The Phoenician League

What the kids think about economics

Our homeschool co-op celebrated the close of another successful semester this week.

It’s humbling to watch these kids learn and grow. They are so much smarter than I was at their age… and they communicate infinitely better.

Here’s a snapshot of my daughter giving a presentation on what she learned in her science class:

Coincidently, I offered to teach a course on economics for the co-op this semester. I was excited about that – I spent some time putting together my first few lessons plans.

Believe it or not… none of the kids signed up for my proposed class. They all wanted to take the other class in the same time slot.

All I could do is chuckle.

For some weird reason I find the study of economics to be fascinating. There’s never a dull moment where economics is involved.

I guess the kids don’t share my enthusiasm for the matter. Maybe I’ll have to try again with improved messaging next semester.

And speaking of improved messaging – I did a webinar with Tom Woods’ group on Monday. Tom has actually written books on economics… so I guess his audience was a little more receptive to my talk.

I shared with you the first of a series of short highlight videos yesterday.

If you would like to peruse video #2, I will post it below. And the full webinar replay is right here: https://phoenician-league.lpages.co/financial-freedom-webinar-replay-tw

-Joe Withrow

The big picture of money and investing…

It’s starting to feel like the holiday season, isn’t it?

Most of the leaves have fallen… the pumpkins are out on the front porch… Sam Adams is releasing its holiday style collection – what’s not to love?

This is by far my favorite time of year. And I can’t help but feel a connection to generations past as we celebrate Thanksgiving, Christmas, and then the dawn of a new year.

There’s something magical about these long-seated cultural traditions that tie us to our past… and imbue us with a responsibility for the future. Perhaps I’ll share more thoughts on that with you next week.

For this week, I’d like to share with you some highlights from a webinar I did yesterday for my friend Tom Woods’ audience. It focused on the big picture of money and investing, and I think I may have communicated it better than I ever have before.

I’m learning how to produce a series of short 2-minute highlight videos pulled from the larger recording. If you would care to check out the first one, you can find it below.

And if you would like to view the entire webinar replay, you can find it right here.

Investing vs Speculating

Bitcoin kept running after I penned yesterday’s insight. It ultimately hit a high of $89,500 before pulling back.

But as we discussed yesterday, to fixate on Bitcoin’s dollar price is to miss the big picture.

What matters is that Bitcoin is a world class reserve asset. And if we want to build lasting wealth, all we need to do is accumulate world class assets over time.

What we’re talking about is the exact opposite of what happened a few years ago.

In January 2021, GameStop (GME) – a company teetering on the edge of bankruptcy – suddenly saw its shares skyrocket overnight. It all stemmed from a plot that originated in the Reddit forum /WallStreetBets.

Somebody noticed that GameStop was heavily shorted… hedge funds were betting hard that its shares would go down. So this person shared that information with traders in the Reddit forum and they came to an informal accord.

The Secret to Building Wealth

Fall is on the downswing up here in the mountains.

Two weeks ago the trees were a robust symphony of reds, oranges, and yellows – shades of each color weaving an intricate web upon the mountains. Today, most of those trees are bare… and winter’s gray stare draws near.

To every time there is a season, as the Book of Ecclesiastes notes. And the same is true in the world of money and finance.

We were talking about Bitcoin when we left off last week. It had just shot past $74,000… and I took a few minutes to reminisce about the ride.

Well, Bitcoin didn’t bother to take a breather. As I write, Bitcoin is now trading just shy of $82,000… and suddenly the six-figures benchmark is in play.

I’ve seen this same pattern play out three times before. First in 2014. Then in 2017… and in 2020. Here we go again…

How to make $73,673 in one move

We’ve been chatting about the US elections this week – and how the results will impact America’s Great Reorganization.

A curious thing happened as the votes were being counted Tuesday night… Bitcoin shot up to $74,000. That means one bitcoin is now worth considerably more than the average car here in the US.

I can’t help but chuckle thinking about it…

I bought my first bitcoins in 2014. As I got more comfortable with it – and as the technical infrastructure improved – I began suggesting that others start buying too.

Please don’t get the wrong idea here… I’m not one of those guys that made hundreds of millions on Bitcoin. I’ve done well. But it’s not like I had the resources to load up in the early days.

In 2014 I had a $50,000 salary and an infant daughter at home. Bitcoin traded for around $250 at its low point that year. For much of the year it was closer to $800. So it’s not like I was buying thousands of bitcoins at a time – that opportunity had past.

The reason I chuckle today is because I told countless people to start buying Bitcoin back then. Then I kept at it for years.

The day after…

The US presidential election results are mostly in… and it seems we have a clear-cut winner. I must admit – I didn’t expect it to be so smooth.

Today I see plenty of folks out there congratulating themselves for a job well done. Elon Musk even put out a tweet saying that the future will be fantastic – thanks to the election results.

I appreciate the positivity. And I’ll be especially encouraged if Mr. Musk follows up on his promise to cut $2 trillion in federal spending.

At the same time… it’s not like some magic switch just flipped.

On Elections, Voting, and Health

Looks like we made it to election day here in the US.

I’ve always loathed this day in the past. Even if you unplug from social media and mainstream “news” – which I have – it’s still impossible to insulate yourself from the fevered noise.

Our system propagates the idea that the act of voting is somehow heroic. It seems to me that the machine wants us to think that voting is our civic duty – and our only one. Like it’s the single most important thing we can do.

Case in point – I’ve seen plenty of political signs recently that say something to the effect of “Save America, Vote for XXX”.

If only it were that simple…

It will take a lot more than voting if we want to salvage what’s left of the American experiment. We’ll need to do more than vote. We’ll need to act.

That is to say, we’ll need to use our unique skills and talents to have a positive impact on our society in some fashion. Let’s talk more about that tomorrow.

Getting back to the election – this is the first time in forty years that I think the outcome will be meaningful.

As we discussed last month, America is at a crossroads. The Great Reorganization is upon us… whether we like it or not. The only question is – will we have an orderly reorganization or a chaotic one?

Old is new and new is old

We “celebrated” Halloween up here in the mountains last week.

I put celebrated in quotes because I mostly despise the holiday. I believe the day may have real significance in other cultures… but not here. It’s a day where people buy a bunch of cheap candy from Sam’s Club to hand out to the kids who trick-or-treat their neighborhood. As though the kids need more processed sugar and artificial ingredients in their life.

The only thing that prevents me from being a complete Scrooge on the matter is how excited the kids get. They plan out their costumes months in advance. And then they can’t wait to see their friends and compare.

Here’s a shot of some of the kids together in our neck of the woods:

This is the only part of Halloween that I like. The kids playing together in their costumes.

Sometimes I wonder why we keep things like this going from generation to generation. I suppose it’s just an old tradition that also takes parents and grandparents back to their own childhood.

The reality is that inertia is a powerful thing.

An object in motion will stay in motion until an outside force acts upon in it. The same is true for holidays like Halloween… which is why we invested in Hershey (HSY) inside of our model equity portfolio.

It’s not often that outside forces act upon cultural traditions. But in the world of money and finance – it’s a routine occurrence.

The Great Reorganization – Part 8

Welcome to Part 8 of this running thread on America’s Great Reorganization. And thank you for sticking with me through it all.

Yesterday we talked about the collectivist approach to investing. That’s the “conventional” retirement planning model.

Retirement Inc. has pushed the collectivist approach for forty years now. It says we should all funnel our savings into various kinds of funds (mutual funds/index funds/exchange-traded funds) and then hold them inside of retirement accounts – 401(k)s and IRAs.

As we discussed, this model created distortions within our society… because it enabled a quasi-political agenda. Worse, the conventional approach strapped humanity to the hamster wheel. Here’s what I mean…

The Great Reorganization – Part 7

Over the past week I’ve submitted to you my running macroeconomic thesis: America’s Great Reorganization…

They say that there are only two guarantees in life – death and taxes. I don’t care much for that statement though. So I’d like to propose a modification.

I think there’s only one guarantee in life… Change. That’s it.

Everything changes over time. We know this to be true by experience.

One day we look in the mirror and see a young, vibrant face. But we don’t think too much about it. We have too many places to go and people to see. Our energy is boundless. We just assume it will always be this way.

Then some years go by and we don’t see that same face in the mirror anymore. Somehow it’s not quite so vibrant. And now it has some lines on it. We might sit and ponder this for a little while… because we don’t have other plans. We lack the energy to do all the things we once did.

Well, it’s the same with the economy and thus our society. Change is guaranteed.

As it stands, the cheap money era that reshaped our society over the past five decades is coming to an end. That which was sustained by printed money and artificially low interest rates will come to an end with it.