MARKETS,Anybody even yet?

[dinghy]

My mortgage in 1974 was 9 percent. It became a bargain when Jimmy got going. Back then 9 was considered normal. I don’t ever see the US returning to 2 percent. We will be lucky to get back to 4-6 percent inflation.

9 was not normal. 9 only happens when the government inflates a bubble.



(Source: https://www.dallasfed.org/news/speeches ... 81024.aspx)

Bubbles eventually deflate.

In 200 years of US history, I believe the average inflation rate is around 2. And we can infer from the chart that other developed economies have been similar.

I only see down for the market at this point and I have more exposure than I would like to have myself.

Why do you have more exposure than you would like? You can sell.

I'm only buying. I buy as we go down, and sell as we go up. This should be a fun week because we have the 2008 repeat risk. For me with significant LatAm holdings, I'm watching today's Brazil election. Crazy communist Lula is expected to win, so in theory my stocks should not crash because the outcome is already priced in. But a Bolsonaro upset would/should trigger a rally. Brazil has been a big performer this year, +10% (EWZ). The only better country on my watch list is Turkey (TUR), +22%.

[olds442jetaway]

As a 24 year old kid with limited financial knowledge, 9 percent was a bargain at the time especially since everyone was paying that or higher for new mortgages. Some of my exposure I will dump before year end for a tax loss and of course anything over 3,000 after offsetting gains I can carry over forever. I am actually nibbling a bit on a couple of good companies with great dividends. Pru and BGS for instance. I also plan to pick up some more of a risky one that has been good to me for 30 years. AWF. It is really cheap now and pays I think an 8 percent dividend at these levels. I have very little NASDAQ exposure. But I still think the market could shrink another 10 to 20% before year end. Hope I am wrong about that. I think NASDAQ stocks are off well over 30% for the year. If I still like the losers that I will dump, I can always buy them back after the wash sale rules are satisfied and pick a big tax break for dumping them.

[dinghy]

9 percent was a bargain at the time

For sure. You have to play the hand you're dealt. You won't get anywhere complaining that the rate was only 4 during the War of 1812.

I am actually nibbling a bit on a couple of good companies with great dividends.

That's the spirit! Not investment advice ha ha, but you give yourself two ways to win because although your stocks may not go up short-term, they're highly probable to turn green long-term.

AWF. It is really cheap now and pays I think an 8 percent dividend at these levels.

Junk bond closed-end fund. That's been a horror show lately:



How do you lose 10.6% in one month when the major junk bond ETFs (HYG & JNK) were only -4?

I don't know. Closed-end funds are vulnerable to the double-whammy because when their NAV declines, often the discount also widens. AWF is currently priced at 8.88 against an NAV of 10.14. But I don't know the history. Some funds pretty much always trade at a discount.

I'm an expense ratio stickler, so I would be discouraged by AWF's 1% expense compared to <0.5% for the others.

I've chosen to go in a different direction, buying EMLC and VWOB which hold emerging market sovereign debt. Their expenses are 0.3 & 0.2% respectively. I hope to buy corporate bonds (at lower prices) later.

[dinghy]

Brazil goes to a runoff (Oct 30th).



Polls had Lula winning outright, so this should be mildly positive for financial markets.

[dinghy]

Check out Glenn Greenwald's tweets on the Brazil election. He's a red-pilled lefty.

Quote: "[The polls] didn't just pick the wrong winners. In some of the most important races, they were off by *20-30 points*, always in the left's favor."

Look at the market reaction. EWZ is +9% this morning.

This may have implications for US elections next month. The polls will probably suggest tight races, but if the Republicans win big, I think stocks could rally.

I must note that stocks didn't in 2016 when Trump achieved his surprise victory. SPY gained <3% for the remainder of November.

[olds442jetaway]

er Market up for now. Hope it holds. I think I paid somewhere around 10 bucks a share for AWF in the 90s. A few weeks ago, I compounded out the dividends for the last 25 or more years I have owned just between 100 and 300 shares. The result was hard to believe. I forget the number, but I think it was between 75k and 100k I would have now if I kept the money and let it grow. Most if not all of the dividends got used up on VP. I did the compounding as if the divs were reinvested and it was still worth 10 bucks a share.

[dinghy]

One of my losers ran wild today. FNHC FedNat provides homeowners insurance in the Southeast including Florida.

Got in last year because of insider buying, and did one successful round-trip but then accumulated into the collapse and am now negative on the position.

Friday, FNHC closed at 11.5c as it circled the drain to bankruptcy. Today it traded up to 69c for an interim session gain of 500%.



No news that I can find. I unloaded about a third of my position around 50 cents. Seems like these situations eventually end in BK, but I have no idea what's going on.

[FAA]

Banner day. I was +1.23% today.

[FAA]

An even better banner day. I was +1.51% today.

[dinghy]

OPEC production cut incoming. Could be up to 2 million barrels.

World consumption is around 100.