Oh, man. What can I say?
Bless me, Father, for I have sinned? I now own *two* boats.
Yeah, I know. This is not a "smart financial move.” But, let's talk about that for a minute.
As with my other boat, which is kept out of the country, this new vessel (which is actually lightly used) will be represented in “assets” (initially at a 25% discount to what I paid for it, and that amount will be periodically adjusted, like other assets, to its existing liquidation value). On that note, many people probably are not aware, but just like used cars, the used boat market has been the subject of “inflation” and serious scarcity over the last few years, “buoying" used boat prices substantially. For example, even though I've substantially marked down the value of my original sailboat purchased in 2018, it’s probably worth, at a bare minimum, $100K over my existing valuation if I were to sell it now.
That, of course, could also change and go the other direction, but that’s where we are today.
Anyway, I’ll accept the basic premise: buying a boat is not a wealth-building purchase, and buying two boats is bananas.
But, perhaps boat ownership is an investment in personal happiness, no? Not the material “thing," of course, but the experiences it provides you, your family, and friends. Is that too much of a rationalization? I’ll let you know.
Oh, and to anyone spewing the old-saw about the “two happiest days of a boat owner’s life,” they are either not a boat owner or not cut out to be one. I’ve owned many watercraft over the years without regret and experienced tremendous joy while being on the water, particularly on our sailboat. If those experiences cost me financially, then so be it. And also, remember the other old-saws that “you can’t take it with you” and that "tomorrow is not guaranteed."
Sometimes—particularly with net-worth bean counters like all of us—we have to recognize that "life is short."
Now that my confession (such as it is) is out of the way, let’s talk turkey.
The book is about to close on another summer and we are headed into a seasonally difficult part of the year (typically, through Halloween). We also have mid-terms, geopolitical challenges that could derail markets (I’m especially looking at you, China), in addition to the erstwhile inflation concerns and supply-chain issues that seem cautiously better in some areas (but still “sticky” enough to be a ongoing problem). On the other hand, life is getting back to normal after the pandemic and some companies are making lemonade from lemons and doing quite well under the circumstances. As a result, the near-term outlook still seems fuzzy.
Likewise, rates are creeping higher while meme stocks were on fire this month. That’s a bit of a dislocation to say the least and it didn’t surprise me one bit when J. Pow talked tough in Jackson Hole last week—but I’m not sure why the market seemed surprised. And, if you don’t think they are watching the market, note Minneapolis Fed President Neel Kashkari, who said “I was actually happy to see how Chair Powell's Jackson Hole speech was received [by the stock market] . . . People now understand the seriousness of our commitment to getting inflation back down to 2%.”
Accordingly, my own views remain the same. Namely, that we saw a nice bear market rally this summer and that we still need a real shake out lower before germination of a new bull market can occur and, of course, inflation decisively under control. |