I bought some more HD in recent days, figuring they were doing well in the housing boom. They were. Their latest financials are spectacular. CNBC headlined this morning:
Home Depot crushes estimates, its sales jump 32.7% as customers rang up bigger purchases
Bu their stock cratered. Here’s the last five days. HD is down 1% today.
Go figure.
The Festering Sore
Nothing will turn off an investor more than a festering sore.
I am an investor who invests in projects, funds, real estate syndications and listed securities, like stocks.
When things go awry, I can sell my listed securities. The pain and the memory disappear instantly.
When things go awry with everything else, it’s often extended pain. Managers don’t understand that festering sores depress their investors — their clients. One festering sore can kill years of hard work building up a relationship with a client.
One closed investment — even one sold at a loss — is closed, and quickly forgotten. We can move on to the next one that is likely to be better. Will be better.
One unclosed investment festers for years. My biggest festerer is Goldman Sachs. Ten year funds are now 15 year funds and still doing awfully. Of course, there’s a reason for the festering: Fees. The last fee that Goldman helped itself to on one of my funds turned out to be 13%. I calculated that by looking at the cash fee that quarter and dividing it by the remaining value of my fund. I was staggered.
I have asked Goldman why they don’t close the fund? After all it was sold as a ten-year fund. It’s way beyond that now — at least five years. I get professional mumble as the answer. “It’s not the right time.” etc.
I have other festerers who own real estate in places things aren’t doing well. I have given one of them this lecture now for several months…They would like me to invest in their new projects. But my brain is stuck on the old festering sore.
The stock market is brilliant. You can sell your sores instantly, if not sooner. Best of all, you don’t have to look at the price of the stock you just sold — to find it now 15% higher. And you’re an even bigger idiot.
Close your eyes. Move on. Play tennis.
This is Kate
She’s the brilliant cook at the best restaurant in Chatham, NY. — Main Street Goodness.
Three days a week she makes me a juicy, rare $10 cheeseburger-to-go with pickles.
I tip her $5 because the cheeseburger is so good.
One morning she told me she doesn’t spend my tips, she invests them.
I asked, in what? She answered, “lottery tickets.”
I winced. “How’s it going?” I asked.
“We’re winning.”
I calculated her IRR. It’s much better than mine in stocks, bonds and real estate.
Much better.
Go figure.
Should I tip her $10 and ask her to “invest” the second $5 for me?
Crypto joy
OK. I’ve wrapped my head about crypto. It’s a Kool-Aid thing.
Business Insider had a piece on millennials being crypto’s driving force. The article contained these delicious paragraphs:
Melissa Lewis, a young investor who uses Binance to trade cryptocurrencies told Insider one of the reasons she likes crypto investing is its ease. “With crypto, you can buy it and forget about it for a couple days and then when I check it, it’s increased,” Lewis told Insider. “Crypto has had a steady and stable increase, whereas my stocks are constantly going up and down,” she continued. Others echoed this sentiment: “I also see a more visible path to making profits in this market versus the equity and bond market,” investor Mitchell Yousem said.
“With millennial investors compared to the older generation, time is on our side and we can afford to hold these investments for 20, 30, 40 years in certain cases and see what happens, where older generations don’t have the luxury of time,” he said. But Peters also believes many are first tempted by the thrill that crypto’s volatility brings.
And these tokens are certainly volatile. The most widely traded, bitcoin, has risen by 78% so far this year alone, having hit record highs around $64,000 just one month ago. But this pales in comparison with the price action in some of the alternative tokens. Meme crypto dogecoin has gained 12,000% this year, while Cardano’s ADA token has risen almost 1,000%. But even that seems small fry compared with tiny, hyper-volatile tokens that can gain 1,000% in 24 hours. “Whilst people may have gotten in initially purely because of the volatility and the price action, once they’ve actually gone and actually understood the technology, what it’s about, what crypto’s trying to do essentially that’s when more of an interest may develop as well, eToro’s Peters said.
Will Powell kill the economy?
The Fed is meant to take care of inflation and employment. If inflation gets high (which it is at present), he’s meant to raise interest rates and de-stress the economy, thus increasing unemployment. But what if inflation is temporary — like many people think it is today (including me)? Ignore it, keep rates low and get more people jobs. Bring unemployment to full employment — maybe around 3.5%.
I’m being more picky
Stocks I ‘ve added to recently — GNRC and PYPL. I’ve also dumped some that weren’t working out — DIS, DOCU, SPOT, FVRR and NTDOY.
I don’t profess to being a successful prediction machine, though I feel confident enough to schedule tomorrow’s tennis game outside.
At tennis this morning we had a visitor:
I have no idea what it is. Except it’s beautiful. The photo is life-size.
The worst mistake a writer (like me) can make is to use an acronym, without explaining it.
AK is Yiddish for Alta Kaka like me.
See you tomorrow. — Harry Newton
