gloopy

It's funny watching the pundit class talk about the dollar "strengthening" while simultaneously taking about near double digit inflation.

KirillTheThrill

Nothing that I’ve read, or if you’re referring to what I said, talks about the dollar “strengthening”. Warren Buffet right now has 144 billion in CASH. Yes, every day you hold onto the dollar you technically become poorer due to inflation, but having cash on standby in a bear market allows you to have opportunities to make huge profits long term. If you’re doing any DD on the market data, we’re in margin call territory. Over leveraged funds will crater the market. If you have cash you can take advantage of the fear, panic, and oversold investments.

mispoken

I think a lot of Friday and Monday were margin call related. Tech has been decimated and the indexes, comparatively haven’t moved anywhere close to what tech has. So, there may be more downside get. Then again, maybe not!

Lots of people I know are losing their minds right now. What I thought were “seasoned investors” are contemplating liquidating everything. Very interesting times!

KirillTheThrill

I have four stocks I eventually plan on investing heavily on: NVDA, ENPH, SHOP, ROKU.

The issue I have with touching any of these positions is the Fed. For the first time in my short investment career, the Fed is selling not buying. Anyone who’s buying into the market is technically fighting the Fed. Margin calls aside, the 50 day moving average moved below the 200 day moving average last week, which is known as the “Death cross”. Usually the market will have a big bull day (which it did) because stocks are considered oversold, but what happens after signifies a bull or bear market. What happened after? Stocks cratered, we’re well below the 200 day moving average, the trend has turned bearish longterm.

mispoken

All plausible. In my past investing life, I’ve always been a market timing failure. In light of that, I’ve decided to buy in all markets. I bought some shares of UPST at $200+, I’ve now bought at $35. I just always buy and rarely sell. I’m incapable of timing and calling tops/bottoms.

Not going to pretend like this year isn’t painful. It is. Brutally painful. But, I honestly believe that depending on your timeframe, this too could be a blip. In 20 years, i may vaguely remember “the crash of 2022”? The alternative is the world as we know it has ceases to exist and we are stuck in a multi decade rut of economic catastrophe and war. Plausible, but I just choose the other side and thus I continue to do what I do.

long story longer, your concerns are justified, but I’m investing in the always underlying “positive drift”.

KirillTheThrill

Hopefully UPST turns around for you, not trying to toss salt on the wounds, but I have funny clip that’s making its rounds on social media.

https://twitter.com/The_Real_Fly/status/1523761180673986561?s=20&t=b5eODJ70ruySW9HU4r_g-A

https://twitter.com/TheWokeAntidote/status/1523761091888971776?s=20&t=xJiTJyDAoKnh-hguipuO2w

Gunfighter

Meanwhile over in the land of rental property....

-Commercial tenants on NNN leases are renewing, one even asking for early renewal. Inflation has outpaced the contractual rent bumps, so the properties would rent for more to a new tenant than the renewal rate. The key was buying properties at or near replacement cost, not an 3x inflated based on a Starbucks or Chick Fil A lease.

-Residential multi-family tenants on one year leases are getting rent increases on renewal commensurate with inflation. Some are non renewed and the units are renovated to a higher standard, bumping rents even higher. These are passive investments that send quarterly distributions. Inflation drives rents higher by $2, but expenses only increase by $1 because expenses are 50% of revenue. Higher interest rates will reclaim a portion of the increased cash flow when it comes time to refinance. Higher rates also put pressure on the sale price, but that is overcome by the increased Net Operating Income of the property.

-Single Family landlords, who know how to manage a property are doing well. With one short exception on a mentorship for my daughter, I've been out of this space for a decade, but still have fond memories of the cash on cash returns and long term capital gains. There is more than enough money to retire from this alone if you build, scale and manage the portfolio properly.

-Storage tenants on monthly leases are seeing rent increases as frequently as 9 mos after leasing. Expenses are approximately 1/3 of revenues, so a $3 rent increase is $2 extra cash flow. Increasing interest rates haven't put pressure on valuations yet because of the all cash buyer pool. When the cash buyers dry up, cap rates will have to align with interest rates.

-Development is like a game of Kick me in the Jimmy. If your deal is strong enough to take the kick, press on. If not, you have completed your first lesson in why cash flow is king. Development deals are cash heavy for a reason, you may be holding the project through the down cycle in the market.

Income property is the perfect example of not fighting the Fed. As an owner of rental property, your interests are aligned.

mispoken

[QUOTE=KirillTheThrill;3419963]Hopefully UPST turns around for you, not trying to toss salt on the wounds, but I have funny click that’s making its rounds on social media.

https://twitter.com/The_Real_Fly/status/1523761180673986561?s=20&t=b5eODJ70ruySW9HU4r_g-A[/QUOTE]

No, that’s good stuff. I’m content with my choices. I find even funnier are the Cramer/inverse Cramer stuff these days. It’s a treasure trove of laughs.

note; no UPST miss in earnings, they beat….just lowered guidance on account of the declining economic outlook. But at -60% who really cares why!

SonicFlyer

To be fair, the two are not mutually exclusive. While the dollar loses value via money printing and resulting monetary inflation, it can also strengthen when compared to other currencies.

Gunfighter

Relative to the Titanic it's not sinking as fast, therefore it's stronger in comparison.