Ground Hog Day

Blog for February 2

Happy Ground Hog Day,

I have not blogged in a while!  A lot has happened in a couple of months. 

I have sold my house in Scottsdale and I am closing on a house in Boise at the end of this month.  I hope to be up there in late March.  My plan is to be a seasonal Arizona person, yeah, a Snow-Bird, makes me a second-class citizen.  The locals like their people well cooked.  I will miss the desert and my place but am excited to get back!  I am going to be a Grandpa for the first time in May.  It’s a boy!  I am looking forward to seeing a lot of friends and my family.

Ground Hog day indeed with Covid.  Okay, I was wrong about how I saw this go down.  We have a lot of cases but are dropping rapidly from a high of over 300,000 cases in one day to about 125,000 cases per day in the last week.  Just checking tonight, we had 114,000 cases which is the lowest since November 8th.

According to the New York Times we are averaging 1.4 million vaccines per day.  Both Idaho and Arizona are lagging behind in percentage of population vaccinated with Idaho dead last. At this rate by May 2nd, we would have about 180 million people immune to the virus through vaccination or from having been infected themselves. The next 100 days from May 3rd  to August 3rd would give us 320 million immune people which is basically the whole population of the US (333 million) That assumes we can find people to get it.  Some people won’t want to, but it should not change the outcome.

The market may have priced that into the current price level, we just don’t know. My guess is that there is more pent-up demand than we realize.  A lot of that demand will be in foodservice hotels and air and ground travel.  Oil should continue to rise.

A question I get a lot is “why are we sitting in these stocks that are not “doing anything?”  Because those stocks usually represent outstanding values.  They are overly beat down, as in the case with oil and Commercial Real Estate.   Everyone is chasing momentum. Client accounts have kept up and should realize appreciation from those “underachievers.”  Value investing always takes longer than you think to play out.  Keep reinvesting those dividends at low price points and you should reap the benefits.

Remember that stocks and real estate are never “going up” or “going down.”  That is misguided.  We have no idea which way they are going next.  We cannot let ourselves base our next move on what happened yesterday.  Yesterday could be the top or the bottom. 

See you soon,