tede02

I have a 60HP excavator. I absolutely love operating that machine. It weighs about 15,000 pounds. It can do some serious damage, LOL. The hours feel like minutes when I'm running that thing.

I found this wide ranging discussion on commercial real estate very interesting. One theme here is you can't really generalize on this topic. There are so many types of real estate, markets, etc.

In all seriousness, prior to 2021, I hadn't spent a minute thinking about the UFO topic until I heard retired Top Gun navy pilot, David Fravor, talk about his his now famous encounter off the coast of California. It was pretty mind-blowing. More recently 60 minutes had a piece on the subject. Made me second guess my pre-conceived notions: Fravor interview: 60 Minutes episode:

I have an uplift desk at home and office. Since I went to a standing desk 7 years ago, I've liked having a bar-stool style swivel. The first one I bought at Wal-mart for $30. I wore it out after 5-years. Now I'm using the same style from Target which is currently priced at $40. They work great. I never put my desk down. https://www.target.com/p/robinson-adjustable-counter-height-barstool-dark-bronze-cheyenne-products/-/A-53441239?ref=tgt_adv_XS000000&AFID=google_pla_df&fndsrc=tgtao&DFA=71700000014804912&CPNG=PLA_Furniture%2BShopping_Brand|Furniture_Ecomm_Home&adgroup=SC_Barstools&LID=700000001170770pgs&LNM=PRODUCT_GROUP&network=g&device=c&location=9019595&targetid=pla-1677955260360&ds_rl=1246978&ds_rl=1247068&gclid=Cj0KCQiA45qdBhD-ARIsAOHbVdEK_ljo9m-CsufDGeuQ7g6CTM-flvsDk9Mfs2wOtM9UUthRPb7s8tsaAt89EALw_wcB&gclsrc=aw.ds

Likewise, I always tuned in when he was on Bloomberg and CNBC. He usually had some interesting takes. I was bummed to hear this news. You just never know when your time is coming.

Crypto took over my thread. LOL. It's all good. Some interesting insights on a subject I don't know much about. To try and bring the discussion back to the original theme, is crypto (maybe bitcoin specifically) a good inflation hedge and why? Or is it the same concept as Twocitiescapital described about gold (that being the relationship between interest rates and inflation).

This whole thing has simply been entertaining to follow. It can't be good if Musk is already looking to raise money and polling whether he should step down.

I'm buying nothing right now LOL. I'm always too early including this year! I came into 2022 with record cash. Put a chunk to work so far. Being patient.

Greg, you crack me sometimes! LOL. Good stuff. I completely know what you mean. A lot of REIT managers (especially non-traded), peddle so much B.S. I get tired of it. It reminds me a lot of fracking companies before many blew up in 2016.

I have no interest in a big debate but the issue is he was profiting off his lies and causing real harm to people. I'm more sensitive to this now than ever because my oldest child is 6 years old, the same age as many of the kids were at Sandy Hook. Imagine your child is murdered, and the next thing you know all these psychos start calling you, sending threatening messages and stalking because some lunatic on the internet is peddling a narrative, for money, that the entire thing was a hoax. One of parents committed suicide ultimately. Alex Jones deserves every damn penny of that judgement. He earned himself a life of misery.

I've never heard this idea. Is the theory that the more negative real rates are/go, the result is capital shifting away from those currencies in search of return or something that is more likely to hold purchasing power (and thus putting demand/pricing pressure on other assets like gold)?

Random musing but is anyone else intrigued that the stories so often told about gold and (more recently) crypto being an inflation hedge have not panned out despite the highest inflation in 40 years? Gold is actually negative this year. Perhaps the dollar strength is a major factor. Nonetheless, I just find it interesting. I remember quite vividly how excited people were about gold a decade ago when QE was a relatively new thing and the doomsdayers were predicting runaway inflation. I don't really know what to think presently. Perhaps the story around gold being a great inflation hedge is just that, a story/narrative.

When will we start to see rising borrowing costs hit REITs? Separate but related question, do most REITs borrow at the corporate level vs property level? The handful of REITs I follow seem to borrow at the corporate level. One in particular is starting to feel the effects of rising rates as they've had to refi maturing debt. Rents have been stable but rising interest expense is starting to eat into profits. I was annoyed that management didn't try to lock in longer-term debt in 2021. Do most REITs borrow on shorter terms or does it largely depend on the type of real estate?

When I was in college and getting interested in investing, my dad set up a lunch with someone who had recently retired after being an analyst or portfolio manager for a fixed income fund (mid 2000s). I remember naively asking something like, "why were you on the bond side, it seems so boring." LOL. Over the last 5-years, I've developed a significant interest in fixed income partially via influences from Howard Marks and Jeffrey Gundlach. I've learned so much following Gundlach and his deputy Jeff Sherman closely. I also like some of the top managers at PGIM. One show I've also become a major fan of is "Bloomberg Real Yield" which is posted on Youtube weekly. The show is basically a rotating panel of top fixed income specialists that spend 30 minutes talking about fixed income. I've learned a lot. Recently, Gundlach has been talking about a strategy of buying some of the credit that has gotten absolutely crushed and hedging it by buying long-treasurys. It's an intriging idea. Separately, Druckenmiller once said that his biggest returns were made investing in long-treasurys ahead of Fed cutting cycles. That really perked my ears up and I've never forgot it.

I was thinking something very similar this weekend. Aside from being a token for speculation (and illicit activity), has cryptocurrency proven itself to have any utility? I continue to wonder if all the cryptocurrencies will ultimitely be $0 but the underlying tech survives. Blockchain is interesting and people make interesting points about potential applications, but that too has yet to materialize. I try to keep an open mind because people like Buterin and Hoskinson are obviously HIGHLY intelligent, but it seems like we're a long way off from widespread application.

I think it's quite possible on the long-end. Less certain on the short end. This is just conjecture from me but I think the market response today is overly optimistic. The Fed is gonna keep going until they get consecutive data suggesting things are slowing and they aren't going to pivot unless all hell breaks loose.

The 1-year Treasury is closing in on a 5-handle. Last year at this time it was <15 BPS. Amazing!

Maybe a 2. I came into this year with tons of cash. So I've been putting it to work, buying names that I've been looking at for years, notably GOOG, META and TTNDY. I'm down in all but trying to build up positions. Also been buying some fixed income and office REIT that has been hit hard. Yields well above 10%. As always, just struggling with how aggressive to be deploying capital into a falling market. I expect very tough sailing as long as the Fed continues raising rates. Market could be in for a big surprise on the downside if inflation stays hot and Fed Funds were to go to 5%+. Really tough to predict. Frankly, I don't want to ever put myself in a position where my pain index is over 4 or 5. I've always been conservative with debt and have learned my lesson being overly concentrated. Also, I was right in the middle of a big real estate transaction when the pandemic hit. Despite having a strong balance sheet and a decent amount of cash at the time, I briefly felt naked in March of 2020. As a result, I told my wife, I don't ever want to be in that kind of situation again. Consequently, I have, and probably always will, 2+ years of living expenses in cash/high quality fixed income.

I was on a call today with Doubleline's Jeff Sherman. One of the best questions asked was where he was putting his personal money. He said he's been adding to some of Doubleline's ETFs which have light leverage. The "Yield Opportunities Fund" currently yields around 11%. Piqued my interest. I've seen a number of levered bond ETFs that are down 20-50% in 2022. It's pretty crazy. They will turn out some big returns if rates ultimately decline.

Good discussion with Druck. I always learn something.

I'm no fixed income pro but it does seem like strange yield moves today. Middle of the curve is down. Long end is up.

I'm with you. I read Trillion Dollar Triage in recent months. One of my favorite parts of the book was the brief history of the Fed with a focus on each chairman. One thing that is made very clear is the Fed as an institution DOES NOT want a repeat of the 1970s. Basically every Fed chair since Arthur Burns has vowed not to make the same mistakes he made. Given that, I agree, the Fed probably will keep financial conditions tight until it is overwhelmingly clear that inflation is easing. And to your point, that will probably come after some significant pain is felt. One thing I keep thinking about is the likelihood that long rates go up significantly more than consensus. Presently, prominent fixed income investors like Gundlach seem to think a 10-year over 5% is VERY unlikely. But what if it does go to 6%, 7% or even higher? The headline inflation numbers in the UK this week were disturbing. What if inflation is stubborn in the US? I don't have any special insight but it seems like this type of scenario is reasonably possible. At the same time, growth is already showing signs of strain so perhaps the risk is coming down. I sure as hell would think we'll know sometime in Q1 if inflation is coming down.

One year ago the 1-year Treasury was at <0.10%. Now it is moving towards 5% (around 4.7% today). Amazing. I follow Gundlach closely. He deserves the "bond king" title. As for rates, if long rates pop up another 100 bps, I expect we're going to see more turmoil like the UK pension situation. Who knows where it's going to come from. I was reading this morning that the Japanese yen is trading at the lowest level against the dollar in 25 years. Bank of Japan is intervening. It's just one thing after another. I've deployed some of my dry powder this year but I think the best deals may still be in front of us in all markets.

All-right guys, 10-year has broken well through 4%. Man, it is going to be interesting to see where things go in the next few months. The inflation numbers in the UK are crazy. US economy remains resilient. Fed will keep hiking short rates. Will balance sheet reduction result on long rates moving up? Or will foreign investors start dumping money into long treasurys? I don't know but what a year it has been. 10 year is presently at highest yield since 2008.

Although I'm in finance, I love doing physical work. Building stuff, cutting wood, carpentry, tractor work, etc. I get a huge sense of satisfaction from this kind of work.