Why are We Seeing High Inflation? -- The Block is Hot

Investing In Yourself – Using Pillars to Build Your Core	https://urbanomics.blogspot.com/2015/04/urbanomics-pillars-path-set-for.html
Setting Budgets + Saving for Black Swans	https://urbanomics.blogspot.com/2013/02/personal-finance-budget-101-free-credit.html
	https://urbanomics.blogspot.com/2019/11/hey-henry-high-earner-not-yet-rich.html
How to Open My First Brokerage Account	https://urbanomics.blogspot.com/2015/04/personal-finance-101-starting.html
Diversify your Life (Mind, Body, Soul, + Investments) HOW TO SEARCH MY BLOG:	Get Updates to Your Email When I Create A New Post:

Inflation is Coming, No Inflation is Here:

I have never really looked back over time to understand when and why I post. I have a feeling it probably aligns over time with when our economy is at its highest and lowest. I've come to conclude that if I put my thoughts in writing and it has a historical time stamp on it, then eventually over time I can change minds (by looking at my past thoughts). I have molded myself over time to being a contrarian...and this means I appreciate going against the grain. I don't try to follow the crowd. The crowd is like a herd and in fact where and when I see a stampede I run away. 

I believe this is how I see risk, protect myself from negative risk, and then eventually use leverage to capitalize on risk. I take these life lessons and simply apply them to the stock market. I try to create habits and repeatable practices that can be applied to the game of life and carry these concepts over to the stock market game. Notice, I purposefully called them a game. There is an ebb and flow to everything in my opinion and you have to know how the game is played. I take time to find, learn, and observe this lifecycle in everything. Whether it's the game of life, the stock market game, sports, or our economy you will notice they all have cycles. Why this repeats OR cycles like a clock is unbeknownst to me, but I'd be a liar in telling you that understanding this concept has made me successful.

I clearly am a broken record because over the years, I've posted about how the economy roughly goes up and down in cycles. From observing the stock market, I can tell you LIKE CLOCKWORK, we roughly have periods of boom and busts that cycle OR repeat every 8-10 years. Read my blog and I think I've thoughtfully documented the following:

• 1987 - Savings and Loan Crisis | Black Monday Crisis - The stock market (via the Dow) was down 22% in one day
• 1995 - 2000 Dot Com Stock Market Soars - It gave us Amazon, Semiconductor Stocks
• 2002 - Dot Com Bubble Busts - Every business added a Dot Com and many did not survive
• 2004 - 2007 - The Hot Housing Markets Soars - Homes prices and buying skyrocket, and no interest loans become the norm
• 2008 - Financial Crisis - We lose Lehman Brothers and financial markets are in turmoil; I used this downturn to finally purchase my first house in 2010 thanks to the First Time Homebuyers credit led by the Obama administration; I also started buy stocks again when the Federal Reserve started lowering interest rates
• 2014 -18 - I wrote in 2014, that the Dow should take a bow. It reached all-time highs. I was starting to plan for a slowdown but then President Trump surprised me and many in 2016 by vocally telling the Federal Reserve NOT to raise interest rates (which slows the economy down) and he doubled down on cutting business taxes which created a Trump era boom after we already had a Obama era boom. Remember unemployment and minority unemployment were at record lows during the Obama presidency and then the set new record lows during the Trump presidency
• 2019 - COVID-19 Crisis led a to a health crisis, stock market meltdown and the entire globe was under siege
• 2020 - COVID Stimulus + Payment Protection Program + Child Tax Credits - because the Federal Reserve could not lower interest rates as they were at 0%, Congress stepped in literally made it rain. 

If you look at this historical backdrop that I documented, the Federal Reserve talked about raising interest rates in 2016 as the economy was doing great 8 years after the financial crisis. But when then President Trump vocally broke the separation of powers and vocally told the Federal Reserve in as many words to not raise interest rates...I believe it led to 2 things:

1) Our economy never really cooled down from 8 years of doing well and started to get hot. I remember in my 2017-18 search for my second home getting outbid and racing to find the next house. Only come to find out this would get even worse in 2020.

2) When COVID-19 hit and shocked our economy we could not lower interest rates. By creating all those stimulus programs and most being for businesses who did not have to pay them back, the US economy was flooded with cash. This is equivalent to pouring gasoline on an already white hot fire.

The gasoline lead to something similar to the Dot Com Bubble, only this time you might call it the Cryptocurrency and Housing rise. Don't believe just look at the headlines:

1. Gamestop, AMC Theatres, and Crypto ruled the day. haha Gamestop and AMC were virtually closed during the pandemic and they are skyrocketing more than our most valuable companies in the world. Crypto which is backed by nothing and can't be used to pay for toilet paper and groceries is now one of the most valuable currencies in the world? Notice what bubbles and inflation begins to do. It makes the unreal -- real, the unfathomable -- possible, the unrationale -- rational. 
2. The 10 richest persons in the world are worth more than 40% of the bottom 40% of the world, which is roughly 3.1 Billion people. 
3. 88 bids were made on one home; 25% of homes in the US were bought by corporations

Pouring gasoline on a white-hot economy did not cause these strange investment scenarios or market inequities...it exacerbated and amplified them. We are now at a point where the only tool we have to slow things down is the Federal Reserve. They pour water on the fire by raising interest rates and this doesn't cause slow burn rather a cold shock. For the last 5 weeks the markets have dropped sharply, convulsing their way down. Interest rates have jumped from 3% to 5%. So I started to dip my toes back into the real estate market to see if I could take advantage of the situation. Nope, the open house I went to was visited by other and I was greeted by the agent telling me this house was already under contract. This tells me the market is still to hot. To change habits, the Federal Reserve will continue to hike rates until it makes you feel sick. 

Crypto hit all-time highs of $60K and now its below $30K

ROKU was at $400 at one point, now decimated to $below $100

 The goal is to raise rates to stop your buying of homes, stocks, crypto which is fueling inflation. 

This is why I moved my retirement funds to inflation - protected investments last year in anticipation. This is also why I'm disappointed in myself when I didn't sell Spotify and ROKU at their highs. I saw it coming and didn't do enough. These stocks have been decimated and are down big time. The funniest is the Federal Reserve told you this is exactly what they wanted to do.

Invest in Your Health Pt. 1 | Prism - Esusu | Prism - Nas, KD and Coinbase

  

Investing In Yourself – Using Pillars to Build Your Core	https://urbanomics.blogspot.com/2015/04/urbanomics-pillars-path-set-for.html
Setting Budgets + Saving for Black Swans	https://urbanomics.blogspot.com/2013/02/personal-finance-budget-101-free-credit.html
	https://urbanomics.blogspot.com/2019/11/hey-henry-high-earner-not-yet-rich.html
How to Open My First Brokerage Account	https://urbanomics.blogspot.com/2015/04/personal-finance-101-starting.html
Diversify your Life (Mind, Body, Soul, + Investments) HOW TO SEARCH MY BLOG:	Get Updates to Your Email When I Create A New Post:

Also Coming Soon - a series on #HowtoInvest. People have been reaching especially after the spikes in Gamestop, AMC, and other stock to learn the basics. I self taught myself how to invest beginning at the age of roughly 18 and have never stopped. To be a good investor and ensure you are not gambling (speculating), I'll cover (hardest parts of investing in RED):

Budgeting 101 - How to Fund Ur Investments?

Why Stocks as an Investment?

What is Ur Investment Profile + Personality?

How to Pick Stocks?

When to Buy Stocks?

How to Enter My Trade?

How Many Stocks Should I Own?

When to Sell Stocks?

Am I Speculating (Gambling)?

Investing in Your Health

I miscalculated and dropped the ball on one of my most important pillars, the "Health" pillar. First is accountability, so I ultimately blame myself. I'll be honest, my calculation was I'm young...I can rip and run the mean streets of Corporate America and gracefully exit the rat race around the age of 35. I tell people in life there are always trade-offs and opportunity costs and I gambled that a former 3 sport H.S. athlete, gym rat, college recreation gym user, and even early adult life YMCA member would be able to stave off my "Corporate 15". That's my take on the Freshman 15 you gain in college. I travelled as a consultant for many years and our typical lifestyle was eating out daily and back to the hotel. Back then not every hotel had a gym and to make matters worse, we worked hard. I often traded relaxing, meditating, exercising for working, drinking, and eating out with coworkers. When I came home, I lived in a fancy apartment complex that had an indoor basketball court/gym, well populated exercise room, and an indoor movie theater. But I was rarely home. As a consultant I once got the designation of being a road warrior --- on the road for over a 100 days within the year. 

Then came life in the office. Being a person a color, I adopted the model of getting into the office early and staying late. I was even chastised by fellow co-workers for delaying my participation in their weekly basketball games...I didn't want the boss to think I was a slacker. So I rarely left early but I participated to manage the image of me not wanting to be a team player. My solution I joined the weekly game but came into work early so I could leave on-time to make the games even though my peers rarely changed their schedules. Back then I lived by the office, which instead of being located in the great city of Chicago was out a good ways in the suburbs. Closer to some of the swankiest and highest priced zip codes in the Chicagoland area. This was another of those secrets we deal with in Corporate America. Many office parks are near where the well heeled live and rarely reside in the our city centers and hardly ever near communities of color. To put it in perspective, we had a good swatch of our workers who commuted from Wisconsin...yep you heard me right. But head down, work hard, I'm a team player and long trips to the city on the weekends to live it up or as my pals in the United Kingdom say to get some culture. My apartment had a room  sparsely populated with a machine or two and I wasn't much of an outside walker or runner. To hit my financial goals, I made a trade-off and didn't join the big gym clubs popular in the suburbs a little over a decade ago. I used the tiny workout room in my budget apartment and drove everywhere I went...classic suburban living.  But stop, who's to blame...ME. I am big on accountability and this is a good example of trade-offs and I needed more balance. Notice one thing that I didn't deploy in my toolkit that should have been...a "MINIMUM BASELINE". In cybersecurity we use this minimum baseline to set a security standard for all of the information systems under our control and by not consistently working out and getting annual physicals --- I didn't know my own baseline. 

More to come on Investing in Your Health in Pt 2. 

How to Buy Stocks

So knowing when to sell stocks OR anything in life is arguably the hardest thing to do. When should you sell your house, stocks, car?? The second hardest question to answer is how should I find stocks to buy. So let me take you back in the day, I used learned the following things when I first got started: 

1) I read everything I could about Warren Buffett and realize to invest you need to know your investing personality. More to come on this but I often find your real life personality mirrors your investing.

High Risk/Reward personalities might like the flash of buying stocks like Ferrari (RACE), Tesla (TSLA), Louis Vuitton Moet Hennessy (LVMH), or trading high flyers, day trading, and high risk high reward penny stocks.

Techy personalities may migrate to FAANG stocks. Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOG) - parent company of Google...the G in FAANG.

Corporate personalities may like Ford (F), Goldman Sachs (GS), Procter & Gamble (PG), Microsoft (MS), Caterpillar (CAT) --- companies many of my peers wanted to work for when coming out school.

Cost Conscious personalities may migrate to companies meet analytical thresholds. We call that value investing. Sometimes the names are boring but they are steady and pay a dividend (which is the equivalent of getting a stimulus check every quarter): General Electric (GE), Real Estate Companies, Oil Companies, and Utilities like electric, cable, phone, and retail companies.

Loner personalities may gravitate to companies that don't get a lot of hype, quirky, are getting bullied, etc. What comes to mind here are clothing company Skechers (SKX), weed company Tilray, and Collectors Universe (CLCT) a collectibles company that grades things like baseball cards.  Then there a bullied companies (often for good reason) which fall out of favor on Wall Street for messing up: 

Tesla - because Elon Musk was being targeted for his tweeting and 420 comments, 

Lululemon - when their stock got beat up because their CEO appeared to mock curvy women

Gamestop - attacked by short sellers

I believe most people will gravitate to one or two categories. Take me for example, I resonated with Warren Buffett and have read tons of books and articles about the man. He comes across as a cost conscious value oriented guy and that defined me -- simple, no frills, no gimmicks, give me value type of style. But I also am a contrarian and tend to go against the crowd. So when I'm not looking for value stocks, I often look for reasons why the carbon industry was so against Tesla, redemption in Lululemon (after getting rid of their CEO), Gamestop providing a need for many communities that may not always have internet to download games, Disney and other retail companies getting beat down during COVID-19 lockdowns. I like the quintessential story of the getting knocked down and getting back up. That story of opportunity was my family's story. My father and mother, hard working immigrants, came to America worked some of the least flashy jobs but got it done. My father mocked for his West African accent and Ph.D degree and being told you're overqualified. I often look to where cancel culture strikes in the stock market and I bet that if at first you don't succeed, dust yourself off and try again. 

Prism - A look at African + African American Investing

1) Esusu - A company with African co-founders makes me proud: 

Why I'm Watching: 

I like to challenge myself. When I cut the cord, I lost the ability to watch CNBC. So I challenged myself to simply listen to the broadcast on Tune-In Radio. When I heard them announce a company called Esusu, my head turned. I had heard this termed used so many times in my African community. It means to pool money together and usually each week or so the group shares the pool money with one member. So it creates the lottery feeling of getting a big payment once every "x" month once it's finally your turn to receive the payout. Well I listened to Abbey Wemimo, co-founder of Esusu, talk about how he helped to start the firm. I even reached out on LinkedIn looking to connect and as an accredited investor I hope to invest and fund companies like his in the future.

2) The Coinbase Remix - How African-American Rappers and Athletes are Diversifying 

Why I'm Reading: 

For those of us that follow the markets, we were BLOWN away by the opening day value of Coinbase a digital exchange where you can buy, sell, and securely store cryptocurrencies like Bitcoin. They became a public company recently and for us regular folk that is similar to baby being born. They were a private company and once they became public the baby popped out and but this baby was valued @ roughly $100 Billion dollars. So I know that many investors were dancing because they cashed in big time. Some of those investors I was proud to say were African-Americans like rapper Nas (Nasir Jones) who you all know I have in my Top 5 rappers of all time and National Basketball player Kevin Durant. Nas reported earned a $100 Million payout from this investment word on the street is KD cleaned up big time as well. I am happy to see these entertainers diversifying their investments...you will not rap and play ball forever. Very proud of these young brothers.

Nas and Kevin Durant Invest in Coinbase

GAMESTOP (GME) - Why Reddit Users Are Rallying Behind My Pick

#MansaMusaMentality

#HuntinPacks - designates investments I made alongside someone in my network

#BreakfastClubforStocks - get your Sherlock Holmes on with news, reports, and data for stock investments ideas

This post is a part of #MansaMusaMentality series and how I use my extended network to invest. Almost like case studies (known as "Details"), I'll highlight how these contacts guide me on investments such as buying real estate, stocks, precious metals, cryptocurrencies, etc. And I want to foster a community culture, so I'll show you how I learn from them and maybe in the future we can crowdsource or here we call it #tribesource investment ideas for the future.

"Detail" - A Breakdown of my GameStop (GME) Investment

Year: 2020/21

Throwback Link: N/A (New Investment)

I think this may be the first time I've revealed my Dec 2020 position in GameStop. This "Detail" is about how I found this investment. Quite simply, I kept my ears to da streets. My life is not dedicated to stocks because it's not my main hustle but I do my research, use my network of connections, and make smart informed decisions. Because I've amassed a nice investment empire, not the size of Mansa Musa, and I'll be damned if I leave it to someone to eat all my profits. Just like how I listen to the Breakfast Club for the culture, I listen, read, and aggregate data for that stock culture. Again, if I have time for the Breakfast Club morning show with Charlamagne tha God... I can also make time for my stock version of the Breakfast Club.  What's your excuse??

I won't be putting this stock in my #MansaHallofFame because I didn't back that thang up and load up like I have with other investments but I'm very happy with how it's performed thus far. So how did I find this stock? I got my Sherlock Holmes on and did my own research. I keep a log of my research and ideas so don't test me. 

How do I get my Sherlock Holmes on? Depending on your age you might prefer: X-Files, Murder She Wrote, Columbo :)   Well I methodically research data and back in September 2020, something made me pause and want to learn more about GameStop. It also led me to a really cool dude who wasn't in my network. Here's what I found:

Stock Investment Idea: GameStop (GME)

New Squad Member: Ryan Cohen, RC Ventures, Net Worth: $600 Million to 1 Billion; made his money by co-founding Chewy which was sold to PetSmart for roughly $3.3 Billion. I won't get technical but Ryan is creeping on the doorstep on entering into my #ABilliSquad network. My research showed back in September 2020, that Ryan amassed a roughly 10% stake in GameStop. Interesting decision for a struggling company. Being a value investor, I was drawn to this stock and the idea that he might be able to turn the company in a new direction but they are so dependent on stores. Do you remember the picture of Gamestop employees having to hand games through a partially cracked door during the COVID pandemic to stay afloat...where was their internet presence??

So I hit Ryan up for more information and through a Fox article learned that he wanted to shake up the direction of the company. He was questioning why customers couldn't trade games online or have more streaming options, why weren't they a bigger e-commerce retailer, and why was management so slow to implement these obvious changes?? So it appears we agreed, handing out video games through a crack in the door isn't a sound business strategy during a pandemic when Amazon and other are open 24 x 7. More importantly he was interested in getting board seats to force the hand of the company if he had to. So I decided to start tracking GameStop like TMZ does Hollywood celebrities. I was following the stock as it's price kept slowly climbing and then another bit of research cemented my decision to invest in GameStop in December 2020.

Investment Takeaways: This pick was due to my extensive research, #BreakfastClubforStocks, which gave me a risky investment idea to consider. Also, I built my network in the process and learned about another great young investor Ryan Cohen, and yes technically I joined him... #HuntinPacks

Outcome: 

Using this chart, the Orange Star represents when my research first alerted me to the GameStop trade (Price Range is shown using the Orange Arrow). It was risky and needed more vetting (Trust But Verify)...so as my buddy says I let the trade marinate for a bit and watched it closely, TMZ style. In December, the Green Star signifies when my research brought me more information. Along with the rising stock price, this information was enough to cement my decision to make my investment. 

This image shows the trade I made on December 22, 2020. GME represents GameStop's ticker and $13 is the price where I initiated a trade. So yes, I'm very happy with this trade.

How is GameStop Corp doing today:

1/22/2021 Stock Price:

SUBSCRIBER ALERTS - are coming soon. Clearly, I've provided enough information that you can go back and source a number of the articles, videos, or interviews that helped inform me of this potential investment. I want to be apart of the process of you growing your network. Timely introductions to investments and investors is a game changer. Remember Ryan now owns 13% of GameStop, a $4+ Billion dollar company. My research gives you the catalyst you need to make an informed decision and grow your investments. MORE COMING SOON

#Tribesource -- Do you have an investment idea, back by facts that you want me to analyze further? Feel free to send them my way.

What do Reddit Day Traders Think:

Courtesy of Bloomberg: 

Reddit’s ‘Angry Mob’

A backlash against Citron by some vocal Reddit users over its views on GameStop came to a head on Friday when the short seller said it will stop commenting on the stock following the actions of “an angry mob.”

“We are investors who put safety and family first and when we believe this has been compromised, it is our duty to walk away from a stock,” Citron managing partner Andrew Left wrote in a Friday letter.

Kujichagulia | Self-Determination - Own Your Destiny

 On the second day of Kwanzaa, I wanted to chat about Kujichagulia (self-determination). With so many obstacles affecting middle and lower class America, no matter your race you must be personally accountable every day for your actions. These actions each and every day are shaping the path you are and will take in life. I train people and coach them on how to improve their financial and personal well-being and often the common responses I get are:

"If you can do that for me"

"If you think this will work for me"

"So what do you think"

"I don't like all the changes/instructions/direction"

I remind those persons each and every day you choose your own path. I can't do anything for you (you can). I can provide my experiences and journey but you must tell me what works for your life. It doesn't matter what I think, it's your life to live. If you don't like what you see --- why did you choose it? And if you didn't choose anything yet, why do you feel compelled someone has made a decision for you...when they haven't. Do you feel the personal responsibility of having to decide, being accountable for the decision you made, and being on the hook for seeing it through.

For me, when I was 18, I looked back and had already seen a life of systemic oppression. In kindergarten, I was told I'd be yanked out of my public school path and put into a magnet school because of my then smarts. Yes a blessing, but a new path that meant two different buses to school each day and classes where most people did not look like me. I remember my 12th Grade teacher give me a surprising look when I told her I needed my National Honor Society document signed by her. I remember every white person in college, at work, and in my personal life asking me and my friends do we play sports. I remember most vacations, young white teens asking me if I could sell them drugs. I vividly remember coming back to my alma mater to assist with intern interviews and calling a candidate's name and no one came up. As I went to go back to my company's cubicle, a young white man called out, hey I "think" you're looking for me. I said you been sitting in the waiting room the whole time (with other students), why would you NOT answer after I've clearly read your name out loud. He said: "I was scared, I saw a big (pause) man standing there...and". I quietly knew the code he was speaking of. This young white man was willing to miss an interview with a premier consulting firm because a black man IN A SUIT, in a large room full of recruiters (and students) in cubicles (tens of us) --- called his name. Again I repeat, he almost missed an interview because of his privilege and prejudices. 

This is why roughly two decades ago I started this blog with one thing in mind. A determination to always be balanced because I have and will always face obstacles in my life. I needed options so my balance stems from my pillars and I vowed to never be financially dependent on anyone or any company (entity). That why I work in Corporate America on terms I find manageable, own my own startup consulting firm, managed a growing investment portfolio and have a rental property to mine name. I can individually live of each of these separately except for my rental property. I technically retired a few years ago (2 years behind my goal of 35) as I humble enough to retire to a modest ranch home paid off in most urban cities of America. But I'm also determined to help people understand how to be personally responsible for their own path and independence -- but you must be determined to roll up your sleeves and do the work yourself.

Kujichagulia (self-determination)

New Stock Shout-Out: Game Stop (if you read until the end, now tell me how can I like a company so hated)