TGCI 138: Roaring 20s or the Great Depression? Transitory Inflation or Hyperinflation?

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Episode 138: Roaring 20s or the Great Depression? Transitory Inflation or Hyperinflation?

Copy of EP #18 - 2 Guests

Summary

In today’s show, Pancham interviews Catherine Putney – economist and speaker at ITR Economics.

As a graduate of master’s degree in economics, she has proved her skills and has become one of the key members of ITR’s Leading Indicator Team. With her insights that helped with ITR Economics’ 94.7% accurate predictions, Catherine has been helping other investors to help reduce risk and create wise business decisions!

This episode will be jam-packed with insights as Catherine shares her forecasts on where the economy is going so we can prepare for what’s about to come. She will share how history is repeating itself with a 2030 Great Depression prediction, why there is inflation in asset prices, and why today is the best time to invest in real estate.

 

Listen and enjoy the show!

PanchamHeadshotTGCI
Pancham Gupta
Screen Shot 2021-06-15 at 11.54.04 AM
Catherine Putney

Tune in to this show and enjoy!

Copy of Quote #00 - 1 Guest

Timestamped Shownotes:

  • 3:58 – Pancham introduces Catherine to the show
  • 5:26 – Her background on helping others with her forecasting skills
  • 7:01 – Why the economy is slowly getting back on its feet
  • 11:46 – Her concerns in asset trends and why another Great Depression will happen
  • 19:50 – The overall economy trendline in the post-covid environment
  • 22:42 – Her prediction on the trends in interest rates
  • 24:39 – Where you can invest your money now (and why you should look out for other countries!)
  • 29:45 – How motivational speeches helped her to be productive
  • 32:47 – Taking the Leap Round
  • 32:47 – Househacking as her first investment
  • 33:53 – What she reminds herself whenever fears in investing arises
  • 34:58 – Her investment that didn’t worked out as expected
  • 35:57 – What investors should understand in the law of economics
  • 37:20 – Where you can connect with Catherine and ITR Economics

3 Key Points:

  1. Every industry reacts differently as it varies on the overall consumer behavior. You can have asset inflations in one type of industry while the other has oversupply.
  2. History could repeat itself as it is predicted that a Great Depression will happen in 2030. Although a depression is predicted, economic growth is also expected when you’re looking at the whole picture.
  3. Keep an eye on the economy in other countries as they would most likely be first affected by economic changes.

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Read Full Transcript

Welcome to The Gold Collar Investor Podcast with your host, Pancham Gupta. This podcast is dedicated to helping the high paid professionals to break out of the Wall Street Investments and create multiple income streams. Here’s your host, Pancham Gupta.



Hey everybody, it’s Robert Helms, host to The Real Estate Guys radio program, and congratulations for getting educated and listening to The Gold Collar Investor.

 

Pancham Gupta: Welcome to The Gold Collar Investor Podcast. This is your host, Pancham. Really appreciate you for tuning in today. I’m absolutely pumped for today’s episode, and you will know why. The economy is opening up, it feels like the things are going back to normal, asset prices are ever rising, and I’ve been talking to many different group of people to get their opinion on what they think where we are heading. And one group of people, they are sitting on the sidelines and waiting for the downturn to come. They are hoarding cash so that when the opportunities come, they will pounce on it. And you hear that for some private equity firms too in the news. And then there’s another group of people, which think, they think that it is the best time in the history to invest. And it’s like the roaring 1920s where the things went up and up and up before the depression came. So, which one is it, right? That some million dollar question. Yogi Berra once said, it’s tough to make predictions, especially about the future. The problem is that everything that we do in finance, ultimately relies on some kind of belief of how the future will play out. As a result, we often search for answers by listening to different opinions on where the market is heading. And there are many, many pundits out there. But who do you really listen to? That’s the question. Wouldn’t it be great, though, to be given a heads up on events like 2008 several months before they happen? Wouldn’t it be great if you knew when the pandemic were to start and the market is going to tank, right? Or wouldn’t it be great that if there was someone who could tell you for sure that when in the next 10 years is the most profitable time in history and when they expect the recession or depression to come? And you should invest in which asset classes, and you know, all that stuff? So now, it may not be important for me to know, and like an economist, but it is very important to understand their track record. How frequently do economists tell you their accuracy? Wouldn’t that be useful information? After all, if you could find a source that has been correct, over 90% with both positive and negative predictions in the US economy over the past 70 years? Would you take their predictions seriously? I would. ITR Economics is a firm that I have been following for last two years now. They have been right on 94.7% of their economic forecasts over the last 70 years or so. So, on this week’s episode of The Gold Collar Investor Podcast, I have invited Catherine Putney of ITR Economics. Make sure to tune into today’s show where Catherine talks about the updated forecast of the remaining of this year and also what she thinks is going to happen in the next decade or so. Before I invite Catherine, a bit about her background. Catherine specializes in applied research regarding business cycle trend analysis, growth cycle trend analysis and the utilization of cyclical analysis at the business level. She earned a master’s degree in economics from the University of New Hampshire. As a key member of ITR’s leading indicator team, Catherine applies her skill sets when forecasting company and market data and sharing those findings and their business relevance with ITR clients. Catherine and the team at ITR economics have put their expertise to work for companies from a wide range of industries, including manufacturing, chemicals, fibers, healthcare, distribution, real estate, construction, and technology. Her economic insight and forecasting experience plays a key role in maintaining ITR Economics’ 94.7% accuracy rating. Catherine, welcome to the show!

 

Catherine: Thank you, Pancham. I’m happy to be here. 

 

Pancham Gupta:  So happy to have you on the show. I’ve been, you know, watching ITR economics stuff for some time now following you and your company.  You guys do some great stuff. So, thank you for your time. Before we get started, are you ready to fire up my listener break out of Wall Street investments, 

 

Catherine: I am ready to roll!

 

Pancham Gupta: Great. Thank you, Catherine. So, you know, let’s start off with why don’t you tell our listeners about your background and more importantly, the person behind that background?

 

Catherine: Yes, my name is Catherine Putney, I’m an economist at ITR Economics. I’ve been there for about five years, going right into ITR from my master’s degree in economics as well. So, I love to fold in what kind of boots on the ground economic perspective, because a lot of people can sometimes think a lot of investors, can sometimes think very high level rather than looking at, you know, what is the data? What are the data points showing us? What can we find, from the economic information that we have that’s meaningful to you that, you know, within the next, during this type of conversation, I want you to be able to say, okay, you know, what, let me go and do something a little bit differently than I hadn’t thought about before, based off of the conversation that we’ll have today. And I focus on many different markets. And I know, I do want to preface this with the fact that I am not an investment banker, I did not get my degree in finance or investment banking. So, a lot of the conversation will be very, my economic approach to a lot of the questions and the concerns, and even the forecast moving into the future today. So, I’m really excited to have this conversation. 

 

Pancham Gupta: Great. You know, I tell you, I’ve listened to so many economists over the time and there are very few of them who can actually relate the on ground data and actually talk about it in English. So that the average person can understand so really looking forward to that. So let me start with this, right. There is a lot going on right now in the economy in the last one and a half years. Some unprecedented things have happened, right, starting with the onset of the pandemic, lockdowns, stimulus packages, moratoriums, elections, etc, etc. It’s been a roller coaster ride, honestly. So, at this point, as we are recording this in June, middle of June 2021, the asset price inflation is happening at a record pace, you know, be it stocks, the crypto, be it real estate, I’m into commercial real estate, I see that there, be it single family homes that supply and demand story there. So, all of this has been fueled by fiscal and monetary policy right? With this new $1.9 trillion stimulus bill being passed, right, that was passed in not new anymore. It’s only three months but feels like forever. Yeah, many believe that we are in a forever bull cycle. So, at what point do you think this will change If at all?

 

Catherine: Great question because I know that -inaudible – and I sure have a forecast for inflation in general, and every industry is going to react differently, you can have tech asset bubbles or asset inflation going on in one area whereas there may be an oversupply in a different type of commodity in another aspect that could be driving prices down, right? The law of economics is that the more supply you have, the lower pressure. But luckily, COVID-19 generally is in the rearview mirror, we’re exiting out of this downturn in this low. A lot of people here in the news or read in the media, that’s V shape recovery here, probably V shape, W shape, U shape, a shape all the letters of the alphabet, 

 

Pancham Gupta: J shape. 

 

Catherine: Yep, so essentially, what the case shape is, is that some industries are, we’re benefiting from COVID, some weren’t. So, you see ups and downs of that. But at the end of the day, we are getting back on our feet again in the economy, GDP is starting to see some really positive numbers, we’re expecting overall consumer behavior to improve as we move through this year, as we kind of get back on our feet again in a post COVID world. And what that means is there’s going to be inflation, folding in the fact that we’re now pumping all this money into the economy. I mean, personal savings, typically in times of recession don’t go up. And if you follow the chart, I wish I could show you at the moment, if I showed you the chart of overall U.S personal savings, it’s just about two point, I believe 2.8 trillion now currently at the moment, which spiked up since COVID, because you’re pumping money into people’s accounts with the stimulus checks that will naturally cause inflation in general, but from an economic perspective, we are expecting a little bit of slowdown moving into late 22. So, this year will be a better year. Next year, we’ll still generally for the majority of the year be a better year, supply chain issues folding in the higher demand will cause inflation, commodities  right now, especially lumber. 

 

Pancham Gupta: Yeah, lumber prices, a lot of these, yeah. So, my question here, right, you know, following up what  you just said, and inflation data just came out, right. And it came out much higher. And a lot of people have been saying this for some time, that inflation is here to stay, right? And some people now are saying Fed came out, said that it’s transitory, right? Some people say no, and that’s just not gonna happen. It is here to stay. Who knows how long? So, what’s your take on that?

 

Catherine: Well, it’s really difficult, you know, you can’t really think in a linear type of way, every business, every data point, when you look at the cycles, you just can’t think inflation is going to go up and up forever. So, we are in inflationary aspects right now. But given the slower demand that we’re going to be going through as we move into 2023, that will contribute to an easing of that inflation. So still, I mean, if you’re not considering raising your prices, or considering the wage growth is certainly there, that’s going to impact your bottom line. You know, you got another thing coming, because that’s we’re in that environment right now. But it’s not going to stay that way forever, it will, we will see this this general temperament of inflationary trends, but it is different on an industry by industry basis, semiconductors, and housing, are seeing, you know, the chip shortages, that is contributing to a lot higher inflationary prices relative to other industries, which may not see as much of that positive pressure going up.

 

Pancham Gupta: Right. So, you know, let’s break inflation down into two separate categories, right. One, where we are talking about, you know, things that CPI measures, you know, daily food, groceries, oil, all that. And also lumber, you can put that in there, because it’s more, you know, for building stuff, all of that on one side, and then let’s put asset like, you know, assets on the other side, which includes gold, silver, or commercial real estate, single family homes, and some of these stocks right out there. So, when we talk about, I mean, I definitely see your point on this side, which is the consumer based products and all the supply chain and dynamics that are going on. But what about asset price inflation? Like what do you think about that? Like, do you think that’s going to continue given all the printing that’s going on? And this infrastructure bill that’s coming out? You know, what’s your take on that?

 

Catherine: Generally, the quick answer is generally yes, is that we are going to see the generally higher inflation on that asset side. And the reason for that is when we measure the data on that side, compared to let’s say, the CPI, which is much more stabilized, right, we have the typical, the Fed deems at 2.1% as the healthy level. If you chart the producer side asset prices relative to consumers, you’re going to see bigger swings. On the producer side, on that asset side, you’re going to see those higher highs and lower lows and the data point because they are more volatile than a more stabilized consumer. You know, when we look at consumer trends, prices are always sticky on the way down than they are on the way up, you know, you can you see all these inflationary trends coming your way, from a producer standpoint, you’re quick to raise prices to your customers, your clients, whoever is, you know, downstream in your industry, whereas prices go down, you’re not going to be as quick on pulling that trigger of lowering your prices to benefit from what’s going on, they’re going to try to gain your market share. So, from one particular trend that I really like to look at, and another cool data aspect, which may not be a great conversation to have right now. But it’s I think, worthwhile. And, you know, it’s transparent, right? It’s not sometimes the data doesn’t tell us where we want to go. And it’s more heading down in the negative direction. But wouldn’t you want to know at least that we’re heading into a certain, you know, downturn in 2006 2007 if you had known the great recession was going to happen ,what type of decisions would you be making differently in 2006, that’s what we’re here to do. We’re here to tell you where the direction of the economy is going and how you can prepare for it, to right now be proactive rather than reactive. So, tying back to my comment on asset prices, let’s look at the performance of the economy as referenced by corporate profitability. Corporate profitability, that’s generally been stagnating as of lately that makes sense we’re in this this the general impact of COVID didn’t really do well on a lot of companies, bottom lines, but then you also chart the same time the S&P 500 and what’s going on with the prices there, logically, they should move with one another. Or you should see when Corporations are profitable, that’s when their asset prices or their stock prices move in a similar direction. When it’s high, the stock price goes up, when it’s low stock price goes down. What concerns me is the latest data, I like to call it the alligator mouth,  where we are seeing deviation where corporations are starting to stagnate with their profitability, but yet at the same time, the S&P 500 continue to go up. And it’s somewhat American, what we went through 20 years ago, with the tech, the tech boom, the same thing happened. And in order for that reconvergence, to connect again, we need one of three things, we need either a huge drop in the S&P 500, the stock market, generally speaking, we need a huge spike in corporate profitability for those lines, data points to connect or somewhere in the middle. That’s what we saw 20 years ago in the early 2000s. downturn. And I don’t expect the first two options to happen. I’m thinking that, you know, we’re not, we don’t forecast the stock market, but logically, for those to reconverge, we need one of those three things to happen. And so, I’m keeping my eye on those trends each and every day.

 

Pancham Gupta: Right? So, can I have a counter argument to this? So, what is, not a counter argument, but what is different between, what it was 20 years ago to now is the liquidity, right? Like the Fed has never pumped in a liquidity like this ever before, right? Fed is like on your side, this put so many things on their balance sheet. And the interest rates are very, very low as compared to what they were in 20s. So, the earnings yield, the P e ratio like IE, the inverse of P e ratio, right? was in sixes and the interest rate was in six, sixes . And you know, the overall net difference delta between the earnings yield and the Treasury was very low, close to zero. And now it’s the other way around, where the rates are like, 1, 2% you know, and the earnings yield, even though, like you said, their profitability is very low still, it is the delta between those two is still high. Do you think that liquidity is going to evaporate at some point that would cause us to change or given the way we have the liquidity now? Like, do you think this is the new way of you know that this is a new way? The new world that we’re living in? You see what I’m saying? 

 

Catherine: Yeah, no, I think I mean, the issue with, when we look at it from a stock market performance, or, you know, more finance side is things can, you can, businesses and corporations that are publicly traded can do things that manipulate the PE or the, you know, stock buybacks or, or doing certain things that can jeopardize the number in a non-sensible, logical way. But I think generally, we are in somewhat new times, I firmly believe that could 20 years ago, compared to today, there’s just a lot more awareness because of I mean, honestly, social media. Look at you know, Robin Hood, people can go on in and create two movements in the stock market there that you never would have been able to do that before the you know, the cell phone was around at all you see movements here and there with was the AMC the movie theater and other particular stories that didn’t make sense. So, I think as we move through the next, let’s say, 10 years, and if you’re familiar with ITR, you’ll know that we’re calling for apocalyptic depression and in 2030, 2030, we will generally, for lack of a better word fall off a cliff. And so, the next 10 years is good leverage right now to take advantage of the general inflation that we are going to see the general appreciation of asset markets. So, getting outside of just strictly, you know, the stock market, real estate’s a huge investment opportunity, especially right now, whereas in 10 years from now, if you potentially could have that debt paid off, that’s a source of income for you, God forbid that you know, are out of a job at that time, you still have that cash inflow, if you can get into the real estate market. So, there are, it’s about being aware of the direction of the economy and where we can put our money now, to brace for impact to me, that’s when people make their money, buy low sell high mentality. So, if you’re aware that this is coming our way, start moving your money around right now, or even as we creep up to the great recession in 2030, and nine years from now.

 

Pancham Gupta: Yeah, which is quite a long way away. so far. It feels a long way away, but it will just pass you know, like that. So, you know, I want to get to this question of yours. Sorry, this comment of yours that where to put money in a bet. So, what do you think like, would you compare this time that we are in right now 2021 as similar to what we had in roaring 20s in 1920s when the economy, given that the economy is opening up, like you said, people are going back to work, and everyone is spending money on vacations, I can hardly find any rental cars when I’m looking for one because there’s a supply chain shortage on the cars to everything, actually. So. So how would you compare this to roaring 20s? And I know you said, in 2023, you will see a little bit of depth in this. But are you talking about a recession or just a stagnation of airy, you know, and two years from now what we are we will be, and it will just stagnate at that level.

 

Catherine: So, the theme is, it’s going to be very similar to what we went through a century ago. And the century ago, we were coming out the roaring 20s followed the Spanish flu. And lo and behold, we’ve been we’re in this COVID world, and we’re going to see general ascent, moving through the next nine years. A lot of people dismiss the fact that 100 years ago, the roaring 20s, there were three recessions in the roaring 20s. 

 

Pancham Gupta: Oh, wow. I didn’t know that. So can you elaborate on that a little bit. 

 

Catherine: So, the overall trend line for that decade was generally ascent, you still saw if you drew out trendline, it was still thin, it wasn’t impervious to those, those small dips here and there. And recession is, recession and depression are very different. So, when I talk about the roaring 20s, they weren’t three recessions, that’s what we’re going to be heading into for the next decade is the overall theme is the economy will generally improve with certain levels here and there. But it will be much better nine years from now than where we are today if you drew that overall trend line. So, we will go through downturns, 2022 and late 22 and 23. But it’s not going to be a fall off a cliff type of downturn that we’re going to be seeing in 2030.

 

Pancham Gupta: And after we go through this downturn in 2023, when do you think it will go back up? Is it 2024?

 

Catherine: Yep, 2024, and into 2025, we’re going to see a rebound again. And I mean, every economy, every market, every business goes through cycles of ups and downs. And yet to this day, we have over 10,000 indicators in our database at ITR. I’ve yet to see one that has just gone straight to the moon and hasn’t seen a peak. But your business can’t continue to reach 100% growth each and every year, there’s going to be cycles, and it’s about identifying when that’s going to happen 2024, 2025 that’s when that upside, the upswing is going to happen. 

 

Pancham Gupta: Right. Okay, cool. So, let’s talk about like, okay, actually, before I go to that question, I have one more question on the interest rates, do you think they’re going up in the next four years or two years? What’s your take on the interest rates?

 

Catherine: Yes. So right now, the Fed funds rate, I believe, is trading at around 0.25%. That is zero and, and 0.5? Yes, I don’t think we can state maintain at this level forever, but there is somewhat, I believe right now for a near term level of PTSD, that they’re acting too quickly on raising interest rates, even despite what we’re seeing and inflation. Longer term, I’m talking as we move into later in 2022, later next year, that’s when we might start to see some small rises. And it’s, it’s really interesting, you know, going out when I go and speak to a lot of individuals is there’s a lot of people, you know, my age, or people that are, you know, near my age, have never seen the type of interest rate environment that a lot of people in the 70s and the 80s they went through. So, seeing no small amount of a bit increase in the Fed funds rate is nothing to a lot of these other demographic trends that are older people were saying, you know, they got their mortgage on their house at 25%. was great. It’s crazy compared to when you look at it from a relative perspective. And there’s a funny, funny chart that I used to show, and it talks about if you want to know the forecasts of where interest rates are gonna go, you look at the height of the Federal Reserve Chairman. So, you had Volcker, who is really tall Greenspan, Bernanke, Yellen, it was a general ascent and that’s what we saw. But then I mean, can’t really get any shorter than Janet Yellen. I don’t believe so. The Powell came in, interest rates are going up.

 

Pancham Gupta: So that’s the sign, you know. That’s a funny, funny analogy. Okay. All right. So, nothing to worry about this year, but some maybe next year. Okay. Got it. So going to this question that you alluded to before. So, what do you suggest? Again, these are all suggestion I know you’re not the financial advisor or investment banker. What do you suggest where people who have cash right now where should they put their hard earned money?

 

Catherine: The one main thing that comes to mind is real estate. Near term, I mean, depends on your long term goals, depends on your long term plans, are you nearing the retirement status? Are you a young person that can take more risk with your investments that changes your behavior and what you want to be putting your money into. At the moment, I think just asset prices in general from someone that’s a millennial that has a while to generally appreciate this in the stock market relative to let’s say, you’re someone that does, it’s older that’s nearing retirement this year, next year, we’ve seen a lot of early retirement being taken in COVID because people are people that are older become more risk averse with their decisions. They don’t want to risk you know, the money in the stock market. If it fell tomorrow, their 401k, or their retirement would be gone. Whereas I’m more willing to take that risk. So real estate’s one of them. The big thing to watch, too, is as we head into the later parts of this decade, keep an eye on other countries as well, because the reason for this depression that we’re calling for in 2030, is going to be worldwide. And there are other countries that are more vulnerable than the US they will tip first. Once they tip, that’s when you want to start calling up your financial advisor moving money, let’s say out of the equities market, into bonds in the book called Prosperity in The Age of Decline that our CEO and President Brian and Alan Beaulieu wrote a great read. And it talks about, you know, let’s say put your money into bonds in Switzerland, Canada, and Australia with the three countries that they’ve kind of advocate to put your money into just from a financial reason. They’re somewhat of a safety net, in terms of putting it into bonds, and the piece of information that’s going to pull the trigger for me to start moving money around. is when Japan tips over.

 

Pancham Gupta: In Japan? What do you mean by that? 

 

Catherine: One of the biggest reasons for this 2030 depression is largely demographics. In the US, we have 10,000 baby boomers retiring each and every day, from now until 2030. And Japan’s essentially has an upside down or I would say, a triangle, the pyramid. Usually, you want to funnel from a population pattern, you want every generation to be larger than the previous Yeah, support the elderly. That is the opposite in Japan, they have such a large elderly population and their immigration policies followed by me don’t know if you know, China, but I’m not sure how Japan if they adopted the one child policy, but their population patterns are not in a favorable set.

 

Pancham Gupta: Yeah, what I’ve heard is they don’t want to even though they don’t have this kind of policy, but they just don’t like to have kids because they’re so overworked, over like they just don’t feel like having kids.

 

Catherine: The sale of adult diapers in Japan surpasses baby diaper sales every year. 

 

Pancham Gupta: Wow!

 

Catherine: And their government, their government is somewhat now realizing the problem in there, the government’s funding an app such as Tinder, or, you know, their government is paying for dating apps, because they want their citizens to go out and make and make babies essentially. So, they’re trying, they’re trying, but they’re the most vulnerable meeting once I start to see them tip over, I know the domino effects going to take hold for a lot of other countries, probably China right after that. But then the US will follow too. So, keep an eye on Japan and China

 

Pancham Gupta: Got it. So, what do you mean by like, what would you look at in the data that would tell you that the Japan has tipped over? Is it the stock market prices? Or what is it that you would look at because Japan themselves, Bank of Japan is the biggest holder of their own stocks are there,

 

Catherine: We like to look at a big indicator that we track is the industrial production. So even for the US and most other countries. That’s one of the macroeconomic barometers that we like to look at purchasing managers index. That’s one of my personal favorites to track is a leading indicator, it tells us where the industrial economy is going to be heading well into the future. So, it’s a great leading indicator, global PMI with JP Morgan publishes their global Purchasing Managers index data. So that’s a big one. Just other specific macroeconomic trends in Japan, not necessarily the stock market data, though.

 

Pancham Gupta: Got it. Cool. All of this is great, great information. Thank you so much. And listeners, if you don’t know ITR economics, do check them out. They have 94.7% forecast accuracy rate. So, I would definitely take everything that Catherine is talking about very, very seriously. All right. Sounds good. So, you know, I would ask you one question before we move on to the last question before we move on to the next section of the show. And that question is this and do you have a morning routine that you follow? And do you think that attributes to your success?

 

Catherine: A morning routine? Yeah. Bud’s Coffee, I would say is I read Oh no, I listened to me forget where he spoke, there was a commencement speaker that talked about, always make your bed in the morning. And even if you don’t do anything else that day, you still made one sort of accomplishment and you got one thing done. And it was I really encourage you to look it up on YouTube or on the internet as it was. I think it was in Texas. It was a general.

 

Pancham Gupta: Yeah, a general. I remember and I remember watching that one that he said, you know, start your day with making your bed. It’s a commitment that you’re making.

 

Catherine: Yep. So that’s my motto, besides, you know, reading the news and enjoying my morning coffee.

 

Pancham Gupta: Okay, got it. Great. Thank you, Catherine. We’ll be back after this message… Do you ever feel overwhelmed by the thought that you have no time after work, and family time to learn about investing? Do you feel left behind that you are not putting your money to work for you? Do you want to create passive income, but you do not know where to start? If so, I have good news for you. I have created an investor club, which I call The Gold Collar Investor Club for accredited investors, I will be putting together investing opportunities exclusively for this group. These are the opportunities where I have done my part of the due diligence for you and will be investing my own money alongside you. If you are interested, please sign up on thegoldcollarinvestor.com/club, I repeat thegoldcollarinvestor.com/club.  I will reach out to schedule a 30 minute phone conversation to discuss your investing goals. Once you sign up, this can be a good opportunity to diversify and take some chips off the hands of Wall Street to produce some cash flow. And in case you are wondering, what is an accredited investor, accredited investor is someone who has earned more than $200,000 as filing single, or more than $300,000 filing jointly for the last two years. Another way to qualify as an accredited investor is if your total net worth is more than $1 million excluding your personal home. It includes your stocks, 401k’s, IRAs, cars, etc. Just not the equity in your personal home. If this is you, I would highly encourage you to sign up… So, let’s move on to the next section of our show, which I call taking that leap round. I asked these questions to every guest on my show. My first question for you, Catherine is when the first time was you invest in a diversified outside of Wall Street if you have,

 

Catherine: Actually, very recently, and I’m surprised you can’t see any of the mess behind me right now because I’m in the middle of a move. I just I just purchased a multi-family home so that is my first major investment outside of Wall Street. So, making the move after this weekend, and I’ll be able to move in there. But then I also have tenants on the other side. bracing, I’m bracing for impact 10 years from now of course.

 

Pancham Gupta: No, actually, it’s an amazing strategy. We call that house hacking like is it a two unit property? 

 

Catherine: Hmm

 

Pancham Gupta: Yeah. So, you know, one thing, people ask me that the biggest regret or one thing that I would change, that if I had done everything that I’ve done, then do it again, what would I change? I would say I would have done; I would start with doing a house hack, which is what you’re doing. So, it’s amazing. So, congrats on that. 

 

Catherine: Thank you.

 

Pancham Gupta: So, my next question is did you have any fears to overcome when you actually decided to do a house hack, manage tenants next door, and also, you know, live in one unit? 

 

Catherine: Shaking in my boots. I mean, there’s a lot of the house was built in 1959 so there’s a lot of stuff that goes on, but I know from an appreciation value that again, given my age and given my investment strategy now that this will pay off in the long run. And it’s really looking at not just today or tomorrow and having no short term and tilter utility the economic word utility is what’s going to create you happiness or what’s going to create you value I’m, it’s hard to do but to focus on the long term. Now I can go and spend my money elsewhere, but really focusing on the long term and there are fears, buying a new water tank or water heater and random little things like that. But I got to keep in mind that it’s a long term. It’s a long term investment

 

Pancham Gupta: Got it. Great, cool. So, my third question for you is can you share with us one investment that did not go as expected, if you have any?

 

Catherine:  I guess I wouldn’t say went, it didn’t go as expected but with you know, 401k plan and my investment strategy, I did the opposite of what I just mentioned that I should have done and my age you have you know, you have sectors of you want to be more risk averse. And your portfolio’s more and, you know, in bonds and other safer type of low returns? Or do you want to have a more aggressive strategy? I decided to kind of be somewhere in the middle, if not a little bit, played it safe. I wish I opted for the highest, the highest risk, just knowing my long term plans. But that’s it’s different for everyone. That may have been the right strategy for someone that is nearing retirement.

 

Pancham Gupta:  Yeah. Great. So, you know, you do, and you learn, right? So, it’s, that’s how you learn. So, my last question for you is, what is one piece of advice would you give to people who are thinking of investing in main street that is outside of Wall Street?

 

Catherine:  Understand which mark that not the economy doesn’t move all together in one cycle you could have right now, the housing market, single family is booming, we’re seeing really good activity coming from there. Now, a lot of the time opening up, you know, the Wall Street Journal every day, or reading the news and turning on the news on the TV and hearing that GDP or employment jobs have grown by X percent, or we added that these thousands numbers of jobs doesn’t mean that’s reflective to certain industry, you have to know that there, they all move differently. Housing is a very upstream market, non-residential construction is very, it’s a lagging market economy. So, knowing from an investment strategy, that the buy low sell high mentality doesn’t always relate to what you hear with what GDP is doing, or what you know, the employment numbers are doing. So, it’s, it’s about identifying the leading indicators that you care about, we look at, we have our own ITR leading indicator, I really like to track the purchasing managers index to know when that peak or when that trough is going to happen. And track those leading indicators because they forecast what’s going to be happening in the economy.

 

Pancham Gupta:  So, for the listeners, if they want to get access to those leading indicators, what are the best ways they can get, you know, hold of that and also, how can they reach you?

 

Catherine: Absolutely. I mean, our website, feel free to reach out to me on LinkedIn or any type of source, but by itreconomics.com, we do have a free mailing list. So, you get periodic random emails that tell you the updates of the latest data points and the leading indicators, you can subscribe to our trends report, there’s a free 30 day trial. And it’s really great read that talks about everything from the stock market, the bond market, the macro economy, the construction industry, the manufacturing sector, everything, and the kitchen sink is included in this is I would call it a monthly magazine. And they all include forecasts besides those financial related indicators, you do not forecast the financial industry. 

 

Pancham Gupta: Great. Thank you, Catherine. This has been great. I would love to have you back maybe towards the end of the year and early next year and see how things have panned out this year. Thank you for your time. 

 

Catherine: Thank you, Pancham. Hopefully, things are gonna be better. 

 

Pancham Gupta: Yeah, absolutely. Thank you. I hope you learned from that show as much as I did. And as per Catherine, this is a really great time to invest specially in real estate even more pumped up or listening to the show, you know, but I would definitely say that investing is a team sport, and you really have to surround yourself with people that you know like and trust. So, thank you for listening. If you have questions email me at p@thegoldcollar investor.com. This is Pancham signing off. Until next time, take care.



Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollar investor.com and follow us on Facebook @thegoldcollarinvestor. The information on this podcast are opinions.  As always, please consult your own financial team before investing.


Copy of EP #18 - 2 Guests

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