VPU Performance v.008

Months Elapsed: 8
Total Growth: 12.80%
Annualized Growth Rate: 19.81%
Distribution Yield (TTM): 2.80%

This isn't a sustainable growth rate. There is risk here, especially if inflation isn't transitory and yields don't continue to decay over the long-term. That said, I'm still comfortable holding it.

I did sell about half of my VPU position this month to buy BTI, MO, PM, and VZ. As a group, I'm up 0.66% on those. Would be doing better if I had not overweighted BTI and VZ. No plans to change course though. Feel good about the allocation.

And lastly, also bought platinum Eagles this month. On the one hand, it would cost 3.27% extra to buy them now. On the other hand, I would lose 3.67% if I sold them now. Still fighting the ~7% round trip spread. That was a tough long-term call. Could have bought a platinum fund that charges 0.5% per year instead. I therefore need to hold at least 14 years to make holding the coins the better choice. As an added bonus, holding platinum coins in one's hand beats holding a paper IOU, especially if there comes a time when many paper IOUs become worthless.

Tesla’s Auto Pileup Feature

August 30, 2021
CNN: Another Tesla reportedly using Autopilot hits a parked police car

The broken-down car was a Mercedes that had come to a stop in a travel lane. The police cruiser was stopped behind it with its emergency lights flashing. The left front of the Tesla Model 3 crashed into the side of the police car, and then hit the Mercedes.

That darn car! What kooky crime caper will it think up next?

Peak Salmon and Halibut?

Chart shows the producer price index for salmon (blue), halibut (red), and meats (black) each independently divided by the consumer price index for all items. January 1950 = 1. Chart therefore shows how the real producer prices for these items have changed relative to what they were in 1950.

Is anyone keeping track of all the prosperity we've "borrowed" from future generations since the dotcom bubble popped? Seems like there should be a national database for it, you know, for posterity.

On a brighter note, the real producer price for meat is quite a bit cheaper. And to the best of my knowledge, it's not even that soylent yet. That said, meat hasn't exactly been getting cheaper since 2000. You could more easily see that in the chart if salmon and halibut weren't so shocking and awing.

Powell’s Speech Summarized

The calming waves will continue until morale improves.

The Case for Permanent ZIRP

The following chart shows the natural log of retail trade. When using natural logs, constant exponential growth is seen as a straight line.

As the pandemic hit, the exponential growth of retail sales failed to the downside. Using massive and mostly temporary stimulus, retail sales then overshot the historical channel and failed to the upside. Look where it's headed next. Welcome to the world of barely damped harmonic motion.

Can You Drive a Car With Damaged Suspension?

A broken shock absorber will result in your car bouncing around, as well as excessive rolling, squatting and diving. In other words, it won't be comfortable. Plus, your car will be harder to control, especially at high speeds. For that reason, you should never drive a car with a broken shock absorber at high speeds and avoid sudden turns and abrupt stops.

If you aren't even a bit worried about the current state of the Fed's economic shock absorbers, then maybe you should be?

Scams Likely

The following is a list of the recent incoming phone calls on my cell phone.

You would need to be quite the optimist to think the call from Haiti wasn't also a scam. They left a long message trying to convince me otherwise, but their warning that I have not yet renewed my car's extended warranty is something that I've been aware of for several decades. The car was purchased new in 1996.

Last year, Jim Chanos called this the golden age of fraud. Thanks in part to the easy money policies of the Fed and the new and improved speculative nature of the markets, I suspect that we've reached the platinum level. Hopes and dreams with smoke and mirrors? Be careful out there. I doubt history will be kind to those thinking there's never been a better time to swing for the fences.

The Sarcasm Report v.288

August 23, 2021
CNBC: Elon Musk says Tesla’s latest beta self-driving software is ‘not great’

Regulators may one day decide to disallow vehicle testing with drivers who are not trained professionals on public roads. But for now, no regulation interferes with Tesla’s ability to turn their customers, and everyone they share the road with, into guinea pigs.

Postponing purchase until there are ceiling mounted water bottles, dashboard mounted food pellet dispensers, and floor mat trays with pine wood shavings. Perhaps it is too much to ask, but I want the full experience.

Trading Update III

Sold some VPU @ 150.39 to buy VZ @ 55.98.

New IRA asset allocation:

Lured by Verizon's 4.5% dividend that seems reasonably safe, or as safe as an illusion of prosperity blogger could reasonably hope to expect. Safe is relative in a -0.27% 30-year TIPS world, of course.

Once again, not investment advice.

Trading Update II

Bought 1 oz American Platinum Eagles @ 1,083.74 each today. Minor investment. Intend to hold many years. This is my second foray into physical precious metals. The last time was 2004. Bought gold and silver. Intended to hold long-term, but sold in 2006 as they started to go parabolic. No complaints. Was a short profitable ride.

They say that past performance is not necessarily indicative of future returns. I hope that's true of platinum. Those who bought platinum 15 years ago are not only still underwater but have clearly not kept up with inflation. I'm speculating that I do better. And if not, at least I'll have a small collection of premium paperweights to serve as reminders of my bottom-fishing folly.

This is neither investing nor speculating advice.

Trading Update

Sold some VPU @ $145.69 to buy BTI @ $37.67, PM @ $100.47, and MO @ $47.97. New IRA asset allocation now looks like this.

Didn't want to sell VPU, but needed to do it in order to buy these three tobacco stocks. The trade was inspired by this post (and quite a few before it) at Credit Bubble Stocks. The temptation to buy has been growing over the past few months, and I finally pulled the trigger.

Part of the appeal of VPU is the addictive nature of electricity combined with relatively high dividends. Adding the addictive nature of nicotine and even higher dividends to the mix seems like more of the same. As an added bonus, it offers more diversification (and potentially greater rewards). I'm no longer relying on just one industry. I anticipate holding all of these investments for at least a decade.

If you are curious as to why I overweighted BTI, I was intrigued by its ultra low 0.14% short interest (according to TD Ameritrade, as of 7/15/21). Shorting a stock with an 8% dividend yield is not for the faint of heart. You better know something that others don't. Apparently, not many think they do. If so few traders want to sell shares they don't own, perhaps I should be willing to buy more. And so, I did.

This is not investment advice.