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I disrobe before you? - June 2024 (#24)

Welcome welcome dear reader! Happy Fathers Day to all the dads, legitimate or otherwise! As well as a fantastic Juneteenth! Your dude Brent has been hit up for an update on my portfolio allocation (allow me to disrobe!) and whats happening with Real Estate. So that’s exactly what I’m providing today. Enjoy!

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TLDR; Not much has changed on my allocation, still BULLISH on SOLANA. Commercial Real Estate Struggling, residential… it largely depends on where you live. Prepare now if you want to buy something!

Alrighty, so time for an update on my portfolio and whats happening with Real Estate. Just remember that was is right for me might NOT be what’s right for you. Especially when it come to risk tolerance…

So confession time… my allocation hasn’t changed all that much since I last disclosed it at the beginning of the year. Why? Because little has changed in my strategy… and really with the markets in general. I mean… overall the markets have been pretty boring… aside from AI (wall streets newest performance enhancing drug) and NVIDIA (the supplier) it’s been largely unexciting. No rate drops, no major geopolitical developments, no huge price swings, it’s been pretty steady eddy. Slowly hitting new highs.

As for my portfolio, I am still VERY bullish on Solana and it is still my largest position. In fact I think my thesis is stronger than ever. Aside from daily active users that trounce nearly everyone else, it is very likely that the next ETF to get filed would be for Solana. There are even unsubstantiated rumors claiming Blackrock has filed one. This would be a very big deal because Solana is so small that if a Solana ETF gets approved and just received a fraction of the inflows that the Bitcoin ETF has had… the effect on price would be MASSIVE. Thats likely a ways off yet, but if true, now is the time to prepare.

Feel kinda naked sharing the above, as critiquing someones portfolio allocation is sport among finance nerds… As you can see I’m still very concentrated in Crypto and Real Estate. I’ll explain why below, but I haven’t done all that much with Real Estate in quite a while. As for Crypto, if history repeats itself, and I sure hope it does, I think it’s soon to provide us another killer round of high returns. I’m concentrated in crypto as I think it’s the best opportunity to build wealth right now. Of course I could be wrong, but that’s the risk I’m taking.

Next, lets talk about Commercial Real Estate. Ya, it’s still really struggling. Haven’t been able to buy anything for a while now. The problem is what’s called the ‘bid, ask spread.’ Bid being what price the buyer is willing to pay and what price the seller is willing to sell at. The problem? The buyers are not willing to pay anywhere near what sellers are willing to sell at. The reason? Interest rates. Buyers getting loans now would pay interest rates twice as high as they would just a couple years ago. Long story short is that prices don’t make sense right now with where borrowing costs are at. Sellers are still stuck on what they could have sold things at just a couple years ago. Think of prices and interest rates being two ends of a see saw. When interest rates go up, prices go down and vice versa. We are still waiting for prices to fully absorb the new interest rate reality and that will just take time. But when that does happen we’re likely to see some deals! So fingers crossed…

As for residential. It really depends on the area. In some areas the demand for housing is still so strong that housing prices have either remained stable or even gone up a bit. Other areas are down by double digits since the peak (looking at you Austin, TX). To sell your home and buy a new one of the same price could DOUBLE your monthly payment because of interest rates, so people are staying put in their homes. This is keeping supply at bay even though demand has shrunk as well. Hard to know how long this crazy story can last, but if rates go down and demand stays strong, residential could end up fine. However, if the reverse happens, we could see residential prices drop more generally and severely. I think that would spook the Fed though and they would end up lowering interest rates out of fear of another ‘08. Keep in mind another housing crash is very unlikely simply because we are, by and large, undersupplied on housing in the US.

So there you have it, my portfolio update as well as my thoughts on Real Estate in General. By and large, things are in a bit of a holding pattern, many people waiting to see what will happen next. My biggest piece of advice is if you do want to buy some Real Estate, start looking now, don’t wait. You want to be the person who’s honed their skills of analysis and due diligence; who is then ready when a killer deal comes up. Remember opportunity is when luck meets preparation.

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That’s all folks!

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