jankythoughts2

Foreword

For as long as I can remember, inflation measures have been criticized as being inaccurate, biased towards the current political ruling elite. The complaints generally assert that inflation was under reported to serve some nefarious political means, usually related to re-elections or other political goals. At the same time, numerous alternative inflation measures were introduced, almost all with much higher numbers than the official inflation figure, some even consistently in the double digits.

What gives?

As usual, a reminder that I am not a financial professional by training — I am a software engineer by training, and by trade. The following is based on my personal understanding, which is gained through self-study and working in finance for a few years.

If you find anything that you feel is incorrect, please feel free to leave a comment, and discuss your thoughts.

Looking outside the window

As I type this, I look outside the window at what looks to be a dreary day — overcast skies and just generally gloomy. At the same time, Google is reporting that the temperature is 82 degrees Fahrenheit (28 degrees Celsius), a warm, bright sunny day.

As I shake my head at the obvious lies the government is feeding us, trying to convince us of global warming to justify the nonsense Green Transition, I changed the Google query from “weather tokyo” to “weather toronto”. Now it says 58 degrees Fahrenheit (14 degrees Celsius), with a heavy downpour. Well, which is it?! Is it hot and sunny or chilly and raining?!

Looking outside the window that is cloudy but clearly not raining, much less a downpour, I can only sigh. What is the world coming to, when even Google’s weather reports are so influenced by the government that you cannot trust it to tell you the weather, here, in New Jersey?

Headline inflation

As we all know, the preferred inflation measure of the US government is CPI inflation, sometimes called headline inflation. More accurately, this is the Consumer Price Index for All Urban Consumers (CPI-U) inflation. This inflation measure is the rate of change of the CPI-U index, itself a composite measure of what the average urban consumer pays for their goods and services in the measurement period.

To simplify it a lot, the CPI-U index is the “composite price” of a basket of goods over time, and CPI inflation is just the rate of change of that composite price. You can find the basket of goods, their relative weights, and the prices of those goods in data from the Bureau of Labor Statistics (BLS), for example, here.

To recap – CPI inflation is based on a known methodology (rate of change) of the CPI-U index. The CPI-U index is a composite index with publicly released methodology on how it decides what is or is not included, with details on the underlying components, their weights and prices, all freely available.

Conspiracy 1

One of the most common conspiracies about the inflation measure is that it is opaque, and legislators/regulators change it at a whim to sugar coat bad economic numbers or to somehow achieve some political gains.

As we can see from above, that is.. quite a far from the truth. The methodologies and details are all public information, and freely available. Yes, they are provided more than a month after the fact, and the data is often revised. But if you think about the scope of the project, the amount of data that needs to be collected, the number of people that need to be sampled and interviewed to determine the basket, it should be obvious that it’s hard to get everything in place in real time, and often initial estimates will be slightly wrong as more data comes in.

Conspiracy 2

The CPI-U methodology (not the data) is changed intentionally over time to make things look better.

Yes, the CPI-U methodology has changed over time. As research into consumer behaviors increase, and as we understand more about economics and finance, it often becomes clear that previous models are less accurate, and new models are made.

This is a common practice in the hard sciences, for example, we used to believe in Newtonian physics, but Einstein introduced Relativity and Einsteinian physics which are believed to be more accurate on a galactic scale. Despite this, Newtonian physics is still taught in schools, because it is pretty accurate when dealing with terrestrial matters and it is much easier to grasp. I don’t hear anyone screaming that the government is up to some nefarious purpose with regards to these 2 physics, do you?

The fact is that economics is not a hard science — there is generally no real way to conduct experiments to verify hypotheses. As a result, there are a lot of assumptions and unknowns in economics which, over time, get refined. Inflation is an area of economics that is most in debate, because of its significance and because so little is understood about it.

And to make it clear that there doesn’t seem to be some higher conspiracy at work, the BLS typically publish the CPI-U for historical dates using the new methodology when it does change, for example here.

So yes, maybe inflation is slightly better now with the new methodology, but it is also probably better for previous periods, which gives us a frame of reference.

Conspiracy 3

My favorite (not) conspiracy is that the government is intentionally lying to us by publishing only one inflation measure and claiming it is the unblemished truth.

If you pay attention to the news, you’ll see that the news outlets typically equivocate “inflation” to “CPI inflation” as we’ve discussed above. The claim by the conspiracy theorists is that this is intentional! That this one number, that clearly does not reflect anybody’s, certainly not their own, experiences is forced upon us for some ulterior motive.

First of all, this is utter bovine feces. There are many measures of inflation, and anybody bothering to spend 5s on Google can find that the government even explains why there are so many, why it’s so hard, and why certain measures are used, for example, here.

For government purposes, there are 2 main variants of inflation measures — the CPI series and the PCE series. There are various differences between how CPI and PCE collects data which I will not go into, and more importantly, each of these 2 series also have different methodologies applied to them to arrive at different inflation numbers.

For example, if you have paid attention in the past ~4 years, you’ll probably have heard of “trimmed mean” inflation, “sticky” inflation, “median” inflation, etc. These are different methodologies applied on the same underlying data (either CPI or PCE) to arrive at different numbers.

Of these, the trimmed mean inflation has a bad rep because it was accused of being conjured out of thin air to present a better picture during the Covid inflation scare of 2021/2022. The truth is that this measure was first proposed in the early 90’s, and has been published for a long time, with historical data points backfilled using the same methodology.

Trimmed mean inflation is just inflation calculated excluding the outliers. There are various ways to determine which outliers are, and different measures may use slightly different methodologies here, but the basic idea is one rooted in statistics. In statistics, an outlier is a data point more than 2 standard deviation away from the mean. The idea is that by removing these outliers, which are likely due to measurement errors or noise, we can arrive at a cleaner signal. Similarly, the trimmed mean inflation measure is intended to provide a cleaner read of inflation trends, by removing what may be erroneous data points.

So, to recap, there are many, many inflation numbers, for example, the regular CPI inflation, PCE inflation, trimmed mean CPI inflation, trimmed mean PCE inflation, median CPI inflation, median PCE inflation, etc., etc. And the government also publishes other measures of inflation outside of the CPI/PCE series.

And if you don’t like any of these, the good news is that the underlying data is all freely available, so you are free to pick your own basket of goods, their weights, and the methodology to determine your own inflation rate.

Conspiracy 4

There are many inflation measures and the government chooses the one that it likes the most for propaganda purposes!

Believe it or not, this argument was made to me by the same person who made conspiracy theory 3. Yes, go figure.

As mentioned above, to make policy decisions, the government (or its various agencies) needs to pick one inflation measure to use. They may look at all of the inflation measures, but there will always be one that is preferred, due to their particular purposes.

For example, for cost of living adjustments to social security payouts, it makes sense to look at the CPI series of data, because that series reflects prices that consumers pay. Of the CPI series of data, CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) was determined to be most representative of Americans on average, so that’s the one used.

Notice the bolded terms, on average. A single number must be used to adjust for whatever policy is at hand, and clearly the one representing the average American is the one most representatives of all Americans in this case. That doesn’t mean that all Americans will see the same inflation! For obvious reasons, everyone spends their money differently, and so will experience different levels of inflation. But for policy purposes, across all Americans, we can’t just pick the inflation that ConspiracyTheoristA faces and apply that to everyone else, can we?

So yes, the inflation measures that each government agency chooses may not represent you, but that’s more of a feasibility limitation than a conspiratorial one.

Other government agencies prefer other inflation measures because it makes more sense for them. For example, the Federal Reserve prefers “core” inflation measures using the PCE series for policy decisions. Core inflation measures strip out items that are generally not affected by interest rates, which generally means core inflation measures do not include food and energy items.

Yes, it is ironic that the Federal Reserve ignores food and energy, 2 of the largest components of inflation experienced by most everyday Americans, but there is a good reason. The Federal Reserve mainly has control over short term interest rates. However, food prices are mainly tied to weather (and thus how crops perform) and energy prices are heavily tied to geopolitical developments (e.g. instability in the Middle East). As such, it doesn’t make sense for the Federal Reserve to make short term interest rates policies based on food/energy prices, because those things are not very affected by short term interest rates in the first place!

Imperfect

The above argues that inflation measures are probably not nefarious in design, but that doesn’t mean they are perfect. And if your argument is that inflation measures are generally flawed, then I will agree completely with you!

Inflation is a subject that is emotional and very poorly understood. So any model of inflation, and any measure of it, is almost by definition wrong. That said, it should be noted that, all models are wrong, but some models are selectively useful.

The topic of what’s wrong with inflation measures is long, and best left for another day. The point I want to make in this post is that in most cases, it seems like the government is making the best of a bad situation, and adjusting their methods as more is learned through research. Maybe on the margins there are some shenanigans going on, but it doesn’t appear, to me, that there is institutional bad faith in policy decisions.

Average, imperfect world

You probably think I’m an idiot, complaining that the weather report for Tokyo and Toronto does not reflect what I’m personally experiencing here in New Jersey. And you’d be right.

Similarly, it doesn’t make sense to complain that any particular inflation measure doesn’t reflect your personal experience — they aren’t meant to. There are many different measures of inflation, for different purposes. Some are tailored to particular segments of the economy, or to particular regions of the country. Depending on how you spend your money, one or more, or none, of these inflation measures may apply to you.

It is, ultimately, up to you to figure out which inflation measure best reflects your personal situation, just like it is up to me, to figure out which weather measure best reflects my experiences.

Just understand that for policy purposes, one single measure needs to be chosen as representative for inflation. It doesn’t mean that some shady government officials shrouded in shadows are decreeing that measure is what everyone must be experiencing! It’s just that for whatever reasons, that measure is deemed to be most appropriate for the situation.

Personal finance

Quick note: It should be obvious from the above, that using CPI inflation for your personal financial planning is probably not the best idea.

Yes, it may represent the average American pretty well for certain purposes, but it probably doesn’t reflect you.

If you are so inclined, you can use the raw data published by the BLS, and your actual spending, to determine a better inflation measure for yourself.

But this is tedious and hard and easy to get wrong — there are legitimate one time expenses (e.g. roof repairs) that will skew the numbers and make things seem better or worse than they really are. Trying to properly adjust/account for these is a science unto itself, which I will not go into.

Personally, being the lazy slob that I am, I typically just take CPI inflation and add 1% to it. Which is to say, for most intents and purposes, for long term planning, I assume a personal inflation rate of 3% (2% Federal Reserve target +1% headroom).

Foreword

The Green Transition is the new name given to the idea that human activities are affecting the natural environment negatively, and that effort should be made to transition the economy to a more sustainable and Earth-friendly path.

Over time, it has garnered much discussion both for and against the idea, and right now, is a politically charged topic, when it really shouldn’t be.

As usual, a reminder that I am not a financial professional by training — I am a software engineer by training, and by trade. The following is based on my personal understanding, which is gained through self-study and working in finance for a few years.

If you find anything that you feel is incorrect, please feel free to leave a comment, and discuss your thoughts.

Background

It is hard to deny that global temperatures have been rising steadily, on the average, across time. Most of the debate in recent times have centered around whether this is a temporary cyclic phenomenon which will revert by itself, and whether this phenomenon is due to human activities, and thus whether human efforts can pause, halt or even reverse the change.

As with most charged debates where both sides are firmly entrenched, politics have gotten involved, and that has dragged in more polarization based upon one’s political affiliations.

Not helping is the apocalyptic language used by some proponents, especially earlier in the discussion (around the 80’s), in some cases suggesting the Earth may be inhabitable by around this time. Ooops. To make matters worse, it has come to light recently that some of the climate studies supporting the narrative have been doctored, fueling conspiracy theorists on the other side. Of course, that big moneyed interests are involved on both sides (building new green infrastructures vs existing fossil fuel based infrastructures) just makes this into an all out dog-fight.

My personal opinion

Before we go on, just as a disclaimer of sorts, here’s my personal take. I have not personally gone over the climate change data in detail — I am not a researcher in the area so the data will just go over my head anyway. I have, however, read quite a bit on the summaries of studies, as well as various layman oriented articles published by both news and scientific outlets.

While I am not 100% convinced, I lean heavily towards the belief that human activities are affecting global climate, and that the current means by which humans extract energy is unsustainable. I have no idea if changes in human behavior will pause/halt/reverse the effects, but I figure it can’t hurt, and more importantly, we need to find more sustainable sources of energy anyway — at some point we’ll run out of dead dinosaurs.

To the tree huggers

A message to the those who are for the climate change narrative — calm down. Yes, I think the scientific evidence leans heavily towards supporting your views, and some hypotheses floating around suggest that not doing anything, or even doing too little, could be disastrous. But crying your eyes out, screaming at the Earth murderers is not conducive to rational debate, and certainly does nothing more than alienate your audience.

Instead, think of it rationally — there is no point crying over spilled milk. The world and reality is what they are now, and we must make do with what is available to us, instead of crying over what it should have been.

First of all, it is impossible that all fossil fuel programs will stop right now, no matter how much you wish it. For all the advancement in sustainable energy sources, there are severe downsides:

• Solar energy is terrible for base load power supply — there is too much of it during the summer, and way too little during the winter. While batteries can bridge the gap between day and night, even across multiple days to account for rain vs shine, there currently exists no battery technology that can store power across months at a large scale. Do not fret though, this is a well recognized problem, and there is a lot of scientific research into this area (more later!).
• Wind energy works across the seasons and times of day, but is unpredictable because the wind itself is unpredictable. Also, during periods of strong gusts, wind turbines actually have to be shutdown to prevent damage to the turbines, an irony not lost to the other side. Wind turbines are also loud which means they need to be situated further from their use, and the nature of them requires much larger land acreage to deploy. Finally, like solar, wind energy isn’t very reliable in winter as extreme cold can sometimes require the turbines to be shutdown. So while less dependent on battery technology, wind energy still requires battery backup.
• Tidal and hydropower sources tend to involve installing largish installations over rivers/beaches. Tidal energy is not deployed right now due to various issues, mostly to do with concerns about their effects on marine life, the sediment process (i.e. how beaches are formed), and that the turbines tend to need a lot more maintenance/replacement than other forms of green energy. Hydropower similarly affects the natural landscape and thus the wildlife and population centers that depend on it, and while much more durable, breaks in the dams built for hydropower can have devastating consequences for the people that live downstream.

At the same time, the transition is going to cost vast sums of capital, capital which the vast majority of the world simply does not have. Yes, over long periods of time, sustainable energy sources generally pencil out to be more cost effective, but that’s not the problem — the problem is the start up costs. Most countries simply do not have the resources to embark on such large scale transition, especially when there are attendant problems with the technologies (which, again, hopefully will be resolved with time). While it is easy for us in our air conditioned offices to type out articles about how the world should behave, it is important to understand that reality is very much different in other parts of the world. Current fossil fuel energy sources remain the most abundant and easily accessible energy sources for the less affluent countries. Yes, over time, investments in sustainable energy sources are very likely to pay off, but that does not address the very real need these countries need, to survive, now — it is hard to think of a better future when current reality simply demands all your focus.

Finally, and most importantly, it simply doesn’t work to shut off all fossil fuels immediately, not in a “we can’t afford it” way, but in a “it hurts the green transition” way. For the green transition to proceed, there things that we simply cannot do without — steel, fiber glass, copper wiring, etc.

As an extreme example, currently, steel cannot be made without coal — each ton of steel requires about 750kg of metallurgical coal, so if we shut down all coal mines, we’ll also be shutting down all steel production. No steel, no wind turbines, no solar panels (admittedly not a lot of steel is needed in solar panels), etc.

And more importantly, until the transition is over, we actually do need fossil energy to, well, power the transition! How else are we going to transport those gigantic wind turbines to remote parts of the country? How are we going to power the factories that manufacturer the solar panels?

A pet peeve of mine, and to illustrate the counter-productiveness of indiscriminate green protests, is the demand for shutting down of coal mines in some industrial countries. Shutting down a coal mine does not eliminate the fact that some industries (steelmaking!) and power plants need coal still to operate — they can’t simply shutdown overnight and leave entire towns without power. So what happens is that the same amount of coal is mined elsewhere, and then shipped to the original country. Think about it, instead of mining the coal nearby and then using it, we now:

• Mine the coal elsewhere, often in a less regulated part of the world, thereby increasing the amount of environmental disruption (though admittedly out of sight),
• Expend more energy, often in the form of burning fossil fuels, to ship the coal to where it is still needed.

How dumb is that?

To the climate deniers

Hey, I understand — those holier-than-thou, green woke hippies can be annoying. Like, really annoying. But let’s ignore their juvenile tactics for now and think rationally for a bit.

What if, just what if, they are right? Even if it’s a 1% of 1% chance, you have to admit, if they are right, the amount of gloating you’ll have to suffer through will be intolerable. But more than that, the Earth itself may be uninhabitable. Kinda makes the whole point of that Hummer pointless, no?

Now, I get it — you love your gas engines — they’re reliable, refuel in a minute and sound awesome. But the price of gas has been on a tear lately, and that is a bummer right? What if I told you, that there is a way for you to secure more gas for yourself, a way that’ll outright prevent some other folks from buying gas? Less demand, lower prices, I mean, you gotta love that right?

Which is why, I think you should support EVs. Yes, they are terrible — they take forever to charge, they don’t work right when it’s cold, and they simply have no soul. But you don’t have to drive one! Just encourage everyone else around you to buy one. Once they buy an EV, they will stop going to the gas station, and there’ll be less competition for gas, which should, all else equal, reduce the price of gas that you have to pay. Imagine paying for a tank of gas with a $50, and getting change!

Similarly for electricity. The more those climate idiots spend of their money developing new energy sources, the more supply of electricity there will be. And Economics 101 tells us that with increased supply, prices should go down. In parts of Europe, power generation during the daytime is so high due to solar power that energy prices went negative. Negative! Imagine being paid by the power company to blast the A/C at max?

So, don’t do it for them. They are wrong. But do it for your wallet. Smile politely and nod as they make their nonsensical case, and tell them to go about their plans, because it is good for you. It’ll lower the price of a tank of gas, it’ll reduce your monthly electricity bills, and more importantly, you get to gloat about how those idiots are paying you to live your life. What’s not to like?

Supporting the green transition

Now, whether you believe in climate change or not, I hope I have made the point that investment (by others, not necessarily you!) into new green technologies is beneficial.

And here comes the controversial part — buying the shares of “green” companies does almost nothing. Yes, maybe it makes you feel better to own shares of “Green Company XYZ”, but you have to understand that when you buy shares on the stock market, you are buying them off someone else, someone who is not “Green Company XYZ”. The company itself sees none of the money that transacted. While there is a case of be made that a higher stock price makes it easier to hold secondary funding rounds, the reality is that most public companies never, ever hold secondary funding rounds — it is generally seen as a sign of weakness, and the stock price tends to get demolished because of it. Also, a high share price does not make it easier for the company to hire better people. Stock/option grants are based on the current price of the share, so for those employees to benefit, the share price doesn’t have to be high, it has to be rising, and it is generally easier for shares with lower prices to rise than for shares with higher prices.

Instead, if you are willing and able to invest to support the green transition, I would recommend that you invest in the debt of green companies, or even better, to invest in green startups. Unlike stock, companies issue debt all the time, and tend to do so on a recurring basis. So the price of their debt is actually important to them, and affects their ability to continue operating. By buying their debt, you are providing another source of demand for that debt, and with higher demand comes higher prices, which directly helps the company during their next debt funding round.

Finally, startups are almost always in need of equity funding. Unlike buying shares from the stock market, investing directly in a startup means the money goes directly into that startup’s treasury, meaning the money is directly available to them to pursue their business needs.

Right now, the areas which I believe are most in need of research are:

• Battery technologies, specifically long term energy storage with minimal leakage. Battery energy density research are good too, as they can help make EVs more palatable by having longer ranges.
• Solar energy efficiencies. Solar power panels typically have an efficiency of under 20%, which is pretty abysmal — 80% of the energy that falls on the solar panel are simply not captured. Increasing that to just a barely passing 60% will decrease the surface area of panels needed to supply the same amount of energy by 67%! Imagine if a solar panels of roughly the size of a dinner table being able to supply all the power needs of a home!
• More efficient/synergistic technologies. Right now, a lot of electricity is wasted simply because existing technologies are terrible at reusing heat. Think about it — we use electricity to remove heat from our fridges, which then dumps that heat in our homes. We then use electricity to turn on the A/C to move that heat outdoors, while at the same time using more electricity to heat up the pool/hot tub (for those who are lucky enough to have one). What if we could just remove the heat from inside the fridge, bypass the rest of the house and dump that heat directly into the pool/hot tub? While we’ll still need A/C to cool down the house during a hot day, the need will be reduced, and even better, that heat can also be pumped into the pool/hot tub! This basic idea of reusing heat can be applied to other areas too — heat generated from cooling of EV batteries can be used to warm up the interior of the car during winter, heat removed from giant datacenters can be used to heat homes, etc.
• Cleaner fossil fuels. Refinement techniques to reduce emissions when burning fuels, while not a long term solution, can buy humanity more time for the green transition. At source carbon capture and sequestration techniques can be developed to reduce and safely store emissions from polluting industries, etc.

Closing

Whether you believe in climate change or not, the fact remains that all of us are stuck on this little rock floating around in space. So maybe let’s stop arguing and let’s start finding commonalities, and where particular efforts can be win-win.

Foreword

Everyone is out to find the next long term compounder — a company with such a strong business model that its earnings compounds steadily over the years. The thinking is that for such a company, if you have a long time horizon, then the price mostly doesn’t matter — simply buy and hold, and eventually, the compounding will make it all worthwhile.

Or will it?

As usual, a reminder that I am not a financial professional by training — I am a software engineer by training, and by trade. The following is based on my personal understanding, which is gained through self-study and working in finance for a few years.

If you find anything that you feel is incorrect, please feel free to leave a comment, and discuss your thoughts.

Consistent, long term compounder

Consider the revenue graph of company X, which compounds from $20.22B in 2000 to $58.03B in 2022, a CAGR of about 4.9%:

And its earnings graph, which compounds from -$1.39B in 2000, to $3.74B in 2001, to $16.72B in 2022, a CAGR of about 7% (from 2001 to 2022):

It should be clear, visually, that this company is doing pretty well — even in the depths of the Great Financial Crisis, it was holding up pretty well, and since it first became profitable in 2001, company X has never even flirted with the 0 earnings line at any point in time.

So, if I told you that company X has an all time market cap high of $Y, where do you think its market cap is today?

1. $Y
2. Within 5% of $Y
3. Within 10% of $Y

This is the market cap chart of company X, also known as Cisco (CSCO) from the same source of the graphs above (Companies MarketCap):

23 years after annualized growth of ~5% revenue and ~7% earnings, the company’s market cap is DOWN about 30%. (edit: I was informed that this is misleading — CSCO pays a dividend and has had for years, so if you include the dividends, the performance is much better. That said, the return will still be subpar due to the high entry price.)

How’s that for a consistent, long term compounder?

Relevance

As we come out of what appears to be (at least, temporarily) a downturn in the markets (in 2022), a point to remember, is that by most historical metrics (1), the markets are pretty expensive today. They were, of course, much more insanely expensive in 2021, when the markets had truly gone wild, but Q4 2021 and 2022 brought us back down to Earth just a little bit.

However, even as most of the market, minus the Magnificent 7, appears to be close to fairly priced (again, by historical metrics (1)), it is important to remember that there are still pockets of excessive exuberance, of stocks priced to such ridiculous extremes that the probability of them returning a generous rate of investment returns (2) over the long term seems rather unlikely.

To be clear, while it is possible to make a handsome profit if you are speculating (2) in these stocks in the short term, investment returns (2) requires holding that position for the long term and profiting only off its productive output, i.e. not selling to a greater fool.

And remember — the higher the price you are paying for a share of a company’s future productivity, the more speculative that position generally becomes.

So, short everything!?

And this is where some folks will start pointing fingers and start screaming “perma bear”. The truth is, if you follow me on StockClubs (3), you’ll realize that my portfolio is actually pretty long the market (levered long right now actually), and other than a brief period from early August to early November, it has generally been long.

There is, always, some assets that are overvalued, and some assets that are undervalued. Yes, sometimes, the only undervalued asset is “cash”, but that’s relatively rare.

Rational, long term portfolio management isn’t about putting money on things you like, or things that others like, or even things that are doing well now — it is to weigh the pros and cons of every position, figure out what is likely undervalued, and then overweight your portfolio towards those assets.

Certainly, overvalued assets can become more overvalued — that is how we get bubbles, after all. And certainly, undervalued assets can become more undervalued, which is how we get depressions.

But it is my opinion that if you consistently weigh your portfolio towards (4) what is undervalued, and underweight what is overvalued, then over the long term, reversion to the mean of ridiculously high (or low) valuations will generally work out in your favor.

Footnotes

1. A constant consternation by some is my reference to “historical metrics”. By this, I mean things like trailing P/E, P/S ratios, etc. For an example of what the the S&P500 looks like today relative to its past in terms of P/E ratio, please see https://www.multpl.com/s-p-500-pe-ratio.
2. For a description of investing vs speculating, please see https://jankythoughts.com/2021/04/12/investing-vs-speculating/.
3. Disclaimer: I am an investor in StockClubs, and I’m only sharing one (out of 10+) of my brokerage accounts on the app.
4. To be clear, “weigh your portfolio towards” does NOT mean sell everything else and only buy something or other. It simply means giving something more weight in the portfolio.