Alchanati Campbell & Associates
Beauty and destruction. There is beauty in people, in nature, in food, in conversation, in the formation of family, in the words of books, in the scripts of songs, but, there is also destruction. We destroy and sometimes we cannot rebuild. How did this happen? When did we become so carried away with profit, growth, and innovation? Forget the shareholders; nature should have majority vote.
Global warming is what we caused. Human activities are estimated to have caused approximately 1 degree Celsius of global warming above pre-industrial levels (1 Celsius = 33.8 Fahrenheit). What would happen if the earth’s temperature rose 1.5 degrees Celsius above pre-industrial levels? Increased levels of drought in some areas, heavy precipitation in other areas, and extreme temperatures in many other regions. Sea level rise will have a more visible impact on islands and deltas flooding towns and cities like Miami. Species loss and extinction would increase. The average person generates 4.5 pounds of trash per day equaling to 1.5 tons of solid waste per year. All of this waste ends up in landfills, the ocean or at incinerators; being burned and breaking down and producing methane gas and CO2. Heatwaves in the artic, drought in agriculture-dependent countries, sea level rises causing towns to sink below sea level, a continuance in the extinction of species, the air becoming unbreathable, waterways polluted unable to drink… what good is paper money when we can no longer breathe from the trees that it was created from.
The Market. 36% of household heads between ages 24 and 32 owned a home in 2014. In 2005, the share was 45%. 20% of that decline can be directly attributed to an increase in student loan debt. California housing inventory increased 18% year over year (buyer’s market). The government shutdown is affecting 25% of the government (800,000 employees working without pay). A national emergency is most likely to happen. The shutdown is estimated to decrease GDP of the first quarter of 2019 by 0.3-0.4%. US politics are still very much uncertain. Fewer than 1 in 5 workers report they’re “very confident” their retirement income will enable them to actually live comfortably. Consumers (us, we, me and you) are feeling incredibly good about the economy but very nervous about where things are headed.
“The stock market is a giant distraction to the business of investing,” (John C. Bogle).John believed that mutual funds make no claim to superiority over the market averages. Nobody can consistently beat the averages over longer time periods. He believed in passive investing, and low fees and expenses. His biggest belief was that the customers’ interest always comes first. If you want to be heard, learn how to communicate effectively. Simple beats complex. Perfect is the enemy of the good. “To repeat, while such an index-driven strategy may not be the best investment strategy ever devised, the number of investment strategies that are worse is infinite,” (Bogle). If you want a successful business, you need to understand your customers. Thinking long-term can lead to extraordinary results. Saving is one of the most important investments you can make. Money isn’t everything. Rest in peace, John C. Bogle.
What life should mean to you. We experience reality always through the meaning we give it. Individual psychology has found no problems in life which cannot be grouped under these three main problems- occupational, social and sexual. Life means- to contribute to the whole. The meaning of life is to be interested in the whole of mankind and try to develop social interest and love. Only the individual who understands that life means contribution will be able to meet his difficulties with courage and with a good chance of success. The only individuals who can really meet and master the problems of life are those who show in their tendency to enrich all others. A full solution of the cooperation of two, each partner must be more interested in the other than in himself. This is the only basis on which love and marriage can be successful.
Brexit, in its simplest sense, is the UK’s efforts to leave the EU. It got its name from Britain and exit, making Brexit. In the most recent news regarding Brexit, we saw the British sterling lose 2.3% of its value against the USD on January 15th, leading up to the Brexit vote, before recovering its losses, and creating a new monthly high after the plan was turned down. The current state of matters in Britain is worrisome, with little to no resolution occurring between differing parties. Theresa May, Britain's prime minister, seems to be unwilling in changing demands, with her main points being on creating a border between Northern and Southern Ireland, a right for the UK to withdraw unilaterally, and a trade deal. After this deal failed to pass, they will have to go back to the drawing board and hopefully reach a consensus before the UK officials leave the EU on March 29, 2019, at 11 pm.
The shutdown. Despite concerns that the longest government shutdown in US history would delay the producer price index this month, the Bureau of Labor Statistics published the numbers on time. January’s numbers are currently set to be published February 14th. The producer price index or PPI measures the selling prices that producers receive for goods at all levels of output. While the PPI doesn’t cover all industries, it is the most accurate indicator of future CPI, has a long history of data, offers good breakdowns of commodities for investors and shows inflation which in turn can move the markets. The PPI for December showed the largest decline in prices in five months, likely a sign that the 13% price drop in gas has lessened the inflationary pressures on the economy. The largest gain in prices was seen in wholesale food which rose 2.6% while the overall cost of goods decreased 0.4%. Some economists argue that the PPI is too easily skewed by energy and trade margins and believe that the core rate is a far more accurate measure of inflation. For December, the core rate was flat, again showing that for the time being inflation has slowed down. Either way, the Feds are taking a "wait and see" approach before increasing rates again.
The Alchanati Campbell and Associates Team
WHAT'S UP FRIDAY? is a weekly newsletter that will give you a summary of "What's up?" on Wall Street, in the US and around the World written by The Alchanati Campbell and Associates Team. What makes us unique is we focus on long-term knowledge; knowledge that will still be useful to you 10 years from now.