Florida Real Estate

Owning Real Estate in Florida is not a bad idea as long as you know where the market is (in relationship to ‘Fair Value’) and you sell before the oceans rise.

As of Spring of 2019 I believe that we are ~20% over ‘Fair Value’ right now. My belief is based on inflation and population extrapolations. Population growth between 2000-2019 was ~23% and inflation of about ~49%. If you don’t believe that the dollar has lost almost half it’s buying power in the past 20 years, see for yourself https://smartasset.com/investing/inflation-calculator#LFWyzg1QVC

again make sure to sell before you’re (literally) under water…

Why (right now) Silver is a better investment than Stocks & Bonds

STOCKS ARE OVER VALUED

  • As of this writing (March 2019) stocks are beginning to come off their historic all time highs, could they recover and go higher? Yes, but is that a risk worth taking, I don’t think so.
  • The key to investing (in anything) is ‘Buy Low’ and ‘Sell High’, yes, it’s that simple. The only question is, what is ‘Low’ and what is ‘High’? Unfortunately there is no simple (or single) answer to this question, it’s all in who you ask. 
  • One person to ask might be Warren Buffet, fortunately he has already told us. If you take the total value of all issued stock in a country and divide it by the countries total annual production get an indicator called, Market Cap /GDP. Which Buffet stated “is probably the best single measure of where valuations stand at any given moment.” This is similar to a PE (Price to Earnings) ratio for a company, but you are looking at the countries economy as a whole.
  • The indicator below is typically used to shows how ‘inline’ stock prices are compared to the overall US economic output. As you can see we are currently above the levels we were, right before the dot com bubble bust in early 2000, a time when companies who had a domain name were worth millions, until they weren’t.
  • If you want more  information on the ‘Buffet Indicator’, check out https://www.gurufocus.com/stock-market-valuations.php
https://fred.stlouisfed.org/graph/?g=qLC

THE ECONOMY IS NOT THAT GOOD

  • There are many people, primarily in the media, saying that the economy is great because employment in the US is doing great. The reason they say this is because the US “Unemployment Rate” is at all time lows, but I want to show you how the ‘Unemployment Rate’ and ‘Actual Employment’ are not as closely related, as you might think.
  • Below are a few charts I pulled from FRED, an economic data resource provided by the Federal Reserve. For starters only ~60% of the US population is actually working, well I guess there could be a bunch of children and retirees, who rightfully should not be in the workforce. 
Continue reading