You, my fairly wealthy, highly successful reader, learned a long time ago how to harness a most powerful force: t-i-m-e. You saved ‘til it hurt and put money away with the faith that you might be in a better spot down the road. And now, when you look back on it all, you think, “No way I want to do that again. Not sure how I even did it. Can we change the subject?” Don’t worry, I won’t tell anyone. But saving ‘til it hurts does something magical. It puts the most powerful force into action. You put time on your side. You become a compounding machine, and without even knowing the miracle … [Read more...]
Archives for August 2023
Don’t Be Average, Be Better: Avoid This Mistake
You bet it’s an exciting time to be a fixed-income investor. But I’ve been telling you that for years. You don’t have to compound big numbers to be a successful fixed-income investor. You need to harness time and let the magic of compound interest do the heavy lifting. What never fails to amaze Your Survival Guy is how the average investor always wants more, more, more. When rates are at levels you can sink your teeth into with some peace of mind and comfort—look at treasuries—they reach for yields that are double that with terrible credit ratings. Good luck. Because it’s in times like … [Read more...]
Americans Are Increasingly Delinquent on Their Auto Loans
A mix of high interest rates and inflated prices are creating a weird situation in which, despite high employment, Americans are increasingly defaulting on their auto loans. Ben Foldy reports for The Wall Street Journal: Five years ago, there were a dozen models of new cars that sold for less than $20,000. In 2023, there was only one: the spartan Mitsubishi Mirage hatchback, which accounted for about 5,300 of the 7.7 million new vehicles sold in the U.S. in the first half of the year. If you are willing to spend more than $100,000, you can choose from 32 models. For the average American, … [Read more...]
China Is Attempting to Avoid U.S. Technology Sanctions
According to the Semiconductor Industry Association, Huawei Technologies, the Chinese telecom company that has been targeted with sanctions by many Western countries, is attempting to develop "a collection of secret semiconductor-fabrication facilities across China," reports Bloomberg's Ian King and Debby Wu. They write: The leading association of global chip companies is warning that Huawei Technologies Co. is building a collection of secret semiconductor-fabrication facilities across China, a shadow manufacturing network that would let the blacklisted company skirt US sanctions and … [Read more...]
“Hey, Survival Guy, Why Are Bond Prices Down?”
UPDATE 8.22.23: With bond yields rising higher than they've been for some time, it's a good time to review duration. Bond duration is a measure of the change in price for a bond given a one percentage point change in interest rates. Every time interest rates rise, bond prices fall, and vice versa. Different bonds respond with greater or lesser volatility to changes in interest rates, and the magnitude of that change is measured by the bond's duration. Below is an update to the interest rate table I posted back in March 2022. Look how rates have changed. Investors in bonds today are actually … [Read more...]
Can Vietnam Destroy China’s Monopoly on Rare Earth Metals?
China has a near monopoly on rare-earth metals production and processing. Many countries are looking for alternatives to China in their supply chains. Reuters's Francesco Guarascio and Ju-min Park report that Vietnam may be the location of new rare earth projects meant to diversify away from China. They write: HANOI/SEOUL, Aug 22 (Reuters) - Korean and Chinese magnet firms, including an Apple supplier, are set to open factories in Vietnam, according to documents and people familiar with the plans, amid a push to diversify supply chains away from China and defend against Sino-U.S. … [Read more...]
Preparation and Experience Can Help, But at What Cost?
With everything that’s going on in the world today, Your Survival Guy is concerned about your safety. Stuff happens, and before you know it, you’re stuck in the fog. You know from here and here about my own experiences in fog. It happens fast. You deal with it. Because living life on the dock is no way to live. Preparation and experience can help. But at what cost? You know this market is foggy. You know our government is in debt up to its eyeballs. Remember the government bailout of GM, leaving common shareholders, the investing class, in ruins? The more government creep we have in the … [Read more...]
Can IKEA Survive in Downtown San Francisco?
Downtown San Francisco has turned into a "No-Go Zone" for many people, including HHS employees. Many businesses have fled as homelessness and crime spurred on by rampant drug addiction have turned the area into what could be compared to a zombie apocalypse setting. Now, IKEA is planning to put a new location there. Can it work? Trefor Moss reports in The Wall Street Journal: The San Francisco store is focused on “small-space living,” said Akalin, the store manager, meaning products such as lighting, kitchenware and storage units are given priority. There is no furniture warehouse where … [Read more...]
This Summer’s Luxury Yacht Style
In The Wall Street Journal, Rory Satran discusses this summer's luxury yacht fashions. She writes: “When a client comes to the boat, they bring their closet,” said Captain Sandy Yawn, a superyacht captain who appeared on the reality show “Below Deck Mediterranean.” “They want to shine in front of their friends.” Jeff Bezos and Lauren Sanchez have been in prime entertaining mode this summer on Koru, their new $500 million superyacht. Sanchez has been flaunting some aggressively revealing looks to shine for friends including Oprah Winfrey. She and Bezos have been extensively photographed … [Read more...]
My Favorite Investment Tool, Real Estate, Water, Fog, and More
Happy Friday. Yes, you can sink your teeth into the short-term end of the yield curve, and there’s plenty of other opportunities along the way. Think of me as your guide. It can get foggy out there. Look at my favorite investment tool and the yields you can get today versus only three years ago. I can tell you investing is a lot like boating in the fog. If you have a plan and some experience navigating in it, then it doesn't need to keep you on the dock. If I stayed home every time there was some threat of fog, I’d miss a lot of good days on the water. The key is to become … [Read more...]