Holiday Mixer Conversation Starters, TRAPping, Con-Mates and Charlie Munger

Topics for Your Holiday Mixers

• The PCE – Personal Consumption Expenditures – continues to decrease with the PCE inflation index at 3%, down from 3.4% the prior month.

• The Core PCE index – excluding energy and food – dropped from 3.7% to 3.5%.

• The Fed, led by Jerry Powell, has indicated that they will hold rates steady when they meet on the 12th.

• The stock market hit a new high for 2023 last week because of that news.

• The 10-year yield fell to 4.22%.  It was almost 5% 6 weeks ago.  That’s an adjustment!

• California gasoline is below $5/gallon.  I know that’s nothing new in the rest of the country, but it’s nice to have it here.

• However, OPEC, aka Organization of Petroleum Exporting Countries – will be reducing output by 900,000 barrels/day.

• That’ll have an impact.

• GDP was revised UP from 4.9% for the third quarter to 5.2%.  That’s smokin’!

• Normally, that would elicit calls of an overheated economy.  But things really aren’t normal, are they?

• So, what does all this mean?  It means that there is growing confidence in a soft landing and avoiding a recession, assuming you still think a recession is still possible.  The economy is sound, except for this inflation thing, which is what everyone sees, particularly food.  Food is what everyone sees, and when a meal for two at a fast-food joint is over $25, you notice that.

• We’ll see what comes out next week for employment and factory orders. 

The Latest Trend…

• What seems to be popping up in employee contracts is a clause called “Stay or Pay.”

• Tell me more, you say.

• Well, this clause requires quitting workers to reimburse their employers – or ex-employers - for hiring and training costs.

• The intent is to reduce the outflow of employees just joining for the training and then jumping ship for better pay.

• This has spread to typically mid- and low-wage gigs like teaching and pet grooming.

• In 2020, 10% of US workers were under a stay-or-pay clause. Now, some experts say the clauses can be found in industries covering a third of US workers.

• Oddly enough, a common stay-or-pay clause is called a “training repayment agreement provision.”  Make that into an acronym, and you have… TRAP.

• Some labor advocates equate this to a “do not compete” clause because it prevents you from leaving your employer for a better job.

• Or starting your own gig.

• It’s a penalty for quitting.  Or just not showing up to work without telling anyone.

• Isn’t that called ‘ghosting’?

• I must believe that California frowns upon this sort of thing, but if, as an employer, you are going to do this, you had better spell out exactly what the costs are going to be.

• And talk to your HR consultant.

• I think a better incentive is to have some sort of bonus if they stay on board. 

Birds of a Feather

• Remember Sam Bankman-Fried, the former head of FTX?  The guy that fried all those banker men with his magical expertise with crypto – now you see it, now you don’t. Take a guess on who some of his cellmates are while he awaits his sentencing…

• Nope.

• Nope.

• Nope.

• Not even close.

• OK, I’ll tell.

• Former Honduran president Juan Hernandez awaiting trial on drug trafficking.  And…

• Genaro Garcia Luna, Mexico’s former Secretary of Public Security, who was convicted of helping the Sinaloa Cartel smuggle 50 tons of cocaine into the US.

• Seriously???  This is like the Penguin, the Joker, and Two-Face being put into the same jail, and everyone thinks that’s just fine.  Except this time, Batman is in senior care, and Robin only wants to work from home. 

Charlie Munger

• So much has already been said about Charlie Munger, so I’ll sum up some of the key parts.

• He was a partner with Warren Buffet and died last week at 99 years of age.

• He was a stock picker with their company, Berkshire Hathaway.

• He lived in Pasadena.

• And he had some good quotes:

• “Invest in a business any fool can run, because someday a fool will. If it won’t stand a little mismanagement, it’s not much of a business. We’re not looking for mismanagement, even if we can withstand it.”

• “The big money is not in the buying or the selling, but in the waiting.”

• “Those who keep learning, will keep rising in life.”

• There are many more, which I will most likely put in future editions. 

As I approach the end of the year, I always reflect on what I did, what I didn’t do, and what I should have done better.  And that last part is what provides an opportunity for improvement.  That’s why I put in the piece on Barry Sanders last week.  Are you pushing yourself to be the very best you can be?  I am working with a company that includes in its mission statement, “Do the hard work.”  To be the best takes hard work, which is why most people will never play to their potential because doing so is, well, hard.  But that is a choice you can make.  Will you do the things that have to be done today, that others won’t do, so you can have the things tomorrow, that others won’t have? 

Do your very best each and every day, and you’ll find that your results will change for the better, but it certainly is easier said than done. 

You can make this change in 27 days with the start of the new year. 

Or you could start now.