First I would like to explain my lack of posting recently as it is not for a lack of topics or opinions. My older son just had fall break, and we used the time off as an opportunity to travel to Florida for several days. The 80-degree weather was a nice respite from the cold in the midwest and the kids had a blast as usual. The resort we stayed at was great, and we gutted out one day at Epcot since we already did Magic and Animal Kingdom back in February. We also closed on a property that we had owned for almost 14 years (love the “mobile” closes). It was bittersweet due to the memories of living there, rehabbing the property, fixing things, and tenant issues (lol). Recently a tenant moved to Arizona, and I decided that I didn’t want to manage from afar or hire a management company. In addition, the market in Grand Rapids has been very hot which manifested itself in competing bids on our property (basically a bidding war over list price). A nice problem to have I suppose.
I would like to think that we are selling at the top and that my instincts are prescient. Maybe, but things usually happen due to a confluence of events and the timing becomes coincidental when looking through a rearview mirror. In other words, luck plays a big part. Luck aside, I do have a sense of foreboding regarding the current social, political, and economic situation which influenced my decision to sell. Whether it is quantitative indicators that I follow, civil unrest throughout the world, or simply conversations I have with people every day, “things” just don’t feel right. Of course, I could argue that it has been that way for a while. With this mindset, selling the property was just one step, and I have also started layering in “hedges” to protect my assets. Translation: I am building hedged positions (short) in the equity markets. A hedge is different in that it is not a primary investment, but rather a bet to protect those investments. Call it insurance. If you want to play at home, I shorted the Nasdaq and will layer in more shorts next week. Yes, I am fighting the Fed and realize it may be fruitless, but my take is that the Fed’s omnipotence will come to an end soon. When that happens, look out below. Aside from monetary policy reaching its limits, I believe we are at a bifurcation point politically which could have profound implications on fiscal policy, and life in general. In short, we are becoming a banana republic and anything can happen.
Disclaimer: This is NOT Investment advice. I am just sharing my thoughts and what I am doing.