Issue #10 - Trump or Biden?

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Happy Friday!

This is the 10th issue of the Goodwill Investing Journal - I hope to see you all at the 100th issue in ... math ... 52 weeks in a year ... thinking ... grabs calculator ... a little less than two years!

Been great fun writing and interacting with readers - thank you ALL for being here and welcome to the whopping 120 new subscribers this week!

I look forward to talking to all of you and so I invite everyone to say hello and welcome any comments/ideas you have.

1. Personal Finance

Maybe you make $10,000 per month salary. 

$2,000 gets taken off the top by your employer for taxes, etc. 

You have $8,000 left:

• food,
• shelter,
• clothing,
• and fun.

You spend it all, every month.

As a result, you have no savings or investments.

I challenge you to take 10% off the top, just like your employer does.

$1,000 off the top, straight to your long-term investing account.

You have $7,000 to spend that month. 

You might not believe me, but you'll adjust and live pretty much the exact same life as you did yesterday.

Only difference is now you're finally on track to have a huge retirement portfolio. 

Pay yourself first. 

2. Stock Markets

CNN headline: Trump calls for "Bloodbath"

---what Trump actually said "...there will be a bloodbath in the automotive industry....".

Obviously it's good to care about politics and how a country is led. 

But don't let it affect your long term investing strategy. Best thing you can do with this mainstream media crap is simply ignore it.

Look at the chart below.

If you invested in the S&P500 and did absolutely nothing else, a $10,000 investment in 1950 is worth $32,000,000 today.

3. Real Estate 

Commercial real estate is in a major rut. No question about it. 

Below I copy a chart from the RBC Equity Research team covering the REIT sector. 

They say the average stock price discount to Net Asset value is hovering around -25%. For good reason, too: interest rates are up, inflation is impacting expense lines and economic headwinds are in some cases slowing down rent growth.

Observation:

If stock prices in the Public Markets for Real Estate are down so much, why haven't we seen the same impact on Private Real Estate?

Because in the Public Equity Markets, capital flows and investor sentiment are reflected almost instantaneously due to stock markets being open on a daily basis.

But in the Private sector, prices are discovered through transactions. 

And due to the dearth of transaction volumes generally for 2023 and 2024, there is next to nil 'price discovery'. As a result, valuations are barely budging.

This makes my day job difficult because, for the stuff I want to buy, vendors think their stuff is worth last year's price. 

Sorry, but it's not.

Maybe I should forward them this email to let them know.