I’m back from an incredible trip to Montana and raring to go.
Doing some quick math in my head it seems that president Biden’s latest school loan gambit is an even better deal for the 800,000 or so graduates that qualify. The Federal government is about to forgive an average of $48,750 of debt. Hmmm.
I believe I have said this in the past but I am not a big fan of debt forgiveness for students. It is part of the growing up process and you just deal with it. What I would be inclined to accept is some form of interest rate deduction. It may not be appealing now since interest rates have risen over the last 19 months but if the government wants to help these young people and indirectly buy votes from millions of people, lower the rates to 3% on all Federally funded loans. They still have an obligation but the monthly payment on that obligation will be reduced. Peg it to the Fed’s sweet spot, which I think is more like 2 %, if you really want to get crazy.
I know this forgiveness program is primarily designed to help lower to middle income graduates and I can sympathize with them but you recieved money to help for your education. Would Citizen’s bank forgive your car loan? No, so you take the burden because it will, in the long term, provide you a better chance at success. That’s it.
Onward.
We are officially in the Summer doldrums and judging by what I have seen since the beginning of June, we really are. Half the country is reeling from heat that is unrelenting and the other half is dealing with smoke and humidity that makes a bald man sweat. It’s all due to climate change for sure. Incredible how every article in the New York Times and the Washington Post repeatedly mention climate change whenever they write about the heat and the weather overall.
So, let me get this straight, in January, when Chicago or Toronto or Buffalo is under 6 feet of snow, it’s climate change as well. The sub zero temperatures that invariably happen across the country are related to my 2014 Tundra that gets a remarkable 14 miles per gallon?
I’m sorry, enough already. Enough with this forcing an agenda on everyone. Forcing a money manager or portfolio manager to use some ESG matrix to invest.
If you look a little deeper, those people that have this mandate have had poor returns for years. To put it bluntly, The idea of investing solely with ESG in mind, sucks.
I am not against using that power that the investment community has to wake up companies that have a very poor track record as far as the environment goes. I just don’t want to make it my priority.
Let’s be honest here. If you have a portfolio that is overloaded with companies that meet this criteria and it returns 6% over time, I guess you can live with that but if you have an opportunity to do better by looking at a company’s potential growth sans the ESG mandate, wouldn’t you prefer to be invested in a company that will have a better chance of helping you achieve your financial goals?
I know, it is selfish for sure and I agree that some people would rather invest in a company with a very good track record as far as ESG goals are concerned but at the end of the day, your investment strategy needs to be better than that.
Besides, most companies do a fairly good job nowadays of attempting to achieve a positive rating as far as ESG is concerned so invest for future growth and I believe you will be better off in the long run.
Back to business.
What I try to do every week is look at the Economic Calender for the week. Sometimes I see things that I think might be important and that helps me look at the bigger picture a little bit better. Investable ideas, probably not but keeping up with economic indicators helps when determining portfolio balance.
The week coming up is a light one. Not sure why they even publish the Empire State Manufacturers Survey but it is Monday to start things off. It’s old time significance is not lost on me but New York’s economy has moved away from manufacturing for decades and I don’t it says much about the overall state of manufacturing in the US. I disregard it.
The rest of the week is inventories and industrial capacity and housing. All watchable numbers but will any of them move the markets? No.
I keep an eye on housing because, while it may seem simplistic at first glance, there are a lot of assumptions that can be made and I have always believed that if a recession were ever to rear it’s ugly head, it will start with housing. So far, it’s not even close. The housing market has stayed relatively strong, not over heated and that’s a very good sign.
In some ways, because the job market is still in very good shape and the housing numbers have been pretty good, my gut tells me that the second half of this year will be as good as the first and that bodes well for the stock market.
I am revising my year end numbers to read something like this: The S&P will end the year above 4800. That works out to roughly a 25% gain (doing high school math here). A gain of 6 1/2 % from here.
Thanks for being Raring......