The Hottest and Coldest Countries in the World.
The 1 Commodity Most Impacting Global GDP & the Dark Shadows Looming Over the World.
​
The Hottest Countries
Guyana‘s GDP is predicted to be the highest in the world at 47%. (Keep reading for the event that sparked such a leap.) Columbia will lead Latin America in GDP, at an estimated 5.8% in 2022. Indonesia’s 5.4% 2022 GDP growth projection is one of the strongest in Asia. That compares to a predicted 1.7% in the U.S., 3.3% in China and a recession in Russia and Belarus.
​

What do the hot countries have in common, in a world where economies are posting much slower growth this year than last? They all export energy products. 3.2 billion barrels of oil was found off the coast of Guyana in 2018. The country began exporting in 2020. In 2021, Colombia was South America’s largest coal producer and second-largest petroleum and other liquids producer, after Brazil (source: EIA.gov). Last year, Indonesia was the world's largest exporter of coal by weight and the seventh-largest exporter of liquefied natural gas (LNG). The country also exports petroleum, and is the world’s largest supplier of nickel. (Watch my webinar on nickel-producing countries.)
 
Russia is the 3rd largest producer of petroleum in the world (behind the U.S. and Saudi Arabia) and the 2nd largest producer of natural gas (behind the U.S.). However, the Russian economy is expected to contract by -7.8% in 2022, due to the worldwide boycotts, as a result of the country’s invasion of Ukraine (source: Reuters). The paradox is that had Russia not invaded Ukraine, it is unlikely that oil prices would have shot up to $110/barrel. 2021 ended the year at under $70/barrel (still high).

Columbia and Indonesia ETFs
With persistently elevated oil prices, why did the share price of the iShares MSCI Columbia ETF (symbol: ICOL) drop -26% this month? Even strong funds and companies can get drug down in a bear market. Another factor for Colombia was that the country just elected Gustavo Petro, the mayor of Bogota and a former leftwing guerilla fighter. He’s Colombia’s 1st socialist President. President Petro is promising pension reforms that could result in a 3% lowering of GDP for Colombia in 2022, if they materialize. While political reform can be glacial, the kneejerk reaction of investors rarely is.
 
Is the country oversold? As one of the global leaders of GDP in 2022, is Colombia ripe for buying? While many investors are focusing on oil companies to capitalize on very high oil prices, if you are interested in energy, another play is to add some of these energy exporting emerging economies. There’s always heightened risk when you’re dealing with emerging countries. There can also be greater rewards. The Indonesia iShares MSCI ETF (EIDO) is down about 10% from its 52-week high.
 
Will Energy Prices Remain So High?
The big question is, “Will oil prices continue to be above $100 a barrel?” Oil prices are highly correlated with war. It takes a lot of oil and gas to fly planes, fuel tanks and truck soldiers to the battlefields. Another key factor to high prices is that Europe remains very dependent upon Russian oil and gas. Demand is high, and Russian boycotts create less supply, and higher prices.
 
On the other hand, when consumers work-from-home, buy electric vehicles or trim back their travel because gas prices are too high, the plunge can be swift and steep – as we saw in the pandemic. The pandemic lockdowns in March of 2020 were the first time that oil prices were negative – when traders were paying others to take delivery of products they had no way of storing.
 
Inflation and Interest Rates
Politicians are keen to reduce oil prices as soon as possible to help out their consumers. Central bank governors are jacking up interest rates to battle inflation (of which energy is the biggest driver).
 
When Will the War End?
Another interesting development is that Western intelligence officials believe that Russia will exhaust their combat capabilities in a few months. Will this end the war in Ukraine?

Bottom Line
For now, there seems no end in sight for high oil prices. However, it’s always best to be forward-thinking when investing, and to be mindful of pricing in our entrance and exit strategies. It is certainly in most of our best interests to lower oil and gas prices, stamp-out inflation, and promote and sustain a more peaceful and productive world.
 
If high energy prices persist, then Columbia, Indonesia, Guyana and other energy exporters (including companies) will benefit. If the war in Ukraine ends or if energy prices abate, what’s good for humanity and the healing of our planet might be very hard on investors’ wallets – particularly if you’ve purchased Chevron, Exxon Mobil or another oil company at an all-time high.
 
The markets remain volatile, and the risk of a recession is real and heightened. The best approach in times of volatility and uncertainty is to be properly protected and diversified – and to rebalance regularly – particularly if a stock or fund has had a nice run (like both ICOL and EIDO did this year, before the June weakness. Personally, I'm bracing for a potentially hellish summer. However, it's never a matter of being all in or all out.
 

If you're interested in learning stock and 21st Century time-proven investing strategies for protecting your wealth and managing the bear market from a No. 1 stock picker, join us for our Oct. 8-10, 2022 Financial Freedom Retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. Get the best price and a free 4-part Protect Your Wealth Now webinar that will get you started immediately when you register before July 15, 2022.


​

Check out Natalie Pace's Apple Podcast.
Watch videoconferences and webinars on Youtube.

Other Blogs of Interest
10 Misleading Broker/Salesman Pitches.
Why are Banks and Dividend Stocks Losing Money?
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Should You Sell in April? 
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The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
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Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
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Investor IQ Test Answers
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Office Buildings are Still Ghost Towns.
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Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
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The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​“Lies, Damn Lies and Statistics” Mark Twain.
Debunking the economic nonsense and noise that abound.
 
When the markets head south, in the initial days of a bear market, broker/salesmen scramble for their sales-speak playbook. Frantic calls pour in, and many are placated with some of the lines listed below – unless the plunge deepens and the losses become unbearable (which sadly has happened in three of the last three recessions). The pandemic recession was the blink of an eye and came roaring back, so many have forgotten that the stock market dropped almost 40% in just a month. Don’t cling to the hope that the next  recession will act the same. In Federal Reserve Chairman Jerome Powell’s words (from a May 2022 interview), “The process of getting inflation down to 2% will include some pain.”
 
So, with the S&P500 officially in a bear market, with losses since the high of -24%, should we be placated or should we get more defensive? Should we rely upon what we’re hearing in the mainstream media and from our financial advisor? What can protect Main Street investors from stock market losses? (There are 21st Century, time-proven solutions. Keep reading.)
 
Below are 10 of the nonsense and noise (lies, damn lies and statistics) that are being bantered about in the media – even as the wealthiest investors continue to send the markets south, as they hunker down for the economic hurricane on the horizon. (Wall Street insiders are always the first to sell, and the first to buy back in at the bottom.)
 
10 Misleading and Potentially Catastrophic Sound Bites
 
1. People are being forced to sell low to take their mandatory distributions.
 
2. The statistics tell us we are not in a recession.
 
3.  The economy is strong and corporations have a lot of cash.
 
4. We can move you to bonds to get you safer.
 
5. The Treasury Series I bonds are paying over 9%.
 
6. If you make changes now, you’ll just be selling low.
 
7. Turning off the news is a good idea.
 
8. Buy and Hold is a strategy that Warren Buffett uses.
 
9. You have to invest to keep up with inflation.
 
10. You should buy a house now before interest rates go up anymore.
 
 
Here is a little more color on each one of these time-worn sales pitches, alongside a better, time-proven, 21st-century plan.
 
 
1. People are being forced to sell low to take their mandatory distributions.
If you have to sell anything right now to take a mandatory distribution, you weren’t properly protected to begin with. Liquidity is an important part of any wealth strategy.
 
2. The statistics tell us we are not in a recession.
Kevin O’Leary, Shark Tank’s Mr. Wonderful, came out with a video today saying that he doesn’t see a recession, even though that’s what a lot of economists and experts are forecasting. The economy contracted in the first quarter. Two consecutive quarters of economic decline marks the start of a recession. So, all eyes are on July 28, 2022, when the 2nd quarter GDP will be announced. If it is negative, we’re in a recession.
 
Jerome Powell revealed that the economy picked up in the 2nd quarter in his press release on June 15, 2022. That could mean that we avert a recession for now, which is often what happens in the early stages of a bear market. However, it is also common for the stock market to start its decline well before the official recession announcement. The last two recessions are prime examples of that. The S&P500 had already dropped almost 40% before most people even knew we were in a pandemic in March of 2020. By the time the White House and Treasury Department admitted that we were in a deep recession in October 2008, the Dow Jones Industrial Average had already dropped about 45%. So, if you wait for the headline that we’re in a recession, it will be too late to protect your wealth.
 
The bottom in the Great Recession was 55% losses. At that point many people thought we were in an Apocalypse because:
 
* Lehman brothers got liquidated,
* The entire banking system had to be billed out,
* Mortgage banks and brokerages had to be rescued
* Insurance companies, like AIG, were bailed out, and,
* General Motors and Chrysler declared bankruptcy.
 
Your plan should protect you from the recession before it arrives. Fortunately, that plan is easy-as-a-pie-chart with regular rebalancing. In fact, if your losses to date are more than 10%, that is a red flag that your current plan is not well-designed.
 

3.  The economy is strong and corporations have a lot of cash.
There is still a lot of cash in some of the corporations. Interest rates were near zero for a very long time, and corporations could borrow very cheaply, let their own credit score fall to the lowest rung of investment grade and receive no penalty for that kind of behavior. Now, we have over half of the S&P 500 at or near junk-bond status, including a lot of banks, brokerages and insurance companies. Saying that the corporations have a lot of cash, and ignoring the mountains of debt, is a perilously dangerous premise.
 
I’ve mentioned that the U.S. economy contracted in the 1st quarter, and is one quarter away from being declared to be in a recession. 2022 full-year GDP keeps getting revised down, with the most recent estimate being 1.7%. The Feds never predict a recession before it arrives. And, of course, when it finally does arrive, it’s always due to some crazy circumstance like war, runaway inflation or some other uncontrollable event. Few ever admit that persistently low interest rates create asset bubbles and dangerously high leverage. Most just try to enjoy the ride as long as it lasts.

​4. We can move you to bonds to get you safer.
Bonds are illiquid and negative yielding. They are vulnerable to interest-rate risk, credit risk, duration risk, and they have no term premium. In a normal world, bonds would be a way to get safe because the Federal Reserve Board would be cutting interest rates, not jacking them up at lightning speed. (There is an inverse relationship between interest rates and bond values.)
 
So, in today’s Debt World, you really need to know what’s safe. Otherwise, you could get locked into a long-term investment that borrows your money well beyond your own expiration date (those 30-45 year bonds), pays you very, very little and is impossible to liquidate. Prospective bond investors should receive a much better interest-rate with lower credit risk as early as next year, and certainly by 2024. If you jump in now, particularly into long-term bonds, you could be left holding the bag on an illiquid, negative-yielding, long-term, money-losing investment.
 
5. The Treasury Series I bonds are paying over 9%.
The Series 1 savings bond is currently paying a 9.62% composite rate. That is astonishingly high in today’s world, where junk bonds are only paying 5%. However, that rate is only good for six months. The new composite rate will be announced on November 1. The fixed rate is zero on the bond. The other piece of the equation is attached to inflation, which is currently high. Inflation could still be high in November. However, if the FOMC‘s projections turn out to be accurate, next year inflation is going to drop by almost half. Since the fixed rate is zero on the bond, this could take the interest rate below 5%. If inflation falls further than that the interest-rate will be lower. If deflation occurs, then you could be getting no interest at all, while others are receiving a much higher rate in their savings accounts.
 
You must hold the Series 1 savings bond for one year. If you exit before five years then you’re going to give up three months of your interest. This could still be worth it. However, it is unlikely that this bond will pay 9.62% for longer than the first six month period – unless inflation remains stubbornly high.
 
6. If you make changes now, you’ll just be selling low.
The S&P earned about 27% last year, and is down about -24% already this year. So, we’ve given back most of the 2021 gains. However, we’ve been in a secular bull market since 2009. So, we’re still fairly high up the buy low, sell high continuum, particularly if we were well diversified and leaning into technology and growth over the past decade. If you are being told that you are selling low, it’s a sales tactic that’s intended to manipulate your emotions to keep you from making any changes. This is a hallmark of the last-century Buy & Hope strategy.
 
What’s true? The sooner that we adopt a time-proven 21st Century strategy, the more of our wealth that we can protect. If we wait and the coming recession is as problematic as the Great Recession or the Dot Com Recession, we could be risking more than half of our wealth. This imposes serious financial hardship on our family. It wipes out our credit score. When we ride the Dow Jones Industrial Average all the way to its trough (which was 6547 on March 9, 2009), we then have to spend much of the bull market making up losses. (It took 15 years for the NASDAQ Composite Index to recover from the Dot Com Recession.)
 
Sadly, after steep losses, many people are tempted to sell low and get out of everything altogether. Clinging to a money-losing proposition doesn’t work and neither does market timing. Having blind faith that someone else is protecting your wealth, when a simple 15-year performance chart could reveal that you are at risk of riding a Wall Street roller coaster much lower than it is right now, can be perilous to your fiscal health.
 

​

7. Turning off the news is a good idea.
Turning off the noise is actually a good idea, but only if you have a time proven 21st-century plan in place. Acting on headlines almost always put you on the wrong side of the trade.

If your plan is not properly protected and diversified, and you are not rebalancing it regularly to capture your gains, then whoever is telling you to stop watching the news is motivated to control you into adopting their plan. If things worsen, you’re not going to be able to stop worrying because you’ll quite clearly see the losses in your accounts. It’s much easier to manage your emotions when your plan protects you from extreme losses.
 
8. Buy and Hold is a strategy that Warren Buffett uses.
Warren Buffett quite famously sold all of his General Electric stock just weeks before the company announced that they were cutting their dividend in half. (The stock dropped by half when the announcement was made.) Buffett used to live and die by Wells Fargo Bank stock. This is a holding that he didn’t get out of in time. He also quite famously bought into airlines at the low in the pandemic, only to sell them at a loss just a few weeks later.
 
There’s a Wall Street saying, “Stick to your knitting.” Adopt a strategy that actually works in the 21st-century, and then don’t allow yourself to be distracted by the noise and nonsense that blusters nonstop. Warren Buffett, like other institutional investors, employs a team of analysts and managers who are active in their trading. When there’s a material event that changes the game or if they made the wrong call (as with the airlines), they are the first to get out.
 
Fortunately, Main Street investors don’t have to jump into active trading. We just need to keep enough safe, be properly diversified and rebalance regularly (1-3 times a year).  
 
9. You have to invest to keep up with inflation.
This is a very common sales tactic. It’s used to get you to buy something – sometimes so that the broker/salesman makes an outstanding commission (6-7% or more, which equates to $6,000-$7,000 on every $100,000 invested). You’ll almost always be told that that investment is going to be safe, even if it’s not. Many investments today, including the ones that would normally be used for safety, like bonds and money market funds, are vulnerable to loss of your principal and have other risks.
 
Getting safe in a rising-interest rate, high-inflation environment is a two-step process. I spend one full day on this topic at our Investor Empowerment Retreat. I have an entire section devoted to “What’s Safe?” in The ABCs of Money 5th edition. I also have a free podcast and webinar that you can listen to and watch.
 
10. You should buy a house now before interest rates go up anymore.
Buying a house at an all-time high is a risky proposition that could ruin your life for a decade or longer. There are many things you want to consider before buying a house. However, buying high and having the value of the home drop below the mortgage can be one of the worst investments you’ll ever make. Real estate is an illiquid investment, which means that you might have trouble getting yourself unencumbered from it.
 
I have a webinar and podcast on this topic that it’s important to listen to before buying a home in 2022. If you purchased a home or a vacation home within the last few years, it’s a very good idea to make sure that you:

• Have the ability to monetize and pay for it in a world where people are traveling less,
• Have sufficient equity room between the value of the property and the total amount of your mortgage, in case the value drops, and
• Can easily afford it in a world where a lot of basic needs expenses have skyrocketed.

 
 
Bottom Line
We learned during the Pandemic Recession that there are things we can’t live without no matter what is happening, like technology, toilet paper and hand sanitizer. What will be the industries that remain more buoyant in the next recession? While technology stocks have actually gotten hammered in 2022, we still need WIFI, smart phones and a lot of the AI that has become imbedded in our lives. The world is still committed to healing our planet and promoting cleaner and greener energy, food and companies. Most of us pay our utility bills, even when we tighten our budgetary belts.
 
The U.S. is a country of innovators that produces a lot of what the rest of the world needs for existence. We tend to attract the top talent from around the world. (Many of our breakthroughs come from immigrants, like Sergey Brin, the co-founder of Google, who is Russian.)
 
The stock market has never gone to zero in over a century – through many times of war and even the Great Depression. Market timing doesn’t work. That is one of the market aphorisms being bantered about that is absolutely true. However, having the appropriate amount safe, being properly diversified, knowing what is safe in a world where bonds and money market funds are vulnerable, and rebalancing at least once a year is a time-proven plan that has successfully navigated through each of the 21st century recessions (which are very different than last-century recessions). This might sound complicated, but it is actually easy-as-a-pie-chart – much easier than you might imagine. That’s why we call it the life math that we should have received in high school and college.
 
The sooner you get a 21st-century, time-proven plan, the better off you’re going to be. It’s time to turn off the noise, sales-speak and the nonsense, and trust results.
 
 
If you're interested in learning stock and 21st Century time-proven investing strategies for protecting your wealth and managing the downturn from a No. 1 stock picker, join us for our Oct. 8-10, 2022 Financial Freedom Retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. Get the best price and a free 4-part Protect Your Wealth Now webinar that will get you started immediately when you register before July 15, 2022.

Check out Natalie Pace's Apple Podcast.
Watch videoconferences and webinars on Youtube.

Other Blogs of Interest
Why are Banks and Dividend Stocks Losing Money?
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Netflix Streaming Wars End in a Bloodbath.
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Are You Gambling With Your Future?
ESG Investing: Missing the E.
Moderna & Biotech Trade at 2-Year Lows.
Bitcoin Crashes.
Crypto, Bold and Stocks All Crash.
The Economy Contracted -1.4% in 1Q 2022.
The Dow Dropped 2000 Points.
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How Will Russian Boycotts Effect U.S. Multinational Companies?
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Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
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2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
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​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
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From FAANNG to ZANA MAD MAAX
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Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
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​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​Investors Ask Natalie: Why Are Bank Stocks Going Down? Shouldn’t They Rise With Interest Rates?
 
While you might think it’s logical that when interest rates rise, banks make “bank,” there’s actually a high correlation with rate hikes and recessions, especially when the rate hikes are unexpected and aggressive. Last week, Jamie Dimon warned that there is an economic “hurricane” on the horizon. We just don’t know how devastating it will be yet.
​
Share price plunges typically precede the actual recession, and bank stocks are no exception to the rout. If you do a chart comparison of major banks compared to the S&P500, they look like shadows.

It’s important to remember that stocks dropped 55% in The Great Recession and took almost 6 years to crawl back to even. The NASDAQ drop was even more dramatic (-78%) and prolonged (15 years) during the Dot Com Recession. Since asset valuations were even higher in 2022 than they were in the Dot Com Bubble, comforting ourselves with the false hope that “it always comes back,” isn’t a great plan.

As researchers Pascal Paul and Simon W. Zhu noted in their report for the Federal Reserve Bank of San Francisco, “What matters for banks is not the level per se but the margin between different interest rates.” When short-term (bank borrowing rates) rise too rapidly, the banks are exposed to interest-rate risk without the buffer of a term premium. The profit margins are just too slim. Combine slim margins with having so many mortgages locked into fixed interest rates at historic lows – about 95% of new and refinanced mortgages have been fixed over the past two years (source: Mortgage Bankers Association) – and a predicted loss of mortgage origination revenue to the tune of a -37% decline from last year, and you’ve got a recipe for a great deal of stress in the financial services industry.


In the Great Recession, if the Treasury and Federal Reserve Board hadn’t bailed out the banks, few would still be in business. Many brokerages (Bear Stearns, Merrill Lynch, Smith Barney, etc.) were absorbed into the banks to prevent them from going belly-up. Investors still lost the majority of their equity investment, and if they were invested in Lehman Bros., they lost all of it. A complete meltdown is not expected to happen this time because analysts point out that credit quality is good and unemployment is at historic lows. However, “pain” can be very broadly spread in a declining market. Losing money in a retirement plan takes down your assets to debt ratio, and your credit score along with it.

I’ll give you a brief tutorial below on some of the issues happening today that are putting bank stocks under pressure. If you’d like to receive our Bank or Brokerage Stock Report Card, simply email info@NataliePace.com with the name of the Stock Report Card that you are interested in.
 
Here are some of the stress points in the economy and banking sector
 
Inverted Yield Curve
Massive Debt & Leverage
High Valuations
Money Market Fund Risk
Russian Exposure
 
And here is additional Information on Each Point..
 
Inverted Yield Curve
The yield curve inverted again on April 4, 2022. Inverted yield curves are almost 100% associated with recessions. It indicates that the bank’s net interest margin is squeezed or negative. In 2020, Paul and Zhu wrote, “Banks’ net interest margins have been falling at the same time as compensation for taking on duration risk has declined over the past three decades.” That scenario is negative for banking revenue and net income.

Massive Debt & Leverage
Low or negative-yielding, high-risk, long-term bonds are a much bigger issue than many fixed-income investors are aware of. Banks have means for managing a lot of this risk, through CLOs and by selling bonds to investors. However, it doesn’t wipe the slate clean, particularly when over half of the S&P500 is at or near junk bond status (including a lot of banks and brokerages).
 
A peak at the Asset Bubble chart below gives you the stark reality of debt and leverage in the U.S. today.
​

Consumer debt is higher than it has ever been, as are corporate and public debt and loans. Additionally, 25-40-year-olds are spending between 35-50% of their income on housing.
The Feds are attempting to contain inflation while keeping the job market strong. However, if layoffs start occurring, consumer debt and leverage could become a big problem for people, products and anyone who loaned money to them.

​High Valuations: Low Interest Rates Create Asset Bubbles
The S&P500 is down -15% from its January 2022 high of 4818. However, as you can see from the chart below, stock prices are still very expensive – even higher than they were in the Dot Com Recession, when the NASDAQ Composite Index dropped 78%. Banks are vulnerable to equity losses.
 

According to the Federal Reserve Financial Stability Report released in May of 2022, “With valuations at high levels, house prices could be particularly sensitive to shocks.” No one is predicting a Great Recession type calamity. However, if you purchased your home recently, it’s worth it to make sure that you haven’t stretched the budget too thinly. It’s equally important to be aware that there are still 1.3 million homes that are severely underwater – even with home prices at all-time highs. Even if everyone pays their mortgage on time, the slowdown in mortgage originations will have a negative impact on mortgage revenues.
 
Money Market Fund Risk
Money Market Funds have seen their assets decline since 2020. Since these funds are “runnable,” they are a “structural vulnerability.” This is something that the Federal Reserve Board has been watching closely. They have a Repo Facility in place to help, which is getting tapped at unprecedented levels (click to see).
 
Many investors are not aware that money market funds can lose money, and that they have redemption gates and liquidity fees. MMFs were a pretty big problem in the Great Recession, and could be a major issue if the current equity downtrend continues. If you’d like to know more about the risks in money market funds, be sure to read the “What’s Safe” section of The ABCs of Money.

Russian Exposure
JP Morgan Chase was often thought of as the bank that raised capital for Russian companies. JPMorgan and Goldman Sachs stated in March 2022 that they were going to exit the country. That means that the 2nd quarter earnings could start reflecting the exit. Citigroup has a bank in Russia. Citi warned that their exposure to Russia amounted to about $10 billion (source: Reuters). Citi’s stock is down 36% -- having plunged more than twice as far as the general market and the company’s banking competitors.

Insurance Companies, Mortgage Banks and Hedge Funds
Most of the issues discussed for the mega, multinational banks are even more problematic for the independent mortgage banks, insurance companies and hedge funds. Mortgage banks are losing revenue and having their profit margins squeezed. Insurance companies (do you have an annuity?) and hedge funds have a high amount of leverage and are very vulnerable to stock market plunges.
 
​Bottom Line
In bear markets, bank stocks are as vulnerable as other equities, as is their dividend. If they don’t pass the Federal Reserve Stress Tests, they are required to cut dividends and suspend share buybacks. (Wells Fargo had this happen in the Pandemic Recession.) When dividends are cut, share prices plunge. Also, the higher the dividend, the higher the risk. Wells Fargo and Citigroup pay the highest dividends in the banking industry right now, and that’s a mere 2.0% and 3.77%, respectively.
 
Now that you know bank stocks can lose as much as other stocks, what’s your best game plan?  Proper diversification with regular rebalancing (something we teach at our Financial Freedom Retreats). You can read about it in The ABCs of Money. You can join us for the June 10-12, 2022 Online Retreat. Or you can email info@NataliePace.com, if you’d like help understanding exactly what you own, how much you are at risk of losing, and what a better plan looks like.
 
 
 
If you're interested in learning stock and 21st Century time-proven investing strategies for protecting your wealth and managing the downturn from a No. 1 stock picker, join us for our June 10-12, 2022 Financial Freedom Retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 

Check out Natalie Pace's Apple Podcast.
Watch videoconferences and webinars on Youtube.

Other Blogs of Interest
Beyond Meat: Rare or Burnt?
Netflix Streaming Wars End in a Bloodbath.
Elon Musk Sells $23 Billon in Tesla Stock and Receives $23 Billion in Options.
Are You Gambling With Your Future?
ESG Investing: Missing the E.
Moderna & Biotech Trade at 2-Year Lows.
Bitcoin Crashes.
Crypto, Bold and Stocks All Crash.
The Economy Contracted -1.4% in 1Q 2022.
The Dow Dropped 2000 Points.
Is Plant-Based Protein Dying?
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
Real Estate Risks.
​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
Omicron is Not the Only Problem
From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Beyond Meat is trading near an all-time low of $25/share (after soaring to $240/share during the pandemic). Kim Kardashian, yes the influencer with 314 million followers on Instagram, just signed on to be the Chief Taste Consultant. So, is this a rare opportunity to buy into the plant-based protein of tomorrow, or is Beyond Meat done?
 
Kim Kardashian
Kim Kardashian is reinventing herself yet again. She is taking advantage of opportunities like hosting Saturday Night Live, dating Pete Davidson and Keeping Up With the Kardashians’ constant headline-grabbing drama to capitalize on one of her passions – a “non-strict” vegetarian diet. Click to watch her Beyond Meat promo, which has already received 1.2 million likes and over 18,700 comments (not all good). Is this all that Beyond Meat needs to find itself back in the freezers of fans and stock portfolios of investors?

Beef, Pork & Chicken Prices Are Rising
In the early days of the pandemic, there was a supply disruption of meat. Beyond Meat products flew off the shelf. By October of 2020, the BYND share price soared to $200/share, from a low of $36/share in March (at the market bottom).
 
In 2022, the USDA is projecting that meat prices could jump 9-10%, with pork up 6-7%. We’ve seen the shift away from meat before during the pandemic. Will inflation price out traditional meat and welcome plant-based protein back into kitchens? It’s a question worth asking before you sell your shares.

2022 Outlook
This year, supply chain disruptions, labor shortages, a lockdown in China and inflation are all impacting Beyond Meat, as well as the other plant-based protein and traditional protein competitors. These factors make forecasting highly uncertain. However, Beyond Meat is projecting a double-digit increase in revenues this year, to $560-$620 million (+21-33%). After subtracting the 1st quarter 2022 revenue of $109.5 million, that parcels out to revenue of $150-$180 million per quarter for the coming three quarters.
 
Last year, the 2nd quarter revenue was $149.4 million. So, 2Q 2022 revenue growth may not be impressive. (Expect the 2Q 2022 earnings report in the 2nd week of August.) However, if the chips start falling in Beyond Meat’s favor or if Kim K’s influence attracts more home cooks, the second half of 2022 could bring more exciting quarterly comparables. The third and fourth quarters of 2021 were $106.4 million and $100.7 million, respectively. At the high-end, the year-over-year revenue growth would be about 70% -- something that should spark investor excitement.
 
If fans love what Kim Kardashian eats as much as they enjoy how she looks, then all bets are off. Her SKIMs clothing line just hit a valuation of $3.2 billion – doubling in value since April of 2021. Forbes estimates that Kim K. is a billionaire. Her endorsement is a major coup for Beyond Meat – despite the snarky comments by trolls and the yammering of bloggers featuring the negative publicity.

​Competition (The Very Good Food Company & Oatly)

Very Good Food Company
The Very Good Food Company announced their 1Q 2022 earnings on May 17, 2022. Revenue decreased -24% YOY to $2 million from $2.64 million a year ago. The 4th Quarter 2021 revenue was $4.3 million, making 1Q look dismal indeed. Investors are throwing in the towel on this company. However, the company’s new interim CEO isn’t.
 
The company recently hired former Nestle executive Matthew Hall as the interim CEO. According to the 1Q 2022 earnings press release, Hall believes that the Very Good Food Company has a good shot at being the plant-based food’s “thought leader.” He stated, “We have a great brand, fantastic products, engaged customers, and some very dedicated and talented people.” 
 

​So, why isn’t that very good product selling and why did the first quarter revenue implode? VGFC stopped their eCommerce marketing spend, largely because the coffers were bare. The company has only $3.3 million in cash, with current liabilities of $6.7 million. If they don't raise money in the next 30 days, it could be restructuring time. That bad news was another grenade to their share price.
 
While there are no guarantees that VGFC will be able to continue without restructuring, having a seasoned executive at the helm improves the odds measurably.
 
Oatly
Oatly is also trading down -86% from its 3-year high of $29.00/share, despite increasing revenue almost 19% in the 1st quarter of 2022. Oatly expects to increase revenue by 37-43% in 2022, to $880-$920 million.
 
It was the staggering net loss of -$87.5 million in the 1st quarter that put the company out of favor with its shareholders. With only $219 million cash on hand, combined with higher interest rates, a resurgence of COVID in China and the tightening of money supply, Oatly is starting to fly too close to the trees.
 
If Oatly manages to increase operating margins, raise more cash and meet or exceed projections, investors should become interested again. However, having been burned so badly by VGFC, Beyond Meat and Oatly, plant-based protein investors have become stunned and disgusted. While YOLO and Shoot the Moon memes were plentiful for Oatly, VGFC and Beyond Meat in the past, there is a lot more DD (due diligence) going on, including valuation.

Valuation
The traditional food companies like Tyson, Kellogg and Conagra have lower valuations. However, they also have lower revenue growth. Many of the plant-based protein companies are younger with much higher growth potential. The companies featured in this blog are all still operating cash-negative, and are reinvesting their cash in new production to meet high demand.
 
Using a price-sales ratio, Beyond Meat, Oatly and The Very Good Food Company valuations are higher than the traditional food companies. However, if these companies can get through the near-term rough patch and start living up to their potential, now could prove to be a great time to pick up more Oatly, Very Good Food Company and Beyond Meat – unless the overall economy takes a deep dive south.
 
Recession?
Are we in a recession? That is the topic of my webinar to be held on Wednesday, June 1, 2022 at 5 pm PT. The podcast will be available on my Spotify page, while the webinar itself can be found on YouTube.com/NataliePace. Given that the 1Q 2022 GDP was a contraction, it’s a good idea to get informed on what the future has in store for investors. This is key for trading, as well as protecting your wealth and retirement plans.
 
Bottom Line
The projections for the growth of plant-based food range wildly from a tepid 3% CAGR to an eye popping 33.6% annualized. Meatless Mondays are becoming de rigueur. As we’ve seen over the past three years, the pandemic, war, economic uncertainty and general mayhem have the ability to upend even the most sound data projections. As we’ve also seen, when meat runs expensive or scarce, plant-based protein has a golden moment.
 
The volatility of companies like Beyond Meat, The Very Good Food Company, Oatly and many others is one of the reasons why regular rebalancing is a key part of any investing strategy (something we emphasize repeatedly at our Investor Educational Retreats and in my books). It’s difficult to want to buy low when a company’s stock tanks, or to sell high when it soars. On the one hand, you’re worried it might stay low forever (or go out of business), and when the party rages, FOMO (Fear of Missing Out) keeps you dancing and drinking in your dreams of gains long after they evanesce… Rebalancing, particularly within our nest egg pie chart system, takes the emotions out of it and prompts you to stay on the right side of the trade.
​
 
If you're interested in learning stock and 21st Century time-proven investing strategies for protecting your wealth and managing the downturn from a No. 1 stock picker, join us for our June 10-12, 2022 Financial Freedom Retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 

Check out Natalie Pace's Podcast on Spotify.
Watch videoconferences and webinars on Youtube.

Other Blogs of Interest
Netflix Streaming Wars End in a Bloodbath.
Elon Musk Sells $23 Billon in Tesla Stock and Receives $23 Billion in Options.
Are You Gambling With Your Future?
ESG Investing: Missing the E.
Moderna & Biotech Trade at 2-Year Lows.
Bitcoin Crashes.
Crypto, Bold and Stocks All Crash.
The Economy Contracted -1.4% in 1Q 2022.
The Dow Dropped 2000 Points.
Is Plant-Based Protein Dying?
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
Real Estate Risks.
​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
Omicron is Not the Only Problem
From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​Streaming Wars End in a Share Price Bloodbath.
Netflix. Spotify. Warner Bros. Discovery. Meta. Are Shares Finally in Buying Range?
 
S&P500 has dropped -13.7% since the high of 4,818.62 on January 4, 2022. The NASDAQ Composite Index is in Bear Market Territory, with losses of -25.17%. However, the plunge in streaming and social media shares are staggering.
 
Social Media, Streaming and Gaming Companies
May 27, 2022

Why is Netflix One of the Worst Performers?
On April 19, 2022, Netflix announced that instead of adding 2.5 million new subscribers (as they projected on January 20, 2022), the company had lost about 200,000 in the first quarter of 2022. The company stopped streaming in Russia on March 7, 2022. (Russia invaded Ukraine on Feb. 24, 2022.) Without losing Russia, the company would have gained 500,000 subscribers – still two million under the forecast.  
 
It was the first time growth contracted for Netflix in over a decade. The company went on to warn that they could lose another 2 million of their 221.6 million subscribers in 2Q 2022. That would still represent year-over-year growth. However, having two quarters of sequential decline was too much for investors to swallow.
 
Netflix had already been beaten up in January, when the share price plunged to $360/share from a high of $700 in November of 2021. After the 1Q 2022 earnings release revealed the massive miss on April 19, 2022, spooked investors raced back to the Sell button. By May 11, 2022, the share price had tanked to $160/share.
 
Why is Netflix losing subscribers? According to Reed Hastings, the co-CEO of Netflix, the competition has heated up, accounting sharing is rampant and the Russian invasion is affecting all of Eastern Europe. Additionally, COVID quarantines had made 2020 the golden year for streaming services. At the November 2021 highs, Netflix’s price-earnings ratio was a very lofty 70. While shares are down 72%, the valuation is more in line with a slower growth company – at a price-earnings ratio of 18.
 
The Competition is Hot
CODA won the Best Picture Oscar for Apple in 2022. Hulu is the place for reality streaming (Disney). Disney is a century-old brand with some of the most beloved films of all time, including the Star Wars and Pixar brands. The Batman just launched on HBO (Warner Bros. Discovery), where Harry Potter fans hang out. So, what will Netflix’s next hit be? Will their focus on international content creators pay off?
 

Squid Game (from Korea) was one of the biggest shows in television history with over 1.6 billion hours viewed. The series contributed to an outstanding 4th quarter in 2021 for Netflix. However, the 2nd season isn’t expected to drop until the end of 2023, or later.
 
In December 2022, Guillermo Del Toro will release his stop-motion film Pinocchio on Netflix. The film’s all-star cast includes Cate Blanchett, Ewan McGregor, Tilda Swinton and Christoph Waltz. Netflix will tease the film on June 15th at the Annecy International Animation Film Festival in France. The Crown is set to return to Netflix in November. It may go head to head with Apple’s Ted Lasso, which is predicted to air around the same time.
 
Higher Prices, More ARM and/or Advertising?
Many households, including family and friends in different households, share accounts to have the best of all streaming worlds. While all of the streaming providers are keenly aware that content is king, each is trying to squeeze more ARM (average revenue per member) without breaking it. Netflix has been testing various ways to get more revenue from shared accounts. CEO Reed Hastings made it clear that Netflix is also looking at a lower-priced subscription with ads, similar to what Hulu and other streaming services already have.
 
Affordable Self-Soothing in an Inflationary World
Incidentally, Netflix shares did quite well in the Great Recession. The share price actually increased from $2.96/share in October of 2007 (the top before the recession) to $6.18/share by March 2009 (the bottom before the recovery).
 
It’s important to remember that not all self-soothing and social media are created equal. Some are paid for by streaming subscribers, while others get their cash from advertising dollars – an industry that implodes in recessions. Advertising budgets are typically the first to go when revenue dries up. All of Meta’s (Facebook, Instagram, WhatsApp) revenue comes from advertising, while none of Netflix’s does (yet).
 
Are We in a Recession?
During the Pandemic Recession (yes, there was one), people were quarantined and given free money. Streaming services had a golden moment. This time around, money is being siphoned out of the system, and Main Street is burning through savings trying to stay afloat. Federal Reserve Board Chairman Jerome Powell has made it clear that he and his board governors have made “price stability” (inflation) a supreme priority and that getting back to 2% inflation will “include some pain.” In his interview with Kai Ryssdal on May 12, 2022, Powell changed the definition of a soft landing from what it typically is – averting recession – to “keeping the labor market strong.”
 
We won’t know if the economy is in a recession until July 28, 2022, when the 2Q 2022 GDP growth numbers are released. 1Q 2022 contracted -1.5%.
 
Streaming Yes. Advertising No.
The 2nd and 3rd quarters are the seasonally weak quarters for Netflix and streaming in general because people are off on vacation with better things to do than sit in front of their screens. So, there could still be more pain in the markets and in this industry, particularly if the 2Q 2022 GDP is negative. However, if I were thinking about buying into weakness in the industry in the early fall (presumably before the Santa Rally), I’d lean toward platforms with strong subscriber revenue, that are not overly reliant on advertising.
 
Is the Price Right?
A rising tide lifts all ships; a crashing wave drowns them. There may be more market weakness over the summer, which could fall as harshly on this beaten-up sector as the others. Netflix is on my Stock Shopping List, anticipating that late September might bring an even more attractive buying price.
 
Bottom Line
A 2022 recession will be very different from the 2020 Pandemic Recession for streaming services. This time, Disney Plus, Peacock, HBO, Paramount and Apple are all competing with Netflix for subscribers, and gasoline, housing and food are competing with streaming in the family budget. Free cash is not showing up magically in everyone’s bank account. And the recession that could be closer than everyone thinks is unlikely to be the shortest in history, like the Pandemic Recession was.
 
Netflix is a staple of the streaming diet. But investors and consumers are fickle. Expect both to become more interested once Netflix releases its next blockbuster – particularly if that happens in the fall, after a potentially hellish summer. If you’re interested in a copy of my Netflix Stock Report Card, simply email info@NataliePace.com with Netflix Stock Report Card in the subject line.
 
 
 
 
If you're interested in learning stock and 21st Century time-proven investing strategies for protecting your wealth from a No. 1 stock picker, join us for our June 10-12, 2022 Financial Freedom Retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. ​

Check out Natalie Pace's Podcast on Spotify.
Watch videoconferences and webinars on Youtube.

Other Blogs of Interest
Elon Musk Sells $23 Billon in Tesla Stock and Receives $23 Billion in Options.
Are You Gambling With Your Future?
ESG Investing: Missing the E.
Moderna & Biotech Trade at 2-Year Lows.
Bitcoin Crashes.
Crypto, Bold and Stocks All Crash.
The Economy Contracted -1.4% in 1Q 2022.
The Dow Dropped 2000 Points.
Is Plant-Based Protein Dying?
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
Real Estate Risks.
​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
Omicron is Not the Only Problem
From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​A lot of ink has been given to Tesla’s share price plunge and how Musk’s net worth has lost about 1/3 since the peak price of $1,243.49/share on Nov. 4, 2021. Of course, the Twitter acquisition is also making headlines. Less attention has been focused on the robust, consensus insider selling at Tesla. Elon is the top seller by far. However, he is joined by his brother Kimbal, Tesla’s CFO Zachary Kirkhorn, Robyn Denholm (the chairman of the board) and others.
 
Starting on Nov. 8, 2021 (at the high), Musk began selling. Between November 2021 and April 28, 2022 (when Tesla was at $877/share), Musk cashed in over $23 billion out of Tesla. Additionally, Musk received a CEO bonus compensation package for operational milestones and for keeping the market value above $650 billion, which are worth about $23 billion in stock options that will be vested over the next 5 years (source: Reuters).

Will He or Won’t He Buy Twitter?
Should you be selling, too, or is Musk simply selling a small portion of his net worth to buy Twitter and diversify his portfolio? ​

With Tesla stock down 43% on the year and the year-over-year revenue growth running at a hot 80.54%, it’s easy to think that holding on will be a winning strategy. However, when evaluating which way prices are headed, it’s important to consider a few valuation tools, as well as where the general marketplace might go. While a rising tide lifts all ships, a crashing wave can destroy them.

Valuation Concerns
With a market capitalization of $730.72 billion, Tesla is now worth more than Ford ($52.72 billion), GM ($54.74 billion) and Toyota ($263 billion) combined. If Tesla achieves 50% growth in vehicle production in 2022 (a claim Elon Musk made in the 1Q 2022 earnings call), then the annual revenue in 2022 could be above $80 billion. Net income could top $13 billion or more, unless supply chain bottlenecks and commodity prices continue to bite into profitability. That would put Tesla’s income above GM ($9.84 billion in 2021), but beneath Ford ($17.94 billion in 2021).
 
There’s no doubt that electric vehicles are the future of the auto industry. According to the Alliance for Automotive Innovation, EV sales increased 11% in the 4th quarter of 2021 (compared to Q3), while sales of gas-powered vehicles contracted by -1.3% over the same period. EVs currently make up only 4.4% of the total U.S. fleet, so there’s plenty of room to grow. However, with a price-earnings ratio of 89 (while the average P/E is around 17), Tesla is still expensive – even with the pullback. When Musk’s profit taking instincts kicked in back in November of 2021, the P/E was an eyepopping 415.

​Tesla’s Deliverables
Austin and Germany Gigafactories are producing now. However, with the COVID shutdowns in Shanghai, Tesla is projecting that 2Q 2022 deliverables will only be on par with 1Q or “slightly lower.” That will still represent year-over-year growth of more than 50%, assuming Tesla’s guidance becomes reality.
 
Auto Stock Report Card
How are the lockdown in China, supply chain disruptions and high commodity prices affecting the Chinese EV makes? XPeng and Li Auto led the pack with 1Q 2022 revenue growth of 153% and 168% year over year, respectively. Nio is still growing, but has seen revenue growth trim back to 49%, with about 28.5% growth expected for the 1st quarter of 2022 (based upon deliveries). Nio will report 1Q 2022 results on June 9, 2022 before the markets open.
 
Despite some of the best revenue growth in the industry, the Chinese EV makers have seen their share prices plunge. Most are trading at a 3-year low not seen since the bottom of the Pandemic Recession. Since these newer companies are still cash-negative, a more helpful valuation tool is a price-to-sales ratio. Here again, Tesla shows up as quite elevated, with a 13 P/S ratio, compared to an average 4-6 in Nio, XPeng and Li Auto.
 

Supply Chain Disruption, Commodity Prices and Inflation
Supply chain, COVID and commodity prices are affecting the entire auto industry. Xpeng’s 1Q 2022 deliveries were 17% lower than 4Q 2021. 2Q 2022 deliveries could be lower than 1Q if May and June are not significantly stronger than April’s deliveries of 9002 vehicles. If Xpeng’s 2Q deliveries are in the range of 27,006, that is still year-over-year growth of 55.22% -- impressive, but much slower than 1Q’s 153% growth.
 
Tesla is in a slightly better position to stay strong despite the COVID shutdowns in China, as it has factories in the U.S. and Germany, too. The company certainly is enjoying popularity. Tesla’s autos are all on backlog in the U.S., with the Model Y not delivering until 2023 (source: Electrek). However, high commodity prices could impact Tesla’s profitability. If Bitcoin remains where it is ($29,000 range) through the end of June, Tesla will have to write down its investment in crypto.

Recession?
There are many signs (and many analyst warnings) that a recession could hit the U.S. over the next year, not the least of which was that the 1st quarter of 2022 contracted -1.5%. (2 consecutive quarterly contractions are considered a recession.) New car sales slump in recessions. While no one has a crystal ball, it’s important to remember that General Motors and Chrysler both declared bankruptcy in 2009 – after years of losses in sales and profitability during the Great Recession. In the 1st quarter of 2022, the consumer appetite for vehicles was strong, despite the contraction.
 
The legacy automakers are far more vulnerable in recessions due to the amount of debt and Other Post-Employment Benefits (OPEBs) that ae carried on their balance sheets. Ford Motor Company is a junk bond, and is the only company on the Auto Stock Report Card that saw revenue decrease year-over-year in the 1st quarter (by -4.84%). If you’d like a copy of the Auto Stock Report Card, just email info@NataliePace.com with Auto Stock Report Card in the subject line.
 
Bottom Line
High gas prices and environmental concerns are fueling a shift from gas-powered to electric vehicles. Ford and GM were already at a disadvantage from debt and OPEBs before the exodus to EV began. While Ford and GM are transitioning, they still ring up 95% of their sales from gasoline-powered products. Companies like Tesla and the Chinese EV makers are seeing stellar sales growth – even with the headwinds caused by COVID, supply chain bottlenecks, high commodity prices and inflation.


​
If you'd like to learn 21st Century time-proven investing strategies for protecting your wealth from a No. 1 stock picker, join us for our June 10-12, 2022 Financial Freedom Retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 

Check out Natalie Pace's Podcast on Spotify.
Watch videoconferences and webinars on Youtube.

Other Blogs of Interest
Are You Gambling With Your Future?
ESG Investing: Missing the E.
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Bitcoin Crashes.
Crypto, Bold and Stocks All Crash.
The Economy Contracted -1.4% in 1Q 2022.
The Dow Dropped 2000 Points.
Is Plant-Based Protein Dying?
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
Real Estate Risks.
​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
Omicron is Not the Only Problem
From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​I am writing in earnest about something so important that I need you to stop whatever you are doing and read this blog now. I know you have heard phrases like this bantered about by other people. However, you never hear something like this from me, unless I’m dead serious and there is something that demands your attention now. Yes, we’re all getting ready for summer vacation and holidays, wrapping up the school year and looking forward to some freedom and fun. However, a little attention now will make the summer go far more smoothly, and help our vacations to truly be the R&R we desire, deserve and need.
 
Are we already in a recession? What can you do to protect yourself now before things get worse? Remember that I called the Great Recession in December of 2007, and offered solutions that earned gains, when most of Main Street lost more than half of their wealth. An email similar to this one was sent on Dec. 23, 2007. That was before the Dow Jones Industrial Average dropped by half.

I was the least popular person at Christmas parties in 1999, when I warned of the Dot Com Crash, while everyone was bragging about their gains (only to lose up to 78% in the Dot Com Recession).
 
I want to stress that avoiding these kinds of losses is easy-as-a-pie-chart. The devastating losses that so many people suffered during the Dot Com and the Great Recessions are even more heartbreaking because they are preventable with a few quite simple strategies. Having time-proven 21st century solutions was what earned me the honor of having Nobel-Prize winning economist Gary S. Becker, one of the most esteemed economists of all time, write the Preface to my book Put Your Money Where Your Heart Is. As Becker wrote, “​​Many people, including educated men and women, often get into trouble when they neglect to follow simple and fundamental rules of the type provided [by Natalie]. This is why I recommend them with enthusiasm.”
 
This system is specifically designed to be easy, efficacious and time-efficient, so that you can set it up, rebalance it once or twice a year, and protect and grow your wealth without stress and drama.
 
Take Our Wealth Challenge
Add up everything you have in your retirement accounts, savings, brokerage accounts, etc. Once you get the total, divide it by half. Then ask yourself, "Am I really willing to risk losing half of my wealth? Should I have blind faith that someone else is protecting my future? Or is now the time to be the boss of my money and know exactly what I own and why, and what a time-proven plan looks like?" (That plan is easy-as-a-pie-chart.)
 
Even if you’re feeling equity rich or that you have a "conservative" allocation in your portfolio, you might be at risk of devastating losses with the added horror of being invested in illiquid assets where you cannot access your money.
​
If you have already lost money (most people have) or do not have a clue what holdings you have in your retirement plan, and you have even $10,000 invested, you need to move heaven and earth to be at my retreat this June 10-12, 2022. Here is why. At the retreat, we will look at the danger zones that you need to avoid NOW before inflation (and 5 other risk factors) start to bring down the stock market. You will carefully restructure your nest egg, so that you are protected against a downturn and are positioned to earn gains in the companies of tomorrow. You will learn sound, higher performing, less risky alternative investments that could bring you thousands of dollars annually right now that are lying right under your nose. You’ll gain an understanding of the best hedging investments and how to be on the right side of the volatility in crypto, gold and other safe havens.
 
Your current investment strategy has very likely already lost a chunk of dough. This could be a hellish summer with more losses on the horizon. We will know whether or not we’re already in a recession on July 28, 2022. (The smart money will know as early as mid-June.) This will be the subject of my June webinar on June 2, 2022. You can listen to it on my Spotify podcast, or watch it free of charge on my YouTube.com/NataliePace channel.

So, if you delay taking action now, whether it is attending the June 10-12, 2022 Retreat or getting an unbiased 2nd opinion personally and confidentially, you are putting your wealth and future at risk. If you wait for the headlines that the economy is in a recession, it’s always too late to protect yourself. Stocks drop before the recession is announced. A better strategy could protect your wealth from losses, and position you for gains, while offering the peace of mind that ensures your vacation will be a golden memory for you and your loved ones. (If you’re constantly checking the news and worrying about your losses, quite the opposite experience is going to occur.) And again, learning and implementing a time-proven, 21st Century wealth plan is not expensive, difficult to learn, or time-consuming. That’s the beauty of something that is well-designed.
 
We have put together a 3-day wisdom immersion experience that is extremely unique, powerful and results-certain. On Day 1, we are going to protect our nest egg. On Day 2, we’ll discover the hottest areas of opportunity and why some of the most well-known brands are at the greatest risk for losses. Day 3 is all about, “What’s safe in a Debt World?” If you don’t know the answer to that question, your conservative plan could (again) be at risk of devastating losses with the added horror of being invested in illiquid assets where you cannot access your money. The safe side of your wealth plan is not supposed to lose money. Meanwhile, many people are being sold into long-term, high-risk, low-yielding investments as a “protection” against inflation, putting their principal and liquidity at risk, while also losing buying power. The investor loses in that scenario, while the broker-salesman makes a high commission.

By the time you leave our retreat on the third day, you will no longer be the same person. (Please take a moment to read the testimonials below). Even if you have been following my blogs and books to a T, the immersion process of getting course-corrected by me personally will teach you how to think how I think, so that you can have the same level of success in your life. I cannot promise that you will make a billion dollars, but I can tell you that if you invest with the foundation and strategies we teach you, it is much easier to amass wealth and to live a richer life. Financial freedom over the coming years will only be possible by adopting a plan that preserves your wealth today, and allows you to earn gains, while having an easy-to-follow plan that is capable of auto-navigating a tough and treacherous economic environment. Without that plan, the coming years could be simply heartbreaking. I’d far rather assist you in protecting yourself now than in rebuilding your life after the crash. (Most people wait until they hit rock-bottom to fix things. Please be smarter than that.)
 
The three days of June 10-12, 2022 will absolutely be the most enriching, the most important and the most valuable three days of your investment life. Speaking of which, we are not charging the $5,000 or $10,000 that most investment training programs ask. We are not even charging half of that. We are creating a value-priced, priceless retreat where I can work deeply, intimately and personally with our most motivated, serious and ambitious retreat attendees. Click for pricing and information.
 
If this resonates with you, register now by emailing info@NataliePace.com with Retreat in the subject line. Click for times, pricing, the 15+ tools you’ll master and for testimonials. Our team is holding a limited amount of space, and you will be attending from the comfort of your living room or office, without any add-on travel and accommodations expenses. Mark your calendar right now and clear it for the dates June 10-12, 2022 from 11-7 pm ET (8-4 pm PT). 
 
If you go into your summer of 2022 without this information, understanding and strategic guidance, you are at risk of a pretty hellish summer. There is no downside to you attending our June retreat, outside of the modest registration fee. Learning the life math and time-proven 21st Century systems that we all should have received in high school will transform your relationship with money and investing forever. “An investment in knowledge pays the best interest,” Benjamin Franklin.  
 
Additional Testimonials
“I did not know a THING about investing but Natalie Pace made it so easy that I was literally jumping for joy after the first day. I learned so much so fast. Before Natalie’s retreat, I never imagined investing could be so safe, easy and profitable, and that I would love it so much.” CC in Canada
 
“We asked Natalie Pace for a second opinion on our investment portfolio. She researched and reviewed each stock and fund. She then explained to us in plain English how we were positioned in the market, and how high our risk exposure was. Her knowledge was so profound that we decided to take her retreat. My husband was still quite skeptical, but 20 minutes into the retreat he turned to me and said "Thank you." Stocks and investing are no longer rocket science. We are finally able to take control of our money. We give thanks just about every day that we met Natalie. I feel like I live on a different planet. I am forever grateful.” AC & AM
 
“Through Natalie Pace and her strategies, I have built up a nest egg from zero (having gone through bankruptcy 9 years ago due to over leveraging myself in real estate at too high of prices just before the crash) to 44K in less than 2 years through investments. I appreciate her discussion about the path to wisdom. The first retreat was emotional and overwhelming. Now it makes so much more sense that I have even started learning about and doing my first options trades!” SS
 
“Ten minutes into the first day I was already much smarter about investing than I ever thought I would be in my life and I knew I was in exactly the right place at this retreat.  I am amazed at how EASY and FUN it is to make my money work for me and those I love. I think this kind of information should be compulsory in schools. I wish I'd learned it earlier in life. I would recommend this retreat for everyone.” CM
 
“I am saving $20,000 annually on health insurance with Natalie’s Health Savings Account tips.” RM
 
“I reduced my electric bill from $800/month to less than $30/month, using Natalie’s Stop Making the Billionaire Corporations Rich at Your Own Expense Plan.” MR


 
No matter how dark and scary the forest gets, if you follow the light, you will reach the promised land. 

​
If you'd like to learn 21st Century time-proven investing strategies for protecting your wealth (from a No. 1 stock picker), join us for our June 10-12, 2022 Financial Freedom Retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 

 

Check out Natalie Pace's Podcast on Spotify.
Watch videoconferences and webinars on Youtube.

Other Blogs of Interest
ESG Investing: Missing the E.
Moderna & Biotech Trade at 2-Year Lows.
Bitcoin Crashes.
Crypto, Bold and Stocks All Crash.
The Economy Contracted -1.4% in 1Q 2022.
The Dow Dropped 2000 Points.
Is Plant-Based Protein Dying?
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
Real Estate Risks.
​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
Omicron is Not the Only Problem
From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​Tesla very famously was booted out of the S&P Global’s E.S.G. Index on May 17, 2022. S&P Global explained their decision in a blog, writing, “While Tesla may be playing its part in taking fuel-powered cars off the road, it has fallen behind its peers when examined through a wider ESG lens.”

Elon Musk responded with a series of Tweets calling the index a “scam,” and noting that Exxon Mobil was in the index. He also shared the above Tweet mentioning that there are 6 oil companies in the index. (There are actually at least 15 oil and gas companies in the index.) Is oil the only dirty little secret of E.S.G. investing? Would Mother Nature be including the companies that S&P Global has chosen for their ESG index? What about those self-proclaimed “socially conscious” funds?
 
ESG is the hot new way of investing. The acronym wraps environmental, social and governance factors into one blanket, offering climate-action and socially-conscious investors a feel-good idea for growing their wealth. However, a look into the actual holdings of these funds reveals that the “E” is missing.  
 
Fossil Fuels
Just 20 of the world’s largest fossil fuel companies are responsible for over 1/3 of the CO2 in the atmosphere. Over half of each barrel of oil is used to make plastic, polyester, asphalt, rubber and other petrochemical products. The S&P Global’s E.S.G. Index includes 15 oil companies and 15 plastics, petrochemicals, and single-use waste-generating companies. If we add in the gasoline-powered automobile companies, airlines and cruise ships (heavy CO2 footprint) and the plastics and petrochemical companies, the number of problematic CO2 companies on the ESG list jumps to at least 30 – about 10% of the list. Add in the environmental impact of biotechnology and mining, which are both hard on our home planet, and the percentage jumps to 20%.
 
The self-described socially conscious fund companies always include banks (which fund oil and other environmentally-toxic businesses), consumer products (many of which promote single-use plastic or paper waste) and even some traditional (gas-guzzling) automotive companies.
 
Plastic and Forest-Clearing
Less than 10% of plastic was recycled in the U.S. Forests are being cleared for toilet paper and single-use paper waste. The NRDC publishes a Report Card assigning high marks to companies that are using recycled paper for their products, compared to companies that are clearing old-growth forests, which their customers are flushing down toilets.
 

Single-Use
Many companies in the ESG and socially conscious funds have a single-use, waste problem. Since recycling isn’t happening, it’s important to focus on the first 5 of the 6 Rs of sustainability – Rethink, Refuse, Reduce, Repair, Reuse. That means that all of us need to pack our water canteen, canvas bags/backpack and reusable coffee mugs on our errand runs (ideally locally, on a bike).
 
Petrochemicals, Dead Zones and Health Hazards
The Dead Zone in the Gulf of Mexico results from toxic agricultural run-off from industrial farms along the Mississippi River. There is a Cancer Alley in Louisiana, due to the amount of oil and petrochemical refineries in the region. Long-term pesticide exposure increases the risk of diabetes, according to studies by the NIH.
 
Bottom Line
The truth about ESG and socially conscious investing is that many of these funds are missing the environmental filter that their clients are relying upon. Whether or not they live up to the SG is for a separate analysis. Mother Nature would be canning at least 30 companies that are included in the S&P Global ESG Fund (probably double that amount), if she were creating an environmentally-conscious fund. Don’t be misled by the fancy title, which is a clear case of false advertising. If you care about the environment and you don’t have time to dig into all of the holdings of the funds, E.S.G. investing is just too CO2 for clean hands.
 
If you’re interested in healing our planet, take our challenge to reduce your personal CO2 footprint by 30% this year. Learn more in The Power of 8 Billion: It’s Up to Us.


If you'd like to learn how to green your investments, while also adopting 21st Century time-proven investing strategies for protecting your wealth (from a No. 1 stock picker), join us for our June 10-12, 2022 Financial Freedom Retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 
​​
​

Check out Natalie Pace's Podcast on Spotify.
Watch videoconferences and webinars on Youtube.

Other Blogs of Interest
Moderna & Biotech Trade at 2-Year Lows.
Bitcoin Crashes.
Crypto, Bold and Stocks All Crash.
The Economy Contracted -1.4% in 1Q 2022.
The Dow Dropped 2000 Points.
Is Plant-Based Protein Dying?
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
Real Estate Risks.
​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
Omicron is Not the Only Problem
From FAANNG to ZANA MAD MAAX
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Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
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Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Moderna & Biotech Trade Near 2-Year Lows.
Is the industry diseased, or has Fast Money just gone crazy with profit taking?
Let’s start with an analysis of Moderna. The company made headlines on Wednesday when it was revealed that the new CEO Jorge Gomez was canned after just one day of work (but would still receive $700,000 for a full year’s worth of salary). Gomez forfeits his signing bonus and bonus eligibility, according to CNBC.
 
Moderna says they had no prior knowledge of an internal investigation into accounting problems at Gomez’s former employer Dentsply Sirona. Dentsply was unable to file its quarterly report with the SEC on time. The notice of the late filing was filed on May 9, 2022, the first day of work for Gomez at Moderna.

Is the CFO Embarrassment a Problem?
Whenever a company sacks the CFO, it raises a red flag. What happened to the due diligence? Why was the former CFO leaving in the first place? As it turns out, David Meline, the former CFO, had actually come out of retirement in order to help Moderna scale up their COVID vaccine quickly. He joined Moderna in June of 2020, after his consultation period at Amgen ended. (He had retired from Amgen effective Dec. 31, 2019.) So, it’s completely understandable that after getting Moderna off to the races, Meline was ready to retire for a second time.
 
When the issue with the newly hired CFO came up, Meline stepped up and committed to staying on until a replacement is found. (He had already committed to a period of transition as a consultant.)
 
It appears that Gomez might have been a former friend of Meline from General Motors back in the day. At any rate, the departure doesn’t appear to be a red flag or a lack of due diligence on the part of Moderna. In fact, it appears that they were fortunate to learn of the news when they did. The histrionic headlines on this should fade soon.
 
So, now let’s look at Moderna’s business, including:
 
Revenue & Sales Growth
M&A & Cash on Hand
The NIH Patent Claim
 
Revenue & Sales Growth
Moderna’s revenue more than tripled in the 1Q of 2022, from $1.9 billion to $6.1 billion. Advance Purchase Agreements for 2022 total approximately $21 billion. This represents an increase of 13.7% over 2021, if that turns out to be the total revenue. So, the annual growth expectation is much more muted than the 1st quarter was. When you factor in the 1st quarter revenue, you are left with $14.9 billion for the remaining three quarters – or just under $5 billion per quarter. Further, 2Q is the seasonally weak quarter, which takes the expectation down to the $4.5 billion range (per the earnings call). That would be flat year over year.
 
With a P/E of just 3.83, the expectations for a weaker 2Q are already factored in. If the news is better than expected that might be great for investors (unless macro market weakness drags this company down with the crash).
 
The bulk of vaccine sales is expected in the second half of the year. The pandemic is transitioning into an endemic. The expectation is that people will be interested in vaccinating and boosting in October in anticipation of the winter seasonal surge in sicknesses. The summer season (2Q 2022) is when most people have already gotten their booster for the summer holiday.
 
Moderna has a footprint around the world – in Asia, Europe, Australia, Africa and Latin America. They also have a healthy pipeline of therapies for oncology, HIV, Epstein-Barr and other diseases, and a booster targeting Omicron in a Phase 2 Study.
 
 
M&A & Cash on Hand
Moderna has $19.3 billion in cash, cash equivalents and investments. That kind of cash puts the company in a great seat for mergers and acquisitions, especially as weakness continues in the biotech space. This industry has been sacked by sellers and some very attractive, compatible biotech companies might be far more affordable today than they were just a few months ago. According to the earnings call, Moderna has “never been so busy” looking at partnerships and M&A.

The company repurchased $623 million of their stock in the 1st quarter of 2022, and have a $3 billion buyback authorization from the board. This could help keep their share price more buoyant if there is continued weakness in the larger marketplace.
 
NIH Patent Claim
Last October 2021, it was reported that the NIH wanted to stick its hand in Moderna’s patent claims on the mRNA sequence of their vaccine. On December 17, 2021, Moderna issued a statement that they were working with the NIH to resolve the matter. (Click to read their statement.)
 
There haven’t been any details released on how that was resolved. However, Moderna disclosed in the 1Q 2022 earnings call that they are paying “third-party royalties.” The net income for the quarter was $3.7 billion.

Is Now a Good Time to Add a Biotech Fund to Your Wealth Plan?
Biotech funds like Ishares (symbol IBB) are trading near their three-year lows. Many profitable companies have historically low price-earnings ratios. Biotechnology is the only industry that Liz Ann Sonders, the chief investment strategist of Charles Schwab, has an overweight on. Visit YouTube.com/NataliePace to watch my entire interview with her from Jan. 30, 2022.
 
If you’d like to receive my Biotech Stock Report Card, simply email info@nataliepace.com.

Macro Problems
A rising tide lifts all ships. A sinking tide can ground them. The first quarter of 2022 saw a contraction of -1.4%. If the second quarter has a contraction, we are in a recession. How likely is it that we’ll have a recession this year (or next year)? Analysts peg the likelihood at about 35%. Click to listen to my podcast, watch my webinar or read my blog on the “Warning Signs of a Recession.”

What happens in a recession? Asset prices can plunge. We’ve already seen a -16.5% correction in the S&P500 from its high of 4818.62, set on January 4,2022. In the Great Recession, the Dow Jones Industrial Average plunged -55%. During the Dot Com Recession, the NASDAQ Composite Index bottomed out with -78% losses and took 15 years to recover. In other words, now is the time to make sure that your wealth plan is properly protected and diversified, and that you know what is safe in a Debt World where bonds have interest rate, credit, duration, principal loss and liquidity risks.

Real estate prices are also a concern. The National Association of Realtors has warned that home sales are expected to contract by 10% in 2022. As interest rates rise, fewer people qualify for a mortgage or can afford the payments. Home prices in the U.S. are at all-time highs. In the most recent Financial Stability Report, the authors wrote, that home prices had “stretched valuations,” and that “a negative shock to house prices might hurt homeowners.”
 
Buying high in real estate and having the value fall beneath your mortgage is hard on your wealth, your wallet, your relationships and your credit score. It can take a decade or longer to recover. I’ll be discussing this in my free webinar this week. If you’d like to join us live, simply email info@nataliepace.com with VIDEOCON in the subject line.
 
I’ve noticed that Jerome Powell‘s most recent definition of a soft landing has changed. A soft landing is typically referred to as raising interest rates without triggering a recession. Powell now defines it as “Getting back to 2% inflation, while keeping the labor market strong.” When asked by Marketplace’s Kai Ryssdal to describe his priority in 5 words or less, Powell said, “Get inflation back under control” (not avoid a recession).
 
Could the U.S. already be in recession? This is something I’m going to be addressing in my podcast and webinar this Thursday at 5 PM Pacific. If you’re on our list you will receive the logon instructions automatically. If you’d like to join the webinar simply email info@nataliepace.com with VIDEOCON in the subject line.
 
Bottom Line
Moderna has a global reach, APAs of about $21 billion and a solid pipeline. The company, along with many biotech stocks, has been beaten up by investors, and might be oversold. If you think biotech is still hot, consider adding a slice of the industry to your nest egg. Measure this against a backdrop of economic contraction in the 1st quarter and a potential recession on the horizon (if it’s not already here). Remember that a healthy wealth plan doesn’t try to market time or jump all in or all out. It’s a carefully designed (but easy!) system of proper diversification and regular (but not obsessive) rebalancing.


If you'd like to learn 21st Century time-proven investing strategies for protecting your wealth  from a No. 1 stock picker, join us for our June 10-12, 2022 retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 
​

Check out my Podcast on Spotify.
Watch videoconferences and webinars on Youtube.

Other Blogs of Interest
Bitcoin Crashes.
Crypto, Bold and Stocks All Crash.
The Economy Contracted -1.4% in 1Q 2022.
The Dow Dropped 2000 Points.
Is Plant-Based Protein Dying?
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
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Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
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From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
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​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
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S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Bitcoin Crashes.
Answers to 6 Common Crypto Questions.
 
If you were getting your altcoin tips from a young trader on Tiktok or Youtube, you probably loved listening/watching in November and are now ready to unsubscribe. A spot check on a few of the Youtube gurus reveals that at Bitcoin’s high, views were in the hundreds of thousands. The same self-proclaimed prophets are now seeing about a quarter or less of that traffic. Is crypto flawed? Are these gurus inexperienced? Do charts work? I’ll answer these questions and more below.  
 
420K Bitcoin in 60 Days!
Worst Crash in Crypto History!
SUPER BULLISH PREDICTION! LUNA COULD HIT $200+ IN 30 DAYS!


Guess which headline was popping up everywhere around November 9, 2021, when Bitcoin hit $69,000/coin, and which one is circulating today. Bitcoin sank to a one-year low today of $28,122.44 (May 12, 2022). The Luna prediction was made last November. In all fairness, Terra (LUNA) did go up after the prediction to a high of $119.18. However, today it is virtually worthless. Not all coins are what they are hyped up to be. Coin clubs can be even riskier. Some are outright scams.
 
Good marketers lure you in with headlines like those above. However, hype-monster marketers are not necessarily great analysts. Remember to always grade your guru before you listen to their advice. (This is true of your financial planner/broker-salesman, too. Be sure to check out my webinar and podcast “Is Your Conservative Plan Safe?” and the chapter in Put Your Money Where Your Heart Is entitled “Brokers are Salesmen.”)
 
Will Prices Keep Plunging?  
We’ve seen a few crypto crashes over the years. In December of 2017, Bitcoin hit $20,000 in mid-December of 2017, and then crashed to $11,000 on January 19, 2018. That was the beginning of a plunge that sank to the $3,000-range by the end of 2018. This wiped out many crypto millionaires. This kind of devastation is not just hard on a wallet. There were suicides.
 
Bitcoin had a reasonable recovery in 2019, but never came close to $20,000 and stayed mostly in the $7,000-$10,000 range. However, in the pandemic, the price plunged again to under $5,000.
 
While the waves of Bitcoin can run independent from stocks, we’ve seen that stock market corrections can drag down safe havens. The recovery of Bitcoin, gold and silver can be more robust and speedier than stocks after a crash. However, in the early stages, everything tends to fall.
 
That’s why having a capture gains strategy is key with this volatile investment. You can’t do that when you are drinking the Kool-Aid that cryptocurrency will be the only thing of value when the dollar collapses. What does a “capture gains” strategy look like? Keep reading.

​Does the Crypto Crash Mean Crypto is Doomed?
No. However, it does reveal a fundamental aspect of all cryptocurrency. It’s a trader’s delight, not a currency (at this time). If you’ve got Diamond Hands and are HODLing (Holding On for Dear Life), the whales are going to eat your lunch. The average hold time of most crypto is less than 4 months. (You can easily see these statistics on Coinbase.) Statistics show that the beginning of crypto crashes are sparked from hedge fund and large investors selling. As the fallout becomes unbearable, Main Street investors might be forced to sell low just to pay their housing costs. Volatility favors sophisticated traders, not Diamond Hands (Buy & Hold investors).  
 
That’s not to say that isn’t a place for crypto in the monetary system. NFTs are gaining in popularity and most are paid for in Bitcoin, Ethereum or altcoins. (There is not a lot of crypto purchasing outside of this sphere at this time.) However, you can’t have a currency that loses half or more of its value every year or two. That’s not a currency. It’s a casino, which means you should limit your betting to something you can afford to lose.
 
Is Crypto a Good Safe Haven Investment?
As I mentioned, in the beginning of a correction/recession, even safe haven investments are vulnerable to losses. There does come a point, however, when the bad news on the status quo makes alternative investments look like Nirvana. Things can pick up steam fast when people feel like they are in an Apocalypse. However, the volatility of cryptocurrencies and the exceptionally weak returns of gold over the past decade are reminders that these safe haven investments work best as a slice of our strategy – not the entire plan.

 
Using our pie chart system will also help you to capture gains at the high and buy back in at the low (without day-trading). You can learn this system by reading The ABCs of Money (5th edition), or you can learn and implement this system now by attending our June 10-12, 2022 Retreat. Email info@NataliePace.com to learn more.
 
Is Crypto an Energy Hog (Like Elon Musk Warned)?
Yes. According to the University of Cambridge’s Cambridge Centre for Alternative Finance, Bitcoin’s annual network power demand is 147 Twh. That is more electricity than the countries of Sweden, Norway or Ukraine burn.

​​Some Altcoins are designed to be faster and greener, in order to compete with VISA and Mastercard, and to meet the social demands of climate action. The altcoins are in a crash, too. However, in a future that is getting ever more concerned about energy efficiency and reducing CO2 emissions, the altcoins have a potential to become a meme hot topic, once the recovery starts generating some steam. Here are some of the altcoins with interesting stories: Cardano (ADA), Solana (SOL), and Polygon (MATIC). You can access their descriptions and white papers on Coinbase.com.
 
Can a Main Street Investor Surf the Waves of Crypto Successfully?
A well-designed investment plan allows you the freedom of investing in a few hot industries, like cryptocurrency – within reason. The 21st Century has proven itself to be volatile over and over again. So, it’s important to have a time-proven plan that you rebalance regularly (at least once a year) that also prompts you to capture gains and buy into weakness.

The pie chart plan does just that. Again, you can read about it in The ABCs of Money. You can learn and implement it at our next Financial Empowerment Retreat. You can also consider getting an unbiased second opinion from me – particularly if you were too aggressive about your belief in crypto and/or purchased near the top. This easy, time-proven plan is the life math that we all should have received in high school. The sooner you learn and implement it, the faster your life transforms.
 
Should You Transfer Your Retirement Plan Into an LLC IRA That Invests in Crypto?
IRAs have tax advantages. Betting your entire IRA on an investment that has a history of shooting the moon and then sinking into the sea is not worth the tax advantage. If you have enough in your nest egg that a couple of slices can be put into an LLC IRA that allows you to invest in crypto, then you might have the best of both worlds. If your slices are still a bit small, then it’s a better idea to build your wealth on a traditional, reliable platform like Coinbase. When you pay taxes, it’s only on the capital gains. If you’ve held the position for longer than a year, it could be taxed at 15% or less (for most people).
 
Bottom Line
Cryptocurrency is better thought of as a hot slice of a well-designed system, not the entire wealth plan. Regular rebalancing is key to being on the right side of the trade and to successfully riding the waves of volatility. This is still a highly speculative play.
 
Capturing gains and buying low is not day-trading. Ideally, you’ll have 2-3 times a year on the calendar to consider your positions, while also having a strategy to deploy if the volatility lands in between those dates. If you’re invested in crypto, you’re going to hear when it soars and crashes. It makes headlines. The trick is being on the right side of those headlines, rather than being crushed by them. Proper diversification with regular rebalancing is your bunker.
 

​If you'd like to learn 21st Century time-proven investing strategies to protect your wealth from a No. 1 stock picker, join us for our June 10-12, 2022 retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 
​

Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The Power of 8 Billion: It's Up to Us and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 5th edition of The ABCs of Money was released on September 17, 2021. 
​
Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden.

Check out my Podcast on Spotify.
Watch videoconferences and webinars on Youtube.

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Crypto, Bold and Stocks All Crash.
The Economy Contracted -1.4% in 1Q 2022.
The Dow Dropped 2000 Points.
Is Plant-Based Protein Dying?
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
Real Estate Risks.
​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
Omicron is Not the Only Problem
From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.