My Portfolio: 23Q3
Updated: Oct 25
This issue of My Portfolio is a summary of my financial situation for the 2023 Q3. The other posts (previous quarters) can be found at links at the bottom of the webpage, under Continue Reading. If there is anything you want to know feel free to ask in the comments.
Recap
We need politicians and government to increase entitlements and provide guarantees of housing/ shelter, food/nutrition, childcare/ education, and transportation. The government should treat its citizens like it treats Wall Street executives and celebrities. Every citizen should be able to know the government is right there to bail them out on the road in pursuit of life, liberty, and happiness. Instead, we have a government that rather tax its citizens into poverty to line the pockets of politicians, donors, lobbyists, staffers, corporations, institutions, executives, and the already wealthy elite. If the government wants to continue taxing hard working individuals (working 40+ hours grossing $40k) more than millionaires or billionaires, then they should be subsidizing the working class. Give people the actual power to participate in a “free market economy,” because right now we do not have free markets. Today and for quite some time, we have been enslaved to monopolies strengthened by crony capitalism, people are forced to make decisions based on factors not of their control. Everything from the products on the shelves, the websites you see, the ads curated for consumerism, all are determined by some executives trying to extract capital to further personal gain. Resources in the hands of the working class is the only hedge the country has against other world powers, the corporations abandon the country as soon as the funds clears. No corporation or institution supports local areas and communities like the people working or living there, and that’s the truth all around the country.
Portfolio/ Investments
Buy, Sell, Watch
Looking at a few swing trades I wanted to make, it seems the most I’ll be able to secure would be around 3%. The recession Wall Street insiders predicted to death is hitting the economy sector by sector rather than all at once. The industry has invented a term called “rolling recession”, when the recession only affects certain sectors of the economy at a time. As one sector enters recovery, the slowdown will “roll” into another part of the economy. Considering recessions typically last about a year, and the recession has been rolling since 2020 (at least), no one can know the depths or extremes of a rolling recession. Typically, healthcare, consumer goods, and utilities are expected to continue a positive trajectory, resulting in continued inflation in essentials as the rolling collapse moves through each sector’s charts of the economy. Utility stocks/ETFs aren't performing as well as many assumed they would during high inflation. I know I'm paying more to those companies for various reasons but looking at the sector it’s been trending down the last 3 months. The likely reason being how utility (& auto) companies are having to adjust/modernize to green energies. Manufacturing, housing, energy, tech, and banking has definitely rolled through recessions, government interference in industrials, travel, and construction will lessen the hurt, but to echo previous posts, labor is striking and demanding increases.
23Q2: I sold my position in SYF; sold shares in USDC, JPM, DG, SBUX, MSFT, RTX, AAPL & AXP and added USDC, ETH, AGM, TGT, DG, LEMB, & ALLY. Stocks on my watchlist: ALLY, BN, EMLC, LEMB, VZ, STWD, DTEGY, GOLD, IBN, SCCO, AFL, AXP, USB, PNGAY & JPM.
23Q3: I sold my position in NEE, GRWS, DHLGY, & RA; sold shares in RTX, BYFC, & KO and added USDC, TGT, DG, LEMB, TOLZ, UL, AXP, ARCC, AAPL, MSFT, KBWD, IBN, STWD, MRK, ACI, VICI, GOLD, BAM, BYFC, DHT, KBR, JPM, HKXCY, XLU, CMCSA, & ALLY. Stocks on my watchlist: ALLY, BAM, BN, EMLC, LEMB, VZ, STWD, DTEGY, GOLD, IBN, SCCO, AFL, AXP, USB, HKXCY & JPM.
Top 10 Allstars
It's great that a few companies I wanted in my Top 10 back in 22Q3 have made the list, specifically, VZ, ALLY, & TOLZ. DPSGY is now DHLGY and no longer available to buy on Robinhood. The reduction of ADRs is starting to make me think the banks aren't making many deals overseas, and maybe foreign institutions aren't interested in the USD. CGW has been moved to the WES Rose portfolio, and the list has been rearranged a bit. Copper is still performing well.
23Q2: SCCO, CGW, MRK, TOLZ, EADSY, DPSGY, ALLY, UL, AXP, & VZ.
23Q3: SCCO, TOLZ, MRK, EADSY, UL, ALLY, AFL, OHI, VZ, & AXP.
Small Bets
This list is composed of my smallest positions. Sold more of my positions in RTX & BYFC, DHT is a gas/ oil tanker energy play that I’m unsure I want to hold due to the connection to fossil fuel but wanted another energy play since the NEE exit. HKXCY is another pick that gives perception into Chinese financial markets, to give more insight in addition to PNGAY & CBON.
23Q2 Tickers: RTX, BYFC, & WBD
23Q3 Tickers: RTX, HKXCY, & BYFC
Top Performers
Agriculture, insurance, gaming, hospitality and entertainment properties are outperforming the rest of the portfolio. Increased positions in MRK, AXP, VICI, and yet MRK & AXP were removed from the list and replaced with AFL & VICI (again).
23Q2 Tickers: MRK, AGM, & AXP
23Q3 Tickers: AGM, AFL, & VICI
Worst Performers
Telecom bets are performing poorly (with the exception of Comcast). T-Mobile is dominating the sector this year. TMUS +1.10%, DTEGY +4.66%, T -18.91%, VZ -16.85%, & CMCSA +27.53% . Two of my favorite banks are struggling, which is considered more of an opportunity at this point. DIS makes its debut after (essentially) a year of various projects yielding negative reactions.
23Q2 Tickers: HOOD, VZ, T, GOLD, & USB.
23Q2 Tickers: HOOD, VZ, GOLD, T, & DIS.
Dividend Payout
This Quarter's dividend total: $144.59, Previous Quarter: $173.82. This quarter's results (-20.22%), making this the first quarter unable to surpass the previous quarter. Jul. $41.86, Aug $62.31, & Sept. $40.42, compared to the previous year, -0.92%, +29.79%, -6.83%, respectively. Top Dividend Payers were STWD, SCCO, & TOLZ. Follow me on X (f.k.a Twitter) for tweet threads involving stocks.
W.E.S. Rose & Shield
At the current time, WES:RS has 9 holdings. Estimated current market value (CMV) is $8,222.58. WES:RT market price is $402.69. Portfolio up -1.10% (-$91.11). More of the value is liquid (33% cash) to ensure distribution payments to ticket holders, uncertainty in markets, and overvalued stock prices. Considering expanding the portfolio with JPM, IBN, BAM, & GLD.
Multipolarity: Collateral Damage
The rolling recession has slashed the risk of a sudden hard landing, according to Bank of America executive Keith Banks. “Higher interest rates continue to reduce the value of US banks’ fixed rate securities and loans and interest rate risk is not captured well in US bank regulation and thus can create liquidity risks,” Moody’s warned in notes. Which means as people are struggling to survive increasing inflation along with elevated Fed rates, banks are further weakened by loan defaults and national credit downgrade, resulting in the banking sector unable and unwilling to support their customers through this hardship.
Collateral Damage: Resource Accessibility
Major governments are in conflict, both openly and discreetly which is affecting the lives of the average person not involved with the conflicts. The constant tit-for-tat between the world's two biggest economies (US & China) has raised concerns over the rise of so-called "resource nationalism", which is when governments hoard critical materials to exert influence over other countries. The countries our government calls second/ third world are uniting under claims of fairness and unity, and realizing they have been exploited, coerced, and bullied into giving power to the west. Now they are gathering to take their sovereignty back in agriculture, finance, trade, energy, and even culture. President of El Salvador Nayib Bukele called for a Central American Union, as they control some of the most important things in the world. China’s Commerce Ministry announced its forthcoming export ban on the metals gallium and germanium (vital components for the chips). The ministry said its new rules did not target a specific country. China has meanwhile doubled down on efforts to attract foreign investment and engage businesses. India (#2 producer/exporter of rice) have decided to ban exports of non-basmati rice "threatening global food security," says America. America also said it'll be ok, and exports more than it imports, and luckily for third world countries (& others dependent on supply) BRICS nations are there to pick up the slack. Russia is giving rice and forgiving debts of around 8 African nations. China is the #1 producer, and I'm sure they'll gladly ship rice to African & South American nations, likely in a non-USD transaction.
Then there’s still oil, while OPEC and OPEC+ nations’ cuts are an attempt at pushing crude oil prices up, increased production from the U.S. has slightly counteracted this. The EIA forecasts 2023 U.S. production to be 12.6 million bpd, surpassing the high in 2019 of 12.3 million bpd. OPEC+ will continue to restrict supply to protect its members' revenue, especially since they are now settling trades in non-USD. New acquisitions in the oil sector could help the BRICS alliance gain further control of the markets. BRICS already controls 42% of the world’s oil markets and commands 35% of natural gas production. Previous reports have indicated Saudi Arabia’s interest in funding the BRICS development bank. Thus, enhancing the attractiveness of the economic alliance, due to the country’s ability to positively affect its economic development. India and Saudi Arabia, along with the European Union, the United Arab Emirates and others, launched the initiative to link railways, ports, electricity and data networks and hydrogen pipelines. Countries are taking inventory of their exports and adjusting them to make sure the deals aren't exploitative (West favoring). Leaving us to expect a rise in prices on energy, rice, corn, smart chips, and various raw materials of the global south.
Collateral Damage: Financial Stability
As an average person, I see the house collapsing around us; bank failures back-to-back, Silicon Valley Bank (Mar. 10), Signature Bank (Mar. 12), First Republic Bank (May 1), and moreover, Silvergate Bank announced voluntary liquidation, and Heartland Tri-State Bank went into receivership (Jul. 28). Meanwhile, cash deposits at America’s largest bank, JPMorgan’s corporate and investment bank fell by $75 billion in the second quarter of 2023, reports the Financial Times. That’s a loss of 10% from one year prior. People and some corporations with large amounts of cash have been shifting away from the banking giant and the traditional banking system at large to utilize digital banks and money market funds, which typically offer 4% or more on insured deposits. In reality, most people aren’t stashing money away, people are also defaulting at an increased rate, or at the very least over-leveraged. Borrowers end up paying more in interest. That could lead to a broader slowdown in the economy, and potentially, to more delinquencies and defaults. Lenders reported $18.9bn in so-called charge-offs (losses on loans marked as unrecoverable) during last quarter, an increase of almost 17% on the previous three months and 75% higher than the same period last year.
As a country, credit rating agencies are downgrading the U.S’s rating; it started with S&P over a decade ago and has refreshed recently with Fitch. The agency cut the U.S. rating by one notch to AA+ from AAA, citing a fiscal deterioration over the next three years that will increase deficits and repeated down-to-the-wire debt ceiling politicking negotiations that threaten the U.S. government's ability to pay its bills. "It doesn't really matter that much because it's the market, not rating agencies, that determines borrowing costs”, Jamie Dimon told CNBC. He found it ridiculous that other countries have higher credit ratings than the U.S. when they depend on the stability created by the U.S. and its military. For others, it’s a reminder that faith in the linchpin asset of the global financial system is dwindling, mainly due to the weaponization of the US dollar that has completely destroyed the national credit on which the international monetary system is based. This explains why both Japan, the top holder of US Treasuries with $1.1 trillion, and China, the second biggest with $860 million, has dumped huge blocks of dollar-denominated debt. The same goes for Taiwan, India, Hong Kong, Singapore and South Korea. This quarter, the U.S. Treasury Department says it plans to borrow more than $1 trillion (over $250 billion more than it forecasted a few months ago). As that burden gets bigger and bigger, the U.S. government is going to have to issue more debt to pay that interest. This is a cycle that is tough to break. As the media and their economists would love nothing more than to shift the blame of inflation and the weak economy on workers, their wages, and any social assistance, the real culprit is corporations' profit greed and governments' corruption. CEOs have gone on record confirming their intentions to pass all price increases to consumers (until they stop paying) and transfer those profits into buybacks and AI worker consolidation or replacements.
The U.S. central bank is continuing to pay out more in interest costs than it takes in from the interest it earns on bonds it owns and from the services it provides to the financial sector. While there's considerable uncertainty around how it will all play out, some observers believe Fed losses, which began a year ago, could eventually as much as double before abating. Bankers like Dimon aren’t worried because they’re prepared to buy it up. Right now, JPM is too big and powerful. JPMorgan is the only U.S. headquartered financial institution with two operating licenses in Saudi Arabia, and Zakharov, a Russian foreign ministry spokeswoman, said the West and the United Nations "tried to present (payment processing by JPMorgan) as a working alternative to SWIFT." Then on the same hand, BlackRock Inc. (BLK) is poised to become a bigger buyer of assets that banks unload to improve their capital and liquidity, after concluding that the industry faces years of upheaval brought on by high interest rates, stringent new regulations and possible consolidation. BlackRock said in July that Amin Nasser, the CEO of Saudi Aramco, the world's largest oil company, is joining the asset manager's board of directors. The world's largest asset manager said the move reflects the firm's emphasis on the Middle East as part of its long-term strategy.
Collateral Damage: Civilian Casualties
22Q3 media exposed CEO salary increases of 325x, recession symptoms expressed, and it was proven that institutional definitions would be changed to fit the establishment agenda. 23Q3 results are appearing to be a continuation. As a result of record high CEO pay and lack of a livable wage (heightened due to inflation) has sparked union rise, along with strikes. Reports of union strikes are as common as cops killing unarmed Black people in 2012-2020. Nevertheless, due to companies' preference to pass down cost increases to consumers, the end result will be further price increases to offset employee wage increases, unless Congress intervenes. Rental rates are expected to increase 3-5% across the board; meaning individuals in apartments, assisted/skilled living facilities, senior living, and healthcare facilities will be affected. Labor rates expected to only increase 2% to offset inflation pressure for the consumer, continuing the downward cycle. The current world order prefers the masses to own nothing and be happy with it. Not only do we have to worry about taxes and inflation, we have to also be aware of confiscation/ asset forfeiture. The DOJ announced earlier this year more than $6 billion in contracts awarded to multiple private companies to help with asset forfeiture investigations. Forfeiture generated more than $45.7 billion in revenue for the federal government alone between 2000 and 2019, according to The Institute for Justice. Proceeds are often split between federal and local police agencies. A previous report found that 78% of all forfeiture cases the DOJ processed between 2000 and 2019 were administrative, meaning agencies seized property with little or no judicial oversight.
The Federal Reserve is expecting to keep rates elevated to force layoffs and push inflation down to 2%. They believe they'll hit this target soon. Then we'll lower rates 2024 and beyond. Chairman Powell also stated a soft landing is a primary objective of the fed. I believe a concept of soft landing is disingenuous and subjective, ignoring working and poor class, who are struggling to survive at current prices. Therefore, the landing may be soft for the folks at the top, but for the folks that make up much of the foundation will be crushed and the folks in the upper middle will be compressed.
Conclusion
We cannot wait for the government to change or just course. We also cannot wait for the government to cleanse itself of incompetence and corruption. We must protect ourselves, the best we can, against this hard landing. The government chose. Rental rates are expected to increase 3-5% by 2024, overall inflation is expected to range 3-5% (2% goal), and wages are only to increase about 2%. That's not even mentioning the price hikes on gas and oil, the semiconductor shortages, and global food insecurity, affecting everything from transportation, groceries, car prices, and all smart devices. The average person will have to cover the financial deficits that come with the increases. To better protect oneself, we must use what we have available. Every person has access to three things: high yielding savings account, certificates of deposit (CDs), and the US treasuries. The primary objective of the working class is to soften the effects of the Fed taming the economy. Here's how I'm doing it. TreasuryDirect.gov is offering 4-week T-Bills at a rate of 5.3%. Ally Bank offers a savings account with 4.25% APR, Robinhood offers 4.90% APR (for gold members), either account would be good to hold cash you'll need 0-6 months. Any funds needed and longer terms 6-12 months can be placed in a CD, credit unions are known to have the best rates, for example, Navy Federal Credit Union (NFCU) has a rate of high as 5.30% APR. So, the plan: avoid lessen market loss in stocks, deposit every extra $100 into T-Bills (spread across 4,8,12 weeks), reinvest if yields continue, and transfer interest payout to Ally or NFCU, NFCU allows deposits into their CDs anytime. Essentially, short term treasuries will act as a high yielding savings account, with the actual HYSA or CD used to accumulate interest on the interest that couldn't be reinvested into T-Bills.
Whether this Administration recognizes we’re in a recession or not, does not change the reality that millions of Americans are experiencing recessionary symptoms, if not depression levels. Even though the markets are crumbling, money is out there, the only setback is that it has been allocated to institutions, corporations, departments, and industries; nothing intended for the working-class individual. Cash-strapped families are steadily losing their ability to save and plan due to the inflation of everyday spending and stagnation of their income. All expenses are determined by “macro” factors, especially essentials: gas (transportation), food (nutrition), and rent (shelter). That will not deter the necessity for individuals to adjust their quality of life and become innovative in order to sustain living standards or risk a debt trap: overleveraging during a time credit is tightening and rates are rising. Our government solution is crony-capitalism. Under the guise of investing in infrastructure, monopolizing agriculture & livestock, and allowing BlackRock and private equity to buy up the land (both residential & commercial) to combat the housing shortage & unaffordability crisis. The solution for the People is simple: invest directly in the individual, allowing them to stimulate the economy in a way that’s sustainable, ethical, and financially reasonable. Whether that looks like direct deposits, tax refunds, fee suspension/ cancellations, rebates, or grants, the best way to benefit the real economy (& America’s international standing) is to pour into the people, while simultaneously keeping corporate greed in check.
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.
23Q3 Report (1)
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Works Cited
https://watcher.guru/news/india-makes-huge-announcement-on-brics-currency
https://watcher.guru/news/brics-saudi-arabia-acquire-international-oil-gas-assets#google_vignette
https://www.economist.com/china/2023/07/06/chinas-message-to-the-global-south
https://watcher.guru/news/brics-what-countries-are-all-but-guaranteed-to-join-in-2023
https://elements.visualcapitalist.com/whos-still-buying-russian-fossil-fuels-in-2023/
https://www.cnbc.com/2023/07/17/blackrock-names-saudi-aramco-ceo-amin-h-nasser-to-board.html
https://www.cnn.com/2023/07/17/business/russia-danone-carlsberg-control/index.html
https://www.ft.com/content/f07c336e-a160-4170-9a96-2712510df086
https://news.bitcoin.com/chinas-central-bank-digital-yuan-transactions-reach-250-billion/
https://www.agriculture.com/india-is-playing-games-with-world-rice-supply-says-u-s-industry-7568082
https://finance.yahoo.com/news/russia-says-jpmorgan-stops-processing-170254121.html
https://www.cnn.com/2023/08/08/investing/moodys-credit-ratings-us-banks/index.html
https://www.ft.com/content/6b28d31c-1a69-4309-9752-a96d7455d0e9
https://www.haystack.tv/v/moody-downgrades-10-banks-puts-6-watch
https://www.reuters.com/markets/global-markets-view-usa-2023-08-17/