Investing Strategies. What is your move?

The technical description of a recession is two consecutive quarters of negative GDP of which we already have the first quarter of 2022 in the books as such. But that is meat for the financial media. These numbers come out of the same minds that say inflation is only 8%.
Yeah, I understand that and not discounting anything here except the fact in this case it is not the consumers causing a negative number, its the lack of supply.
Im CONSTANTLY amazed at some huge car dealers here. Chevy, Toyota and Honda. The lots used to be PACKED with cars and trucks. The reason I am so amazed is I still can't get in my head every time I pass their huge lots that used to be packed with vehicles and I MEAN PACKED, I was always amazed, like, where do all these buyers come from *LOL*
But the lots are empty now, I mean really empty!
All of them used to have in varying ways, vehicles in a fancy way staked up on display, or the roofs of the buildings or just plain lined up out of the parking lots and onto the lawns. For years, years and years since we moved here 16 years ago.
Now? Nothing and I mean, in most all cases nothing on the lots. I still can't get over it, so that tells me something, consumers got the money but there is no product, at least in this part of the country.

I also know for fact. My son works for BMW, the assembly lines for all their X cars run, like non stop, turning out amazing numbers of vehicles non stop, can't catch up.

AGAIN, just my little part of the world here, rest of the country, maybe its not the same? If not, why is there nothing to sell here?
BTW - Much of the boating sales here are the same, right now stocked up but if like last year, they get wiped out then nothing left to sell, it never used to be like that.
 
For those who follow the Cass Freight Index.


  • “After a nearly two-year cycle of surging freight volumes, the freight cycle has downshifted with a thud. It’s possible the April data include some indirect impact from lockdowns in China, but with container ship backlogs still off North American ports, the direct effects on finished goods imports seem more likely in the June/July timeframe.”
  • “The prospect of freight recession is now considerable, as substitution from goods back to services spending picks up pace, and as inflation slows overall spending, particularly via higher fuel prices and by pressing up interest rates.”

https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/april-2022
 
We will find out in a few months. Folks are curbing their non necessary spending cause everything they need is going up in price. Higher credit card balances across all income brackets doesn’t necessarily mean a healthy economy.

The gas tank now costs $40 to fill up that was previously $25.….. the shopping cart at grocery store is now $100 that used to cost $70.

Does the family of 5 cancel their vacation trip to Disney this summer because airfare, hotel, car rental and restaurants has gone up substantially ?

Is that vacation to Central Florida really a necessity ?

https://www.cnbc.com/2022/05/12/us-...ercent-in-april-flights-got-even-pricier.html
Hey! We will be in Destin shortly (driving though) and I have to say, just about everything is booked up in the SanDestin Resort, for like, forever!
Glad we booked months ago, execellent weather coming our way, Im looking forward to it, love the clear Gulf water, wife booked a fishing charter and snuba diving (not scuba and not snorkel) should be interesting. Snuba was the easiest to book (she took care of everything vs scuba)
But don't go by us, nothing ever stopped us from traveling, we like our vacations and covid 2020 and 2021 didn't matter to us other than make it more easy to book places *LOL*
May check out some homes and communities in the Panhandle too... got a couple in mind, if time. Im almost afraid to look, REALLY love my home, wife does too, but wife is ready to move anytime I say go!

I don't know, but after a couple years of covid and other families flush with cash because they haven't done anything the last 2 years, not sure if it will make a difference or not but I see your point, for other people not us. Next month looking forward to the east coast Myrtle Beach area, I can tell you know those rates are higher too and we don't have one booked yet. But they are busy. Covid 2020 we felt like we had so much of the place to ourselves, I expect this year to be nuts.
(I know we are not the normal people though, nothing stops us and could care less about anything but having fun) :)
 
But the lots are empty now, I mean really empty!

AGAIN, just my little part of the world here, rest of the country, maybe its not the same? If not, why is there nothing to sell here?
My local Ford dealer just folded. They were getting in 4 new cars per month. The other Ford dealers are not far behind, with just a trickle of cars n trucks.

But I travel a lot, and I'm seeing the same thing everywhere. Quite simply, I don't believe the claimed production numbers. I got some verification from an insider that there is a whole bunch of nonsense going on. Including sales numbers that include vehicles that were produced over a year ago.

There is a reason an economic collapse is underway, and it has a lot to do with the uncomfortable reality of very poor industrial performance.

Oh and the 13 gal gas tank is not $25 to $40 to fill up, it's $77. And Diesel fuel was $7.15/gal in my East Coast travels.
 
My local Ford dealer just folded. They were getting in 4 new cars per month. The other Ford dealers are not far behind, with just a trickle of cars n trucks.

But I travel a lot, and I'm seeing the same thing everywhere. Quite simply, I don't believe the claimed production numbers. I got some verification from an insider that there is a whole bunch of nonsense going on. Including sales numbers that include vehicles that were produced over a year ago.

There is a reason an economic collapse is underway, and it has a lot to do with the uncomfortable reality of very poor industrial performance.

Oh and the 13 gal gas tank is not $25 to $40 to fill up, it's $77. And Diesel fuel was $7.15/gal in my East Coast travels.
I certainly agree with "poor industrial performance" and with a lot of what you are saying.
I think there is too much uncertainty to know for certain what is going to happen in the coming 12 to 24 months. I personally have an upbeat outlook.
Just came out of Covid, 2 year back log on items is going to take along time to catch up.

My wife battles with this every working day of her life, dealing directly with factories all around the world getting time critical products shipped to companies here in the USA. Nothing much has changed over the last two years of her decades long experience doing what she does.
China locked down again, Shanghai ports backed up leads to USA companies in the same industries backed up but at least the USA industries are doing well except as you know, cant keep up with production and hiring. But all this will change, so far demand from USA companies is very strong.

My personal feelings are households are flush with cash that they can not spend (or borrow) and once the items are available the rebound will be swift. Wages are off the wall when entry level basic jobs like pouring coffee for customers or packing boxes for Amazon or stacking paper towels at Target makes $20 a hour.
I think this is different from other points in time, normally the household runs out of spending money and that transpires to lack of demand.
Right now the demand is there but the product isnt. The problem is though, the homes are flush with cash ands willing to pay extra = inflation.

I do think to a small degree, long term we as a nation will be better off as companies will not be tying their entire product chain to China and look to diversify their supply chain. But who knows, that can go out the window as soon as things go back to normal.

Interesting times for sure. Just this mornings thoughts drinking my coffee before heading to the gym in my now retired life. ;)
 
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For those who follow the Cass Freight Index.
  • “After a nearly two-year cycle of surging freight volumes, the freight cycle has downshifted with a thud. It’s possible the April data include some indirect impact from lockdowns in China, but with container ship backlogs still off North American ports, the direct effects on finished goods imports seem more likely in the June/July timeframe.”
  • “The prospect of freight recession is now considerable, as substitution from goods back to services spending picks up pace, and as inflation slows overall spending, particularly via higher fuel prices and by pressing up interest rates.”

https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/april-2022

I follow the trucking industry VERY closely, I’ve mentioned this a few times over the years here on BITOG. The entire American economy revolves around trucks. Truckers see the economy change before its even mentioned on the news or financial channels.

What do CB talking, gear shifting, jake braking truckers know about the economy that the important folks on TV are refusing to acknowledge ?

:unsure:

My personal feelings are households are flush with cash that they can not spend (or borrow) and once the items are available the rebound will be swift. Wages are off the wall when entry level basic jobs like pouring coffee for customers or packing boxes for Amazon or stacking paper towels at Target makes $20 a hour.
I think this is different from other points in time, normally the household runs out of spending money and that transpires to lack of demand.
Right now the demand is there but the product isnt. The problem is though, the homes are flush with cash ands willing to pay extra = inflation.

I do think to a small degree, long term we as a nation will be better off as companies will not be tying their entire product chain to China and look to diversify their supply chain. But who knows, that can go out the window as soon as things go back to normal.

alarmguy,

I disagree with you that households are flush with cash.

A good 50% of the country is living paycheck to paycheck and have less than $2000 cash in the bank for an unexpected emergency. Like I said before, an exponential increase in credit card use and balances now that their stimulus cash has dried up and folks have no other choice than to use credit cards to make ends meet.

Consumers have no other option than to “pay extra” for everyday needs like: food, housing, gasoline, utilities, baby formula, diapers, clothes, eyeglasses, pharmacy medications, vehicle repairs / maintenance, etc….

I do agree with you that we need a lot more manufacturing here in the USA, but unfortunately that will increase the prices of everything made here compared to overseas manufacturing.

The ‘Walmart-ification’ of our economy started over 50 years ago….

.
 
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alarmguy,

I disagree with you that households are flush with cash.

The ‘Walmart-ification’ of our economy started over 50 years ago….

.
It’s ok to disagree, I don’t disagree with everything that you disagree with me on and understand your point of view.

With that said my position is industry can not keep up demand regarding two major purchases, automobiles and homes.

I still think this economy has a way to go and not as bad as the bad news press makes it out to be.
I find the modern media a joke, latest buzz word = baby formula and you can bet they are working already on the latest misery story to replace that one.
People being played by the media and the public still doesn’t get it,
According to the media, life is miserable and there will never be a day when they report that life is good. They have the public hook, line and sinker.
Employment at a high, wages at a high as well. Life has never been better for mankind but people listen to misery from giant corporations peddling “news” for profit.

True WallStreet does not live in the present but the future, so how long it lasts is an unknown but I think longer than most expect and even when it ends life on planet earth has never been more easy in the USA.

Ahhhh! Walmart earnings today! I used to get the jitters in WMT been long on it a while now, since it was in the double digits.
It’s been good to me and I expect it to stay that way, after all the “misery” in the country people may have to shop there instead of Publix 😗
“Living paycheck to pay check” is a choice many people make by wasteful choices in life. No one starves in the USA with the government safety net a first in mankind history.

Wow, just posted this from my phone laying in bed in an awesome corner suite at the Sandestin Beach and Golf resort. Outstanding weather, Snuba and snorkeling today so have to get up early, Fishing Thursday, Wed undecided .. haven’t been in BITOG much and best part of a vacation now a days is ignoring the pathetic news corporation’s peddling misery.🙃

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Oh well, there goes Walmart stock, down the drain for a little while, hopefully not longer. Until yesterday is was up around 2% YTD vs S&P down 14%... its possible it might join the S&P group as earnings had a big miss.
Than again, maybe it will be short lived after a good hammering, at least revenue was higher.
Ok, back to vacation time for me, never and out ... ha ha
 
The beginning of the end for the housing market?

Mortgage Demand drops 12% in the latest weekly snapshot. Demand is down 15% from this time last year.


https://www.cnbc.com/2022/05/18/weekly-mortgage-demand-from-homebuyers-tumbles-12percent.html
Well I’m kind of set with my home and where I live but at the same time I’m kind of looking for a housing crash as I sit here in a suite overlooking the Gulf with its amazing turquoise water in northern Florida, my wife and I would really like to look at some homes here and consider moving but I just can’t wrap my head around the current prices and what they are offering at those prices.
As far as the stock market I resigned to the bashing I am currently receiving but I’m not concerned as I’m invested in conservative huge slow growth companies with solid returns over time.
Do I wish I sold when I was at incredible highs a couple months back? Yes but I’ve felt that way in the past as well when the market looked bad and why I’m at the point in my life of conservative safe investing with solid long term gains.
(Hopefully)
It only stands to reason, higher mortgage rates WILL reduce home prices. I looking forward too it.
If you are a buyer who is going to have a mortgage then in the long term you will be better off paying a higher interest rate and lower home price. But right now we’re at the threshold where home prices are high and mortgage rates are high eventually the mortgage rate will push down the home prices because the public can’t afford the payment.
It’s always about the payment either the bank is getting the money in interest rates or the homeowner is getting the money in house price. Right now we are at the point that both prices are high because interest rates have recently gone up, we will get to the point now where homeowners and builders will have to lower their prices to sell homes and that’s a good thing all around.
 
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This question is about short term investments and probably has been covered in other BITOG threads.

Is there somewhere better to park a good chunk of cash besides a low interest bank savings account? "Good chunk" is relative, but lets say 25 to 75K that you want easy access to AND collect a bit of interest.
 
doitmyself - not really

I just cashed out everything, the straw that broke the camel's back --- Target, WMT, and LOW earnings all in the toilet. If people are not spending their money at those stores - they are not spending. Just my guess - the market is headed for a few rough months...much rougher than the past few.
 
This question is about short term investments and probably has been covered in other BITOG threads.

Is there somewhere better to park a good chunk of cash besides a low interest bank savings account? "Good chunk" is relative, but lets say 25 to 75K that you want easy access to AND collect a bit of interest.


Answers will vary but it depends on the time frame you want this money parked. If less than two years then a money market is pretty much the answer. Don’t expect any interest from anything safe right now.
 
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