Inflation VS stocks

Common stocks beat inflation. I've learned that years ago and I still believe that it's true, as long as inflation doesn't reach 19% like it's been the case this year in Estonia. 

And even if inflation reaches 19%, what are your other options? Keeping money in a drawer? That's automatically a negative 19% (if you live in Estonia). 

I like these tough periods for the market, because it epurates the market from speculators. And, in the long run, those who are staying in the market will be rewarded. I'm sure about that. And if I allow myself 10 years for this prediction, I'm even more confident. 

Some people change their strategies when the market is red, day after day. Some think that stocks will continue to go down, thus investing only in low PE stocks. Like if a low PE couldn't go lower. Well, I've actually tried this before and it's sad, but a low PE can go lower. Yes, a stock with a PE of 8 can become a stock with a PE of 5, just like a stock with a PE of 25 can become a stock with a PE of 18. 

I think that dollar stores are a good place to be. Dollar Tree's last results were very good and I believe that results should also be good for Dollarama, Dollar General and Five Below. I'm not a wizard. I only believe that this inflation is way too high for people to keep their habits and paying a premium for the stuff they can buy at dollar stores. Of course, dollar stores will have to readjust their prices because of gas prices. But even if they raise their prices, they'll still be cheaper than almost any other shop.

Eventually, I believe that banks will benefit from rates increase. Because rates can't stay that low. These rates are a part of the explanation of this inflation. People don't save money with such rates. When they'll go up, people will save more money and banks will benefit from that. And currently, banks are not expensive at all.

Of course, I still believe in Google and Mastercard. But I think that dollar stores and banks will benefit from the current situation for the short term. 

Happiness

The most important thing in life is not love, family, friends or money. 

The most important thing is happiness and you may achieve it by finding at least a couple of things that really turn you on. Then trying to put your focus on these things as much as possible. Because you'll realize sooner of later that:

1- If you don't have that kind of things in your life, you'll feel empty and your life will seem worthless (and it will actually be worthless);

2- These passions will be your companions in times when you don't have companions;

3- You'll long for these passions when you don't have time for them. They will make you excited about them.

4- Everything comes and go in your life, but if you have a true interest for something, it may stay in your life until you die.

So, if you really want a motorcycle, buy it. If you want to play an instrument, buy it. If you want to travel all over the world, go for it.  

These are an other kind of investment. That's an investment on your well-being and happiness. 

Living among humans

Living among humans is complicated and frustrating. 

I don't really like most of the people around me. I don't hate them, but I'm indifferent or I dislike probably 75% of the people I meet. And when I like somebody, they like me maybe 50% of the time, which leaves me with a little percentage of success in my new relations. 

Please note that these percentages can't be documented with scientific data.  

More thant that, I could live the rest of my life without seeing again most of the people that I call my friends. Because I'm not sure that I really need them.

The problem is that I can't be completely alone. I need some people around me from time to time. But I think that if I had an infinite reservoir of interesting people, I would gladly go from one person to another for the reste of my life. 

Life in general

I think that it's important to realize that, in this life, we have every option.

We could live our life to the fullest or we can simply commit suicide. We can play by the rules, play by our own rules or stop playing the game.

I don't think that suicide is a good option because, as worthless your life seems to be (and probably is), by commiting suicide, you break the life of many people around you, which is the real tragedy. Because your life will end quickly, but those surrounding you will spend the rest of their life with guilt and endless questions.

But suicide remains an option. It's however, in many cases, the worst possible option.

And what means "living your life to the fullest"? Who really does that? Almost nobody. Most of us spend at least 50% of our spare time laying on a couch with our phones, watching stuff on Tik-Tok or on Youtube. Our spare time is mostly wasted time. It doesn't bring us to the next level. It makes us stagnate where we are.

So, I guess that most of us are just living a meaningless life with tons of wasted time. Once in a while, we share on social medias the rare moments where we think our life has a significance. 

This is life in a few sentences.  

Fuck off

I've reached a point of boredom related to writing posts about the stock market at the same time that I've reached a point of anger about life in general. 

I've decided that I would now write stuff about anything that's in my mind, may it be the weather, the war in Ukraine, stupid people, the lenght of my turds, etc. 

I just don't give a fucking shit. 

Discipline

I'm 43 today and each year, at this date, I always write a post titled "Discipline" to show how discipline can make a difference on a portfolio. It's usually a message of hope and trust in the american dream which could be translated as "to become rich as quick as possible with as less effort as possible".

The word "discipline" means to save money and to invest on a regular basis. However, this year, discipline is very deep into my ass because the market is down like fuck. I've always assumed that saving money would increase my portfolio's value, whatever the market does. It hasn't been the case this year.

Euphoria has been replaced by anxiety and even depression for many people. It was about time. When it's easy to make money, a lot of dumb people become rich and then try to teach us the true meaning of investment. 

I wonder how things are going for "investdiva", the so-called investor on Instagram who went from 0$ to I don't know how many million dollars with her crypto investments. I bet she managed to do well even if Bitcoin is down like a rock in the ocean, because these people always have the easy recipe to become richer in any circumstance. They're simply magicians. And they are very rich, even if they seem to need new clients all the time. 

Anyway, I'm not an "Investdiva" because of these numbers: 

Performance since may 16th 2021: -8% (portfolio value in absolute numbers)

Annual performance since may 16th 2009: 31% (portfolio value in absolute numbers)

These performances are related to the absolute value of my portfolio. In other words, it's a combination of increase of value and new money invested. That's why this post is named "Discipline". If I hadn't save money on a regular basis, I would never have reached that 31% annual increase of my portfolio. 

The decrease of 8% over the last year is not that bad because the decrease of value has been almost 27% since the beginning of the year. Let's be honest, even if marketing masters would tell me to avoid saying that. 

"Blood on the streets"... ?

I just come back from a 2 weeks trip through Europe. 

I've been in Lithuania, Latvia, Estonia, Finland and Netherlands. I've sung in a few karaoke. I've seen the mark of communism. I've met a lot of 20 years old kids who become my friends on Instagram. Most of them were pot-heads in Amsterdam. 

And now, I'm back with super red markets. I realize that I was so much richer a few months ago. Like, a few hundred thousand dollars richer. But I don't care, because what I like the most about the stock market is that kind of period.

It's a "Only the strong survive" situation. Weak people sell everything or exit the market. 

Experienced people do nothing or invest more money. 

The only problem is that these recent travels, my roof's refection and my scooter acquisition cost a lot of money and I can't really take advantage of that big drop. I hope you can. Because that's exactly the kind of period that will accentuate your performance during the next 5 years.