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Weekly Market Review

Weekly Market Review

Good afternoon,

 

Before we get to the RMC report, let’s take care of some regularly scheduled business. I’m sorry if the WMR goes a bit long this week.

 

Dr. Doom is at it again

https://www.msn.com/en-us/money/markets/nouriel-roubini-says-predictions-for-a-mild-recession-are-delusional-as-severe-financial-crisis-looms/ar-AAZXVZu

This guy has been right once in the past 2 decades, and that may have been luck. He’s been wrong every other time so I wouldn’t put too much faith in his opinion. Also, that’s a terrible nickname, unless maybe you’re a wrestler for the WWE or a Marvel super villain.

 

And not far behind him is the International Monetary Fund (IMF)

https://www.foxbusiness.com/economy/imf-warns-global-economy-teetering-brink-recession-slashes-growth-outlook

Notwithstanding that I don’t really trust any government created 3 letter agency, it sounds like more fear mongering.

 

Here is WMR favorite economist Brian Wesbury from First Trust Portfolios explaining how politics is overriding real economic data,

Click here to watch the latest Wesbury 101 video: Politics Makes People Stupid!

Oh, and Brian has been right (or should I say accurate) since 2008, or earlier.

 

From the definition of insanity department. In a bid to curtail inflation, our leaders have once again raised interest rates and at the same time are planning yet another big spending bill.

https://www.foxnews.com/politics/manchin-admits-mistake-saying-past-spending-bill-wouldnt-cause-inflation

Let’s review. Raising interest rates DOES slow the economy, but DOES NOT slow inflation. Inflation is a monetary problem, always. Too much money chasing too few goods = higher prices.  The government printing and spending more money will only make things worse. How come they don’t know that? What does your family do when things start to cost more? My guess is that you buy fewer things and spend less. Which is what you should do. Once again, the government doesn’t get it.

 

This week’s crypto commentary, if I were to write one, which I’m not really supposed to do as cryptocurrencies are not a current offering by my firm, would be something along these lines.

 

The SEC busted a crypto Ponzi scheme. https://www.cnbc.com/2022/08/01/sec-charges-11-people-in-alleged-300-million-crypto-ponzi-scheme.html

Ponzi schemes are not unique to crypto of course, so if something sounds too good to be true, it probably is.

 

And it turns out that your favorite celebrity endorsement isn’t worth much to the value of whatever crypto they’re promoting,

https://www.thestreet.com/investing/cryptocurrency/celebrities-erase-their-crypto-ties-as-crypto-mania-turns-into-crisis

Most of the coins that have been touted by famous people haven’t held up well.

 

If you’re a fancy watch connoisseur, the so called “crypto winter” that may or may not be happening might be good news. Business Insider says that the crypto price collapse has worked its way into the collector watch market. As the “crypto bros” have to sell their timepieces, the price of pre-owned Rolex and Patek are coming down.

https://www.businessinsider.com/rolex-daytona-resale-prices-slide-as-crypto-crash-wipes-wealth-2022-7

A silver lining, if you will. Or maybe stainless. Or rose gold.

 

Now, as promised and widely anticipated (or not), here is the report from this year’s Rocket Mortgage Classic PGA golf tournament at the Detroit Golf Club. If you have no interest in golf, you can stop reading here.  In a cut to the finish, your 2022 champion is Tony Finau, https://www.pgatour.com/daily-wrapup/2022/07/31/tony-finau-wins-rocket-mortgage-classic-for-second-straight-pga-tour-victory.html

Which, BTW, is his second consecutive win on the PGA tour. Winning on the tour at all is extraordinarily difficult. Winning back to back is almost unheard of. Mr. Finau earned just north of $1.5 million for his victory last weekend. Not bad for few days work. But of course, it’s not just a few days, it’s a lifetime of commitment to his craft.

 

A person holding a golf club

Description automatically generated with medium confidence

 

Here is how much the rest of the field earned this year, https://www.golfdigest.com/story/here-is-the-prize-money-payout-for-each-golfer-at-the-2022-rocket-mortgage-classic

I’ve mentioned before that golf is a meritocracy, aside from sponsorships, on the PGA tour, you only get paid if you win. Here is an example of PGA pressure. On Friday, on the last hole of our round with 3 pros, my standard bearer and I are watching one young competitor finish up. His score was -2 to this point on the last hole. The projected cut line was -3. So if this guy makes this 14 foot putt for birdie, he’ll finish -3, make the cut, play the weekend and earn some kind of paycheck. At least 5 figures. If he misses, he goes home Friday night without earning a nickel and has to do it all again next week. That’s pressure. Spoiler alert, my guy missed the putt. #mathwins.

 

This was my 4th consecutive year as a volunteer and here are my notes from last week, along with previous WMR commentary from 2019 and 2021 for comparison purposes. 2019 comments are in black, 2020 in RMC red, 2021 in blue and 2022 in green.

 

Like previous years, I worked as a Walking Scorer, inside the ropes with the players and caddies keeping track of their round. 2019 was highly attended, upwards of 50,000 fans per day. 2020 was eerily empty, with just players, staff and limited volunteers only. 2021 was in the middle, not crazy busy, but not empty either. Ditto 2022. I worked/walked every day of the tournament this year and without keeping exact count, I think I logged somewhere around a million steps over 5 days.  The weather cooperated and the course was in great shape, aside from a few brown spots on select fairways. The greens were rolling and the rough, especially around the greens, was challenging if you found yourself there. Kudos to the grounds crew at Detroit Golf Club for keeping the track playable and in great condition. My group assignments this tourney were just ok, no big names and no leaders on the final day. And I don’t know how I missed this in previous years, but the tournament is called the Rocket Mortgage Classic. Even from year 1, the RM “Classic.” How is it a classic if it’s only 4 years old? Just wondering.

 

Here are some anecdotes from my time there last week. In no particular order…(originally published July 2019, updated July 2020) (Updated again July 2021) (updated again July 2022)

2019 – I enjoyed being a walking scorer. It wasn’t as difficult as it was portrayed to be and it was cool being inside the ropes with the pros. I’ll do it again next year.  

2020 - AGREED. NO CHANGE FROM 2019.

2021 - AGREED AGAIN. IN FACT, I’VE BECOME MORE THAN A BIT SPOILED. AFTER ONE OF MY SHIFTS, MY STANDARD BEARER (THAT’S THE KID THAT CARRIES THE SIGN WITH THE PLAYERS NAMES ON IT) AND I STOPPED TO WATCH A COUPLE OF OTHER GROUPS FINISH. WE WATCHED FROM OUTSIDE THE ROPES LIKE REGULAR SPECTATORS. NOT COOL, WE’RE USED TO BEING ON THE FIELD OF PLAY WITH OUR GUYS, NOT WATCHING FROM THE OUTSIDE.

2022 – Agreed. I might even be a little jaded by my job now. Like Forrest Gump meeting the President, “they invited me and the ping pong team to the White House. So I went. Again. And I met the President of the United States. Again...” I walked with the pros, again.

 

2019 - The pros are generally very nice guys. They introduce themselves at the beginning of each round and hand us a signed golf ball at the end of each round, which is a nice gesture. I gave them to my son. Not to be snooty, but their autograph would be more valuable to me on some new account paperwork, but a golf ball is nice too. 

2020 - AGREED. NO CHANGE FROM 2019.

2021 - CONFIRMED. NOW THAT I’VE DONE THIS FOR SEVERAL YEARS AND MET PROBABLY 30-40 DIFFERENT PLAYERS, SOME OF THEM ARE NICER THAN OTHERS, BUT IN GENERAL THEY SEEM TO BE GOOD GUYS. I REMARKED TO ONE PLAYER THAT I HAD WALKED WITH HIM LAST YEAR AND HE SAID HE REMEMBERED ME. WHICH I’M SURE IS NOT TRUE, BUT WAS NICE OF HIM TO SAY.

2022 – Confirmed. All the pros I interacted with this year were very nice. That is true of the caddies as well.

 

2019 - A small handful of the pros aren’t so nice, as I heard that a few of them stiffed our locker room attendants, leaving without tipping the guys for their work during the week. That’s not cool. 

2020 - HAVEN’T HEARD ANY BAD REPORTS ABOUT ANYONE THIS YEAR.

2021 - DID NOT HEAR ANY BAD REPORTS THIS YEAR.

2022 – No bad reports at all this year.

 

2019 - The big name guys can’t go anywhere without being mobbed. That has to get old.

2020 - NOT A PROBLEM THIS YEAR SINCE NO FANS.

2021 - EVEN SOME OF THE LESSER KNOWN GUYS HAVE TO DEAL WITH THE PRICE OF SEMI-FAME.

2022 – There were some popular players there this year, Finau, Rickie Fowler, Will Zalatoris, but many of the formerly big names have left the PGA for the LIV Tour, so name recognition wasn’t super high this year.

 

2019 - During the practice rounds, the guys are friendly and talkative. 

2020 - AGREED. NO CHANGE FROM 2019.

2021 - CONFIRMED. ONE OF THE PROS I HAD DURING THE PRACTICE ROUND WAS A 37 Y/O SPANIARD. TALL, ATHLETIC, GOOD LOOKING. HIS BROTHER WAS HIS CADDIE, ALSO TALL, ATHLETIC AND GOOD LOOKING. AND THEY BOTH HAD SPANISH ACCENTS. I SAID ‘THAT’S NOT EVEN FAIR, TALL. ATHLETIC, GOOD LOOKING AND ACCENTS?? CAN’T YOU LEAVE SOME WOMEN FOR THE REST OF US??” THEY LAUGHED.

2022 – Confirmed again. Pros don’t mind chatting during practice and they try to make it fun for the amateurs that are playing with them and spectators who come to watch practice.

 

2019 - During the tournament, they are laser focused and I learned not to speak to them unless they spoke to me. 

2020 - AGREED. NO CHANGE FROM 2019.

2021 - CONFIRMED. THE PLAYERS ARE AT WORK, DON’T BOTHER THEM.

2022 – Confirmed. Although one of the caddies did initiate some light conversation with me on Sunday.

 

2019 - The fans who ponied up $10,000 to play in the Pro-Am tournament have too much time and too much money.   

2020 - PRO AM WAS CANCELLED THIS YEAR.

2021 - CONFIRMED, ALTHOUGH THE AM’S SEEM TO ENJOY IT.

2022 – Confirmed. The Am’s this year were a very pleasant group of guys and turned out to be reasonable golfers.

 

2019 - Most of the spectators are great.

2020 - N/A. THERE WERE A FEW HOMES AROUND THE COURSE WHICH SET UP SMALL VIEWING AREAS, 6-10 PEOPLE, AND THEY WERE PLEASANT AND SUPPORTIVE.

2021 - CONFIRMED. HAVING FANS BACK WAS BETTER. MOST OF THE PLAYERS SEEM TO LIKE A LITTLE FAN EXCITEMENT.

2022 – Confirmed. Spectators seemed to be having fun.

 

2019 - A few of them are not. Yelling inappropriate things and just generally being jerks. The pros ignore them.

2020 - N/A, EXCEPT FOR PROTESTERS WHO CHANTED PEACEFULLY OUTSIDE THE MAIN ENTRANCE.

2021 - CONFIRMED. ONE OF THE PROS MENTIONED TO ME THAT 98% OF THE FANS ARE GREAT AND THE OTHER 2% ARE (UNPUBLISHABLE DERAGATORY TERM.)

2022 – Didn’t hear anything negative this year. Although, one of the caddies did say that fans don’t really understand the game that the pros play. They’ll shout “great shot’ or whatever when, by pro and caddie standards, it isn’t. That’s not a negative necessarily, just an ignorance of how different the game is to the pros.

 

2019 - Spectating is fun from pretty much anywhere, on the course, from a corporate cabana or whatever, but most especially from inside the ropes with the players.

2020 - STILL FUN TO BE WITH PLAYERS.

2021 – CONFIRMED, BETTER TO BE INSIDE THE ROPES.

2022 – Inside the ropes for sure.

 

2019 - Walking with a group past a cabana in which your friends are having fun is a unique experience. They begin shouting your name as they see you walk by. Fans of our own, so to speak. Strangers in adjoining cabanas don’t know why they’re yelling, but they begin to look too. One of the pros turned around and gave me a smile as I waved to my crew. Shout out to the Go Team.

2020 - N/A THIS YEAR.

2021 - CONFIRMED. I HAD FRIENDS CALLING OUT TO ME ON THE COURSE, SO DID MY STANDARD BEARER, WHICH WAS FUN.

2022 – A few shout outs, which is always cool.

 

2019 - Professional golfers, in general, have attractive wives or girlfriends.

2020 - I WOULD ASSUME THIS IS STILL TRUE, BUT NONE WERE IN ATTENDANCE THIS YEAR.

2021 - CONFIRMED. WIVES AND GIRLFIENDS WERE BACK THIS YEAR.

2022 – Confirmed.

 

2019 - The professional caddies are very smart guys and usually excellent golfers themselves. They know exactly where they are on the course at all times and they know exactly how far their guy hits every club in his bag.

2020 - AGREED. NO CHANGE FROM 2019.

2021 - CONFIRMED.

2022 – Very true indeed.

 

2019 - The logistics of putting on an event like the RMC is fascinating. There must be a gazillion (that’s the technical term) of items to handle and decisions to make.

2020 - AGREED. EVEN WITH A SMALLER EVENT, THE LOGISTICS ARE AMAZING.

2021 - CONFIRMED. STILL AMAZING. AND TO THINK THAT THE PGA TOUR DOES AN EVENT NEARLY EVERY WEEKEND ALL SUMMER LONG WITHOUT ANY MAJOR HICCUPS IS ASTOUNDING.

2022 – Still astounding. Preparations begin months in advance. Getting the course in prime condition, construction of the grandstands and tents, cabanas, hospitality areas, coordinating dozens of sponsors, 150 pros, nearly 2000 volunteers, parking, food, security, miles of cables for TV and wifi, ropes to mark off spectator areas, temporary fencing installed around the entire club, both courses, with RMC and FedEx emblazoned upon them every few feet. And much more. And BTW, some of the bigger structures erected are not tents in any sense of the word. They are multi level, semi permanent facilities with air conditioning and elevators.

 

2019 - And finally, the game that the pros play is nothing like the game that the rest of us play. They are so much better on every level that there really isn’t a comparison to us amateurs.

2020 - AGREED. NO CHANGE FROM 2019.

2021  - CONFIRMED. WHAT THE PROS DO AND WHAT WE AMATEURS DO IS BARELY EVEN THE SAME SPORT. THEY ARE MAGNITUDES BETTER THAN EVEN THE BEST AMATEURS

2022 – Confirmed. Pros are light years better than the average golfer. I do wonder why they won’t let the pros use range finders to get yardage. Seems like it would speed up play and it doesn’t make executing your shots any easier.

 

Some additional comments from 2020. The PGA has lots of “official” sponsors. Official insurance company. Official beer. Official wine. Official spirit (not to be confused with beer or wine.) Official newspaper. Official tire. Official multi function printer. Official at home colon screening sponsor (yep, that’s an official thing.) Official tech partner. And so forth. I’m guessing, just guessing, that there is a sponsorship price which once paid, gets you an “official” title.

2021 - Confirmed. Lots of advertisements everywhere, but with a purse of $7.5 million, that money has to come from somewhere. Several people asked me how the members feel about having the tournament, how long the course is out of commission for us, etc. In short, we love it. I think it’s great for the club and great for the city of Detroit. We’re off the course for a total of about 10 days, which is no big deal. And we have reciprocity to play other courses in town, so it really isn’t much of an inconvenience. The set up of the tents and cabanas and stuff takes several month but it doesn’t affect play and the breakdown takes only a few weeks. By the end of this month, the course will be like nothing ever happened.

2022 – Saw the Goodyear blimp this year. That was new.

 

2020 - The named presenting sponsor, Rocket Mortgage, had its name plastered pretty much everywhere. There wasn’t a blank space around a TV tower or fence line that didn’t have the logo.

2021 - Yep, and we’re happy to have them. Without them and Dan Gilbert especially, there would not be a Rocket Mortgage Classic. There is one more year left on the contract for the RMC at DGC, but I’ve heard that we’re working on an extension.

2022 – Same. And the club and PGA recently signed a 4 year extension so the tourney will be around at least until 2026.

 

2020 - Golf can be a painfully slow sport. The pros, this is their job after all and a stroke or two saved can mean a vast difference in paychecks, are very deliberate. In between shots, there is a lot of hurry up and wait.

2021 - Confirmed.

2022 – Confirmed. Practice round was very slow with 4 Am’s and 1 pro. Early round on Sunday morning with only 2 pros who weren’t really in the mix went much faster.

 

2020 - I do plan to volunteer again next year. Hopefully, it will be more normal than this year.

2021 - Confirmed.

2022 – Confirmed. Of all the available volunteer positions, and there are many, I still think the walking scorer role is my favorite.

 

If you’ve read this far, thanks for indulging my ever expanding RMC diary. If you enjoyed it, I’m glad. If you didn’t, my apologies for wasting a few minutes of your life.

 

 

This week’s chuckle is engineer/comedian Don McMillan with some interesting statistics, https://www.youtube.com/watch?v=LYE3GtXqDV0

Safe for work. #mathwins.

 

LF28 – “They’ve done studies you know. 60% of the time, it works every time.” – Brian Fantana.

 

Have a great week and stay healthy. CRN-4884365-080222

 

Want to get on my calendar? Click here, https://calendly.com/michael-acho

Michael J. Acho, MBA, CFP®
Private Wealth Advisor

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