.  I left the restaurant having eaten a “not too unhealthy” Reuben sandwich with a side vegetable salad.

After a brief Starbucks break, I headed to the Nelson Atkins Art Museum.  The museum could easily be an all-day activity and was a world-class museum.  Here are some of my favorite works:

 

 

After the museum, I briefly visited Papa Keno’s Pizza and ate two huge slices of pizza, one of which was a Greek Pizza.  Definitely one of the top 5 pizza slices I’ve had so far.

 

Here are a few songs I enjoyed listening to:

[youtube https://www.youtube.com/watch?v=u6lTU_bhISI]

Even though people won’t admit it directly, deeply emotional/sexual relationships sometimes have a deep, lasting effects. In this song, an ex-girlfriend is singing about her now-married ex-boyfriend using lyrics such as:

• “I got the boy and she got the man.”
• “I got the first kiss and she’ll get the last.  We each got something the other will never have.”

[youtube https://www.youtube.com/watch?v=rNJwu-YkQlc]

[youtube https://www.youtube.com/watch?v=IKqV7DB8Iwg]

Last night, I repeatedly woke up in the middle of the night.  The Walmart parking lot where I parked the RV was illuminated throughout the night, which made it difficult to stay asleep.  Also, the cold weather made it difficult to stay asleep.  Accounting for all the midnight breaks, I probably only slept 4-5 hours.
After waking up around 7:30 AM, I immediately began driving toward St Louis.  About an hour into the drive, I stopped for breakfast at a Hardee’s/Carl’s Jr off the freeway in rural Iowa.  The fast food restaurant was filled with groups of elderly men and women.  The men were eating together in groups ranging from two to five people, and the women were also eating together in groups ranging from two to five people.  It seems like most of the people routinely visited the restaurant in order to socialize, drink coffee, and eat breakfast.  All of the men and women seemed to live simple lives as farmers and appeared to be very lively, energetic, outgoing, and content.  A couple of people even wished me “good morning” as they walked past me near the beverage counter.

After taking a shower at an Anytime Fitness in St Louis, I drove over to Downtown St Louis to visit the St Louis Arch and Old Courthouse.   As a single ticket holder, I was able to hop onto the 1PM tour, rather than having to wait until the 4PM tour.  Here are some interesting facts about the Arch:

• The Arch is meant to symbolize the entryway/expansion route that Lewis and Clark took when they explored Westward.
• The Arch is 630 feet high, and the ground distance between the bases is also 630 feet
• The Arch was constructed in 1963 and has never needed any structural repairs since its construction

The tour began as we descended a ramp into one of the bases of the structure.  We continued descending ramps and stairways until we were 50 feet below ground, the lowest point of the structure and also where the transportation cabs are located.  The 9 transportations cabs transport visitors to the highest point inside the arch where there are eastward and westward facing views.  Knowing about the history of the arches and its meaning added a lot of value to the experience.

While enjoying the view from the top of the Arch, it was interesting to notice how flat the terrain is in St Louis.  As far as could be seen in any direction, the landscape looked to be perfectly flat in all directions.

 

 

After, I walked to the Old Courthouse, which was built almost about a hundred fifty years ago.  In the below-pictured room in the courthouse, Dred Scott sued Ms. Emerson for his freedom and was emancipated.

The Cathedral of Basilica of St Louis is located on the border of a low-income neighborhood.  The design and mosaic-work was very detailed and beautiful.

“The Loop” (Also the “Delmar Loop”) is known, probably too generously, as “One of the 10 great streets in America.”  The street is lined with older, street retail buildings housing restaurants, bars and specialty shops.  What makes “The Loop,” “The Loop?”

• Proximity to University (serves as a hub for college retail/dining)
• Street retail (buildings have no setback from street)
• Sidewalk dining
• Large tree-lined sidewalks
• Specialty shops, restaurants, and bars

I ate a meal at Chipotle, had a (tasty) cookie from Cookie Insomnia, and then continued driving a couple hours to Columbia, MO.

Song of the day:

[youtube https://www.youtube.com/watch?v=BxuY9FET9Y4&w=560&h=315]

Starting Point:  Chicago

Ending Point:  “Middle of Nowhere” Iowa

Total Distance Traveled:  ~300 miles

 

This morning I woke up around 7:30am, sleeping much later than I was expecting to.  It might have been because I only slept 4.5 hours the night before or because I was sleeping in the basement and there was no morning light in the room to wake me up.

After taking a shower, I walked on Clark Street a couple of miles until walking into a CVS to buy some items for the road trip.  After spending a few minutes in the CVS, I realized the CVS was located in a seven story shopping mall which was under renovation.  The shopping mall seemed extremely inefficiently designed (small floor plates; only a few stores on each level, etc.) so I decided to look into the history of the property.  Within a few minutes of brief research, the property’s rich history as a 3,000 seat theater, concert hall, and eventually a lifestyle center was uncovered.  As of now, there’s only a Victoria Secret, H&R Block, Aveda, school,  Landmark Theater, CVS, and a few others stores.  It’s difficult to imagine the finished product, but considering that Bed Bath & Beyond and Fitness 19 are located across the street in underground store locations, these storefront locations don’t seem too bad.

In the 1970s, the theater was threatened by demolition.  Real estate developers came to the rescue and decided to turn the project into a lifestyle center along with the addition of a 450-space parking garage.  Looking at the project today, it almost seems like they would have been better off never converting the 3,000-seat historic theater into a shopping mall It’s unlikely that the real estate developers achieved “home run” results with this project, even if they did buy it well.  They must have spent tens of millions of dollars converting the theater into a dull lifestyle center.  40 years after the conversion of the property to a lifestyle center, the property is still dead and doesn’t seem to be performing too well.

In a way, it’s like the Broadway theaters in Downtown LA.  The doors of all the theaters were closed for many years, except for occasional special events.  Now, the Broadway theaters are much more financially viable, especially considering the reduced prices that these assets were acquired at.  Now, the “Century” Chicago project is just sad, depressing, and confused.  If it wasn’t for its prime location and the underlying land value, it would be another one of the hundreds of malls dying across the country.

Leasing brochure is available through the following link:  http://www.hiffman.net/Brochures/TheCentury.pdf

After stopping at the Century, I walked toward Lakeshore Drive I noticed a beautiful statue of Goethe, inscribed with the tribute “the mastermind of the German people.” Goethe (https://en.wikipedia.org/wiki/Johann_Wolfgang_von_Goethe)  was a German poet, writer, and statesmen.  One of his quotations is “We do not have to visit a madhouse to find disordered minds; our planet is the mental institution of the universe.”

After walking a few more minutes, I noticed a beautiful high-rise condominium building across the street from Lincoln Park and decided to walk inside.  At the corner entrance of the building, there was an entrance to a shrine that was incorporated into the design of the high-rise condominium building  I walked into the cathedral and was greeted by a few older ladies who offered a choice to join a tour that was about to begin.  A few minutes later, the tour of the National Shrine of Cabrini (http://cabrinishrinechicago.com/) was off and running.  The tour guide explained that the entire site of the condominium project was previously a hospital founded by Saint Cabrini.  In around 2002, real estate developers acquired the hospital, and after a lengthy dispute with the Shrine of Cabrini, all parties reached a compromise in which the shrine would be incorporated into the design of the high-rise condominium.  The end product is the “Lincoln Park 2550” project (http://www.lincolnpark2550.com/).  A few years ago, the CEO of Hyatt sold a 5,000 SF unit in that building for $900/SF.  Today, the prices are likely over $1,000 SF.

After taking a bus back to the AIRBNB, I requested an Uber for the drive to the Cruise America pickup location.  A 34-year old Charlie was the Uber driver.  During the 30 minute drive (which only costed $21!), Charlie mentioned he was from Ghana and has been living in Chicago for about two years.  In Ghana, he won some sort of a lottery that gave him the right to work in the United States.  He’s currently working at a hospital and as a part-time Uber driver.  He explained that the setup of the American economy makes people into indentured servants because the cost of living is high, wages are low, and we are taught to have endless desires and aspirations.  He said he’s attaining a much better understanding of how the system works and is planning on saving as much of his wages as he can in the future.  After hearing about common stories such as Charlie’s I can’t help but to be grateful/humbled for all the opportunities and advantages I’ve had.

Afterwards, I picked up the RV and began driving toward the Davenport, IA.  The ride of the RV is uncomfortable/unsteady, especially at speeds above 60 miles per hour.  Several times, I was forced to abruptly slow down from 70 miles per hour to 60 miles per hour, after I was continuously forced to turn from one edge of the lane to the other because of the terrible handling and/or weather pushing the car in each direction.  Even though the RV is only 19 feet, it’s only a one-axle vehicle which makes the handling very difficult and unstable

Tonight, I was lucky to find what I’ll now begin to call a “Golden Triangle” stopping place.  A “Golden Triangle” stopping place contains the following three amenities within a few minutes of each other.

• McDonalds/Starbucks (For late-night WIFI)
• Walmart (for parking the RV and sleeping)
• Anytime Fitness (for showering in the morning)

The song of the day is:

[youtube https://www.youtube.com/watch?v=K41kIS_Wl94&w=560&h=315]