The Wall Street Journal's Will Parker, Konrad Putzier and Shane Shifflett explain the fate of Jay Gajavelli, and investors like him across America, who are reeling after using low-interest rates to fund their investment empires. They write: Few investors rode the pandemic-era housing boom as high as Jay Gajavelli. Fewer still have fallen as far. Before Gajavelli found his real-estate career, the 61-year-old immigrant from India was just another information-technology worker, putting in 60-hour weeks for a middling job in Dallas. Last year, Gajavelli’s company owned more than $500 million … [Read more...]
Archives for May 2023
Letter to the Federal Reserve Chairman from Your Survival Guy
Dear Chairman, Millionaires next door have questions—lots of them. But we’re not getting answers. Something earth-shattering is going on. And it seems no one in power is giving it much thought. Please review the chart series below. It looks like a bullwhip. A cliff. A ski slope. It’s dramatic, to say the least. How will this end? Your thoughts on the matter would be appreciated. Thank you. Warm regards, Your Survival Guy P.S. Tomorrow, read about American investors' last line of defense. Originally posted on Your Survival Guy. … [Read more...]
Is Japan Rising Once More?
In a long piece in the Financial Times, Leo Lewis examines Japan's current ascendance and wonders if the country is truly turning itself around, or if this is one more false alarm. He concludes: The problem with the “rising sun” thesis is that, in several cycles and across multiple decades, it has been rapidly followed by a decisive reversal as concerns around the shrinking and ageing population have resurfaced and derailed brief spurts of optimism. Rallies are always strongest in Japan when there is a pro-reform regime in government and a perception that there will be action as well as … [Read more...]
When Did You Become Serious about Your Money?
In my conversations with you, you tell me when you became serious about money. If it didn’t happen when your dad, grandad, or friend showed you Richard C. Young’s Intelligence Report, it happened when you yourself became a subscriber. You needed to make good investment decisions for your retirement. Also, when you subscribed to Dick’s letter, you signed up for a handful of others too. Over time you let the other subscriptions lapse, you tell me. But you kept subscribing to Dick’s letter. His was the one you liked most because you felt he enjoyed writing to you and cared about your success. … [Read more...]
Can Western Automakers Survive in China?
As local manufacturers catch up to and overtake offerings from Western automakers in China, is it still feasible for foreign companies to compete in the Middle Kingdom? Peter Campbell reports in the Financial Times: When a market turns against you, how should businesses respond? This is the question being pondered with some urgency across the automotive boardrooms of the world. The market is China, the world’s largest auto market. It was once the breadbasket of the industry, flush with a hugely profitable pool of newly-wealthy consumers, many of whom were eager to flaunt their status with … [Read more...]
“I Came from Nothing,” He Said. “I Mean Nothing.”
It was a sad end. He sent a thoughtful note. The window had closed. It wasn’t anyone’s fault. The timing wasn’t right anymore. They weren’t going to become clients. Like all relationships, we spent a considerable amount of time getting to know each other. We talked about his savings accumulated over close to eight decades of living. He’s the millionaire next door. But no one in the neighborhood would know it. “I came from nothing,” he said. “I mean nothing. We had a roof over our heads. Sure. But that was about it.” When you grow up like that, it’s something you never forget. The … [Read more...]
Private Debt Funds: More Risk than Meets the Eye
Private debt funds seem to be the latest too-good-to-be-true asset class on Wall Street. Private debt funds claim to offer high returns with minimal risk. One fund even shows that its investors have earned ten units of return for each unit of risk. U.S. stocks have historically offered about a half unit to three-quarters of a unit of return for each unit of risk, so this private debt fund is off the charts in terms of return to risk ratio, or is it? Unlike public investments, private assets such as private debt do not trade in public markets, resulting in smoothed prices that do not … [Read more...]
“Tell Me,” How Are You the Millionaire Next Door?
Don’t look now, but you’re the millionaire next door. You’re the one they’re talking about. “How do they do it? They’re off on another trip,” neighbors wonder. But you don’t think like that—like a millionaire—you’ve always lived this way. It’s your way of life. You’ve saved ‘til it hurts, paid taxes, and spent what you needed—but never too extravagantly. You wondered, a long time ago, how the other guys “afforded” the new trucks and toys. “I haven’t seen them in years,” you say to yourself now. “Wonder what they’re doing.” Chances are, if you’re reading Your Survival Guy, you know what I’m … [Read more...]
Can Auto Sales Drive the Economy?
Sales are rising at motor vehicle dealers as consumers shift spending away from home furnishings toward new automobiles. Justin Lahart reports in The Wall Street Journal: What Americans are spending their money on is changing. But they keep spending more, nonetheless. And in one crucial category, there is reason to believe growth is just getting started. The Commerce Department on Tuesday reported that retail sales rose a seasonally adjusted 0.4% in April from a month earlier after slipping 0.7% in March. That was less than the 0.8% economists polled by The Wall Street Journal had … [Read more...]
Starving for Fixed Income? How Can I Help?
Starving for fixed income? Looking for a stream of cash you can live with and live on? I hear you. When rates are this high, I pay attention. Because with this generational opportunity come lots of decisions. You have a chance to get your lazy cash out of the bank. You have an opportunity to park it in my favored Fidelity Treasury Money Market, yielding around 4.5% today. When you move your lazy cash from the bank and invest it, you get paid a handsome rate for your efforts. Isn’t that the way it’s supposed to work? You turn the tables. You invest. You win. I like that. What about … [Read more...]