Pay Yourself First

Posted on Monday, September 6th, 2021

Our son is adjusting well to school and I haven’t heard from my daughter in weeks – so she must be doing well. Our focus and attention is now on our youngest. He is feeling the crush of senior year. He is constantly at practice, doing homework or off to SAT classes. This weekend we were working on college essays. Ugh! Diane is back to tennis after months on the mend and my big news is I have decided to get the Moderna vaccine. Diane was so excited that she had me an appointment inside of 10 minutes. I’m not an anti vaxxer. I’ve had them all – flu, measles, shingles. My thought process has always been how long do the natural antibodies last and which vaccine is the best? I have said from the beginning that I would get the vaccine as soon as they wouldn’t let me travel. Diane and I had tickets to the US Open tennis for today and could not go because I was not vaccinated.  Down here in Georgia we are finally seeing those who had the virus last year get it again and the data says Moderna is the most effective against delta. It doesn’t change our investing thesis. We still think that delta is the peak.

I got a great lesson from a client this week on how to save. The client is actually a daughter of a client who lost her dad a few years ago. She turns to me for advice and I am more than happy to help. She has had some real success in the corporate sales world and has been able to put some money away. The key to her success (other than hard work) is that she automates everything and she pays herself first. I convinced her that paying off her car loan was a good idea. The key to her saving success is that she then takes the car payment and redirects it to her savings account every month. That’s what most people miss. They spend the money instead. Look at a mortgage refinance. Most people refinance and find they have an extra couple hundred dollars to spend every month. That’s where they go wrong. You have that extra money because you extended the loan by years. You now have a 30 year loan again. They key is to take the extra money you are saving and automate those savings to pay down the mortgage faster. Tell your kids. Find the right apps but more importantly automate to pay yourself first. That’s how you save.

We had this to say last week.

“We made good money on Friday”. We say that not to brag but as a trading signal –a  wakeup call if you will. All summer long we have had days where we make really good money and then the next day we give it all back…If, tomorrow, we hold those gains then something has changed. The hot mess of energy and the entire “back to work” trade may be resolving itself higher.

We are reminded of one of Arthur Cashin’s classic remarks. – “When you find the keys to the market they change the locks.” We kept the money but not for the reasons that we thought we would. Financials gave back some of their gains and energy hung in there. We made money in gold and Japanese stocks which we added this week. The jobs report was bad news for jobs but good for the market. We are back to bad news is good news. Bad news on the jobs front means that the Fed will keep easy money around longer. September is the worst month for stocks. If we go down in September we would not be shocked. The real thing to watch out for is if stocks go up when they are expected to go down seasonally. That shows that the bulls are firmly in charge and we could get that melt up scenario.

I think we aspire less to foresee the future and more to be a great contingency planner… you can respond very fast to what’s happening because you thought through all the possibilities, – Lloyd  Blankfein

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. – Winston Churchill

 

To learn more about us and Blackthorn Asset Management LLC visit our website at www.BlackthornAsset.com .

 

Disclosure: This blog is informational and is not a recommendation to buy or sell anything. If you are thinking about investing consider the risk. Everyone’s financial situation is different. Consult your financial advisor.