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May 10, 2023

Berkshire Hathaway Conference Takeaways: The Dangerous Trend of Risky Investments | Money Moves

In this episode of Millionaire Mindcast, the dynamic duo is back. Matty A and Ryan Breedwell talk about the Berkshire Hathaway conference takeaways, as well as this past week's updates on world news, finance, and other market updates. So tune in, and...

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In this episode of Millionaire Mindcast, the dynamic duo is back. Matty A and Ryan Breedwell talk about the Berkshire Hathaway conference takeaways, as well as this past week's updates on world news, finance, and other market updates. So tune in, and enjoy! 

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Matty A: Welcome into today's episode of Money Moves. We are back in the studio, as always your host, Matt, a co-host, Mr. Breed.

Well, what's up back from the other side of the pond. I was too

Ryan Breedwell: far ahead of y'all. I was in a whole nother

Matty A: day. Well, we got a lot of great stuff for you on today's show, as always, covering stocks, real estate investing and personal finance to help you on your march to a million and beyond. If you are new to the show, don't forget to hit that subscribe button.

We got these posted the video episodes on the YouTube channel, and of course we are on all [00:01:00] podcasting platforms. If you have not taken 90 seconds to leave us a review and you enjoy what we post and share each and every week. We would be greatly appreciative. Leave us a review and of course, don't forget to take advantage of all the resources and things that we provide our millionaire mind cast community.

Mm-hmm. First and foremost, the free financial x-ray from Ryan and his amazing team, which is

Ryan Breedwell: we will take a look at your current investments, what you're kind of doing with, um, any insurance that you got already set up, and we can. Kind of build you a plan. Take a look at what fees you're paying, what your plan might do if you didn't make any changes, recommend changes to be made, and if you wanna make those changes, we can help you make those changes.

Matty A: If you're an accredited investor and you are not on my accredited investor list and you want to look at more investment opportunities, passive income plays, you can text the word deals to 8 4 4 4 4 7 15 55 and of course for the free financial x-ray that is [00:02:00] X-ray to 8 4 4 4 4 7 15 55. Don't forget to check out millionaire mind

We got all kinds of great stuff for you guys in the store, the Rich Life Planner, the net worth tracking spreadsheet, income and expense trackers, all kinds of great stuff. For those of you who really wanna sharpen your financial tools and resources in your Rolodex, you can grab

So today we're gonna be digging in on the state of the market. We got some updates going on with PPI and cpi. Where is inflation coming in? US unemployment rate came in this last week. The Fed made a new move, of course, on the rates, and will they continue to jump or pause? How's this gonna tie into a potential soft landing in the market?

Us default coming on debt, or are they gonna raise that debt ceiling? We'll talk about that today. And we've been seeing some interesting activity in the markets with some potential short selling [00:03:00] and what the administration, Biden administration is looking at there. We had the Berkshire Hathaway annual Shareholders Conference, S from their meeting, and the Oracle of Omaha and Charlie Munger and what they think of one Berkshire Hathaway and two, what's going on in the market.

And the global economy and of course some real estate updates. Are we seeing the market slow? Is it gonna be picking back up and the data? What is that support? So we'll share a crystal ball and some thoughts around all those things today. First and foremost, I wanna know how it was. The

Ryan Breedwell: trip trip was great.

Um, I was completely unplugged. In, in London, Paris, Bordeaux went wine tasting. How

Matty A: did it compare to Napa? Was every Napa Valley

Ryan Breedwell: wines from what I tasted taste better than the wines from Bordeaux? That being said, the wines in Bordeaux are excellent. They're just [00:04:00] different. Was it what you expected?

Matty A: Did it

Ryan Breedwell: disappoint?

No, it didn't disappoint at all. It was above my expectations. It was really good. I bought three or four cases of wine, uh, back. Um, it was really good, like really great stuff. Fun experience. It's just totally different. They have so much more history

Matty A: and age. And if somebody was going out to wine country in Bordeaux, what's one place that you visited that you would say they gotta checkout if you

Ryan Breedwell: can?

Uh, I went to Chateau Mar, uh, Margot, which is pretty famous. Um, Chateau there. Um, there's another old one, Chateau and Dulay. Um, that one's really good. Those are in the Margot region. Um, did you

Matty A: like the wines or the champagne better?

Ryan Breedwell: I didn't drink any champagne. No bubbles. No bubbles. Um, different part of France, I was, uh, I mainly drank, they, they mainly grow merlott grapes in the part of Bordeaux that I was in.

So I drank a lot of, of Bordeaux blends. Um, and I had some really good almanac, Al [00:05:00] Al Almanac. I think it's like a cog cognac type deal. I had some from 1966. Ooh. So that was really good. Um, and I went to a really old small town that's over in the Bordeaux region. It's kind of a wine growing area called Saint Emilion.

And it was really, really, really old. Built in like the 809 hundreds. Uh, they had like a church that was like carved out of the mountainside, so then actually build it. They just carved it into the, like the mountain. Then just carved a church into it. So you like walk in a mountain. Wow. That's cool.

Matty A: It was pretty cool.

So it was a favorite trip. Favorite city and why Or favorite destination you stopped at Amsterdam.

Ryan Breedwell: Nice. It was just, it was the easiest city to get around. They had really good food, um, really nice people. The Dutch people are super nice. The, uh, uh, Alex wanted to go, my wife, she wanted to go see the, uh, tulip blooms who went to Koff.

Oh yeah, those photos looked cool. Yeah. Saw that we went into another tulip field and walked in there. So she got her. [00:06:00] Tulip game, uh, strong. And I was happy cuz she was happy. And then we said, we've met this owner of a new Italian spot that had opened two weeks ago from I think Bulgaria, pul, Pia or something like that, part of Italy.

Um, they have a special flower. They're making their pasta by hand. So we ate there twice. It was a vibe. It was a good time. Amsterdam's awesome. I'd recommend it. London was the least favorite. The food just sucks. I mean, it's. Terrible in London. Yeah. Demetrius and Karen. Love y'all. I know you live out in London.

Um, food's terrible. Indian would food is on fire though. Oh, it was the best Indian food I ever had in my life. Yeah. Yeah. They got a Indian, but I would never,

Matty A: I would never demographic out there and great, great Indian

Ryan Breedwell: food. Never go back. Cuz the food was just, it was, it was.

Matty A: Place to visit and see one time and yeah, more to be seen in the

Ryan Breedwell: world.

Yeah. I got to see, I went and saw a big band. I saw everything you could see in London because I was like, I'm never coming back here.

Matty A: Well, [00:07:00] switching back over to state of the market, we continue to hear recession talk, and yet a lot of the data. Isn't necessarily supporting that. Yep. So we got unemployment data that came out this last week.

Currently at 3.4%. This is the lowest level since 1969. US households have 500 billion in excess savings per the San Francisco Fed. It was noted that US households. Still have some 500 billion in excess savings compared to before the COVID 19 pandemic that could support consumer spending late into this year.

According to research published on Monday by the San Francisco Federal Reserve, we saw of course the fed bump rates this last week, last time, up 25%. There will be no more hikes. Now, they did say, We're not done raising rates. Oh, they're done. But [00:08:00] he also, I don't, Powell came out this week and said, Hey, you will notice that there was a statement in our last notes that we removed that basically kind of left the door open for.

We're not gonna necessarily, they're be raising rates. They're

Ryan Breedwell: pausing. It's a hundred percent. They're pausing, but

Matty A: there still could potentially be one more. Nope. Depending on what data comes out with on, Nope. E P I C P I over the next quarter. Nope, I don't

Ryan Breedwell: see it. You don't see it? Nope. How come I'm putting my, I'm putting my flag down on this one.

They're, they're done. They're pausing. They're not cutting yet, but they're pausing. They are pausing. We should see cuts. Uh, I think in the July meeting.

Matty A: You think, we'll, you think we'll see cuts in summer.

Ryan Breedwell: End of summer, uh, end of fall, we're gonna see cuts. Um, they're gonna cut at least two, two times this year.

They should cut three times. Wow. Yeah. I know I'm crazy. But end up, you know, you look back six months and I'm right.

Matty A: So we got PPI and CPI coming out this week. Yep. How does [00:09:00] this inflation data one, what are the whispers in camps in your world, in the financial world, and then how does PPI and CPI data.

Based on how it's trending or you think it's gonna trend mm-hmm. Tie into what the fed's gonna do. Tr uh, the debt

Ryan Breedwell: ceilings, stealing a little bit of a shine away from the P B I CPI weight, which is maybe good or, or or bad. Um, CPI is gonna be, I think, uh, on a graph up month over month due to shelter data being throwing it off again.

But then again, the core c p I removed the shelter data and all that other stuff and it's going down. That's, that's the expectation. So we should have a, in the Fed has said core is what they're, they're watching. So we should have a month over month, uh, uh, down read on, um, core. We sh we sh It's hard on the p p I though, because last time I was looking at the same data metrics and it was like, p p I might be surprisingly hot.

And I even was like, wow, it doesn't look as promising as it, it could be. And then the [00:10:00] p p i data came out like way, way pull back. Um, I think that might have adjusted by now, and now we're going to see maybe what I, I was predicting last time where we have hotter than expected, uh, PPI numbers. That's not a good thing.

Uh, it's not necessarily a bad thing, but it, it would be good to see another unexpected, um, drop in PPI if we could, because I, I just. To the recession talk, you know, we're talking about the, the inflation. If we keep seeing the data roll in, we are earnings that are coming out. Earnings have been really good.

Palo uh, not Palo Alto networks. Palantir had their first profitable, um, quarter or reporting that they're going to have their first reportable quarter ever. Um, and that's a company that's not, that's a very high beta company, high risk company. Um, these companies are reporting positive earnings and beats on estimates, which is what I said was going to happen during earning season.

That everybody's going to start revising their earnings down and they're going to be, [00:11:00] uh, pleasantly surprised. Um, we can't have a recession if unemployment continues to go down and the consumer spending continues to stay. So, uh, stay so strong. Um, I was talking about it on my Twitter. If you have dick skin and you're not a liberal, you can follow my Twitter dad arre.

Well, and I was posting about how the, we've been in this kind of rolling recession. That's not really like a true recession, but it's definitely tech technical rolling, however you want to shine it up. We've been in this period, this bear market for so long, and we're only now 14% off the peak of the market, high of the s and p back from when we hit that in tw uh, late 2021, rolling into 2022.

So we're not, we're within correction territory, right? 20% or less off the high. We're now out of a recessionary area. We're back into correction territory, and the [00:12:00] market seems to continuously pull back up at the tail end of the yield curve, we have the three 10. Excuse me. The five, 10 and 30 year, um, treasury yields back on an actual curve now there that that part of the curve is back in line and, and moving more back in line, meaning long-term debt has higher yield than short-term debt.

There, there's just so many things that tell me that recession is not going to happen, and, and one of the main ones is that it's being pushed so hard by the mainstream media and by retail investors being worried about it. It's one of the biggest shining blinking lights. Like this is def retail investors are some of the worst investors that exist.

That's why I have a job. Um, they sh they don't know anything. The market knows. Investors do not. So modern portfolio theory, which tends to be correct most of the time, says we lean on what the market knows cuz the market is essentially all knowing [00:13:00] and in a, in a data way, not like a omniscient way. And it's telling us opposite things and what the media is saying.

The bond market's not saying that we're going into a recession. The stock market's not saying we're going into recession. The data that drives those markets is not saying we're going into recession. People are just cherry picking things based on templates in the past that are not applicable to our current time because what we're going through right now has never happened

Matty A: before.

What are your overall thoughts when it comes to some potential fractures in the economy or in the banking system that could potentially domino into a recession? I

Ryan Breedwell: just, the, again, I'm still sticking with my guns on the banking thing. It's, it's just small regional banks that are, were mismanaged. It was mismanagement errors.

It wasn't because the banking, the institutions are, are, uh, Have a systemic or an issue with them. Um, JP Morgan bought them, [00:14:00] which I was joking that they might, and then they regularly said they can't, but then they made a special approval to allow JP Morgan to buy them. So now JP Morgan has over 10% of all US depositors.

Um, that's wild. Yeah. Over 10% of all the money that moves in the United States moves to that bank. That's where I bank at. I'm happy for it. It doesn't mean it's good or bad, but I, again, people were kind of freaking out about this and like I just, coming back from London, there's like three or four banks.

They don't have that many banking institutions. They just don't do that. So it's, it's works in countries that are thousands of years older than us. And the reason it works is because it works. You don't need. Too many Indians, not enough chiefs. But don't you

Matty A: like the, the argument that I know a lot of other people would make, and we actually had some listeners kind of reach out on this one.

I'm saying, well, you don't really necessarily want it consolidated you. That's the beauty of why, why free markets and competition.

Ryan Breedwell: Show me the competition that's happening with regional banks to larger banks. It's just, it's not there. [00:15:00] What do you mean by that? Show me a regional bank that is competing for your business better than a large bank.

Well, I think

Matty A: it gives more utility and options to how outside of, oh, well, tons of loan products for small businesses, for commercial real estate. I know this I'll, I'll speak from the real estate perspective. Anytime I see somebody come to the table with a loan, On one of the big banking institutions versus a commercial local bank, regional bank, credit union.

The terms to the borrower, me as an investor or that person come to the table way more flexible and favorable than the larger institutional organization. So for me, I would go, I, I don't want to just have those be my options. I like, These other banks creating more competition in the marketplace. I think

Ryan Breedwell: though, when they absorb those businesses and they have, like with JP Morgan doing that with, um, oh [00:16:00] God, not, not some First Republic.

First Republic, thank you. They're gonna absorb those businesses and they'll now service those businesses. They just don't, that's not their bread and butter. JP Morgan makes their money on wealth management. Yeah. They don't make their money on, um, they, they don't make their money on loans or anything like that.

It's Bank of America at Wells Fargo. Um, Mo most of the big banks make their money on wealth management. That's how they make their money. Um, I think though that as they absorb those businesses, kind of like when Berkshire Hathaway started, they were a, a textile company. Mm-hmm. And now look at them today, they've slowly absorbed all these companies into the company they are today.

And I think people constantly point out like, Duopolies or monopolies or things like that. And

Matty A: that's the bigger concern for a lot of

Ryan Breedwell: people, right? But we have a lot of those that already exist and we allow them to exist, and they're okay to exist. I mean, if you think about, there's like three meat suppliers in the United States.

It's not duopoly, but I mean, there's three of them and they, they all, it's [00:17:00] Cargill, uh, I forget the other two, but there's like three main, there's four main suppliers for chicken. There's two main suppliers for pork. So just, we already have it in other industries and we don't care about it in those industries and it works in those industries and we constantly get cheaper and cheaper and cheaper food prices.

Yeah. Minus in the small st that we're going right now. Food hasn't gotten more and more expensive as a whole. If you apply, you know, what we're paying and you add inflation to it, it's actually gone down. Yeah. Um, that, so I don't see that, I don't see banks being the, the fuck you fat. Rich cats and saying, oh yeah, we're not going to, we're not gonna give you products that keep that business coming in.

Mm-hmm. We're just gonna do it our way. And, and I think that if a bank of that size decides it, economies of scale would prove that they could, they could choose to do it. And if they did do it, they could choose to do it better. Mm-hmm.

Matty A: Because they have the economies of Yeah. I mean, I think that's, that's definitely one argument that [00:18:00] could be made on one side of the coin, maybe

Ryan Breedwell: they're not doing, I know they're not doing it because those big banks.

JP Morgan being the worst. They pay the least amount of to their depositors and all they're doing is going, buying treasury bills with it and making 5%

Matty A: on it. Yeah. Speaking of kind of the banking industry, the Biden administration has said it's watching financial markets closely to analyze how short selling is affecting healthy banks.

We're seeing some of these players in the market. Take shorts on banks, assuming that some of this contagion or some of these dominoes are gonna continue to fall, I think, forget which one it was that I sent you earlier this week. The shares of a relatively healthy bank were down 54% for not really any pinpoint, well, like, like

Ryan Breedwell: Schwab was going through that and everything.


Matty A: what is going on there, I guess is the question. They put a temporary, uh,

Ryan Breedwell: ban on short selling certain financial companies, which by the way is not the first time that's happened. It happened in 2008. Um, [00:19:00] the, I dunno if it was the Bush or Obama administration, but I believe it was the Obama administration.

They banned short selling on certain stocks. The stock market recovered for a short period of time, and then after they lifted it tanked again. Um, the reason they do that is because markets are made, and I don't think people understand that the market is made every day. That's why there's a job called a market maker.

There's a person that literally sits in audits and looks at all the trades and they'll shut down the market. Of a certain security, if there's fraud or if there's suspected capping and pegging going on or something that's not supposed to be happening, um, that is an okay thing for that to happen. I think the more important thing for people to focus on is not getting caught up in the short term stuff, because so many people are throwing out, you know, seven or eight months ago it was recession, then there's no recession.

Now, recession's back on the table. Um, it, it's just, it's so much loudness that [00:20:00] it's a clear sign that it's a time to kind of put your blinders on and just run. And if more people did that and more people stuck to their plans, Things would start panning out in the way that they're supposed to. I think the only place I'd be running from right now is commercial real estate in large, large, large commercial real estate.

I don't know what the classes are called, but like the ones that like are office, office space.

Matty A: Well, right now, I mean real, they're calling it the Widowmaker Real Estate's Next Big Short is so risky. It's called the Widowmaker. So, This was, uh, written on the Real Deal, which is a large kind of real estate, mainly commercial real estate blog and, and, and publication.

Um, wall Street's Next Big Short is on offices, but betting against offices is easier said than done. Speculators are placing billions of dollars worth of bets on commercial mortgage backed securities on the belief that. Remote work and the 108 billion worth of securitized office loans set to mature and the next five years we'll wreak havoc on bond holders and the overall [00:21:00] market.

Now that's still somewhat of a risky play, right? You're betting on the fact that these trends continue to be somewhat catastrophic for the next five years. I think that's a, a lot can change as we know what we've seen in the last three years, right? So still though, I think there is a transformation happening in commercial office product.

With retail product, the way consumers workforces, corporate environments are navigating and ultimately, you know, retooling their um, kind of ecosystems. And that obviously has somewhat of a ripple effect on commercial real estate assets. But in your opinion, again, the sentiment. Banking financial institutions, the overall system as a whole.

Strong stable.

Ryan Breedwell: Yeah, yeah, absolutely. All the, all the larger important banks are, are, are capitalized in a proper way. Um, the main banks, you're gonna see banks at the top end that have like, uh, uninsured deposits at like [00:22:00] BNY Mellon, uh, p and c banks that work with wealthier. Individuals or businesses, because the F D I C limits 250.

So I mean, once you have 260,000 in there, that person qualifies as an uninsured deposit. Mm-hmm. It, it doesn't necessarily pan out to be bad if you go through a lot of the details, but when you have not like the, uh, signature bank or, um, a Silver Gate, um, and all of them. It wasn't just that, it was that they were that to the tune of like 88, 90 4% uninsured deposits.

And then they're backing those uninsured deposits with, um, uh, interest rate sensitive securities in a rising interest rate environment. So whoever made those decisions, didn't know the bond. Teeter totter, interest rates go up, your face value goes down, and then people are taking money out. So you have an investment that's bleeding off value due to market losses, plus withdrawal losses that you're not expecting.

So it just. Too much of a [00:23:00] run. All the money it was there and it got, it's getting returned and is going to be returned to people, but it was illiquid and it could not get to taken out fast enough. I think I, I went over 40 billion or so in an hour, or excuse me, four or $5 billion an hour versus, took like seven days to do that amount of money back then.

So we can just move money a lot quicker than we used to be able to do it in this digital age. And that was something that was not

Matty A: accounted for. So we're seeing some. Headlines and concern over us debt ceiling, the stalemate between raising the debt ceiling, Congress, you know, not being able to come to terms with what the final decision's going to be, which is ultimately coming to a head here at the end of this week.

Ryan Breedwell: Yeah, I think it's gonna get decided here the next couple days cuz McCarthy just went and met with Biden. I think they're actually meeting right now. The meeting was at 4:00 PM Eastern time, so. They're,

Matty A: um, they're, it seems like we have this conversation [00:24:00] every time we had it last year. The debt ceiling is about

Ryan Breedwell: to expire.

We had it, we had this conversation at this exact same time last year. The media was saying the same thing. It was the same exact narrative. It's all the same bullshit that gets tossed around. Social security is gonna run outta money. No, it's not. Um, you know, the, the dollar's not gonna be the back. The currency backing.

Yes, it is. Um, just all of it. I, when we talk back and forth, it cracks me up because it's like, it's all just fluff and bullshit. Well, and there's nothing to back it that ac it's like, oh look, somebody said this,


Matty A: it's going to happen. The only thing I could think of that, and I guess, I guess the question or the, the conversation and debate comes back to us is one, administration's budget and spending so egregious.

So negligent every single to the harm of the country itself. And I think a lot of what people are [00:25:00] spotlighting right now is how much money is being moved over to Ukraine and, and

Ryan Breedwell: another 1.2 billion got sent today.

Matty A: And so, so I guess that's, that's where I see the potential, whether it's, and I don't think it's gonna be today, but in the future, if there's some administration that is just so.

Egregious with the spending and, and how the budget ultimately is misaligned with supporting American values companies, the future of our country. That's where I could see it potentially becoming to a stalemate. But then again, that's at the harm of the country as a whole. Correct. And we can't afford to default on.


Ryan Breedwell: debt, we would never default on our debt. It just wouldn't happen. We also have a bunch of bonds that are being paid and coming due like a couple days before that, that aren't being talked about. So we won't hit our actual debt ceiling limit. We would have an emergency fund of like 390 billion from bonds that [00:26:00] came due to us from other countries.

Um, and that would float us through, I believe the end of June, which is crazy. 390 billion only gets us to the end of June, but, um, Yeah. The debt ceiling thing is just a political ball they throw back and forth and they, it's who can puff their chest the most. Mm-hmm. It gets, you know, a concession on this and a concession on this behind closed doors.

They all know it's gonna get passed. Yeah. That's why nobody on Capitol Hill is freaking out. Yep. If it wasn't going to get passed, people would be freaking out on Capitol Hill, cuz it would, they would lower our credit rating and then that would actually be a time when I would start scratching my head on.

Wow. Is the dollar going to be the world reserve currency? Yep. Because we can't lose our credit rating. One of the reasons we have it as the, is because we're so strong with that credit rating. We've never, the US has never missed a debt obligation. We've definitely told some people to screw off and unwound their debt like Venezuela.

Um, but we've never missed a debt obligation [00:27:00] payment of people we said we were going to pay. I guess I, I don't know how that is though. If we said were gonna pay somebody and we just told 'em, nah, we're not gonna pay anymore. We don't count that one. But hey, That's, that's what happens

Matty A: when you make the rules.

That's when you're the top dog. Yeah, exactly. So with that being said, you also noted that it sounds like, which two countries were no longer, was it China and Russia? Or there was certain countries that weren't, uh, gonna be dealing in rupees anymore? Oh, India and, and,

Ryan Breedwell: uh, China. And China, yeah. Oh no, India and Russia, they said they were going to deal, do their dealings in roofies and.

You know, people were talking about it and of course they had just announced, Hey, yeah, no we're not, we're going to settle in US dollars. So it's just, it's all just not, and I don't get how people can, it's not possible. It's literally not possible. You cannot trade. It's the mo the reason people trade in dollars is cuz it's a stable currency.

Ask Macaroni Tony. He, there's lots of currencies that he, I [00:28:00] think used to trade and there's a lot of pretty volatile ones. I don't think we, I would say the US dollar is the most volatile currency or a really sexy currency to trade. I think the yen and the Euro and spreads between currencies are more fun, but the US dollar is kind of not that sexy.

Am I? Am I hitting the nail in the head there? Yeah, yeah, exactly. Yeah. So the reason the US dollar is a reserve currencies is cuz when people trade in it, they can depend on the value being received and not worrying about it going crazy overnight. So there's just a lot of reasons why it is the world reserve currency and it will stay the world

Matty A: reserve currency.

Berkshire Hathaway's 2023 annual shareholders meeting took place with the Oracle and his right hand man, Charlie Munger. They discussed various topics including the company's performance, which showed strong Q1 earnings and net income of 11.7 billion. They're gonna

Ryan Breedwell: have some, they said the companies though, that they invest in are gonna have lower earnings at the end of this year.

They [00:29:00] didn't then, but they, but they said, Then last year.

Matty A: Right. Which, which, which we knew what was going down last year was just,

Ryan Breedwell: that's act, that's

Matty A: not necessarily negative. It was like that every single

Ryan Breedwell: year. Yeah. It's almost like somebody's saying like, Hey, the, you got this piece of real estate. It's a good piece of real estate.

It's gonna appreciate, it's just not gonna be 2019 to 2022. Right. That's, that's

Matty A: a fair They did note that they wished they had increased investments in Apple and Bank of America because those

Ryan Breedwell: calling Apple the best ran company in the world

Matty A: ever. Yep. He also noted, I do

Ryan Breedwell: not agree with that, but that is, that is what happens when you have billions of dollars

Matty A: in a company that pays you to Charlie Munger expressed regret for not investing in Google and Amazon earlier.

They also cautioned against heavily, they had a pretty big segment on this of investing in cryptocurrencies, calling them a very dangerous trend. Yep. And ultimately a retail investor craze. Yep. Um, both voiced their concerns [00:30:00] over pen potential, continuing potential inflation risks and rising costs, and that they ultimately kind of predicted it's just gonna be stickier for longer than, you know, people like I, I think younger generations are gonna kind of just, this is gonna become normal for them.

Ryan Breedwell: Yeah, the murders. But the thing, they're gonna get used to it. The thing you have to remember is that inflation where it's at is actually not high. It's just high for the last 20 years. This is actually normal. And something I'll remind people look at, um, look at the United Kingdom or Europe. They had next to zero interest rates the whole time.

We did, but do you know why they did it? It's cuz corporations were making like zero money. Mm-hmm. So they can't afford to have paper B as expensive as it is when we have paper as expensive as banks and corporations are more profitable. And when they're more profitable, that that ensues. A is a [00:31:00] healthier economy.

We did not have zero interest rates until the 2008 financial crisis happened. We did not, and in fact, go look at interest rates where they were prior to oh eight. They are higher than they now, than they are today. Yep. So this is not, let me remind everybody, uh, this is not high inflation. This is normal interest rate environment and this is how money is supposed to work and how it's supposed to cost.

And it allows people on both sides to pay to play and everybody be, is profitable. It's really hard. I mean, there's a reason that, uh, stocks had made such a crazy run over the past couple years. You had massive stock buybacks and Apple, one of the biggest proponents that they just approved another 80 billion stock buyback, I believe.

Matty A: Yeah, big stock buybacks and just more. Money to get, those are going allocated into the

Ryan Breedwell: market. Those are gonna get lessened and lessened. But when you buy your own stock back Yep. And you reduce the amount of outstanding shares that you don't [00:32:00] own, you're just gonna drive your price up. It's just the way

Matty A: it is.

I think two of my takeaways from their panel, cause I watched a handful of their panels and just was trying to play catch up and see what some of the highlights were, were very basic 1 0 1 s x's and O's. It was. Nothing sexy. No, it really wasn't. It was be cautious of leverage, good debt versus bad debt, and how it can ultimately amplify your gains or it can drastically hurt you and create additional losses if you don't do it responsibly, whether in stocks, whether in real estate, anything.

The other thing was, Consistently playing the long-term game and about being time in the market versus timing the market, and with how exponential some of the growth has been over the course of the last few years. People have gotten into this timing. The market mindset doesn't work versus time in the market mindset or maybe getting [00:33:00] away from that and just talking about.

How long-term investing, focusing on quality businesses and avoiding market speculation, staying away from the mainstream news, the headline articles, and just looking at good ethical quality businesses with quality teams, with quality business plans and being in those companies for the long term. I wonder if anybody

Ryan Breedwell: we know has ever said that.

I don't know.

Matty A: If you've been listening to Money Moves for a while, you know that's at least what we prescribe to as well because it's so easy to want to be a part of that get rich quick. Know what it was Pepe coin or something this week. If you had Pepe, it was a cryptocurrency and you know whether or not this is gonna be another pump and dump or another, it's a pump and

Ryan Breedwell: dump.

It's down like $200 million today. But

Matty A: it, it went, it got up to what? Over a billion market cap in less than a week or something like that? For sure. A pump and dump. I mean, if you had, I'm $10 in it, of it, I'm not gonna lie. What was it? $10 in it?

Ryan Breedwell: $10 was a million.

Matty A: [00:34:00] Insane. That's not real. So, but again, right though that type of mindset and mentality is going back to what they talked about, extremely dangerous.

And when you see those types of news threads or Reddit groups and channels or those types of communities that are con, it's a couple people that benefit. In terms of it being a Ponzi scheme and it's, and based

Ryan Breedwell: on the losses of others, and

Matty A: it's at the detriment of so many other people and the ripple effect that has over the long term, not only in their physical world, but also the mindset, their actions that they take beyond that are never take ever again.

It really hurts the overall, um, trajectory of someone's wealth building plan. And so, Getting rich, you know, getting wealthy is, you know, for some people you can 10 exit and it happens a little bit quicker, but for most people it's just doing the right things consistently over an extended period of time and it's that time in versus that timing side [00:35:00] of the market.

So that was, those were my takeaways. Did you have anything to add to that in terms of maybe what, and by the way, those fools. Are like just fucking gangsters. Yeah. They're so old. Like they, they munger's 99 buffers. There's a straight

Ryan Breedwell: like star seeing telescope for like, when he looks into a camera, his eye look so

Matty A: big because his glasses are so thick.

Those freaking, those are some absolute spectacles. He, that's how he picks the stocks and he can see the financial statements into another. Galaxy with those glasses. But I just, I love their wisdom. I love how practical they are. I love how,

Ryan Breedwell: I love how Warren Buffett still is ripping down a coke at every meeting.

Matty A: Every, I mean, because you know, he

Ryan Breedwell: is got Coke. He's like, hold on. That's, that's three

Matty A: a day. Well, he's noted that's his best performing stock, I think of all time that it's one of those

Ryan Breedwell: earlies and he is never sold it. Yeah, ever. He's buys and buys and

Matty A: buys pretty, pretty. So, any, any final thoughts of adding to the two of them?

No, just, I mean,

Ryan Breedwell: like I've [00:36:00] said it before and I'll say it again. It doesn't sound fun. It doesn't sound sexy. Keep your money in the market. Yeah. Keep putting money into it. Wait until it's time to use it. Then tap into it. It will treat you well. Buy great and quality real estate. Run the numbers below the what makes you feel good and make it make you not feel good and still pencil out.

Yep. Just do the hard thing. It's easy to own a Baskin Robbins and have 31 tubs of vanilla. But it's more fun to go out and do the hard thing and, and have some excitement. But the, the non excitement, exciting part of it is it takes time. You have to be consistent with it, and it costs money. Yep. You can't just make your money and spend it all and say, man, I, I really hope one day I cannot do this.

You have to take some of your money aside and set it aside for you and let your money work for you, and it takes time for your money to work for you.

Matty A: It just does. Round in the corner to wrap things up on the state of [00:37:00] the real estate market, commercial and residential. Uh, this last week, Lawrence Yune, um, the Chief Economist Officer for N Na R.

Um, they did a kind of data dump on commercial and residential. And ultimately what the data shown, especially on residential, is just for the fact that this year, while it's gonna be stable, It is just gonna be a lot slower. I mean, if you go and look at the data that's been trickling out, and we thought as of last week after two consecutive weeks of inventory, uh, rising, which.

It wasn't drastic, but still rising, you know, two percentage points each week. Uh, this last week, inventory decreased 0.6% week over week, which is still down 52.6% compared to the same week in 2019. So again, we're still seeing historically low inventory levels. We're still seeing relatively strong demand, even in light of the [00:38:00] rates jumping up.

Uh, this last week, Fannie May. Just put out their data from q1. Which shows that foreclosures ultimately minus a very, very tiny uptick is not increasing. This is down 95% from the peak number of REOs in Q3 of 2010, so we're not seeing a lot of distress mounting there. The Fed survey banks reported tighter standards.

And weaker demand for all loan types. I think this is somewhat of the aftermath of, you know, the banking contagion and some of the concern that was there. But ultimately we're just seeing banks. Kind of tighten up their standards a little bit, and they're looking at making sure borrowers are strong and deals are strong, and they're not pushing money into the marketplace as freely as they once were.

We're seeing weaker demand for all loan types, so we also saw less people looking to. Get debt going into the markets, and I think people are starting [00:39:00] to be a little bit more patient and see where does everything land. And once the dust settles, we might see some of that increase again. But banks reported tighter standards and weaker demand for all commercial real estate as well as for all home equity lines of credit.

And for residential real estate as well, we saw reported weekly active inventory up 35% year over year with new listings down 22% year over year. Active inventory was up at a slower pace. With for sale homes up just 35% above one year ago, new listings, which is obviously a measure of sellers putting homes up for sale.

We're down again this week by 22% from one year ago. We saw rent growth continued to decelerate. We're seeing apartment construction at a 40 year high, and rents just aren't gonna be able to continue to grow at the pace or on the trajectory that they were. Over the course of the last few years because we're starting to see [00:40:00] now much more supply of units come into the marketplace for rent.

Supply jumps. Demand of course, doesn't keep up with that. We're gonna see rents decelerate a little bit. So I think overall we're just starting to see things based on what the Fed is trying to do to fight inflation. And now the, you know, the supply and demand economics and different verticals of real estate start to shift a little bit.

The market's cooling down a little bit, but nothing is ultimately falling. Out of the bottom, nothing is ultimately crashing. The financial side of, you know, the real estate economy is still very strong. It's just being a little bit more conservative right now. But we're not seeing bad loans getting written.

We're not seeing, you know, uh, bad borrowers getting approved. And I think that, you know, overall this is gonna be a steady. But also stable and strong year for values [00:41:00] in commercial real estate, and especially in single family real estate. But we will see certain asset classes, and I really think it's gonna be not in your mom and pop type of investors.

It's gonna be more so in some of these larger institutional players. That took on a little bit riskier debt to get into some of these opportunities starting to age out. And they're gonna have to figure out what they want to do, especially if the banks aren't working with them on the refis or working with them where the numbers pencil because of the cost of capital to get into something different.

So that's something where I think there will be opportunity there. Of course, there's always opportunities in every market. Um, I'm working on a medical plaza right now in a market that I already have a medical plaza and I'm finding a 10 cap deal. On a triple net, fully stabilized commercial property.

Boom. And this was an off market deal brought through a broker based on relationships. These types of deals are out there. They're gonna continue to be out there. People are always cycling in. And out [00:42:00] of commercial real estate and single family real estate. So as long as you're in the game, you're building the right relationships, you're having the right conversations, and you're building certain alliances, whether that's with capital partners, whether that's with private lenders or investors that wanna partner with you or get in on deals, or that's people that are looking to sell or are working with sellers.

There's always. Bear Mar, or a bull market somewhere, as Mr. Breed, well would say, money doesn't. Money doesn't disappear. So we will continue to track all of this data for you guys. Of course, we appreciate you tuning in each and every week. Don't forget to subscribe to the podcast if you are not subscribed yet.

And of course, if you enjoy any of the data, any of the content that we share and talk about, all we ask is that you take 30 seconds, leave us a review, whatever platform you want. Head over to million of Check out all the great stuff that we have for you guys. If you wanna take advantage of your free financial x-ray, come on, text the word x-ray to 8 4 4 4 4 7.

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