Welcome back to the Rambling Mind Newsletter.
This post is 1978 words and a 10 min read. ENJOY!
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😓Stock Market Returns:
Tale of the Tape
Economy
According to a survey from Harris Poll, 43% of Gen. Z workers plan and expect to retire before age 65. This is the highest of any generation:
37% of Millennials say they expect to retire before 65 (this is called a sobering reality)
24% of Gen X say they expect to retire before 65
Gen Z sees retirement differently from other generations. According to Northwestern Mutual executive vice president Christian Mitchell:
When you ask a young person about retirement and you ask an older person about retirement, they’re thinking about two fundamentally different things. Retirement may be a second career, retirement may be doing more gig work, retirement may be working for a nonprofit. They’re thinking about it in more nontraditional ways.
🤔Math Ain't Mathing: Only 35% of Gen Z say saving for retirement is a priority. Compared with 48% of Millennials and 66% of Gen Xers.
My Takeaway: It is GOOD to be YOUNG!! When the realities of life have not set in. As someone who is well-versed in all things finance and aims to retire early, I am not completely sure that I will achieve it. Early retirement sounds sweet and achievable based on our current lives and all the things we see others talk about. But we evolve much more than we think and will become different people as we age. It also takes a lot of sacrifice in our present life to make room for a better tomorrow. Personally, I have not met a lot of people willing to make those sacrifices. But I am glad Gen Z’ers are already thinking about these things.
My Advice: At the very least make a 65-year-old retirement the backup plan by investing in boring 401(k) or Roth IRA plans. Just in case the big break that allows you to retire early never shows up.
After months of anticipation, the Federal Trade Commission announced they were suing Microsoft to block their acquisition of Activision Blizzard.
⏳History: Back in January which feels like an eternity ago, Microsoft announced the acquisition of Activision Blizzard for $69 Billion. The largest acquisition the company has ever made. Immediately, everyone began to wonder if such a deal could possibly go through with how heavy-handed Lina Khan, head of the FTC, has been with blocking most deals, especially any by Big Tech companies.
💬In Their Words: Well our worries were not unfounded. The FTC said:
With control of Activision’s content, Microsoft would have the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition — including competition on product quality, price, and innovation. This loss of competition would likely result in significant harm to consumers in multiple markets at a pivotal time for the industry.
Microsoft's Vice Chair and President, Brad Smith said:
We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers. We have been committed since Day One to addressing competitive concerns, including by offering earlier this week proposed concessions to the FTC. While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court.
Takeaway: This is the first Big Antitrust lawsuit against Microsoft in over 20 years. After dancing with the DOJ and FTC back in 2000, Microsoft has been able to stay under the radar unlike its Big Tech counterparts (Apple, Google, Facebook, Amazon). Who have all been summoned on multiple occasions to Congress. With FTC Commissioner Lina Khan those days are long gone.
My Takeaway: As a Microsoft Shareholder, I am bummed this is going to court. I was hoping Microsoft would be able to pull this off without much of an issue. As a gamer, I think this is a good thing because when a game publisher or developer gets bought. The games from the publisher/developer are locked behind that platform’s walls i.e. Microsoft buying ZeniMax and making Elder Scrolls an exclusive game for Xbox and Windows.
Stats of the Week
The National Median Rent dropped below $2000 for the first time in 6 months
According to a report from Rent.com, it is now $1983 after hitting a high of $2053 in August.
This is great news for inflation but also for everyone's wallet
The average 30-Year Fixed Mortgage rate fell for a fourth straight week, now down to 6.33% from a high of 7.2%
Another sign inflation is easing and definitely helps anyone looking to buy a home because home prices are also declining
Side note: On Wednesday, the Money Mentality topic will be on Homes (primary residence) as Investments. TL:DR they are not
The G7, European Union, and Australia all agreed to pay a maximum of $60/barrel for Russian Oil
The price cap is designed to limit profits for Russia to use to fund its war against Ukraine
This is another reason gas prices have fallen sharply over the last month or so
There is a possibility that this group of Ultrawealthy nations could use this same power to counterweight the power of OPEC to set oil prices
That is the expected average cost of auto insurance for one car in 2023 according to Insurify.
Insurance is expected to increase by 7% from 2022 and almost 30% from 2020 prices.
Just as gas prices are going down, insurance fills the gap.
For the first time ever, the average monthly insurance premium will be more than $150/per car
Cars have so many phantom costs, insurance is one of the biggest. I hate owning a car
TSMC, the largest and most advanced Semiconductor Chip manufacturer in the world, announced it will increase its investment in a fabrication facility in Arizona from $20 Billion to $40 Billion to bring advanced chip manufacturing to the US.
This is the largest direct foreign investment in US history.
Big deal because currently all the high-end chips are manufactured in Korea or Taiwan. Bringing it stateside helps the US protect against China
To show how important this was, President Biden and Tim Cook traveled to Arizona for the announcement.
Biden said, "American manufacturing is back, folks."
Individual Investors have lost a combined $350 Billion so far this year according to Bloomberg
The average retail investors portfolio is down 30% Year to Date while the S&P 500 is down only 17%
I can attest to this. My Single Stock portfolios are down 15% & 25%
Maybe we are not as good at investing as we thought we were
Looking Ahead
Fed Speak and Inflation
On Tuesday, we get the final inflation numbers for 2022. Expectations are for inflation to decrease year over year from 7.7% in October to 7.6%. It is also expected for core inflation which excludes food and energy prices to decrease from 6.3% in October to 6.2%.
On Wednesday, Jerome will speak for the last time in 2022. It is expected that he will announce a 50 basis point (0.5%) increase in interest rates. Bringing the Federal interest rates to a more normal 4.25% to 4.5%. However, the pace at which interest rates got there has been anything but normal. This has been the fastest increase in interest rates in history.
My Takeaway: There is nothing new here. Inflation has peaked and keeps dropping. The Fed has not changed anything they have been saying for months. But I can almost book it that stocks will fly upwards on Wednesday and then crash back to earth on Thursday. As investors overreact to everything Jerome does or does not say.
Sports I Love
Rumor has it that Cristiano Ronaldo will be getting paid $200 million per year to play for Saudi Arabian club, Al Nassr. No wonder he was willing to throw everyone under the bus at Man U.
🏆The Gift That Keeps Giving
This World Cup is the Gift that keeps giving. After some of the worst penalty shooting I have ever seen:
Croatia beat Japan
Morocco beat Spain, shocking the entire World.
Portugal wiped the floor with Switzerland
Brazil played true Samba Football and crushed South Korea.
The Quarter Finals were just as exciting:
France beat England in a very thrilling match
France tried their hardest to give the game away
Harry Kane was too polite and did not accept the gift
Brazil beat Croatia easily with their beautiful and dynamic footballThis team is special. I love watching the way they move the ball and have fun on the field
UMMMM I was completely WRONG about that!
How is Croatia able to keep doing this?!!
I cannot believe what I watched on Friday
New rule: NEVER LET CROATIA GET TO PENALTIES!
Morocco ended the dreams of Portugal
Ronaldo's dreams ended a while ago as he is now a bench player
No one saw this coming. I thought Morocco had a chance but this was a total surprise
Thank you Morocco, now Nigeria can make it to next World Cup
By Morocco going to the semi-final of this World Cup, it increases the number of African nations that can qualify from 6 to 11
King Leo continued his march to world domination by beating the Netherlands
This game was intense and INSANE!
The Dutch came back from 2-0 down and almost stole the game but penalties were their downfall.
THIS WORLD CUP HAS BEEN ONE FOR THE AGES!!
MERRY CHRISTMAS TO ME!
Extras
Always great to see what we all thinking about throughout the years. As a finance nerd and a content creator, this was how I decided what content to create or will create in the future. So here are the top trending finance questions we had in 2022:
How do I buy I-bonds?
I'm pretty sure no one wants these anymore cause they no longer pay 10% interest
What is a bear market?
Extended market crash. I am sure everyone knows this one well now
Why is gas so expensive?
Putin is a dick, Covid messed up supply chains
How to get student loan forgiveness?
No one knows cause Republicans said NOPE
Should I stop 401(k) contributions?
HELL NO! Unless you have a really good reason and it is the last place to remove money from
Elections FINALLY Over
On Tuesday, Raphael Warnock beat Herschel Walker to remain in place as the Senator for the state of Georgia.
Major Takeaways: It is finally OVER!! No more spam mail in my mailbox telling me to go vote. No more ads! I am free from the annoyance!!
I should not be but I am kinda shook that Walker stood a chance. It is extremely sad to see just how far we have come as a nation. Walker showed no signs of having the ability to lead. But guess logic does not matter right now in our current society. It is all about our emotions
This gives Democrats a 51-49 majority in the Senate, removing power from Senator Senima and Joe Machin who were a pain in the Democrats behind the last two years.
$1.4 Billion was spent on elections in Georgia since 2020
$400 million was spent this mid-term election
Never get it twisted. Money Rules EVERYTHING!
Wash Your Hands and Cover Your Mouth
Major Flu Outbreak in the US
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Recommended Reads
Starting a new section in the newsletters of things I read and enjoyed
Barry Ritholtz breaks down the supposed "Worker Shortage"