Our valuations have been volatile, lately. Everything we own is inexplicably up today. I expect the volatility to continue until mid year, or so. That is based primarily on subjective assessment. Suffice to say, I will not be trading on this thought. As I predict volatility of our personal net worth, we are about to essentially ignore our portfolio for a few months. This causes me no concern at all. For me, this is a sign our portfolio is where we need it to be. When you can see a rough patch coming and you don't touch the wheel, the car is operating smoothly.
Here were are. At a crossroads. Again. Is the recession over with a boom to follow? Many think so. China has ended their zero COVID policy. It seems like the economy should start working better in the near future. Are we at the edge of a precipice with the next step being global meltdown? Many have indicated this. As well as CEOs of the world's largest companies, there have been investment bankers and financial journalists citing near certainty of bad times ahead. We haven't sold anything, nor have we purchased anything of significance in quite a while. We turned our DRIPs back on because we hit an arbitrary maximum cash level we had decided on. In other words, we have done nothing and we will continue to do so unless some great deals present themselves.
Here are some thoughts on incubating companies. These are companies that are very young, not listed, but interesting as potential future investments, should they ever become publicly listed or somehow investable. Sharrow Engineering LLC - Have several loop blade marine propeller designs that have proven to dramatically increase efficiency at cruise speeds (20% real world testing). Sharrow might be an interesting match for Archer Aviation but I expect Archer will stick with more traditional props for a little while and might ultimately go with something like the CFM RISE but the Sharrow design appears much more simple and obvious. Sharrow is also obvious for electric boats which so desperately need the 20% increase in range, as well as cargo transport or really any cruising vessel.
I expect T+1 settlement will increase market volatility. That's ideal for me. Wbi = no idea My portfolio performance in the last two weeks = no idea Concerns = none
Cathy Wood thinks we are heading out of a recession that started in very early 2022. She cited inventory issues that will clean up shortly and head into a boom by 23Q2. She sees a period of deflation which she worries could get out of control. I am not a disciple of Cathy Wood any more but I still consider her an extremely intelligent person and try to follow her point of view. I do not present this as my view. It is simply something interesting I stumbled across.
When I bought Tesla in 2016, I was literally threatened in a PM on another forum. In the public side of that forum, I was called "shit for brains" and was declared a moron by many. Basically, 45 people telling me I cannot be trusted with my own investment money and two people who had a similar view to my own but, oddly, did not take the same textual abuse I did. In 2021, a few of those people started to post that they always knew Tesla was a great investment. Now I'm retired. A little bit of that wealth came from Tesla. Those people are still on that other forum and they are still against every new idea that comes down the pipe. lol! You would think some of those folks would be retired by now also, given how well they were able to predict the future. I'm mostly a tentative investor. I am patient. I'm happy with modest results. I stick with a company as long as I believe in management. Good opportunities don't come along very often but if I can manage to identify one, I hit it hard. I don't go all in but I don't just dabble with pin money, either. Right now, I am gaining confidence that I can see another great opportunity. I will know more in a couple of weeks. Exciting times, gentlemen!
Last week, SVB was shut down and taken over by the federal regulator. Monday, feds also closed Signature bank. Markets were definitely down on Monday. Tuesday, markets are up quite a bit. About half of Friday/Monday loses have recovered. We are still under threat of a banking crisis. The government is indicating these are isolated problems and this seems to be true but they have proven themselves clueless at every turn. I can only conclude American investors are a bunch of risk blind maniacs.
I understand, Spud. When you are trading for gains of $10,000 per day, you dont want to let too many days slide or the next thing you know, there will be no bitches to pose on the twin turbo Ferrari.
Wrong dude. I'm happy with a dollar a day. No Lambo in my driveway, same old $1,000 hoopty I've had for ages.
A chat from earlier today made me realize my thought process seems to be unusual in a way I did not realize. A few years ago, I wrote in this thread that everyone goes all-in, at some point in time. They say they have not but everyone has done it. There has been a house that required every cent plus some borrowed from family. There has been a stock that was purchased with every dollar of spare cash in an account. At some point, everyone has thrown their system over their shoulder and gone for it. Everyone. Do not bullshit us. I've done it. I sold a house some years ago with the idea of paying off two mortgages. Instead, I put all of it into a REIT which was paying well with the idea of using the dividend to pay the debt service. Instead, I set the REIT to DRIP and paid one of the mortgages off with my salary and the other was almost paid off when the property was sold. That REIT had a PE of 4.2. It was like staring at a cheese cake. All I had to do was reach out with a fork and take a bite. You only get to do that a very small number of times. I thought there was an 80% chance of success with my last all-in move. I got away with it. Many did, back at that time. If someone were to continue to do that, they would eventually make a bad gamble and end up in trouble. These days, I play it extremely conservative. I have a plan to start a business and that will soak up some of my free cash but there will be plenty left to live on for many years, if it all goes south. I'm just saying, going all-in is something you do one or two times in your life. It's a game of deer hunter. You cannot cheat death forever. Take the risk, get yourself back onto secure ground, and be happy you did not lose everything.
Europe is going to raise their interest rates another half a percent, despite the banking system looking pretty shaky. I expect the US will go the same route.
China is now pushing heavily for self sufficiency in supply chains. ... and we continue to walk down this gang plank. Now that we've given our best technology and IP to China, we need to find another country that hates us to give our technology and IP to. Enter, India.
I've been looking closely at South east Asia. They are doing a lot of good things. Ultimately, I think the corruption and autocracy of president Xi is going to prevent the entire region from prospering. In fact, I see a dark medium term future for China and it's closest allies. I see a dark future for US and Canada, as well. With IP given to their enemies and no ability to make anything, they are not going to prosper. There appears to be dark times ahead. I am not selling anything. The most I will do is grow money markets to weather a storm that might last the rest of my life. Europe is a bit more clear. I doubt they will solve their corruption problems but I hope they do. It seems clear Russia will be driven from Crimea by late summer or, at least, the end of the year. I make no prediction of Putin being killed. I'm not sure it matters if he is. If someone takes out Putin, he will be replaced by someone who will be as autocratic as Putin is now, within two years. Initial declarations of openness and a new era won't last long.
Always a good read in your thread TB16. As most are focused on economic stuff, you do touch on a subject that I have noticed and thought about more recently. Seems there are many countries right now involved in this "tit for tat" game of posturing and antagonizing each other globally. With so much pushing the envelope it seems. The problem is going to be when someone miscalculates or just simply makes a mistake, or over plays their hand. Then what? Its almost akin to the grade school kid launching spitballs at the teacher as she writes on the blackboard with her back to the class. It seems like a plan...until you get caught with the straw. I don't lose sleep about it, nothing we can control about it. However, with the increase in all of this activity....the potential is there to have a greater impact than any economic event could bring.
I'm a long term hold guy so I'm trying to keep an eye on some things and perhaps deciding between reinvesting dividends or building cash. It appears I will be building cash for quite some time but I have no intention to sell. If I sold every time I saw dark clouds in the sky, I would not be retired right now.
I need to acknowledge that Europe made it through a winter without Russian energy. Europe appears to be generally OK, although they are having the same problems with China as North America is.
