The most important life lessons came during a time when my future wife and I were living in my car. The trunk was compartmentalized into healthy foods and eating utensils, while our Northface backpacks held all our belongings; I still remember its uncountable pockets growing fat off of necessity clothes, homework and Walmart gift cards celebrating birthdays and holidays. We kept our credit scores up despite our living conditions, and I had a robust savings account to encounter emergencies thanks to the Army’s TRADOC environment. These were hard times, but the best of times because they molded me into the type of investor and husband I am today.
I married the same woman a year later, our wedding cake proudly penciling in icing, “Because someone bothered to swipe right”, thus commemorating our finding each other over Tinder. We eventually would have earned enough to rent an apartment, and as of 2018, buy our first starter house with half the money I was able to procure from a VA loan. In retrospect, and perhaps the idea will be preposterous for some, when I was a fledgling specialist, or just starting out as a no-name to the military, the one company that aided my wife and I was Bank of America’s Cash Rewards credit card. During that time, I was nursing my financial life back to health on a small income. Before I started investing, I was initially overwhelmed by the plethora of large and small analysts lauding, denouncing, pandering, and fuming about sectors of the economy. It was only until I started ignoring most of them that I became a better, confident investor.
Analysts routinely tell you to do the opposite of what is logical, especially for the most profitable (or potentially profitable) companies. They want you to be fooled so they can load up on promising stocks before quarterly earnings are released. As a 90’s child, I watched as federal holidays became increasingly commercialized; Halloween, Thanksgiving and Christmas now share the same shelf, regardless if one has come or gone before the other arrives. Corporate America has played their chess pieces and for the sake of the sale, now mandates the holidays represent the same strange polytheistic reality.
The average consumer is bombarded by companies everywhere they go, all claiming to be the best examples for humanity while trying to convince you they know what is best for you and your wallet. Products are lined up for you as you exit the grocery store. Advertisements cling to your peripheral vision while watching a Youtube video. Your job tries to sell you their brand of insurance, or forces you to sell it to unsuspecting customers if they want to buy, for example, a storage unit. And the same can be said for financial journalists, or mouthpieces for big companies and the wolves of Wall Street who are, more often than not, whistleblowers for the American people and the same corporations they’re warning you about. Bear markets, therefore, can teach you a lot about yourself and the world around you.
As this article is being written, the FAANG companies are experiencing a decline in sales and stocks as growing fear mounts behind a potential trade war between president Trump and China. Once more, the same fear and greed patterns of investing behavior manifests themselves again in a colossal selloff. The news was baffled, why would the POTUS do something that would interrupt the aging bull market? Reason, however, suggests that the so called ‘trade war’ with China is actually just ‘trade talk’; ever since Richard Nixon helped the US open doors to relations with the Chinese economy, a fact overshadowed by the Watergate Scandal, people forget that the two giant economies have a healthy, regulated interest in trade socially, economically and politically. Even if a trade war did develop, the US and China shake hands with wealthy, powerful people in high places. Thus the tax cuts that will allow corporations to make record profits and give back to shareholders is not only policy now, but inevitable.
Moreover, the tariffs are an aggressive negotiation tactic countries use to regulate economies on the international scene. What is real again, is the tax cuts. Profitable companies like NVDA, FB, AAPL, and thousands of US companies will all benefit from tax cuts, inevitably paving the way for companies to report record profits. To speak bullishly, right now is the best time for investors to load up on profitable companies like the FAANG stocks. But despite these opportunities in place, analysts are suggesting NVDA’s price tag is speculative, talk of Facebook’s demise and Zuckerberg’s dethroning from the future Congress hearing is imminent, articles of analysts older than father time are stating they’ve never seen a volatile market like this before. A trade war is coming. Warren Buffet may perform CPR on General Electric. The sky is falling. And on and on. But the reality to me is much more obvious, and deceptive: the American people have made money, and corporate America wants it all back. Case in point, considering that the only material reason anyone has presented for NVDA’s drop in price is factoring for an alarming decline in crypto trading.
But holistically speaking, the company’s reliance on blockchain is merely a drop in the bucket of their revenue. So then, what gives? Why are analysts mounting fears on something so trivial? An informed opinion could be that, beyond a reasonable doubt, they know what they are doing. The POTUS is also a business man, let’s not forget, and just like the 1928 Stock Market Crash that could have been staged by bankers, the potential for a bear market seems like self-fulfilling prophecy, and the same fear and greed tactics are once again targeting the American people. In all honesty, do people run from sales? No, they flock to them. History repeats itself to those who don’t or wont listen.
When my future wife and I were living in my car, we watched and observed our well-to-do friends obtain and squander their wealth in a matter of weeks, or sometimes in the same day due to fear and greed. Being close to the poverty line taught us how careful we had to be with our money, but also how insidious corporate America can be even when you are careful. As long as you are alive and have money, you are a target. In recent history with the advent of technology, consumerism is not only demarcated by the selling of brands, but sucking the personal information of the masses in cloud computing technology to better assist companies in making money off of you by third parties. In my own opinion, I doubt Facebook did not realize close to a hundred million users’ Facebook accounts weren’t itemized for third party interest. Money talks, and money is power, and those with power rarely want to give up their position. And that’s why historical tragedies and bear markets continue to repeat, and food and water are price tagged and limited.
My wife and I refuse to be debt slaves. Although we carry debt, we are quickly climbing out. Living in my car taught me how to be a more intelligent, cunning investor that invests with a skeptical disposition, one unfazed by emotional rhetoric. Being poor and limited in options gives reality a sense of unlimited potential, because suddenly you have time to build your empire when no one is looking or cares. Slow and steady wins the race, and when you have nothing, hope and anger can be your greatest allies and motivators. My top investments in this sideways market has rightly been clean energy, water and real estate while everyone seems to be loading tech stocks with their countless capital. Granted, I’m also in a couple of tech stocks and ETFs too, but my greed was never so great that diversification did not happen. And before anyone accuses me of taking an extreme political stance, I value the existence of corporations. I have been a long time Bank of America customer, and I’ve been making money off them just as they make money off of me.
Being a shareholder is, in a financially comforting way, almost egalitarian; being a shareholder levels the playing field. But it also makes you a target to hungry analysts and their masters. As I grow in my military career, I’ve noticed that the military is mostly paperwork at the top. And so it is true with many corporations. The higher position you are in a company, the greater that paperwork. Memorandums and terms and rules and signatures rule the world of blue chip companies so long as there are people to govern. But, while the Whales of Wallstreet will have their dinner, my wife and I will have ours too.
THE STOCK TALK 