Why I’m celebrating Higher Rates!
The Fed is going to keep rates higher. What rate are they going to raise it to? Honestly, I don’t give a rat’s ass. Just don’t. I’m going to be honest with you, I’m kind of happy about these higher rates. Blasphemy? No, no, no. I’ve been around for a while, and these higher rates have added another tool to my toolbox. Before, cash and cash equivalents were the only option for my clients who needed cash close to retirement or for college education funds. They were just sitting there, and it was difficult to get a return on them. But now I can. I like to remind people to go back and see what the 10-year Treasury was yielding back in 1995, when the whole tech revolution started.
Own Good Companies, it’s a necessity!
I am perpetually against my job. I watch the media, the various pundits, and the portfolio managers out there with their arrogant predictions about how they handle their clients’ money. They’re always moving things around, like cash, and making changes. As Dirty Harry Clint Eastwood said, “a man’s got to understand his limitations.” We understand that we can’t predict the future, so the cream will always rise to the top with fundamentally sound companies. We need to understand what the trend is. It’s not necessarily bad that rates are higher, as certain portions of your portfolio, like cash and cash equivalents, will do much better.
Bulls make money, Bears make money, Pigs get slaughtered
I had a thought that brought to mind a quote from someone long ago: “Bulls make money, bears make money, but pigs get slaughtered.” What made me think of that? I keep watching all these so-called experts and portfolio managers who really don’t know what they’re doing. They talk a big game about when to buy and when to sell and how they’re moving their money around, but they’re just spreading misinformation. Frankly, they’re not that good. Let’s face it, they don’t have a flux capacitor or a crystal ball to predict the future. They need to understand their limitations and do the right thing.
Jerome Powell meets with Congress!
During the big Federal Reserve testimony, Jay Powell faced Congress and answered their questions. Honestly, I rarely see eye to eye with Elizabeth Warren, but on this occasion, she made some good points. Let’s be real, she made great points. The Fed can’t fix everything, and she basically said, “Hey, you need to put two million, maybe 3.5 million people out of work to deal with inflation.” Another Democratic Senator, Warnock, asked, “Is the cure worse than the disease?” I think they’re getting it wrong.
Practical investing advice
I’ve said it a million times over the years here at Watchdog on Wall Street podcasts, radio shows, and “money minutes: our job is to dispel narratives, push away conventional wisdom because conventional wisdom is poison. The ongoing narrative right now by all of the talking heads, business programs out there is that they try to get you to believe that they can time the markets and what they’re doing and what they should be doing. They tell you what they’re doing, but they’re guessing. Do you want your financial advisor to guess? Is that what you want your portfolio manager to do—guess what’s going to happen next? I remember on Wall Street, Gekko said, “I bet on sure things.” I do too. Stocks for the long run work, and you shouldn’t change a darn thing if you’re a long-term investor. Take advantage if you’re short-term with the higher rates.
You can’t fix the economy by destroying it!
I was thrilled to see Judy Shelton come out today and, in essence, blast the Federal Reserve and Jay Powell for saying that they’re going to fix the economy by destroying the economy. Let’s think about these people; you’re a free thinker. Does it make any sense at all to put nearly 4 million people out of work to fix the economy? Is there no better way? Is that the only way we’re going to go about dealing with inflation? No, it’s horse manure, quite frankly. But again, you see all the talking heads on Wall Street: “Oh, look at these Fed people; they’re wonderful; they’re so smart.” Baloney! If any of these people were threatened with losing their job, they would be singing a much different tune.
The FED has got it ALL WRONG
It’s been a good week for free thinkers like myself. Judy Shelton was able to express her views on the actions taken by the Fed. And today, Jeremy Siegel, whom I consider a mentor and one of the best in the business, presented the same case. The Fed’s actions are not going to help supply. It’s frustrating to see all the pundits on these programs, who are supposed to be smart, talk about the Fed’s decisions. These are the same people who failed to see that inflation was getting out of control about 18 months ago and dismissed it as transitory. I’m not so sure.
Jobs Numbers, Jobs Numbers, Jobs Numbers
Are you excited about the job numbers coming out tomorrow? You’ll get to see the Brady Bunch boxes in all their glory. But honestly, I’ve participated in these discussions before, and my answer is usually, ‘I have no idea.’ The way the federal government calculates these numbers doesn’t make any sense, especially in a post-COVID world. Their models are ridiculous, and I’m starting to trust the economic numbers coming from our government about as much as I trust China’s.
Bidens Budget plan is absolutely RIDICULOUS
The Biden budget blowout is almost like a waste of time. He’s putting everything at the kitchen sink into this budget that he couldn’t get past back when he had both houses of Congress under control. Why bother doing this? You guys get your salaries and are not paid by the hour. For crying out loud, it might be better to have a conversation to see what might fly and what might not, especially since there are crazy ideas like the wealth tax and surtaxes on top of surtaxes.
Silicon Valley bank COLLAPSES
I’m reminded of the South Park episode during the financial crisis, where people went to the bank and lost all their money. It’s not a joke; this is a big deal. I wouldn’t put my money in something like the Silicon Valley bank because of how it’s structured. It amazes me that so-called bankers haven’t noticed that rates have been high for a while and are going up, and that they should adjust their positioning accordingly. People need to understand that this kind of thing doesn’t just happen overnight. It’s not like pulling a brick out of Jenga and everything comes falling down. This is mismanagement from top to bottom, and there might be more to it than we know.