Kevin Thompson

Comments:

• God speed my friend. You have been an inspiration to many. Peace be unto you!

  Post: The C Word

  Link to comment from June 15, 2024

• Those funds buy futures. The investor pays for the roll cost and cost of carry. Those funds have a significant tracking error. Those are merely trading vehicles and should not be owned for long period. Disclosure: this is not advice but merely observational.

  Post: From COW to KARS

  Link to comment from January 28, 2024

• Absolutely. If world goes to hell and hand basket, you can’t eat gold. I always say, rather own wheat, rice, corn, etc.

  Post: From COW to KARS

  Link to comment from January 28, 2024

• The power of the purse is very valuable and as you can see, nations without it can lead to adverse consequences. Look at economies around the world that issue in their local currency but borrow in another, they are impacted by rates. Hence Venezuela, Greece (drachma prior to euro), Italian (Lira prior to Euro), and a number of others. there are only a handful of nations that have the true power of the purse, Japan, UK to name a few. The true question we should be asking, will the dollar remain the global reserve currency? If that somehow decouples, we would be in for a world of hurt.

  Post: What Goes Up

  Link to comment from November 5, 2023

• Great book and also great explanation. MMT “never” stated they could print money without fear of inflation.(you are entirely correct) Quite the contrary, it actually stated, “absent” inflationary pressures when you have the power of the purse, increasing the money supply would benefit the overall economy, as has been done for decades. Furthermore, MMT became relevant back in the 1990s and gained esteem during the financial crisis. I quite often have this discussion with my colleagues and we banter back and forth.

  Post: What Goes Up

  Link to comment from November 5, 2023

• Not sure what that means so I’ll take it as a compliment! I’ll presume you meant “get” returns. You are correct but that’s not the argument. If I get 50% in “pick random alt coin” in a year and received 9% in S&P 500, you did receive 50%, but at what cost. Was the return you received actually commensurate with the risk you took? just because my portfolio got a return doesn’t mean it was worth taking on additional risk to receive that return. In portfolio management, we measure everything with risk/return. Are we receiving enough return per level of risk we are taking to justify the investment.

  Post: Sea Change?

  Link to comment from October 29, 2023

• enjoy reading your commentary and love its thoroughness. The one item most don’t take into consideration in regarding returns, are risk-adjusted returns. Yes markets have returned more than bonds over the long-run, but risk adjusted returns are less. for example, take in consideration your bond analysis. Yes the Apple price will appreciate, and bonds may not move higher much or at all, but you must consider if Apple moves downward, and yes I know we are all shocked to hear that. I know my bond will pay par value so I at least get my principal back plus coupon payments. lastly, risk adjusted return. I’m not a fan of bond funds honestly because I like to know my duration and tax situation. Further, if my expected market return is say 9% and risk free rate is 5%, we expect the beta to be low or not market correlated to S&P. So the 4% risk premium I must endure is truly not worth going out into equities when I am getting 5% at the moment, not to mention the 5% expected return with a zero beta, since bonds are supposed to be non correlated asset class. I guess I’m saying this because risk-adjusted returns matter and most disregard that concept.

  Post: Sea Change?

  Link to comment from October 29, 2023

• As a financial professional, I often feel as if many of us (financial advisors)have a god complex. We feel as if we are all knowing and people cannot exist without our tutelage. in reality, it’s very simple. Spend less than you make, save a minimum of 20% of gross income (depending on where you are age wise), keep investment cost low across broad indexes, minimize debt cost, and protect your assets. I know it’s deeper than this of course, but a very good starting point.

  Post: On Second Thought

  Link to comment from September 9, 2023

• I’m much like you. I don’t enjoy cars and would rather spend my money elsewhere. I do have a proclivity for cigars so there is that, but be that as it may, cars to me are such a burden. I have a 2007 Mercedes I purchased for my wife and drive it now since my SUV of 17 years and 206k miles basically was on its last leg. I sold it for $1600 and never looked back. my Mercedes has 163k miles on it and is still in great shape. I feel if I can get it to 200k miles without any hiccups I will win this game. My next vehicle will likely be my last purchase being that I hope it gets me through another 20+ years. I hear those tundras can get you close to 500k miles if you treat them right or maybe a diesel engine. I just want something that won’t give me trouble. every time I have to take my car into the shop, I battle with cost of repairs and then tell myself, this is a 3-4 month breakeven for me if I don’t purchase a new car. The issue is, what’s the next issue that arises, will I just continue to pay out of pocket until it gets extreme? Who knows, but the car has been solid altogether. for those that are asking, I purchased a BMW x3 2014 for my wife 6 years ago for 25k with 20k miles. It now has 110k miles in it and been relatively good. the real question you have to ask yourself, is this about you or about leaving a legacy? You are now 80 years of age, get all the bells and whistles and enjoy life.

  Post: My Car Journey

  Link to comment from September 3, 2023

• I often wondered the same thing as I have come across this in many of my portfolios. if we believe in the principle of modern portfolio theory, then, by definition, diversification, is the reason why we would have a commodity. However, the concept of risk and return given the fact that commodities have a lower return and higher risk means that they should not be included. this takes me back to the argument for crypto securities. Many believe that if you allocate 1% inside of crypto, the amount of excess return received outweighs the risk of going to zero. so I guess the question may be, possibly using crypto to stand in for commodities hedge? Who knows… Reality, commodities are tangible products with a physical backing unlike crypto.

  Post: Don’t Have a Cow

  Link to comment from August 27, 2023