Issue #23 - People spend 15% of their waking life stressing over money.

Read time: 3 minutes

Hey everyone!

This weekend I'm salmon fishing in the most beautiful place in the world - Desolation Sound - with my best buds and this is our 7th annual trip together. 

A lot has happened over 7 years and the four of us now being dads it is not lost on me how special it is to keep traditions and friendships alive. 

Here's to the next 7 fellas. 

1. Personal Finance

Did you know the average person spends 15 hours per week worrying about money?

That's basically 15% of each waking hour per day. 

I was shocked, but not surprised, to learn this statistic.

With groceries and gas and housing costs elevated, people are feeling the pinch now more than ever.

Worse yet are the negligent education systems that ignore finance and investing in favour of trigonometry.

This leads to poor money management and ultimately a lot of stress on households as they look toward the future.

Equally sad is hearing that young people these days are saying no to having kids because of the economic stress of doing so. 

This is why my newsletter, investment course, and social media presence exist - to help people get a handle on their finances and improve their investing habits, in a fun and lighthearted way.

All it takes is a few hours of learning how to budget and invest, and those hours spent worrying all of a sudden transform into hours to be spent on other things, like love and relationships and fun. 

So for all of my readers, thank you for your support, your comments and ideas inspire me to keep writing and helping people. 

2. Stock Markets

They say big tech is the only place to make money these days. 

Indeed, NVIDIA stock is up 200% over the last year. 

But one of my contacts pointed out that Abercrombie and Fitch is up 400% over the same time period. They sell Cargo Pants.

Just goes to show you that if everyone is saying one thing, you might want to 'look up' once in a while and see what else is going on in the world. 

Also, did you know the likelihood of the each of the Top 10 companies in the S&P500 today being in the Top 10 twenty years from now is 0%?

That is, the great leaders of today will hardly be the same tomorrow. 

This is why Index Funds are so powerful, instant exposure to the best companies in the world. They are low cost, almost free in fact. And their Darwinian like rebalancing system sees the cream rise to the top and those that can't hack it fall off the list.

All you have to do is buy the index every month, and you will participate in the innovation machine that is Corporate America.

3. Real Estate

Interesting signal in commercial real estate land:

3 weeks ago - broker tells you not to bother writing an offer at a 6 cap, way too far off the mark.

1 week ago - broker calls back saying buyer activity might be quieter than expected and suggests you write an offer after all.

Especially interesting given the rate cut last week and a drop in 5 year bond yields (which our mortgage financing is priced off of).

At Narland, we typically require a "positive spread" when we acquire assets. 

Meaning, we need the property's net operating income to more than cover the interest expense. 

And for the last two years since interest rates started increasing, it has been extremely difficult to find acquisition opportunities that meet this criteria (although we did manage to get two deals done during that time, one grocery anchored retail plaza, and one small bay industrial property).

This is why deal activity in my world has been extremely slow. Just not many buyers willing to invest in negative leverage situations while vendors have anchored their expectations of value on prices seen 2 years ago.

But with this latest signal, among other things we're seeing, deals that were negative leverage last year might just be swinging to positive spread territory. 

1 Quote

If you want something done right, do it yourself.

-Charles-Guillaume Étienne

A Question

What are you doing this summer?

I'm going to Venezuela to visit my wife's family. I will share some stories with you along the way. It is a beautiful country, with beautiful people and amazing food and scenery. Sadly, the political situation has gone from bad to worse since the communist dictator Hugo Chavez took rule in 1999 and then his hand picked successor Maduro who both ransacked the country of its infrastructure and stole from its people. In the Western World, we need to be careful not to follow the dangerous path of socialist ideals. 

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Thank you

Eddie Gudewill, CFA
 

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