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Hey everyone!

Last week's fishing trip was a great success. Caught way more Chinook salmon than we could keep, including a bunch of nice +20 pound slabs. 

And next week I'm off to Venezuela. Mj and baby Julia are in transit as we speak on a nearly 40 hour journey from Canada to Valencia. Serious troopers these two beautiful ladies are and they are handling the journey like champs. 

Not surprising, since Mj spent 3 months walking 1,100km across the Israeli desert ALONE and has completed every single trail of the Camino de Santiago. Obviously our daughter gets her tenacity from her mother and I am proud of them both and will join them there in a few days! 

Anyway, this week I'm going after Amazon Prime Day with one simple image.

PS. If you are enjoying this newsletter, and you think others might as well, please forward them this email to subscribe. 

1. Personal Finance

Amazon sold a record $12 Billion during last year's Prime Day.

Expectations this year are to easily exceed that number. 

Millions upon millions of dollars of ad spend and marketing are coming for you this July 16. 

You will be convinced you need to buy. 

If you leave a trace of your scent, they will hunt you.

So just a short public service announcement today:

2. Stock Markets

For every chart or discussion of the stock market's 10% average return, you get the handful of naysayers saying "but that's not inflation adjusted, this is so misleading"!

Ok ok ok let's settle down a bit here. 

Fact 1. $500/month invested at 10% compounded over 40 years = $3,188,000.

Fact 2. Inflation of 3% means a real return of 7% (10% - 3%) = $1,320,000 real spending money.

Fact 3. If you DON'T invest in the stock market and earn a nominal (before inflation) return of 10%, and instead you put your $500/month under the mattress ($240,000 saved in total), you wind up with $140,000 after 40 years. In another 40 years, it'll be nearly 0. You destined your money to death.

So out with the "oh but inflation lowers your future spending power so I'm not going to invest in broad stock markets, instead I'm going to buy a micro cap stock my buddy is running so it must be a great deal".

Just zip it and buy the index. Earn that 10% and do it for a long time.

It's the best return you can get. 

3. Real Estate

Trying times in the commercial real estate sector, especially when you see this headline:  

Slate Office REIT faces $158M debt default amid challenging market conditions

Just a reminder, however, that when people use this headline to make a blanket statement that all Real Estate is in trouble - when this is an Office portfolio - is a bit of click bait. 

Yes, Office is struggling in a major way. Work from home, 4 day work weeks, etc have forever changed the landscape for Office assets.

They will struggle for some time yet until the vacancy issues get worked through. But this will take decades, not years. 

Meanwhile, certain Industrial and Retail markets are performing exceptionally well.  

1 Quote

"There is nothing so useless as doing efficiently that which should not be done at all"

- Peter Drucker

A Question

Tell me your summer plans?!

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Thank you

Eddie Gudewill, CFA
 

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