INSIGHTS
AUG
26
COSTA’S CORNER
Starting today, instead of giving quotes that I either made up or borrowed from some movie or classic rock song, I am going to suggest some music to give a listen to. Some of the suggestions will be songs, some will be albums but what they all have in common is that they are great to listen to.
For today, get out your record player and put this vinyl gem on.
Stand by Sly and the Family Stone. This was the groups high water mark stylistically and musically. I chose this record for the impact it could potentially have on today's generation. It’s a protest record wrapped in a joyous celebration of life within the confines of a funk-jazz fusion unlike any record of it’s time.
There isn’t a weak song on the album and continues to be powerful and easy to listen to.
What’s not easy to listen to is the rhetoric about the trade war with China. Enough already, S--t or get off the pot as my father used to say. They have been at it off and on for almost 18 months and if you are like me, either tell China to get real and get it done or get lost.
Maybe I am looking in the wrong places but we have had this trade war accelerate or decelerate for what seems like forever and I really have not noticed any change in my spending. I am not seeing this huge inflationary impact that we all thought was going to happen.
I get the problems with the supply chain and that there are farmers that are having a bad time right now but my reality is this. I have seen nothing to make me call my senator or congressman and bitch.
The supply chain problem actually doesn’t affect too many people on a day to day basis. I buy one TV every 5 years, my cellphone is working fine and the price goes up on every new generation phone anyway so who cares if apple is paying 20% more for some components? The expectation of anyone purchasing a new technology every two or three years is that the prices will have risen exponentially anyway, trade war or not.
I like to think about things on a grass roots common sense level and this trade war has not shown up in any meaningful way, so stop with the threats of an imminent collapse of the US economy. I call BS to all of it.
Is it impacting China? Yes, I believe it is more so than the US.
Because something I purchase periodically went up does not impact me as it will impact someone who makes that product. It’s not my limited investment in something new that they have to worry about it’s the increasing number of people that may delay the purchase of a product that may have an impact on China. This slowing down of turnover means nothing to me but the manufacturers in China it is everything.
The greatest impact that I can see is not in consumer spending (which, surprisingly, is very strong), it’s in the equity markets.
Like every major or minor event, the market overreacts to signs and signals and if you enjoy the thrill of daytrading, this over-volatility was made for you but those overreactions are disconcerting to everyone else.
That's the damage the trade war is having on the US.
Unfortunately, this can’t be helped and investors need to ride out this nonsense for a while longer.
The bigger threat to equity markets is a recession and the talk is all about the timing. So being prepared for that eventual slowdown in the economy is what investors should be doing now. I like the take your profits now, buy your portfolio back a little cheaper later philosophy.
Which brings us to the model portfolio. Time to take some money and run as Crosby, Stills and Nash once sang.
40% Stocks
30% Fixed Income
30% Cash
For today, get out your record player and put this vinyl gem on.
Stand by Sly and the Family Stone. This was the groups high water mark stylistically and musically. I chose this record for the impact it could potentially have on today's generation. It’s a protest record wrapped in a joyous celebration of life within the confines of a funk-jazz fusion unlike any record of it’s time.
There isn’t a weak song on the album and continues to be powerful and easy to listen to.
What’s not easy to listen to is the rhetoric about the trade war with China. Enough already, S--t or get off the pot as my father used to say. They have been at it off and on for almost 18 months and if you are like me, either tell China to get real and get it done or get lost.
Maybe I am looking in the wrong places but we have had this trade war accelerate or decelerate for what seems like forever and I really have not noticed any change in my spending. I am not seeing this huge inflationary impact that we all thought was going to happen.
I get the problems with the supply chain and that there are farmers that are having a bad time right now but my reality is this. I have seen nothing to make me call my senator or congressman and bitch.
The supply chain problem actually doesn’t affect too many people on a day to day basis. I buy one TV every 5 years, my cellphone is working fine and the price goes up on every new generation phone anyway so who cares if apple is paying 20% more for some components? The expectation of anyone purchasing a new technology every two or three years is that the prices will have risen exponentially anyway, trade war or not.
I like to think about things on a grass roots common sense level and this trade war has not shown up in any meaningful way, so stop with the threats of an imminent collapse of the US economy. I call BS to all of it.
Is it impacting China? Yes, I believe it is more so than the US.
Because something I purchase periodically went up does not impact me as it will impact someone who makes that product. It’s not my limited investment in something new that they have to worry about it’s the increasing number of people that may delay the purchase of a product that may have an impact on China. This slowing down of turnover means nothing to me but the manufacturers in China it is everything.
The greatest impact that I can see is not in consumer spending (which, surprisingly, is very strong), it’s in the equity markets.
Like every major or minor event, the market overreacts to signs and signals and if you enjoy the thrill of daytrading, this over-volatility was made for you but those overreactions are disconcerting to everyone else.
That's the damage the trade war is having on the US.
Unfortunately, this can’t be helped and investors need to ride out this nonsense for a while longer.
The bigger threat to equity markets is a recession and the talk is all about the timing. So being prepared for that eventual slowdown in the economy is what investors should be doing now. I like the take your profits now, buy your portfolio back a little cheaper later philosophy.
Which brings us to the model portfolio. Time to take some money and run as Crosby, Stills and Nash once sang.
40% Stocks
30% Fixed Income
30% Cash