Clients & Friends,
August was a quiet month in terms of market returns and economic data (more below). We also saw heart-wrenching videos of folks trying to flee Afghanistan as the US's departure allowed the Taliban to retake the country. No exit would have been perfect but this certainly did not look like a healthy way to handle things. I can only imagine the level of frustration and anger the people of Afghanistan feel towards Americans.
Otherwise, not a lot happened in August so this update is short and sweet.
Housing
Turning to the world of housing, prices keep going up. The percent of builder share (the share of houses built by a publicly-traded homebuilder) hit a ...
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Clients & Friends,
It's been a busy month with the delta variant running rampant in parts of the U.S. and world, and renewed concerns over reimplemented lockdowns taking the center stage. The hospitalizations appear overwhelmingly concentrated by those who are unvaccinated. While the amount of people still not vaccinated is concerning, the vaccines are now battle-tested against delta with strong results. Hopefully those who are not vaccinated will take notice.
In economic data, Q2 GDP was released and came in at 6.5% which was materially lower than the 8.4% estimate. A large reason for the miss was related to inventories and supply chain issues. Meaning, inventories were drawn down but not replenished as supply chain issues prevented ...
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Clients & Friends,
June was a relatively muted month so we'll keep this month's update short and sweet. Some trends have persisted such as housing prices which continue to climb while inventory levels are at historical lows. The hottest debate now is whether inflation will be persistent or transitory. Battle lines are being drawn and portfolios are being adjusted. But even the Google searches for transitory may prove transitory ?.?
According to this survey by BofA, the transitory gang has more members.
A key moment was when Jerome Powell made hawkish comments on the 16th on discussing scaling back mortgage bond purchases and rate hikes in 2023, which is sooner than expected. Long term bond yields spiked ...
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First off, let me add a disclaimer that I'm not an estate planning attorney or CPA and that everyone should seek counsel from one for your own unique circumstances. The information herein is for information purposes only.
As the election and 2021 nears, we are all aware there may be a change in administration and with that, a potential change in estate tax law (amongst other things).
Now, BDIT's (pronounced bee-dit), AKA 678 trusts, are currently very popular due to their flexibility to freeze the value of an asset or one's estate. In most trusts, the person setting them up (grantor) typically gifts something of value for the benefit (beneficiary) of a spouse, children, charities and other people. There are countless ...
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I made a decision in December to switch from monthly updates to quarterly ones and of course it's been one of the most active quarters I've ever experienced. I truly hope everyone is safe, healthy and most importantly finding productive ways to spend the time in quarantine.
As I write this update on Saturday from my house in Austin TX, the virus continues to ravage our communities and the global economy. The Fed has embarked on an unlimited monetary stimulus while the government has passed a $2 Trillion stimulus package with likely more to come. There's a lot of pain out there in the world and while I do get a sense of camaraderie similar ...
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Monthly Recap
After September's noisy month of being dominated by WeWork and a potential impeachment of President Trump, October was equally as busy with a Fed rate cut, continued impeachment discussions, a bailout of WeWork by Softbank and much much more. The markets continued their march higher as the economic expansion continues to break records with each passing month. But one must wonder how much longer can things continue on this path. Negative rates does not make much sense and is a very big experiment most of the developed world is engaged in. My hypothesis is it's not going to end well. A wise man once said that we often meet our destiny on the ...
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Monthly Recap
Another busy month of data and dram with the markets dropping and trade war escalating. To recap, here are just some of the noteworthy events and stories from May:
President Trump increased tariffs on Chinese goods to 25% which caught the markets off guard. China responded with their own set of tariffs on around $60B worth of US goods. This continued escalation adds uncertainty at a fragile time in the economy and will surely knock some growth off GDP. Beijing’s threat to use its dominance of rare earths in the trade war risks serious disruption to U.S. industry, by starving manufacturers of components commonplace in everything from cars to dishwashers and military equipmentWith the trade wars front ...
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Monthly Recap
February we witnessed the same recurring themes and headlines in the US and abroad. The equity markets posted solid gains as the markets seem to believe that the Fed has got it's back once again. To recap, here are just some of the noteworthy events and stories from February:
Amazon pulls out of NYC due to political backlashThe U.S.’s financial burden is growing despite a strong economy. Total public debt climbed to more than $22 trillion as of Feb. 11, according to a Treasury Department report. The US avoided another government shutdown, however, the President then declared national emergency to use funds to build the great wallBernie Sanders announced his candidacy for the presidency in 2020Trump met ...
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What does it take to spur private capital to invest in areas that are struggling to create jobs and develop their communities? Would a tax break on capital gains realized by investors be enough to inspire them to reinvest those gains in low-income urban and rural communities across the country? Congress has decided to give that theory a try by creating something called Opportunity Zones: designated areas of the country that are crying out for long-term investments but which, until now, have offered little incentive for such speculation.
The idea, established by Congress in the Tax Cut and Jobs Act of 2017 (TCJA), offers a mechanism that enables investors with capital gains tax liabilities across the country to receive favorable ...
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As a startup that is raising capital, the amount you own today of your company will decline depending on how much capital you raise, how many times you raise, your pre-money valuations and any investor preferences along the way. This is known as dilution and being able to map this out from day one and in multiple scenarios is important so that, as a founder you can protect your equity (possibly).
As more funding rounds occur, early investors will also become diluted – not just the initial founders. There are key dilution definitions each founder needs to fully understand.
Keep in mind that there may not be anything you can do to prevent yourself from being diluted over time. That ...
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