Discussion Board 6-21-2021

Read an interesting article about the impact of deficit spending and and the Fed’s efforts to hold down interest rates. While I firmly believe that both efforts were necessary and probably single handedly helped us avoid an economic depression in 2020, make no mistake these policies clearly benefit the wealthy over the poor.

“QE inflates assets and commodity prices. The rich benefit from the first, and the poor are hurt by the second. The same applies to most government spending programs. The rich employ accountants and lawyers, and find ways to benefit from changes in the law, and lobby for exceptions to policies that seem to favor “soak the rich.”

Here is the full post: https://alephblog.com/2021/06/18/estimating-future-stock-returns-march-2021-update/

So current efforts to address just some of the wealth inequality in our country like higher minimum wages, access to affordable quality child care, health care and education, forgiveness of student loan debt as well as fair taxation of the wealthy, are all really just small things that we can do to try to tip the scales, just a little, to make our country a fairer and more just place to live.

Markets are toppy and the Fed is now talking about, talking about, pulling the interest rate rug out from under us. Soooo, what to do now?

Seems like the markets may have at least one more push up but I really really don’t want to be the one holding the growth stock bag when this turns. I’m staying away from the 60+ times earnings of the FANG and other tech names. If I do take a position in these areas I almost always sell some protective calls and I keep my investment time horizon short.

Most of my investing money is in various retirement plans so taxes are really not a concern and this does give me some flexibility and advantage as I can move in and out of names rapidly if I think the story is becoming less favorable. In addition, Fidelity’s “no commision” trading doesn’t penalize me for frequent versus lower turnover trading. (FYI – my other brokerage, “IB” also purportedly have no commissions, but they sell their order flow to 3rd parties and I have definitely noticed that my fills in FIdelity are far more favorable than in IB. Accordingly, I’m fairly certain that frequent trading in IB is a more expensive proposition than Fidelity. Regardless, I keep my IB account because they are more liberal in the tyes of securities that I’m allowed to trade (for example I can trade AUS warrants at IB but not Fidelity).

So for Monday? Darren points out that ACRE fell 12% last Friday alone. I owned it but sold about a week ago for a nice gain when its RSI went over 70. Now that its fallen back, I’m looking to reopen a new position. Also looking to add to UNIT, an infrastructure financing play. Finally going to probably double my AUS SPAC investment if we drop below $9.90. It closed at 9.92 on Friday.

I have a ton of cash right now. Just not seeing a lot of attractive buys?

Board is open.