My Portfolio: 22Q3

This issue of Peek Into My Portfolio is a summary of my financial situation for the 2022 Q3. If there is anything you want to know feel free to ask in the comments.

Inflation

So, I heard Caty Woods talk about inflation. I didn't agree with most of it, but it highlighted the difference perception can make. The main consumer stores have increased inventory, just in time for Q4 holiday season. Lower prices are coming, but I don't think they'll be real price decreases, significant, or more than transitory. It appears most agree (including Woods) on the importance of gold and copper. Is consumer spending down or are the supply chains in shambles? Stores don't want to take returns and electronics require pre-ordering and still the delivery time is ridiculous, if you even get your item. Inflation numbers are being manipulated due to the federal manipulation of gas/ oil, while they still ignore food and rent. Restaurants/ food services are slow to raise prices due to recognized cost on end customer (and their choices); but with food, rent, and labor increasing that too is unsustainable. I find it unfair and very telling that there are some that would rather have us earn less for our labor than corporations on their scam accounting. Government needs to incentivize workers, their: labor, worker's benefits, healthy working conditions, and beneficial employment.

CEOs took home 325x more than median paid workers while at the same time cutting middle/ upper management to "save" money and brace for recession. Many tech companies and banks are suspending hiring and cutting spending. The real economy is the working person putting in a minimum of 38 hours a week making less than $50,000 a year (gross). Those are the people that decide how many price/ interest rate hikes that go by unquestioned and unobjected. Those are the ones that expose monopolies and the illusions of free markets and consumer choice. When we look around the grocery store and see the obvious price increases, it makes sense when you learn everything in there is owned by a handful of companies (more likely 3 max). Leading me to think the true face of inflation are monopolies. Companies that own entire industries and supply chains. Prices couldn't rise continuously and at steady rapidly increasing pace without companies doing so unilaterally up and down their supply chains. I assume if there are multiple vendors, suppliers, or customers, a company should be able to negotiate better prices to produce, supply, and deliver goods and services. Instead, we have 11 companies controlling the entire consumer food, drink, and product market. We as a community would need to build up these industries in local capacity, source local and reasonable, bring competition not only in price but in positive work culture and community building. Many have already become do-it-yourselfer or entrepreneurs to save costs, cut out corporate middlemen, and even following passions.

Recession (At least Recessionary Symptoms)

Welcome to the new quarter, not much change regarding inflation. What has changed is the definition of a Recession. 21Q1 Dallas Federal Reserve President Robert Kaplan told CNBC he likely will favor an interest rate increase before the end of 2022. However, just three other officials on the 18-member FOMC agreed with Kaplan's position, and the plot overall still indicated no hikes through at least 2023. I have been reporting a market downturn since 21Q1, and also the weakness in the banking system. Even though banks say they're strong and prepared with reserves, their actions say otherwise. (Sidenote: I need to look into the Federal Reserve figureheads.) 21Q2, in my blog, I reported shortages in the labor market and supply chains. Also, the Fed did a U-turn on raising rates, not like they had much credibility before. In the post I asked, what effect does stock prices have on inflation? Or what correlation? It turns out that it brings the markets down, but since there's so much other shit going on we can only suspect. 21Q3 I reported my gas expense growing and needed to be increased. Even more market pullback, 52-week lows hits. Mega banks like JMP reported hoarding cash for something "big", now we know they meant recession and inflation. 21Q4 was the first-time inflation received its own section. Also, further weakness in banking exposed & explored. 22Q1 dead cat bouncing through the quarter. 22Q2 Appears to be the beginning of the rebound for me, or at least discovered the resistance.

I recapped all that to understand what this current administration is trying to spin. They refuse to admit the country is in a recession and change common terms. Whether they want to admit it or not, the truth is out there and is known and more importantly felt. Simply put, a recession is when the economy stops growing and starts shrinking. According to Investopedia, a recession is a significant, widespread, and prolonged downturn in economic activity. Because recessions often last six months or more, one popular rule of thumb is that two consecutive quarters of decline in a country's Gross Domestic Product (GDP) constitute a recession. Economists including those at the National Bureau of Economic Research (NBER), which dates U.S. business cycles, define a recession as an economic contraction starting at the peak of the expansion that preceded it and ending at the low point of the ensuing downturn. Last, the White House defines recession as a significant decline in economic activity that is spread across the economy and that lasts more than a few months.

Notably, there are no fixed rules or thresholds that trigger a determination of decline, although the committee does note that in recent decades, they have given more weight to real personal income less transfers and payroll employment. The one thing they all have in common are the variables the committee typically tracks: include real personal income minus government transfers, employment, various forms of real consumer spending, and industrial production. Maybe I shouldn't ask dishonest lawyers if the country is in a recession, what difference does that make? They have a money printer, I don't. What I should be asking is, am I in a recession by their standards & definition? Then I can move accordingly, and if thousands are also in a recession, then it doesn't matter what this administration admits or not.

By simple definition, being a recession is when the economy stops growing and starts shrinking. In my opinion, I feel the economy had stopped growing around 21Q2. By Investopedia's definition, since there has been 2 consecutive quarters of GDP decline, we are in a recession. By NBER's definition the peak of the expansion would have been Jan 3, 2022, Low point Jun 16, 2022 (according to VOO, QQQ, IWB & VTI) (My portfolio: peak Nov. 8, 2021. Low point was Jun 16, 2022.) Sounds like a recession. By the White House current definition, the significant decline in economic activity that is spread across the economy and that lasts more than a few months has happened in: housing, consumer confidence, and jobs.

By tracking what the NBER tracks, being: real personal income minus government transfers, employment, various forms of real consumer spending, and industrial production. I will determine if I'm in a recession. Let's begin, my real income has shrunk, I make less because I stepped down from a supervisor position, inflation kicked up, and housing costs are forever increasing. I don't get government transfers. I'm employed, but it's not a living wage in California ($21.26) or what they say the average is ($31.89). Real consumer spending, I spend most of my money on essentials and buy what I want with credit, is that real? Industrial production is shot, I ordered a phone, and it never came, store shelves are empty or low, getting items in a reasonable time & for a reasonable price isn't happening. Factories are closing or burning down, and workers are striking across the country.

Going through all that, I can say I'm in a recession, or I'm experiencing recessionary symptoms. I like Jerome Powell's temperament, but judgment and perspective are wrong more often than right, so I take his reports with little weight. The elites and mainstream puppeteers will not let anyone use the word Depression. The word is already trademarked. The end of August is when the turnaround in industrial production, stores are able to receive their inventory and distribute their products. I will work on the inflationary factors that I can control and get in a position to take control of the factors that are left.

Portfolio/ Investments

Buy, Sell, Watch

Last quarter I exited out of: AAL, SFTBY, DISH, & OGE; sold shares in XLU, & SCCO; and added, GM, PNGAY, EADSY, CMCSA, CMF, NEE, KBWD, SBUX, AAPL, DG, CGW, EMLC, BYFC, T, WBD, ETH, DPSGY, SCCO, TOLZ, LAZ, ALLY, NEE, DIS, UL, TGT, AXP, and OHI. Stocks on my watchlist: KO, STWD, XLU, F, RTX, GOLD, WBD, CMF, KBR, CGW, SYF, BYFC, ADDYY, and LAZ.

This quarter: I sold shares in EMLC, CARV, BYFC, RTX, BKNG, MRK, SIX, & SQQQ; and added, ACI, VZ, KBWD, VICI, UBS, USB, ADDYY, OHI, ALLY, TGT, SPGM, EADSY, GOLD, DIS, CMF, UL, BYFC, ETH, SQQQ, USDC, & SPXS. Stocks on my watchlist: KBWD, EMLC, CMCSA, SCCO, VZ, UBER, KO, STWD, DG, ADDYY, TOLZ, GOLD, ALLY, OHI, GM, IBN, HDB & JPM. On Twitter you can read all my comments and thoughts on many of these stocks and more (click here).

Top 10 Allstars

Q2: MRK, AXP, CMF, TOLZ, SCCO, CGW, AGM, CBON, SPGM, & GOLD.

Q3: CMF, AXP, MRK, TOLZ, CGW, AGM, SPGM, GOLD, SCCO, & CBON.

I'm glad I uploaded the percentage; beginning next year, I'm going to change some tracking methods. My Top 10 says: the entire portfolio shrank, medical shrank, copper hit a snag and crumbled, and overseas is in a little worse shape than us. Only 4/10 are green, 6/10 are in the red. At this point I'm no longer happy with the Top 10. I think a few stocks on my watchlist or top dividend payer deserves to be in the Top 10 more than others, to represent my financial view. Companies I want in my Top 10: GM, VZ, KO, ALLY, BAM, DG, AGM, SPGM, TOLZ, & KBR. All are good picks, real interest and money, with decent dividends (GM just qualified).

Top Performers

Q2 Tickers: AXP, VICI, MSFT

Q3 Tickers: VICI, AXP, MSFT

I'm not really focused on the top 3 at this moment, top performers 4-10 let me know insurance, medical, agriculture, consumer goods, and utilities are proving to be recession/ inflation resistant.

Worst Performers

Q2 Tickers: HOOD, SOFI, SCCO, CGW, & SIX.

Q3 Tickers: HOOD, SCCO, GOLD, DPSGY, & T.

The 5 laggers are interesting because T took out SIX but beyond that, DPSGY came in between them. DPSGY used to be a prime bull during the pandemic, but the war in Europe and Russian hold on energy/oil had taken pounds of flesh from the stock. I believe it's effecting the entire German market, but I only own a couple German stock, and neither are ETFs. So, take with a grain a salt. T is also interesting because it spun off WB to Discovery gave shareholders a portion (WBD, both stocks are falling). Telecom is being taken by T-Mobile unfortunately they're cooler and cheaper than competitors that also pay dividends, since TMUS is a foreign company, I'd probably take a position in one of the foreign owners in Germany (SoftBank sold its share I believe and is a flailing stock). Unfortunately, TMUS has gotten in bed with Elon Musk, which brings less legitimacy to Musk (to me). When I think of reliability, secure, and customer care for satellite telecom service I see VZ or CMCSA.

Gold, Copper, & W.E.S. Rose

The GOLD dropped below $18, the market claims that gold can fall to

$1,200 oz/ $12 per share. I woke up to a boost in SCCO in the beginning of July, which confused me considering GOLD also operates copper mines and didn't make any gains. With gold being a "hedge against inflation" it peaked in April and has been declining since. GOLD has business in Africa, and I was hoping they had a part in the huge gold deposits discovered in Uganda, but it appears it's a Chinese firm. I added GOLD to my portfolio as a hedge against inflation and dividend income, but it's been taking a beating while inflation has run wild. It hit it's 52-week low on July 13. A few days later, copper was down. It entered bear market at the end of June. Miners like Barrick (GOLD) are economic engines on their own. They operate 2 mines in Tanzania and contribute hundreds of millions of taxes, programs, and the government. They provide jobs to thousands, add attract other investments; and now they set their sights on Pakistan. Ghana is Africa's top gold producer and the world's sixth largest. Last year, the nation produced more than 117 tons of gold.

Ghana is the latest central bank to announce plans to increase its gold reserves. Earlier this year, a survey from the World Gold Council showed that of 57 central banks, a quarter planned to add more gold to their foreign reserves. Most of the demand is coming from emerging market central banks. Many economists and market analysts see central banks' growing appetite for gold as part of the growing de-dollarization trend. Nations are trying to lower their exposure to the U.S. dollar.

The W.E.S. Rose finally returned to positive in mid-August, and market commentators and experts are talking about a pullback/ recovery. They were wrong, the Rose dropped 4.2%.

In Conclusion

For the reinforcement of the overall portfolio, building a cash pile is necessary and only adding to positions that give dividend income, along with growth potential are a few ways to strengthen the portfolio. July dividend equaled $32.48, 16 payments. August dividends equal $48.01, 18 payments. September dividend equaled $42.44, 20 payments. Check out my IG, I'm tracking dividend payments there, among other things. That being said, with the market crumbling, it is expected for the dividend payments to decrease while stocks adjust.

There's been changes to the world order. July was a headlining month, politicians are still expressing the fantasy that people are flushed with cash, which is why they're not working and employed. In reality, the only people flushed with cash are the politicians like Nancy Pelosi and Federal Reserve chairs, who use their positions for personal gain. World Leaders are shuffling. President Biden was considering removing tariffs on China imports. Japan's Prime Minister was assassinated, and England PM Boris Johnson resigned, new PM elected, then Queen E. dies and new monarch is implemented. Sri Lanka's PM also resigned, but they've been going through it for a while now. President Biden also traveled the Middle East kissing ass and rings, selling weapons, and everything in between for the hopes of more oil and strengthening partnerships (but China already have Saudi on lock). India has become a very interesting place to me, I would love to explore further.

I started writing this post in the beginning of the quarter, and it's reassuring how markets are finding solutions and getting what they can done. That being said, things are breaking and I'm not sure if they're fixing fast or wide enough. Experts claim liquidity is high, but they're all going for real assets (land) at the same time the housing market is overpriced for working people and unstable. Overall, there's also a lot of bailout funds out there: Infrastructure Bill, Inflation Reduction Bill, and Chips Act and others. Corporations will be back in the black, while main street America is left out on the streets

It’s crazy that I have to say this but: none of this is investing advice and you should do your own research and never take the word of someone else without doing so. All investing involves risk, and only you can decide what to risk and is worth risking for. And you look stupid trying to sue someone because you followed blindly.