The Mini E

The Mini E will debut next month at the LA Auto Show. You can lease one of the 500 battery-powered Minis starting sometime in 2009. It sports a 204 horsepower electric motor, gets 150 miles per charge and sprints to 100 kph mph in only 8.5 seconds.

Via Autoblog.

Apple Borrows Colors

I wonder who inspired Apple in its choice of iPod Nano Colors? American Apparel.

Inspired by AH

Cali Shakes

The tremor today centered in Chino Hills, CA reminded me of a photo my girlfriend took of me and my friend Charlton last year, inside of the Safeway supermarkey just 15 miles from Chino Hills, in Upland/Claremont:

(click to enlarge)

“Earthquake Kit: $8.99 + tax”

We were sure surprised to see it; definitely one of those things that you’ll only see in California.

On the positive side of the quake: Charlton’s private lemon orchard probably rained down a bounty of citrus:

(click to enlarge)

I called Charlton today. He said he felt the quake all the way in San Diego.

Watch This

DGENERATE NATION - Skate With Me @ Vimeo.

The Magic of Compounding Interest

Albert Einstein is quoted as saying that compounding interest is “the most powerful force in the universe.”

L.A. entertainment billionaire David Geffen has just been the victim of compounding interest, according to the L.A. Times:

“Media mogul David Geffen [...] recently spent about $10 million on a 1,473-square-foot two-bedroom house [in Malibu]. [...] What makes the transaction interesting is that Geffen owned this same property once before. He bought it in 1996 for approximately $1.2 million and sold it two years later…”

David Geffen bought it in 1996 for $1.2 million, sold it, and bought it back 12 years later for $9.8 million (which amounts to a more than 800% markup over the original purchase price).

Seems like Geffen got taken, no? Well, the magic of compound interest suggests otherwise. See, that 800% gain over 12 years amounts to only a 19% annual property appreciation rate, and shrewd businessmen like Mr. Geffen can often increase their net worth at rates above that level. They have investment options such as private equity funds (which generally aren’t available to those worth less than 8 figures) which historically generate returns above 25%. Warren Buffet, the famed stock investor, has averaged gains above 25% over the last 30 years. If we assume Mr. Geffen was using appropriate instruments to increase his wealth at these rates, then perhaps his $1.2 million sale and $9.8 million repurchase make sense:

$1,200,000 * 1.25¹⁰ = $11,175,870
$11,175,870 - $9,800,000 = $1,375,870.

Mr. Geffen’s gains from investments at an assumed 25%/year on $1.2 million dollars from 1998 to 2008 would turn his principal into $11,175,870 pre-tax. Buying the home back in 2008 for $9.8 million means that he would pocket an additional $1,375,870 (his investment gains minus the 2008 purchase price), would have avoided paying waterfront property taxes for 12 years, and still own the home. The only thing that he would’ve missed out on is use of the home for those 12 years, which wouldn’t hurt Mr. Geffen at all because he already owns a multi-lot palace nearby. This calculation is extremely conservative - Geffen probably pocketed much more than this projected $1.375 million because he probably sold the home in 1998 for more than the $1.2 million that he paid.

Assuming a 10% appreciation rate on the beach house in 1996 and 1997, Geffen would’ve sold the home for $1,452,000 in 1998, increasing his investment principal by $252,000, and his total to $13,522,000 in 2008, leaving him an additional $3,722,000 instead of the $1,375,870 we calculated earlier without adjusting for real-estate appreciation.

Perhaps Mr. Geffen didn’t let compound interest beat him, and instead, he taught the power of interest a lesson.

Sterilization is the Law

Los Angeles is now requiring all pets to be spayed/neutered by the age of 4 months. The reason: too many pets are euthanized every year in shelters, and stopping the breeding will eliminate a large portion of the unnecessary euthanizations. The effort goes towards making L.A. a “no kill” city.

Luckily, the law isn’t overreaching and doesn’t apply to everyone. Breeders and people who compete in dog shows and competitions are exempt, as are police dogs and guide dogs.

Also, the whole system is pretty fair. Non-adherents are fined and assigned community service, and subsidized spaying services are on offer to make them more accessible.

My question is, when will we roll this law out to reign-in the already out of control human population?

Pet Sterilization Becomes Law in LA

American Apparel Being Snapped Up By Funds

American Apparel (which has only been publicly traded on the AMEX since December) is getting a lot of attention from hedge funds. Some recent SEC filings indicate that Morgan Stanley, Fir Tree, and SAC Capital Advisors each own in excess of 5% of American Apparel (AMEX: APP). SAC has a notable record of finding moneymakers in youth retail, making this development something to watch.

Click over to the article at FashionInvestor for more.

(Full disclosure: author owns shares of American Apparel both directly and indirectly at the time of this writing.)

American Apparel Going Public (Kinda)

I wrote the following post today for FashionInvestor.com, click here to warp over and read it there:

Endeavor Acquisition Corp. (AMEX: EDA), a blank-check company, has revised its offer for American Apparel due to the fact that sales and earnings at AA have increased significantly since the original buyout offer was made. Dov Charney, American Apparel’s quirky founder, has some newfound reasons to smile, as the agreement brings his annual salary from $1 to $750,000, includes a $100 million life insurance policy, more than triples the amount of shares to be given to AA employees, and allows Charney to hold on to his 55% share of the company. Also, the debt ceiling pre-transaction has been raised from $110 million to $150 million, as American Apparel needs the money to finance the company’s huge expansion. Another new inclusion in this deal is that Endeavor will purchase all of the shares owned by the other American Apparel shareholder, Sang Ho Lim, for approximately $67.9 million in cash when the deal closes.

The special meeting of stockholders to consider the transaction is expected to be held Wednesday, December 12, 2007. With the approval of Mr. Charney, the founder and controlling shareholder, this deal is pretty likely to go through, barring any last-minute drug-fueled reconsiderations. Watch out for big moves in Endeavor stock in the next month or two.

City of Angels Photoroll

Shopping at Kitson

Bought some kicks and a gift at the Kitson boutique on Robertson boulevard. There was a Rolls-Royce Phantom parked out front, confirmation that I was in good company.

Shopping at the Grove

We went shopping at the Grove, just east of Beverly Hills. Probably checking out Kitson on Robertson Boulevard later.

Straight Outta Malibu

We met up with a friend of ours in Santa Monica, who was kind enough to show us around the 3rd St. Promenade, the beach, and the pier. Pasteur wouldn’t exactly recommend swimming in Santa Monica, so we headed to Malibu Lagoon to take a dip in the sea there.