Chaos in the Town Square
Musk's Twitter takeover, Lottery winnings and Positive news from Fed
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Twitter is, according to many, the town square of the internet. There’s something for everyone: whether you like to discuss the news, engage in sports banter, or have someone explain the science behind the latest Nobel prize in physics, you will find a corner to your liking. There’s also something uniquely democratic about Twitter (some would say too democratic): you can be an astrophysicist explaining the Lunar Eclipse and falconwarrior420 will reply with a 14-tweet thread on why the earth is flat and you are wrong.
Ever since its acquisition by Elon Musk, there’s been absolute chaos in the town square. Musk is likely taking a leaf from Zuckerberg’s ‘move fast and break things’ playbook, but right now, there appears to be a lot more breaking than moving. Last week, we saw the introduction of Twitter Blue: essentially, for $7.99 a month, you can get a blue tick next to your name.
While many analysts had warned about weaponized impersonation, arms manufacturer Lockheed Martin experienced it firsthand as a single tweet from someone with a copycat account brought their stock down by more than 5% in a single day. Predictably, Twitter Blue has been paused for now. To be fair, Musk had clarified that his aim is to try out various features and keep what works, so in the immediate future, we might see a lot more experimentation.
Last week also saw major movements in the market as the S&P 500 jumped nearly 5% in a single day (the biggest rally in two years) and took us out of the bear market. The Powerball finally found a winner in California who won the world record $2.04 Billion jackpot. Let me fill you in on the details.
Managing Lottery Winnings
There’s quite a bit of math out there describing why the lottery is a tax on the poor: when your odds of winning are one in 302 Million, you have a better chance of predicting to the exact second when a dog is going to bark in the next 9 years. Now, a lottery winner is by definition lucky: yet studies have found that one-third of lottery winners eventually go bankrupt. If you are lucky enough to win the lottery or got a generous inheritance, check out my thread from earlier this week on how to manage your windfall.
In my first video last week, I take you through the history of the lottery, why one of the biggest winners is almost always the average US taxpayer (spoiler alert, that $2 Billion jackpot drops down to ~$500 Million real quick), and how you can invest your winnings to retire comfortably. Also, drop an F in the comments section for the 500 Powerball tickets I purchased.
Wave of Optimism
With the latest inflation data coming in at 7.7%, a new wave of optimism has hit the economic landscape. The stock market had one of its biggest rallies last week with the S&P 500 going up by 5.6% and the Philadephia Federal reserve bank president announcing that a pause in the rate hikes might be on cards. The newfound confidence is not only because the Consumer Price Index (CPI) has decreased - but also because core inflation, which does not take into account constantly fluctuating gas and food prices has also decreased. This gives some hope that things just might be changing for the better. Check out one of my older threads on how inflation calculated from CPI might not be in line with your experiences.
In this video, I cover everything you need to know about the latest inflation data and how the changing sentiment is affecting equity and housing markets. I also describe why rental prices are often more sticky and a lagging indicator compared to inflation, so check it out and let me know what you guys think!
So that’s it for my Sunday round-up. For the new folks here, in this newsletter, I give a quick recap of whatever you may have missed over the week on Sunday, and on Wednesday, I will be doing my deep-dive article on one of these topics.
See you next week with another bunch of exciting videos!
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F
With that lottery winning i would go and find me a „family office“.