Inflation | Stagflation | Recession - Either Way Here's How I'm Trading

 

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
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ALL EYEZ ON ME

With a backdrop of rising inflation, down markets, and lots of chatter about recession, here is what I have been trading. First, I have NOT been doing much trading at all. When the market is choppy, treat it like high waves on the beach -- DO NOT GET IN.

I exited a number of traded and YES many of them were performing poorly and trading at a loss. As the song goes, you have to know when to fold them and take your lumps. I recall many years ago I forced myself to learn how to play poker. I hate the thought of putting up money and more importantly losing it, but poker teaches you risk management (how good is your hand), how much to invest (in poker this is your bet), and last but not least how to read a room (in poker this is anticipating your opponent's hand). 

In this market, I had to get back to basics and start playing poker. 

Risk Management -- I sold my "No Scrubs" stocks. They were broke azz stock not doing much for me or I didn't think they had an opportunity to go much higher. Clearly the market's mood (called sentiment) has changed and it's a risky environment.

How to Invest -- I went Coke Zero, Crystal Light, and Michelob Ultra, I started cutting back the sizes of my trades. I can't afford to make big mistakes in a down trending market with talks of recessions every day.

Read The Room -- People are driving less, spending less, and homes are actually staying on the market for a few days. 

So in response, I've been trading stocks that fall into the following categories:

PAIN TRADE - When something hurts, I buy it. I own a Plug-In Hybrid Vehicle and work from home. So I don't even know what the price of gas is and I make a trip to the gas pump about once every 2 months I would say. But I know you're hurting, so I buy the industry that's applying the pain. Oil and Gas stocks are bursting at the seams with cash, and even my old buddy Warren Buffett is in on the act with his investment in Occidental Petroleum. I personally think he wants to buy the entire company...let's wait and see.

OUTSIDERS - I've been an underdog all my life, so I appreciate when high a stock has been kicked down so good, that there still is an opportunity to get up. I've recently traded Snap, Snowflake, Roblox, Teladoc, Zoom, and Coinbase to name a few, for just this reason. They don't align with my goals, but for now I look for underdog prices in a difficult market.

ARB - Short for arbitrage, Twitter and Activision are places where I've stuck money in hopes of the companies getting bought out. A company slid into their DMs and presented them with a ring -- and I hope they get to the alter. There are many risks with this strategy and Elon Musk dissing Twitter and Microsoft needing to get regulatory approval to buy Activision will be no easy path.

Tegna - Is my version of a investor's lotter pick. I bought a large number of shares back in 2019 around the $15 dollar range. I believe media would see it's day again due to the presidential showdown. Tegna has paid off and they too have a company that slid into their DMs.  I hope they get bought out at $24 dollars but risk is on the table. Media unions have come out strongly and made their opinions heard. They are concerned the merger means loss of jobs. I am torn here, I think have these people forgotten we live in a capitalist society. I actually lean towards their perspective and being a person of color, people that look like me are often the first to be let go at many companies. But then I wonder why support for programs and industry groups that support empowering workers is so low? I guess many don't care UNTIL it impacts them. Tegna's CEO has come out and indicated no jobs would be lost as she is a veteran of the media industry and values local media. I don't know what will happen here but as the stock inches up -- my knowledge of Wall Street tells me the deal gets done and someone does a lot of government lip service that stringent due diligence was done. Either way, I think this remains a strong lottery pick because if you look back at my blog, Tenga at one point had 4 suitors. This is a company that will be bought my someone and I just hope it's a happy marriage.

Stock Ticker Stock Name Industry Target Price REASONS

CVX CHEVRON OIL & GAS $152.50 PAIN TRADE

DVN DEVON ENERGY OIL & GAS $60.00 PAIN TRADE

OXY OCCIDENTAL PETROLEUM OIL & GAS $60.00 PAIN TRADE

SNAP SNAP COMMUNICATION SERVICES $7.00 OUTSIDERS

BYND BEYOND MEAT CONSUMER RELATED $30.00 GOOD NEWS

TWTR TWITTER COMMUNICATION SERVICES $50.00 ARB

SNOW SNOWFLAKE TECHNOLOGY $120.00 OUTSIDERS

RBLX ROBLOX VIDEO GAMES $25.00 OUTSIDERS

TGNA TEGNA MEDIA $20.00 LOTTERY PICK

COIN COINBASE TECHNOLOGY $40.00 OUTSIDERS

TDOC TELADOC HEALTHCARE $25.00 OUTSIDERS

ZM ZOOM TECHNOLOGY $85.00 OUTSIDERS

ACTVI ACTIVISION VIDEO GAMES $75.00 ARB

Stormin The Capitol - 2 Different Economies + ESG Investing

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

Week In Review (Week of 1/4/2021)

Risky Business 

The biggest headline this week was how domestic terrorists were able to storm our sacred US Capitol building. I cannot think of any other word that would describe the acts of these people. As you cried out "Storm The Capitol", you assaulted law enforcement, caused our lawmakers to fear for their lives, and literally tried to stop Democracy in progress. What seemed like a cute slogan is more akin to treason if your objective is to try and intimidate and tear this country apart. We truly live in two different worlds, when a bunch of thugs think it's okay to lead an insurrection and no response occurred for hours. Luckily patriots in our news, our government, and our nation are speaking out and these people are being held accountable. So as I consultant, I share a simple rule with my readers: "You may be engaging in risky behavior if what you are doing any point in your life (no matter your age) COULD NOT be printed on the front page of the newspaper or be the lead story on your local news."  Your brand always matters and will follow you as the internet never deletes anything. There have been recent stories of students kicked off college campuses for their racist remarks, athletes dismissed from sports teams for being photographed for not wearing masks at gatherings, and yes thugs fired from their jobs as facial recognition and the public reported these bums boasted about damaging our democracy.

Link from the Streets: Corporate Execs Fired for Participating in Riots

Keepin in Real - Why is Housing Breaking Records

Did you know that the housing market was on absolute fire last year. How is this possible in a Coronavirus pandemic environment?? If you recall, I began my rants on having a national holiday to starve the virus in March 2020. As corporations raced to implement Work from Home (WFH) orders to keep Corporate America going strong, corporate workers began to taste another concept I have written about for years: optionality. While I have been working from home exclusively since 2017, many non-front line employees began benefitting from this trend in 2020 while still being productive.  So you have this strange irony:

1) White Collar Employees - Have work, NO commute, earning a paycheck, saving $$

2) Blue Collar/Essential Workers - Many unemployed, forced to work if essential w/ no vaccine (at the time), no PPE, no hazard pay, and still may need to use public transportation to commute to work

We call this the K economy. Using the really cool image that I created, white collar employees are on the space ship that keeps going up and to the right.  They can move outside of the city limits, have more space, keep working, and due to the Federal Reserve providing bailouts to the housing and corporate markets --- their home values, stock, and retirement accounts are sky rocketing too. They are making money hand over fist.

Unfortunately, my image depicts the front-line, blue collar worker as the mouse. There is a pandemic on the loose and while those guys (me included) get to work from home, they are being told they are "essential" -- please risk your life everyday. Often blue collar workers are more likely NOT to own homes, have monies in the stock market, and may only be benefiting IF they participate in a state or federal pension that have monies in the stock market. They also may need to stay close to the city because the hospital, city-county, or federal building they work in is in the city.  Few bailouts have been given here - the primary was unemployment benefits and immediately negative comments were made about how unemployed people were living high of the hog because they were given an extra $600 a month. 

#facts - White collar workers on the space ship are benefiting from a bailout, handout, or an entitlement. The Federal Reserve which has the ability to print money did just. And what did they buy with that printed money?? See for yourself: Fed Buys 1 Trillion in Mortgage Bonds

#facts - The reason why housing prices went up 16% alone from May to June 2020, is because for the last year the Federal Reserve has kept their interest rate at 0%. This means you are earning nada, zilch in your saving account and they are politely "forcing" you to spend your money to earn a return. So many are using low mortgage rates to buy homes as a way to earn a return...the rest of us are throwing our money in the stock market. It's safe to say if you own a home or stocks, you are on a rocket ship flying high.

This breakdown of very complex financial market activities was brought to you by Urbanomics. 

Ballin on Wall Street

At the end of 2020 and already in 2021 everyone is buzzing about sustainability. I laugh because now that advanced nations have depleted the Earth of everything she has to offer we finally want to invest in companies that will help to save it. This concept is NEW right?? Not really, but the fact that we have to rally privileged people around the world to do the right thing is mind boggling. So my buddies on Wall Street call our latest mission ESG investing, which stands for Environmental Social Governance. This may be the reason why my boy Elon Musk became the richest man in the world this week. That's a bad boy and his mission to electrify everything is a good start. But shouldn't ESG start at the top?? What about ESG politics, laws, leaders, and then yes companies and investments that support those initiatives. Do we need fancy letters to tell us to be good to the planet? Do we need fancy letters to tell us to STOP killing black men at the hands of the police who have a shield of immunity? What about the widening gap between the rich and poor? The middle class is getting eroded and the working class isn't just black and brown...there are many poor white folks in America now. This increases as non-college manufacturing jobs are shrinking across the nation. Do we need letters to tell Corporate Executives that they should do and say the right thing:

- Did anyone tell Wells Fargo CEO Charlie Scharf after he blamed the lack of diversity at his bank on "a very limited pool of Black talent to recruit from."  #wtfdidhejustsay

- Did anyone tell the former GE CEO Jeffrey Immelt who often jet-setted around the world with two corporate aircraft — one that actually carried him, the other flying just behind as a backup “shadow plane” on the off chance that a mechanical problem might delay his busy schedule. His aircraft was rumored to stock both lobster and steak so the boss could choose his midflight meal. In his 12 years as CEO, Immelt raked in an roughly $168 million as GE sank further and further into irrelevancy.  #newgoals:become Greedy CEO

Similar to politics, I don't need letters to tell me what's right and wrong. There has been a lot of wealth created and benefits and perks realized in politics and Corporate America. Strangely all the while, the earth and poor working class people has been depleted under their governance and supposedly with ESG at the top of their mind. 

Because who needs letters to tell people there is a talent pool of black people or to NOT fly two jets (even if the company is paying for it).  I guess I would storm the capitol too if slowly these perks were being taken away from me or someone that looks like me. 

 But really, at the expense of Democracy?? #DAMN

Managing Dave Chappelle's Contract | Leeds x Roc Nation | Chris Paul + Bill Ackman

 My job is to manage risks and for some of the largest organizations around the world. They run some of the most complex business activities and I often keep my head on a swivel to ensure that the impact of various risks (political, economic, social, technology, legal, and environment) are thoughtfully considered. It often leads me to believe that people often incorrectly:

a) take on too much risk

b) assume risks they were unaware of

c) calculate risk vs reward (can lead to not taking action when things are actually in your favor)

Here are the concepts I consider everyday when managing risks and negotiating deals:

1) Leverage / Strength in Numbers - I list this as my first concept I often think about when I'm doing business negotiations. It's necessary because far too often the persons on the other side of the table do NOT look like me, may not take/respond to my call or business offer, or take your meeting BUT do not take you seriously. Here is Dave Chappelle with little leverage when he was first pitching his show:

Chappelle revealed that he pitched the concept for “Chappelle’s Show” to HBO before it landed at Comedy Central in the early 2000’s. The comedian claimed that the premium cabler’s execs “kicked me out of the office,” and asked him “what do we need you for?”

2) Own Your Work / Know The Terms of the Deal - You often hear me cite this as my most important principle because everyone signs contracts/agreements in life. IF you do not know what any terms in that document mean...use my rule: stop / question / demand. Being a risk manager, I read many of my own and other people's contracts - so I stop reading, question a section, and demand a change that's more favorable to my cause. A recent example of this is I was awarded my 2nd contract in as many months. I spent over 4 hours reading the 18+ page contract and made significant changes to the language that were NOT in my best interest. If you have "Leverage" (like I shared before) it will be easier to get these changes across. And always know which terms/risks are dealbreakers --- yes some terms are not meant to be compromised. Once you hand me a contract, I trust no one. And for very complex items, I am NOT afraid or too cheap to go and get additional legal representation to further review the deal. 

Dave on his first Contract: “I was desperate, I needed a way out,” Chappelle claimed was his reasoning at the time. “It wasn’t good money and it wasn’t good circumstances, but what else am I going to do I said? All these white people sitting at that table told me trust us Dave it’s a good contract, and I looked around the table and they all seemed to agree it was a good contract. But what if it was like that game of three-card monte? What if they were all friends and I didn’t know it?”

I often focus on terms that indicate "all the ways" I might owe you money (usually I'm on the receiving end of being paid as an in demand consultant) and "all the ways" you owe me or might make money off of me. It's unclear but I think Dave may have had a resident deal - meaning he got paid as long as he worked/was an employee of the company. My question to a younger Dave is: a) Who owns the work, you or them?? b) what happens if you leave -- do you still get paid? c) What happens if your show hits syndication, re-run status, sold to another network do you get incremental / royalty / payments for your work still being used?? (Notice a simple question like this is not unheard of as the Cosby Show went into syndication if I am correct AND it would have address future situations and oddly enough new tech like streaming)

Dave on NOT being paid after leaving ViacomCBS: "They (ViacomCBS) didn't have to pay me because I signed the contract" "But is that right? I found out that these people were streaming my work and they never had to ask me or they never had to tell me. Perfectly legal 'cause I signed the contract. But is that right?"

3) Know Your Value / "ADD VALUE" to your Customers - At the beginning, negotiating deals was difficult because I would often think every deal is the most important deal and then I would be frustrated as the deals were close to being completed but NOT ultimately the terms I wanted. I had my lightbulb moment one day, when 3 companies called me about the same deal. haha the funniest or most maddening thing was the terms of the deal were very different even though all 3 companies were calling about THE SAME PROJECT. I started with the highest bidder and forced the others to match and/or come in higher -- amazingly I got the following "please allow me to escalate this to my senior level executive we don't want to lose you". Yeah that's what I thought. So from then on I set my own terms, take it or leave it. I know my value/my worth and what I offer and I'm sure it's hard to find in the industry. Please put me in contact with a decision maker. As you know, I am owner of Manchester United's stock so I was pleased to see another English Premier League club in the news and THEY had decided to partner their marketing/growth vision with Roc Nation. Leeds is tiny compared to Man U but relax and take notes, they wanna go places and teaming up with a black-owned enterprise when you participate in a sport that has many black, African and international players is simply strategic. I hope more ownership in the NFL take note as Colin Kaep is still not on the field...unacceptable. Here is the Leeds Mural celebrating their partnership:

4) Social Justice (No Longer Be Silent) - Affordable housing is becoming a bigger issue as the United States is becoming more of a renter nation. The new trend is new homes are built and being sold to investors like myself who in turn rent those immediately to renters. Not sure who can afford to rent a brand new house but I am just sharing the latest trends we talk about. Well my billionaire buddy Bill Ackman (who is worth $2.2 Billion) and Chris Paul appear to be investing through their family foundations (yeah you're rich when your family has a foundation) in affordable housing. The $357 million investments appear going to Bobby Turner the CEO of Turner Impact Capital to develop affordable housing for working families. This appears to have a social impact to it, but to be clear, I've not read the prospectus for this fund. I truly hope it targets the communities of color that are disproportionately affected by the affordable housing crisis. But again I don't judge, maybe I'll see if I can learn more about the investment fund and if I like what I see...why not invest.

Bill Ackman and Chris Paul Affordable Housing

Side Hustle 101 - AR/AP | Pay Debts Like a Lannister

Side Hustle 101 Series

Starting Your Own Small Business
https://urbanomics.blogspot.com/2018/12/side-hustle-101-start-your-business.html

Running a Small Business
https://urbanomics.blogspot.com/2019/02/side-hustle-101-own-your-business.html
https://urbanomics.blogspot.com/2019/03/side-hustle-101-are-open-for-business.html
https://urbanomics.blogspot.com/2019/03/a-21-savage-look-into-business-income.html

How to Manage Small Business Risks
https://urbanomics.blogspot.com/2018/11/side-hustles-101-risk-vs-reward.html

Small Business Benefits
https://urbanomics.blogspot.com/2018/12/side-hustle-101-pay-yourself-first-with.html

Small Business Diversification
          Keep Your 9-5 Job: 

https://urbanomics.blogspot.com/2019/11/hey-henry-high-earner-not-yet-rich.html

Know Your Worth: 

https://urbanomics.blogspot.com/2020/10/what-you-need-in-life-invest-like.html

Know When You're Speculating: 

https://urbanomics.blogspot.com/2020/10/oh-snapchat-whats-difference-between.html

This past week marked another significant milestone in building a side hustle that earns more than my main hustle (or 9-5 job).  Over the years, I've documented the slow build up of how to start, run, and manage a small business. A key part of this process is managing risk, something I help large corporations all across the world do. In particular I am building a business that helps me diversify my risk. 

My goal is to never be reliant on one source of income. 

My other goal is to add value to people's lives and this world.

I'm well onto my way of achieving these goals as my side hustles are getting close to eclipsing the relevance of my main hustle. Secondly, I continue to build a professional services business that is growing without a website, any marketing or overall push --- remember I have a 9-5 job. I landed my first major contract in San Antonio, Texas and this leads me to my second goal. I'm proud to be an employer --- I'm not just responsible for myself but my business has given someone a job and that speaks volumes. This person is well qualified but with the backdrop of a nation divided, my focus is on hiring people of color, veterans, women (in particular single moms), and anyone who wants to work hard while giving back to others. 

Due to the fact that I have to pay employees and vendors I wanted to quickly discuss how you manage your cash flow, prepare payroll, and make payments. First, I always remind people to understand who you're doing business with and get all terms documented in a contract. Being a risk manager, I review all my contracts and remove terms that ARE BAD FOR MY BUSINESS.

Cash Flow (Sales | Invoices | Receivables)

Sales - Review my Side Hustle series above and knowing your worth goes a long way into negotiating a sale of your product or service. My firm charges at a range where it's a win for my client, my employee, and myself.

Invoices - Next, I'm careful to invoice my customers on time and per the terms we agreed upon.

Receivables - Finally, I'm a hawk on knowing when and IF we got paid for the services we provided.

Payroll

If you have W2 employees, the best bet is to get a good payroll software here to help you ensure that you are deducting payroll taxes according to state and federal laws. If you only have 1099 or Corp2Corp relationships, you can accomplish this with requiring those relationships to invoice you according to a contractual agreement you've established.

Payables

You've seen me write before, I pay people according to the agreed upon terms "Like I'm a Lannister". Yes as in the dubious Lannister family in Game of Thrones, notoriously known for paying their debts or obligations. I keep my employees and vendors happy if I am paying them on-time and of course the right amounts. I've used a few companies this week to help me receive my cash timely and pay people time. I'll list a bunch (which include a few I use):

• Paycom
• Intuit Quickbooks
• ADP
• Paychex
• Gusto
• Your Bank

To keep things simple, for

Cash Flow and Receivables --- I channel The Notorious BIG on the song Get Money. Good contracts and tracking how much and when you're owed will ensure you'll never have to say the following lines: "Guess you could say your the one I trusted / Who would ever think that you would spread like mustard?"  

Payroll - Get help here, you're dealing with the laws. Don't be cheap on getting this right, as there are plenty of online software.

Payables - Paper or Plastic?  Believe it or not checks are the primary option for free delivery of payments to you employees or vendors. NOW you see why this area is ripe for disruption by startups. (hmmm maybe that will be my next startup company). Expect to pay a fee here to deliver payments directly to a bank account (direct deposit) --- but it reduces the risk of lost checks...and saves time.

#sidehustleseries   #paydebtslikealannister   #dontletcontractsspreadlikemustard  #paperorplastic #sanantonio  

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.

A 21 Savage Look Into – Business Income, Risk, & Expenses

A Conclusion to Side Hustle 101 Series 

Income

Music has always played a big part in people’s life.  Reading through my blog over the years, you will see that it is always top of mind for me. So when I drop some knowledge on the subject of income I could reference:

·         21 Savage – A Lot

·         YG – Big Bank

·         Jay Z – Big Pimpin

But I’d rather hit you with a simple rule I learned I learned from Warren Buffett: “Never Lose Money”. His second rule: “Remember Rule #1”. J  This rule is so crucial I use it as a baseline for my other pillars now:

·         “Never Lose Faith”

·         “Never Stop Learning”

·         “Stay Healthy”

Make sure your business and investments make more money than they lose and life becomes a lot easier. Stress over risks to your business and try to get the best return on your investment when you have expenses.

Risk Management

I spend most of my time stressing over things that will derail my pillars in life and my investments. If I’m eating unhealthy, why not cut back on sugar (easier said than done). If I want to reduce stress, why not focus on prioritization, time management, prayer, and meditation. You get the picture, but many people don’t think about risks UNTIL well they hit them in the face. A few examples:

·         Boeing – Recent crashes that have taken hundreds of lives may possibly be linked to not updating airplane software and a lack of pilot training.

·         Equifax – How ironic is it that the company responsible for our credit scores, history, and maintaining so much of our personal data is hacked ( A close second: Ashley Madison’s website hack and they promote discreet relationships for married people)

·         Lululemon – How smart was it for an athleisure company executive to mock curvier women who wear their clothes when that is your primary customer base

·         Netflix – How about when you do nothing wrong like Netflix, but you have the new “risk” that Apple’s new TV streaming service is now dubbed the ‘Netflix killer’

Well I think you get the point…consider all risks and focus on the biggest ones…your company depends on it.

Expenses

This is no one’s favor subject so let’s make it fun by keeping it simple. There is a reason why so many businesses were started in garages…for the free rent J So stop trying to play the part until you actually have money rolling in. Can you work out of your home or garage and forgo that pricey co-working space.? Do you have expensive software when you have one customer? I saw a show where a small business was going to trade shows every year and losing money (why go?).  Don’t get me started on a company car!!. I constantly evaluate: Office Location vs Co-Working vs Home-based; Software vs Spreadsheet; and Personal Car vs Company Car. Grow your business and make sure that next expense helps increase your bottom-line in the future.   After two good years, I decided to pick up the fully loaded BMW X5 e40 company car (I still have my personal SUV because that's for personal use). In the words of J. Cole on 21 Savage’s “A Lot” à ‘How Many Faking They Streams…I Can See Behind the Smoke and Mirrors People ain’t as Big as They Seem”.   Don't fake your streams and get a car you and your business can't support. Stay humble and grow your business smartly. Peace

Pics of my Company Car (and yes I plug in to get roughly 600 mpg...call me cheap)

Apple Proves Value Investors Like Tech

Many people know my personality is similar to my investing style...I tend to go against the grain.  As a techie, I don't love the Apple phones for a technical reason it's a closed source ecosystem. Unlike open source devices, Apple prefers that you use only their software and products. I have to remind people that Apple did not invent putting things in the cloud, sending files/messages should be something you should be able to do to any phone, and chargers are meant to be universal.

But in order to be a good investor your personal preferences should NOT interfere with buying stocks.  While I don't own the phone, I don't dismiss many people around me use the phone. Or the fact that iTunes gift cards are a normal gift around the holidays without even asking me if I am an iPhone owner.  But these aren't the reasons why I decided to stake a claim in the value play a few years ago.  Many forgot back in 2016, Apple was trading under $100 dollars and there was fear they wouldn't be able to break into China and growth had stalled.  But as Apple continued to reinvent itself, I saw value in a company starting to pay a dividend, expanding internationally, and growing a profitable services and payments business. So when there is fear in the water you stake a calculated claim on an old dog that still has a few tricks.  Being in Risk Management, I had fun analyzing this stock and pulling the trigger when everyone was saying I got in too late. At an average of roughly $93 dollars, I was betting on a growing dividend, growth in China (maybe India), apps being the future (including iTunes), and logical determination that Apple phones would become larger as I knew people would share my frugal sensation over phone/tablets or phablets if you prefer (why have one of each when supersized phone does the trick).  I am not placing a big bet on Payments yet because I tend to know a little bit about this space. While people love the technology...I think there needs to be one wallet that can travel with you as you change from an ApplePay, SamsungPay, GooglePay....and merchants are CHEAP so it will be a very long time until every store and gas station pay for upgrade technology that supports these new types of payments.

Many say value is dead but I argue, you have to look in the right places. I just read an article about how Warren Buffet and Berkshire are enjoying the amazing gains of Apple. I laughed because I'm wondering if the pupil is finally learning from the teacher...looking back I bought Apple prior to when Berkshire made their purchase:

Post Mentioning Apple:
https://urbanomics.blogspot.com/2016/10/how-to-invest-in-clinton-trump-election.html 

Wall Street Journal: Buffet Bet Big on Apple


This has also happened with Teva Pharmaceuticals recently so I hope to keep the streak alive and maybe may a few future recommendations...one Oracle to another. :)