Month: June 2022

#54 – Austin, Markets, Housing, Elon/SpaceX, Elon/Twitter!

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Austin Texas bachelor party. I love that town. 

Dr. Emperor of masks and vaccs Fauci has Covid; and he’s been vaccinated 4 times. 

Chesa Boudin the progressive DA of the most progressive city was recalled. Are people actually getting tired of crime? 

Markets: 

  • S&P down 23% and Nasdaq 100 down 30%. 
  • Fed just raised 0.75% this week. First time since 1994. Now we’re at 1.75%. 
  • Inflation. Gas. War. 8.6% 100% up for gas. News flash: interest rate hikes don’t drive gas prices down. 

Credit card companies make a lot more money when gas prices double. Their revenue doubles. Buy Visa and Mastercard?

Housing: 

  • In Jan 2021 30 yr mortgage rate was 2.65%. Avg home price $402k. 
  • Today. 5.78% and $570k. 
  • 20% down payment. Monthly payment is $1,294 to $2,671. 106% increase. 
  • Rates are 3% higher. So $500k loan. $15k/year or $1,250/mo. 

I personally just saw more houses for sale on Zillow in my neighborhood, more than ever. 

USA Today removes 23 articles after a reporter fabricated sources. USA today is allegedly a “fact checker” for Facebook and possibly Twitter. Musk at Twitter All-hands.  

Elon Musk: 

SpaceX fires employees. No woke ass bullshit!! 

NYT reporting on letter. Brian Armstrong

“The letter, solicitations and general process made employees feel uncomfortable, intimidated and bullied, and/or angry because the letter pressured them to sign onto something that did not reflect their views,” Ms. Shotwell wrote. “We have too much critical work to accomplish and no need for this kind of overreaching activism.”

Twitter: 

  • So casual. Looks like he is on iPhone and some dude walking around in kitchen in background. 200m daily users. 7.8b Gap. 8b in world. Wants 1b at least. 
  • How to verify. $3/month. 
  • Payments. 
  • Entertaining advertising.
  • Video: Talk about how to make Twitter better! https://www.youtube.com/watch?v=FLvTcRrzy20
  • Video 2: How do you define success. 

Netflix take some lessons! TikTok!! 

Electrician and immigration. 3 strategies: 

  • PHD’s. 
  • Lower labor. 
  • Refugees. 
  • AND Strong borders. 

Tesla stuck in the mountains. https://twitter.com/ShowersJacob/status/1537556676558979072

#53 – Mike Greene – CEO of Resi-Shares & Real Estate Expert

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Mike Greene – CEO of Resi-Shares & Real Estate Expert

Mike Greene is innovating and changing the future of single-family home investment opportunities! 

Mike Greene is the CEO of Resi-Shares; a firm that is leveraging data, technology, and financial innovation to deliver systematically diversified appreciation and rental income from single family homes.

Mike and I go back a long way having attended the MBA program at UC Berkeley.  

Mike has worked his entire life in real estate including sell-side banking, buy-side and finally at HouseCanary, a company leveraging big data and AI to provide actionable insights on real estate. 

In this episode we talk about: 

When Mike co-founded his business Covid hit and he thought it would be a perfect time to invest in single-family housing, but the markets sky-rocketed and real estate prices went up. Turned out the timing was terrible, but like any great entrepreneur he persevered, learned a lot and survived! 

What his company Resi-Shares and other institutions are doing in the real estate markets: BlackRock, BlackStone, and investing in real estate investment trusts (REIT’s). 

We spend a lot of time talking about Bay Area real estate (at my admittedly selfish request). 

  • Should you buy or rent?
  • Should you sell or rent if you’re moving? 
  • What’s going to happen to Bay Area real estate, given economy and interest rates.  

We’ve seen a migration out of California, but housing consistently goes up in price. We dive into the why. 

Recommendations discussed: 

#52 – Recessions?, Invest NOW, Elon/TSLA, Ford, Hunter B.

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Markets: 

S&P 500 down 15% and Nasdaq 100 down 23% YTD. 

Housing Market: 

  • Mortgage rates from 2.5 to 5.5%. $1m loan at 3% is $30,000 per year, Double that to get pre-tax earnings of $60,000. That means you need to be earning at least $60,000 more per year to cover mortgage interest on $1m loan. 

There is a silver lining to this market. Big downturns every decade or so make for the best 2-3 time opportunities in life to invest. 2022 is it. Fund your 529’s. Dollar cost average in.  

  • Sept 2000: 1520 – 800 Oct 2002. 47%. 
  • Oct 2007: 1565. 95% (doubled money in 5 years). 
  • March 2009: 712. 54% down. 
  • Jan 2022: 4800. 574%. Almost 6x. 13 years. 
  • May 2022: 3900. 20% down. 

Tesla: 

Ford: In another headline: Ford to Create Thousands of Factory Jobs, Invest $3.7 Billion in EV, Gas-Engine Production

  • The 3.7 multibillion-dollar investment will go to retooling factories to build newer versions of gas-engine models, such as the Ford Ranger pickup and Mustang sports car, the auto maker said Thursday. 
  • 55,000 Union auto workers. 

In Closing; 

#51 – GunLaws, Layoffs, Economy, Crypto, Apple, TSLA, NFLX, Ricky

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Reasonable Gun Laws. Background checks! Mandatory insurance. 

80% of Americans agree on a lot of things. 10% extremes driving the political conversation and divisiveness. 

Elon Musk just said this again that if he owned Twitter 80% would like it, but 10% extreme left and right would complain vehemently. 

Economy and Markets:

Huge rally this week: Stocks up 4% in 4 days. 

  • Layoffs at PayPal, Netflix,  Robinhood and Bolt (one click startup payment company)
  • Hiring Freeze/slowing at Meta, Uber, Coinbase, Microsoft, Nvidia.  
    • I have not traded on Coinbase in 2 months. 

Fed minutes indicated will still increase 0.5% in June and July. But then open to “wait and see”. 

Housing market: 

  • Mortgage rates up: 2.5% to 5%+ 
  • Home Sales are down Jan to April. 6.5m to 5.6. 15% down. Spring/summer should be up!? 
  • Single family starts lowest since Oct 2021. 
  • Mortgage purchase applications slowest since May 2020. 
  • Homebuilder sentiment lowest since June 2020. 

Energy:

  • Gasoline up 80%. 

Crypto is not a hedge: 

  • Crypto market cap has fallen from $2.3t to 1.3t. 
  • $4.5b fund at Andreeson Horowitz. A16z
  • My Luna is $0. 
  • BTC. Down 56%
  • ETH. Down 60%. 
  • DCA in still recommended. 

Apple holding up well in the News. 

  • $144, down 21% YtD. was down 25%
  • Flat iPhone sales. 220m, same as 2021. Expected 240. 
  • Tormer Tesla Autopilot software engineer who left to join Apple’s secretive car project last year, has left Apple to join Luminar.
  • Lidar vs. AI real cameras. Tesla showing different types of cars, doors open, garbage cans, cones, traffic lights…insane! 

Tesla: 

  • Diner. Submitted plans for a Tesla diner as part of charging station in Hollwood. 
  • 3700 charging stations globally.
  • Elon committed to buying Twitter.  

Netflix: 

Netflix Games suck. 

  • Stranger Things. Can it have a Squid Game effect? Its been 3 years and only show streamed/seen more was final episode of GoT. 

In Closing: 

#50 – Recessions, Stocks, CPI, Tech, NFLX, TSLA/Twitter, Elon interview!

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Market update: 

  • S&P 20% and NDX 29%. Largely propped up by Energy: Up 
  • Inflation data: 8.3%. 
  • Fed at 0.75% – 1% and raise 0.5% in June and July. Will have to stop before mid-terms! Q4 rally? 
    • Federal Reserve is a joke. Powell keeps talking about controlling inflation. 
    • This is going to 
  • Coming for “the Generals”
  • Crypto. Terra (Luna). Bitcoin at 29k down from 68k. 57%. 
  • Consumer Sentiment index.  
  • Target, Costco, Walmart, Lowes, Home Depot, Koels: All down 25-40%.
  • FATMAANN. All down over 25%. Shooting Generals.

#Netflix stock down 73% from high and making some strategic adjustments. Would have been nice to see 6-9 months ago. But, better late than never:

1. Content: Focus on higher quality.

2. Content: Testing live TV.

3. Content: Staggered release. Stranger Things in Q2 and Q3.

4. Revenue: Advertising in Q4.

5. Revenue: Crackdown on 100m households sharing passwords.

6. Culture: “You may need to work on titles you perceive to be harmful. If you’d find it hard to support our content breadth, Netflix may not be the best place for you.” I guess they realized “get woke, go broke”. Applies to (1) above as well.

7. Culture of Finance: “Spend our members money wisely.” Layoffs terrible, but sends a message of fiscal responsibility (or is it a message that Q2 is going to be even more awful than forecast!?)

To be fair, even if Netflix was growing subscribers at decent clip, the stock would still be down 30-40%. But anything beyond that is Management’s responsibility. 

  • Tesla. 
    • Tesla removed for S&P ESG Index. 
    • Why buy Twitter. Play clip 1:
    • Twitter. Bots. <5%. 
    • Says he’s voting republican.
    • My take: similar. Voted Dem for niceness. 
      • Pro borders and pro immigration. 
      • Pro law enforcement. And pro-freedom. 
      • Social programs. Helping homeless. But not feeding them crackpipes. 
    • Tesla at All-In. Play clip. 
    • This is pretty incredible. This means Tesla’s operating income of $3.60B in Q1 2022 was slightly higher than Toyota’s ($3.56B), the largest automaker in the world by vehicle volume.Toyota sold ~2,759,000 vehicles in Q1 vs Tesla who sold 310,048.
  • In lighter news: 
    • My Tesla service story.  
    • Teen tracking Elon’s jet is now tracking Zuckerberg. “He tracks us, so we should track him. 
    • Lincoln Lawyer.