That's not necessarily true.... Remember, when you take SS early, your benefits are considerably less (25%). So the total draw on the system may end up being less.

Here are the current yields we are getting from our SS contributions. Looks like 2.7% overall but newer US treasuries pay out around 1.4%. Are future social security payments sustainable?

290EE433-EBD0-4901-BC10-A9C9777FAFC4 (resized).png

As a controller we can get supplemental Social Security until age 62, when we get our full ss.

What difference is 20 Trillion compared to 27 Trillion, does it really matter any more? What if it is 100 Trillion. Always thought the "your grandkids are going to have to pay" line is funny as hell.

I also took a shot on gaming. Bought PENN (Penn Nat’l Gaming) on 5/15/20 at $19.44 a share. Today closed at $29.65. So I am up 52.52% in 6 days. But I hate short term capital gains. Haven’t sold yet but may regret that. Maybe it will go back up to $39 pre-covid level.

It all depends on how you want to slice it.

If you have a good paying job and like going to work everyday, then stay with the job. I had a job like that until I was laid off at age 61.5. I wanted to go to 66, but it was not to be.

I had been laid off before and know how it works. I did not lay around; I hit the streets looking for a job. Age 62 was coming up and unemployment was going to end. I could not even get a job as a janitor so my decision was made for me. I was either over qualified, did not have the right skill set, "sorry, we are not hiring right now", but no one ever said I was too damned old; but age was the thing that got me. With those options you retire.

Retiring early. Here is how the math works.

Using some semi-magic numbers here: If I could have waited until 66 to retire, my SS would have been $1,900.00 per month. But going out at 62 put me right around $1500.00 per month, a $400.00 per month difference. 1,500 x 12 = $18,000.00 per year. In fours years time I drew out $72,000.00.

So, I am now 66, have drawn out $72K and you have just retired at 66 and will be drawing $1900.00 per month. You are drawing $400.00 a month more than I am. Take that $400.00 month and divide into $72,000.00. $72K / 400 = 180 months. 180 months =15 years. Even at your higher monthly rate, it will take you 15 years to reach the point that we are equal on what we withdrew because I am already $72K ahead of you.

66 + 15= 81. 81 is how old we will be in 15 years.

Are you feeling lucky?

This is where you have to play the actuarial odds. If I live beyond the age of 81, I would have been better off to have found some podunk job instead of retiring early. So, if you and I die before we reach 81, I will taken out more than you. But anything beyond 81 and you are the clear winner.

Other than my paternal grandfather who lived to age 83, my grandmother died at 77, my sister died at 42, my brother at 58, my mom at 65, and my dad at 71. With these numbers in mind I figure my reaching 81 is a long shot. All of these are the decision points I used when deciding to retire early. To date, I am having a ball. I have no regrets.
-------------------------------------

The financial writers never seem to look at the total amount you withdraw between the ages of 62 and 66.

I'll drive the point home a little further. When you apply for Social Security you are told to allow 3 months before your first check arrives. I applied in October and requested a January pay date for my first check.

In December I got a call from a nice lady from SS. She told me she could have my first check in a few days. She also said that if I waited until January that I would never make it up. And actually, I turned 62 in August so I could have started drawing 4 months before I did, but I did not want to retire. At a $1500.00 monthly rate I left 4 months of SS money, or $6000.00, on the table

What is this supplemental social security? How are you going start drawing early at 62 and then still manage to get full retirement at 66?

I am all ears.

Finally i see someone who agrees with me on the math about social security - people always ask me if they should wait as top expects always say you should wait. WRONG - unless you continue to work and make great money - and of course you want to work - the other thing you left out is at the age of 81 you more then likely don't need more money as you will be too frail to do anything.

thanks ed

We dont have the option of working past 56 so we get a supplement in addition to our pension and TSP. I'll be eligible for retirement at 49, and planning to go right away. 14 more yrs.

https://ask.fedweek.com/federal-retirement/special-retirement-supplement/

I say retire as early as you possibly can. I know a lot of people who retire at 65+ and the health issues start and their quality of life diminishes. I have been planning my whole working life to retire at 55 while I still have time/health to enjoy life. My dedication to investing and being financially prudent will (hopefully) get me there.

Now I understand. I was thinking an accountant type controller. Not aircraft controller.

Massive sell off at end of session today?

Huh? The session was down around 100 all day and finished down 8.

I’m 56, and I was planning to slow down at 55, but you know what? I’m way more productive now than I was 10 years ago. In 2010 I was watching the clock and the calendar. Now I’m kicking ass with backend development, and I’m not ready to stop.

I retired two years ago at 58. I have a pension and no longer contribute to SS. I am planning on taking SS at 62 and should receive about 1200 at that age, with it increasing around 100 per month for every year I wait. I am going to draw it at 62, but will the amount be affected by this year's Corona virus unemployment figures? I was born in 1960.

You would need to call the SS office for an answer to that. And the wonk who answers the phone will probably be high enough pay grade to make an answer.

Should not effect your SS figures.
https://www.ssa.gov/planners/retire/applying8.html

Humm, checking many future.
Seems like Tuesday will be a down sell of day again.

Here comes the real estate.

https://www.cnn.com/2020/05/25/tech/airbnb-hosts/index.html

"Airbnb hosts are planning to sell off their properties because of the pandemic "

"With global travel screeching to a halt during the pandemic, a number of Airbnb hosts are planning to sell their properties "

When it comes to SS I like to bet to live

Delaying SS to age 70 is what I’ll do as of now. I’m 57. It also depends big time on what the tax laws look like in 10 yrs

The power of compounding on that extra 8% each year adds up especially when that COLA inflation kicks in

AND, if you love your wife at that point then her survivors benefit would be based on that much higher amount, assuming she doesn’t predecease

AYX and SE have crushed it lately and 2 long term holds for me along with TTD, NOW, FSLY, MDB, MELI and of course AAPL, AMZN, GOOGL and MSFT

Just added GMED last week. Hoping SHOP pulls back to go back in on it

Forgot to mention PINS. One of the few not at all time highs in my universe of tech/social media stocks

Breakout is just a matter of time. 6-9 months. “Event planning” took a big hit. Obviously. Partnered with SHOP

MPW, BRX and STOR are 3 of my favorite REITS to buy now

I’m curious if the real estate market will be a state by state issue. I think commercial real estate is going to get hit pretty hard as office spaces are going to be assessed by lots of companies.

My work is saying work from home unless it can’t be done at home (like if you need to be in a machine shop or assembly area) and they seem to be in no rush to bring people back to the office.

My wife works in one of many off-site buildings that we lease and she thinks that she will never go back to that building. It is all office space and every person there is currently working from home and can continue to do so.

We do not work for a trend setting type of company within the corporate world. We are a world leading business as far as out products go, but adapt to some things at a slower pace. Some groups have been asked if they can work from home very long term. I’d be all for that.

For residential real estate, this is where is think there might be a state by state issue. AZ is opening up and are currently at 25% capacity when looking at bars and dine in. I see that getting bumped to 50% pretty soon. Other states are moving at their own pace. Some are still super locked down, while others are even further than AZ.

I think there are going to be entire industries where the workers will have to downsize if things don’t rebound for them sooner than later.

I really don’t want there to be massive disruption like that, but also think it all comes down to the timing for a cure/vaccine. The Tucson area is largely the Air Force base and the university. I can’t imagine the base would be affected and with universities shifting to online for at least next semester I don’t see that as being largely affected, although I think on-site staff who aren’t teachers might be affected by a downsize.

Lots of travel/hospitality industries going to be very lean for a while though.

The AirBnB thing won't make much of a difference unless you're in an area full of them. There's already kind of a housing shortage and that will just help the inventory some. Maybe like Florida would be hurt or some cities on the coast. There are some people who were pretty heavily leveraged with those that will probably be having to sell in order to stay afloat.

People are railing on Buffett again, reminds me of 20 years ago.

Railing on him for what? I’m about to go looking, but in case I don’t find anything fun to talk about...

i buy houses in RI, CT and Mass and it is scary right now - but i have sold like 5 houses in the last 2 months for a lot more then i thought i would get - right now the inventory is very low and people are scooping them up quickly - also they have raised the standards to get a mortgage and people want to get their houses now.

i see a drop in the higher price houses, or the 2nd houses as i call them - where people sell their first house to get a nicer bigger second house. in reality none of us really know what will happen. i was going to buy a 450k to 500k house for 325k and flip it. it needed a good 50k in work - i backed out thinking it was too risky - and i still think it's too risky.

my son just moved in his house up the street from me and i threw out the idea that he should buy it and sell the house he just bought 6 months ago - well he put his on the market today for 314900 and already has an offer higher and has 8 more showings set up. so right now the market is still strong. i expect it to drop - but hey i have been expecting the market to crash for 3 years now (and i have been wrong). lately i been trading oxy, xle and dkng and making some good money getting in and out of them - so i am playing the market again - i actually bought the oxy and xle as long term things when oile was negative - but they went up too quick and i got out. i think i am done with oxy as it's been flat even when the market has been way up. draft kings i think i will hold onto long term as i there model has so much rev oppurtunities.

anyway back to the real estate and pinball - yes there is a pinball in his house in the pictures. he always loved harlem globetrotters so i got him one.

https://www.trulia.com/p/ri/north-smithfield/557-victory-hwy-north-smithfield-ri-02896--2002843491

thanks ed

There's a huge shortage in the low end but the high end is going to have issues in my opinion. Affordable housing is a big issue in this country right now. For the next year, I would expect housing to still do really well in spite of everything else. After that though, the foreclosures are going to start happening and inventory will rise, plus there will be less buyers. Just a combo for flat to lower prices for a while. I don't see it being another 2008/09 because there's not excess inventory like then, but the unemployment is much worse. Plus I think they're going to do everything in their power to have people stay in their homes.

Commercial real estate is toast though for a while, and some other sections of real estate may also suffer if they start reducing unemployment benefits.

i pretty much agree with you - commercial is going to be real bad as all the companies are now realizing people can work from home and be just as productive so they will rent less spaces. in our state (rhode island) we already have lots of empty commercial buildings - now we are going to have a lot more - the big issue is who is going to pay all the taxes that are needed for the cities and states to survive. it's going to be scary. it will take about 2 years for the next wave of foreclosures - i am hoping to be cash ready to buy. last time in 08 i bought some and rented them out before i realized i could sell them and not have to deal with rentals.

who knows what is going to actually happen - we all can just speculate based on our history and knowledge.

There appears to be a crazy euphoria in our stock and property market here down under.
It's really crazy to be caught up in the ride, my stock investments are small and being a newb to shares it has been interesting to see the wild ride.
I have a really bad feeling that this is the deep breath before the major exhale ! the build on the ASX is too intense and I don't see sustainability.
All I see is crazy overvalued shares with zero dividend, the whole thing is nuts !
Huge upswing here again today, hope my balls are along for the ride and a swift withdrawal when necessary is possible, lol

asx (resized).JPG

Based on the morning futures, it's beginning to look more and more like a 3 month wealth transfer.

The unpleasant woman Suze Orman was bragging about how much cheap stock she bought while giving very different advice to her adherents during all this.

I'm happy to say that nobody profited off of me via panic selling.

Agreed, but the indexes are a bit deceiving. There's a ton of individual stocks still down 25% or more while the indexes are barely down 10%.

It is going to be interesting to see how much the newly working at home group is able to continue doing it as a normal way of life after the pandemic is over. I have been doing full time work at home for 13 years, but my job has a very clear quantifiable and verifiable work product.
My wife is an accountant and she was doing work at home about 3 days a week before the pandemic and has not missed a beat working at home full time during the pandemic. The biggest difference in her that I have noticed is that she seems less tired probably from not having to do her 20 minute commute each way.

Disney up over 20 points in what seems like less than 10 trading days.

Here is what 600 points of Dow look like when you break it down.

Screen Shot 2020-05-26 at 8.33.55 AM (resized).png

Screen Shot 2020-05-26 at 8.34.12 AM (resized).png

You are more diplomatic than I am. This bought a lot of votes.

Let me be clear, I'm not suggesting in ANY way that the reaction and precautions and seriousness of Covid19 are being overstated. I believe the quarantine and stay at home enacted by States and other nations is appropriate.

I'm simply pointing out that the reactions of small investors to sell into the panic enriched others unwilling to follow said panic.

Stay the course is usually sound advice and I follow it.

WTH is with the market up again today? Has anyone yet to figure out this unprecedented roller coaster?

I'll try. Market is fundamentally different from the "Free Market" in the past.
As Companies borrow money Fed becomes a partial owner with input as to Business decisions.
As Real Estate values are crushed Fed loans enable vulture Capitalist to swoop in for great deals.
Massive unemployment will evolve into a permanent drop of Employees, the highest cost for Business is salary. The ones will under the knife to be winnowed will be higher paid, older, or slackers. Long term = more profits.
O Interest Fed liquidity enables large players to borrow money and gamble it in the Market. If they lose liberal bailouts are now the norm, a win win for the speculator.
The Fed learned it can turn on the spigot of Taxpayer-backed liquidity (money printing) without a peep heard from citizens, who were payed off a pittance 1200 to 2400 while billions went to Banks, hedge fund managers, partial Fed ownership of cruise lines, airlines, Factories and Real Estate.
Fed is also purchasing Foreign assets as well ensuring World dominance by the dollar and making the sawbuck truly the Worlds Reserve Currency. This hinders alternative currency( Brics, Yen, Bitcoin, etc) from gaining hold.
Fed promised "Unlimited Liquidity". Market has evolved in to a true Ponzi scheme with no or little connection to Main Street USA.

Looking forward to picking up that 50% with Boeing.

There is a "Quiet revolution" occurring now which will be favorable long-term for this Market. Thousands (millions?) are desperately seeking to move out of big Cities into smaller areas.
This reverse migration will be a win for these rural Towns with transferred wealth fueling demand for Schools, medical care and infrastructure. Depressed Real Estate will enjoy a marked increase, more disposable wealth will fuel home improvement and discretionary spending.
Big Cities with high taxes, oppressive regulation and freedom-limiting laws will lose big time.. for awhile.
Valuable Commercial Real Estate will be purchased at fire sale prices. Taxes will be forced down, valuations lowered, regulations relaxed.
Then the game begins again.

Incredible.

Market is pure Casino. House wins.

Fundamentals count for jack all.

Ride the wave people!

I wasn't brave enough.

It always fascinates me that when the market is down big there are huge swings up and down all day, but when is up big it’s pinned up for the entire day most of the time.

Something is rotten in Denmark.
Im still thinking unloading all me ETF's by Friday. Keeping many stocks long term.
Going with to big to Fail.
BA, GE, F, anything that government always comes in and bails out, is the way to go for awhile. IMO

No brainer

And here come the rest of the “in the ditch” stocks that will make it to the Destination

“Bottoms up”

What’s the destination though? The market PE is going to go north of 30 here probably this next quarter at a minimum. That’s what I’m trying to figure out here. I have websites that I run that indicate sales and advertising $$$ have fallen significantly year over year. So it reaches February highs, then what? Is a really high PE the new normal?

That’s what I’m trying to figure out. So the fed is causing this reinflation of assets, when does the price discovery take place? Like next year? The year after that? Never?

Looking at buying some options. Can someone tell me how much these will cost ?
Thanks

F0402814-DC66-49DB-A0DE-A12BE18FAE3A (resized).png

The Fed pumping trillions of dollars into "the market" causes assets to re-price. "Don't fight the fed" as they say. Happens every time. The enormity of the dollars is unprecedented. S&P is at 23 p/e right now and it's meaningless.

FORWARD looking 2021 earnings are being priced in at 18x according to Fundstrat. That's meaningful and relatively cheap given current conditions.

Given where interest rates are, monetary policy is and fiscal stimulus 20x is "fair value" for the broad market based on 2022 predictions of $200 to $220 per share and certainly not a ridiculous number. That puts the S&P 500 at 4,000 in a year. Food for thought.

Investors are anticipating that the 2nd quarter is going to be the trough and the 3rd quarter will post some of the biggest numbers in history due to the restart.

This rally is going to continue because of all of the above, with bumps in the road. Fear and panic is subsiding despite media attempts to keep it alive, the world is re-opening and there WILL be a vaccine and therapeutics. And the "second wave" is another fear tactic that will NOT shut down the economy if it were to happen to any degree.
Another prelude today of what's coming with Novavax positive trial info this time.

"Bottoms up" individual stock investing is my preferred method and NOT index or "market" investing.

See above statement again.

The "S&P 500 market" is a tale of many different markets. Why would i buy the whole market? I'd have to own Netflix AND AMC theatres, airlines and other industries i don't want to own. Or short it? Want to get trampled by TTD, SHOP, AAPL, AMZN and other "new economy" stocks etc?

Growth and momentum was in the back seat and flat today. My preference under the current political, tax, monetary and fiscal environment. P/e's will always seem high, and deservedly so in some cases.

We will look back on this time 6 months from now and say, how did i miss out on CCL at $14 per share, up 12.5% today, DIS when it's back at $150 per share. Hilton, Marriott, BKNG etc. etc. etc. Some of these stocks have already had massive rebounds and some will have longer recoveries but the excellent businesses will get to the Destination if they can survive the journey and it will be at much higher prices.

The VIX is at 28, it hit 85 in March. Not going back there.

The funny thing is, "the market" is not worried about China yet! If there were no pandemic for the media to bang 24/7 then i suspect we'd see the VIX pop on China trade and cold war fears.

Plus, "the market" is pricing in virtually ZERO election risk right now and making the calculus that independents and more moderate blue's will be able to discern the differences going on right now with Red versus Blue re-openings. That a BIG part of the calculus right now subject to shifting.

Anyhow, that's my take at the moment.

I'll be looking to rebalance a portion of the portfolio from growth/momentum to "in the ditch" very soon.

Can't wait until the positive news happens and gets confirmed in July, August and September, too late then to catch the coming tsunami.

Look at your table of strike pricing and expiration dates and decide how far out you want to go what "strike price" you want to set and then determine how many contracts you want to buy.

Is a contract 100 times the price ,
So a 1.25$ contract would cost 125$ ?
And get me in at say 23$ strike price ?

Really? Cause I heard "strong fundamentals"...

What exchange is "Human Capital Stock" listed on?