Gregmal

I had the same problem in 7th grade Trig as I did when working with people managing money. It often goes as follows... holy shit, how did you arrive at that answer so quickly? Me? IDK, just kinda made sense to me. Did it in my head. Show your work! Why? Cuz, you have to or it doesnt count! Me? Nah...its a waste of time. I got a C in Trig and had to retake it in 8th grade because the teacher insisted showing your work was 50% of the credit. I just kinda cared about being in the right place at the end of the problem. To my knowledge he's still working....

We keep coming back to this but inflation didnt start 12-24 months ago. Theres plenty thats done well over 1/2/3 year time horizons dating back to the start of the inflation which was summer 2020. If we redefine holding periods constantly of course they'll arrive at the desired conclusion but I think it simply makes sense to start the goalposts where inflation starting spiking them and bring them to current day. Not every single year, or every single TTM holding period, in every asset class, all the time, will be positive or "the best" asset allocation decision, however its very clear what has durability and resiliency and what doesnt.

J-bills providing 15% today.

Class A trophy always wins. No matter what asset class or macro situation. If you own the best of something, anyone who is even remotely interested will want it.

We were told stocks arent a good inflation hedge and from July 2020-today the verdict is pretty clear. Real Estate at decent valuations and with certain tailwinds too. I dont even think its a debate. You just wanna own assets through the cycle. Apartments stuff I think is ok. Nice, safe alternative to bonds but still for grandmas. Awhile ago in my 2018/19 housing thesis I figured that rentals and homeownership would both go on a monstrous multi year, maybe even multi decade run, but with some see sawing where one is clearly favorable to the other. Right now you clearly wanna be on the homeowner/homebuilding/home related resources side of things after the apartment stuff just had its monstrous run.

Speaking of investments you can make with a longer term horizon...I gambled on some XRP right before it was delisted from Coinbase figuring the settlement or victory being favorable was inevitable. 3x'd that recently with the court win. Also had made several investments in Ripple preferred stock at valuations translating to $15-28 per share. Just got notice that the company is tendering for a chunk of them at more than $61 a share. None of these required anything more than a gee shucks I see lots of ways this works but dont have a time horizon and dont care if it takes awhile approach. All made possible by a higher risk tolerance due to life being secured. Whereas in 2011 I passed on pre IPO Facebook because I needed a house, car, and boat LOL.

Simple. My house, my rules lol. Boating/fishing works as my decompressor. Lets me get away from the daily grind.

Exactly. I told myself and my wife(then GF) in my early 20s that once I had a decent house, a decent car, and a boat, the rest would be easy. And it really has been. Once the aspirational shit and necessity stuff is out of the way, you're just using money you dont need and money that has a very long time horizon and runway and investing that to me has always been pretty easy.

Yup. That and I cant tell you how beneficial the financing element is as well. I knew so many people who were smart and risk averse and rushed to pay down their mortgages the pst decade, or chose to be all cash buyers, that now cry thinking about the idea of having 6-7 figures of 30 year fixed under 5% locked up.

The people who continuously have to work or be bothered by their rentals are usually cheapskates who don’t want to spend money to fix problems but rather bandaid them. I have 4 and I do virtually nothing for them. If a major appliance or something goes, I pay up to have it fixed or a quality new one brought in. That or their lease terms are dumb. If your contract states the unit must be returned in the condition it was handed over…you rarely have an out of pocket expense. My leases even state that “there is no such thing as normal wear and tear” lol. But in regard to the topic here I am simply talking about a primary home. I would imagine most here have them and yes I don’t even think it’s debatable. Another overlooked reason is the built in savings mechanism that occurs with principal pay down. When folks pay their rent they look at what’s left and make whatever decisions they need to. When you pay your mortgage you’re auto saving right off the bat.

Yea I just don’t get this sort of spreadsheeting every aspect of life mentality. But hey if folks think they can live in an ETF til they die, have at it! I’d rather own places I enjoy and have cashflow optionality and then build around that while everyone worries about termination or increase notices annually.

Yea I’m not by any means pointing this “at” @TwoCitiesCapital but mainly the logic…..but what kind of schmuck is like hmmm…should I buy myself a house, or some Bitcoin? Lol like it’s just totally lunacy. Or lives in the rear view mirror where everything they buy they go back and look up everything under the sun and if they find anything that performed better feel like they made a bad decision? I just can’t even process that. I just look to own good assets and as many as I possibly can, in a responsible way, and that’s it. No room for a perpetual loser like cash.

Totally. I could also care less about people’s performance here. It’s about the process and it’s an excellent mix with overall a very above average skew in terms of acumen. Remember when people would whine how they can’t find any good ideas here? LOLzzz And it definitely ain’t Cardboard. Forget what exactly it was but he bought a camping park around Québec or something recently that he’s busy with.

Same if I won the lottery. For the normal guy though, playing a normal risk/reward game with the side kicker being “life consideration”, checking off the shelter box greatly supersedes spreadsheets and lottery tickets. I don’t know anyone who bought speculative stuff like BTC pre popularity who wasn’t playing almost entirely with disposable money. Was pretty much the same as venture capital or pre ipo investing.

The difference is that when you buy crypto to gold or whatever, you are 100% banking on appreciation and thats it. Theres far more to it when you buy a primary home. Not everything, to everyone, is purely a financial this or that situation. How many older folks have zero fucks to give because their mortgage is paid off? Same sort of thing. If you took out a mortgage in 2010 or whenever you've just about cleared the tipping point regardless of appreciation and life is about to get much easier and more fun.

Make it $500

Props for surviving it despite not owning any bonds. Frankly I don’t know how you missed it. The massive 5 decade long super bull market in bonds that was so obvious and crystal clear to everyone. In 2022/3! I remember in 2013 hearing folks snidely retort how rates are manipulated and can’t possibly go any lower. A decade later they still chime in about how obvious it was rates would be low and stocks would do well the last decade and how this time it’s different.

Stocks

Yea as much as I wanna buy it and put it away Im trading about 30% of the position cuz I do agree theres gonna be volatility with all the news around this one. But good start nonetheless. Its dirt cheap.

Yea it’s classic “don’t be a hero” situation in office. Do I have gut feelings? Sure. Burning desires to put on trades? Yup. But why reach for the riskiest dollars when there’s greener pastures elsewhere?

Yea idk but after years of messing around with this stuff, best overall bang for the buck plus food quality and convenience factor is a decent electric smoker which runs about $400. Just set the time and temp and that’s it. Cook briskets, chuck roast, pork butt and shoulders, sausage, and even salmon all the time. They’re great and the consistency is what makes it worth it for me.

100%. I’ve never really seen a case where a DCF was applied by people who actually understood the businesses. It’s always by some excel warrior trying to find a blanket approach to arrive at a simplified way of valuing something that probably requires a bit of work and/or industry specific experience.

Yea idk. Maybe it’s not always something that shows up greatly on the financial end of things. But one thing I’ve noticed as I’ve gotten older is holy shit do people love making problems for themselves and worrying about things. Again anecdotally my little sister is at Lockheed and has been there a while. Makes “good” money, benefits are awesome. Travels to DC, Miami, Qatar…fun stuff as far as work goes….worries regularly about the rent. Last 3 years her rent at a Camden property has nearly doubled in downtown Orlando. Whereas I remember visiting her in 2015 and seeing her current student “house” a 4 bedroom she shared with her friends in Oviedo…was for sale and they were getting kicked out…suggested why don’t we just buy it? $185k was the ask. Too much hassle and work apparently. Today it’s $550k. I think for most normal people, securing the shelter element of things gives them a lot of peace of mind and security. For one, when you want to move, you don’t have to worry about a down payment. You don’t have to worry about annual rent escalations. It just makes a big part of life simpler.

True, but investing and homeownership is really the only path left for a normal person to ever get anywhere. Lets say you are super lucky, and for 30 years average $150k annual pre tax salary. This probably isnt realistic bc most people won't get anywhere close to that number until probably 2/3 of the way through their adult work life. But lets say its the average. After taxes, rent, and what comes with lets say 1.5 kids instead of 2.5, and a wife/husband who doesnt divorce you(even though thats the case like 60% of the time), if you're not investing but just saving, you're probably able to live like a cheapskate and sock away $30k a year? x30-40 years of working? You got like a million bucks.... So if you're an extreme outlier for a normal person, and get lucky, and beat the odds, and save for a really, really, really long time, you can be a millionaire at 70! Conclusion? at some point you need to take control of your shelter situation and to get ahead you need to have your money start making you money at some point.

Yea it’s very weird but not abnormal. Between friends and family I’d say the majority of the people I know live similarly. Thankfully they are W2 and not 1099s…but one is a construction guy in NYC and makes $160k a year doing custom office buildouts. Another a manager for Lockheed Martin in Orlando making $110k. Another a cop in Palm Beach doing $130k including overtime. Another a nurse making $98k in north Florida. They live what we probably grew up thinking was middle-upper middle class lifestyles. Two own, two rent. The ones that own bought precovid. But the common theme? In order to live middle/upper middle class with what most would consider top 15% type jobs/income…requires them saving absolutely nothing and barely taking advantage of the company offered stuff. It’s weird and probably something that’s gonna appear in some sort of longer term investment theme although at this point I haven’t identified where yet.