techno-ag said:

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WWR near all time low at 68 cents.

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Time to load up! JkJk

Ags2013 said:

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techno-ag said:

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WWR near all time low at 68 cents.

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Time to load up! JkJk

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Never be this low again!

Seems relevant here...

https://instagr.am/p/CwGCD5FrgmL

Clown world. Jpow tells us he won't rest until we have double digit mortgages and tech can't borrow at all, and the crowd goes wild

Charismatic Megafauna said:

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Clown world. Jpow tells us he won't rest until we have double digit mortgages and tech can't borrow at all, and the crowd goes wild

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His hope was to talk the economy into slowing down so he can start to lower rates slowly. Not going to work. People cant stop their runaway lifestyles. Savings and cash are mostyl gone and people are operating on credit and about to slam into a brick wall. Then FED will have no choice but to lower rates but it will be too late and all it will do is create even worse inflation down the road.

Quote:

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A recent survey by the financial services company Empower found that a third of households with student debt expected their monthly loan payments to be at least $1,000, and that many were preparing for "significant" lifestyle and budget changes when repayment begins. Those planned adjustments include cutting back on dining out, as well as taking on more credit card debt.

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Credit Card Debt Hits New Peak as Some Borrowers Face Financial Strain - The New York Times (nytimes.com)

How do you recommend getting prepared? A couple days ago you discussed the cycle making an argument we are in the middle recovery phase. You stated not being prepared is a bad plan even if the big move isn't for another 7 years.

Does that mean going all cash? If so and the love doesn't happen for 7 years, the move may not even be down to our current level. Is it better to just stay mostly invested?

Currently we are preparing by paying down debt at a massive clip. Paid off our student loans last month and should be debt free including house in 14-18 months. At that point a significant reduction in our free cash flow won't be as catastrophic.

Just curious your thoughts. Appreciate and respect your input.

i think of the business saying... revenue is vanity, profit is sanity, and cash is king

keep revenue sources flowing... make sure that your personal balance sheet is profitable and not operating at a loss, and build that cash stash

for me... no debt unless 2% or less interest rate... maintain diversity in investments (i will not go all cash for the fear of missing out on growth or dividends)... increasing that personal P/L profitability, and building that cash stash up as much as possible (and staying short in treasury markets for interest)

i still believe that we are on the precipice of one of the best times in history for purchasing assets

disclaimer... this is not financial advice and your mileage may vary

reineraggie09 said:

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How do you recommend getting prepared? A couple days ago you discussed the cycle making an argument we are in the middle recovery phase. You stated not being prepared is a bad plan even if the big move isn't for another 7 years.

Does that mean going all cash? If so and the love doesn't happen for 7 years, the move may not even be down to our current level. Is it better to just stay mostly invested?

Currently we are preparing by paying down debt at a massive clip. Paid off our student loans last month and should be debt free including house in 14-18 months. At that point a significant reduction in our free cash flow won't be as catastrophic.

Just curious your thoughts. Appreciate and respect your input.

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I think you are smart to pay off debt so long as you aren't paying off notes secured at historically low rates with low leverage.

You absolutely should be invested. But the days of dollar cost averaging blindly should be over. You have to be targeted with your money. Every single trade-able asset operates on its timeline, with its own fundamentals, it's own technicals, and largely independent of outside forces barring major market events. But as we saw in 2022, there isn't much hiding space when an event happens. And you won't know it's coming. And you won't know how long it will take. You will try to re-engage at multiple bottoms only to find that wasn't the bottom.

And you absolutely cannot assume the decade of historically low rates and free easy money will be repeated. What happened prior to COVID happened. It might happen again. But just throwing money in SPY and ignoring it while assuming it will be worth more in 10 years than the amount the dollar has lost is foolish.

You should divide your investment cash into six segments. When income is earned and excess cash is generated, the cash should be regularly divided between the segments and should be consistently spent based on the plan for the segment and the allocation you pre-decide.

1. This is your **** hits the fan money. You do not care what happens to this money in relation to the dollar value of it. This should be spent specifically on hard assets meant as a true hedge against catastrophic events. Physical metals is pretty much the guideline here. This should be a small portion of your monthly investible cash. Again, the value of this segment doesn't matter. The dollars should be considered sunk. This is an insurance policy for a situation you don't want to have to think is possible - the dollar being destroyed. If you are 80 and it hasn't happened, RE-convert to cash and buy some Heinekens, cocaine, and hookers.

2. This is your hedge, similar to the above, but in an event where the dollar still remains. Physical metals can be in this segment, but you can also add gold and silver stocks, Bitcoin, and inflation resistant commodities. This is your recession segment. While your speculative investments will be decreasing, this will be stable or increasing in 2008 type of event.

3. Fixed income. This is moving into the productive side of investments. Bonds are a great place. You're not trying to beat the S&P or make bank. You're just guaranteeing that you will have something providing a steady income at all times.

4. Low risk equities. This is one step above segment 3, but still a risk adverse segment. You should be aiming for high performing, low volatility stocks that return a consistent dividend. They aren't as safe as bonds, but can be far more lucrative. This step starts to require more active management. Even great stocks can get hit with the down bug for extended periods of time (cough Disney cough Tesla).

5. Alternative investments. This is where you invest in syndicated real estate deals, business startups, patents, you name it. Your money will likely be untouchable until the sponsor decides to return it, but it can be very lucrative. High risk high reward. And well rounded while not tied completely to the stock market.

6. The final segment. This is for this thread. Highly speculative high risk stock market equities, options, and futures. This is your betting money. Now that you have safely invested your money into a well diversified range of vehicles, you can safely play around. If you lose every penny of this, you should no longer be worried because you were smart with the rest.

How does this look in practice? It's harder to start than maintain.

Say you generate $1,000 of excess cash per month. Here's how you might divide it.

Segment 1 - 10%
Segment 2 - 10%
Segment 3 - 25%
Segment 4 - 25%
Segment 5 - 20%
Segment 6 - 10%

If you don't have enough up front to effectively afford what the segment is designed for, say buying physical gold, then wait until that segment does have enough. For segment 5, it might take you a while to have $25k-$100k to invest in a big deal. That's ok. Plan out how long it will likely take and invest that segment into segment 3 matching the duration until it's hit the threshold.

Returns from each segment should be RE-invested in their own segment based on your own tax threshold. Segment 6 returns should be allocated to the other segments the same way excess cash from primary income source is. Segment 5 can also be re-allocated to the other segments, but might consist of significant capital gains so might be wise to reinvest with segment 5.

The real kicker is, you can't half ass this. It's a life change. You have to commit and stay committed. Each segment represents and risk and return threshold necessary to survive long term no matter what is thrown at you. It is not get rich quick and it cannot survive throwing caution to the wind and suspending the plan for one year. If you have a financial advisor and aren't comfortable self managing all of this, make sure they know the plan and stick to it.

Lastly, I'm by no means saying this is how you have to operate. You asked how to be prepared. You asked if you should be invested waiting for something we can't predict. This is how.

I would recommend buying shares of ASO and selling $50 calls 3 weeks out @ 6.5% return. Then the rest of the year is gravy.

Charismatic Megafauna said:

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Is silver primed for a run or gold primed for a drop? I've had this theory that btc (and crypto in general) have knocked the historic pm proportions out of whack by taking market share from gold. So maybe it's time for a btc or eth run, and gold drops back to 50x silver without silver running?

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Have you taken into account the supply of gold and silver? How much is being mined? Correlation between supply and price?

I think it is logical to assume that BTC, the instrument dubbed as "virtual" gold, has taken some of the market share of precious metals, especially in the younger demographic who would likely have hedged using gold and silver had BTC not been a thing.

But what is the reality? It's far more complicated. Gold and silver have a historical reaction to many things, primarily their own supply (both in rotation and new supply) and demand, but also the value of the dollar, value of other currencies, and geopolitics. And regarding the supply of silver, a good amount of it is lost every year to scrapyards. It's extremely hard to "mine and add into rotation" more than is lost, but we don't really even know how much is lost and "out of rotation".

And how is BTC going to react in a recession? We don't have enough data points yet in its young life to truly feel confident that it is digital gold. It's also not even a fair comparison. We know how much total BTC can ever be mined. We don't know how much gold can be mined. So there's a supply related deflation component to gold that won't be a component of BTC in short order. That alone makes BTC very compelling.

You could study this for hours and still not have answers on any of these things. Just a lot of hot air, opinions, and prideful commentary. You end up picking and choosing what you want to believe. At the end of the day, gold and silver have a LONG track record, predating modern charting and stock market trends, as being a stable store of value throughout the life cycle of entire civilizations. That is why it's primary purpose should be as a hedge against the entire system we live in. And there's reason to believe BTC will perform the same way, though the lack of history and track record does provide a risk factor. On the other hand, if your goal is to make money off the rising or decreasing value of metals OR BTC in relation to the dollar, then you have to treat them like any other tradeable asset and assume the risks that you would with any other investment vehicle.