-Nick Maggiulli
This is why we stay invested and invest more regardless of the headlines or our feelings or whatever.
The stock market is up more than 20% since it bottomed in October of 2022. Despite all the yelling about an impending recession (guilty of feeling bad about the economy), and yelling about an impending crash. All the stock market has done is GO UP!
This is why we stay the course. If you have been buying throughout this time period. Congratulations! You may look at your portfolio again. Because it probably looks very beautiful right now. I know mine definitely does!!
Welcome back to the Rambling Mind Newsletter. This is your Market Update.
Markets
This newsletter is 1,536 words a 7 min read
Tale of the Tape
Economy
According to States Farm & Allstate, the State of California is uninsurable due to the increase in wildfires in the state.
💬In Their Words: State Farm said, "We take seriously our responsibility to manage risk. It’s necessary to take these actions now to improve the company’s financial strength.”
Allstate said, "The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes and higher reinsurance premiums.”
🤧Not Alone: California is not the only state that is gunning for the title of uninsurable
Louisiana and Florida are also seen as uninsurable by many insurance companies due to the risks of hurricanes.
Many of the companies that wrote policies in the state went bankrupt due to Hurricane Delta, Lauren, Zeta, and Ida between 2020 and 2021.
Colorado and Oregon are slowly moving in the direction of California as Climate change causes more often and larger wildfires
🛌🏾Takeaway: We have made our bed and now it is time to lie in it. For the longest time, we believed Climate Change was someone else's problem. Well, now it is at our doorstep. When other continents were suffering from the decisions we made in the US, we ignored them. Well, we cannot ignore it anymore. The question is, will we actually do anything about it?
Plus we really need people to stop building homes where they know that there is a high likelihood of destruction. Looking at you Florida. But then again these are some of the most expensive homes usually because MONEY TALKS.
On Monday, Apple held its WWDC Event. They unveiled their newest device. Also, the first brand-new truly stand-alone device launched since the iPhone. It is an augmented reality headset called "Vision Pro".
🔢By The Numbers: It will cost you a nice $3500 to get your hands on one. It is very much priced for the enthusiast crowd.
🔀Into The Mix: Apple joins Microsoft & Meta (Facebook) as the few companies that continue to forge ahead in the computer on face arena.
Microsoft has been working on this since early 2016 with the HoloLens. However, they have only sold 200,000 devices.
Meta has its Mixed Reality Oculus Headsets. Selling about 20 million units
Takeaway: Unlike Meta & Microsoft, when Apple launches a product, it typically does well. I am not so sure about this new headset. However, Apple is the cool brand that everyone wants to be associated with. So it will probably sell very well.
My Takeaway: They showed an example of a parent playing with his daughter and using the goggles to interact with her. I just cannot imagine that people will prefer having these ski goggles on their faces while other people are around. But then again no one thought phones would be this integrated into our lives.
From all the reviews and first impressions from tech nerds, it seems Apple has blown it out of the park once again. So I'm glad to be an Apple shareholder. But I will be waiting for iteration 3 when the price is something that I can actually afford without selling my body parts.
My Concern: My worry is it seems more and more technology is leading us to a world of isolation. Everything being created is more and more centered on the individual. There is nothing for communal sharing, it is all designed to remove us from the reality of our world and to a world of our own creation. But as we all know, we humans NEED social interaction to survive. It will be interesting to see what the effects are of these new devices over the next decade. Just as social media was not all good, I wonder what we are walking into.
Stats of the Week
Marvel is still Marvel. Miles Morales is the Best Spiderman. Yeah, I said it.
Spiderman: Across The Spider-Verse brought in over $120 Million in its opening weekend. This was the second-best opening weekend of any movie so far this year, behind only Super Mario Bros.
I loved the movie. I could not look away the entire time, plus the way it ended was just
🤦🏾♂️$21.4 Billion
After fighting and getting $80 Billion to expand IRS Budget and help the government bring in more revenue to operate. The Biden Administration agreed to cut the IRS Budget Cut by $21 Billion in order to come to an agreement with Republicans to raise the debt ceiling.
So DUMB! Essentially the government is shooting themselves in the foot in the long term. This would be like Apple deciding to stop producing iPhones to focus only on the Vision Pro. Could they still make money? Yes, but they would quickly go bankrupt because the iPhone is their primary money maker.
🚺2056
According to projections by the Center for American Progress, women will finally reach pay parity with men in 2056.
🔢By The Numbers: In 2021, a woman working full-time earned $9,954 less than their male counterparts.
A Few Reasons why the gender pay gap still exists:
Women are overrepresented in lower-paying jobs like teaching, hospitality. And underrepresented in higher-paying jobs
Women also tend to take more time out of the labor force to care for children or work part-time.
Bad bosses still exist which means discrimination still exists.
Takeaway: To reach parity it will require structural societal changes. From the ability for men to take extended parental leave. Women not being seen as the main or only cog for child care.
👮🏾♂️$130,000
A man in Finland was fined $130,000 for going 20 mph over the speed limit. You might be shooketh but let me explain.
Details: In Finland as well as Switzerland and a few other countries. They have something called a Day Fine system. Where your fine is based on your daily income. The fine increases as the severity of your offense increase. The man fined in this case was a multimillionaire who owned a company called Wiklof Holding Company. He also happened to be one of the richest men in Finland.
This is how fines should work. Right now in the US, most fines burden those who are poor or doing okay and do nothing to those who are rich. If you want people to really stop abusing the system for their benefit, we have to make it really hurt.
New York is introducing something similar for parking tickets. Currently, it has over $1 billion in outstanding parking and speeding tickets.
My Dad used to say, "Empty barrels make the loudest noises."
According to Analytics firm Antenna, between May 26 and May 27 when Netflix began cracking down on password sharing. Netflix saw 100,000 daily subscribers.
"Average daily Sign-ups to Netflix reached 73k during that period, a +102% increase from the prior 60-day average. These exceed the spikes in Sign-ups Antenna observed during the initial U.S. Covid-19 lockdowns in March and April 2020."
People may scream on Twitter but Twitter is not reality. I pay more attention to what people do than what they say. One of my new favorite things to say is, "I can't hear you because your actions are too loud."
We are all addicted to having easy access to entertainment. Anyone who says otherwise is lying to themselves.
Expect expensive gas this summer. Saudi Arabia just announced an oil cut of 1 million barrels to drive prices higher. Looks like I have my excuse to stay inside my house for the Summer.
Looking Ahead
Inflation & Rate Hikes
On Tuesday, we get fresh Consumer Price Index numbers for the month of May.
🔢By The Numbers: Expectations for inflation are:
Month-Over-Month increase of 0.2% lower than the 0.4% in April
Year-Over-Year increase of 4.1% much lower than the 4.9% in April
Decision: Because of those inflation expectations, it is expected that the Fed will pause rate increases. Keeping rates at 5%.
I tend to agree. The Fed has accomplished its job. Although, the job market never really cooled off. Inflation has continued to decline. Hoping that decline continues into the end of the year. But then again, average inflation may decline but your personal inflation may still be high based on what you buy. Plus I do not expect prices to come down, just to remain level for the rest of the year.
Sports I Love
The GOAT is coming across the Atlantic to the United States. Messi signed a 2-year deal to play for Inter Miami after leaving PSG at the end of this season.
The Deal: This was not a regular negotiation for a player. The MLS threw all the stops to ensure Messi would be coming to the States. Including:
Apple TV & Adidas profit sharing (not just on his jersey sales but on all jersey sales)
An option to purchase a percentage of an MLS team at the end of his 2-year deal
This was all in an effort to lure him away from Saudi Arabia, where there was a rumored $400 million deal on the table. Also, Barcelona had also been vying to bring Messi back to the Camp Nou. But they are broke and could not really offer much competitively.
Takeaway: People never cease to amaze me. Tickets for Atl United vs Inter Miami went from $20 for cheap seats to over $300. Now there are tickets that cost well over $1,500. People are willing to go broke for an “experience”.
🏆NBA Finals
I believe the Denver Nuggets end the series against the Miami Heat today and win their first-ever NBA championship. Miami just do not have an answer for the flurry of ways that the Nuggets can attack them.
👑The Empire Strikes Back
Man City did it. They completed the treble. The Evil Empire has accomplished its mission. Only 6 teams in the history of time have ever done this. Pep Guardiola coached two of the teams. Without a doubt, he is the Greatest Coach of All Time.