patrick.net

Patrick says

Once the pandemic is over, we are meant to be heading for a new ‘Roaring Twenties’ as economies flare back to life: a re-run of The Great Gatsby era, but with less jazz and more Teslas. It is not impossible. But history suggests that a chaotic or catastrophic ending to the boom is more likely.

https://www.bloomberg.com/news/features/2021-01-26/roaring-twenties-2020s-will-try-to-roar-like-1920s-after-covid

Someone wrote a bloomberg article comparing the 1920s with the 2020s.

I'd say that the biggest difference is that today, we're a highly finance oriented society.

In other words, with all the new tech of the 1900s: the automobile, the telephone, the washing machine, etc, there were jobs which went with them. So in effect, where women had no meaningful well paying work earlier, during the 1920s, there were practically limitless jobs for switch board operators.

In contrast with today, there are numerous applicants for limited jobs in IT or finance, with only health care adding headcount (and even that's shaky w/ budget cuts & reduced services). Many other jobs are a part of the gig economy, volatile and unstable.

And also, it's really the addition of the endless unemployment extensions with added benefits, which is keeping things afloat. So while there's pent up demand, if those unemployment checks stop, the music is over and all that demand would disappear with ppl lining up at the food banks looking for their next meal.

Just went by Fry's Electronics

"After nearly 36 years in business as the one-stop-shop and online resource for high-tech professionals across nine states and 31 stores, Fry’s Electronics, Inc. (“Fry’s” or “Company”), has made the difficult decision to shut down its operations and close its business permanently as a result of changes in the retail industry and the challenges posed by the Covid-19 pandemic."

We went up on all the anticipated stimulus and tech craze from !Covid!, now there's nothing more to anticipate and the market will either go sideways or somewhat tank in an oscillating manner which may already have started. Inflation is preventing a crash but the bull run is over, select stocks only.

Onvacation says

Just went by Fry's Electronics

"After nearly 36 years in business as the one-stop-shop and online resource for high-tech professionals across nine states and 31 stores, Fry’s Electronics, Inc. (“Fry’s” or “Company”), has made the difficult decision to shut down its operations and close its business permanently as a result of changes in the retail industry and the challenges posed by the Covid-19 pandemic."

Another victim of Amazon.

A simple admission of obvious truths would change the whole world for the better:

- outdoor masks are frankly stupid, because there has been not one documented case of casual outdoor transmission anywhere on earth
- indoor masks are pretty stupid as well, because they simply don't work at all
- the virus is mostly harmless. the only people at real risk are the elderly. the average US age of a wuhan virus death is greater than the US life expectancy

We should just ignore the whole damn thing except for keeping the elderly isolated, and the whole problem just goes away.

But the tech billionaires and new vaccine billionaires don't like that idea one bit.

The reason the stock market has not cratered is interest rates are low.

People who have cash to invest are usually choosing between bonds or stocks; today stocks are more attractive than they were when interest rates were high.

Another reason has been mentioned; the consumer is not broke because the government keeps paying people not to work and to have children. So, corporate profits are continuing.

What can ruin it is Biden and his ilk raising taxes and the cost of energy.

I’m nervous about it because I’m greedy and I want another $500,000 of net worth before 2022.

clambo says

I’m nervous about it because I’m greedy and I want another $500,000 of net worth before 2022.

I simply don't want looters showing up at my house. Realize, I have a RealDoll at home so I'm perfectly satisfied not interacting with the rest of humanity anymore.

clambo says

People who have cash to invest are usually choosing between bonds or stocks; today stocks are more attractive than they were when interest rates were high.

I just read one explanation for last week's market falls is that the 10 year bond yield went above the S&P dividend yield, both somewhere around 1.5%. So you can get more actual cash out of bonds than out of stocks now (on average) with zero risk of default for government bonds.

Of course you also have very little risk of getting rich with bonds, too. And quite a bit of risk of losing to inflation.

clambo says

I’m nervous about it because I’m greedy and I want another $500,000 of net worth before 2022.

@clambo But say you get that extra $500K of net worth this year. What do you do with it then? Let it ride?

Patrick says

We should just ignore the whole damn thing except for keeping the elderly isolated, and the whole problem just goes away.

Do the elderly need us to keep them isolated or can they decide for themselves?

Good point. They should certainly be able to decide for themselves.

But not able to decide that we must all stay home, or wear masks, or other ridiculous intrusions on our freedoms.

Re: what I would do with another $500k :

I will be more aggressive with my travel and spending. I might take the Baja Plunge with $100-$150k, get a shack or etc. down there.

I’m still inclined to “let it ride”=stay invested in stocks (I’m about 10% bonds in funds).

I’m also worried about our absurd government money wasting and debt, it might be a good time to get into Swiss stocks because of the value of the US dollar falling and Swiss companies are generally good.
I know of two Swiss funds, one at Franklin Templeton and one at iShares.

I rolled the dice with a few stocks and made a bundle; it’s really fun. I’m a believer in mutual funds because they are generally a better idea but I want to feed my greed and I need more kicks.

Bonds are a waste of time and will wreck a lot of people. 1% yield while the fed inflates M1 at 20% a year. A lot of tech stocks left conventional value stocks in the dust. But at the end of the day, at some point, it's still going to be about how much money they make and how much money they yield. The amazon model can't work for everyone. Stocks like Exxon Mobile, BP, Altria, Verizon and so forth are still yielding upwards of 5 to 7% and they haven't had a run up. Moreover, the whole idea of indexing and forget about worked well for everyone in America, however, if you've done that around the world, they've gone almost nowhere. Foreign stocks have completely decoupled from the US. When you look at US stocks vs the world, we are in major bubble territory. So the foreign stocks offer you a chance to obtain an uncorrelated asset that is at an all time low relative to US stocks.

The fed is out of bullets and they have no ability to reign in the punch bowl. Free money for everyone and a national debt that can skyrocket with just an uptick of interest rates. My portfolio is very defensive and prepared for market carnage.

20% Dividend Blue Chips
20% Foreign stock ETFs that yield dividends (EWS, EWT, EWL) from Singapore, Switzerland, Taiwan.
40% Precious Metals, 80% Silver, 20% Gold
1% Bitcoin, which I'm slowly acquiring up to 5%

The rest I'm in is cash which I will deploy as I expect all assets to fall during some sort of mass liquidation, just like in 2008.

What is odd is when I look at my Vanguard account on the iPad app it shows some bond fund capital gains (inherited in 2017).

A good fund for the cautious is Wellington and for the more income oriented Wellesley Income.
But, I like everything actually, I’m a hoarder.

I’m not a fan of metals or cash; my friend bought thousands of dollars worth of silver about the same time I added to my Apple shares; he is about 40% underwater (won’t admit it) today. I can buy a house with my AAPL capital gains, but I don’t rub it in. He’s glad uncle Sam doesn’t know what is in his safe, my shit is all known to the government (except the variable annuity, those are secret) 🤐

clambo says

I rolled the dice with a few stocks and made a bundle;

Must be nice. I am mildly ahead in stocks, but would have been way ahead if I did not buy SunEdison and JCPenney.

How would your stocks be doing without your AAPL bonanza?

I’m lucky, I have bought some good stocks and not lost money.
The mutual funds are good, but I have had them for years.
My stock picks are few; Apple, Alibaba, Deere, Roku.
I have 15 shares of GME just for the hell of it.
Around 1999 I bought Sun, Compaq, Apple, I got annoyed with eTrade, Sun went down, Compaq fired my friend to hire guys from India so I sold everything (big mistake selling any Apple).
I believe mutual funds are the essence of investing but it is fun trying to choose a stock.

I avoid mutual funds because they almost all have fees which are a significant drag on their income, not to mention pointless churn.

There was a Fidelity study which showed that a lot of the best investors are actually dead:

Best Investors Are Dead: Fidelity Study
NOVEMBER 27, 2019 ALEX SMITH INVESTING
Fidelity noted an internal performance review on accounts to determine which type of investors received the best returns between 2003 and 2013. The customer account audit revealed that the best investors are dead or inactive.

The inactive investors were people who switched jobs and “forgot” about an old 401(k).

https://wealthydiligence.com/best-investors-are-dead/

The lesson seems to be to do nothing.

There are mutual funds which have essentially no fee; Vanguard Index Admiral shares.
I think those have 0.05% fee.
Fidelity has "zero" funds , one is their Total Stock Market Index fund.
This has 0% management fee.
I have a few bucks in it.
Index funds are tax efficient too.

This is the answer to your conundrum

Look at the top row and compare it to the bottom row

I have pretty much been a 'dead' investor. Even Vanguard pesters me to use their commission based personal advisors. I'm too lazy to even communicate with such a person, much less become entangled with them in my portfolio balances.

The history of the investments suggest that this was OK, they have reliably gone up in excess of market averages.

However, It is very clear that there is an inbred superstitious necessity for a sense of control and desire to exceed probability in order to congratulate oneself that one is special.

I also think that men are biologically programmed in an "all or nothing" mindset that promotes gambling and grandiosity, primarily in order to afford access to women and reproduction.

My own advice would be to try to sublimate these gambling tendencies in ways that are not destructive to the gradual growth of value. Find ways to gamble that don't fuck up your shit.

Ceffer says

I also think that men are biologically programmed in an "all or nothing" mindset that promotes gambling and grandiosity, primarily in order to afford access to women and reproduction.

I agree with this, and think it follows directly from the ability of men to have far more children than women.

When men win, they can win very bigly. Some sultan in Morocco had 800 children, iirc.

The Spaniards in the New World pretty much replaced the entire native male line with their own.

There are many such examples. I think it follows that risk-taking men were sufficiently rewarded for those risks on average that genes for taking risk propagated among men.

It's the appearance of profitability, with none of benefits. Same thing happened in Weimer Germany right before the collapse.

I'm old enough to remember when it was called the Dow Jones INDUSTRIAL average. It represented actual wealth generation, largely from raw resources.

For a long time the DOW has represented mostly the tertiary service economy, meaning high DOW average means high sales of imported goods enriching the few and moved/peddled by peon class people. Hearing people cite the DOW as their proof that the economy is booming has been frustrating for 20+ years now.

Onvacation says

Just went by Fry's Electronics

"After nearly 36 years in business as the one-stop-shop and online resource for high-tech professionals across nine states and 31 stores, Fry’s Electronics, Inc. (“Fry’s” or “Company”), has made the difficult decision to shut down its operations and close its business permanently as a result of changes in the retail industry and the challenges posed by the Covid-19 pandemic."

the Bezos laugh

The Fry's in Phoenix by our house was always super empty despite occupying a huge space. Was always kind of surreal shopping there..

NuttBoxer says

The Fry's in Phoenix by our house was always super empty despite occupying a huge space. Was always kind of surreal shopping there..

I was just out there in Anthem last week. Drove by a Fry's. Not sure exactly where as we did 4 courses, well 3 were in civilization. I think along Cave Creek highway? Might have been Anthem? Was drinking and golfing (not driving myself). Either way, empty parking lot.

NuttBoxer says

The Fry's in Phoenix by our house was always super empty despite occupying a huge space. Was always kind of surreal shopping there..

Too bad. I always liked Frys and shopped there for many years.

I recently discovered they also had a Fry's grocery store in AZ, which was actually pretty nice.

Hircus says

Too bad. I always liked Frys and shopped there for many years.

They always had stuff. Lots of stuff. They used to have geeks in all of the departments that could find the capacitor you needed for your filter circuit. Last time I was in there (Concord Fry's) the employees couldn't even tell you where to find USB cords.

Geeks still build things, but they went to the internet for supplies years ago. Fry's was just a place to buy some headphones, a cheap computer, or a USB cord when you didn't want to wait for it to get delivered.

As California's Rich Get Richer, State Expects $10.5 Billion Surplus Despite Slow Economy
At the end of 2020, California had lost a record 1.6 million jobs during the pandemic. Nearly a half-million people stopped even trying to look for work. Business properties saw their value plummet more than 30%.
But California’s bank account is overflowing. As of January, the state’s tax collections were $10.5 billion ahead of projections. By the end of the fiscal year on July 1, Gov. Gavin Newsom and the state Legislature could have a $19 billion surplus to spend.
It’s so much money that, for just the second time ever, the state is projected to trigger a state law requiring the government to send refunds to taxpayers.

Onvacation says

Last time I was in there (Concord Fry's) the employees couldn't even tell you where to find USB cords.

Ya they got pretty bad towards the end.

EBGuy says

It’s so much money that, for just the second time ever, the state is projected to trigger a state law requiring the government to send refunds to taxpayers.

They'll find a way around it.

EBGuy says

It’s so much money that, for just the second time ever, the state is projected to trigger a state law requiring the government to send refunds to taxpayers.

FUCK! Why did you have to tell them?

Now they are going to spend it before they have to give it back

Around $4 billion of the total [$1.9 trillion American Rescue Plan Act] will go in emergency relief to California’s transit agencies.
I imagine some of the surplus will got to fill giant holes like that....

NuttBoxer says

The Fry's ... was always super empty despite occupying a huge space

Mega square footage retail buildings are becoming somewhat of a liability in the age of the internet. I tried Fry's a few times long LONG ago and quit going because it felt like a giant Big Lots or Wal-Mart of electronics and the shopping experience was never pleasant.

I wonder how the Simon Group is doing. They're one of the biggest mall owner/operators in the country. A year ago, they bought one of their biggest tenants, Forever 21, out in bankruptcy. The deal closed during the opening stages of the whole Coronavirus thing, imagine the buyer's remorse now.

Automan Empire says

I wonder how the Simon Group is doing.

Financially I'm not certain. I can tell you the two I know are Simon properties around me are packed when I drive that way. Just wear a mask and stand on your floor dot. Throw up a bunch of hand sani stations and poof, covid is gone.

Outlet malls will be pretty popular with the Karen's after this. Usually they're open air until you get into the store. They own quite a few of those across the country. Big huge indoor malls are a dying breed. Figure out how to repurpose them and you'd be rich. Usually though the property taxes will kill you with structures that size and they're better to tear down and repurpose the land.

WookieMan says

I was just out there in Anthem last week. Drove by a Fry's. Not sure exactly where as we did 4 courses, well 3 were in civilization. I think along Cave Creek highway? Might have been Anthem? Was drinking and golfing (not driving myself). Either way, empty parking lot.

This was the one on Greenway right by the 17 freeway. Had those Asian looking statues out front you see in Mr Robot

Hircus says

I recently discovered they also had a Fry's grocery store in AZ, which was actually pretty nice.

Yep, they're everywhere, the same company as Ralph's in California.

Automan Empire says

A year ago, they bought one of their biggest tenants, Forever 21, out in bankruptcy. The deal closed during the opening stages of the whole Coronavirus thing, imagine the buyer's remorse now.

All bailouts are for the purpose of saving the stock-holders(i.e. the banks).