tede02

Interesting discussion about state of office market with Boston Properties CEO. He suggested that work from home trend has plateaued or moderately reversed with more people in the office in 2023. Also echoed some points of other industry players including the major bifurcation between A properties and lower tier stuff (high quality doing relatively well with lower quality seeing lots of vacancies). Also struck me his point around the public REITs being off 50% meanwhile the ncreif index, which is based off appraisals, is down 5-6%. Very interesting market.

This is from last fall, near the bottom of the equity markets. I've gone back to it several times. The first thing PTJ talks about has happened, short rates are no longer moving up. But the equity markets (according to Jones' articulated model) are ahead of where they should be. We've already seen a big rally in the stuff that was beaten down last year. But, maybe the recession starts to show prominently and earnings take a hit pulling equity prices down before the Fed cuts, then we find bottom. I'm no market timer but it is fun to talk about.

Bond market seems convinced of significant downturn. Equity market doesn't know what the hell to do.

Yesterday I bought a tiny position in the common and preferred of SYF.

I bought some more brokered CDs (1, 2 & 3 yr) yielding over 5% with idle cash.

Interesting! I really enjoyed his book. I got a signed copy at the Berkshire annual meeting. I constantly see the automatic behavior he describes in the book (click whirl if I remember right) in myself. It's helped me out.

It's interesting that despite treasury yields cratering over the last week, yields on brokered CDs are holding up. I've bought some call protected 2 and 3 year issues over the last few days at 5%+. Apparently banks want deposits again...LOL.

Sounds interesting. Where do you get the fund-level YTM figures?

I grabbed a 3-year brokered CD still yielding over 5% off Fidelity's fixed income patform.

Did anyone get some 2-year Treasurys at the five-handle? I bought one tranche for my personal account before the market tumult! Amazing how fast the sentiment can change. Makes this game so interesting.

Big move in short-rates today to the upside. Market is trying to digest all the opposing forces (as am I!). I think the Fed goes 25 bps next week and then waits to see if there is any more wreckage between then and the next meeting. The bank failures are such a great reminder that these things always come out of no-where. I'm sure there will be more surprises this year. I'm still thinking the risk-reward for short-term Treasurys looks better than stocks (generally speaking) in the near term.

This resonates with me. Just before the pandemic hit in early 2020, my wife and I had signed a purchase agreement to buy a property we'd been watching for years. Excitement turned to fear in a matter of weeks in March 2020 because we had signed a purchase agreement to buy, but still needed to sell. I've always been pretty financially conservative but I never felt so naked and sold a few long-term equity positions that had declined but fortunately weren't bombed out (Luckily I was able to buy one back at a lower price a few months later). Everything worked out but I told my wife I NEVER want to feel exposed like that again. As a result, I keep over two-years of living expenses spread across banks, I-Bonds, brokered CDs and short-Treasurys. Jamie Dimon always talks about a fortress balance sheet and that's how I've tried to shape my own.

I'll be very curious to see what happens with short-rates in the weeks ahead. Is this a temporary blip as the market piles into treasurys? Or will employment numbers and monthly inflation data continue to come in strong forcing the Fed's hand? I don't know the answer, but before these bank failures, I thought short-term Treasurys were starting to look better than the S&P500 on a risk-reward basis in the short-run. That still might be the case even after this big decline in rates. The equity market has seemed sanguine to me this entire year.

LMAO! Good one!

I'm tempted to buy the inverse Jim cramer fund. SJIM

This is total conjecture from me but it seems like we're setting up a for a fast sell-off of 10-20% assuming Fed keeps ratcheting up rates and then we get an economic scare. The equity market seems exceptionally sanguine presently.

I've been buying short-term treasurys with cash. 5% yield STATE income tax free.

I totally agree with respect to how hard it is to untangle. It's always fuzzy to me what percentage of the equity portfolio is float vs. positions owned outright by BRK. Likewise for all the cash disclosed on the balance sheet.

Gary Shilling likes to show a chart of zeros from the early 80s. If memory serves me right, CAG was in the mid-teens. I always remember that and Druckenmiller who has said a number of times that his biggest years came from taking leveraged positions in treasurys ahead of Fed cuts. As an aside, I've always wondered what kind of leverage he used, in other words, what terms. Did he have positive carry before the bets paid off? I've also found it interesting when he said he's never lost money on junk debt because he's always bought when we're in recession and spreads have blown out. Makes good sense.

10-year is moving back toward 4%. This fascinates me because a strong consensus formed in January that inflation was coming down, the Fed pivot was imminent, etc. Equities and fixed income rallied and now we have the reversal as the most recent signals suggest the economy is charging ahead and price pressures remain. Looking back to 2022, it was so obvious yields were going to rise off of zero but determining where they peak out seems much more difficult. With all the negative sentiment, perhaps we're close to peak yields right now. I annualized the month over month CPI figues going back to July. The 6-month average came out to 3.26%. Inflation is definitely easing since peaking last summer but there's a lot of noise mixed with the signal.

This is a legendary talk. I also started with Lynch's books in the early 2000s. It is what introduced me to investing and led me on to Buffett.

Narratives are interesting. The financial media makes them up daily to explain market moves when they typically have no idea. The inflation rate is certainly coming down. But the way everything is priced presently creates a lot of downside risk if it (inflation) sticks around or we get some jumps in the coming months. The new narrative is the the economy is slowing, inflation is coming down, Fed is going to pause soon. Today was a good reminder that it may not be that predictable.

All the bond guys say the Fed isn't going to make it to 5%. Will be interesting to see if they exceed that level and market response. I feel like we're in for one more run up in long-rates before this hiking cycle is over. But this is total conjecture on my part.

I've had a small position in a non-traded office REIT for over 10 years. Class A in markets across the US. I've hung onto for a variety of reasons. It's done decent and I just kind of enjoy following it as one barometer for what's going on in commercial real estate. The shares wered marked down 16% in 2022 but most of it was due to an equity position the REIT holds in a spin off that is publicly traded and the impact of rising rates on valuations. What's interesting to me is occupancy has hardly moved over the last three years and is hanging in the 88-89% range. Rents have been flat. If you would have told me that's how things would play out after the pandemic hit, it would have been hard to believe. More recently, the dividend was recently cut around 20% because the REIT is rolling debt at obviously much higher rates. I'm annoyed that management didn't secure better terms before rates surged. This seems like a big miss.

I had to look it up but it would be considered in the midi class. It's a Komatsu PC60-7 with a blade. I'd like to get a hydraulic thumb on it eventually for handling logs and anything else I want to pick up.