Category Archives: Market Comments

May 2023 Audio Video Review – Buffet/Munger Words of Wisdom, Debt Ceiling, – Financial Planning and Capital Market Review – By John Kvale CFA, CFP

Hello and Welcome to our May 2023 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets thoughts and current events!

Hope you enjoy!

May 2023 Video –


YouTube

Financial Planning Tip(s)

Berkshire Hathaway – Buffett Munger Words to Live By

In this post Charlie Munger and Warren Buffet are discussed in great details… along with a secret to speeding the time to listen (1.75x speed)…..

Main thoughts to live by from Charlie and Warren:

  • The world is full of foolish gamblers, and they will not do as well as the patient investor.
  • If you don’t see the world the way it is, it’s like judging something through a distorted lens.
  • All I want to know is where I’m going to die, so I’ll never go there. And a related thought:
    Early on, write your desired obituary – and then behave accordingly.
  • If you don’t care whether you are rational or not, you won’t work on it. Then you will stay
    irrational and get lousy results.
  • Patience can be learned. Having a long attention span and the ability to concentrate on one
    thing for a long time is a huge advantage.
  • There is no such thing as a 100% sure thing when investing. Thus, the use of leverage is dangerous. A string of wonderful numbers times zero will always equal zero.

Particularly added this as just last week, saw a review of the meeting that completely missed several of these points in my opinion.

Capital Market Comments

Debt Ceiling Fizzle- All done until after next elections

With several comments from the field, we spoke multiple times, here and here about the Debt Ceiling, the history and the most likely outcome…

Much of our confidence on the matter comes from our contacts that we have developed over the years that try to give us a 100% straight scoop as much as possible…. They could always be wrong, but being numbers folks, we go with the odds…

They were right, once again!

Have a Great Day, Talk to You at the End of June !

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

Rates… Fastest Increase Review … Looking Forward for Effects … Newsletter Precursor …

This is an updated chart from our favorite buds Visual Capitalist

Last year we spoke of the speed of interest rate increases a lot… given the unique pace at which rates increased AND the super low level of (zero is about as low as you can go) starting point … it became a shock to the financial system….

So in all likelihood, rates are near their top for the foreseeable future….what lies ahead?

We will have more on this in the coming Newsletter but rates 500 times higher than they were just a few quarters ago AND looking to stay higher… there are major implications..

Debt/Financing costs higher =

Better safe investment returns aka Fixed Income/Bonds

More costs to debtors (lower returns for those using debt because of higher costs)

End of companies requiring very low costs to make profits

Have a Great “Fastest Rate Increase Effect” 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

Debt Ceiling History/Thoughts … Pools Ready to Open in our Neighborhoods … Memorial Day on the Horizon …

Would you believe or be surprised to know the US had raised the debt ceiling aka Increased their Credit line some 90 times since the 20th Century? Probably not….

Most including ourselves believe this will get resolved… but there may be drama…. seems more the norm …

By Wikideas1 – Own work https://fiscaldata.treasury.gov/datasets/debt-to-the-penny/debt-to-the-penny, CC0, https://commons.wikimedia.org/w/index.php?curid=131990039

We know the history very well and will not bore you with the things that have happened in the last three or so decades…. just know headlines may be …. ahhhh… dramatic next week!

Speaking of dramatic …. but on a more fun note… Who let the pools out ? Next week!

Memorial Day Weekend Beckons

Next weekend marks the opening of pools, the very wonderful remembrance of those that allow us to safely ponder things like debt ceilings and a long weekend to boot…

Ahhh…that is all next week …. today is a Fun Friday, near the end of the school year for our clan… Enjoy and 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

Berkshire Hathaway Annual Meeting, Buffet Munger Analysis, Thoughts, High Points, Words to Live by and be Successful According to them …

On May 5-6 of 2023, the Annual Shareholder Meeting of Berkshire Hathaway (BH) occurred… if you are not familiar with BH, here is a nice review from Wikipedia.

At 92 (Warren Buffett) and 99 (Charlie Munger) a 7 hour marathon where random, unscripted questions are answered in very good form (if we could all be so lucky) makes for great theatre and some what of a cult like experience…

Until just a few years ago, thanks in part to the lockdown years, BH meetings … while not secret, were behind closed doors and demanded in-person attendance, even if one had to sit in the hall outside of the actual area of the meeting and watch a live feed of the event… today as noted, earlier in our pre-view post not only can you access the event live, but also in replay with the ability to turn up the speed !

Personal High Points of Interest from the Sped Up meeting (Live by comments at end):

Neither man would rather live in a different country or location, even while there are of course, short comings,

Warren would not mind starting over today with nothing, to see if he could do it again, Charlie, not so much.

Charlie: China and the US should just get along, do business together and jointly prosper, rather than bowing up to each other for perceived dominance. Was Russia in the day, today China. (Large Applause)

Not withstanding point one, the bifurcation and hatred in society is disheartening, unproductive and destructive according to both men.

Buffet reversed course on a $5 billion investment in a semiconductor company located in Taiwan due to tension, location and likely provoking point three above.

100 Year Plan/Dream/Desire (question from audience) Buffet explains to operate a Company that compliments society, is good for society and has good people working for it. (Simple, fresh, positive!)

Vice: NetJets – Charlie still rides in coach, even on NJ – Expensive, but worth it according to Warren, especially on overseas extended trips.

Absolutely bash (and do not care for), Venture Capitalists and Private Equity guys at every chance and state that at the onset of most deals, they are already looking for the escape hatch/sale.

BH is actually too big to make agile, more aggressive and growth like investments, which prevents it from being a growth like company. (Reiterated for years now)

Management Skill recommendation – “Phrase by name, criticize by category!”

Live on less then you earn to keep stress down.

You do not have to be lucky to make it.

Be nice to people.

Get toxic people out of your life.

From the infamous Buffett Shareholder letter, released 2-25-23

  • The world is full of foolish gamblers, and they will not do as well as the patient investor.
  • If you don’t see the world the way it is, it’s like judging something through a distorted lens.
  • All I want to know is where I’m going to die, so I’ll never go there. And a related thought:
    Early on, write your desired obituary – and then behave accordingly.
  • If you don’t care whether you are rational or not, you won’t work on it. Then you will stay
    irrational and get lousy results.
  • Patience can be learned. Having a long attention span and the ability to concentrate on one
    thing for a long time is a huge advantage.
  • There is no such thing as a 100% sure thing when investing. Thus, the use of leverage is dangerous. A string of wonderful numbers times zero will always equal zero.

Remember, these are Warren and Charlie thoughts, only with a few comments and notes from us!

Have a Happy “Oracle of Omaha’s” 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

Happy Mother’s Day Weekend – Oracles of Omaha (Warren Buffett & Charlie Munger) Preview – Turn Around Trip Week Productivity – Friday …

Happy Mother’s Day weekend to all of you very important Mother’s !

Enjoy your very special and much deserved Day!

Nerds in Action

So you guys all know we are Financial Nerds …we are ok with this – calling a spade …..if the shoe fits… or however that goes…ha

Care to guess what Financial Nerds do to multitask?

Turn Around Trip Productivity – Warren and Charlie, Oracles of Omaha

If you click here, you will be directed to the 2023 Annual Berkshire Hathaway Shareholder meeting… it is a mere 7 hours and 44 minutes long…. eeeekkk

Break In – Think we finally figured out how to make the picture hotlink back to the webpage – lets see if it works when the email is received – fingers crossed!

Shhhhh…. don’t tell anyone, if you increase the speed to 1.75 X it is only a bit over 3 hours AND the voices sound amazingly normal (because everyone is speaking so slow normally) …

Turn around trip completed, lots of fun to a state just north of our resident Texas, great visit with Friends and clients…. AND the complete Berkshire Hathaway Annual meeting digested….

Now that’s multitasking…ya ya.. nerds, but that is ok, we will keep the review short but with the most important stuff!

Full report next week….ahhhh, but that is next week, enjoy your Friday and your Mother’s Day 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

Kastle Back to Work… Stuck on Half Way! Effects beginning to be seen …

It has been a while since we previewed one of our favorite resources from the lock down. A chance article, below, rekindled our attention. We have added more observations.

Per the article:

A San Francisco office building was worth $300 million before the pandemic. Now, it could sell for only $60 million — a perfect example of why downtowns are in trouble

Kastle Systems Analysis and Barometer

Latest release

Publicly trade REIT – Real Estate Investment Trust – Actual Company withheld purposely (Public Venue) – Specializes in office space Assets

About a 75% drop in value. Not sure if the office headcount stays away, but certain office buildings are bearing the brunt!

Have a Great “Kastle Office Asset Analysis” 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

The BTFP – Bank Term Funding Loan Program UPDATE, Created a new process of Banks Merge/Buyout …

Did you happen to catch the Financial System adjusting the way it does business right before your eyes?

No worry, if you said no… it was not super obvious, but worth a quick review for future knowledge…

So here we go!

BTFP- Bank Term Funding Loan Program Makes Adjustments to the Financial System

As we explained in great detail here in this post in March, the Federal Reserve set up a Backstop program for struggling banks. As several more banks have had issues, the creation of this program has changed the way mergers or buyouts will occur while this plan available.

If you are an acquiring bank, no matter desire, you would be crazy not to wait until your desired bank, if under stress, hits up the Federally backed program aka BTFP, as the Government essentially will guarantee much of the buyout once entering the program.

While it may seem unfair or counterproductive to price discovering markets and mergers, possible unintended consequences created from this program…. they are what they are … and look to continue until we are beyond the rain clouds….

Have a Great “Watch the Financial System Adjust” 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

April 2023 Audio Video Review – Cyber Reminder, US Dollar Discussions, Chat GPT the modern .COM (Dot Com) – Financial Planning and Capital Market Review – By John Kvale CFA, CFP

Hello and Welcome to our April 2023 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets thoughts and current events!

Hope you enjoy!

April 2023 Video –


YouTube

Financial Planning Tip(s)

Cyber – Fraud Reminder

In this post about cyber fraud and a reminder we point out where some 95% of all intrusions come from….

The trojan horse of clicking on a spam email!

Capital Market Comments

US Dollar Currency Status –

After hearing from four different directions …discussions of the US dollar and weaking in its status… the follow post was born

Likely overstated…but acknowledge there are surely effect from cutting a countries Swift code- (lifeline to wires)

True Foreigners, likely want a WEAKER US dollar – as its strength is not waning currently!

.COM and Chat GPT Comparisons

One of the neat things about staring so young in this industry and doing this for so long, is at a fairly young (this is subjective our course) age we get to recall and remanence about times of old….

…We all know what happened eventually, tons of .COM companies came public and expired in short order… BUT public companies learned by adding .COM to their name or services would drive the stock price up… many times in huge amounts…

.Com rhymes with Chat GPT – in almost every way…. but be sure to follow the revenues, not the narratives!

Have a Great Day, Talk to You at the End of April !

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

Reliving Memories of .COM Exuberance Time Period … Chat GPT and AI Comparisons … Recall History Really Rhymes!

In late 1999 heading into the infamously dud of Y2K … MANY including most financial companies were very concerned the clocks on computers would cause MASS outages- not kidding here – cannot make this up, even if it seems silly now! (Yes we were doing this back then… showing age – but all good!)

Wow a lot of stuff happened all at once, there was also an effect grabbed on to by many public companies called .COM …

We all know what happened eventually, tons of .COM companies came public and expired in short order… BUT public companies learned by adding .COM to their name or services would drive the stock price up… many times in huge amounts…

History Does Rhyme – .COM & Chat GPT

We are in no way saying AI and the afore mentioned Chat GPT is going away…. but where we see the rhyme… companies announcing some type of AI/CHAT GPT are finding novice investors may be rushing to their stock with ever greater enthusiasm… hmmmm

Revenues need to be associated with such services… just saying… great idea, neat tools… but very likely the “True Long Term Uses” are yet to be revealed…

Be Careful with the narratives – History does rhyme!

Have a Great “History Rhymes” 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

US Dollar Reserve Currency, Status and Comments by Ben Hunt, 20 Year Chart of US Dollar …

After a question at my Starbucks Saturday morning coffee buds, several inquiries from you guys in the field a Sunday morning e-mail from my well respected author … then lastly one of our favorites … a one hour podcast Ben Hunt on the Grant Williams podcast on the subject matter … we wanted to summarize some of the items that are occurring around the US dollars reserve currency status.

U.S. dollar Reserve Currency status 

Dramatic shift away from the US Dollar is likely very overstated…..

In our opinion much of this conversation can be traced back through the decision of locking down swift codes during the commencement of the most recent war. While an aggressive tactic some peripheral effects may have commenced.

Smaller countries that may be on the edge of friendships with certain nations most certainly took note when certain countries swift codes (prevents from moving money) were shut down barring them from transactions and from their own funds during the most recent conflict. Not surprisingly a protective move to diversify if one found itself in this own situation would be expected. 

Ben Hunt Chimes in on the Grant Williams Podcast…

  • Both Political Parties can find some power in the Narrative of a US Dollar Reserve issue
  • Crypto enthusiasts have a natural bias towards a loss in US Status
  • US Dollar is 90% of all transactions
  • These comments started 40 years ago and are still not true

US Dollar Chart

International folks understand the dollar itself has not shown much weakness – 20 year chart!

Depending on interest we can do into this in MUCH greater detail in the Newsletter… but until then, thought it worth some clarity!

Have a Great “US Dollar Strength and Longevity” 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