Author Archives: John Kvale CFA, CFP

Q4 2021 J.K. Financial, Inc. Newsletter … Video Audio Podcast Review ! By John Kvale CFA, CFP

Welcome to our Video and Audio Podcast Review of our Q4 2021 Newsletter. For those on the road or just unable to grab the time to read, our podcast type review gives you the behind the scenes insight to our thoughts, observations and deep views of the entire Newsletter.

Click the Download button below, for a direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page

BREAK IN – We hope you see videos in the email notification, but if not, you may click on the code for the actual video…hence the dual videos, hoping one works on your cell!

Let’s get going! We hope you enjoy!

Q 4 2021 Newsletter

(YouTube)

Irrational Expectations

An article that just kept giving us more great information:

Kyle Bass Most Important Predictions

  • Oil hits $100 per barrel this year … due to mal investment over the last 7 years.
  • The Federal Reserve will continue to support the markets with continued purchases.
  • We push through the Delta Variant and there is a REAL re-opening effect that works its way through the economy

We hope you enjoy … talk to you at the beginning of the year !

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

Federal Reserve Detailed Analysis from Last Weeks Announcement … A Very Stern Jerome Powell

As mentioned in our Preview Post last week, we have been watching the FOMC as their posture is due to change with regards to the stimulus put in motion early last year….

Jerome Powell Gets Tough

Recall as the economy was shut down last year the FOMC chaired by Jerome Powell and its members moved interest rates on the short end of the curve to zero and commenced a $120 billion per month purchase of treasuries and mortgage back securities. Both of these moves were to help stimulate the economy and to stabilize the capital markets.

Meeting their goal of stabilization and a much-improved economy the FOMC are ready to shift policies and unless any major economic or other disruption occurs Powell made it very clear that he expects policymakers to begin decreasing the $120 billion per month purchases, and if all goes well to have completely stopped monthly purchases by mid-2022.

As mentioned in some of our prior posts this message has been floated by multiple fed presidents and Capital Markets seem to be taking this news in stride, much to participants and reserve members’ pleasure.

Much of the mainstream media seemed to report that there was no major change in policy or tone to which we disagree.  In listening to Powell especially in his interviews after the pre-plan reading of notes, he seemed much firmer and resolved to stop the monthly purchases and the tone in his voice in our minds, let us know if this would occur in the very near future.

As has been mentioned before many of our fellow professional investors have long desired this happened many months ago, but no matter, it appears that it is about to occur slowly and diligently, and capital markets are accepting.

On another totally different and non-market related and non-economic related topic several federal reserve members had transactions over the past year that were not optically good for the federal reserve. One of the members is our very own favorite Robert Kaplan who had multiple large transactions in securities that the federal reserve was involved.

While we will voice no opinion on this … Jerome Powell was very stern surprisingly, and in our mind so stern that it could be an occupational loss for some of these members. It will be interesting to see what comes out of this, but this is not the end of it and once again Powell was very angry and forceful on this point.

Bottom line we would expect a taper, slow lane of monthly purchases to commence shortly and will be watching interest rates which have already made some moves as well as capital market participation.

Have a Great “About to Taper” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Federal Reserve Preview, Month End Next Week (Fast Month!) … Friday … Ryder Cup Weekend

FOMC Preview

Knowing the FOMC is at an inflection point on changing posture (Monthly Asset Purchase slowing i.e. Taper) we have paid greater attention as of late in order to keep our own thoughts as clear as possible and actually avoided much of the main stream analysis for the very same reason….

Next Week we will dig into the FOMC’s most recent statement and discuss Jerome Powell’s virtual post announcement interviews with reporters… there were some juicy stuff to review, actually not associated with the FOMC’s statemen.

Month End Already- Wow…

Several Months last year seemed to drag by so slowly, you would think they are never going to be over… Not this year, it is flying, just the way we like it, busy, fast, fun and furious!!

Next week is the end of the month, we will have our Newsletter Video, the afore mentioned Fed talk and possibly the end of the month video too…. Haircut time.. haha

Friday Ryder Cup

Ahhhh, but today is a Friday heading into a US versus the other guys weekend of Ryder Cup

Enjoy your Friday and your weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Seasonal Patters Exist, Farmers Almanac, Traders Almanac

Growing up on a farm, we were always conscience of the coming season. The change would come whether we liked it or not (never big fan of the dark months ..Feeding the Cows in the dark, Ice Storms, Sleet, Brrr) but we knew they would eventually come and if we did not like the coming season it would eventually work its way through on to the next season.

This was tracked by The Farmers Almanac!

Of course we never knew just exactly when, how bad … and sometimes it would even seem like it was not coming, but it would… frequently of differing severity, but at the absolute least rhyming with the season from the prior year.

Just like Summer, led to fall and fall to Winter and so on…. believe it or not, Capital Markets have seasonality too!

The Traders Almanac

Not living on a farm anymore, and having a fun occupation that entails Capital Markets, it is worth noting of the Seasonality of Capital Markets….

According to the Traders Almanac October followed closely by September are the worst two months of the year…. among many other seasonal patterns…

  • Mutual Fund End of the Year Occurs during this period
  • Public Company Final Quarter projections confession
  • Lack of Cash Flows Due to Nearing the End of the year
  • Black Out Periods of Buybacks due to earnings season
  • Religious Holidays
  • Quadruple Witching (Expiration of 4 Different Options Type contracts) One of largest ever last Friday

Any or all could be the reason some or maybe none…..

Pair this with extended valuations which we have been beating you with and maybe a FOMC that is sending smoke signals of tapering asset purchases….

It may be bumpy for a while….

But guess what?

Just like knowing on the farm that in December the days began getting longer, November and December are “Seasonally” the best months of the year for Capital Markets …. of course there are exceptions (2018) …

Stay buckled, we have you covered but there may be some turbulence if seasonality holds!

Have a Great “Farmers/Traders Almanac” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Back to the Office? Not Yet, Kastle Back to Work Index Update

One of our first and favorite finds of interest over the last year and half, the Kastle Back To Work Index.

This index, created by Kastle an office security among other things company (what a clever way to use resources) references multiple city indexes as well as the average on all the cities they cover..

Great progress, with a bit of curving over as of late…. Not back to 50% yet on any of the areas they produce tracking data.

Total Average of just over 30% back at the office, again with some decreases of late. On a personal note, we have had multiple large industry related gatherings switch to virtual as of late!

Will be interesting to see how long it takes to get back to “Normal” and just what that looks like?

Have a Great “Back to Office Update” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

New Tax Laws … We are Reviewing … Friday

Did not want to scare you with the title of this post…. after all it is a Friday!

The initial new tax proposals have finally been released and we are on them…but not too deep as of yet!

For the record the initial proposal is not too terribly strict …. Certainly not near as strong as some of the headlines you may have seen!

Keep in mind, these are PROPOSALS and will be different once in law….. but we like to get a jump start on things for planning purposes… but NOT take actions until set in stone/law….

Friday

With a big week of posts, we will let you off easy … No Promises for next week!

Be good, be well, be safe, and Enjoy your Weekend and Friday!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

1040 Estimated ES Quarter 3 2021 Tax Due Date Today!

Today is the due date for Quarter 3 2021 Estimated Taxes!

Between the last two years of jockeying the dates for regular returns and filings, and the odd timed ES filing (note below Q 2 is only a two month gap) if you have forgotten or are off on your days…. do not worry you are not alone.

While the postal system is getting better, as mentioned here it may be a good idea to file your ES both Federal and State Electronically!

This is the exact link to the Federal deposit site do not want bad guys jumping in front of your browser, make sure your browser gets to this link.

https://www.irs.gov/payments/direct-pay

Looks like this:

We know many of you are old fashion and want to send it via coupon and mail, no worries, just make sure it gets in the mail to be postmarked by tomorrow and use that handy cell phone as your scanner and take picture of the coupon, check and envelope for proof if there is a delay!

From Publication 505 from the IRS

Link to publication

From Page 26 of the Pub 505:

For the period: Due date:
Jan. 11
– March 31 …….. April 15
April 1 – May 31 ………. June 15
June 1 – Aug. 31 ……… Sept. 15
Sept. 1 – Dec. 31 ……… Jan. 18, next year

Form 1040 Instructions : ES Coupon Page 11 and Fillable

Here is the link to the IRS booklet that has blank ES Coupons, specifically Q 3 is on page 11…

Again, the booklet is fillable for those such as myself who’s handwriting has fallen off a cliff in clarity! haha, not kidding!

Have a Great “ES Tax Reminder” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Robert Kaplan Dallas FOMC President Town Hall Analysis and Update, New York President Williams Chimes in, Wall Street Journal’s Favorite Fed Reporter Too – Taper Transition to Begin

While not sure why all Federal Reserve Chairs do not do this type of event … there are an even dozen Fed Banks scattered across the country for roots in various geographic areas, we are very happy our local favorite, Dallas’s own Federal Reserve Bank President, Robert Kaplan has started his own town hall event.

Think this is our third or fourth attendance, with the first as mentioned here, becoming an accidental question…

Incidentally at this event, the first three questions were from acquaintances… Great Minds I guess!

Another Robert Kaplan Town Hall Update New York Fed Williams Chimes in

The most important item mentioned in this town hall was that Kaplan supports a taper of the 120 billion monthly purchases of Mortgage and Treasury bonds as soon as October, with an announcement in two weeks at the September 22, 2021 Fed meeting.

Luckily with the delay of the weekend to produce this full post, New York Federal Reserve (debatably the most powerful bank) Chair John C. Williams in a speech via video conference to St. Lawrence University said the following:

“There has also been very good progress toward maximum employment, but I will want to see more improvement before I am ready to declare the test of substantial further progress being met. Assuming the economy continues to improve as I anticipate, it could be appropriate to start reducing the pace of asset purchases this year. I will be carefully assessing the incoming data on the labor market and what it means for the economic outlook, as well as assessing risks such as the effects of the Delta variant.”

Wall Street Journal’s Go To Reporter Pens Friday Article

Then the following story hit the Wall Street Journal Friday, September 10, 2021 by the Fed’s favorite go to reporter, NIck Timiraos..

NIck runs with a November 2021 Taper Transition and a 15 Billion per meeting drop off from the current 120 Billion monthly purchase…

What to Watch – Longer Term Interest Rates, Markets Themselves

If this is true, and the FOMC does begin taper, we will need to keep a sharp eye on interest rates, especially the longer end i.e. 10 year treasury.

Near then end of 2018, the FOMC began lowering asset purchases AND raising rates at the same time… Markets protested with a sharp 20% drop, causing Fed members to reverse course.

Kaplan and other officials are reiterating that just because the Taper may begin, interest rate increases are not on the horizon yet.

Recall in our very recent Kyle Bass review, where Fed officials are known to carefully watch the Capital Market reaction to their comments. If as true as Bass thinks, Fed officials will be watching close!

Other Kaplan Notes from the Town Hall:

  • Delta hurting travel, and leisure, Dallas Fed US GDP estimate 6.5 down to 6 because of delta
  • Slow workers with Jobs, Aug jobs number not surprised Sept slower than expected, JOLTS showing work avail, fear of delta keeping away,
  • 3 mill folks left workforce since 2-20, 1.5 milion left for care of kids – matching problem work
  • Supply demand on materials,  PCE will be 4% PCE headline will be 2.6% 2022-
  • Economy recovering slow Q3 but still growing, 3% inflation 2021
  • Economic Fits and starts bc delta- vaccine, booster, masks help but
  • High frequency mobility data not falling, folks adapting and managing through
  • Business expect supply demand last longer than thought
  • Worker demand higher pay, higher absence, reluctant to come back to labor force
  • Mid to small business tougher time with employee—Larger Businesses more flexibility
  • Broadly all businesses raising prices and they will stick

Apologies for the length of this post … this was a combination Reporter, notes and collection of various data points…

A smooth transition is very important, and long desired by many in the investment community, buckle up and let’s see how it goes!

Have a Great “Smooth Taper Transition” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Kaplan Town Hall/Newsletter Preview Breaking News … Friday … Sports Begin …

Another Fantastic Kaplan (Dallas FOMC President) Town Hall

On Wednesday evening of this week, Robert Kaplan did another Town Hall …. Pretty sure this is our third or fourth to attend so there is some continuity working as we can hear changes, continued thoughts and just a general getting to know Kaplan…

The most BREAKIN NEWS from the talk, was Kaplan saying the following…

“If there are not major changes in the Economy before our next meeting on September 22, 2021, I will suggest taper is announced and it begins in October of 2021!”

This was a big (so soon) enough statement that we were surprised not to see any public media discuss yesterday….

We will dig into Kaplan’s comments next week in a deeper fashion and the possible outcomes should this statement come to fruition.

Newsletter in the Works

The Newsletter is coming right along, we have found some greater details from our Expectations Post Earlier in the Quarter, along with our candid comments…

On a personal note, if you ever want to know how fast a Quarter can go, do an all original Newsletter every 90 days… All Great, but really seems like we just completed the last one…. Time is flying I guess!

Friday

Ahhhh, it is a VERY late summer Friday heading closer to fall… Sports is getting into full force…


Enjoy your Friday and Weekend – Talk Next Week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Why You May Want to Register Your Name on Multiple Email Providers Even if You Do Not Plan on Using that Service!

With the proliferation of spam, cyber attacks and just some bad actors out there, it may be a good idea to register your name as well as your family members name for your own safety…

We have registered all of our family names on the big five at the time of registration, gmail, hotmail, outlook, yahoo and icloud…. these are no longer the biggest…see below

Even if you do not plan on using the provider, it may make sense to register so some “bad Actor” does not pose as you…

Ok, we get it, with a weird last name like ours, it was not that hard, those with more normal names may have a tougher time, but you may still want to try…. bad guys are not going away!

The Largest Email Providers

The following is a snap shot of the last frame of this neat graphic from Statics and Data

Not sure if any of you noticed the last few videos are not coming through email notification well…but we did… and it is currently being fixed….

Hence the Snapshot, we know that will work…

Here is the actual embedded video… if you see a video, it has been fixed, if just a link, not fixed yet…

There you have it… another in our Why series AND a light, fun and hopefully helpful post labor day article!

Have a Great “Register Your Name on that Email” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents