A Toast --- Refinance Your Future

Blessings all pon mi life and

Me thank God for di journey, di earnings a jus fi di plus (yeah)

Gratitude is a must, yeah

Me see blessings fall by mi right hand

Buss a toast fi di friends weh tek off heavy load

One time did sit down inna class and we bored

Den Oli say do road and mi gwan wid di road

Lyrics by Koffee --- "Toast"

Gratitude is a must, well said Koffee and a beautiful and fun song. A reminder life is short, thank God for the journey and the earnings that we have. I know many of us are following along and trying to position our family, friends, and colleagues in a position where we can come out of this COVID-19 pandemic crisis as as unscathed as possible. It is not easy but I remind people recessions are built into our economic model and life is uncertain --- so we must always stay ready for what life has in store for us. And yes Koffee me thank God for the journey, the earnings are just a plus..they cannot replace family, friends, memories, or life itself.  So this article is to stop and recognize the hard work of friends, family and readers. I think about all those hours I used to spend in the gym, on the football field, and on the baseball diamond. Practice helped me during the most difficult moments of a game. I relied on the skills I had practiced day after day. So "we" must all do the same in life --- keep your head down during adversity and keep your eye on the greater prize. Here is how we are surviving and thriving through the Covid-19 pandemic:

Liquidity is Key
Remember during a crisis, cash is king and debt is debt is not your friend because the people that provided you with that debt are afraid you won't pay. So rule #1 is to get your hands on cash.

Rainy Day Funds - Me personally I have a rainy day account that is just for these times. Pandemic, loss of job, emergencies.
Stock Funds - I got liquid here as well. It's easy to sell like I did in my 401K account and go to cash. But in my brokerage account I sold a few winners and reinvested in losers. I also bought some new stocks and I hope to ride them on the way up
Assets - Another popular way to get liquid is to tap your home equity. Also called "Cash-Out Refinance", you can borrow equity from your home. Readers and friends have contacted me about how they were able to successfully tap equity and are sitting on a war chest as small backstop through this crisis or to fund their next investment. But if you weren't in the gym with us, you'll find now that banks are reducing their risk and that means they are closing off this popular source of getting cash.

Debt is Not Your Friend

The most difficult thing during a crisis is paying debt when your primary source of funds dries up -- reduction in hours, loss of job, furlough. Hence why liquidity is key to hold you over.

Refinance - If you were in the gym with us. You used this time to refinance as much of your debt that you have. You can have good debt and bad debt but all must be evaluated. As mentioned above, I know of readers that refinanced, I just refinanced and dropped over 1 full percentage point off of my mortgage rate. Got the great news today the loan is closed.  

Cutting Costs - I recommend reviewing all of your costs. You choose what is necessary and what is a nice to have. But don't be scurred, all of your debt or costs need to be revisited. This is the fun part --- where you prove you are the boss of your life/household/path. Make a list and reach out to every vendor and see how you can renegotiate terms. First, they should value and covet your business. The biggest risk to a vendor is losing a good customer. Second, the next big risk is a customer who can't pay. So work out better terms or leave for a new vendor. If you cannot pay, talk to them about your hardship --- credit cards, student loans, and many utility companies will work with you on payment plans or temporary forbearance.  Over 7% of all mortgages (needs fact checking) are in forbearance so there is no stigma if you lost your job or have fallen on hard times. Many business people I know even go a step further and reorganize their corporation --- this is a fancy term for bankruptcy. Nothing to be ashamed of...you never want to get into debt so deep that you'll never really be able to pay it off.

I'm having fun with it and call it board meetings -- I just called Comcast and didn't like their answer so we are switching to a new vendor. For insurance, I reached out to a consultant who is calling a number of providers to find me the best insurance plan for my family. If you don't meet my demands in my board room, we jump ship. See ya Geico.  But read the fine print and avoid long-term contracts unless they are truly in your favor.

Go on the Offense - My favorite thing is when the world is pulling back to find those pockets to begin investing. When things are at there darkest hours, I think of myself as an explorer looking for those rare gems. Again, my friends and family are already pouncing. Toast to my little brother purchased his first home and I know of friends who have offers on the table. If you look back, during the last major crisis is when I bought my home --- I did the math and prices in the city of Chicago had dropped roughly 40% since the peak. Remember my candy bar analogy, I only remember when Reese's Cups were 50c. So you're gonna have a hard time talking me into paying anything more. 

Now that I've refinance my home, I'm going to have a board meeting on my rental property...if my bank is smart they will come to the table with a good deal. After that, I plan to begin search on my 3rd property. This will take lots of research because my next investment has to earn the right to use my hard earned money. Hopefully this next property can be the stepping stone to fund an empire of diversified property. I guess you can say I have dreams like Lucious and Cookie in the TV show Empire. 

Moment of Prayer --- No matter how successful you are, there are variables that are out of your control. I saw the disgusting murder of a black man in Minnesota and I got emotional. Once again, the snuffing out of an innocent life was on full display for the world. It reminded me recently of the time, I was returning from the hospital to go to work and got pulled over. I was checking in on my critically ill father and the police pulled me over for speeding at 8AM in the morning (even though I was not given a ticket). I had recently watched the movie "The Hate U Give" --- and rolled my window down quickly and put my hands on the dashboard. The cop recognized how serious I was taking this event and commented that this is not the way to start you day huh. I stayed quiet because at that moment all I could think of was my critically ill father, my youngest daughter, and my pregnant wife. I have a family to come home too. And if someone took that away from me ---- they don't deserve that right. I tell everyone to please be safe from the Covid-19 virus but to my people of color I also have to tell you to please be safe AT ALL TIMES.  God bless you all

2020 Kick-Off - Reflect But Expect Disruptions

If Regular People Did That Sh!t

Carlos Ghosn – The previous CEO of Nissan must have been watching the movie “Catch Me If You Can”. For those of you not paying attention, he had been jailed on charges related to misusing company funds – a charge alleged by Nissan.  Mr. Ghosn orchestrated an escape out of Japan that truly only rich people can get away with. So regular people if you ever get jammed up, follow what rich people do, not what they say:

First he was not required to wear any electronic monitoring device (smh).  Then Carlos evaded detection and took a high speed train to Japan's Osaka airport to board a private jet.  How do you board a plane when you been accused of damaging Japan's iconic Nissan company - well by jumping into a large speaker box used for concert equipment (remember to poke holes in it like he did or it might not turn out good). From there, the plane went to Turkey and his team got him onto a plane to Lebanon.  Why Lebanon – because Carlos’s game is tight he is a citizen of Brazil, France, and Lebanon. And Lebanon DOES NOT have an extradition treaty with Japan so for now he’s untouchable. To plot and possibly test run this escape, it took months and supposedly hundreds of thousands dollars.  So next time you think you’ve made it, ask yourself is your get outta jail card as good as Carlos Ghosn??

No Photoshop – A Real Look Back

I continually assess my performance to ensure I am reaching my goals and targets. Here is a look back at 2019 and when personally reflecting you have to be real about what worked and did not work. But I always caution patience, look at my list from the previous year end and surprisingly the areas where I decided to push forward paid off.  Here is a quick summary of Items that Did Not Work (in Red) and Nice Surprises (in Green):

·          Colony (CLNY) – Due to poor performance at this company, some investors have called for CEO Tom Barrack to step down. Investor(s) rationale: being a close personal buddy to Donald Trump has caused reputation risk to the company and has been and operational distraction for Tom. Who is the agitator: Blackwells Capital. Outcome: Unclear if it’s a coincidence, Mr. Barrack has named, Marc Ganzi, as his successor and the CEO transition will take place in 2021. 

·          AMC Entertainment (AMC) – AMC is a good example of poor risk management on my part. I had successfully traded this position multiple times for small gains. Using options, I was in a position that allowed me to finally own the stock even though I profess to hardly going to the movies because of the costs and now due to the ease of streaming. All was temporarily well after the most recent earnings call – revenue was up however earnings missed the mark. At first glance I was good, the stock rose and I had a profitable position. Bur the EPS miss may have been signaling a more significant problem - AMC is spending significant mounds of money to fuel the monthly subscription service called Stubs-A-List which is supposed to draw people back into the theatres.  Long story short, I should have done a proper risk assessment. It would have led me to a 5 second conclusion: I think movies are slowly declining business as streaming is the new trend. I think once AMC stops burning cash this stock will do well…but they’ve burned bridges with me. I’ll reevaluate after the next few earnings but this won’t be a long-term position.

·          Retail – This sector will continue to be difficult to trade as retail companies are reeling from too many headwinds: 1) Amazon, 2) China Trade Issues, 3) Changing trends (like working from home and athleisure wear), and 4) decline of malls. So yes my investments into Foot Locker, Kohls, and Stitch Fix were misguided because I thought I could dip my toe into the deep end of a pool for a quick buck and hop out.  However, every time Amazon flexed its muscles or supply chain disruptions were identified in China (from the Trump admin – China trade war in 2019) it was more like jumping in the deep end and remembering you’re not a great swimmer.  The positive is jumping in with Foot Locker, Kohls, and Stitch Fix is like jumping in with 2 experienced swimmers and one newbie who poised for breakout, respectively. At current prices, these stock have likely bottomed and but the rebound will take time.  Business and Life Lesson: Always set limits for short term positions and goals and don't be afraid to adjust or admit failure. If NOT, be prepared for the long-haul.  

·          Moore’s Law – If you’re not familiar with this law you should be. This law theorizes that computer processing doubling every year and I believe that semi-conductor chip makers are sitting in the middle of a revolution – Computer’s are more powerful fueling the Cloud, 5G phones, autonomous cars, gaming, streaming, televisions and the COSTS are coming down across most of these product segments. You’ve seen me dabble in chipmakers: Qualcomm and Qorvo but there are many more like AMD I need to evaluate.  I believe it’s fueling the investment trends of the future listed above and impacts all corners of life. See these examples below:

o    Sports - I joke other areas of our lives are impacted by Moore's law and are racing to reach a most optimal efficient state. Take sports – the games have gotten faster, the players bigger and smarter, the hits – harder, and the focus is now all about DATA analytics. When I used to play Sony Playstation's Madden NFL football game years ago, I always picked a team with a mobile quarterback. Fantasy football – same trend I foresaw years ago the path to racking up passing and rushing yards is through mobile quarterback. The rationale – Football is simple à keep the ball moving forward, limit the sacks and incomplete plays and good things will happen. Well we’ve come along way from Randall Cunningham, Michael Vick, Donvan McNabb and others being an outlier. Look who’s in the playoffs this year: Russell Wilson, Lamar Jackson, Patrick Mahomes, Deshaun Watson, Josh Allen, Ryan Tannehill. They took a theme I knew back in the early 2000s when I would pick Donovan McNabb or Michael Vick in Madden…which was "OPTIONALITY".  Just like in life on every play I wanted options - in football it was the option to Run/Pass/QB run to always gain positive yards.  Funny it took the league over 15 years to catch up to the obvious or wait maybe there was something more holding back the inevitable?  Live your life like water - find the most efficient path and then always give yourself OPTIONS.

o    AfroBeats – I don’t love the name for this music genre but hey I guess if Lil Nas X is not country music who am I to judge. The mix of musical influences is nothing new to life, however; I belive the only thing that holds the flow of music is labels and the radio stations. Moore’s Law to me is like water, life will find its most efficient path and that is happening in music. Everything is FLOWING to streaming, the cloud and to blending sounds. The only people that didn’t get the memo are Country Music execs in their denial of Old Town Road, but strangely I hear there are country rappers now. 👂 But back to the message: Amazing artists have blazed a path just like artists did in in Electronic/EDM when they infused the electronic sound with pop artists (unless you were tripped out...who wanted to listen to music with no words). But now African artists are getting their shine. Not sure what took so long because the music has been so good and so rich for so long (clearly when I would attend African parties or watch music videos during my trips to London). So now I’m happy to see really good artists blowing up mainstream:

§   Davido - Fall

§   Burna Boy – Ye

§   Koffee – Toast

§   AfroBeats – Drogba (Joanna)

§   Wizkid – Come Closer

§   Rotimi – Love Riddim

Props to Akon (Senegal), P Square (Nigeria), Rihanna (Barbados), Nicki Minaj (Trinidad and Tobago), and French Montana (Morocco) for continuing to blaze the trail. Even more than ever, we have African and Carribean infused music being played all across the world. Thanks to the streaming outlets for giving the people what they want. So prepare to be disrupted in your life - it's inevitable. Take Moore’s law and the music industry - disrupted Radio music execs and stations who always want to rinse and repeat music about cash, drugs, and sex now have to compete with the endless amounts of music on YouTube, Streaming outlets and Satellite Radio. This is a good disruption because allowing music to easily get out into public brings variety (and a many bad viral one-hit wonders) but I wouldn't have it any other way.  Our society and culture… are so much more that power being in the hands of few trying to curate our lives one song at a time.

Stay tuned - I'll post soon about the fear of World War III and the impact to your portfolio in case you haven't been watching Oil + Gold prices and stocks skyrocketing