Investing Thread

[Goose]

Sultan

I agree. I believe 2008 showed what lengths the government will go to to protect the economy. We saw it again in the pandemic. While I completely disagree with the government being involved, it proved to me it would take a super catastrophic event to completely derail the economy. Imo, that is not the government’s job, but it is fact of life.

[MU82]

2008 is probably the closest we will get to a Great Depression given the regulatory systems currently in place and our government's willingness to borrow to prop up consumption.  2020 shows that government spending can be effectively used to prop up an economy when it is needed.

On your first sentence ... here's hoping! On your second, I agree.

[The Hippie Satan of Hyperbole]

My strong belief is that the Great Depression would not happen today outside of some catastrophic environmental or man-made event. The circumstances that lead to Black Monday are nowhere similar to where they are now, and even if that event occurred again, it would rapidly be blunted by governmental intervention. The Depression IMO was worsened by the fact that we didn't have a full understanding of the levers we could pull at the time.

[Goose]

I think the levers are there for the government to cover their ass. I wish I believed they were there to protect the citizens, but believe they are used to hide 25+ years of mistakes and corruption on their part.

[The Hippie Satan of Hyperbole]

I think the levers are there for the government to cover their ass. I wish I believed they were there to protect the citizens, but believe they are used to hide 25+ years of mistakes and corruption on their part.

I don't think we passed COVID relief packages to cover government mistakes and corruption.

[Goose]

Sultan

No, but they printed and spent money without any concern of the consequences. That said, I think every second of every day is spent covering up mistakes and corruption. Only mentioned the pandemic because by almost definition of catastrophic, the pandemic met catastrophic in my book.

[Hards Alumni]

I think the levers are there for the government to cover their ass. I wish I believed they were there to protect the citizens, but believe they are used to hide 25+ years of mistakes and corruption on their part.

That stretches back further than 25 years.

[Hards Alumni]

Sultan

No, but they printed and spent money without any concern of the consequences. That said, I think every second of every day is spent covering up mistakes and corruption. Only mentioned the pandemic because by almost definition of catastrophic, the pandemic met catastrophic in my book.

I'm not sure what the consequences were.

[GOO]

On Musk and Tesla have to agree 100%. A lot of bad with the good.  I didn’t buy Tesla for a long time, due to Musk. The product is like the iPhone, but with a genius child at the helm - maybe a Steve Jobs - not a Tim Cook.

Musk is also less about shareholder value and more about the product and advances in tech and pushing the boundaries of tech and manufacturing. Everything is rethought and done in new ways always. That’s great when it works. And they have leapt over traditional car makers in manufacturing efficiencies - I didn’t t see that coming. It has worked out, but that was a little scary when you’re betting the company over and over. Maybe they are at the point now where they are no longer betting the company on each new product. 

From an investment point of view, that always scared me.  Product over shareholders. I finally bit in a small way when it got down to low 100s. Couldn’t resist and wanted to have some in the portfolio. So far so good. But I still consider it a bit risky. 

But I’ not an individual stock guy anyway. Vanguard philosophy all the way. Consistently dump money in and ignore it. Only own a few individual companies and Birkshire as a way of owning equities with less downside in tough times. Index funds all the way, only way over the long term for me. Take a few individual stocks in at the right time, and ignore.

[Goose]

Hards

I do think the government’s non stop printing of money has consequences. It has been a great thing for the stock market and a nice segment of people benefited from that. IMO, that has come with a very big cost to the overall economy.

There were/are a lot of things broken in our economic system and that is troublesome from my perspective. First, I believe making money is hard and easy made money is not a long term positive. For argument sake, if someone had a $500k in their retirement plan and was 100% in the S&P this year, they made roughly $125k. That $125k makes people feel smarter than they are and reckless spending is east do if you think you are smarter than you really are.

That is great for them, but many took years or decades to hit $500k and that $125k windfall changes perspective on one’s wealth. Spending habits change, thinking you can help grown children comes into play and it changed the overall economy.

I have said on here many times that a very smart man once told me that if you do not think $100k is a lot of money, see how hard it is to save $100k. The divide in society continues to get larger and the cost of living is in a dangerous position, imo.

I am going to admit, my thinking of how an economy should function is probably outdated and it took me a long time to admit that. That said, I believe the “new” economy is dangerous and will create a bigger divide between the classes.

Fortunately, I am 60y and still have time to accept the changes and adjust my thinking and plans. I’m hopeful that my grown kids can create their own wealth, whatever that means to them, and live the life they want to live. That said, I think this is the toughest time in my lifetime to know is the best path forward for younger people.

My kids, three own homes/condos, have made good decisions and that is great. Now, all are looking to upgrade and the cost is out of their price range. IMO, some of that is due to the person that made a $125k in their retirement plan and think they can bankroll a home purchase for their kids. Hence, home prices for younger people who cannot afford it and the $125k for older people was put at risk.

To sum it, I think the American Dream is the greatest idea/concept in the history of the world on the economic front, but I think it is so messed up because of the government bailouts that my kids will never fully understand why it is the greatest economic idea ever.

For the record, I have never, never wished for an economic catastrophe and always want as many people as possible to prosper. That said, I have no idea how this economy works today without government intervention. That troubles me.

[The Hippie Satan of Hyperbole]

I think Millennials and GenZ have a significantly different view of government intervention in the economy mostly due to 2008, which they believe disproportionately impacted them while also not really impacting people with high incomes and net worth.

[TSmith34, Inc.]

But I’ not an individual stock guy anyway. Vanguard philosophy all the way. Consistently dump money in and ignore it. Only own a few individual companies and Birkshire as a way of owning equities with less downside in tough times. Index funds all the way, only way over the long term for me. Take a few individual stocks in at the right time, and ignore.

My investing in 2023 definitely shifted closer to your thinking. While I will still buy some individual stocks and continue to dabble in options, the vast majority of my fresh money went into "leave the individual investments to others". This included some ETFs (VGT, TMFC), a selection of BDCs (ARCC, MAIN, TSLX, GDBC, TPVG), and a big, big helping of the S&P500. One of my best performers this year was KKR, which brought its CAGR to 15.5% in the almost 10 years I've owned it.

The BDCs are there as I build out a leg of stool for eventual retirement; they should provide a steady stream of dividends that will allow me to be more judicious around the timing of equity sale draw downs.

I was definitely raised on Peter Lynch's notion that small investors could outperform the market. But, if you boil down his success, a large portion of it was based on asymmetric information. I'm not sure that is possible in the internet age where information is so much more readily available.

I've become more of an adherent to Buffet's advice to stick your money into index funds, given that a large majority of professional money managers can't beat the indexes. I'll probably always allocate some funds to individual stocks, and will play options as that has been pretty lucrative as well as entertaining, but my strategy has evolved to outsource the individual picks far more.

[Goose]

Sultan

You are likely correct, but that does not make their opinion correct. I am not saying they are wrong, but I do not think economic policy should be changed because of their opinion. I know I am in the minority thinking economic hardship is not always a bad thing, but I had an extremely difficult 2023 professionally and I learned from it. It taught me (again) to have a firm business plan in place, the need to be prepared for what-if situations and the need to make tough decisions quickly.

While 2023 is tough for my business it also brought to light a ton of positives. IMO, having a difficult year is not the worst thing in the world, provided you learn from it. We learned a lot at work this year and are well positioned going into 2024. The tough year at work obviously toke a toll on personal finances and that is the American economy should look like, imo.

Again, on the macro level, my opinions are very likely outdated and time to pivot. The biggest mistake I made over the past decade was not taking advantage of free money being thrown out of the windows of every bank. I should have borrowed until I could not borrow anymore and invested in a ton of assets that went up like crazy. Instead, this idiot thought that business model was dangerous. Funny thing, I live my professional/personal finances in reckless manner for the most part. By that I mean, I continually bet on myself and swing for the fences. Lesson learned was I should have been leveraged to the hilt.

[SoCalEagle]

Sultan

You are likely correct, but that does not make their opinion correct. I am not saying they are wrong, but I do not think economic policy should be changed because of their opinion. I know I am in the minority thinking economic hardship is not always a bad thing, but I had an extremely difficult 2023 professionally and I learned from it. It taught me (again) to have a firm business plan in place, the need to be prepared for what-if situations and the need to make tough decisions quickly.

While 2023 is tough for my business it also brought to light a ton of positives. IMO, having a difficult year is not the worst thing in the world, provided you learn from it. We learned a lot at work this year and are well positioned going into 2024. The tough year at work obviously toke a toll on personal finances and that is the American economy should look like, imo.

Again, on the macro level, my opinions are very likely outdated and time to pivot. The biggest mistake I made over the past decade was not taking advantage of free money being thrown out of the windows of every bank. I should have borrowed until I could not borrow anymore and invested in a ton of assets that went up like crazy. Instead, this idiot thought that business model was dangerous. Funny thing, I live my professional/personal finances in reckless manner for the most part. By that I mean, I continually bet on myself and swing for the fences. Lesson learned was I should have been leveraged to the hilt.

Goose, economic hardship certainly teaches us a lot, as long as we pay attention.  I started investing in my mid 20s and have seen it through the dot com bust, the great financial crisis, and the covid collapse.  Through all these years I have used what I call the ABC method of investing (Always Be Compounding) and have continued to remain in the market.  It worked because I realized that each of those events represented a tremendous buying opportunity.  And the beat goes on ...

Quick story: you may remember that the stock market closed for several days after 9/11/2001.  Like most of us, I did a lot of thinking over the days immediately after those planes hit the towers and ran into the ground in PA and DC.  I thought to myself that America is a great place and we will be back!!!  Then, on the day when the markets re-opened, I took a small amount of what I had that was not already invested and bought 10 shares (for approximately $1,000) of the Vanguard Total Stock Market Index (VTI).  This index tracks every public company in America and it was my small way of betting on the U.S.A.  For all these years I have kept that investment separate just so I can track how well "we" are doing.  From time to time I check on these shares (20 now after a split many years ago) and smile.  I will never sell them. 

Anyhow, regarding your point about leverage, too much of it hurt a lot of people over the years (think of those losing homes during the great financial crisis).  You likely avoided that with your conservative investing style.  Good luck to you in 2024 and beyond!!!! 

[MU82]

Regardless of what the economy is doing, booze never goes out of fashion ...

(From Seeking Alpha)

Spirits revenue in the U.S. is slated to increase ~3% in 2024 compared to '23 as liquor company CEOs say that despite concerns over inflationary impacts on consumer spending, drinkers still see spirits as an affordable luxury.

U.S. sales of spirits is expected to reach $54.9B in 2024, according to Statista. From 2023 to 2028, revenue is expecgted to increase at a 2.85% compound growth rate.

Based on sales, vodka and tequila are projected to be the two highest selling spirits in 2024, at, respectively, $12.9B and $11B. Whiskey came in thurd at $10.9B.

The biggest sales growth between 2023 and 2024 is seen with brandy, tequila and vodka with increases of $400M each projected.

Statista noted that customers are gravitating more to premium and craft spirits, as well as flavored spirits such as fruit-infused vodkas and botanical gins.

[Goose]

SoCalEagle

Good stuff. Hope you have a great 2024 as well.

[MU82]

Wisconsin's job market finishes the year on a strong note with record high number of people working

https://www.jsonline.com/story/money/business/2023/12/29/wisconsins-job-market-strong-with-a-record-3-million-people-working/72052057007/?utm_source=jsonline-dailybriefing-strada&utm_medium=email&utm_campaign=dailybriefing-greeting&utm_term=Content%20List%20-%20Stacking%20-%20optimized&utm_content=pmjs-milwaukee-nletter65

Wisconsin’s economy ended 2023 in good shape with businesses hiring workers and the state’s unemployment rate at 3.3%, lower than the national average of 3.7%.

Jobs and employment data is still being gathered for December. However officials with the Wisconsin Department of Workforce Development said that in November the state had more than 3 million people working, which is a new high for the state, and in the month 1,700 employees were added to the workforce.

In 2023, roughly 32,300 workers entered the workforce in Wisconsin. 

The biggest problem with the economy has been there aren’t enough bodies to fill the openings. 

[Uncle Rico]

Wisconsin's job market finishes the year on a strong note with record high number of people working

https://www.jsonline.com/story/money/business/2023/12/29/wisconsins-job-market-strong-with-a-record-3-million-people-working/72052057007/?utm_source=jsonline-dailybriefing-strada&utm_medium=email&utm_campaign=dailybriefing-greeting&utm_term=Content%20List%20-%20Stacking%20-%20optimized&utm_content=pmjs-milwaukee-nletter65

Wisconsin’s economy ended 2023 in good shape with businesses hiring workers and the state’s unemployment rate at 3.3%, lower than the national average of 3.7%.

Jobs and employment data is still being gathered for December. However officials with the Wisconsin Department of Workforce Development said that in November the state had more than 3 million people working, which is a new high for the state, and in the month 1,700 employees were added to the workforce.

In 2023, roughly 32,300 workers entered the workforce in Wisconsin. 

The biggest problem with the economy has been there aren’t enough bodies to fill the openings. 

Best governor evers

[SoCalEagle]

Regardless of what the economy is doing, booze never goes out of fashion ...

(From Seeking Alpha)

Spirits revenue in the U.S. is slated to increase ~3% in 2024 compared to '23 as liquor company CEOs say that despite concerns over inflationary impacts on consumer spending, drinkers still see spirits as an affordable luxury.

U.S. sales of spirits is expected to reach $54.9B in 2024, according to Statista. From 2023 to 2028, revenue is expecgted to increase at a 2.85% compound growth rate.

Based on sales, vodka and tequila are projected to be the two highest selling spirits in 2024, at, respectively, $12.9B and $11B. Whiskey came in thurd at $10.9B.

The biggest sales growth between 2023 and 2024 is seen with brandy, tequila and vodka with increases of $400M each projected.

Statista noted that customers are gravitating more to premium and craft spirits, as well as flavored spirits such as fruit-infused vodkas and botanical gins.

This is certainly true within my circle of friends.  We used to get together for "beers," and now we get together for "drinks."  It used to be a 75% / 25% split in favor of beer, and now it's the other way around.   

[SoCalEagle]

Wisconsin's job market finishes the year on a strong note with record high number of people working

https://www.jsonline.com/story/money/business/2023/12/29/wisconsins-job-market-strong-with-a-record-3-million-people-working/72052057007/?utm_source=jsonline-dailybriefing-strada&utm_medium=email&utm_campaign=dailybriefing-greeting&utm_term=Content%20List%20-%20Stacking%20-%20optimized&utm_content=pmjs-milwaukee-nletter65

Wisconsin’s economy ended 2023 in good shape with businesses hiring workers and the state’s unemployment rate at 3.3%, lower than the national average of 3.7%.

Jobs and employment data is still being gathered for December. However officials with the Wisconsin Department of Workforce Development said that in November the state had more than 3 million people working, which is a new high for the state, and in the month 1,700 employees were added to the workforce.

In 2023, roughly 32,300 workers entered the workforce in Wisconsin. 

The biggest problem with the economy has been there aren’t enough bodies to fill the openings. 

Hmmm, I wonder how we can fix this problem? 

[Jockey]

Wisconsin's job market finishes the year on a strong note with record high number of people working

https://www.jsonline.com/story/money/business/2023/12/29/wisconsins-job-market-strong-with-a-record-3-million-people-working/72052057007/?utm_source=jsonline-dailybriefing-strada&utm_medium=email&utm_campaign=dailybriefing-greeting&utm_term=Content%20List%20-%20Stacking%20-%20optimized&utm_content=pmjs-milwaukee-nletter65

Wisconsin’s economy ended 2023 in good shape with businesses hiring workers and the state’s unemployment rate at 3.3%, lower than the national average of 3.7%.

Jobs and employment data is still being gathered for December. However officials with the Wisconsin Department of Workforce Development said that in November the state had more than 3 million people working, which is a new high for the state, and in the month 1,700 employees were added to the workforce.

In 2023, roughly 32,300 workers entered the workforce in Wisconsin. 

The biggest problem with the economy has been there aren’t enough bodies to fill the openings. 

Thanks for providing proof of our cratering economy.

[MU82]

Well, Jockey, there are some red flags, and this article points to a couple of them. Other articles point to plenty others.

So it's not close to a perfect economy (if there is such a thing). Overall, though, it's pretty strong and resilient. Those who have been forecasting a recession for years have been wrong ... and if they invested with that in mind in 2023, they missed out on a chance to increase their wealth.

And this is the Investing Thread, so crazy me will talk about investing ... as an investor, my biggest concern is that much (most?) of the market is overvalued. But I'm also a long-term investor - and over the long term, the market always moves higher.

[Goose]

82

If memory serves me, a lot of wealth was lost in the market in 2022. I hope 2024 is remotely similar year to this past in the market and the economy does not stall. I am done guessing on what happens next and am counting on Uncle Sam to intervene whenever they feel it is needed. Bloated 401k plans would make any decisions on how to fix social security easier.

[MU82]

82

If memory serves me, a lot of wealth was lost in the market in 2022. I hope 2024 is remotely similar year to this past in the market and the economy does not stall. I am done guessing on what happens next and am counting on Uncle Sam to intervene whenever they feel it is needed. Bloated 401k plans would make any decisions on how to fix social security easier.

There will always be up years and down years, but more up than down. Those who stay the course instead of trying to guess usually do pretty darn well long-term.

I don’t really get what you’re saying about 401k plans and Social Security.

SS is actually a relatively easy fix — and it will be fixed because of the political pressure to do so. Medicare is a more difficult fix, so we’ll see what happens there.

[Goose]

82

Of course there will likely be more up than down years. Only pointing out the last two years pretty balanced out to two average years if you were fully vested for those 24 months.

What is your quick fix for social security?