Roaming Returns

012 - Buying Opportunities Despite Market Fear (And They're Not Overpriced Tech Giants)

September 26, 2023 Tim & Carmela Episode 12
Roaming Returns
012 - Buying Opportunities Despite Market Fear (And They're Not Overpriced Tech Giants)
Show Notes Transcript

With so much fear surrounding the markets and economic climate, it's no surprise that people are hesitant to invest right now. 

More fear means less money in the markets.  Inflation and interest rates are higher also reduce discretionary funds. 

For those who are investing, they're flocking to the "safe bets" like Facebook, Tesla, Google, Microsoft, and Apple. 

Following suit, is a risky move. These big growth companies are propping up the market and will still decline in the recession that's coming.  

So what should you do?  

Invest in Bullet Shares like BSJP and BSJQ until other investments drop into a favorable price range. That way you’re earning ~6.8% yield while you wait. 

Sectors to monitor and stocks to put on your Watchlist: 

  • Mortgage backed REITs - AGNC, NLY
  • Energy stocks - ET, AMZA
  • Bonds and bond funds - YYY, DSU
  • Banking stocks - MAIN, OMF
  • Utilities - AQN, UGI
  • Shipping and delivery services like Amazon, UPS, FedEx b/c holiday season - no good options yet
  • Home builder stocks - MDC, KBH
  • Phone network stocks - VZ, T (or cell tower infrastructure CCI)
  • Closed ended funds at a deep discount - JRS, JQC, CRF, CLM
  • Retirement and medical facilities for elders - MPW, OHI (maybe AFCG a pot REIT)
  • BDCs that lend money to startup tech companies - HRZN, HGTC

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Welcome to Roaming Returns, a podcast about generating a passive income through investing so that you don't have to wait till retirement to live your passions. 

In today's episode, Tim and Carmela are gonna talk about the craziness that's going on in the market right now. All news is apparently bad news. Everybody's got fun. But you don't have to. Yes, we're going into a recession. But there's always opportunities to take advantage of tune in. And we'll talk about all the cool little pocket sectors that you guys can take advantage of, and we got tickers out the ying yang today. I hope you're excited to hear this because there is a way to make money through all this nonsense. Here we go. All right, guys. Welcome to the next podcast episode.
This one's a banger, as our British friends will say, banger mash.
We weren't really sure what topic to discuss tonight. And Tim was we were just getting to talk and then he said about the current economic situation, which I think is pretty pertinent because it's like shits crazy right now.
Like I was, like I said, last, a good podcast or a newsletter. I fully expected September to be bad, and it's down 4% So far, I figure another one to 2% It'll go down before it goes up in October. So it's where we are. We're in a shit show. I'm your host, hostess with the most this. Okay, so currently, we have multitude of factors. That sometimes seem like they're converging against investing,
which is why everybody's got so much FUD fear, uncertainty. Basically, the
first aspect is all all news is bad news. No matter what the news is. It's all bad. They're the Fed. Federal Reserve is not going to raise the interest rate. That's bad news because the rates will be higher, longer. The Federal Reserve raises the interest rates. Well, that's bad news because they raised the interest rates. Inflation came in at 5%. Well, that's bad news, because it's more than 2% inflation went down to 4.5%. Well, that's bad news because consumers are spending less. There's always bad news in every regard and if you historically look at periods like this, the best time to start stocking away investments is when everybody is terrified because everything's bad news.
Yeah. So if you know anything about bear markets and bull markets, they say that the best time to buy is when everybody else is afraid, fear doubt. Uncertainty, that whole thing. So two
of the biggest points that no matter what publication you read, or listen to, if you listen to us, thank you. higher inflation and higher interest rates. That's that's two huge topics. Inflation is they say quote, unquote, it's out like 3.5%. But I can tell you now they're full of shit. Anybody that goes to the grocery store knows it's more than 3%. Anybody that buys a car knows it's more than 3%. Anybody that buys anything knows that inflation is probably 10 to 15% so their metric is is asked, but whatever. So we'll use their cheap, they're cheap data and say it's 3.5%. They want it to be 2%. So we still have a long way to go to get down to where they feel comfortable lowering interest rates, that ties into the higher interest rates, you remember 18 months ago, interest rates were between zero and 0.25% are currently at 5.5 or 5.75, which is not what the average person's interest rate is. That's what the Federal Reserve's interest rate is. The bank's interest rates are probably seven to seven and a half percent. So if you want to add to get like a mortgage, you're going to be seven and a half at the least probably closer to eight. If you get if you have perfect credit you went to get a loan for a car, you're probably paying 12 or 13 at the least. So interest rates. There's two different things I wanted to point out there that there's the federal interest rate, which is at 5.5. And then there's the you know, you yours and my interest rates, second year and eight the 10 or 12
because the middlemen have to make their
money. Another thing that's happened that they don't really talk about too often is prior to when they started raising interest rates in 2022. The government was printing money like like, like paper, they were just like, here's a million dollars. Here's a million dollars that was called Quantitative Easing or QE ease if you read stuff and they say QE. It's basically quantitative easing, which is they were just printing money out of thin air. They stop doing that. And what they're currently doing now is they're starting to try to balance their sheets and they're taking the government liquidity out of the market, which means they're selling more treasuries, but they're taking less mortgages and less bonds. Out. So there's less government money in the market, which means the overall market numbers are going to be lower. So the prices should go down to match the lower total money, total income, total revenue in the market. So
that's where all that COVID money came from. Right when they printed. They printed all that money to give everybody pretty much yeah, they
just said, Hey, here's here's $2,000 a month for staying home and not getting COVID.
So basically, they just printed that. So where does that leave us? Well,
we have all this negative news, what is actually working in the current market conditions? Well, if you see all the reports, they say, Oh, the stock market's up 12 to 50%, or it's up 10 to 12%. While that's true, that's misleading like any other data that comes from mainstream, mainstream media. It's founded in fact, but it's misleading the market itself. Technically is up 12%. But the reason it's up 12% is because you have Facebook, Apple, Vidya, Google, Microsoft, and I'm missing one or two of them, but like, Tesla, there's basically like 10 to 12 stocks that are up like 60, some percent 50 to 60%. And because of that, they've propped up the market to the point of 70 to 80% of the gains of the year this far are because of those stocks. If you take those stocks out, the market itself is up, maybe 2%. So it's been a sideways here for everything. That's not the favorite stocks of all investors.
And our email subscription that just went out this morning was talking about how those, those stocks are all significantly overpriced.
They're all because everybody's clamoring to get into them. They're all overvalued too like Amazon's PE is ridiculous.
Well since they did their stock cut, it's still ridiculous still 103 And what did you say the average PE is supposed to be like 24
For me personally, whenever I'm doing research, I like to find stuff under 20
so 103 right now for Amazon when I looked up this morning, that's a no bueno That's
why I brought up in the last podcast the podcast before last I mean, they all do
a quick PE thing. I thought that was a really good description about how PE is basically
brought up the view of Mac stuff like the Tesla yo Max and then the videos Max because you can still make money off of putting money into those stocks, but they do it a different way. They do the covered call of those. So you're basically making like a we made 500 and some dollars last month on Tesla covered calls. And we actually don't know any Tesla so it's a way to make money off of them.
But the thing with owning Tesla the other way if you buy the stock, you have to wait for the price to appreciate for you to actually get any value increase but you don't actually take any profit off the table until you sell it
because you said PE whoa like for me. Again, I am not a college graduate graduate in the business realm but for me PE is what an average investor should be expecting to pay to make $1 and earnings. So a P E of 103. Like she said, and Amazon means you're going to invest $103 into Amazon to make $1 $1 on their earnings.
And if you look at that from a ROI perspective, which everybody who owns businesses talks about ROI we don't really talk about that with investing usually but I think it's a good way to look at things and level the playing field by going percent route 400 That's cheeks as you would say cheeks cheeks
and super cheeks so like I like if you're doing a screener, I would always include the PE comparison. It's a way to make everything apples to apples comparison because everything has, for the most part a PE metric. And then in the ticker label, I mean, I don't know how to describe that. But if you pull up something in Schwab, it has a PDF, you pull something up in Vanguard, it has a PE. So that's a way to actually compare
and the point of that why is the stock don't get sucked into the fact that everybody's getting in those top 10 stocks because usually the strongest stocks are the last to go down. And usually when everybody's jumping into one thing, that's when the price usually goes the other direction. So
with that said, what she just said is I fully expect the market to go down between now and probably in the first quarter which would be one March of next year. I think it's gonna go down. So if you look at it, you're already starting to see the cracks like all Kryptos now and I don't know any crypto that's up. Gold and silver are both down from their highs just like two months ago. They're they're down
but usually they go the opposite direction when everything else goes down. So there's definitely some manipulation going on. So
what's what's up though, is US Treasuries. And they're only like you don't make much on them. But I mean they're they're away if you're doing income investing, you should have like, we have ours tied up and bought shares, which is basically their bonds, bond funds, like they basically make their money off of buying bonds of different companies and then giving you the interest payments out
what shares are nice because if you're not actually going to be getting actively into stocks they sit at a pretty, pretty tight price range. So they're almost like a I don't want to call them an actual like savings account, but they kind of mimic that in an actual stock market. So you can sit in there at least grow some yield while you're waiting for the prices to do whatever the heck they're going to do. So you can actually get in at a more beneficial price to you versus while everything is over inflated right now.
As a way like I like them because they pay dividends every month. So your money is compounding every month. So I like both shares. I
think they're like at what 6.8% They're
between six and seven depending on which ones you get into like BS JP is I believe 6.7 BSJ Q 6.8 or 6.9. Some of the other ones are less than that but those are the two main ones that I get into the BS JP BS JQ an area that's really up is crude oil. Surprised reason crude oil is up is because OPEC has their meetings. I don't know if it's every month or if it's every quarter I don't really read too much into it. I just can tell by going to the pump and saying oh look how much I'm paying for gas oil is up again. And
where he is we have even bigger taxes on gas and manipulating the hell out
of the oil price. They basically what how they do that is they say we want crude oil to be 80 or 90 or $100 per barrel and if it's a 60 $60 per barrel that will literally will just cut off supply like we're not shipping more than 2 million barrels. This day. So they manipulate the supply and demand to get the price to where they want it. So that is a area that I mean you probably could get away with investing in oil for the probably 2024 I do believe that you can make some money in energy. So energy is up this year. Mortgage rates are the highest they've been in 20 plus years, and they're only going to go up more because they're not lowering interest rates. And even when they lower the interest rate. I think I read somewhere it takes like 18 to 24 months to the interest rates to start corresponding to what the Feds doing. So if they if they lowered
you know what's funny about that they didn't go the other direction. So they went up they lower the rates
and January's probably going to take to like at the earliest like June of 2025 to start going down like they're lowering them and ai o ai is just blown up and it's kind of reminds me of the night that I'm how this I'm gonna date myself here. All your old heads on know this it's bubble of 1999 were anything that just put we have a website here's our here's our shitty It like sold for ridiculously high prices.
And that's what we're seeing right now with the AI the one
that people always relate to is It literally had nothing it just had and it made a lot of money and then it crashed to zero. That's what's going on with AI right now not saying AI is the same as bubble but it reminds me a lot of it or any any company comes out and says here's AR AR AR AI platform, or here's our software that uses AI or here's what we're doing to have aI on our company and once they put that in their earnings report people are like oh, it's an AI company and they buy into it. It's kind of crazy. And
crypto kind of did something similar where this to tech companies and all the tech stuff in general what happens is the first wave you get those crazy spikes that shoot up to everything that's like trash ends up crumbling and burning. You gotta wait for the second wave to see the stuff that actually innovates and like pushes the the leaders down or actually has credible stock and software and all that other stuff to really justify their prices and value. So we're definitely expecting to see some interesting stuff come out with the AI but I kind of think it's a little early in the game. For I
do believe that AI is going to run everything in like 10 years. But
if you want to do some AI I was reading how nividia I think is the only tech company that's actually producing the chips are this some kind of foundational piece for the AI platforms. So if you're going to invest in something I would invest in the actual platform that the AI technology is going to sit on why
I recommend the video, you'll Max because you're making I think a paid 40 Some person
got to think a little bit more creatively instead of investing directly in like the individual stuff
over than last month I think because what the video yo Max was. Video is one area where they actually don't talk about that's really going to just add everything up is that since COVID student loans have not really been required to be paid. They're doing away with that and it's happening soon, like this month soon, where people are going to have or my have already started happening with some lenders where you're going to have to start
repaying well you know what my one girlfriend just told me about her student loans are going to start needing to be paid off. That's probably what she was talking about.
So that right so you couple that amount of capital coming out of the market, along with the feds liquidity coming out of them. Are
they taking interest on to that whole time?
Yeah, okay. They shouldn't have been. They may have that would be sketchy if they did was so you're bringing out so you're taking all that money away from the consumer in the form of student loans and you're taking all the money from the market in the form of the federal government. So there's going to be a lot less money in the market. So the market is going to go down just because there's no money in it. So that takes us to our crystal ball projecting. And now I'm not a gene or Oracle,
Oracle, do you have Oracle tendencies? We did just watch the matrix. But I
can tell you, I am pretty confident that we're going into recession. If we're
not already in the one it just doesn't depends on
the like they all would like what they would they keep doing what they've done for like the last five years, they keep changing the definitions like a recession used to be two quarters with like, lower GDP and they did away with that because we've had we've been there four or five quarters, lower GDP. We've been there. So they changed it something else but we're going into recession I don't believe it's going to be a bad one like all the doomsayers are saying it's going to be the worst and the depression be like the end of the dollar and it's going to be the end of the world. I don't believe it's going to be that bad. But the valuation of companies is going to have to catch up with the actual money in this system at some point. Yep. The PDS are going to have to come down Are you like $103 to make $1 is ridiculous. That has to come down it has to come back to the mean at some point that's why it's the main
I say the higher you go up, the harder you come down. So that leaves
us with if we think the market is gonna go down. We have to think about where we should be parking our money to make money to make the most money or to
hedge your downs to be able to make the most money when it corrects. So money wise probability wise
is your principal is going to be lower by like the next summer than it is this past summer.
This our account definitely reflects but
again, the reason that we liked the investing method that we have is I'm not too concerned with the principle as much as I am with the number of shares and the number of shares have been really doing well. Because
when you take your dividend reinvesting and it goes back in, you're buying more shares with that same dividend payout. So you're increasing your share quantities while prices stayed flat or go down. And like we just said, even though our valuation of our account is down, our money coming in every month is slowly going up because of the increase in share quantities. Yes, so
I would actually pull out a pen and paper because I got a shit ton of tickers. We're coming up here. What should people be investing in between now and probably March of next year? Well, obviously high interest high interest high dividends, investments, but good companies, right, good companies, but like in certain areas like mortgage backed Rei T's mortgage back loans is a huge area with that. What that means is when a company lends money out, they're actually buying the companies that they're buying their their loan or mortgage loan. So like if I lend money out to the neighbor, I would basically say I'll lend you $100,000 But I want to deed to your house type of shit like that, like they're going to get physical, physical, real estate if they default on the loans, which is huge. And the reason I think that's going to be huge is because like I mentioned before, the government's actually not having as much money into real estate as they were prior to the quantitative easing. Being relaxed. Companies like AIG and C and NL why they're both pretty good. Mortgage back rates they 92% of their I think 92 For AGNC and 90% for NL y of their portfolio is mortgage backed REITs and they pay I do believe agencies 15% And I'll Why is 13% dividends, they're going to be able to actually afford those dividends because the interest rates are going to be high. So they're going to be generating more income with the higher interest rates because they're owning and it's basically real estate. Yeah, and the rent is going to be obviously corresponding to the the amount that the mortgage is like if you have a rental property and like your mortgage goes up, you're going to raise your rent to cover your mortgage that's exactly what they're going to be doing. Energy is always a good place to start by energy I mean, the nasty dirty coal and oil aspects, fossil fuels, fossil fuels, two of the best are energy transfer. Et and Amca. They have really good dividends are really good run companies. I believe ETS at 9.6% yield I think AMCA is at 11% yield. So Rock on, you're gonna make money off like my philosophy on oil is you're gonna make money off oil you want to make money off oil and dividends. And I wrote a piece about how I invest in companies in the email that we send out if you've got it, you read it already. So I'm sorry to repeat myself but like most investments that I'm not sure about, I actually turn the drip off and I take the payment in cash and I keep track of it. So if I invested $1,000 in E T, I would actually turn the drip off until I've accumulated $1,000 in cash that $1,000 in cash that I get every quarter I think that's quarterly on their dividends. I will then spread around my other dividend payers and buy more shares until I get it to $1,000. So that basically I'm breakeven breakeven with et and then I'll start with an alternative drip on and start reinvesting the dividends into companies like that. So
then you basically have free money compounding into the same stock
hope that makes sense it
makes sense that way if it does go down or goes to zero or whatever, you're really not out anything. It's taking, in my opinion, all your risk completely off the table by investing using our strategy.
Bonds are another area that I've been beaten on the table about since probably December of last year. You can do multiple things you can invest in bonds directly if you want just go onto your brokerage account and go into your CD slash bonds slash treasuries area and you can do research for bonds. How I do the research for that is I'll just type in 9% So I hope to be making 9% interest and I'll bring up all the bonds that fit the criteria of paying 9% interest and then you can do research on the different companies. That's one area one way to do it. Another way to do it is actually just buy a stock from a fund that invests in bonds for you stocks. I think they're both closed ended. Funds. I could be wrong, I'm not sure. But why why why? And DSU both invest in bonds. Basically, that's all they invest in. And what they do is they take the interest payments they get from the different bonds, they'll buy 100 companies bonds and all the interest they get from that they'll actually return in the form of dividends. So let's see, you're actually technically not investing in bonds, but you are. That makes sense. I like that way
to go because it's kind of easier. It's a lot easier, a lot less research. Yeah, because sorting through the bonds on your own is kind of a pain in the butt.
Another area I expect to be just rockin is banking stocks. Banking style like sounds just like it is like you could buy in like Wells Fargo or what's around here Penn something other I forget the SEC you can buy directly from them, but I actually like to go Main Street, ma i n or one main financial Oh MF. They both have like double the triple the dividends that you get from your local bank. I do believe because cryptocurrency is down. It's down a lot. I do think it's gonna go down more but in 2024 bitcoins halving again, if you look at the historical impact that the halving process bitcoins had on cryptocurrencies every time Bitcoins have it started a prolonged bull market and crypto. Well
that's why I don't know if you guys really pay attention to this. We dug into this for like an entire year went pretty deep and whatever and a crypto and because it's computer tech backed is blockchain backed, it has this like repetitive pattern, or they call it the halving. So when Bitcoin goes into a halving, that's when it'll go into an exponential spike up. So right now it's like pulling back and it's integrating or whatever it's doing before this is
what the hobby basically means is currently you make X percent processing Bitcoin payments. The heavy means they're going to take what you make now and cut it in half. So you're making half as much as you did for what that does. Is it actually puts less Bitcoin into the circulation, therefore making it a scarce
resource and when it's a scarce resource, economics 101 your price and demand when there's more demand and
this isn't a product of cryptocurrency podcast, but like generally speaking, whenever Bitcoin goes up, Aetherium follows suit. And generally when Bitcoin and Aetherium go up, all the all coins that we use the Etherion platform generally go up
and we will dig deeper into them when the shitshow that is crypto right now
goes out like polygon like manna eight Cardona, even shit coins like Doge and sheep anywhere they all go up because they all use technology on the Etherion platform. And when Bitcoin goes up, Ethereum goes up because they're kind of tied together even though they're not because I think if I read this correctly, institutional investors are Wales as they're called, that invest in Bitcoin like to keep the Bitcoin and Aetherium percentages, kind of even even so like they only ever want like 60% of the total market cap of cryptocurrency to be Bitcoin and like 20 to 25% to be a theorem. So they try to keep it like that. So when Bitcoin goes up too far, they'll actually have to buy more Aetherium to bring the 60 the 65% back down to 60. Well, and
the reason we're not going to talk about crypto for a while because it's still kind of a pain in the ass to acquire it and for the normal person to go through the hoops to set up. Now I will
tell you one way to actually play crypto is to actually do co NY which is the coin base yield Max. I
was just gonna say, I think Black Rocks coming out with an actual crypto type fund on the stock exchange. I think that's in the works. So there's going to be ways to invest so that's why we're going to table the whole crypto thing right now because you can make passive money through peer to peer lending but because of the valuation shifts when it's it's almost like currency. If you've ever watched currency, platforms and exchanges it's it's a whole different way. of thinking and that's outside this podcast at this current moment
we're gonna SEO and why I think it just 20 some percent. Really right now. Yeah. You said
that's one of the yield Max things it's one of the you imagine so that's what we were talking about that with Tesla and then yield
Max like you have to be careful on that, like you can't fully expect to be making 40 and 40 and 45 and 25 and 20%. What's happening is they're brand new, and when they're new, they have less money in them. So the more people they can pull and the more money they have in them.
So they're incentivizing the early early adopter, once they have more people
and the dividends going to go down because they have to pay obviously more people out. Right now they're to get in a lot of money from a little bit of people. That's how they have these 40%
So if you do have some extra cash to tinker with stuff like is what we did with it because Tim's always looking for new stuff to tinker with. So we threw I don't know how much money you put into him. Like
9000 into like, eight of them. So 9000 total,
if you're interested or more about that info specifically, shoot shoot us an email and we'll I was
thinking about doing like a newsletter for like, I don't know, November, December, just specifically on HUMAX investments. They're pretty interested in long one but whatever another because we're going into a recession and the winter, winter coming. And they're always just something that to invest in whenever you're worried about your capital is utilities, like you like that's always up. When people invest in like video gold, they do silver they do consumer staples like cereal and toilet paper and they do utilities because people need to have heat and air conditioner to have the better dividend paying utilities are AQ n which just died last year, so it's completely undervalued. So it might be a good time to get into it. And if you're in the northeast, you know about ugi they both they both pay six to 7% and dividends and they're relatively safe for your capital.

Another area that no matter what the financial climate is, is going to be Amazon UPS FedEx just because they got the holiday, everybody shopping online, but then everybody shopping online, like Amazon. The only way I do Amazon is Amazon actually does have a yield Max. It's called AMZ why? And I put 2000 into that just because it's Amazon either I refuse to buy Amazon stock. It's always overpriced.
So we're gonna benefit off people actually doing options with Amazon ups. And
FedEx they both have dividends or not a lot and no way if you Max ever comes out with a UPS or FedEx tins jumping on ETF I'll let you guys know I'm going to jump into that. Another area that I don't think enough people are focused on are home builder and construction stocks. Because there's so such pent up demand for new housing and new infrastructure. Unfortunately, construction stocks pay dick and in dividends so those are literally just growth stocks. One that I like is this it's Si Si Si x I think it's an X it's some X Men company, Mexico cement company from Mexico. My
God, I love this. So back when Trump was president and he was talking about building the wall in China and making the Mexicans pay for it Tim invested in that because of the cement needed
like they they supply like 60% of the world's sun that they don't pay a day but I needed if they do it's like 1% If around there but it's a cement what they do. There are two homebuilder stocks that pay four to 6%. MDC. It's basically it is called MDC solutions. They build the houses and businesses and then there's kbh which is I want to say I don't remember what it's called, but they're both homebuilders, home building stocks, like I said, four to 6%. But there's going to be a lot of appreciation in price because there is like a 10 million deficit in the amount of new homes wanted the new homes available. Holy crap. It went from 12 to 10. So we're getting there even with interest rates being absurd there's still the deficit and new homes people are insane. Okay, another area to invest in as well. These two these two stocks got the shit kicked out. I'm gonna share.
I'm not disconcerted with that one. And
I fully expect next year that they're going to unveil six g.
They've already talked about it. I've heard it in several they just
can't take it the 5g just came out this year. So I think 60 will be next slide.
Yeah, six g is like you have to actually be part of some kind of backwards weird stuff. Like I listened to like the fact that they were talking about 16 before 5g even launched. Like they're gonna come out with it. And then the public's gonna tweak out and these things rise
and an OTT vz and to surprise they both pay over 7% and dividends and they are literally just a network play. If you believe that the communication network is something that is going to grow which I do. Yeah, I mean, another way you can do that is to actually invest in something like CCI, which is crown castle. It's a REIT basically, that owns 80% of the cell towers. Oh, I like that one better, and they pay out a higher dividend both Verizon and att. I like the cell tower REIT.
They pay out higher than Verizon and 19 Interesting. It's called CCCI.
I would look into it they literally I think it's 75 80% of all cell towers they actually own and that Verizon and ATT will rent from them to actually have their little 5g,
like one of my dad's clients owns the actual PennDOT building. So that
and then so that's that one. Another area is closed ended funds because they're always zero. Like I mentioned previously, you're always able to determine when they're at a discount, and there's deep discount ones right now. JRS JQ C CRF CLM are just for CRF and CLM pay 17% DRS Sanjay QC paid damn near 10% But you literally can just go on to Google and type in A C E F screener and you can screen for whatever closing the phone you want. They have a closed ended fund for everything. From cell towers to send stocks which is tobacco and alcohol to utility for I mean, you can go they have gold,
we talked about. We talked about because there are funds in a previous episode and we were at least we're comparing pods. I think it might have been the bond episode where we were talking about closed ended funds are very, very similar to bonds with the ability to understand a par value or a going
into if you type in like CRF into your your brokerage, you generally should be able to determine by scrolling to the very bottom they'll have a discount to premium chart, anything below zero is at discount anything above zero is premium. The further away from zero it is the better it is because it's obviously at a higher discount, but then you have to then you have to look into what they're holding. Why are they so discounted? I know CRF and CLM like their top 10 holdings are like Amazon and Netflix and shit. Like that. So that's another way to actually invest in all the stocks that people are making money off of and making and dividend policy high dividend. They both pay like I want to say 17 or 18 cents a month per share and they're like that we'll see RFC six, eight something 820 CLN like 870 so you can get a whole bunch of shares for like $10,000 and make up. I know when we first started doing this, both of these I had in the force, the first income portfolio and we were making $340 a month on both a piece on both of them. Because they were new no just because they pay like ridiculous dividends like 18% a year like um, but when it's that cheap, you can get so many shares
compared to what Amazon's doing. You're just like ah, so
those are like that, but that generally when I do close in and funds I like to find them at discounts and I like to find them under $10 Because I can get more shares, which then gives you more payout. But that's me other people just like quality ones that have a history of not cutting their dividend or having like share offerings on what a share offering is and the closing fun is one of the ways they make money since they can't actually produce more shares without a share offering one of the ways they make money is to say hey, we're gonna put 5 million new shares on the market at this price and that price is
just their holdings, right of their holdings and then they'll buy them back the buying
back through time but like what they do is they delay though dilute the amount of shares that the public can get every year like every year CRF and CLM will actually issue shares when they do that
and that's a pattern you can bank on and manipulate the SysVol take advantage of that. Remember it goes
over the price always goes down. But that's fine demand. Okay, another area this is one I've been saying but like it's just been a shit show this year, but that's because it's been a shit show. It's probably vastly undervalued is retirement and health care rates, like old people are getting older and more old people in the world the more people are going to be need to be taken care of.
I mean, this has to be a thing because we we've had so many old folks homes or retirement communities and I've seen more and more medical establishments just pop up and weird places so
MPW it pays 80% Like it's just got destroyed this year because it cuts dividend and like everyone panic.
Yeah, but it was so funny. We were late to bed the other night. We've been talking about MPW probably for like the last three months, and Tim's like got to get stuck in that it just like tanked and then he's like, Oh, it's a good stock and it tanked again. And he's like, I think it's time to buy MPW again.
Always that's where you do it.
He's like it is they're cheap right
now. What the company does what they own and the people running it, it's good, it's going to go up. And another one is O H i O H O which is a pretty good one. MPW pays like 18%, so HR is like 8%. So if I was general public, I would go for MPW if you're making more than twice the amount and dividend payments and it can't go much lower
than that. That company is actually referenced in books. If you go back to like I read three books now where that's been, like a primo. I'm just saying it's a great company.
It's a portion of the market that people don't think about until everybody's already invested in it. Yep, like the another one would be the the crown Castle read that actually lends out its space on itself hours. People don't think about
all they think about like variety. Second level thinking
Verizon ATT oh, we need to get into these companies that are going to have the tech that's going to like propel us in the future, but they don't think about where's the tech going to go like I've imagined what resources as a tech company would probably be another good one, but I don't know any satellite companies that pay a dividend. And the last area would be business development companies that lends specifically to tech companies to come to mind HR z n which we've discussed ad nauseam and H GTC, which we've discussed ad nauseam, which is one of our favorite are two of my favorite investments. Horizon pays 11 cents a month. It's a 10% Hercules capital pays I believe it's 40 cents a quarter. So that's whatever that is.
I put HGTC up there in the aristocrat category, because they raised their thing,
don't raise it. Normally what they'll do is they'll actually when they raise it a penny each time and then whatever, then they'll actually give you like a supplemental or a boson bonus dividend. Well,
we do love the special ones. There's so much fun like, like
bonus dividends. I did mention them like Hercules capitals, one and Trinity training capital, like I can't even get over how Christmas all the time trend and ECRI and like I literally put like, I think $6,000 into that and I've already doubled my money in that and I keep taking out profits and it just keeps going up. I don't understand it. Like I that's the only time in all my investing career that I've actually bought something at the absolute bottom. They bottomed and I bought it like pretty much the next day. I was like well that one looks good. I bought it and the damn thing has just gone straight up since then. It's been months. I got it in like think February or March. This literally just went straight up. Like I even say stuff to Carmela. I'm like I can't believe the fucking thing is up again. It's like it's up for four days out of five a week. It's up.
You hear about that one in the mass media all you hear about Amazon and Tesla all that
key point that I want the key takeaways. The key point is don't overpay for stuff between now and the end of the year because there's going to be a the Santa quote quote unquote Santa Claus Rally tied nonsense where like the end of the year what is euphoric and stupid. End of the year. Stocks generally go off starting in October and they generally go up. I want to say three to 5% between October and end of the year but they've majority of time they'll actually go one to 2% between like the last couple of weeks of December. Don't buy if you have stuff that you like when you're going to Riga reconfigure your portfolio and you want to sell stuff and wait until the week before Christmas to sell stuff because people will pay a higher price. And then rebalanced at that point. Things will go down in January they always do. There's been multiple times where I've bought stuff before I knew what I was doing. I bought stuff in November in December. And I'm like oh and then I was like look how awesome I am. The stuffs went up 3% Already and then by the end of January, I'm down like 5% like it always goes down in January. I don't know why. It's kind of like September it always goes down in September. There's just too much there's just certain months where the market always goes down no matter what
it probably has to do with the people that sell stuff at the end of the year to like lock in their losses for tax purposes they can't buy again for 30 days. So there's really no money that can go back in from the the savvy investors. So
if I was a person that was investing, which I am but I was you which I am I would buy in September January because they're always going down in September, January I would buy in September or January and then during October, November, December I would just put money into both shares both shares are going to make 6% or
if you happen to find a closed ended fund you know as well below par value, but
both shares like I would that's an option that I didn't even include in the all the points made above like both shares and if you're making 6% and it's relatively safe, it's not going to go up or down too much. It's betas almost
7% But yeah, that's a great place to just park your cash wait for those discounts wave
goes like we don't know when exactly the recession is going to happen. We don't know when all news is bad news is going to change the all news is good news, but it will it always does. So there's going to come a time when it's just all was it puppies and rainbows,
puppies and rainbows. I think it's unicorns and rainbows. It's all wrinkled.
It's all good. Right now it's all bad. I
just did rain a corn poo
right now it's all bad. Be prepared for it to get worse. And if you're invest in stuff don't panic. So just don't panic sell just just watch your share numbers. So what I what I do on days like there's days when our portfolio goes down like $2,000 or $15 I don't I don't even look at the amount of money in the account. I just look at the number of shares. That's a way like I tricked my mind and like
that is how you have to do it and if that's how you if you really are susceptible to those price fluctuations, keep track of the number of shares that you have. And if you see your share numbers going up and up and up and up and up. Once those prices rebound you'll be like oh my God, thank God I did so well.
way to do it. Like if you really have a tendency where you want to panic sell as keep track of your shares, like she just mentioned, but then go look at like the fair value price or like where the prices of all your investments were before everything started going to head to hell. Like MPW was trading at like $10 or $11. So if you bought it at $5 and say you got 500 shares, well, let's take your 500 shares, times what its price was before everything went bad at $10. It's 5000 instead of the
so what are we correct, that's what you'll have at the share quantity you currently have. So that's an easier way to hold
or you have to trick your mind into saying this is how much it's going to be worth and whenever
when the market we correct the timeframe and it always corrects or another way
to actually do that is I know in Schwab I don't know anyone anyone any of the other ones that have it like there's investment income tab you can literally can just click on that that always gives me a warm fuzzy because it says $1,300 a month.
Oh whatever tells you how much you're making a month.
Yeah, that's what it does. It takes it current dividend plus, I mean, there's probably AI programming, but I'll tell you what they projected to make for 2024 and they're like oh, you're gonna be making $1,300 a month. I'm like who warm fuzzy.
Yeah, so if you do it that way, and you just look at what you're making with your dividends and so if you couple
that with like I just mentioned, you take the number of shares times where it should be and then you look at income investment you'd like Okay, so my portfolio is going to be worth this much and like one to two years
and it's that gets you through stomach and those value shifts
because you have money dumping into the stock market and September in January when everything's down especially this year because 2020 was a shit show and this year has been sideways except for like 10 stocks.
Yeah, if it were me I had the extra cash like right now we're trying to hustle to get this freaking condo sold to take the $50,000 in sweat equity to just dump it into the market because my god I can't wait everything's gonna be all the sale. Everything is on sale. Well when everything we're hoping I'm hoping to have it sold soon enough so that we can actually get in while everything's down compounds that was
a wall event so and a lot of ticker so
it'll be in the show notes. Don't worry about taking notes. Alright guys, thanks for tuning in. Hopefully we didn't blow your brains up. And if we did listen to this a couple times the more and more you listen to this type of stuff, the better and more familiar you'll get with it and next thing you know you'll be talking like this like a second language you'll be fine
like the main takeaway would be you. You can't rest on success. Like you're successful investing in tech right now. You can't just stay on that because everything's evolving. Everything's gonna go down. So you have to start having the fourth, the fourth thoughts of like, what's the what, what sectors are going to be profitable in a year's time everything
fluctuates and it goes through cycles. So if you can look back or you have just like
the switch generally just a why when you watch the news and you say oh, you see oh, there's like a 10 million deficit and houses will you know that houses and cars and like construction equipment are going to be at some point going up to to fulfill those those those really
should be common sense. But just get like that second level thinking and be like, okay, so if there's a demand for this, what products are they going to need, what networks are they going to need, what this are they going to need? And then that's the type of stuff you want to look at.
Another area that I didn't even mention that I just thought about because I was thinking for forethought is an area that people never talk about when there's a recession is gambling. Oh,
that's actually the sin stuff. porn, gambling, drugs and alcohol. So
find some casino stock Sox fans and shit like that isn't
there a potrete it was a packed array of AFC G we're
in that. Yeah. So
like seriously when people get depressed and the markets go into recession, everybody does what everybody does they numb out
80% 80% for weed. That's why we're in that because it's probably one of the better Rei teas for we don't even smoke weed because we don't even care well that's that so just have fourth row for thought for thought for thought. You
guys got this? Yeah. And if you're still getting your your training wheels on, you can email us you can
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