Disclaimer: Do you own investment research, this newsletter is for entertainment and informational purposes only. The author is not responsible for any losses incurred. What you are reading is not investment advice.

On Tuesday, the S&P CoreLogic Case-Shiller National Home Price Index was released for the month of October. The twenty city index beat analyst expectations showing a 8.4% gain in October ’20 median home prices compared with October ’19, up from 7% growth in September.

During the outset of the Coronavirus Recession, there was debate on Wall Street over what “shape” the economic recovery was going to be: V, L, U, or W. The American economy ultimately received the “K treatment.” A “K-Shaped” economic recovery refers to an economic recovery unequally benefitting different industries or sectors of the economy. All recessions are unequal, hitting some industries harder than others, however the Coronavirus Recession has accelerated this fact pushing: hospitality, cruise lines, movie theatres, casinos, restaurants, salons, gyms, brick and mortar retail, and airlines into record bankruptcies and restructurings. …

Wealth compounds itself over generations. Not having access to wealth, or even income for hundreds of years puts you at a significant structural disadvantage. The legacy of slavery connects to hundreds of years of economic exclusion which continued long after emancipation. During the Civil War, General Sherman’s Field Order No.15 sought to divide nearly 400,000 acres of former plantation land on the coast of South Carolina and Georgia into forty acre parcels which would be granted to newly freed black families in Georgia. President Lincoln was assassinated before he could formally validate the wartime order. …

Private prisons are under significant political and social scrutiny. Companies like Geo Group and Core Civic have been accused of profiting off mass incarceration. With a potential Biden Presidency on the horizon, activist investors have an opportunity to cash in on a wild rollercoaster ride come November 3rd.

As many analysts on Wall Street have been calling for a Biden win as the most likely scenario, on par with most polling averages, others like DoubleLine Capital CEO Jeffrey Gundlach maintain the thesis that Trump, the underdog, can still win. …

Applying Leverage

Leverage in the financial world is a sophisticated way of saying debt. Using debt to invest sounds contradictory to how we’ve been taught to manage our money, but if used correctly it can yield awesome investment returns, and accelerate the compound annual growth of your capital. On the flip side, if you use too much, the risk profile of the investment increases proportionally as well. The ultimate risk is total default. In real estate this foreclosure. Essentially leverage accelerates potential gain, but also potential loss; both to the same proportion.