Newsletters - Past Issues

Kid in a candy store December 28 2023

Is the job market still on fire?

They say windows of opportunity close quickly. Nothing can be truer as it relates to the current job market.

I had three kids in college this year, and during CoVid, I encouraged them to apply for apprentice programs at the highest quality institutions they could find. I explained to them firms like banks, financial advisory firms, insurance companies, high tech companies and the like were clamoring for warm bodies.

Simply put, regardless whether potential workers were afraid of CoVid or sitting by the river contemplating their naval (as my dad used to say) few people wanted to work and companies were desperate to fill their many job vacancies.

Heck, even my local Bank of America shuttered its doors on certain days due to the lack of available bodies to man the teller windows.

Unlike decades before where the world was flooded each and every year with college grads viscously competing for jobs, these last few years reminded me of the proverbial kid in a candy store for those willing to set the alarm clock and get their butts out of bed and to a work desk somewhere.

I hammered on all three of my lovelies to hit the yellow pages (well nowadays the internet) and put their face in front of a hungry interviewer who was given the edict to fill the seat with a willing worker.

In fact, in my 45 or so odd years of working, I could not remember a time when it was easier to land a good paying job somewhere than during and right after the CoVid era.

In the past, a college degree in no way guaranteed you a job, even with a solid degree in a hard science, let alone those majoring in sociology or communications. Not knocking those degrees mind you, but they are two of the harder to employ degrees out of many on surveys of past graduates a few years into the workforce.

Not so during Covid.

Institutions of the highest caliber were more than eager to hire high school grads willing to work, and if you had a college degree, all the better. College grads have had a golden opportunity of not only getting a job, but getting a good job.

Fast forward to today and the employment picture is reverting back to where it was for decades. Graduates who sat back and took their time to grab a job may now be realizing that with inflation soaring and CoVid savings evaporating, grads by the ton are hitting the streets again looking for work.

The sobering news is that companies may not be hiring due to the slowing economy, and many are laying off workers as the worst inflation of 40 years takes a bite out of consumer demand.

From Reuters just last week comes the sobering news for graduates and non-graduates alike looking for work:

“U.S. job openings dropped to more than a 2-1/2-year low in October, the strongest sign yet that demand for labor was cooling amid higher interest rates”.

One of my sons has just graduated from U.C. Irvine and having to now spread his wings and pay rent in the Los Angeles, he has moved into the ranks of those looking for a good paying job and finding a time of it securing employment.

As dad warned him a few years back, an apprenticeship with a bank or advisory firm or some other high paying employer a year or so back would have likely solidified him into a great job now once graduated. Having waited however, he is now competing with many others in the same predicament: Too many graduates sans a parent paycheck needing work but finding fewer job openings.

In conclusion, the CoVid years was literally a once in a lifetime window where landing a job was a foregone conclusion as long as one wanted to work, which apparently not many did.

Now that times are harder and prices are higher and the economy doesn’t look to improve much anytime soon despite what the CNBC cheerleaders tell you, the job market has reverted back to where it was for so many years.

If you want a job, a good paying job, once again, you better have a sturdy pair of walking shoes and fast internet and be prepared to use them.

“Watching the markets so you don’t have to”

(end)

(As mentioned please use the below disclaimer exactly) THANKS (Regulations)

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services. Email: news@moneymanagementradio.com

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Open letter to investors Nov 20 2023

Greetings and salutations!

Wanted to update a bit on the markets. First of all I had a total knee replacement on Nov 8^th and as always, the office staff and Jess covered me while I was in surgery. The next day, known as day one was brutal. The last 5 or 6 days haven’t been fun either but stayed away from the drugs mostly. On occasion however, they were absolutely necessary!

On to the markets: Hunkered down in T bills and the like may have avoided a negative market in the early fall and late summer.

This week saw a lower inflation metric float in. Now be clear, I do not think we will get inflation under control and look for an article on that soon that I will send to you shortly.

However the markets trade on sentiment, not reality. The markets REFLECT reality eventually but trade on the sum of the beliefs of all the traders in it on any given day.

That said, the most recent belief is the FEDS are done with interest rate increases. I tend to agree. But I differ in why I believe this. The FEDS believe inflation is abating but they are not sure. The RATE of inflation indeed may be slowing, but it’s still up. Sort of like a drug addict claiming he has kicked the habit because he has slowed his increasing dosage but still increases it with every fix.

Yea, it is sort of like that.

The news media and the public dissemination and analysis of the inflation data is very skewed in my opinion. Slowing inflation is not SOLVED inflation.

Inflation is still a very serious threat to both the markets and the consumer. The only way we would see relief is if we saw reduced prices, or what is called deflation. In that way we could get back to where we were. But with higher wages being demanded across many union fronts, wage push inflation is probably right behind the inflation we are already seeing.

The point is that not only have prices increased already damaging consumer pocketbooks, inflation may be slowing but it is STILL RISING.

That said, the markets are looking at the slowing inflation data as a good enough reason to make the markets run, at least temporarily. Therefore in a more aggressive stance as far as being in or out of a larger position of equities, we may have dipped our toes a little more into various stocks and indexes.

I will be, given my opinion of the markets, fast on the trigger finger to dump if indeed the markets turned down again. Nothing is guaranteed of course, we can only attempt to protect portfolios when it comes to events happening in the macroeconomic arena.

What may be our largest holdings, EIi Lilly, and Novo Nordisk, which both make the ground breaking weight loss drugs that also appear to help with other addictions, are gaining traction once again as each subsequent news announcement excites investors. We may continue to hold these as I think these drugs will drive prices much higher. My opinion of course.

Technology seems to be in rotation again, and we may be seeing the start of the Santa Claus rally. The Santa Claus rally is a theory that stocks rally going into Christmas because of the enlightened mood of investors. It is interesting to note that the news media’s claims that increased sales point to a healthy consumer. But remember, they do not count number of units sold, they only count the total nominal amount of sales. So we must ask ourselves, with inflation, it is fairly obvious that more money is being spent on goods and services because of the much higher prices we have seen with our inflation, but figure might not mean more units were sold. They don’t track that figure in the aggregate so we may never know. But we can use common sense. Higher prices means more money spent, and not necessarily more actual units sold.

I am of the opinion, that there have actually been fewer units sold, as we see a few percentage points of increase in total sales while inflation is running much higher than a measly few percentage points. It is the reason every year we see increasing Christmas sales, even as the economy may be spiraling.

But it makes for good news spin doesn’t it? Especially coming into an election year.

In my opinion sales volume should be replaced with number of units sold. That would give us a better indication of how the economy is doing.

For now, we will dip more toes in the proverbial waters as the market may be setting up for a mini-bull period as we move towards the holidays, yet always with an eye on the exit doors if necessary.

In conclusion, if anything has changed in your financial situation, or anything else that I should know about, please contact me. I will check back in a while. I am hoping this knee surgery recovery goes well and appreciate all the well wishes.

We will talk in a bit,

“Watching the market so you don’t have to”

Marc

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Monthly services for homeowners November 2 2023

Monthly Services worth the money.

My electrical service is the often beguiled PG&E. My gas needs are propane and my water is from a well. All three have inelastic pricing which means I have no bargaining power with any of the companies that provide these essentials.

Since the cost of these things are going up in price along with everything else, the budget gets a squeeze with every new bill in the mailbox.

Years ago when my electrical bill hit over $700.00, I decided to seriously adopt some practices to reduce it. The old PG&E slogan “Kill a watt” came to mind and we began shutting off the lights when we left the room, unplugged all those little black converter boxes the kids had for toys they never used, turned down the automatic timers that controlled various lights, pumps and electrical equipment, and generally reduced our power consumption during high peak times whenever we could. As a result, the bill dropped about $200/mo. A victory for sure and one that not only saved me money but also a tiny slice of the planet.

Fast forward to today and I have Tesla solar array that cost me nothing. Back ten years ago or so, the company was called Solar City, before Tesla absorbed it. The deal was Solar City would put an array on my house for free, and I would pay them $.16 a kWh for everything it generated.

It is not large enough to power the entire house, but the way PG&E charges you, called the tier system, they charge you more per kWh the more power you use. The Tesla panels therefore help knock me down the costs to the lower tier usage and therefore cheaper levels. This makes the $.16/kWh I pay Tesla a bargain.

I ended up saving about $150 a month. Not great but I had absolutely had no out of pocket expense (which would have been about 30 grand) and Tesla is responsible for its maintenance for life. They monitor it 24hr/7 and if something goes wrong, they know about it immediately and send someone out to fix it, no charge.

As for propane, well on that one I am stuck. I tried switching companies every so often for the teaser rate, but changing tanks every time I did that was a pain. And the initial deals they offer you to switch expire quickly so you are soon right back paying regular prices.

I could own my own tank, but besides being a hassle to do so, I would then be on the hook for its integrity and safety and that I am not interested in.

As for water, I have a well. One would think wells provide free water and they do. It’s the equipment to get the water out of the well and to the house that costs. Obviously the pump uses electricity, and the well pump is an expensive little bugger. About every 7 years I lose a pump or its motor and then it needs to be pulled out and replaced. I have my home warranty to cover that, but the warranty costs me as well.

I also need a water softener to make the acidic water from the well compatible with my pipes. The water softener needs bags of salt every other week and calcite every 6 months. It breaks every so often so there is more cost there. I lose a water heater every 4 years or so no matter what I do. The water tests neutral and they tell me the softener works but I still lose water heaters. My toilet and sink valves that go into the wall also rot out every few years and I have a couple of dozen of those. More fodder for my home warranty, which in itself costs money.

To pay the ever increasing costs of these essentials are just a small part of what us home owners have to deal with. Doing the best we can to conserve, I am kind of like you.

I have to work a little harder and get up a little earlier to afford to run the homestead at today’s rates.

In conclusion, the cost of everything we need is skyrocketing beyond belief but you already know that don’t you?

Just know that I too, feel your pain.

It is what it is and we deal with it.

“Watching the markets so you don’t have to”

(end)

(As mentioned please use the below disclaimer exactly) THANKS (Regulations)

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