Diamonds Aren’t Forever
Nicholas Hoffman & Co. Blog
by Nicholas Hoffman and Company
4d ago
I remember vividly the UK’s years of high inflation in the 1970s, which included strikes by the coal miners union, power cuts, and rationing. We bought in bulk because prices were going up by double digits annually. The period was marked by a deep recession from 1973 to 1975, during which the price of a barrel of oil quadrupled. The stock market suffered dramatic losses while the price of antique furniture appreciated at the rate of inflation or greater. This was a time when some would talk of antiques as a better investment than stocks or bonds. The assumption was that there would always be a ..read more
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Time for the Old Guy to Retire
Nicholas Hoffman & Co. Blog
by Nicholas Hoffman and Company
1w ago
No – I am not referring to either of the pugilists in this year’s presidential prize fight. There are plenty of others who will cover that topic. My comment is focused on Warren Buffett. As regular readers of this blog will know, we hold Buffett in the highest regard. In fact, our investment philosophy is based around many of the same principles as those followed by Buffett in building Berkshire Hathaway. Examples include having a long-term focus, discipline in sticking to a clear strategy, avoiding being seduced by the latest fad, and not investing in opportunities you do not understand. Not ..read more
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The Evolving Landscape of US Home Sales
Nicholas Hoffman & Co. Blog
by Nicholas Hoffman and Company
2w ago
Last Tuesday, a federal judge preliminarily approved a $418 million settlement that could significantly alter the landscape of home buying and selling in the United States. The agreement resolves two similar lawsuits in Missouri and Illinois brought against four major real estate brokerages and the National Association of Realtors (NAR), a trade organization representing more than 1.5 million members, alleging NAR’s rules on agent commissions facilitated collusion and artificially inflated fees. Stemming from a jury verdict in October, it is expected to cover roughly 500,000 Missouri home sell ..read more
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Changing the Game in Women’s Basketball
Nicholas Hoffman & Co. Blog
by Nicholas Hoffman and Company
3w ago
Whether avid sports enthusiasts or casual observers, there are few across the United States who fail to recognize the name Caitlin Clark after this past March. The college basketball star competed in last month’s NCAA Women’s March Madness tournament, contributing to record-breaking viewership and propelling the Iowa Hawkeyes to the Finals. Caitlin became a national sensation as the holder of the NCAA career scoring record, across both men’s and women’s divisions, with 3,951 points. She also notably played in the three most-watched women’s games on record. Last month’s March Madness Finals, th ..read more
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All Hands on Deck
Nicholas Hoffman & Co. Blog
by Nicholas Hoffman and Company
1M ago
The cargo ship, Dali, recently struck the Francis Scott Key Bridge in Baltimore, resulting in the tragic loss of six lives. The Port of Baltimore was forced to shut down temporarily – a significant event given Baltimore is the ninth busiest US cargo port. The Port leads the US for the volume of automobiles and light trucks handled and specializes in “roll on, roll off” cargo. Consequently, the commercial effects of the closure will be felt most significantly by the automobile industry, including heavy machinery, as well as the coal industry. About a quarter of all seaboard US coal shipments we ..read more
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A Renaissance in the American Shopping Mall?
Nicholas Hoffman & Co. Blog
by Nicholas Hoffman and Company
1M ago
Commercial real estate is a diverse asset class. Its various sectors experience different trajectories. While certain sectors, such as multifamily housing, have thrived before and during the pandemic, the retail sector, particularly shopping malls, has faced major headwinds. The surge in e-commerce looked poised to make malls a thing of the past. Over recent decades, the retail sector has experienced a steady decline, with the number of malls in the US decreasing from around 2,500 in the 1980s to approximately 1,150 today. Typically, malls involve multi-tenant structures anchored by major reta ..read more
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Challenges for Multi-Family Housing
Nicholas Hoffman & Co. Blog
by Nicholas Hoffman and Company
1M ago
Once the darling of the commercial real estate market, Class A multi-family properties are currently in a bit of a slump. A combination of changes in market cycle factors has prompted the sector to stumble for the first time in many years. There is now a lot of challenging work to be done in a market sector that was firing on all cylinders as recently as 2022. The current challenges in the rental housing market are mostly self-inflicted. Following the immediate aftermath of the COVID recession and a return to easy money lending policies, builders of multi-family properties saw strong upside in ..read more
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Slowing Down the Business News Cycle
Nicholas Hoffman & Co. Blog
by Nicholas Hoffman and Company
2M ago
A news cycle is traditionally defined as the period between when you get the latest information and what your reaction is to that information. When I started my career, the news cycle was daily. The information you needed was delivered in your daily newspaper. One would read the print edition of the Wall Street Journal and find various bits of news that would affect stocks and bonds, and investors could make decisions based on their conclusions. But in today’s digital age, the news cycle is measured in milliseconds. This can create confusion for investors. The news cycle in the 1600s was an ex ..read more
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The Madness of Crowds
Nicholas Hoffman & Co. Blog
by Nicholas Hoffman and Company
2M ago
In 1852, Scottish journalist Charles Mackay wrote Popular Delusions and the Madness of Crowds. In his book, Mackay chronicled financial manias through history, including the 17th-century Dutch Tulip Mania bubble. He showed the consistency of human behavior when it comes to greed and fortune. Is another bubble brewing in today’s artificial intelligence (AI) sector? NVIDIA Corporation just surpassed a $2 trillion market capitalization and sits only behind Microsoft and Apple in terms of valuation. The stock price for NVIDIA has increased 66% so far this year. Last year, it surged 239%.  Tod ..read more
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A Bad Habit Which Refuses to Die
Nicholas Hoffman & Co. Blog
by Nicholas Hoffman and Company
2M ago
Bad habits can sometimes be hard to break. One bad habit in investment analysis is using cost basis to judge performance. The point of this note is to explain why it is a bad idea and a habit in need of breaking. It is natural to wonder, how are my investments doing? The question might come up as you periodically review your accounts. It seems intuitive that you could simply compare today’s value of any investment with its cost basis to assess how the investment is performing. The problem with this intuitive approach is the treatment of income, dividends, and capital gains. Cost basis is not d ..read more
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