Parenting and Getting Better

By Jeff Kelly on July 14, 2023

The parenting phrase, “the days are long, but the years are short” might be a cliche, but it’s true on so many levels. Parenting is the most rewarding, complex, difficult, and exasperating thing one can do. It’s incredibly hard to do well. As I get older my memory of good parenting decisions I made becomes murkier and murkier. I can, however, remember almost every mistake with absolute clarity. The time I got angry when I shouldn’t have, the time I didn’t listen like I should have, my lack of empathy or my lack of understanding. There are so many times, where I wish I had been better, smarter and more patient. A better listener and a better example. I wish there had been fewer days when I was too tired to play or to selfish to read.

It’s not like playing a sport where you can remember the time you caught the ball, made the basket, or hit the home run. The good parenting moments just slide into the abyss of the past. They are there, they happened but it’s not in our makeup to mark them like our failures, or mine anyway.

In a lot of ways, it’s similar to managing a portfolio. You remember a few of the winners but what really sticks with you are the mistakes and the bad decisions. Of course, with a portfolio you can change it around anytime and reverse your errors. Parenting mistakes are etched into memory forever. Our kids never forget.

A few Fridays ago, our youngest daughter called with news that’s she’s pregnant with our 1^st grandchild. It was such a wonderful day. We are over the moon. I can’t wait to spoil her in every way possible. November 1^st looms as a very special day. It’s not easy to believe but this little one is going to have a little one. It was only a minute ago she was our baby but the “the years are short” indeed.

The markets are giving us chances to improve each day. Just when we think things will never go down again the rug will be pulled. We are at or close to that time. We’ve reached some extremes to the upside and a pullback seems in order.

The first earnings out of the gate from the financials were lukewarm at best. A deluge of earnings is on tap for next week. We will need a better showing to hold the market at the lofty levels we have achieved.

The best market news of the week is the great numbers out of the CPI and PPI. Inflation is continuing to decline. This takes some pressure off interest rates and makes potential declines look like opportunities to buy at better prices.

The chance to improve and get better is always out there. Whether as a parent, grandfather, or portfolio manager I’m going to do my best to move forward and be better. Have a great weekend.

CHARTS FROM THE WEEK PAST

Inflation as measured by the Consumer price index (CPI) goes from 9% to 3% and yields stay the same.

Some one is going to be wrong here.

The “tame prints came as our CPI diffusion indices plunged, indicating narrowing price pressures.”

“Airfares dropped -8.1% m/m, and are now down almost 20% y/y. Used cars fell less than we expected (-0.5% m/m), but based on Manheim data, they’re set to decline further in July. New car prices have stalled.” “We see core inflation moving down to 2% by 2Q24, but it will take a sharp increase in unemployment, and much slower ULCs to get there – a recession is necessary before inflation can stay down sustainably.”

Interesting deal between Shutterstock and OpenAI.

“Shutterstock today announced that it plans to expand its existing deal with OpenAI to provide the startup with training data for its AI models.”

“Over the next six years, OpenAI will license data from Shutterstock, including images, videos and music, as well as any associated metadata. Shutterstock, in turn, will gain “priority access” to OpenAI’s latest tech and new editing capabilities that’ll let Shutterstock customers transform images in Shutterstock’s stock content library.”

“Shutterstock says that, in addition, OpenAI will work with it to bring generative AI capabilities to mobile users through Giphy, the GIF library Shutterstock recently acquired from Meta.”

Michael Parekh believes AI will follow a path like the Internet evolution.

1^St the Chips to power the evolutions then moving to several levels ending with applications.

Lots of Semiconductor making equipment making its way to the U.S.

• “Recovering vehicle sales – set to avg 15.5m units here in ’23, vs. ‘22’s 13.8m – will be a modest support for overall consumer spending.”
• “The ‘modest support’ – suppressed by high prices & rates, and tighter lending standards – won’t be enough to prevent the recession we expect to start in 4Q.”
• “Better quality credits are also deteriorating – the jump in rates has already driven sub-prime delinquencies to pre-Covid levels.”
• “Production supports include the uptick in sales, pent-up demand, still-meager retail inventories, and cleared supply chains.”

Intra-Year drawdowns vs. S&P 500 annual performance.

We are likely close to a significant pullback.

Global yields higher everywhere but Japan.

Can it hold out forever?

Oil has likely made a bottom for the foreseeable future.

The low around 66.6 is has been tested a few times as we begin to refill the Strategic Petroleum Reserve.

The rate component of housing affordability is pricing out many buyers.

Global temperature continues to set records.

Current rates and conditions make renting more affordable than buying.

Obviously, coffee enabled all technological advances since 1698 AD.

The 4.2% drop in the Manheim used car index in June was the largest drop since the 11.4% drop in April of 2020, just as the pandemic was starting.

Consumer stress index is NOT stressed.

Big improvement year over year.

Deflation continues.

Producer Prices +0.1% year/year vs. +0.4% est. & +0.9% prior (rev down from +1.1%); core PPI +2.4% vs. +2.6% est. & +2.6% prior (rev down from +2.8%).

Misery Index, CPI + Unemployment rate falls to the lowest level since March 2020.

U.S. consumption moving back to less goods more services.

Part of the evolution after the pandemic.

Redbook Sales turn negative on a year over year basis.

Student loan repayments will be a headwind for discretionary spending.

Back to School spending is expected to be down.

UPS potential strike is a very big deal.

China’s exports continue to slide in June.

Cloud Adoptions now approaching 200 billion scale.

Credit spreads falling to the lowest levels in two years.

Great news.

Credit spreads in Europe also lower.

WEEKEND HOMEWORK

Interesting Stats:

At Vanguard, one-fifth of investors 85 or older have nearly all their money in stocks, up from 16% in 2012.

“The spirit of the times is ‘Don’t worry about the markets crashing. They will come back up and set new highs.'”

-Robert Shiller

America’s Retirees Are Investing More Like 30-Year-Olds

Last week, neo-Nazi flags were waved just outside the Chabad in Marietta, Georgia, and Temple Beth Israel in Macon, Georgia. Every year we say, “Never again,” and yet events like these still occur.

Georgia leaders voice concern over antisemitic demonstrations outside 2 synagogues

Remember, if it wasn’t for government handouts none of the Musk empire would exist.

New York State Built Elon Musk a $1 Billion Factory. ‘It Was a Bad Deal.’

AI image recognition models are powering the world’s next agricultural workforce:

Ryan Holiday is the bestselling author of Trust Me, I’m Lying; The Obstacle Is the Way; Ego Is the Enemy; Conspiracy and other books about marketing, culture, and the human condition. His work has been translated into over 30 languages and has appeared everywhere from the New York Times to Fast Company. His company, Brass Check, has advised companies such as Google, TASER, and Complex, as well as multiplatinum musicians and some of the biggest authors in the world.

Jocko Podcast 219 w/ Rose Schindler: Auschwitz Survivor. Never Give Up Hope. Inspiring.

A wonderful summer weekend unfolds. Get outside! It’s already mid July. There are only 60 days of summer left. Hit the pool, lake, or ocean. Feel the sun, hug a loved one. Experience life! I’m going to call two old friends. Tell ‘em I miss them, and we should get together soon. I hope you can do the same. Have a terrific time.