Blake Hampton

What is the role of the Federal Reserve in handling inflation then gfp?

I guess my general thesis is that inflation is looming and that the Fed can either get control of it or they can't. If they can't: Oil and real estate And if they can: Cash Anything that doesn't seem to be completely essential turns me off. It can't get any more essential than fuel and housing.

I’d also be interested in residential real estate if I could get a mortgage to be smaller as a percentage of my wealth. I think the terms for that type of debt are really good, I just don’t want to over-leverage. Prices for good homes are also quite modest where I live (3-4x median household income).

and cash.

I like energy: - BRY - ECTM - OXY

I don’t know specific metrics regarding the NASDAQ currently but I assume it’s outrageous. Please someone fill me in on how QQQM and IBIT are good investments.

Had to look up IBIT. At this point, I feel like I’m being trolled because this portfolio is unbelievably risky.

Well if we're talking about Buffett, he would say one good idea every year or two. His equity portfolio has normally consisted of about 5 to 10 equities with a turnover rate of about 5 to 10%. I also believe that if he were only managing his own money that he'd be more concentrated. I think what made him so successful at a young age was that he could put half or more of his net-worth into one idea, and that takes some balls. Berkshire's 2022 Shareholder Letter: "At this point, a report card from me is appropriate: In 58 years of Berkshire management, most of my capital-allocation decisions have been no better than so-so. In some cases, also, bad moves by me have been rescued by very large doses of luck. (Remember our escapes from near-disasters at US Air and Salomon? I certainly do.) Our satisfactory results have been the product of about a dozen truly good decisions – that would be about one every five years – and a sometimes-forgotten advantage that favors long-term investors such as Berkshire. Let’s take a peek behind the curtain."

I'll start off by saying that there's a difference between the quality of a business and the price you have to pay for it in order to make an adequate return. For example, Apple is certainly one the best businesses in the world with a return on shareholder's equity of nearly 165% in 2024. For every $1 invested in the business itself, they made a return of $1.65 in earnings. But the question that we must consider is what is the correct price to pay for such a business? If you could buy in with Apple at book value you'd make an absolute windfall. The same goes at 2x book, 3x book, all the way to maybe 25 - 30x book if you really believe in the business. But their currently experiencing negative growth and they're facing fierce competition in China. I would personally not be comfortable buying into their business at their current multiple of 59x book. That's just too expensive and seems like too much risk. This same logic goes for Nvidia, Netflix, a ton of companies that I would describe as great businesses selling at awful valuations. It also doesn't help that I'm not an expert on much tech. As for Hong Kong, I've been there and done that. They have companies that look extremely cheap on paper but I simply don't trust the Chinese Government. Property rights do not apply over there, especially for ADRs, and you may just well see that the cash on that balance sheet never moves. The only thing that would interest me in international equities like that would be a huge dividend yield such as what was offered at PBR. But even then I remain skeptical.

You are describing speculation.

But I'm also all-in on Fartcoin.

At the end of the day, investing is about not losing money. That’s Buffett's #1 rule. A ton of ideas and activity that I see floating around are nothing short of complete speculation. - Bitcoin and crypto in general? A president who is promoting it? - No-growth companies selling at 40x earnings? - Real estate selling at 6x the median household income? - Record use of derivatives? - Massively unsustainable fiscal and monetary policy? - S&P 500 at 5.3x book? Investing is not about blind optimism; It is about being grounded in data and using logic to make decisions. I try to back up my beliefs with quantitative evidence that I can point to if needed, and I could give you sources and figures for each one of my listed points above. I read annual reports, the WSJ, the NYT, The Economist, Barron's, Fortune, and a slew of books. Specifically, I also read the annual reports for both the Fed and the U.S. Government. Maybe I'm just some moron who doesn’t get it, and I'm warped in thinking that all of this isn't normal, but I'm not so easily convinced. I will admit, there are some decent ideas where I do think the market is ignoring reality. However, I do think that these opportunities are quite rare at this point. Just because a company that's making some frivolous item is selling at 10x earnings, that doesn't mean it's cheap. You have to remember: with a company, you're paying for its cash flows 20 to 30 years out. I have some serious concerns about the current environment, and I'll end on this: The last two major crises this country has endured have been BIG ONES, nearly Great Depression–rivaling events. Both of those times, our country was largely saved through stimulus and bailouts from the U.S. Federal Government. The concern now is that this is where the current problems lie. If your idea for buying equities is simply that "cash is trash," take a second to think about the implications of that.

I heard somewhere that Dick Fuld was stupidly optimistic.