Wednesday, December 30, 2020

Trading Update Part 2

I slept on yesterday’s purchase decision and am reasonably comfortable with it.

Used the remaining cash in retirement account today to buy VPU @ 134.748. I’m now all in on the Vanguard Utilities ETF. Other than reinvesting dividends on autopilot, the only trading I intend to do in this account is withdrawing to meet minimum IRA distributions. That starts in about 14 years.

This also means that I’m officially an old geezer. Don’t expect any more fireworks in my retirement account, unless the entire United States power grid someday fails. Of course, in that instance cash would have hardly been a much better investment. I only half-joke. *cringe*

Still intend to use money outside my retirement account to buy more savings bonds. That part isn’t changing.

Tuesday, December 29, 2020

Trading Update

Bought shares of VPU @ 134.325 inside my retirement account today, bringing the cash in that account down from 100% to just 29%. I expect VPU to be a very, very long-term holding.

I would prefer to buy long-term TIPS instead at some point, but that party appears to be over. I’m reasonably convinced that this economy can never survive high real yields again with all this debt.

For more than a decade, I’ve believed that our ultimate destination would be nearly permanent ZIRP. Not seeing anything that would change my mind.

My next purchases will be more I-Bonds and EE-Bonds next month, outside of my retirement account. Not expecting much from 0% I-Bonds in a potentially low inflation environment. The EE-Bonds doubling in 20 years appeals to me much more (but lack safety if inflation does somehow accelerate).

The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. - Alan Greenspan (1966)

May we live in interesting times.

Saturday, November 7, 2020

Standing Back and Standing Down

We'll be standing back and standing down for at least 4 years! Woohoo!

P.S. Best election year ever. 🙂

Tuesday, June 16, 2020

Covid Kitty

The Covid Kitty takes after Punxsutawney Phil. If he comes out and sees his shadow then there will be 6 more weeks of pandemic. And then, unfortunately, he repeats the process.

Sunday, May 31, 2020

Infectious Words

August 12, 2015
Illusion of Prosperity: The More I Listen to Donald Trump...

I can't speak for others, but the more I listen to Donald Trump the more I realize just how infectious his words are.

And when I say infectious, I don't mean irresistible and compelling in a rapidly spreading influence over me sort of way.

I mean his words give me nausea and fatigue, in a rapidly spreading influenza into me sort of way.

If only it was just influenza. Not only is the USA currently the world leader in Covid-19 deaths by a very wide margin, but we also have unemployment at historical levels, a massive increase in our national debt, and justifiable national civil unrest possibly not seen since the 1960s. Making America Great Again? Seriously?

If Trump intended “when the looting starts, the shooting starts” to ease tensions and de-escalate the civil disorder, I’d say that his strategy has failed miserably. Of course, that’s not what he probably intended his words to do. As always, I strongly suspect that he intended his words to be infectious.

Let that sink in. Sigh.

Bad men need nothing more to compass their ends, than that good men should look on and do nothing. - John Stuart Mill, 1867

Saturday, May 30, 2020

The Faces of Cabin Fever

River is at her wits’ end, desperately clinging to any sense of normalcy.

Meanwhile, Dexter has chosen to escape reality into the world of video games. Cats. Go figure.

Our pets take after their human parents.

I’m not suggesting that all we’re doing is clinging to pillows and playing video games during a pandemic. Far from it. We’ve also been walking, eating, and watching TV. In fact, we’re currently watching the local protesting and looting news going on right now in downtown Seattle. I think that’s much more than just cabin fever gone wild though.

Some have claimed there is a lot of pent-up demand due to the pandemic. Seems to be a lot of pent-up demand for justice, tear gas, burning police cruisers, and/or freshly looted Nordstrom purses and perfume.

At what point do we tire of all this winning? Sigh.

Friday, May 29, 2020

Initial Claims

Over the past 7 weeks, initial claims have settled into a negative 14.1% weekly growth rate (as seen in the exponential decay trend in red on the chart). Should the trend continue, there will be an additional 9.8 million cumulative initial claims over the next 10 weeks. At that time, initial claims will mostly be back to normal. Speaking of normal...

In normal times, 10 million claims in just 10 weeks would be considered very bad news. Good thing these aren’t normal times. What’s 10 million more when we’ve already seen 40+ million in the previous 10 weeks?

How many of these jobs will actually return? And of those that do, how long will it take? Stay tuned.

The illusion of prosperity is alive and well. Thanks for asking. Sigh.

Source Data:
St. Louis Fed: Initial Claims

Wednesday, May 13, 2020

The Planet Fitness Report v.002

April 17, 2020
TheStreet: Planet Fitness Pumped Higher on Expected Reopening

Investors were pumping shares of Planet Fitness (PLNT) higher on Friday on expectations that the gym and fitness chain will be among the first allowed to reopen its doors under President Donald Trump’s guidelines for easing the lockdown amid the coronavirus pandemic.

Planet Fitness stock was up 10% at $55.11 in trading on Friday following Trump’s phase one recommendations to restart the U.S. economy that would allow it to open itself back up - so long as it adheres to strict physical distancing and sanitation protocols.

Somebody sure was pumping, and then they were clearly dumping.

PLNT closed at $50.10 on April 16th, reached an intraday high of $66.28 on April 29th (a 32% gain in just 13 days), then fell back to close at $47.92 today, netting a 4% loss for the round trip.

Meanwhile, my local Planet Fitness is closed, they have temporarily stopped charging my credit card, and I have not yet decided if I will cancel my membership when it reopens. The sooner they reopen and start charging me, the more likely I will be canceling. In any event, I will not be using their locker rooms and showers again. At best, I will be attending late at night when few are around, dressed ready to workout, and will be taking showers at home afterwards. Not quite the same experience.

Opinion subject to change at some point should a highly effective vaccine appear. Planet Fitness investors better hope that my thinking is the exception, and not the rule.

This is not investment advice.

Source Data:
Yahoo Finance: PLNT

Monday, May 11, 2020

Flattening the Curve

If industrial production in the United States was a disease, I’d say we’ve done a great job socially distancing ourselves from it since the Great Depression.

Source Data:
St. Louis Fed: Custom Chart

Saturday, May 9, 2020

The Path Back to the 1950s

The following chart shows retail and wholesale employees per capita. We peaked in April of 2000 at 7.35%.

When it comes to retail and wholesale trade employment, we were eventually heading back to the 1950s anyway. The virus is simply speeding things along. I doubt very much that we will stop at the 1950s. Fully automated warehouses are only a matter of time. At what point will the government stop reporting non-farm payrolls and instead start reporting non-farm, non-retail and non-wholesale trade employment?

This is deflationary. Robots will never demand higher wages to compensate them for all their hard work.

May 8, 2020
CNBC: Coronavirus fallout: Here are the 16 department stores Nordstrom is closing permanently

Nordstrom shares were up about 4% Friday afternoon, amid a broader market rally. The stock, valued at $2.8 billion, has fallen about 56% this year.

The world is running out of department stores. They just aren’t making any more of them! Buy now or be priced out forever!! There’s never been a better time to buy department stores!!!

This is definitely not investment advice. Sigh.

Source Data:
St. Louis Fed: Custom Chart

Friday, May 8, 2020

What’s a Trillion Dollars Worth?

May 8, 2020
Barron’s: Oops! Invesco Forgot to Rebalance an Index Fund. It’s Repaying Investors $105 Million.

Fund giant Invesco (ticker: IVZ), which manages more than $1 trillion in assets, reported this week that it had failed to rebalance an S&P 500 equal-weight mutual fund in April, a mistake that initially cost investors $105 million. An ETF version of the fund, Invesco S&P 500 Equal Weight (RSP), wasn’t impacted, highlighting how mutual fund and ETF performance can sometimes diverge.

Totally understandable. The last time I was managing a trillion dollars in assets, some of it was eaten by my dog, some was shredded by my cat, and some disappeared for weeks at a time in the crevices in our couch. No big deal. I made sure that those trusting me got most of their money back, once they spotted some of my errors. As I type this, I see a big bag of cash next to the fireplace. That’s just an accident waiting to happen. I should move that to somewhere safer someday.

Thursday, May 7, 2020

Initial Claims

At this rate (-16.3% per week), it will take 7 more weeks before initial claims fall below a million. That’s 0.91 million on June 20th. And even then, initial claims will still be higher than the worst week of the Great Recession.

The good news or bad news is that this trend will fail at some point. But which way and how soon?

I’m not back to posting regularly. Everyone’s fine here (including our pets). And oddly enough, still have more than enough toilet paper. It’s one of the perks of long-term illusionary prosperity thinking, lol. Sigh.

Oh, and my retirement account is now sitting entirely in cash. Turns out that there wasn’t actually a TIPS bond bubble after all. Intended to hold to maturity but panicked investors and/or the Fed recently gave me a premium offer that I couldn’t refuse. Now patiently waiting for new opportunities to appear. No hurry. Like Warren Buffett apparently, I have never been this content in cash.

Source Data:
St. Louis Fed: Initial Claims