The Long Term Investor

I will start the day off with some good news....at least for me and EVERYONE else that is on Social Security. We are going to get a REALLY GOOD cost of living increase this year.

Social Security cost of living adjustment could be largest in nearly 4 decades
2022 COLA could be highest paid since 1983

https://www.foxbusiness.com/economy/social-security-2022-cola-estimate

(BOLD is my opinion OR what I consider important content)

"Social Security beneficiaries might be in for the highest cost of living adjustment (COLA) in nearly four decades, according to new projections.

The latest estimate from nonpartisan senior advocacy group the Senior Citizens League puts the 2022 COLA, which will be announced in October, around 6.2%.

"The estimate is significant because the COLA is based on the average of the July, August and September CPI data," Mary Johnson, a Social Security policy analyst for The Senior Citizens League, said in a statement. "With one-third of the data needed to calculate the COLA already in, it increasingly appears that the COLA for 2022 will be the highest paid since 1983 when it was 7.4%."

Cost of living adjustments, which began in 1975, are implemented in order to counteract the effects of inflation.

The Social Security Administration uses a formula to determine what the COLA will be each year. It is based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers, which are calculated on a monthly basis by the Bureau of Labor Statistics. Benefits will increase if there is a measurable increase in the index year over year.

Benefits increased by 1.6% in 2020. For a recipient earning $1,479, the average monthly benefit among all retired workers, checks increased to about $1,503 per month.

The Senior Citizens League noted that about 86% of beneficiaries said the bump was not enough.

The cost of living adjustment for 2019 was 2.8%. In 2018 it was 2%, but it was largely perceived to be offset by increases in Medicare costs.

There was a 0.3% increase in 2017 and no adjustment in 2016.

As previously reported by FOX Business, a spike in inflation has squeezed seniors – who received a modest cost of living increase in 2021. That situation, however, is expected to ease due to a relatively large benefit bump next year, as well as expectations that inflation will ease."

MY COMMENT

SHOW ME THE MONEY. Unfortunately If I had been able to put the couple of hundred thousand dollars that I paid in to Social Security and Medicare into a private investment account I would be way ahead of the game. BUT....the system is what it is and for those in the lower income levels.......that do not ever save.....the payments are a Godsend. As a self-employed person I paid just over 15% for my entire work life. So I will take any increase with......NO GUILT.....since at this point and for many more years I am just getting back my own money that I paid in.

In the music business I know some people that never paid in.....due to living off cash payments. The never racked up the required 10 years of credits necessary to receive a payment. Now that they are older it is very SAD. A good example of very short term thinking....or rather.....no thinking. ALL it takes to get credit for a quarter is......reported income of $1470. I believe the minimum "regular" benefit is about $500 per month....a bargain for someone that just reported the minimum for ten years.

 

As to AMAZON.....I have no problem with the company or the business model or their DOMINANT SUCCESS. They are a money making machine. It is not their fault that their shareholders are NOT being rewarded at the moment for AMAZING earnings and profits. I STILL see it as one of those...once in a lifetime companies. As the fundamentals and money PILES UP quarter after quarter.....it is just a matter of time till it suddenly makes an impact on share price......it is money in the bank.

My ONLY....single issue....with the company and their generally GREAT management.....is their stubborn, irrational, refusal to split the stock.

 

Obviously to anyone that reads on here......I have no concern for inflation. I dont believe it is an issue.....and....even if it was, it is just a condition that investors have no control over and you just power on through it......good or bad. EVEN if it happens.....I do not......start with the assumption that it will be bad for my investments.

BUT.....I agree with this little article on the topic.

The Cool Down in July’s CPI Data
Things are starting to inch closer to normal.

https://www.fisherinvestments.com/en-us/marketminder/the-cool-down-in-julys-cpi-data

(BOLD is my opinion OR what I consider important content)

"In what now seems like a monthly ritual, headlines went nuts for July’s Consumer Price Index report on Wednesday. It showed the headline inflation rate remaining at 5.4% y/y, leading a number of outlets to bemoan inflation’s apparently digging its heels in. Other outlets noted month-over-month price gains slowed to 0.5% from June’s 0.9%, acknowledging recent hot inflation rates seemed to be moderating.[ii] Yet many still went fishing for reasons to argue we are a long way from “normal.” We do still see some signs of post-lockdown weirdness in the data, but in some ways, we are already back at normal. Stocks and bonds saw this coming months ago, but perhaps a quick look at the data will help you have more confidence that rising stocks and falling bond yields haven’t been wrong.

Last month we highlighted the major categories driving June’s big increase: food, energy, hotels, used cars and transportation services. The first three of those remained sizable contributors to CPI’s month-over-month increase in July, rising 0.7% m/m, 1.6% and 6.8%, respectively.[iii] Used cars stalled[iv], however, decelerating sharply from June’s 10.5% m/m gallop to July’s 0.2% crawl.[v] Transportation services detracted, falling -1.1% m/m as car rental prices fell -4.6%, car insurance slipped -2.8% and airfares inched down -0.1%. So the surge of pent-up demand post-lockdown is still affecting travel-related items, and shipping headaches still appear to be hindering the food supply chain and driving prices up. Yet the auto-related hiccups appear to be evening out, as July’s data suggest rental car companies have largely finished rebuilding their fleets, allowing them to slash fares and cease contributing to the upturn in used car prices.

This month, what really jumped out at us was the shelter component, which rose 0.4% m/m and contributed over one-fourth of CPI’s monthly rise.[vi] Hotels contributed about half of that. The other half came from rent. Not rent of primary residences, which is what you actually think of when you think of rent. That figure rose 0.2% m/m, and it is only 7.6% of the total CPI basket, making its impact on headline inflation negligible.[vii] The real culprit: Owners’ equivalent rent (OER), which rose 0.3% m/m and is a whopping 23.6% of the CPI basket.[viii] Yes, you read that right, nearly one-fourth of the CPI basket is imaginary. Owners’ equivalent rent isn’t real—it is the hypothetical amount homeowners would pay to rent their own home, if they rented instead of owning it. It is not something anyone ever pays. It is instead a crude stand-in for home prices, which are an investment, not a capital good, and therefore excluded from CPI. We will leave it to you whether it is sensible to put this made-up service in CPI, but it is there nonetheless.

When seeing how much of the CPI basket OER hogs, you might logically ask: What does inflation look like if you strip that out? Lucky for you, the fine folks at the BLS anticipated this question and have a “special aggregate index” called “All Items Less Shelter.” It rose 0.5% m/m in July, down significantly from 1.1% in June.[ix] That 0.5% is much closer to the long-term average since data begin in 1940, 0.3%—and post-lockdown weirdness likely explains the remaining gap. A second special index, “All Items Less Food, Shelter and Energy,” slowed below 1% m/m for the first time since April, which happens to be the month that CPI inflation surged and set off everyone’s alarm bells.[x] It rose just 0.3% m/m, matching its long-term average since data begin in 1967.[xi]

That seems … normal? We aren’t dismissing the lingering pandemic weirdness in travel, food and energy. Of course, July is also just one month—trends take time to develop. But here is another way to see it: Services, which comprise 61.5% of the CPI basket, saw aggregate prices rise just 0.3% m/m, below the long-term average (0.4% since 1956).[xii] That is even with the OER weirdness and lingering hotel price increases factored in. So while pandemic-related hiccups are still affecting supply and prices, that is confined to the universe of stuff, which also happens to be a minority share of GDP. Said differently, the majority of the US economy didn’t experience unusual inflation in July.

Inflation doesn’t have a preset market impact, so none of this is inherently good or bad for stocks. But we still see plenty of headlines alleging markets are somehow overlooking various risks, inflation chief among them—a statement that severely misunderstands how efficient markets work. They aren’t ignoring anything. They are just better at analyzing data than most pundits seem to be. In our view, they saw inflation trending toward normal months ago and acted accordingly."

MY COMMENT

EXACTLY.....the markets came to terms with the potential for inflation many months ago. What is left now is the constant daily fear mongering of the topic by the day to day financial media. LUCKILY for investors......this "stuff" is irrelevant to business. The people that run ICONIC companies are....NOT STUPID.....they know how to anticipate and hedge their business interests when it comes to business conditions. In fact....I believe that any bit of inflation we see will .....probably....over the longer term benefit business.

I remember very well the.....OLD DAYS....back in the late 1970's and into the 1980's when inflation was considered HEALTHY up to about 4%. NOW....we are stuck in the WEIRD thinking that inflation should not be over about 2%. This is INSANITY.

YES.....when we look back in five or ten years.....this "stuff" will have been a big.....TEMPEST IN A TEAPOT......and will be forgotten. We will be fear mongering some other condition or happening....which will ALSO turn out years later to be IRRELEVANT. That is just the way human nature works. My PRIMARY JOB as an investor is.....AVOID....all the negative impacts of human brain behavior that kill investing returns.

 

WELL.....I lost my ART flip. The painting that I was going to buy and flip....now has a pre-auction bid above what I was willing to pay. The auction starts today about 11:00 today.

BUT......one door closes and another door opens. I am now watching a painting on eBay that I might try to buy if the price stays low. The auction has a good number of days to go.....and there is no "buy it now" so I have no idea if I will bid or not. It will depend on the price just before expiration. The current price is a couple of hundred dollars The painting has a value of about $4000 to $6000. I might be willing to buy it up to about $1000. Probably not going to happen......but I will keep it on "watch".

 

Here are a few interesting article on a variety of topics.

Lumber prices.....being hyped a few weeks ago are falling quickly.

https://finance.yahoo.com/news/lumber-falls-nine-month-low-145911384.html

HERE is a....QUIRKY...little indicator that some find interesting....I personally dont follow this sort of stuff.

Liquidity Is Evaporating Even Before Fed Taper Hits Markets

https://finance.yahoo.com/news/liquidity-evaporating-even-fed-taper-200454138.html

Contrary to the focus on inflation today.

Analysis-Investors renew focus on Fed following signs inflation may have peaked

https://finance.yahoo.com/news/analysis-investors-renew-focus-fed-050715614.html

July data reveals 'significant cooling in transitory inflation': Morning Brief

https://finance.yahoo.com/news/july...sitory-inflation-morning-brief-090325791.html

 

As I sit here listening to business TV and scanning the financial media......my "FEELING" is that we are simply seeing a typical.....churning, shallow, low volume.....summer market. There is no REAL news or events driving the markets. They are just being mildly thrashed around day to day with no real direction at the moment.

I dont do anything short term anyway....but...a typical directionless August market is CERTAINLY not something that I am going to get all excited about. The bad news.....it just makes for very BORING days for long term investors. I GUESS the greatest danger for some people is......the potential....to overreact out of frustration or boredom and .....DO SOMETHING.

The mantra for this sort of market....just like nearly EVERY market is.....JUST DO NOTHING.

 

SINCE there is NOTHING happening today and NOTHING in the news that matters at all to a long term investor.....I find this little article and what it says about human behavior very interesting. YES.....anyone that has been investing for years has seen this sort of "stuff" before. BUT....human behavior ALWAYS fascinates me.

Millennials are quitting jobs to become crypto day traders. Here's the risk, reward.

https://finance.yahoo.com/news/cryptocurrency-fomo-pushes-young-investors-100248559.html

(BOLD is my opinion OR what I consider important content)

"Hamez Trezhnjeva became so enthralled with stocks and Dogecoin during the coronavirus pandemic last year that he decided to make day trading a full-time gig this summer.

The 27-year-old Albanian immigrant recently quit his job as a bartender at a French restaurant in Manhattan to spend more time trading on his phone. His decision was sealed when he became frustrated that his work income was just 20% of his earnings prior to being laid off from another bartending job last year.

“I kept thinking about all of the lost opportunities ... to make even more money day trading,” says Trezhnjeva, who lives with his wife, Gabrielle, in Bayonne, New Jersey. “I was going into work to make money, but I could have made at least twice that amount if I was at home spending more time investing.”

Meme mania pushes millennials, Gen Z into the stock and cryptocurrency markets
The fear of missing out (FOMO) on record-high stock prices and the boom in cryptocurrency – or digital currencies – has pushed more young Americans like Trezhnjeva to try day trading and other kinds of investing for the first time. For people who kept their jobs during last year’s COVID-19 recession and are flush with stimulus money and savings, there’s an anxiety to cash in big on everything from GameStop to cryptocurrencies.

It’s easy to see why.

The stock market has surged nearly 100% since March 2020. AMC, a struggling cinema chain, has managed to soar more than 1,490%. Robinhood, the online trading platform that catapulted AMC to new heights, also has been a market darling, shooting up more than 60% since it went public on July 29.

Meanwhile, Bitcoin more than doubled in value this spring, reaching $64,000 in April before briefly tumbling back to below $30,000.

Why young investors have COVID-induced FOMO
All these lofty values and the wealth generated by it have drawn young Americans to investing, even though they have been hit by two “once-in-a-lifetime” recessions early in their prime earning years. The ability to become rich quickl seems close at hand.

But the drive to get in on the action comes with big risks. And while the do-it-yourself spirit of day traders is understandable given frustrations with low-paying retail jobs and a distrust of big financial institutions, low levels of financial knowledge leave most Americans at risk of losing more money than they can spare when markets turn volatile or crash.

“It’s like a Las Vegas-style atmosphere where you’re gambling and things can work out in your favor," says Michael Sheldon, chief investment officer at investment adviser RDM Financial Group at Hightower. "But just as quickly they can turn against you.”

Still, most Americans aren't familiar with cryptocurrencies
It was only 17 months ago that the COVID-19 pandemic drove down financial markets 34% and sent the economy into one of the sharpest downturns since the Great Depression And while that market collapse was the shortest on record, $9.5 trillion in wealth was wiped out.

That implosion serves as a warning of what can happen to people without a financial plan or solid grounding in investing basics. And it came just 13 years after the Great Recession of 2007-2009 began, prompted by a collapse in the U.S. housing market.

Yet despite both meltdowns occurring within recent memory, many amateur investors in the U.S fall short when it comes to knowledge of finances, markets and investments, according to Wall Street regulators and financial experts.

And one of the newest and most volatile of investments is among the hottest: cryptocurrencies. They are essentially digital coins created and exchanged over a decentralized computer network where transactions are secured and verified through coding.

If Americans struggle with financial knowledge in general, it’s also true they don’t fully grasp the finer points of this asset. Roughly 60% of U.S. adults say they are "not very" or "not at all" familiar with cryptocurrencies, according to results of a Harris Poll provided exclusively to USA TODAY.

Here's how much lack of financial literacy costs Americans
More broadly, nearly two-thirds of Americans say they understand investing well, though only 20% say they understand it very well, according to Harris.

Literacy appears to correlate with income. About 40% of U.S. households with income over $100,000 say they are "very" literate, compared with only 21% of households with incomes under $50,000, Harris Poll data shows.

Lack of financial literacy and not knowing how to manage one’s personal finances cost Americans more than $415 billion in 2020, or an average of $1,634 per U.S. adult, the National Financial Educators Council estimates.

"When it comes to investing, Americans say they're sufficient, but not proficient by any stretch," says John Gerzema, CEO of The Harris Poll. "They acknowledge they're OK at it, but they haven't mastered it."

Americans think they know more about investing than they actually do
This is also a nation where most Americans believe they know more about investing than they actually do, according to data from the Financial Industry Regulatory Authority, Wall Street’s self-regulatory arm.

In a 2020 survey conducted by FINRA, 50% of investors exhibited low investing knowledge, yet their confidence in their investing capability was relatively high, with 71% of investors reporting average or higher levels of confidence in their skills.

Although most Americans may think they’re financially literate, new investors are less likely to have high levels of financial literacy compared with their more experienced counterparts, FINRA data shows. Most younger investors exhibited low levels of investing knowledge, including 57% of 18- to 29-year-olds and 53% of 30- to 44-year-olds.

Key errors young investors make
Young investors are making two pivotal mistakes while trading cryptocurrencies: Their investing time horizon is too short and they’re scooping up too many speculative assets in their portfolios that are risky, according to Yosef Bonaparte, associate professor of finance and the director of external affairs in finance at the University of Colorado Denver.

Cryptocurrencies can see wild swings within a day or even minutes, making day trading dangerous for small-time investors who lack knowledge about them.

"The everyday individual is looking at crypto assets as an investment or opportunity to build wealth," says Tyrone Ross, chief executive of Onramp Invest, which provides cryptocurrency asset-management technology for financial advisors. "But the majority of people should not be investing in them."

To be a professional trader, for instance, requires exams and a FINRA license to execute orders for a Wall Street securities or brokerage firm. The average Joe in America, however, isn't required to do that if they're day trading for themselves.

“It can work for the right person, but there are so many things that are important before you get there, like having an emergency savings, paying down debt and setting your financial goals,” Ross adds. “If you haven’t done that, you shouldn’t be trading crypto.”

Trezhnjeva says that he's still learning the in and outs of day trading. He was attracted to cryptocurrencies because he either paid no fee or lower fees to transfer money back to his family in Europe.

He wakes up two hours before the stock market opens to prepare for his day. His wife Gabrielle, a 24-year-old leasing agent at an apartment-rental company, gets texts from him throughout the day, asking her opinion about whether to buy a particular cryptocurrency or stock.

But they are still cautious. The couple plans to hold their crypto money for the long haul to build up their nest egg and save for a home.

"We never invest more than we're willing to lose," she added.

Gabrielle has been investing for the past five years and helped push him into cryptocurrency by buying Dogecoin, a popular meme stock that was created as a joke. She predominantly uses the Robinhood and says she feels a rush of validation when she gets congratulated or sees positive emojis for her trades on the app.

“It can get addicting because it’s a sign of reward," she says. "We get gratification and it’s a big part of the gamification of investing.”

The gamification of investing brings significant risks
James Fielder, an adjunct professor of political science at Colorado State University who has studied Robinhood, wrote in a research paper that “by delighting users, Robinhood creates players rather than investors. This helps them overlook the fact that speculative investing is very difficult and could cause them to lose lots of money – even if they are professionals who spend hours and days scrutinizing companies and trades.”

Fielder adds that Robinhood’s emojis, push notifications and backslapping affirmation emails create a “game play loop” that makes stock trading easy.

Fielder in an interview with USA TODAY said Robinhood’s gift of a free stock to those who join for the first time is a “very powerful” tool to bring in new investors. Yet, he said novice investors should be careful.

“I tried it myself, and I thought, ‘Oh, this is crazy,’” he said.

Fielder says Robinhood allows traders to directly link their savings accounts to the app, which could cause a novice trader dabbling in options or other risky trades to quickly lose their money.

Gabrielle, meanwhile, says that investing classes weren't offered in her school curriculum growing up. She's paying off her student debt and currently maxes out her 401(k) contributions because of investing help from her parents. Her husband doesn't have a retirement vehicle like a 401(k) or IRA.

America lags other countries in financial literacy
Part of the issue with retirement planning and investing, experts say, is that Americans aren't equipped with much financial education since most states don't require financial literacy classes for high school students.

As of 2020, 21 states required high schools to teach financial literacy, and 25 states required a high school economics course, according to the Council for Economic Education.

Each year, Americans graduate high school without knowledge of basic life skills like how to keep a budget, file taxes, open and maintain a bank account and save for retirement, according to Bonaparte.

That's added to a staggering dilemma where two-thirds of states – 35 states including Puerto Rico and Washington, D.C. – earned grades of "C" or less for financial literacy instruction, with just 17 states earning grades of "A" or "B," according to a study released by the American Public Education Foundation in 2021.

The U.S. ranks 14th in the world for the percentage of financially literate adults, with only 57% of them meeting that standard, according to Standard & Poor’s Global Financial Literacy Survey. Countries with the highest rates include Australia, Canada, Germany, Israel, and the United Kingdom, where about 65% or more of adults are financially literate.

Crypto frenzy pushes millennials to mine for digital currencies
Travis and Carolina Stewart, who live in Houston, are mining a cryptocurrency called ether with four computers in a shed in their backyard. Mining is the process that creates cryptocurrency.

Their electricity bill is $250 per month, at least double of what it once was. But they say it’s worth it because they’re making enough money off their ether profits.

Travis, a 32-year-old petroleum engineer, got burned and lost money on a medical stock in his early 20s and decided he had an issue with financial literacy. So, he took a coding course that also had a curriculum on cryptocurrencies at Rice University in his hometown during the pandemic.

“It was terrible losing that money, but it caused me to take a deeper dive and learn more about investing,” he says.

Why young investors are drawn to speculative investments
The pandemic has been a boon for speculative corners of the market like cryptocurrencies, with 68% of owners having possessed it for less than a year, according to Harris Poll.

And much of that is ownership comes from young investors. Overall, just 13% of Americans own cryptocurrency, but among millennials that number is far higher, at 25%.

Younger investors need money to buy a house or a car, or they want to get married or travel. But some of them saddled with debt or low-income jobs aren’t setting themselves up to invest for the next 50 years. They’re doing it for just the next three or four years to cover short-term needs, pushing them to buy speculative assets like cryptocurrency, says Bonaparte.

“The fear of missing out is huge. If you want to gamble like in Vegas, only 2% of your portfolio should be in speculative assets, not 100%,” Bonaparte says. “You can buy cryptos because they have a good run sometimes, but you can’t have your entire portfolio in speculation,” he says. “That’s what we’re seeing with millennials.”

Dan Kearns, whose son Alex committed suicide after he thought he had lost a significant amount of money trading options on Robinhood, agrees with Bonaparte.

Kearns says he believes too many teenagers have become investors by getting caught up in the "outsized influence" of social media and are trying to get rich quick.

"There's the 'fear of missing out,' or FOMO, that seems to rule the day," Kearns told USA TODAY."

How some young investors spend their crypto profits
The Stewarts, while young, are taking a measured approach to investing. They paid off their student debt and car payments, padded their emergency savings and have been maxing out their retirement contributions. So, they've using their cryptocurrency profits to generate more savings for retirement and have even incorporated it into their life milestones.

Travis bought Carolina’s engagement ring with about $10,000 he made off ether before the pandemic. Once Carolina, 33, paid off her student loans a few years ago, she started maxing out her 401(k) plan and began trading Bitcoin and gave Travis a fancy watch for their wedding with her cryptocurrency profits.

“I wanted to be a day trader, but then I realized I wasn’t good,” Carolina said, who is a clinical trials project manager at a biopharmaceutical solutions organization. “It’s very stressful because you can lose so much money within hours. I gave up and decided to hold those crypto investments for the long haul.”

“Young Americans who are investing for the first time may be having fun making money, but we really haven’t had an extended economic downturn or bear market,” says Sheldon, the chief investment officer at RDM Financial Group at Hightower.

“Under those circumstances, younger investors might feel differently about taking risks and their decision-making may certainly change if the markets weaken for a period of time,” he said. “They don’t really teach financial literacy in school, but they should.”


Bitcoin outperformed the S&P.
Ross agrees.

"I have yet to meet a billionaire who made their billions from day trading," Ross says. "The greatest investment is education."

Even so, Trezhnjeva, the young day trader in New Jersey, isn't worried about his prospects, for now.

“I’m not afraid of leaving my job. I can always go back to hospitality," he says. "I’m confident that crypto is the future.”

MY COMMENT

I really dont care about people doing what they wish to do. It is FREE ENTERTAINMENT....to watch it. BUT....I already know the end of the story....I have seen it many times in the past and the end is always the same.

 

I have noticed....lately...more young people buying in the Facebook market place and I was aware of auctions but know nothing about it. My daughter in law looks for bargains on Facebook. It makes sense since they have such a built in massive user base. I dont know if they can really do much with it since this is really not their expertise.

My primary rule with buying art is to ONLY buy art that has an established market value. Which usually means.....dead artists. Living artists that are represented by galleries are pushed and hyped.....and....often they simply fade away or at the end of their career when the HYPE ends.....the art is worthless. I like to stick with art that is sold by auction.....so I know that the prices are being established by actual buyers in a competitive market environment. Of course.....even with auction prices.....art goes in and out of style and prices can drop. I ALSO....like you with the comics.....have educated myself so I have a LOT OF KNOWLEDGE of the particular art market for the type of paintings that I am interested in.

THE primary rule......buy what you LOVE and want to live with. If you have the knowledge and it turns out to be an investment....that is a BONUS.

 

I am seeing some gains today....as you would expect with where the NASDAQ is at the moment. I REALLY did not mind the go-nowhere past three days. I am MORE than content to......TREAD WATER....while I am sitting on a 19.45% year to date gain.

 

The housing market is ALSO ridiculous.....BUT.....I am glad to take it.

I noticed just now that our little neighborhood of 4200 homes just jumped from 14 listings to 21 listings. WHAT.....?

Than I noticed that there were 7 homes just DUMPED on the market by the builder of the last remaining neighborhood (about 80 homes) in our area that is currently under construction. About 6 months ago it said that it was sold out and they sold off the 2 model homes. NOW....suddenly 7 homes come on the market.

I suspect that they had contracts that allowed them to ESCALATE the cost of the home and buyers BAILED. The homes came on the market for $150,000 to $220,000......MORE......than they were selling for six months ago. This is one of the WORST neighborhoods in our area because the construction is average at best and the homes are just CRAMMED in and the lots are TINY.

Back yards about 10 feet deep. BUT....they have been able to sell them.....I suspect to buyers that prefer new construction over a "used" house. Many of the buyers are Indian and other cultures that seem to prefer new construction. These homes are listed for $700,000 to $970,000.....and...most are about 2400 SQ Ft.....although the two highest priced are at 3000 SQ Ft.

The prices that they are going to get for these homes is just....INSANE. BUT...people are DRIVEN to buy in this area for the neighborhood and the AMAZING schools....not to mention the fact that we are fairly close in and there is not a lot that is going to ever be built in the future this close in.

It seems like people are being taken advantage of....but they are willing buyers.....so I guess not. AND....the homes will probably continue to go up. The ONLY other homes in our area that are being built are in the $2,500,000 range and large acre lots.....about 12 of them available.

That is my updated.....local....real estate report.

 

Regarding the above....I did see this....on a national level.

Home price gains moderate for first time in the last year
Low rates may fuel strong buying into late summer, which usually slows

https://www.foxbusiness.com/economy/home-price-gains-moderate-first-time-last-year

(BOLD is my opinion OR what I consider important content)

"There's some welcome news for people shopping for a home, as the rise in prices could finally be starting to cool.

"Realtor.com’s weekly data show that the number of newly-listed homes for sale continues to grow, leading to a noticeable moderation in the pace of price gains, which have risen less than 10% year-over-year for the past two weeks, the first time we’ve seen this in the last year.," according to Realtor.com Senior Economist George Ratiu.

The Freddie Mac fixed rate for a 30-year loan inched up this week.

According to Ratiu, mortgage rates responded to the rise in the 10-year Treasury, fueled by investors anticipating another rise in consumer prices and a higher rate of inflation.

"Yesterday’s release showed that price growth in July was significant, but not as high as June, especially when considering core inflation," said Ratiu. "In short, rates are expected to bounce around below the 3% mark until the Fed clarifies a timeline for the expected tapering of monthly mortgage-backed securities purchases."

The Labor Department said consumer prices rose 0.5% from June to July, down from the previous monthly increase of 0.9%. Year over year, consumer prices have increased a substantial 5.4%.

Spring has traditionally been the busiest time of the year for home buyers, but low rates may fuel strong buying interest into the late summer, which usually sees a slowdown, according to Realtor.com.

"The combination of rising inventory, slowing price gains, and low interest rates offer a much-needed ray of sunshine to many buyers who have been growing increasingly exhausted by an extremely competitive housing landscape," said Ratiu. "These factors also signal that fall may turn out to be a busier season than usual, as buyers seek to take advantage of improving market conditions.""

MY COMMENT

I dont see much slowing of the market for the Fall and Winter around here....although I think the INSANITY of the market has backed off some. We have not had ANY seasonal slow down for the past 2 years....the market just stays strong all year.

 

AND.....in conjunction with the above....I just saw in the paper that the Census figures for Central Texas show that.....the City of Austin........ increased in population by 21%.....in just the last 10 years. The surrounding areas......ALSO....MASSIVE increases with no end in sight.

 

I believe that the MILLENNIAL generation is driving what is going on now. EVERYTHING is being driven sky high in price by social media influencers and the HUGE BULGE in the population that is the young generation. I dont believe it is inflation....but some of it is being caused by a MASSIVE number of young.....well paid consumers....chasing too few....high end...... goods. Simply the market forces at work. I see it in investing, housing, cars, high end watches, clothing, shoes, and everything you can imagine. In addition we have a HUGE number of more affluent buyers flooding the world markets from China and India.

Welcome to the peak everything market and economy

https://www.cnn.com/2021/08/12/investing/stock-market-economy/index.html

(BOLD is my opinion OR what I consider important content)

"New York (CNN Business)Stocks are near record highs. Housing prices are soaring. Inflation is running wild.

The Covid-19 pandemic has helped create a financial environment beset by unusual (and perhaps unsustainable) spikes in asset prices.

The rapid shutdown of the economy in the spring of 2020 led to a brief but painful recession. But the resulting reopening has caused a massive boom that has some wondering if America is now in the midst of a new Roaring Twenties ... just like 100 years ago.

Still, there are indications that the economy and market may soon be reaching peak levels -- for just about everything.
"What will the return to the new normal look like? We may soon be past the peak," said Yung-Yu Ma, chief investment strategist with BMO Wealth Management.

Earnings momentum should begin to fade
Investors and consumers should prepare for the possibility that the economy may finally start to settle down in the latter half of 2021 and into 2022, especially if the Delta variant becomes an even bigger problem.

Stocks may have a tougher time advancing as valuations grow more expensive and earnings growth inevitably cools.
Price-to-earnings ratios for stocks are well above their five- and 10-year averages, according to estimates compiled by FactSet.
Meanwhile, analysts think earnings for the S&P 500 surged nearly 90% in the second quarter from a year ago. But that will probably be the top growth rate for the foreseeable future.

Earnings growth is expected to fall to 28% in the third quarter and 21% in the fourth quarter. In 2022, profits are only anticipated to climb 9.5%. Once investors realize that this could be the peak of corporate earnings growth, company valuations (and stock market levels) could pull back.

"I do think the markets — all of the markets — have priced in really good outlooks. So there could be more risk to the downside since so much good news has been priced in," said Tim Schmidt, chief investment officer with Prudential.
Schmidt added that he doesn't see any bubbles per se, but that the market may be a little ahead of itself.

Housing prices may finally pull back a bit

New home sales dipped in July, a possible sign that buyers are unwilling to lose one bidding war after another in a market where housing supply is still tight.

Renters may be opting to stay put until prices finally cool off a bit. If sales continue to dip, it stands to reason that prices inevitably will fall as well.

Economists don't expect that will lead to another big housing market crash like the late 2000's.

But any noticeable slide in housing prices should have a negative impact on the broader economy. That's because housing makes up about 15% to 18% of the nation's overall gross domestic product, according to the National Association of Home Builders.
A potential top for the broader economy isn't all bad news though. Inflation could be less of a problem in the next few months.
Eric Winograd, senior economist with investment firm AB, noted in a recent report that "with the pace of gasoline price increases moderating, we are likely at or near the peak in headline CPI."

The prices of other goods and services that have experienced gigantic increases due to temporary factors such as supply constraints and a massive, rapid uptick in demand, may cool off too.

"While inflation is high, it likely is at or near its peak," said Scott Ruesterholz, a portfolio manager at Insight Investment, in a report.
"We will be looking to see if volatile categories that have driven much of the recent surge in prices, like rental cars, hotel rates, and used cars, shows signs of moderation," he added.

Inflation could cool, but it won't go away for good

But what happens next in the labor market is the big wild card for inflation. Wages have been rising. And when workers are making more money, that has the most potential to drive longer-term prices higher.

BMO's Ma said wage pressures should continue to go higher because of permanent changes to the dynamics of the labor market as a result of Covid-19.

Employee shortages in key services industries have forced retailers and restaurants to boost wages to attract more workers.
"We don't want to be anchored to pre-pandemic norms. It's a new environment and in a lot of ways things will be very different. Inflation could be persistent for some time to come," he said."

MY COMMENT

On......HIGH END GOODS.....from my reading prices are EXPLODING all over the world. Demand is far outstripping supply and prices are often 2-4 times higher in the GREY MARKET. Demand is coming from Asia and all over the world in addition to the EU and the USA. I think we are starting to see a BIG IMPACT from the largest generation in history.....THE MILLENNIALS.

If you own a home in a good area....or any sort of collectable, or car, or shoe, or watch, or other......high end item......that is sought after......it might be a good idea to just hang on to it for the long term. At least....that is my plan for now.

 

Way to go oldmanram. Nothing like a late day surge.

I also was nicely green today. My best gainers.....over 1% each......were APPLE, MICROSOFT, and NVIDIA. I was able to get a beat on the SP500 by 0.18%. So I made up most of the ground that I lost to the SP500 earlier this week. I am also beating the SP500 YTD......at the moment. Half way through the month at the close tomorrow. So far we have not seen much of the....."August is a bad month".....myth this year.