Grow Your Portfolio the Intelligent Way

Is the Juice Worth the Squeeze? 

By Jim Woods

I have a confession to make. I am in love.

Is this romantic love that I’m in? Well, yes, but that’s not what we are going to talk about today. Today, the “love” I want to talk about is the love I have for conversation, my love of exchanging ideas, and my love of persuading someone that what I think to be correct is a point of view that they might also want to consider. 

Now, first off, notice how I said that I am love with conversation, and not with argument. Yes, from a formal education perspective I’ve been trained to analyze complex arguments. I spent my undergraduate years at UCLA honing this skill while earning my BA in Philosophy. But argument in the adversarial, confrontational sense is not what I love. 

What I love is a conversation where both parties can exchange even diametrically opposed views and still come out of the experience with a richer understanding of the opposing side, and perhaps a greater understanding of the strengths and flaws of their own side. And while this can be difficult at times, it also can be a profoundly rewarding experience. 

Yet as my father often told me, when you engage in any difficult pursuit in life, you want to, “Make sure the juice is worth the squeeze.” That was his way of saying that if you engage in any pursuit or any exchange, you should first consider whether it’s worth your time and effort. 

Unfortunately, in our ultra-polarized political and social milieu, it has become increasingly difficult to come to the conclusion that the juice is worth the squeeze. That’s not only true of opposing sides in an issue, but often from people who are mostly of similar opinion on many topics. 

I’ll relate two personal experiences here to give you an idea of when the juice is not worth the squeeze, and when it is worth it. 

Very recently, I attended a gathering of libertarian/free-market types. This event had two very prominent speakers, and they conducted an excellent Q&A session after interesting presentations. One of the questions, was, however, incredibly disturbing. 

A woman had asked a question about the pandemic and the lockdowns, a question which contained in it a very negative assessment of Dr. Anthony Fauci, and how he has handled the public communication on COVID-19 for the past year. Then she ended her question by asking the speakers the following: “So, who is worse, Dr. Fauci or Dr. Mengele?”

The room sort of gasped, and rightly so. And to their credit, the speakers pivoted, basically brushing the comment aside as that of a disturbed person who equated one of the world’s leading experts on immunology and infectious diseases, and a man credited with basically conquering the AIDS epidemic, with one of the most despicable characters in human history, a Nazi doctor who performed medical experiments at the Auschwitz death camps. 

Later that evening, I was engaged in a great conversation with several people, and this same woman rudely interrupted our conversation to start talking about her agenda. I couldn’t help but address her with my assessment of her sickening question, asking her if she really believed that Dr. Fauci and Dr. Mengele were similar. Her answer (prepare to be stunned): “Dr. Fauci is worse, at least Dr. Mengele didn’t kill anyone.” 

I immediately knew that conversing with this woman was an example of the juice not being worth the squeeze, because what do you say to someone who is this ignorant and this confused? Does she not know that Dr. Mengele was called the “Angel of Death?” A person such as this is not subject to rational discourse, and she proved it with basically every word she uttered. My advice is to not waste your time with these sorts. The juice ain’t worth the squeeze. 

On the opposite, and much more hopeful, end of the spectrum was an interaction I recently had with a neighbor of mine. This man was a self-proclaimed political progressive who is proudly in the Bernie Sanders wing of the Democratic party. 

He and I were talking politics during a weekend barbecue at a nearby ranch, and I told him that while I disagreed with Sen. Sanders on policy, I understood why his views had such strong appeal. In fact, I even referred my neighbor to my Feb. 20, 2020, article on the subject

I explained that the reason why I thought Sanders is so appealing to so many is because he doesn’t just talk about policy, he talks about policy in moral terms. Policy isn’t just about what works or what maximizes the social welfare. Policy, according to Sanders, is about what’s morally right and wrong. 

This Sanders supporter admitted that he never thought of it that way, and that he agreed with me upon reflection. From there, I was able to talk about this issue in moral terms, explaining to him that I thought it was immoral for government to punish the highest achievers in our society and to redistribute their achievement to others by force (i.e., taxation). 

My moral assessment of that premise is that it is theft, and prohibition against theft is a moral principle that every society in history has abided by. I further explained that what I would like to see is a politician arguing in favor of capitalism — not just on utilitarian grounds, but also on moral grounds.

Those grounds are that capitalism is the only economic system that supports individual rights, property rights and freedom from force and coercion, either by other individuals or by a collection of individuals known as government.

The result of this exchange was that my neighbor learned more about his own position, and why he held it. Moreover, he learned much more about my position, and why I held it. And not just in some tribal, red state vs. blue state paradigm. Rather, I was talking to this man about moral principles, and how they operate in politics. 

We both came away from our discussion gratified, and in this case, the juice was definitely worth the squeeze. 

So, whenever you’re interacting with others, or whenever you choose to take on a difficult task (or really whatever you choose to do in life), I recommend determining whether the juice is worth the squeeze. 

If it’s not, then find a squeeze that is worthy of your life. 

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ETF Talk: Hedge Against Inflation with This Multi-Asset ETF

The SPDR SSgA Multi-Asset Real Return ETF (NYSEARCA:RLY) is an actively managed fund that attempts to hedge against inflation by investing in other funds with exposure to real estate, commodities, Treasury Inflation-Protected Securities (TIPS) and natural resources companies.

RLY seeks to achieve real return consisting of capital appreciation and current income. The fund invests in exchange-traded funds (ETFs) registered under the Investment Company Act of 1940, as amended, to track the performance of a market index, exchange traded commodity trusts and exchange-traded notes (ETNs).

The fund’s portfolio may invest in certain exchanged-traded products that pay fees to the fund adviser and its affiliates for management, marketing or other services. RLY provides exposure to inflation-protected securities issued domestically and internationally, domestic and international real estate securities, commodities and publicly traded companies in natural resources and/or commodity businesses.

These companies may include agriculture, energy, metals and mining companies. The fund’s investment process relies on a proprietary quantitative model, as well as the adviser’s fundamental views regarding factors that may not be captured by the quantitative model.

Chart courtesy of StockCharts.com

While a low fee and strong investor interest help to make the case for RLY, performance has been somewhat disappointing in recent years. Over the past year, as you can see in the chart above, RLY was hit hard by the pandemic, but quickly recovered and climbed to new highs. However, please conduct your own due diligence in deciding whether or not this fund fits your own individual portfolio and investing goals.

Unlike some of its peers, RLY has attracted sufficient assets and liquidity since its April 2012 launch to signal long-term viability. Investors might be enticed by the relatively low fee, or perhaps they like RLY’s value proposition returns above the rate of inflation.

The fund’s allocations — made easier to grasp by an ETF-of-ETFs structure — are consistent with this goal. RLY holds TIPS, but it also has direct and indirect exposure to commodities, including a huge stake in a global natural resources ETF (GNR) and real estate exposure via real estate investment trust (REIT) ETFs.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You may see your question answered in a future ETF Talk.

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Talking Politics, Ideas, and Gold with Good Friend Rich Checkan

What do you get when you bring two Renaissance Men together to discuss the current political, social and financial market craziness?

You get a really fun, lively and informative conversation between myself and former U.S. Army officer, West Point graduate and current expert on investing in precious metals, Rich Checkan, of Asset Strategies International.

In this episode, Rich and I talk about the Capitol Hill insurrection, the state of societal discord, the importance of listening to others and the current and future prospects for investing in gold and other precious metals.

If you want to sit in on two friends discussing critical topics of the day, and how to approach those topics Renaissance Man style, then this is the podcast for you.

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In case you missed it…

The $100 Trillion Bitcoin Bet

We all know that cryptocurrencies, and particularly Bitcoin, are all the rage right now in the investing landscape.

And while raging asset classes such as this tend to be extremely volatile, they also tend to be extremely profitable for intrepid investors who know the value of being early adopters.

One such investor also happens to be the CEO of one of the premier tech companies around today, and no, I’m not referring to Elon Musk of Tesla Motors (TSLA), although his company is in on it, too. Rather, I am referring to MicroStrategy Incorporated (MSTR) Chairman and Chief Executive Officer Michael Saylor.

As head of one of the best companies in the enterprise analytics and software security space, Saylor is betting big on Bitcoin. In an interview with CNBC, Saylor talked about the news that his company added some $1 billion in bitcoin to its balance sheet. More specifically, the company purchased 19,452 bitcoins. That bumps up the company’s bitcoin holdings to 90,531.

That’s certainly a vote of confidence by one of the leading tech companies; however, what really made news was Saylor’s bold prediction that Bitcoin’s market value would rise to $100 trillion one day!

To put this very robust call into perspective, the current market value of all bitcoin is about $1 trillion. That’s a 100X call on an asset class! Here’s the money quote from Saylor explaining his reasoning behind the provocative prediction: 

“There’s a $500 trillion monetary planet and the outer layer is currency, then you’ve got stocks, bonds, real estate. There’s $10 trillion worth of gold in there, $1 trillion of bitcoin in there. Bitcoin is going to flip gold, and it’s going to subsume the entire gold market cap.” 

The “entire gold market cap” is certainly a very bullish Bitcoin call, and one that I must disagree with here, both practically and in principle. Practically, gold isn’t going anywhere because of its actual physical utility. It’s not just for coins, it has both ornamental and industrial uses.

However, what I do agree with Saylor on is that Bitcoin still can be considered in the nascent stages of widespread adoption. Think about this: Bitcoin was first created in January 2009. That means it’s only 12 years old, which is the average age a human male enters into puberty. 

I don’t know about you, but I remember puberty as being a confusing, exhilarating and extremely formative time in my life, and you might say that’s what’s taking place with Bitcoin. 

Yet as the digital currency matures, and as it continues working through its growing pains, I suspect it will continue to go “mainstream,” and that means more and more companies will add bitcoins and other cryptocurrencies to their respective balance sheets the same way MicroStrategy, Tesla, Square (SQ), PayPal (PYPL) and many others already have. 

Now, the Saylor Bitcoin call is yet another example of why every investor needs to know about cryptocurrencies. More importantly, the surge in the price of a bitcoin, as well as the dozens of other cryptocurrencies out there, is an opportunity for you to profit — even if you never actually own a cryptocurrency. 

But how can you benefit big time from cryptocurrencies (and by big time I mean over 5,900% over the past year), and still not actually own any digital currency? 

You can find out right now by watching my special cryptocurrency summit that we’ve titled, “My $20 Backdoor Bitcoin Play.”

This summit is free, and all you need to do to attend is click the above link. Hey, isn’t it time you found out a lot more fascinating facts about cryptocurrencies — and how you can make huge profits from this tsunami-like wealth creation wave in this potential $100 trillion sector!

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Don’t Be A Puppet 

“It’s time you realized that you have something in you more powerful and miraculous than the things that affect you and make you dance like a puppet.” 

— Marcus Aurelius

Stoic wisdom is nearly always useful, and there’s a reason why stoicism and the life lessons that it teaches are more popular today than they’ve ever been. Here, Aurelius reminds us that you don’t have to be a slave to others, or to bad thinking or to bad circumstances. Rather, it’s how you choose to feel about things that allow you to emancipate yourself from the tyranny of the outside world. Remember this the next time you feel perturbed about any situation. 

Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.

 

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