Some issues I like and don’t like in the intervening time:
I like huge up years within the inventory market. Final yr the S&P 500 was up 26%. This yr it’s up almost 29%.
Since 1928 there have solely been three different cases of 25%+ returns in back-to-back years:
- 1935 (+47%) and 1936 (+32%)
- 1954 (+53%) and 1955 (+33%)
- 1997 (+33%) and 1998 (+28%)
So what occurred subsequent?
One thing for everybody:
- 1937: -35%
- 1956: +7%
- 1999: +21%
Horrible, first rate and nice. Not useful.
It’s unimaginable to attract many conclusions from an N=3 pattern measurement but it surely’s necessary to recollect one or two years of returns doesn’t assist a lot with regards to predicting subsequent yr’s returns.
Your guess is nearly as good as mine.
I don’t just like the housing market. The housing market has been damaged for a number of years now however the longer the present state of affairs goes the more serious it is going to be sooner or later.
Enable me to clarify utilizing a chart from The Washington Publish:
Right here’s Heather Lengthy on our lack of constructing in America:
In 1972, when the U.S. inhabitants was simply over 200 million, almost 2.4 million new houses had been constructed. Final yr, just one.4 million houses had been added, for a inhabitants of 335 million. Realistically, not less than 2 million new houses should be constructed yearly.
Extra individuals and fewer homes being constructed.
With 7% mortgage charges this quantity gained’t be growing anyplace near the two million houses we want added yearly.
Clearly, individuals who already personal a house and/or have a 3% mortgage profit from ever-rising costs. Nonetheless, it makes issues worse for housing exercise, which is an enormous a part of the economic system.
And younger individuals who wish to purchase a home are out of luck.
I like The Company. I don’t understand how many individuals have Showtime on Paramount+ (generally the streamers are so complicated) however The Company is one of the best new present of the yr.
It’s bought Michael Fassbender, Jeffrey Wright, Richard Gere, CIA/spy stuff.
That is the type of present the place you set your telephone down for an hour and don’t take a look at it even as soon as.
The Company is a depraved sensible present.
I don’t like how each assembly is a Zoom assembly. I perceive why video conferences took off throughout the pandemic. Distant work grew to become a factor. It was an effective way to remain linked.
Generally it’s good to see individuals in a gathering.
However all conferences? Severely?
Can we sprinkle in a very good previous convention name each now and again?1
I like having conversations concerning the potential for AI. I don’t use Chat GPT or Claude or Perplexity all that a lot but. I’ve performed round with all of them however AI isn’t a part of my each day routine.
However I’ve had a lot of conversations and demos with individuals who use these instruments frequently, and it makes me excited for the long run.
I benefit from the honeymoon part of expertise like this.
I additionally suppose AI goes to make out lives extra environment friendly in so some ways.
I don’t like several of the House Alone motion pictures after the primary two. Look, House Alone 2 was a money seize following the success of the unique but it surely was nonetheless good.
Nonetheless, all 4-5 (?) iterations that attempted to recreate lightning in a bottle are unwatchable.2
House Alone is the best household film of all-time so I get why they tried to do that.
So far as I’m involved, House Alone stopped after quantity two in New York Metropolis.
I like this story about Woj. Sports activities Illustrated had a narrative about why Adrian Wojnarowski walked away from his job at ESPN. This half hits arduous:
In Might, Woj traveled to Rogers, Ark., for a memorial for Chris Mortensen, the longtime NFL insider who died in March from throat most cancers. Mortensen spent greater than three many years at ESPN. When Woj arrived in Bristol in 2017, Mortensen was among the many first to welcome him. Many ESPNers made the journey to Arkansas. What Woj was struck by was what number of didn’t. “It made me do not forget that the job isn’t every thing,” Woj says. “Ultimately it’s simply going to be your loved ones and shut pals. And it’s additionally, like, no person provides a s—. No person remembers [breaking stories] in the long run. It’s simply vapor.”
Work is necessary. I like my job. It’s not every thing.
I don’t prefer it when markets appear too straightforward. Market cycles are occurring quicker than ever today.
This decade alone we’ve skilled the next:
- 2020: The Covid crash, placing the economic system on ice, 14% unemployment, adverse oil costs and an insane restoration to new all-time highs in file time.
- 2021: The meme inventory bubble that burst in a painful manner.
- 2022: 4 decade-high inflation, rates of interest going from 0% to five%, everybody assumes a recession is imminent and housing costs that refuse to crash.
- 2023: Inflation falls from 9% to sub-3% but we don’t have a recession, the inventory market booms and shoppers simply maintain spending.
- 2024: The Fed lowers charges however bond yields go up, the inventory market/crypto maintain booming and leverage takes off.
That’s so much to digest and it seems like I’m solely scratching the floor of all of the stuff that occurred.
Have a look at this chart from Morningstar’s Jeff Ptak on the insane progress in single-stock leveraged ETFs in recent times:
Persons are going loopy for these autos.
I’m certain loads of buyers (speculators?) have made cash in these funds. Good for them.
I simply change into slightly uneasy when it looks as if persons are making straightforward cash.
Investing could be made easy but it surely’s by no means straightforward…not less than over the long-term.
Additional Studying:
Are U.S. Shares Overvalued
1I do know you’ll be able to flip your video off however in case you’re the one one it makes you seem like a curmudgeon. I want everybody to make use of no video.
2My youngsters made us attempt all of them.