5 year Market Outlook opinions
05-10-2022, 08:43 AM
#531
Gets Weekends Off
Joined APC: Apr 2018
Posts: 295
No one has really talked about what is guaranteed to work in this environment...you only need 3 things:
1. ownership in a car wash
2. a supply of Methylamine
3. a friend with a solid understanding of chemistry.
1. ownership in a car wash
2. a supply of Methylamine
3. a friend with a solid understanding of chemistry.
05-10-2022, 08:51 AM
#532
Optimized
Joined APC: Oct 2017
Posts: 391
Originally Posted by BCan
No one has really talked about what is guaranteed to work in this environment...you only need 3 things:
1. ownership in a car wash
2. a supply of Methylamine
3. a friend with a solid understanding of chemistry.
1. ownership in a car wash
2. a supply of Methylamine
3. a friend with a solid understanding of chemistry.
05-10-2022, 09:19 AM
#533
Stands to be Corrected
Joined APC: Mar 2018
Position: C-17 / 7ER
Posts: 323
Originally Posted by BCan
No one has really talked about what is guaranteed to work in this environment...you only need 3 things:
1. ownership in a car wash
2. a supply of Methylamine
3. a friend with a solid understanding of chemistry.
1. ownership in a car wash
2. a supply of Methylamine
3. a friend with a solid understanding of chemistry.
1. Ownership of 2 casinos, a vacation resort hotel, and a funeral home
2. Run a charity
3. Launder money for a major drug cartel through said properties in an austere location
4. Watch a lot of people get killed
05-10-2022, 09:41 AM
#534
Gets Weekends Off
Joined APC: Apr 2007
Posts: 4,459
Originally Posted by BCan
No one has really talked about what is guaranteed to work in this environment...you only need 3 things:
1. ownership in a car wash
2. a supply of Methylamine
3. a friend with a solid understanding of chemistry.
1. ownership in a car wash
2. a supply of Methylamine
3. a friend with a solid understanding of chemistry.
Ended badly....
Originally Posted by Breadcream
Or:
1. Ownership of 2 casinos, a vacation resort hotel, and a funeral home
2. Run a charity
3. Launder money for a major drug cartel through said properties in an austere location
4. Watch a lot of people get killed
1. Ownership of 2 casinos, a vacation resort hotel, and a funeral home
2. Run a charity
3. Launder money for a major drug cartel through said properties in an austere location
4. Watch a lot of people get killed
The real lesson is alignment of interests with .gov. It's amazing how much better things turn out when you play with .gov (or pseudo gov, the Fed).
Last edited by Gunfighter; 05-10-2022 at 10:02 AM.
05-10-2022, 11:11 AM
#535
Gets Weekends Off
Joined APC: Nov 2020
Position: Enoch Powell Enthusiast
Posts: 2,124
The dollar will decline in value, as all fiat currencies do eventually, but crypto has a non zero chance of becoming worthless in the blink of an eye.
State governments are jealous of their seigniorage powers. They might not be able to make it disappear, but they can make it illegal.
Money to be had there, as with every pyramid scheme. Timing is everything.
State governments are jealous of their seigniorage powers. They might not be able to make it disappear, but they can make it illegal.
Money to be had there, as with every pyramid scheme. Timing is everything.
05-10-2022, 11:57 AM
#536
Gets Weekends Off
Joined APC: Jul 2010
Position: window seat
Posts: 12,522
Originally Posted by 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.
You brought up a good point though. With so many malinvestments still pumped up artificially by policy and fiat, it seems like every day more people are starting to preference negative 8-10% returning garbage ("cash") instead of actual things.
But but but, "including the Great Depression the market always goes up!" right?
Not financial advice.
05-10-2022, 02:10 PM
#537
Gets Weekends Off
Joined APC: Apr 2007
Posts: 4,459
How would our hypothetical MBCBP be doing right now? I'm especially interested in the impact of MB on the CB portion of the of the P.
05-10-2022, 03:30 PM
#538
Gets Weekends Off
Joined APC: Dec 2009
Position: Capt
Posts: 2,023
Originally Posted by Gunfighter
How would our hypothetical MBCBP be doing right now? I'm especially interested in the impact of MB on the CB portion of the of the P.
05-11-2022, 04:16 AM
#539
Gets Weekends Off
Joined APC: Dec 2007
Posts: 5,414
Originally Posted by 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.
-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.
Other tidbit observations:
Why are folks talking about extremely volatile Bitcoin as an inflation hedge? "Hedging" 8% inflation with a 50% BTC loss?
Best way to hedge inflation is to continue buying cashflowing assets at reasonable valuations, whether it be real estate, stocks, small businesses etc. The energy sector would be a good stating point. BTU, ARCH, EGY, PUMP, CRESY(full disclosure: I own all) are all trading at insanely low multiples on cashflow.Lastly, any wagers on when ARKK closes? I don't think the fund makes it thru 2023. It's brutal out there for Growth oriented investors, but this should be no surprise as it's happened before repeatedly.
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05-11-2022, 04:24 AM
#540
Gets Weekends Off
Joined APC: Dec 2007
Posts: 5,414
Originally Posted by 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.
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.
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