Showing posts with label Commentary_2023. Show all posts
Showing posts with label Commentary_2023. Show all posts

Sunday, December 31, 2023

The Post-Modern Period -- Commentary -- December 31, 2023

Locator: 46436B.

************************
Into The 21st Century

I assume this is Susan Rubinow Gorsky but I wrote this years ago, and did not catch the source, or the full name of the writer. But let's assume it was Susan Rubinow Gorsky:

Gorsky said that “Virginia Woolf speaks for the modern period.  Modernism is the most important aesthetic movement of the twentieth century. Along with such experiments as Joyce, Eliot, Yeats, Faulkner, and Lawrence, Virginia Woolf is a prime representative of those so strongly affected by the tumultuous transition to the current [20th] century.”  

According to Gorsky, at the time of Virginia’s birth, “Victorian England was becoming increasingly aware of the tumultuous change which introduced what today is called the modern age.  

This period of upheaval witnessed frequently disruptive events in history and literature. 

The breakdown of the traditional Western family and of class structure, the coming of a major economic depression, the accelerated shift from an agricultural to an urban and industrialized society – these general trends were supported or symbolized by specific occurrences, among them the death of Queen Victoria, in 1901, the flights of the Wright brothers in 1903, and in 1914 the great climax of the first World War. At the same time, startling new ideas were being promulgated by Carl Jung in anthropology and psychology, by Sigmund Freud in psychology, by William James in philosophy and psychology, by Henri Bergson in philosophy, by Albert Einstein in the sciences, and by Sir James Frazer in anthropology. 

"However little or much the theories of these important thinkers may have been understood by their popular audiences, there can be no question of their impact.  For example, Jung’s work suggested strange and universal links among all people, an idea supported by Frazer’s study of myths which repeat themselves from one community to another, from one culture to another.  The explorers offered support for each others’ ideas, and the ideas themselves inflamed the curious and sensitive who learned of the new discoveries.” Somewhere Gorsky stated that the transition from the Victorian Age to the Modern Age was as remarkable as the transition from the Dark (Medieval) Ages to the Renaissance Age. That is a remarkable statement if one stops to think about it a moment. 

From my perspective, moving into the second half of this decade (2020 - 2029) could be just as tumultuous:

  • "the death of literature as we knew it":
    • the rise of OpenAI; 
    • Harvard president not guilty of plagiarism; 
      • admits to "duplicative language";
      • will be allowed to add citations to her PhD thesis
    • "woke" literature;
      • LBGTQ authors rise and shine
    • wedge issues decide elections
      • supposedly decided in the 60s, abortion now the #1 wedge issue
  • tectonic geo-political changes:
    • most believe that one way or another, the boundary between mainland China and Taiwan will be much more seamless by the end of the decade;
    • US hegemony will continue to decline
      • US seems unable to manage asymmetric warfare
    • Putin "wins" in Ukraine
      • NATO grows but a paper tiger as it cedes Ukraine territory to Russia
    • Middle East: Iran showing its bite through its proxies
    • globally: anti-Semitism becoming acceptable
      • US east coast / west colleges leading the charge
      • Palestinian movement in US seems to be gaining almost exponentially 
    • Southern Surge divides the nation
  • medicine:
    • mRNA
    • CRISPR
    • cures for sickle cell; thalassemia
    • diabetes type II: Ozempic
    • diabetes type I: on the cusp?
  • the gilded age: at least in the US
    • the wealth gap between the well-off and the middle class will continue to widen
    • cryptocurrency surges in value
    • guys like Warren Buffett won't touch it
    • Elon Musk will do a whole lot more than touch it
    • EV house of cards falls; implications enormous

Tuesday, December 26, 2023

WTI Surges -- Thank You, Houthis And Iran -- December 26, 2023

Locator: 46394INV.

WTI: up 3.44%; up $2.53 / bbl. Trading at $76.09. 

********************
The Market 2023 Going Into 2024


From The WSJ

Mentioned:

  • S&P 500 ETF Trust
  • bonds
  • MMFs
  • crypto

The "market, 2023 going into 2024" is tracked here.

Sunday, December 17, 2023

Top Ten Lists, A Look Back -- 2023 And Recommendations -- 2024

Locator: 46329INV.

 ************************
Posted After January 15, 2024

Barron's Roundtable: long, long read. January 14, 2024. Eight stocks recommended. Lots of discussion. Link here.

************************
Posted Prior To January 15, 2024


Link here, AppEconomy, best companies of 2023:

  • META: the year of efficiency;
  • SpaceX: skyrocketing valuation;
  • Novo Nordisk: is Ozempic right for me?
  • MSFT: OpenAI, Azure, and Activision
  • Nvidia: company of the year

Barron's top ten for 2024, in alphabetical order, in BOLD, my favorite:

  • Alibaba
  • GOOG (Alphabet);
  • Barrick Gold
  • BRK (Warren Buffett)
  • BioNTech (partner PFE and competitor Moderna)
  • Chevron
  • Hertz Global
  • Madison Square Gardens Sports
  • PepsiCo
  • U-Haul Holding

Barron's top ten for 2023 (same link as above):

TMDW top ten for 2024, one-year change; 5-year change; new money -- not necessarily top picks for the year; for example, if I didn't have to re-balance my portfolio, AAPL would replace ABBV or WMT, as just one example. The following list is "fluid" but likely where 85% of my new money will be allocated in 2024, in order of preference:

  • TSM: 35%; 187%;
  • AVGO: 105%; 361%
  • MSFT: 54%; 277%
  • NVDA: 201%; 1,400%;
  • CAT: 28%; 138%
  • DE: - 11%; 170%;
  • WMT: 7%; 75%;
  • DVN: - 24%; 105%
  • NOG: 20%; 80%
  • ABBV: -5%; 81%;

Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

Forbes: besides top ten stocks for 2024, a nice article about investing (not trading):

Unicorns, link here:

Top five on-line periodicals plus a few more if you need more:

  • WSJ;
  • Barron's;
  • The Atlantic;
  • The New Yorker;
  • New York Review of Books;
  • Boston Globe;
  • NY Times;
  • LA Times;

Top retailers:

  • computers, phones: Apple
  • toys: Lego
  • furniture: Stickley
  • fast food: McDonald's; Chick-Fil-A (tie; comparing apples to oranges)
  • streaming: Amazon, Hulu (tie)
  • home, grocery: Walmart

Seven dividend-paying big-cap stocks: 

Link here.


From Barron's, link here: the AI run is not over. 


From Barron's, link here: AAPL could hit market cap of $4 trillion in 2024.

Apple currently has a market cap of about $3.1 trillion. The stock would need to close at $257.19 a share or higher to reach the $4 trillion market cap milestone. That’s a 30.6% gain from Tuesday’s close.

********************
The Market 2023 Going Into 2024


From The WSJ

Mentioned:

  • S&P 500 ETF Trust
  • bonds
  • MMFs
  • crypto

Legacy Fund -- Deposits -- November, 2023

Locator: 46326B.

Link here.

Link here. For an oil play that was nothing but hype and a little oil, North Dakota's Legacy Fund has done very, very well.


I wonder: whatever happened to Jane?

Tuesday, November 14, 2023

The Market Today -- A "Goldilocks" Economy -- November 14, 2023

Locator: 46048INV.   

 Clearly this is a day that one needs to watch the entire twelve hours of CNBC.

I've never seen this before: literally, in the middle of "Power Lunch," the host halted the discussion and was dumbfounded to see the Russell 2000 up 5%. That just never happens.

The tone of the discussion changed completely. 

One might argue "irrational exuberance," but that's something one never sees on CNBC. Wow.

It was most fun seeing fund managers trying to explain why they have been on the sidelines and continue to remain on the sidelines out of an abundance of caution. Okay.

But today, the big anchors on CNBC all agreed: there is something different about today's market.

Folks who focus on a recession seem to forget that "everyone" is now working (many with jobs), and "everyone" is making money.

For investors, the market today provides an opportunity one seldom sees. 

I have some thoughts on investing in this market, but this is not an investment site, so I will not post those thoughts.

Perhaps more as the day progresses. 

**********************


Wow, there has been a lot of great commentary today.

The huge takeaways:

  • a classic bull market since 2012
  • already in a Santa Claus rally
  • too many folks have mis-allocated too much of their portfolio into cash (my favorite chart)
  • investors don't need the Fed to lower rates; the economy is managing very, very well
  • those on fixed income are doing well

Thursday, November 9, 2023

Urban Rambling -- November 9, 2023

Locator: 46007ARCH. 

Usual disclaimer applies. There will be content and typographical errors, and those errors are more likely in a long note like this. Read at your own risk. It's not meant for readers but for the grandchildren as an archival document to remind us what "things" were going on today.

Wow, I'm in a great mood. 

IRS: has just published new tax brackets. Whoo-hoo! I'm sure every change was made in favor of the taxpayer. LOL. IRS publishes new tax brackets for tax year 2024 on November 9, 2023. These new brackets are for tax year 2024! Because of inflation, the changes are actually in the taxpayers' favor.

Oilprice.com today

Inflation. I just returned from Target to pick up a few items. Target still has logistics issues; many shelves with empty spaces.

But having said that, it felt like prices have stabilized, and, in fact, dropped a bit. Sales everywhere, including a big sign, 10% off total bill for orders greater than $50. Or was it $10 off for orders greater than $50. I forget now. Whatever.

Apparently Target does not carry McCormick Cinnamon Sugar. I've never seen it there. Will continue to look. I love it on my French toast for breakfast. The French sure are clever, more on that later, if I remember. So, I'll order from Amazon. I'll start ordering my vanilla extract from Amazon, also. It's slightly less expensive than Target and much more convenient. Just a click away. 

But eggs! OMG. $5.00 / dozen last year at this time and Biden was getting all that blame for the high price of eggs (avian flu, of course, was the real cause, and poor logistics in some cases) but now at the high end stores (see yesterday's note), a dozen eggs cost $1.69 and today at Target, $1.39. Are you kidding me? $1.39 for twelve eggs. I hope folks are sending "thank you" notes to the White House. LOL. 12 cents an egg.

Seriously, grocery prices at Target have that feeling that we have simply seen a "reset." We're now where she should have been had there not been a Covid-19 lock down. So, we'll see.

The freezer coffins are over-stuffed (pun intended) with huge Butterball turkeys and their prices are starting to go up. Earlier this year, they were $0.99 / pound. Today, at Target, Butterball turkeys are $1.49 / pound. There was one honeysuckle turkey -- wow, it was huge -- for $1.19 / pound.

Every year for the past several years we've dropped off 10 - 15 turkeys at Sophia's elementary school for the annual Thanksgiving turkey drive, but not this year. I noticed that no one seemed to care one way or another how the drive went, not even a note in the school's weekly note with a summary of last year's drive. I'll donate the money to the "red kettle." Salvation Army.


 

Post-Covid: speaking of groceries, we're also "saving" a lot of money by drawing down on all the grocery and paper supplies we squirreled away during the Covid-19 lock down. A lot. 

Disney: had a great day. 

One Disney analyst, who is not a Disney bull, says Disney still has problems, but says that one exception is Disney Parks. Apparently the parks are reporting explosive profits / explosive growth. Not surprising. People say Disney park tickets are expensive. My response: "compared to what?" One can easily fact-check this; I did and, yes, Disney parks are doing great. I continue to add $200 / month to the 3-y/o twins Disney fund -- held in a Schwab investment account. They are three years old; they will go to Legoland, San Diego, when eight years old and Disneyland, Anaheim, California, when they are a bit older. The fund was started not long ago and now has over $5,000 invested.  

RSV: I mentioned that I got my RSV vaccination yesterday. Absolutely no cost to me: no deductible, no co-pay. Cost to insurer? $210.78. But we did get a coupon for 10% off on one grocery trip -- no limit on the 10%!

New car: with all the money I'm saving by shopping at Target, I was able to buy a new McLaren.



Jews not welcome? Sign of the times? On another note, DFW Kabob and Gyros restaurant, here in Grapevine, Texas, has excellent / outstanding Mediterranean / middle Eastern cuisine for really good prices. 

My wife and her best friend, who happens to be Jewish, were in line for lunch there today when a Palestinian (most likely) customer ahead of them, in a loud voice, shouted "yea, Palestine," to the DFWKAG proprietor who returned a "go, Palestine, from the river to the sea."

Needless to say, our Jewish friend was unable to have lunch there and they left. There are a gazillion restaurants from which to choose here in our local area. This will no longer be one of them.

I will send DDFWKAG a note to let them know of this incident and that I'm willing to make an 8x10 glossy / laminated sign, "Jews Not Welcome," for their window, if they would like. I wonder if they bake cakes.

Wednesday, November 1, 2023

The Only Word Not Used In This Article: Goldilocks -- From The WSJ -- November 1, 2023

Locator: 45892ECONOMY. 

This is an incredibly good article. Greg Ip has it exactly right. But despite all his "research." Greg Ip is/was unable to answer the question, "why are Americans in such a rotten mood?" There are four obvious answers. Actually five. Archived.

Link here.

This is an incredibly long article for The WSJ.  

This is such a great article I may break it up into three or four posts.

The beginning:

Last week we learned that the economy, far from sliding toward recession as economists had predicted over the past year, has actually picked up steam thanks to indefatigable consumers.

Not only has economic output made up all the ground lost during the pandemic, but it is also above where it would have been had the pandemic never happened, judging by what the Congressional Budget Office projected in early 2020.

The same goes for the job market. The unemployment rate at 3.8% is only marginally above where it stood in January 2020. For a while, low unemployment overstated how healthy the job market was because so many people had left the labor force. But except for those over 64, they have mostly returned. The share of the population ages 15 to 64 with jobs topped its prepandemic peak in August.

So if the economy is so good, why are Americans so gloomy? Confidence readings are depressed. Some 69% of respondents to a Wall Street Journal survey in August said the country is headed in the wrong direction. President Biden’s approval ratings are mired around or below 40%, and approval for his handling of the economy is even lower.

The most popular explanation for this dichotomy is that good feelings about jobs are more than offset by high inflation. There is a lot of evidence for this, but it is still not an entirely satisfying answer.

There are two longstanding surveys of consumer confidence. The index produced by the Conference Board, a business research group, incorporates attitudes about the labor market, but not inflation. And this index remains well above its lows around the 2008 and 2001 recessions. No dichotomy there.

By contrast, the University of Michigan sentiment index is at recession-like levels. It appears to be more sensitive to inflation, in part because it asks people if they are financially worse off, and recently 40% of those feeling worse off blame inflation.

But can inflation be the whole story? After all, since peaking at 9.1% in June last year, based on the consumer-price index, inflation has fallen to 3.7%. Some gauges put underlying inflation at around 3%, and the Federal Reserve thinks it is headed gradually to 2%, relieving it of any need to raise interest rates for now. And yet, sentiment is up only moderately since inflation began falling.

And, yes, the next section is on the "misery index." I might post that later.

Monday, October 23, 2023

For The Archives -- Without Comment For Now -- October 23, 2023

Locator: 45804INV.  

Tag: economy, jobs, goldilocks, Bidenomics, GDP, surging.

I think "everyone" knows who Dr Jeremy Siegel is. 

3% inflation. Target: 2%

  


Bidenomics.

A Thought Experiment From A Naive Capitalist -- October 23, 2023

Locator: 45802MORTGAGES.

***********************
Flashback

Back on November 23, 2022 -- almost exactly one year ago I wrote, as a "thought experiment from a naive capitalist." Not one person challenged me on this this entire past year. Here's what I wrote:

On buying a house, these are my observations for folks in my socioeconomic demographic:

  • the price of the house is of little importance (don't take that out of context):
  • the house bought is based on the monthly outlay (principal, interest, insurance, property taxes, etc)

With "free money" or interest rates at zero percent:

  • folks will buy a $400,000 house for $600,000;

With "expensive money" or interest rates at twelve percent:

  • folks will buy a $600,000 house for $400,000.

Experts / realtors will tell folks to buy the "most" house they can afford

  • that they can afford = monthly cash outflow

Monthly cash outflow:

  • if folks think they can afford $3,000 / month, the realtor will convince the buyers they can come up with $4,000 / month
  • buyers will come up with $3,600 / month on their "back-of-the-envelope" budget
  • if they were able to budget $3,000 / month, they will do whatever it takes to come up with that extra $600 / month
  • buying a home becomes a way to force one to save

$600 / month =

  • $6 / day at Starbucks, five days a week, 20 days a month = $120
  • four nights / month out for dinner for a family of four, $100 x 4 = $400

The first two years will be incredibly tough, very painful for the family.

At the end of the first two years, the family will become used to meeting the monthly mortgage.

By the third year, the family may, in fact, have more disposable income than they did two years earlier

  • (pay raise; wife returns to work; second job; more overtime; bonuses; inheritance; family help; tax breaks with a big house)

Interest rates tend to cycle, fluctuate, change (not always, granted). 

If the family buys the $600,000-house for $400,000 with "expensive money" they will be in a very different place two years after they buy the house than if the family buys a $400,000-house for $600,000 with "free money.

Now, break, break. Where would you rather be two years from now: in a $400K house you bought for $600K with "free money" or in a $600K house you bought for $400K with "expensive money."

We're going to stop here and come back to this tomorrow. 

My thoughts may be very naive, but playing devil's advocate this is where I am right now in this thought experiment. 

I thought about this on November 5, 2022, just three weeks ago, and I posted a short note on the blog at the time.

Investing: best years of investing in front of us.

Consider the source, a goldbug, but I can't disagree. 

"Expect five years more of problematic inflation."

Two points:

  • the gap between investors and savers will widen immensely;
  • this year and next will be the best two years to buy a new house.

My thoughts have not changed. I think I'm right on this. It works in an interest rate environment between 0% and 6%. I'm not sure if it would work in a 14-percent environment like we had under the Carter administration.

This "thought experiment" came up again today with the release of the University of Michigan's monthly "Surveys of Consumers.

But for now, ask yourself where you would rather be in 2026:

  • owning a $400,000-house bought for $600,000 with "free money" in 2020 or,
  • owning a $600,000-house bought for $400,000 with "expensive money" in 2023 (or 2024)? 

If the "$400,000-house" and the "$600,000-house" analogy is confusing or doesn't make sense, substitute the phrase "the most house you can afford" for the dollar figure. 

And this whole thought experiment might not make any sense to anyone but me, but I'll come back to it tomorrow to see where my thinking is faulty. 

It should be fun. 

************************
Now, An Update

Link here.

Contrary to what many are saying, it might not be a bad time to buy a house.

That's because buyers waiting for rates to drop may be waiting a long time.

When mortgage rates do go down, competition and demand are set to come roaring back.


By many metrics, the US housing market has never been more unaffordable, and all of the prevailing wisdom right now says buyers should wait it out, either for mortgage rates to drop or prices to come down.

And yet, there's an argument to be made for getting in now if you can find something, even amid 20-year high mortgage rates and stubbornly high prices.

Mortgage rates at 8% have sidelined a good portion of the competition. While it might not seem like it, the current landscape might be more of a buyer's market than in recent years, particularly compared with the height of the pandemic when sellers could demand any contingencies be waived, and buyers were snapping up homes sight unseen.

More importantly, though, the lack of competition now means that when borrowing costs do ease, buyers can expect a flood of pent-up demand to wash over the market. "The days of the 2%-3% interest rates are never going to come back. Forget about that. But they will come down," the "Shark Tank" investor and real-estate mogul Barbara Corcoran said in a post on Instagram this week.

"The minute they drop and come to anything with a five in front of it, the whole world's going to jump back in the market. There's going to be no houses around, and prices are going to go up by 10% or even 15%. So don't get out of the market. This is the very best time," she said.

****************
Bottom Line

Ask yourself where you would rather be in 2026:

  • owning a $400,000-house bought for $600,000 with "free money" in 2020 or,
  • owning a $600,000-house bought for $400,000 with "expensive money" in 2023 (or 2024)?

Hint: there's no correct answer. 

But don't expect to see 2% mortgages any time soon. And when you do, you're going to need a lot of cash to outbid your competitor who is looking to buy the new house.

Saturday, October 21, 2023

Biggest Investing Story Of The Day? October 20, 2023

Locator: 45777ECONOMY.
Locator: 45777RETAIL. 

Updates 

October 22, 2023: The WSJ.

October 21, 2023: not so much talk about a recession right now. JPow has lots of room to maneuver.

October 21, 2023: just out of curiosity, if one was living paycheck to paycheck, if one was worried about the economy, if one was worried about saving money for retirement, what part of your life would you give up first to save cash? Everybody will answer differently.

For me, I would argue that going out to eat would be number one on my list, and if not number one on the lists of other folks, it would certainly be among the top ten "things" to give up. 

[Moving to a state with no state income tax might be the best way to save money, but that's not a reasonable option for many / most.]

US retail sales in September, 2023, came in 4x what was forecast.

Quick! What sector inside "retail sales" led the pack? Answer: restaurants and bars. Is anyone paying attention? Households still have a lot of money.

From CNBC:

 “The U.S. consumer cannot stop spending,” said David Russell, global head of market strategy at TradeStation.
“All three retail sales reports for Q3 were above estimates, which puts us on track for a strong GDP number later this month. It also gives the Fed zero reason to loosen policy, which keeps the 10-year Treasury yield pushing toward 5%.”
Sales gains were broad-based on the month, with the biggest increase coming at miscellaneous store retailers, which saw an increase of 3%.
Online sales rose 1.1% while motor vehicle parts and dealers saw a 1% increase and food services and drinking places grew by 0.9%, good for a yearly increase of 9.2%, which led all categories.
There were only a few categories that showed a decline; electronics and appliances stores as well as clothing retailers both saw decreases of 0.8% on the month.

Original Post

Time to answer the question. Yesterday I posted this:

Link here.

Will be posted later. Connects a lot of dots.

See if you can think what that story will be.

Hints:

  • Fortune 500 company;
  • earnings;
  • record results;
  • meme: it's for old, rich people
  • fact: millennial and Gen Z customers fastest growing demographics

******************************
The Answer: American Express

I think this was the most important retail / financial story yesterday. It connects a lot of dots.

The biggest dot to connect: just where is all that money coming from that allows Americans to keep spending. Remember: in September, American-retail-spending came in four times what was forecast.

Imagine if the headline had been: Apple's profits come in four times expectations.

And yet the fact that Americans spend four times what was forecast seemed to get very, very little media play.

So, from where is all that money coming?

Here are the dots to connect:


They're living at home, rent-free, mortgage-free:

Another dot to connect: how much money is being saved by working from home, not buying gasoline, or even a car in some cases?

Enough of that. I'm sure you can think of a lot more examples. 

Oh, one more example: the millennials have no health care expenses. Their health insurance premiums are being paid for by their employer and because they are in great health (young age and not pregnant) they don't have any deductibles or co-pays about which to be concerned. 

Think how much more discretionary / disposable income you would have if you had:
no mortgage

  • no mortgage or rent expenses
  • no swimming pool expenses
  • no internet, Hulu, Netflix, HBO expenses
  • no car (gasoline, maintenance even if paid for; monthly payments)
  • no health care premiums or out-of-pocket health care expenses
  • no college payments for child (children)
  • no diapers, no formula for new babies
Now back to American Express.

Link here (same as above). From the very, very well-respected Barron's:

From the article:
Consumers keep shopping and traveling and that translated to American Express announcing its sixth consecutive quarter of record revenue.
Revenue at American Express climbed 13% from the year-ago quarter to $15.4 billion.
Profit topped expectations -- by 12% -- growing 30% to $2.45 billion, amounting to earnings of $3.30 a share, another record for American Express. Analysts had been projecting that Amex would earn $2.95 a share. [Think what AAPL would do if profits topped expectations by 12%.]

Total card member spending climbed 7% to $420 billion on a currency-adjusted basis. In the U.S., card spending climbed 9% year over year, while the company’s international segment saw a 15% increase in spending after adjusting for currency. [Of course a lot of that has to do with inflated prices.]

American Express noted that households and businesses have not lost their propensity to spend on going out with travel and entertainment expenditures climbing 13%, helped in large part by restaurant spending.
And then look at this:
The company also was optimistic about its continued ability to court younger clients. Millennial and Gen Z customers are American Express’s fastest growing demographic, with spending up 18% year over year and the group accounting for 60% of new accounts.

Why are millennials and Gen Zers using the most expensive, most prestigious credit card available? Because they can. These are folks with high paying tech jobs with no car payments, no mortgages, no health care costs.

And that's why retail sales came in four times greater than expected

If it weren't for Sophia, I wouldn't need a car. As it is, I'm spending $25 / month on gasoline for a car that has been paid off since 2017. 

Saturday, August 26, 2023

Where We Stand With Regard To Renewable Energy -- August 26, 2023

Locator: 45477RENEWABLES.  

For the archives. Perhaps the best update so far this year.

Link here.


Data points:

  • US power generation from gas-fired plants jumped by 10%, first eight months of 2023, compared to same period, 2022, one year earlier, still coming out of the pandemic
    • this jump occurred despite overall electricity generation declined by 2.1% so far in 2023
  • meanwhile, natural gas in electricity generation in the US has averaged:
    • 40.4% this year to date; compared to
    • 36% for same period last year.
  • electricity generation:
    • from coal: continued to drop
    • "clean power" flat due to lower wind speeds and lower hydropower generation offset a surg ein solar power output
  • By category:
    • nuclear and hydropower: 40.5% of America's total power generation, 2023 to date;
    • compared to 39.9% in the same period last year (2022)
    • despite a surge in renewables installations, power output from wind and hydro was lower than usual -- lower wind speeds and drought in Pacific Northwest
  • a lot more statistics at the linked article, but bottom line:
    • renewable installation exceeding nuclear production
    • but renewable power has been basically flat
    • one can do the math
    • making up the shortfall? Natural gas.

This, all against the backdrop, of increasing EV penetration. 

Solar and wind won't be able to keep up. Period. Dot.

Worse, much of the wind generation is not where the US population is centered: east of the Mississippi. 

Cumulatively, operating clean power capacity in the U.S. is now more than 237 GW, accounting for 15.1% of electricity generated. Texas leads with 26.353 GW, or 18% of total operating U.S. clean power, followed by California with an 11% share and New York with 6% of operating clean power. 

Bottom line:

  • renewable installation exceeding nuclear production
  • but renewable power has been basically flat
  • one can do the math
  • making up the shortfall? Natural gas.

Sunday, August 6, 2023

UAW Contract Demands -- Commentary -- August 6, 2023

Locator: 45357EVS.

Commentary to this story linked below.



**********************************
Article

From the linked article:
The United Auto Workers union is set to demand the largest pay increase on record as it continues contract negotiations with car manufacturers Stellantis, Ford and General Motors.

The raise, divided into yearly increments, would ultimately boost auto worker pay by 46%. 
The first 20% increase would be effective once the new contract is signed by Detroit car manufacturers, with additional 5% raises implemented annually until 2027. 
The top-earning union members would eventually make $47.14 an hour, nearly $15 more than the current maximum hourly rate of $32.32. 
UAW president Shawn Fain, who has promised to aggressively pursue the organization’s interests in the face of “corporate greed,” revealed the wage demands in an overview of the union’s proposed contract released Tuesday, August 1, 2023. 
Fain took to Facebook the same day to explain his reasoning.
“Big Three CEOs saw their pay spike 40% on average over the last four years…We know our members are worth the same and more,” he commented. As evidence, Fain pointed to Mary Barra, General Motors CEO, whose total pay for 2022 amounted to $29 million, up 34% from the year before. A majority of Barra’s earnings came from benefits, as her $2.1 million salary remained unadjusted throughout the period.
Two of the Detroit Three car manufacturers responded to Fain’s comments over the course of the week. Ford spokesperson Kelli Felker stated the company would continue negotiating with the UAW to develop “creative solutions during this time when our dramatically changing industry needs a skilled and competitive workforce more than ever.” 
General Motors appeared less outwardly receptive to the union’s proposed price, although the company has confirmed it is amenable to a wage hike. 
“The breadth and scope of the Presidential Demands, at face value, would threaten our ability to do what’s right for the long-term benefit of the team. A fair agreement rewards our employees and also enables GM to maintain our momentum now and into the future. We think it’s important to protect U.S. manufacturing and jobs in an industry that is dominated by non-unionized competition.” 
Although it is perhaps the least interested in entertaining a significant wage increase, Stellantis has yet to respond directly to Fain’s demands.

While its requests may sound extreme, the raises pitched by the UAW do have some precedent. In its report, The Detroit News notes that the International Brotherhood of Teamsters, a labor union active in both the U.S. and Canada, recently negotiated an average top rate of $49 per hour with UPS, slightly above the $47.14 requested by Fain
Workers are also experiencing rising living costs in an economy undergoing intense inflation and interest rate hikes. Should it fail to score a win against The Detroit Three, the union may resort to a labor strike, a decision which could heavily impact dealers, car manufacturers, consumers and auto workers in the months to come.
**********************************
Commentary

I wholeheartedly support the UAW on this one. I can come up with several reasons why but the main reason: Ford can price their F-150 Raptors for $100,000 and still not be able to keep up with demand. Period. Dot. 

And $50 / hour will not break the bank -- see IBT / UPS -- and a lot of what Ford does can be outsourced. Assembling EVs is a completely different process than assembling ICEs. 

By the way, what is Elon Musk paying his hourly Tesla workers?


This will have zero impact on inflation compared to other inflation drivers.

Might someone run the numbers and suggest what Ford's earnings might be, based on Ford's EV sales projections, if the auto manufacturers meet the UAW demands? My hunch: very little impact. 

Thursday, August 3, 2023

After Today's Proceedings In Washington, DC, Time For The Midnight Hour To Begin -- August 3, 2023

Locator: 45326ENNUI. 

That's not the best word, but for now ennui will have to do.

Tonight, after watching today's events in Washington, DC, I find myself thinking about the 60s and 70s. 

He, 77 years old. Did not serve. Medical deferment. Classifications.

For those who did serve, all gave some, some gave all.  

The baby boomers. Gen X. Gen Y. Gen Z. Gen Alpha. The music will be forgotten; Gen Alpha will hear the covers and not know.

Fortunate Son, CCR, link here.

Time to re-read Hunter S. Thompson

San Francisco in the middle sixties was a very special time and place to be a part of. Maybe it meant something. Maybe not, in the long run… but no explanation, no mix of words or music or memories can touch that sense of knowing that you were there and alive in that corner of time and the world. Whatever it meant.…

There was madness in any direction, at any hour. If not across the Bay, then up the Golden Gate or down 101 to Los Altos or La Honda.… You could strike sparks anywhere. There was a fantastic universal sense that whatever we were doing was right, that we were winning.…

And that, I think, was the handle—that sense of inevitable victory over the forces of Old and Evil. Not in any mean or military sense; we didn’t need that. Our energy would simply prevail. There was no point in fighting—on our side or theirs. We had all the momentum; we were riding the crest of a high and beautiful wave.…

So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high-water mark—that place where the wave finally broke and rolled back.

Perhaps, the midnight hour has arrived an hour early tonight.

Sunday, July 2, 2023

The Blog -- July 2, 2023

Locator: 44868B.

The Bakken: in 2009, with some posts as early as 2007, I started blogging about the Bakken because I was curious about the coming shale revolution. Over time the blog evolved. It was never an investment site. But in the process of blogging about the Bakken I became much more disciplined in my investing. Whether I've done better, from a dollar point of view, had I not blogged, I will never know, but I do feel much more relaxed and much more comfortable about investing since starting to blog. Much more could be said, maybe later.

Apple: I was the original Fanboy #3. Several others lay claim to that title, but let's see who has an e-mail address with some variation of that handle. I have followed Apple much, much longer than I've followed the Bakken. I started following Apple in 1984, well before EOG, Harold Hamm, Slawson, and the others probably even knew of the Bakken's potential (link here.) Like the Bakken, I never followed Apple for investing reasons. 

The fork in the road.

The Bakken: consciously, provides me little insight with regard to investing. Subconsciously and emotionally, blogging about the Bakken probably plays a significant role. But for those who are much, much more knowledgeable about oil and the Bakken, one might argue, the easy money has been made. By the time Buffett jumps into something, in this case OXY, it's like Bruce Springsteen making the cover of Time and Newsweek. By that time ... 

Apple: for me, AAPL might be where the Bakken was in 2000 (Montana) or 2007 (North Dakota. [Digression: I'm using the "Bakken" as a metonym, not as the geological play that straddles ND, MT, and Saskatchewan]. 

If I'm right, this offers a second, or a third, or a fourth opportunity for investors who missed AAPL in 1984, 2011, and 2020. See history of Apple.

For me, Apple-2020 is very, very similar to Bakken-MT-2000 and Apple-2023 is very, very similar to Bakken-ND-2007 in terms of a "break-out."

The Bakken broke out in 2007 but didn't hit its stride until 2012 / 2013 by which time investors (repeat: investors, not traders) had planted their seed corn and were now starting to harvest some of the early crops and rotating others.

The very same thing is happening now. The really, really smart folks following Apple (unfortunately not me) planted their most recent seed corn in 2020 and saw the fruits of those plantings on June 30, 2023. 

We will now see some significant harvesting, but two things are going to happen. One, not necessarily first, there will be a rotation among the various [existing] varieties of seed corn. Two, not necessarily second, there will be a scramble by investors [and traders] looking for new varieties.

See World Economic Forum, January 14, 2016, or wiki.

[By the way, the Germans got the technology right but the Germans were unable to capitalize due to Greta, the greens, and subsequent failed energy policies. One wonders to what extent the CIA and Al Gore orchestrated this German, then pan-European, failure.]

What does this mean for blogging?

TheMillionDollarWay blog is not an investment site. It never has been and never will be. 

My posts are a combination of facts, factoids, opinions, and trolling. And it's very, very difficult to sort things out -- everything needs to be fact-checked and I continue to post links to help folks get started. I may not always provide the sources, but I always try to provide the links.

[Trolling has a bad name in social media but in fact, it can be quite profitable. There's a reason that those who like to fish, often troll.]

Most importantly: I tried to organize the blog to make it somewhat easier to follow the Bakken. I've always maintained the sidebar at the right and the links at the top are more important than the daily posts.

Likewise, I am reorganizing the blog to make it easier to follow Apple.

More to follow.

Storm clouds are gathering and I'm on my bike.

Part Two

With regard to the Bakken (the metonym), investors are mostly simply re-arranging the chairs, the chairs being the operators and the acreage in the various plays. Most folks who have followed the Bakken since 2007 are probably quite familiar with most of the "chairs."

Very little of that is going on in comparison to Apple. One, there are way more "chairs" involved with Apple [and we will now start using "Apple" as a metonym, also]. Two, the "chairs" have changed significantly since 2011. 

Following the June, 2023, WWDC there's going to be a lot more new "chairs." Which means .... ta da ... we need another scorecard.... link here.

 

Monday, June 19, 2023

Rambling Thoughts On Oil From Someone With A Rolling 30-Year Investment Horizon -- June 19, 2023

Locator: 44981INV.  

There is nothing new in this blog. I've been saying this for the past few weeks. 

I've been blogging since 2007, though the "Bakken" blog has at its first post, dated sometime in 2009. From day one, one theme was an eventual shortage of crude oil. I don't know "who" started that meme (there were probably several) and thus I have no idea what the "hidden agenda" was -- by those who started the meme.

Certainly, Big Oil and Saudi Arabia benefited from that meme.

It took awhile, but it's now clear to me that there will never, ever be a shortage of accessible, affordable crude oil. At best, the meme has changed to this: there will continue to be an increase in crude oil demand, albeit not much, through 2050, with some suggesting that from 2027, crude oil demand will start to decline.

In other words, for the investor with a rolling 30-year horizon, "oil" is not a growth sector. It may be a lot of things for investors and others, but for investors, it won't be a growth sector. Someone much smarter than I opined that Big Oil would now "go the way of the cigarette companies, but not, perhaps the way of the dinosaurs.”

For humankind it matters not whether we run out of crude oil for transportation. We will never run out of energy for transportation: wind and solar will last forever; uranium / nuclear energy will last just as long for all practical purposes; coal will easily last several centuries; natural gas will last long enough, and then it's electrolysis of ocean water (inexhaustible and renewable) to make hydrogen for as far out as we can see.

I'm gradually re-balancing my portfolio.

Warren Buffett: know what you have in your portfolio and know why you own it.

I have "too many" companies in my portfolio; I know why I bought them originally, but it now becomes more difficult to keep up with everything.

I'm looking forward to a busy, busy week.

Saturday, January 21, 2023

Conversation Starters For Holiday Meals In North Dakota -- 2022 -- Probably Will Still Work In 2023

Locator: 10010THANKSGIVINGTALK.

Link here. That link is broken. Here's a new one. Do not click on that link unless you like clickbait and tons of ads. These are the tips:

Thanksgiving is almost here, so it's time to make sure you have deflection tactics to avoid getting sucked into an unwanted conversation with family... or...

You can take one of these carefully crafted talking points to pull the pin and wait for the fun.

For fun, we have divided the topics into categories for your test subject, target, loved ones by age demographics.

Gen Z and Millennials:

By just clumping these two together, the seeds have been planted. Gen Z and Millennials can't stand each other's humor, personalities, or styles, so pitting them against themselves is by itself popcorn-worthy.

1. Gen Z are still children; their opinions are not wanted or needed, and they should be banished to the kids table where they won't be seen or heard. Ignore them and what they have to say; treat them like toddlers.

2. If you are FORCED to interact with one, every time you hear a young spry Gen Z'er say something that you don't understand, stop them in the middle of what they are saying and have them explain.  Even if you are not part of that conversation, heck, even if you know what they are talking about, drill down on having them spell it out.

Millennials, on the other hand, are an ocean of anxiety and insecurities; attack them. You may even be able to make a Millennial completely lose it without even having to say a word.

3. Judge Millennials by not only their individual life choices but their generation as a whole. For example, "Millennials have ruined the housing market" and "Millennials only care about avocado toast, latte's, and energy drinks."  Even if your Millennial is a blue-collar home owner, lumping them in with those who give the generation a bad name and doubling down when you need to is an easy path to paydirt.

4. We have all heard, "When are you going to give me a grandchild?"  It's tried and true because it is so successful. Challenge their worth as a person by what they don't have in their lives: children, their own house, a "real job".  For an extra cherry on top, mention how a family member or peer of theirs has already achieved those things.

Gen X

The Gen X'er can be a bit tricky to handle.  In their long time on this earth, they have become wise, but they are also prone to falling prey to their own hubris.

5. Find something that they love and say something disastrously wrong about it. "Did you know that Michael Jorden was suspended for gambling, and the NBA and him agreed that it was a retirement?" or even better, "I heard that the Pioneer Woman has all of her cookware made in Lithuanian sweat shops."  The options are limitless and hilarious.

6. Being Facebook friends with them is almost a must.  Pre-select a couple of hot-takes they have had on Facebook; if you don't know anything about the situation, find out the opposite stance, save some ammo, and pounce. "I just read that Thee-Sided Beauty Supply is a mid-level marketing scheme, and that's the same as a pyramid scheme, say Aunt Patty, didn't you use to sell that?" Pull out a chart that describes why the thing they love is bad and start the countdown to meltdown.

Boomers

Boomer's are like someone who was raised by wolves; they look exactly like you and I do, albeit with a few more wrinkles, but if they are triggered, they will turn into feral beasts.

7. This one is so simple yet so sure-fire that it should be illegal.  Loudly overenunciate everything you are saying to make sure that they can hear you, and then, when they are just about to lose their wits, ask them about a completely made-up conversation "DID. YOU. CALL. DR. NRKIK. ABOUT. YOUR. IBS. MEDICINE. YET?" Chef's kiss, gaslight it up all day long.

8. Boomers are once again children; their opinions are not wanted or needed, and they should be banished to the kids table where they won't be seen or heard. Ignore them and what they have to say; treat them like toddlers who ruined the economy for everyone else. Dismiss everything they say as a cooky take from an addled mind.

Grab Bag

Here are a couple more people that you may run into on Thanksgiving that you can swing away at.

9. Pet People: It's as simple as telling pet people that they are not real parents, and having just a pet does not count, and you could never love it as much as your sister loves her twins Skeyeler and Neeb. You can also talk about how dangerous such-and-such a breed is.

10. The Already Bickering Couple: Start things off strong by mentioning an unrelated married couple and how you are so glad that Simon has cut down on his drinking and that Peggy has worked on her Amazon addiction. Follow it up by asking if they are planning to get away anytime soon, and then mention how well you have been doing at getting in shape.  Walk away for a little while; it's better to let the pressure cooker percolate.

The main thing is just to get out there and enjoy creating a little chaos, or, you know, full-blown psychological warfare.

Thursday, January 5, 2023

"Mandate Entanglement" -- What A Great Country When The Fed's Mandate Is "No More Jobs" -- Sort Of Like "No More Drilling" -- Such Unprecedented Riches -- January 5, 2023

This is not a criticism, it's not a political comment, it's just an observation.

The Fed has a dual mandate.

Using a term from quantum theory: entanglement. 

Particle theory.

So, here, JPow and the Fed has two "entangled mandates": jobs and inflation.

Inflation is "something" with which "we" definitely need to be concerned.

But.

In my entire adult life, beginning when I was in high school, without exception until recently, there has always been a concern by high school students, college graduates, and young adults entering the workforce, and then some decades ago, women entering the workforce in large numbers, about the unemployment rate and the strength or weakness of the job market, and whether everyone who wanted a job could find one. 

There were many, many summers during my high school years and college years when it was almost impossible to find a job. After joining the military I never had that concern again, but I remember reading newspaper articles almost every spring about the job prospects for new college graduates. More often than not, it was often a grim picture. 

Now, for the first time in my adult life -- fifty-five years? -- we have a "Fed" that is actively trying to destroy the job market, drive the unemployment rate higher, and Wall Street takes a tumble when the Fed's policy fails to result in more lost jobs, higher unemployment.

Truly amazing. 

Good, bad, or indifferent, that's how I'm reading it. What a great country. This country is doing so well, it's government is actually trying to "kill" the economy and "kill" jobs. 

"Kill" may be hyperbolic but that was the first word that came to mind.

From earlier:


Data points:

  • Dow down 400 points after jobs report;
  • JPow telegraphed no rate decrease in 2023;
  • he most likely had job data at time of his statement

From CNBC:

  • ADP: jobs added in December, 2022: 235,000
    • forecast: 150,000 new jobs; a huge miss;
    • November numbers unrevised; 127,000 jobs added
    • questions: adjusted? seasonal hires? offset anticipated job losses in 2023?
      • if this is not seasonal but similar numbers hold through 2023, it suggests exactly how much "free money" and fear of Covid kept folks from returning to work 
      • fear of Covid keeping folks from returning to work much less a factor than "free money"
  • weekly jobless claims, also came in less than expectations
  • JOLTS: job market remained strong

Note: from Reuters:

The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the Labor Department's Bureau of Labor Statistics' more comprehensive and closely watched employment report for December on Friday. It has been a poor predictor of private payrolls in the BLS employment report.
Jobless claims:

  • 204,000
  • a drop of 19,000
  • from The Washington Examiner:

While the number of new jobless claims has remained low enough to avert fear that the country is already in the throes of a recession, most economists anticipate that the U.S. economy will enter a Fed-induced recession at some point in the new year. That is because rate hikes can take a while to filter through the broader economy and create recessionary conditions and job losses.

It is expected that as the rate hikes begin to ripple across the economy, jobless claims begin to tick up, and then monthly jobs reports will begin to turn negative.