The Dividend Cafe

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Is the Fed about to Break This? Jun 17, 2022

Show notes

Once again we find ourselves in the midst of a tumultuous week in the markets, and yet with bigger fish to fry in the Dividend Cafe? What could be bigger than a 1,400 point drop in the market on the week, and a 3,000 point drop in the last two weeks (note: I am hitting “send” on this before the market opens on Friday, and pre-market action Friday does appear to be to the upside right now, but you know how that goes)?

Well, for one thing, I think most of the commentary I have to offer on the specific things taking place this week in markets was well-covered in each edition of The DC Today this week. If day-to-day market distress is distressing you, I hope you will turn to The DC Today as a resource. Reading it cannot make the market go up any more than my act of writing it can, but hopefully, it can provide clarity around where this volatility fits into expectations for investors who have real financial goals in their lives.

So the bigger fish to fry I refer to are not about the specific Fed meeting of this week, or this most recent interest rate hike, or even my broader theme about the carnage in “shiny object” investing … It has to do with discussions around a potential deeper level of concern in financial markets, and what they may look like. I hope after reading this week’s Dividend Cafe you will feel a bit smarter, a bit more informed, and a bit more at peace.

Let’s jump into the Dividend Cafe …

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The Next Bad Thing Jun 10, 2022

Show notes

I purposely wrote this week’s Dividend Cafe before the CPI number posted this morning at 8:30 am ET. Lots of traders were getting in front of this late Thursday, and a market that had rallied up +2,000 points in the last two weeks was down -1,000 points in the last five days and is now down a lot as markets open Friday.

We are in a period of short-term traders trying to front-run the Fed, but more particularly, trying to front-run those who they think are trying to front-run the Fed. What I mean is not as complicated as it sounds: The basic belief is that if inflation data looks worse, for longer, the Fed becomes more Volcker-like in their hawkish tightening, and that hurts risk assets; therefore, if we see a whisker of “more inflationary than expected” some will start selling, and we should sell before they sell.

Well, good luck with all that.

Today I am going to look at what could make this market get worse, not in a “traders are going to do this” kind of way, but in a real systemic, significant, macro kind of way. It will turn into a two-parter, no doubt. But let’s look behind the headlines of the day, the CPI print of the moment, and the Fed actions of next week. Let’s dive into the Dividend Cafe …

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

My Eyes Have Seen Midstream Energy's Resurrection Jun 03, 2022

Show notes

I am doing three things in the Dividend Cafe today that I pretty much never do. For one thing, I am blatantly ripping someone off (you’ll see; it’s not as bad as it sounds). Secondly, I am getting pretty biographical (though I guess I do that every once in a while; last week being the most recent example). And then finally, I am really focusing on one pretty specific and even granular investment topic. Now that, I do every now and then – but not like this. You’ll see.

So jump on into the Dividend Cafe to see me rip off someone else’s work, talk about a very personal and biographical aspect of my life, and apply it all to a really specific investment lesson and principle – one that should not be missed.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Housing Comes Center Stage May 27, 2022

Show notes

I really do not know how today’s Dividend Cafe is going to be received. I obviously believe in every word of what I have typed or I wouldn’t have typed them, yet I have found two things to be the case in my efforts at thought leadership in matters of markets and economics:

(1) People sometimes do not like it when I veer off of a stock market focus, and

(2) People do not like hearing what they do not want to hear

The first one is more problematic when it comes to things like the bond market or public policy or monetary policy or alternative investing – the excitement of the stock market sometimes has to take a backseat to other matters that are absolutely integrally connected to it!

But the second one is what I am worried about today. In over 20 years of professionally stewarding client assets, I have never seen investors be as emotional about any “asset class” as they are about housing. And if all that meant was “people are nostalgic and protective about where they live” – that would be one thing. But that is not what I mean. Opinions about the residential real estate market are, shall we say, sometimes laced with emotion, sometimes perhaps delusion, and often with various presuppositions that are hard for me to make sense of at times.

Housing is back front and center in financial discussions, and all I want to do today in the Dividend Cafe is make sense of it, and give you some wisdom and insights that I believe will be useful in a holistic commentary of the day. So to that end, I work. We’ll still be friends if anything I say bothers you.

Let’s jump into the Dividend Cafe for a special Housing edition …

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

All the Questions You've Been Dying to Ask May 20, 2022

Show notes

I have done something really fun with today’s Dividend Cafe – at least fun for me. I have taken the most common questions I receive these days from clients, in emails, in meetings, in interviews, etc., and compiled a set of answers that walk through the big issues of today. I think you will find it valuable.

I doubt I cover everything on your mind here, so by all means fire away with new questions (questions@thebahnsengroup.com). You may just see it covered in The DC Today, and you will certainly hear from me personally.

In the meantime, let’s jump into the Dividend Cafe.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The Beached Whale of Doom vs. Reality May 13, 2022

Show notes

I had fun writing today’s Dividend Cafe and I think you may very well have fun hearing (and reading) it. I also think some of you may be mad at me for it. I hope I am wrong. I believe there are a multitude of messages in the Dividend Cafe this week that are vital for investors in this current era, and the one that is to come. I also feel these messages are timely. Jump on in …

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

A Booze Free Punch Bowl May 06, 2022

Show notes

Market volatility is on a roll, with the VIX now double the level it started the year at. This week saw the biggest up day we have had all year, followed the very next day by the biggest down day of the year.

A lot is happening, and we can and will unpack it in today’s Dividend Cafe, but we will not leave it there. The takeaway today will be what to do about it (or not do about it), and that is why you should enter the Dividend Cafe. Knowledge followed by action. To that end we work.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Some "R" Words are Worse than Others Apr 29, 2022

Show notes

Recession. The dreaded word, “recession.” For those who have lost their job in one, it can feel like a depression. For those who kept their own job in one but saw their portfolios drop, or saw neighbors or loved ones lose their jobs, or experienced a decline in income or business revenue, it may not have had the existential punch that it did for others, but it generates unpleasant memories of unpleasant times.

There is a lot of talk about a recession right now, some of it imbecilic, some of it overtly political, and some of it, quite substantive and important. But if the Dividend Cafe exists to bring simplicity and honesty to topics that are often spoken of with too much complexity and/or abundant dishonesty, the task at hand is readily apparent.

And so we will look at recession reality in current times, when, what, and why, and unpack the investment implications on all of it. I will always do my best at the simplicity part (I know I miss the mark there sometimes). I will be unrelenting in the honesty part. But as far as the pleasant part of it all, well, let’s just say my focus is on the honesty part.

Jump on into the Dividend Cafe …

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Market Outlook w/David L. Bahnsen - April 25, 2022 Apr 25, 2022

Show notes

Volatility, Rate Hikes, Inflation, and so much more on this Dividend Cafe Special Edition Podcast

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

We Work, or We Suffer Apr 22, 2022

Show notes

If there is one thing that animates me it is the application of real-life economics to investing. I have always been obsessed with economics – both theory and application – but it is in more recent years that I have really found it a calling to synthesize the foundational truths of economics to financial markets.

And truth be told, that calling transcends the applications of economic theory to financial markets. I believe properly understood economics has profound implications for all aspects of human living. My extra-curricular endeavors in economics (the book I wrote last year, the class I teach at the high school I co-founded) are all extensions of this passion I have for a free and virtuous society. But yes, applying these things to financial markets is my real passion, and the inability and disinterest the financial advice community has for applying economic principles to markets is a constant source of irritation.

Today’s Dividend Cafe is about the labor market – the state of jobs in America. For 99% of the media and even economic analysts these days this is an econometric subject. In other words, it is a data point that provides an input to a spreadsheet, and from there carries some numerical relevance to another input (i.e. if wages are here or unemployment is here, then consumer spending is possibly going to be here, etc.). Worse, it is often just a mere political data point, perhaps an even more imbecilic understanding of work than even reducing it to an economic data point.

But economics is the study of human action around the allocation of scarce resources. Our understanding of what is happening and not happening in the world of work will be improved to see it through the lens of the human person. Political and econometric reductions will tell us almost nothing, and in fact, may tell us things that aren’t true at all.

Investors and actors in financial markets need a fuller understanding of current realities in American labor. To that end, we work … (see what I did there). So jump on into the Dividend Cafe.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

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