Where is the Froth?

I got a lot of nice emails and suggestions about my high cholesterol mention yesterday. Thanks everyone.

I might as well tell you all about something else bothering me…

I am 52 and living in the sun most of the time….is there a way to slow the age spots on my face and hands?

I’ve had a rough week as my back seized up (muscle related I think) from all the cycling. It’s my first cycling injury (non crash). I have to hit the streets of New York today with a bit of a hunch.

Ok to the markets…

My friend Morgan Housel recommended an investing book yesterday that I just ordered titled ‘What I learned Losing a Million Dollars‘.

The markets are dealing with a lot of froth it seems and doing so quite well.

The crypto craze is now in full SEC gotcha mode. Further, the NYC Attorney General wants to peek under the covers of all the exchanges.

The speculative dollars will continue to get worn out and chased from this sector for the forseeable future.

The stock markets seemed to have shaken off the froth for the moment via the volatility surge which has rapidly subsided the last week. I doubt we have seen the end of volatility, but we are starting to see the winners and losers.

Netflix and Amazon seem to get stronger while others in technology get weaker when volatilily shows up. Fear only seems to create greater demand for ‘prime’ and spare time ‘Netflix and chill’. In hindsight I guess that makes sense.

Their is an IPO wave at our doorstep as well according to the New York Times.

With IPO’s come supply, but I don’t think it is short term bad based on the IPO’s in the pipeline I am seeing.

IN the glutty, not frothy department, the retail real estate glut is something that will have to be dealt with by the markets.

This ‘subprime ‘carmageddon‘ is definitely an area of concern that the markets will have to chew through at some point.

The real froth right now is hard for most investors to see or evaluate because it is happening at the mid stage growth company level in technology. Money is just pouring into tech companies from Asia, not just the USA venture capitalists pushing the prices higher.

This chart has that frothy feel…

I will end with this great bit of investing wisdom from Ed Borgato:

Real Estate: Location, Location, Location.

Private Equity: People, People, People.

Public markets: Behavior, Behavior, Behavior.

In all things: Simplicity, Simplicity, Simplicity.


Also published on Medium.