I always say that the gap between now and the future will be filled with technology. So I don't know what she's referring to as the only path towards the future is through technology.
It's really about the top of the US tech sector. I'm not sure I buy the thesis, but the problems that she highlights are real. The US is finally beginning to lose its historic dominance in the market.
"Within sectors, Shah recommends utilities or real estate. Since the start of May, the two classic bond proxies are the only S&P 500 sectors in the green. Globally, she prefers U.S. stocks over emerging markets."
I keep reading on here that no real estate safeguards were put in place after the 2008 crash. Why would anyone feel safe investing heavily in real estate knowing that?
So late in the debt cycle, I’d avoid RE like the plague (although it appears interest rate increases are off the table for the foreseeable future). And utilities? With renewables being deployed and still coming down in cost? No no no.
Why is progress in renewables a bad thing for utilities? Just in the past 10 years or so, coal prices have increased by ~50% while natural gas prices have dropped at an even greater rate. Churn in the prices of underlying energy generation technologies seems both inevitable and 100% normal for the industry. I don't see any reason why this can't be profitable just because the churn might be renewable during the next cycle.
Stranded assets, distributed solar, that sort of thing. Investor utilities are no longer the gatekeepers they once were to electrons. You can put solar on your roof, and depending where you are, payback period is low single digit years.
I'm a fan of rooftop solar for quite a few reasons. One of those is that it is effectively the only competitive choice that a consumer has for cases where the utility charges excessive rates.
But lets not kid ourselves here. Utility rates in much of the country hover around ~.12/KWh (less in many places, much more in some places). The levelized cost of solar, inclusive of its initial outlay is often very close to this in the best of circumstances.
For example, with a well placed (facing south) 5KW system in the southeast, I can expect to produce ~7000 Kwh per year. At an initial system cost of $7000 (assuming a tax incentive of 50% and unincentivized cost of $3/KW), that system will pay for itself in about 8 years.
If your rates are exhorbitant or your incentives are much higher then this all changes. But higher rates also mean that the utility has a lot of room to lower rates economically.
We’re not kidding ourselves. California now mandates solar for new construction on residential roofs. The cost of solar will continue its decline. It’s even easier if you wrap your system cost into a mortgage or finance with home equity on a long amortization schedule at historically low rates.
I don’t think utilities are going away, but I also don’t think they’ll be so profitable as to invest in them as a retail investor (which was the initial discussion above).
I mean, in a sense they really haven't been a big money-maker as an investment in the past either, barring some exceptions. They are stable dividend stocks and I don't really see that changing.
Keep in mind GE used to be a reliable dividend stock until they bet incorrectly on natural gas instead of renewables (and lost hundreds of millions of dollars in the process).
People talk a lot about what will be the trigger for the next recession. I could see it being tech. Not the blow up of 2001, but rather a capping out of growth by the big tech companies as they turn into giant, stable to slightly contracting behemoths.
Also possible tech trigger: extremely unprofitable tech companies going public. Slack, Uber, Lyft, etc. In fact,
"In 2018, 81 percent of US companies were unprofitable in the year leading up to their public offerings... That's a statistical dead heat with the rate in 2000, the year the dot-com bubble burst"[1]
What is the difference between her and an astrologer? If she is so sure, they should return all their clients money(invested in tech) or put them in defensive stocks.
I kinda envy her for making a lot of money and being on TV for i don't know what! no one can predict what's going to happen. Golden state winning yesterday was a sure thing. But then didn't! and now i finally realize that i or nobody has any idea what's going to happen.
Looking at the past we can say with certainty(if we assume it will repeat) that stocks will crash someday. When that happens some money that can be risked should be used to buy a well diversified ETF. Till then if you can't hold on to cash then keeping buying every month.
>What is the difference between her and an astrologer?
To be fair, they don't let random astrologians on the curb manage $442 billion.
That said, this is likely just PR for her personal/firm's position against tech and likely bullshit. If a recession happens tomorrow, tech would be affected and she'll win even though the underlying cause probably wasn't tech. I think the DOJ investigations will make tech more interesting at least, so I really doubt the "glory days are over" when more glory opportunity comes along (whatever the fuck glory means in tech).
Tech's growth has been riding on monopolies (FAANG) and useless, manipulative apps (a large portion of SV startups) for the past decade. It's no surprise that a correction is coming. Useful software will never stop being important, but there's a whole lot of fat right now that's just waiting to be trimmed from the industry.
It's amazing how the story changes just within a few months or years. Tech is the future of everything one day. The next, its glory days are behind it.
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[ 3.2 ms ] story [ 60.7 ms ] threadI keep reading on here that no real estate safeguards were put in place after the 2008 crash. Why would anyone feel safe investing heavily in real estate knowing that?
But lets not kid ourselves here. Utility rates in much of the country hover around ~.12/KWh (less in many places, much more in some places). The levelized cost of solar, inclusive of its initial outlay is often very close to this in the best of circumstances.
For example, with a well placed (facing south) 5KW system in the southeast, I can expect to produce ~7000 Kwh per year. At an initial system cost of $7000 (assuming a tax incentive of 50% and unincentivized cost of $3/KW), that system will pay for itself in about 8 years.
If your rates are exhorbitant or your incentives are much higher then this all changes. But higher rates also mean that the utility has a lot of room to lower rates economically.
I don’t think utilities are going away, but I also don’t think they’ll be so profitable as to invest in them as a retail investor (which was the initial discussion above).
I'd disagree that they're necessary not growing. Just growing at a more typical market rate for an established industry.
"In 2018, 81 percent of US companies were unprofitable in the year leading up to their public offerings... That's a statistical dead heat with the rate in 2000, the year the dot-com bubble burst"[1]
[1] https://www.vox.com/2019/3/6/18249997/lyft-uber-ipo-public-p...
I have a sense as soon as the first one fails, the others will be under a lot of pressure combined with negative sentiment.
Looking at the past we can say with certainty(if we assume it will repeat) that stocks will crash someday. When that happens some money that can be risked should be used to buy a well diversified ETF. Till then if you can't hold on to cash then keeping buying every month.
$442B.
To be fair, they don't let random astrologians on the curb manage $442 billion.
That said, this is likely just PR for her personal/firm's position against tech and likely bullshit. If a recession happens tomorrow, tech would be affected and she'll win even though the underlying cause probably wasn't tech. I think the DOJ investigations will make tech more interesting at least, so I really doubt the "glory days are over" when more glory opportunity comes along (whatever the fuck glory means in tech).
https://www.bloomberg.com/opinion/articles/2018-05-08/all-co...
"Every Company Is Now a Tech Company"
https://www.wsj.com/articles/every-company-is-now-a-tech-com...
It's amazing how the story changes just within a few months or years. Tech is the future of everything one day. The next, its glory days are behind it.