All Things Investing: Gas Prices | Interest Rates | Venture Cap | Crypto

 

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)?

Don't Complain About Gas Prices --- Invest

I recently reminded a cyber student training under me not to complain when they see gas prices rising. Use it as a lesson, when things are low buy them on discount. In my older posts, hopefully you noticed the trend where I began to buy few oil and gas investments:

UCO - Bloomberg Crude Oil

Par Pacific Holdings (PARR) -  a oil and gas exploration and production company

When gas at the pump was super low, that was a signal for me to buy it and store it as an investment (so to speak). My only problem as you read was trying to get to cute. It was volatile and I sold it to take advantage of what some of my billionaire buddies do, tax loss harvesting. While UCO was down I sold in at the end of the year to offset my gains and my plan was to repurchase around January 31st (because you have to wait 30 days) to buy back into it for tax purposes. Well all through January oil started to skyrocket. As my wife says, don't be cute just pay the damn taxes...yes ma'am.

Finance 101 - Interest Rates

Many on main street (that's you) don't know that their bank's mortgage rates are loosely tied to the Treasury's 10 Year Interest Rate. I won't bore you with my poor man's econ class but when interest rates drop, mortgage rates soon follow. My next reminder is be patient. I have been talking about refinancing for months now and I finally got the terms I was looking for and close in 1 week. I own 2 home both with rates at 3.25% or lower which means I have optionality going forward. More to come.

Hedge Funds | Venture Capital | Private Equity

I like to speak things into existence and I look forward to starting a wealth management fund someday. I have my hands full in the cybersecurity space but if Elon Musk can build Tesla, solar panels and SpaceX...I must learn how to build my disparate business to scale and sustainability. I was listening to the CEO of a tech firm called Bevy described how they partnered with minority venture funds and I was surprised to learned these VCs (as they are called) are prominently displayed on their website...job well done Bevy...I want to learn how to use your product too. This has motivated me to link with VCs of color such as Kobie Fuller, Arlan Hamilton, Mac Conwell, TD Lowe, Reuben Ogbonna II, Mandela Schumacher-Hodge Dixon, Baron Davis (former NBA player), Olatunde Sobomehin, and Michael Johnson (yes Olympic Gold Medalist) and others who were listed as investors or advisors to this young start up. A reminder here to save your pennies...it takes money to make money. To invest in COMPANIES you need to expose yourself to more than just stocks, investing in private companies often leads to outsized gains just ask Nas (made an estimated $100M) and Kevin Durant in Coinbase.

Cost Conscious (Value Investing)

I was reading an article which tried to give insight into Roku recent resurgence. For those of you that don't know Roku have been an amazing investment for me. It's easily in my Mansa Musa Hall of Fame and just became a 2 Bagger!! Yes major bag alert as Wendy's would say. The article is what I would call a two-fer. It discussed a rumor that Comcast might consider sliding into the DM of Roku and or VIACOMCBS. Both stocks are major holdings of mine and I've benefited greatly in the last few weeks from this speculation that Comcast needs to strengthen its streaming option called Peacock. ViacomCBS was beaten down to the point where they traded at prices I like...like getting a 50c candy bar...which is rare to find. So I buy and hold and hope others see the value in a hidden gem. Roku on the other hand is a serious disrupter. We have a Roku soundbar and love it! This is a Growth stock true and true. It's like owning Drake when he signed to Young Money, the investment just keeps delivering.

I'm not a businessman...I'm a Business

So my side hustle has been doing amazing. It sounds simple but to build a company you need to be a company that can solve someone's problem. I've found a way to do that by simply not saying NO. I used to term business away because I wasn't looking at the writing on the wall. Companies all across the country contact me for cybersecurity help. So eventually I stopped saying no and started saying how can I help you. I've hired 3 staff in the last month and this is me moving slowly because my focus right now is on my health. But nothing is more empowering that to give people hope, to give them jobs, and to plant seeds. I plan to spin-off a business that will help people get their business registered, use digital invoicing, payroll, cashflow, and bookkeeping/accounting tools. I hire all types of people but focus on diversity, equity, and inclusion goals to ensure there is diversity in tech. The biggest thing I share with my cyber advisors, consultants, residents, and interns --- is have great soft skills. Don't just be confident on your block --- be confident in a board room, meeting, or gala too. 

Cyber - Crypto, Ransomware

I've been flooded with news about Crypto. I'm still on record, what value does it serve me IF I have to convert that investment back into dollars. I could have just used Zelle, Paypal, Cash App, Venmo. So clearly the primary purpose for bitcoin until full regulation comes in for illegal and illicit activities. My investment in Symantec / NortonLifeLock has boomed as NortonLifeLock has said it will allow consumers to mine for crypto in the future. Breaches are through the roof because the hackers trade in bitcoin in hopes that their trail can't be caught...isn't that basically money laundering. But the hope of Bitcoin may be a bit oversold. Did you read the story about how US was able to retrieve millions of  ransom dollars paid in the Colonial Pipeline hack. Can anyone tell me how that happened for a secure encryption platform where the transactors are anonymous. Either the password was hacked, stolen, or those transactors weren't as anonymous as they thought. Either way I'll stick with my insured bank account for now and just Zelle you your cut of dinner. 

Peace I'm Out

Keep On Pushing - Q2 Market Outlook Amid Coronavirus Pandemic

With Quarter 1 2020 in the books, I wanted to capture a few of the headlines coming across my screen that I'm paying close attention too:

What you Should Know:

1. Unemployment numbers are on the rise
2. The Federal Reserve is printing money an unprecedented levels - rates have lowered as they help unfreeze the mortgage markets
3. Shelter-In Place is sparking a rise in internet companies
4. Deals are being lost but the big ones are going through
5. SBA Loan Details

Jobs Number:
- A record 3.3 million Americans applied for unemployment benefits last week (Labor Department).  Last week saw the biggest jump in new jobless claims in history, surpassing the record of 695,000 set in 1982. Many economists say this is the beginning of a massive spike in unemployment that could result in over 40 million Americans losing their jobs by April.

Interest Rates:

- 30 Year Mortgage are at lowest levels of: 3.4%

- Mortgage Applications up 15.3% 

- Refinance up 26%

Note: One company said they received 8K refinance requests day

Investment Themes:

Invest in Internet Related Companies:

- Match Group disclosed that Tinder interactions are up. But it is not resulting in a large number of  new customer adds just yet

- Zoom Media (NASDAQ: ZM) is winning the marketing war. Everyone thinks Zoom and Slack (NYSE: WORK) are the only telework software out there. There are many but Microsoft Teams (Microsoft: MSFT), Go To Meeting, are go to collaboration and communication tools.

- Also cyber security software is in high demand. To help my client with the Coronavirus crisis, I manned the call support line and took calls from all over the world for the first time in my life. Every major client was working remote and more importantly I listened to the name of the software being used: Zscaler and many remote authentication and identity management tools are needed NOW more than ever.

Deal or No Deal

Madison Square Garden (NYSE: MSG)  – The owner of the NY Knicks just recently spun off their restaurants business. Hmmm I think someone may be separating the good assets from the bad assets.

Xerox (NYSE: X) – Some Mergers are no longer being pursued. HP is no longer being courted by Xerox.

Sprint (now merged under T-Mobile TMUS) - Some Mergers were pushed through. One of my biggest wins was Sprint and this deal closed today!!! T-Mobile required their 16 banking partners to come through with the funding --- Deal Closed

Helicopter Money - The last line of defense for the capital system under stress is to bail everyone out. I sh!t you not in economics its called the helicopter money strategy. Well for anyone looking to get a Small Business Loan, I captured some of the details here:

SBA Loan Details:

• Small Business Administration (SBA) Loans are available beginning Friday
• All existing SBA-certified lenders are eligible
• All FDIC-insured banks and Credit Unions are eligible
• The SBA is developing a portal for borrowers without existing relationships to find local lenders

      SBA Loan Terms:

• 0.5 interest rate with 2- year term
• Payments are being deferred for 6 months
• Partial or full loan forgiveness avail depending on layoffs (not happening) and certain qualified expenses
• The loans are 100% guaranteed by SBA
• The loans are administered by individual lenders

POETIC JUSTICE --- Navigating The Storm To Come

If I told you that a flower bloom in a dark room, would you trust it? ~ Kendrick Lamar

You ever get that feeling of Déjà vu?  Well I did and I did not like what I was seeing. That was the rationale back on March 2^nd when I first started posting on COVID-19 and the risks it posed to our health, economy, and wealth. I beat the drum beat of quarantine, lockdown, or as they are now calling it --- stringent social distancing because as a risk manager you want to prevent the worst possible outcome. I do that on a daily basis for corporations and it is much better getting yelled at by clients for being overly protective and concerned than witnessing them painfully recover from the depths of something that could have been better mitigated.  For example, I once had a banking client down in the Florida Keys. The Keys is a great location --- think conch fritters, fresh oysters, beautiful water and sites. But I also had a job to do --- what natural disaster quite common in Florida and the Keys: Hurricanes. My job was to ensure not only was their cybersecurity posture adequate --- but for a client in the Florida Keys I paid very close attention to their disaster recovery planning and insurance policies. When I completed my assessment, I wanted to provide some level of confidence is they were adequately prepared.  Yes, a large aspect of my blog is about financial empowerment but more importantly you need to be able to sleep at night knowing you did everything in your power to plan for health, economic, and financial success. And your plan has to be resilient to get you through black swan events just like my client who vigilantly prepares for that next hurricane.  

Does History Repeat Itself

Undoubtedly it does. I think it was Will Smith (don’t quote me) who said anything you can think of has already been done and is somewhere written in a book --- you just have to find it. Maybe not exactly like that but you get my point. So if navigating through a crisis is a class, guys like my big homie Ray Dalio are the excellent teachers to keep up with. He runs the world’s largest hedge fund but ironically often sounds the alarm of the true inequities of people today and having a plan to address then because history will eventually give us a black swan moment that will send us reeling.  If I lost you I apologize, but the point I am trying to make here is I am concerned about the tools our government has to get us out of a crisis may have already been exhausted. I’ve heard Ray and a few other people that I follow echo the same sentiment.  I’ll break it down like this because I write about it often here, when times are good for a family or a country the excess wealth it takes in must be saved for a rainy day.  We did not do that as a nation and it’s not going to make RECOVERING from the economic crisis that ballooned out of the COVID-19 pandemic that much harder.

My other example is: When times get bad, a retail store may resort to providing discounts to get customers in the door to spend and give the business a boost. A federal government uses interest rates similar to how a store uses discounts or coupons. If you reduce the interest rates, money is discounted and people come running through the door.  BUT WHAT HAPPENS WHEN INTEREST RATES ARE ZERO --- OR BETTER SAID WOULD YOU KEEP BUYING IF THE STORE KEPT GIVING YOU EVERYTHING FOR FREE??

If you recall, I posted very little in 2017 and 2018 but when I did I highlighted that I had changed my investment strategy to trading stock option contracts. Again not to overcomplicate things:  I simply had a very hard time finding deals in the stock market so I invoked my sandlot strategy --- I took my ball and went home.  I wasn’t buying any stocks but taught myself how to trade options because I wanted short term-investments that didn’t leave me hanging out to dry when the eventual was to come --- a Recession. We were already in our 10+ year of an economic expansion, one of the longest on record.  My biggest concern is the COVID-19 pandemic lit the fuse for a big drop in market I already thought was running too hot.  If you’re lazy here is a snippet: “I explored options for the first time in portfolio and it was a big reason for my investing success this year.  I have been studying it for months, used a fake portfolio of money to test trading strategies out, and implemented BASIC trades that have complimented my LONG-TERM VALUE oriented approach.  I repeat, I was afraid and had never traded an option contract in my life.  This year I’ve executed over 80+ option contract trades in a way that I believe lowers my investing risk, especially considering I’ve told people to be cautious because we are in the 10^th year of a stock market rally. “ Feel free to read my comments here:

https://urbanomics.blogspot.com/2018/04/the-plan-can-economy-grow-forever.html

https://urbanomics.blogspot.com/2018/12/2018-year-in-review-year-of-growtha.html

I want to wrap up here by saying I’m very concerned. Ok yeah I worry a lot, but please put my logic together:

1)  I traded my first option contract on May 30, 2017 and I spent the first half of 2017 learning and practicing something I had no clue about because THEN I thought the market was overvalued.

2)  Debt Levels are very high because our government did NOT save for a rainy day when times were great (10+ years of economic expansion). This does not help thing when in a debt crisis.

3)  Unfortunately President Trump constantly spent the last few years criticizing the Federal Reserve into lowering interest rates. You traditionally raise rates when times are good (we had over 10+ years of good times).  Rates are now at ZERO and that means we have NO MORE TOOLS left to fight an economic battle.  It is the main reason, I recommended going to cash in my Individual Retirement Accounts just a few posts ago.

My next post will break down what happens in a Recession and why I’ve learned from the 2008 crisis --- When I sounded the alarm it was the only other time I’ve ever moved my IRA to cash. Like then, do not try to be a hero in these markets. After 10% down days you may get itchy to buy the dips but prepare to be nimble and get out the next day. Don’t panic, but brace yourself for a bumpy ride down --- and hey if I guess it will be a little Poetic Justice.

NovaGold Resources Inc. (NG) - Mining for Riches

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)	Search My Blog

In honor of Black History Month, for my next few posts I am going to release some of my core positions, like Novagold, and how they got there.  I have received questions from a few readers over time which circle around -- "How does someone invest like how I write here?"  At the top of each post, you'll find the basic building blocks to get you to where you need to be -- use the links to invest in yourself and your family.  You can't build a meaningful investment portfolio without a consistent source of income - like a job, a budget (that allows you to SAVE capital or funds for your investments), opening a brokerage account (to manage your investments), and physical, mental, and spiritual fitness (that allows you set meaningful goals).

As your personal finance coach, I can't begin to help you on the march to freedom without these things in place.  For example, I have a friend who was a landlord and rents their property to a tenant. The lease had lapsed and the tenant was stalling each month by asking for extensions and stating they had an interest in buying the property.  Like a personal trainer, I tried to coach this person by asking them what goals did they set for themselves? Even more simply, what is in the best interests for you and your family??  I was surprised by the pause in response, but by asking this one question it became a lot more clear what needed to be done. Put your goals first and if selling your property is best for your family's future -- get it done.

NovaGold 
Why did I invest in Gold? Well I have been investing in gold since 2008. One thing I learned during that rough time period for America was that Gold is a safe haven. Gold, like other metals and Crypto Currencies, is not a currency backed by a government which can purposefully be inflated and deflated.  So in 2008, the market was on the path to being broke so the Federal Reserve decided to pump the economy full of money. Gold is a good asset to bet that it's value may rise if you think the dollar value is being deflated (by the Fed pumping the economy full of money).  

So why in the world is Gold doing well when we are arguably in the best economic period some claim America has seen. Well #followthemoney -- Because the economy is doing fairly well, I was preparing to exit my Gold position. The Fed doesn't need to deflate (pump money into an economy doing well) so I anticipated Gold was NOT going to do well. The strange thing that has happened in the last year is that the Trump Administration has signaled for the Fed to juice or pump the economy with money -- even while its at record low unemployment. That's a signal for me as an investor that something is wrong with this thesis -- either the economy is actually NOT doing as well as we thought OR the Trump administration is artificially manipulating the Fed Reserve to juice the economy further.  While you get political -- I prefer to get rich:

Source: Google
1) I invested in Gold over a decade again. Patience is a virtue when you begin to understand the markets. Search my posts and you'll find my previous posts on NovaGold.

2) Look at this chart above. Yes, I finally stopped trying to sell my Gold position in NovaGold and let it run. If the Fed is juicing the economy, the Wall Street world hear's the signal "The Economy is NOT as strong as we believe... when the Fed lowers or does not raise interest rates".

3) The prudent side in me says, I believe the data coming out of our government and the economy is doing well. But then I can't explain why the Fed is not raising interest rates...except coming to the conclusion that they feel coerced into keeping rates low during a period of record low unemployment. So similar to my Sprint trade, I'm just going to follow the money...why guess that the government is going to do the right thing.

Final Summary: Gold runs higher as the economy cannot reach 3% GDP growth even with the Fed juicing the market, and the tax cut boost. But new entrants into the Gold space, be careful...it has run up very fast but with fears of coronavirus, the 2020 US Presidential Elections it could run even further.