🧲 This Could Change Everything

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What’s on the Menu 🍴

This summer has been anything but boring for investors.

From a wild earnings season, aggressive Fed interest rate hikes, and innovations… There’s never a dull day in the markets!

Let’s dive in and break some bread together:

• This Could Change Everything 🧲 

• Dumb Money Arguments🤬

• Master the Mental Game of Investing📚

• Fed's Rate Hike: What's Next? 📈

Today’s newsletter is a 5 minute read.

This Could Change Everything 🧲 

This past weekend a pair of academic papers were published by a team of Korean scientists, and if their claims can be confirmed, our world may forever change.

The scientists are claiming to have found a simple material that acts as a superconductor at room temperature and ambient pressure.

Unlike traditional electrical conducting materials such as copper, superconductors have the incredible property of zero electrical resistance once they dip below a critical temperature.

Superconductors can hold electric currents with little to no degradation even with minimal voltage applied.

Practically, this means that superconductors can act as super efficient batteries or as electrical transmission lines with virtually no transmission losses.

Think iPhones & computer chips that never overheat, super efficient electrical grids, quantum computers that don’t cost millions to build, cheap MRI machines, and maybe even workable nuclear fusion reactors.

Superconductors are not new, but most of them operate at extremely cold temperatures below -200 degrees Celsius / -300 degrees Fahrenheit or at extremely high pressures.

A room temperature ambient pressure superconductor material that is easy & cheap to make would be a total game changer for our society.

There is rightly a ton of skepticism about the claims from the Korean scientists. Their papers appear to have been hastily released and missing key pieces of information.

Some have speculated the papers were released in this way because of infighting for credit, as this discovery would be worthy of a Nobel prize if confirmed.

The good news is that the material they found seems to be replicable in a matter of days or weeks, and efforts are already underway by scientists to confirm/discredit the discovery.

An American engineer is even live-tweeting their process:

We will likely know within weeks (or possibly days) if this discovery is the real deal!

In the meantime we’re going to be spending some time thinking about the investing ramifications as there could be MANY winners and losers here.

 Dumb Money Arguments 🤬

In “personal finance land” a one track mind is probably the worst kind you can have.

We see it all the time: people arguing that their way of building wealth is the best way.

The fact of the matter is, most arguments over how to handle money are pointless.

The reason behind this is very simple:

Everyone’s financial situation is like a unique fingerprint.

One person may prefer, and be able to afford leasing a car and renting in a big city (in fact, owning a home in a high cost of living city may make ZERO financial sense).

Another may benefit more financially by owning a home in the suburbs and hanging onto the car they own.

Then there’s the Real Estate investing argument which we see a lot of lately.

Some people hate the idea of owning real estate. As “passive” as people make it sound, it’s simply not!

The things that dictate how someone may invest and manage their financial lives are:

• Income level

• Risk tolerance

• Free time

• If they have children or not

• Their career

• How much they travel

And the list goes on and on…

Keep this in mind: there's no single recipe for creating wealth in the kitchen of life, and don't let anyone stir doubts in your mind by suggesting otherwise.

Just as there are countless ways to bake a cake, there are multiple paths to financial success.

Master the Mental Game of Investing 📚

What sends the price of a market soaring or plunging?

You guessed it - the fascinating thing we call human psychology.

The best investors don't just play the game; they understand the game…

And the first rule of this high-stakes game is to comprehend the workings of your own mind before attempting to decode markets.

Our mental cogs can be our allies or our foes in the rollercoaster ride of trading and investing.

And to ensure they're more of the former than the latter, we've curated a list of some killer books that break down the science of investing psychology.

1. The Psychology of Money: Timeless lessons on wealth, greed, and happiness

A money-managing manual like no other. Morgan Housel delves into how our perceptions of wealth, aspirations, and personal satisfaction impact our financial decisions. It's a must-read to challenge your own notions of money and success.

2. Predictably Irrational: The Hidden Forces That Shape Our Decisions

Dan Ariely pulls back the curtain on the irrational behaviors and biases that sway our decisions, even when we believe we're being logical. A wake-up call for anyone looking to fine-tune their investing mindset.

3. Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

Nassim Nicholas Taleb takes you on a wild ride, exploring the often underestimated role of luck and randomness in our lives and markets. It's a cautionary tale that warns against mistaking luck for skill in the world of investing.

4. Irrational Exuberance: Revised and Expanded Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing

Robert J. Shiller brilliantly dissects financial bubbles, mass psychology, and their disastrous impact on the markets. This book is a beacon guiding investors through the stormy seas of market manias and panics.

5. The Mental Game of Trading: A System for Solving Problems with Greed, Fear, Anger, Confidence, and Discipline

Like a seasoned coach, Jared Tendler lays out strategies to tackle fear, greed, and other psychological pitfalls that can trip up traders. It’s like getting a playbook for mastering the mental game of trading.

6. Trading in the Zone: Master the Market with Confidence, Discipline, and a Winning Attitude

Mark Douglas is your personal investing therapist, helping you overcome the fear and risk associated with trading. The book underscores the significance of consistency and the right mindset in achieving investing success.

Remember, the game of investing is not just about numbers and trends, it's a psychological ballet danced on the global stage.

So, dive into these reads and flex your investing mental muscles!

Fed's Rate Hike: What's Next? 📈

The Federal Open Market Committee (FOMC) of the U.S. Federal Reserve recently decided to hike the fed funds rate by 25 basis points, bringing it to a range of 5.25%-5.50%.

This move was fully anticipated by markets.

Now, you might be wondering, "What's the big deal about a quarter of a percent?"

Well, a small change can cause a big splash. This rate hike means tighter credit conditions for households and businesses, which could potentially slow down economic activity, hiring, and inflation.

But, like predicting the weather, the extent of these effects remains uncertain.

The Fed Chairman, Jerome Powell, is keeping his cards close to his chest. No decisions about future rate hikes or pauses have been made, and the central bank will be highly data dependent going forward.

Interestingly, the Fed staff is no longer anticipating a recession, a change from their previous forecast of a mild one.

Despite this, the market is like a stubborn mule, not fully buying into the Fed's projections.

There's an 82% probability that the Fed keeps rates the same at their next meeting in September, and the market is predicting rates to start dropping by next March.

But remember, in the world of macro economics, a lot can change faster than a New York minute.

Now, let's talk about how this impacts you, the investor.

Higher interest rates mean borrowing money becomes more expensive. This can slow down economic growth as companies might cut back on spending and consumers might cut back on borrowing.

On the flip side, it can be good news for savers and investors looking for income-producing investments, as they could see higher returns.

As for the banking system, banks might tighten their lending standards, making it harder for consumers and businesses to get loans.

But, banks could also benefit from higher interest rates, as they earn more from the interest they charge on loans.

So, what's the takeaway?

As an investor, it's important to keep an eye on the Fed's moves and understand how they can impact your investments.

But remember, investing is a marathon, not a sprint. Don't make rash decisions based on short-term events.

Instead, focus on your long-term financial goals.

This Week’s We Talk Money Episode 🎙️

In this week’s We Talk Money episode, we’re talking about WHY the stock market keeps brushing off the Fed’s attempt at crushing the economy by raising interest rates.

You’ll learn:

• Are stocks going to hit a new all time high soon?

• Is crypto going back into an altcoin season?

• Earnings season $GOOG $MSFT $SNAP

• Twitter turns into X

• Worldcoin & more

Delicious Bites 😋

• 8 Tips To Improve Communication In Your Startup Team

• Billionaire charged with insider trading

• SBF political campaign finances charges dropped

• Who’s more likely to get audited by the IRS?

• One of our favorite crypto hardware wallets

Food For Thought 🧠

"The only way to make sense out of change is to plunge into it, move with it, and join the dance.”
- Alan Watts

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.