Womack Investment Advisers

  What do markets hate?   They hate uncertainty, and recently there has been plenty of it. Some of the questions plaguing economists and pundits include:   Why aren’t people returning to work? Americans, like people in other parts of the world, have not been rejoining the workforce at the pace many had anticipated. One of the most frequently cited theories was explained by The Economist :   “In America businesspeople, almost to a pinstripe, are convinced that the $300-a-week boost to unemployment insurance explains the shortages. However, pundits do not agree on whether stimulus handouts really lead people to shirk. The evidence is hazy elsewhere, too…Australia ditched its job-protection scheme in March, and shortages have worsened.”   The unemployment data has inspired many theories about why jobs aren’t filling more quickly. These include fear of contracting COVID-19, low hourly pay, and lack of dependent care, to name a few. Some states recently modif...

  Single-family homes had their biggest price increase on record in the first quarter of this year.   With many analysts noting the real estate market is “white hot”, it might be helpful to look at a relative comparison of real estate to the other main source of U.S. homeowner wealth - the stock market.    The following graph from analytics firm Visual Capitalist shows the total return since 1990 of the U.S. National Home Price Index compared to the benchmark S&P 500 stock market index.   The Home Price Index has gone up a respectable 200% since 1990, but looks quite tame compared to the 1000% return from the S&P 500 over the same period. Best regards,  Womack Investment Advisers, Inc. WOMACK INVESTMENT ADVISERS, INC. Oklahoma / Main Office: 1366 E. 15th Street - Edmond, OK  73013 California Office: 4660 La Jolla Village Dr., Ste. 100 - San Diego, CA 92122 Phone (405) 340-1717 - Toll Free (877) 340-1717   Website: ...

confidence is returning. The big news last week was the announcement from the Centers for Disease Control (CDC) that fully vaccinated Americans can resume normal activities without wearing masks or social distancing, except where required by law. Suffice it to say, people are ready to return to normal. Results from the latest Axios-Ipsos Coronavirus survey, conducted in early May, found Americans were feeling more optimistic. Among those surveyed: 59 percent had visited friends or relatives during the previous week. 54 percent had gone out to eat during the previous week. 31 percent had made plans for the summer. 18 percent had a stronger sense of emotional well-being, a six-point jump from the prior survey. 60 percent indicated trips to salons, barber shops, and spas were low- or no-risk activities, up six points from the last survey. If your exuberance about resuming “normal” life has been tempered by a reluctance to change the routines you’ve adopted during the pandemic, you’re ...

Uncle Inflation is here. Will he overstay his welcome? Ever since the financial crisis, central banks have pursued expansionary monetary policies to encourage reflation and avoid deflation. Well, it’s taken some time, but inflation is finally here. Last week, major stock indices in the United States moved lower after inflation, as measured by the Consumer Price Index (CPI), was four times higher than anticipated, reported Ben Levisohn of Barron’s . Higher inflation is the result of a supply and demand imbalance. As the pandemic has calmed in the United States, consumers have emerged eager to spend money – so eager that consumer spending is about 5.5 standard deviations above average. That’s a lot. The problem is finding stuff to buy. The Economist explained, “…red-hot demand is increasingly met slowly or not at all…Nowhere are shortages more acute than in America, where a boom is under way. Consumer spending is growing by over 10 percent at an annual rate, as people put to wor...

  An interesting event occurred this past week.   The total market value of the 300 largest cryptocurrency assets surpassed the value of all physical U.S. dollars in circulation.   Statistician Willy Woo analyzed recent trading data and concluded this year’s bull run is different from the rest because speculative hands are not holding and seasoned investors – including banks and institutions - are buying up the slack at higher prices than ever.   “This cycle is different; the movement of coins to strong holders is unprecedented,” he summarized. Best regards,  Womack Investment Advisers, Inc.   WOMACK INVESTMENT ADVISERS, INC. Oklahoma / Main Office: 1366 E. 15th Street - Edmond, OK  73013 California Office: 4660 La Jolla Village Dr., Ste. 100 - San Diego, CA 92122 Phone (405) 340-1717 - Toll Free (877) 340-1717   Website:   www.womackadvisers.com Womack Investment Advisers, Inc. (WIA) is a registered investment adviser who...

  There is a long-standing scientific theory about the size of a mammal’s body relative to its brain offers an indication of intelligence. The findings of a recent study seem to debunk that idea, reported Science Daily .   An international team of scientists investigated how the brain and body sizes of 1,400 living and extinct mammals evolved over time. They made several discoveries. One was significant changes in brain size happened after two cataclysmic events in Earth's history: a mass extinction and a climatic transition.   Not every mammal changed in the same ways. Elephants increased body and brain size. Dolphins and humans decreased body size and increased brain size. California sea lions increased body size without comparable increases in brain size. All have high intelligence.   “We've overturned a long-standing dogma that relative brain size can be equivocated with intelligence…Sometimes, relatively big brains can be the end result of a gradual decrease in ...

  Like a gender reveal gone wrong, last week’s employment report delivered an unexpected surprise.   Economists estimated 975,000 new jobs would be created in April. The United States Bureau of Labor Statistics (BLS) reported there were just 266,000. That’s a big miss.   Economists, analysts, and the media offered a wealth of theories to explain the shortfall. These included:   Pandemic fear . A March U.S. Census survey found 4.2 million people aren’t working because they fear getting or spreading the coronavirus, reported Gwynn Guilford of The Wall Street Journal . That’s more than half of the 8.2 million non-farm jobs that need to be recovered to reach pre-pandemic employment levels.   Too-generous unemployment benefits . Another theory is federal unemployment benefits ($300 a week) have created a labor shortage. The theory is being tested. Last week, Montana announced it will no longer participate in federal unemployment programs. Instead, it will offer a $1...

  The cryptocurrency ‘Dogecoin’ (which started out as a joke by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer) has passed a market cap of over $75 billion—more valuable than the iconic Ford Motor Company.   (By the way, Jackson Palmer says the correct pronunciation is “dohj coin”).    After this weekend’s appearance on Saturday Night Live by populist Dogecoin promoter and Tesla CEO Elon Musk (during which he joked Dogecoin was a “hustle”), Dogecoin fell from a pre-SNL high of 72c to as low as 43c but had rebounded to 57c as of mid-Sunday evening.   Whatever its merits or demerits, Dogecoin is certainly the most valuable joke in the known universe! Best regards,  Womack Investment Advisers, Inc.   WOMACK INVESTMENT ADVISERS, INC. Oklahoma / Main Office: 1366 E. 15th Street - Edmond, OK  73013 California Office: 4660 La Jolla Village Dr., Ste. 100 - San Diego, CA 92122 Phone (405) 340-1717 - Toll Free (877) ...

  Estimates suggest there will be 25 million by 2100. Take a guess: electric vehicles, household robots, wild elephants, centenarians, or streaming services per household? Electric vehicles. There may be far more than 25 million – estimates suggest 145 million – on the road by 2030. Household robots. Domestic robots that offer companionship or help with tasks like lawn mowing, vacuuming, and mopping are becoming popular. Estimates suggest about 55 million domestic bots will be sold next year. Wild elephants. From 1989 to 2018, the number of elephants in the wild doubled to 34,000, reported Earth.org . Streaming services per household. Currently, the average number of streaming services per household is four. There’s room for growth, but probably not that much. Centenarians. The world is in the midst of a longevity revolution and, by 2100, there may be as many as 25 million centenarians – people age 100 or older – around the globe, according to a source cited by Science Direct . ...

  It’s Spring and economic recovery is in the air. Last week, the Bureau of Economic Analysis reported the U.S. economy grew at a 6.4 percent annualized rate for the first three months of 2021 . While that’s good news for companies and workers, asset managers are checking their expectations. The stock market reflects what investors think may happen in the future. During the past year, major U.S. stock indices moved higher as investors anticipated vaccines and economic recovery, reported Patti Domm of CNBC . Since its March 2020 low, the Standard & Poor’s 500 Index has gained 88 percent. Amidst strong signs of recovery in the United States, some asset managers are positioning for “inflation and tapering,” according to a source cited by Naomi Rovnick of Financial Times . “ Investors have topped up their cash holdings at the fastest rate since March 2020 as debate intensifies over whether stock markets will continue rallying now the U.S. economic recovery from the pandemic...

  With upward price pressures already impacting the economy in areas like construction and building supplies, it was only a matter of time before food price inflation arrived at a supermarket near you.   The Bloomberg Agriculture Spot Index has risen by 76% year-over-year - the biggest rise in nearly a decade.  This is more than just a problem at the American dinner table as there is extensive literature connecting big jumps in food prices to periods of social unrest.   The Arab Spring unrest in 2010-11 coincided with the last jump of this magnitude.    Deutsche Bank’s Jim Reid points out that “… emerging markets are more vulnerable to this trend, since their consumers spend a far greater share of their income on food than those in the developed world.” And Warren Buffet said at this weekend’s Berkshire Hathaway annual meeting that "We are seeing substantial inflation. We are raising prices. People are raising prices to us, and it's being accepted...