Survive and Thrive December: Disaster Prep in Our Newport Bunker and Your Survival

A spokesman for the Biden-Harris transition team did not immediately respond to a request for comment.

Biden’s campaign has called for giving owners of “assault weapons or high-capacity magazines” the option to either sell their weapons to the government or register them with the Bureau of Alcohol, Tobacco, Firearms and Explosives under an expansion of the National Firearms Act.

Police groups, Second Amendment advocates and even former Democratic presidential candidate Sen. Bernie Sanders have criticized the idea of mandatory buybacks – with the latter calling them “unconstitutional.”

If you still haven’t done so, I can’t impress upon you how important it is to get your gun and your training now.

Survive and Thrive this Month.

Warm regards,

E.J.,

“Your Survival Guy”

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P.S. You work too hard to have your savings messed with. You have enough on your plate as it is. Between keeping track of the rules for Roths, IRAs, RMDs, it all adds up. You read about ESG funds that are supposed to be “good” for the environment and wonder, “But, are they good for me?” In my series for you, “You invest, they win,” you wonder.

You may also wonder about my concerns with Vanguard being too big. “How do you know if it’s too big?” you ask. “Well, it might be too big,” I respond, “if your phone rep is greener than a recycling bin and working in a room the size of a football field.” If you’re looking for seasoned guidance by counsel, think about a small private family office, not a 1(800) call center with phones worked by kids fresh out of college.

You know about my concerns with low-cost index funds and ETFs. So-called advisers stuff your portfolio with them. You pay upwards of two percent, and then they try to sell you the latest environmental or ESG fund.

The “low-cost” ETFs and mutual funds get you in the door. Then they force-feed you higher cost “active” management products. The next thing you know, your portfolio is saving the world with ESG. You just wanted to save enough to retire.

It all happens fast. One of the risks of a GOP Senate loss is the unraveling of President Trump’s deregulation program. A GOP Senate can block Democrats from using the Congressional Review Act to overturn rules. The GOP can protect the wall.

“Last month DOL finalized a rule underlining that the Employee Retirement Income Security Act (Erisa) requires plan fiduciaries to act ‘solely in the interest’ of plan participants ‘for the exclusive purpose of providing benefits’ and defraying reasonable expenses,” explains the WSJ. “In other words, managers can’t prioritize their own pecuniary or political interest.”

We can thank Labor Secretary Gene Scalia, son of the late Supreme Court Justice Anthony Scalia for this.

Oftentimes, ESG dreams get put in front of your goals when it belongs in the recycling bin.

Is your investment counsel investing in ESG funds for you, or for them? You don’t want to find out you’ve been investing in someone else’s pet project to save the world when all you wanted to do was save enough to retire comfortably.

P.P.S. We joke that it’s becoming a `Zoom town,'” Angelica Webb of Redfin says, referring to the now-familiar video-conferencing platform. Bend, OR, for example, is becoming one.

“A lot of folks are moving to Bend without having ever stepped foot here. They’ve heard good things and want to get out of their cramped San Francisco or Seattle apartments, so they’re coming here and buying awesome, 3,000-square-foot colonial homes.”

The same is true with the migration out of New York City to places like Newport, RI. What it means for restaurants left in the cold is yet to be seen. But it doesn’t have a great feel. Lockdown mandates are picking up steam, especially in blue states. Again.

OK, let’s move on from those “awesome, 3000-square-foot homes” and how obnoxious it sounds and look at what’s happening here. For one, tourist destinations for years have been struggling with retaining customer-facing employees as residents. They’ve been priced out of the market. They live an hour away because it’s what they can afford.

The trend of big money exiting big cities is making small tourist towns full of residents that work via ZOOM. Tourist towns are the new bedroom communities.

The harm being done isn’t measurable yet. But let me share with you two recent experiences I had. In the first, we sat down, and our server said, “You need to put on your mask when I approach you. You need to pull up your mask between bites and sips. And it’s a mandate.” We left. She walked back to the kitchen.

It’s restaurant week in Newport. This is normally a big week for them. We tend to avoid it because it’s so busy. We were out the other night, though, and it was so quiet—empty seats everywhere. I’ve never seen it like this. Stay tuned.

Liz Lucking reports in Mansion Global:

“I’ve never seen so many New York license plates at open houses in Monmouth County,” Redfin agent Anthony Gonzalez, said in the report. “City folks are coming to New Jersey with New York salaries, and they can get quite a deal here even though competition is fierce. One of my buyers recently lost out on a house because another bidder paid $75,000 over the asking price. Who does that? New Yorkers.”

Indeed, New Yorkers are ditching the state in droves, according to the data.

Almost 47,000 more Redfin.com users looked to leave New York state than move into it during the third quarter, roughly 35% more the same time last year, the report said.

Meanwhile, New York City boroughs account for the three U.S. housing markets that are cooling down the most.

Queens ranked first, followed by Brooklyn and the Bronx. The city saw a greater net outflow of Redfin.com users than any other metro area during the third quarter.

P.P.P.S. “I’m a plodder,” a prospective client told me recently. “I like what you wrote last week, I read your stuff.”

“Thank you,” I said. “Plodders are especially welcome in times like these.”

In case you missed it, I wrote:

Why You Should Listen to These Wise Men in Times Like These

OCTOBER 30, 2020 BY E.J. SMITH – YOUR SURVIVAL GUY

I recently received this message from a client:

EJ, it was great talking to you yesterday. While doing a little reading last night I came across a quote I thought you might like. The Old Testament book of Proverbs was compiled by King Solomon who many consider to be the wisest person ever. So I looked this up and I think Ben Graham and Warren Buffet and Dick Young are in good company, at least philosophically. The quote is from the book of Proverbs chapter 21 verse 5. “Steady plodding brings prosperity; hasty speculation brings poverty .“ Sounds like Solomon would have made a great financial adviser like the aforementioned men. Now I need a quote on how to handle a Pandemic and a contentious election and an anxious wife in a darkening Winter. I may not need Solomon just a little more Basil Hayden (bourbon). Take Care and Thanks.

In the September 2015 issue of Richard C. Young’s Intelligence Report, Dick Young wrote:

The Prudent Man Rule is based on common law stemming from the 1830 Massachusetts court formulation Harvard College v. Amory. The Prudent Man Rule directs trustees “to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital invested.”

Since I started our family investment management firm in 1989, I have operated under the assumption that the Prudent Man Rule to this day carries as much weight as it did in 1830. Common sense and prudence just don’t go out of style—ever.

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