Let it rain, let it rain, let it rain. After one of the driest spring seasons I can remember, the rains arrived with June on the calendar. We are getting ready for a month on the road, so let it rain all it wants down here in Florida……though I apologize to the tourists! Sweltering summer weather combined with crowds of annoyed/tired tourists bring back nightmares from my childhood, and are also the reason I avoid the Orlando theme parks. No matter, it’s time to see some old friends and have some new experiences.
As you may recall, in 2016 we took two long road trips over a 6 month period. The first jaunt was about 7,000 miles and covered 17 states over about 4 months. A couple months later we took an outstanding road trip out to Colorado, and had a ton of fun in spite of a few bumps. This time around we’ll be gone for 4 or 5 weeks, and making a loop up to Wisconsin and then out to the plains states. It should be fun, but it does start some pretty hilarious conversations. For instance, which of the Little Man’s cache of toys do we take.
Me: Which toys do you want to take in the car son?
Little Man: The really tall ladder.
Me: Um, no. Which of these toys (gesturing to the toys, tools, bike and scooter Mrs. IS thoughtfully laid out.)
Little Man: I want the tall ladder, and I don’t want to take Daddy’s car.
Me: Oh no? What car do you want to take on the road trip?
Little Man: I want to buy a really big tow truck, and put Daddy’s car on top.
Seriously happened, and ultimately resulted in a bit of a meltdown. Haha, the Little Man is officially a “three-nager”. You can’t fault his logic though his practicality may be a bit lacking. He knows he likes big trucks…..and we would have redundant transportation if we drove a tow truck with a fully functional sedan on the back. Such a rig would be awful hard on the wallet though.
Low costs are one of the reasons we love our road trips. Typically our trips only cost about $1,000 more dollars per month than if we were at home. That statistic doesn’t include wear and tear on a car, but a car will eventually breakdown whether it is buzzing around your home town or out experiencing the open countryside. I should also mention another way we keep costs down is by generally staying with friends or family…..and why wouldn’t we. Those are the relationships that help inspire these trips. They are the people we want to see. All the better if we kill two birds with one stone. People and experiences you enjoy…..isn’t that what Flexible Independence is all about.
So I am sitting here enjoying one of my frugal beers of choice……which is usually either Killian’s Irish Red or Yuengling Black and Tan……listening to the rain…..and looking forward to the open road. As much as we travel, we don’t really bring a bunch of stuff. One family family member is notably absent from this trip however, our beloved Black Lab. Earlier today I was thinking about the tens of thousands of miles she and I have covered together over the last 10 years. Long before I met Ms. IS, she was my traveling companion. She will be sorely missed.
Our preference continues to be allocating capital to long term investments. Given the current investment environment, we have set aside $15k-$20k to make shorter term trades. I WROTE about a few of the trades last week. Since that time, the small gold miner we bought as risen substantially while we sold out (tiny gain) of the agricultural processor we had bought. Both were swing trades, and we continue to look for other opportunities. Later this week could be interesting, so stay tuned.
A very interesting concept from the world’s largest retailer. For years Walmart has used a low margin high volume business model, and relied on scale to keep competitors at bay. In order to grow the top and bottom line, Walmart grew the store count year after year. Store locations in the US are very near saturation, and the growth of physical Walmart stores hasn’t translated very well in many foreign markets. At the same time they have more competitors than ever, and just as much pressure to deliver low prices. I am pretty impressed that management has recognized the need to invest in the future, and the company has been putting a ton of CapEx into those ideas. I am not a buyer of Walmart’s stock, but this article is about a new grocery vending machine concept that Walmart is trying out. I could see it working out IF customers become comfortable with having just a few product offerings. Think of it like an automated Aldi. Would you shop there?
For the last several years, China’s debt load has been a hotly discussed topic. Some high flying hedge funds have nearly gone bankrupt as the Chinese collapse remained elusive. The discussion has intensified over the past three weeks, since Moody’s downgraded China’s debt for the first time in decades. This article offers the counter argument to the China Bears. While I don’t know what is going to happen, I am skeptical of the argument that a recently rising Chinese stock market means smooth sailing ahead for the Chinese economy. Remember that Chinese shares comprise as much as 25% of many emerging market ETFs…….and that those funds have seen tremendous investment inflows over the last few months. I’m sure you’ve heard the old adage about a rising tide lifting all boats.
This interview with Blackstone’s cofounder and CEO was very interesting, just be sure to ignore the political jabs This guy is a living legend, who has helped grow Blackstone into an enormous and profitable company. This interview isn’t about picking stocks or the like, but it’s a solid read if you are interested in business structures and management. (Raising my hand, guilty as charged.) Numerous ideas caught my attention in this interview, but two lessons really stuck with me. 1) The oft repeated, “do what you love.” 2) Hire the best (most talented) people so that your business will thrive…….you will trust them……..and you don’t become a bottleneck and impediment to business success. These guys built a great platform, utilizing great people, and it doesn’t NEED the founders any more. Corporate success is when your business thrives and outgrows you.
This read is about an idea that San Francisco’s Fed President John Williams is touting. The idea is interesting conceptually, but would require a significant paradigm shift on the part of market participants. Essentially, he is suggesting that the Fed should vary their inflation target annually….. based on the past rate of inflation. So lets assume hypothetically that we get a 1% inflation reading by the Fed’s metrics for the next couple years. Their official goal is 2% annual inflation of course, meaning that they have undershot by a full percentage point for two consecutive years. At that point they could decide to have a revised official inflation target of 3.2% (or so) in order to make up for the prior years results. Citing this new target, they would need to begin new stimulative measures to goose the economy. My issue with this concept is that while the ACTUAL rate of inflation is important, it is not nearly as important as the EXPECTED rate of inflation. The expected rate of inflation is what affects consumer (and corporate) behavior most, in my opinion. I think a varying and handicapped message from the Fed would do more harm than good. Thoughts?
Disclosure: This article is for informational purposes only and should not be considered a recommendation for anyone to buy, sell, or hold any equities. I am not a financial professional, but you should consult a financial professional before making (or changing) any investments.