*This is sponsored advertising content.
Happy Friday Everyone! 👋
Remember, save, invest, do nothing, repeat until rich.
SIX things you need to know this week in 60 seconds.
Average 30-year fixed mortgage crosses 5%
Battle for Spirit Airlines
Elon takes Twitter by storm
Investors hide from inflation in the US Midwest
Terra buys the dip (again)
The Green Monster is going green
If you’re reading this but haven’t subscribed, join our community of +XXk smart, fun & edgy investors 👇
1. MACRO
Average 30-year fixed mortgage crossed 5%
Last Sunday we dove into the housing market and took a look at the underlying factors that have revised the American Dream. If you missed it, check it out here.
The TLDR (too long, didn’t read) is that even the slightest increase in mortgage rates ends up having an outsized impact on monthly payments. This can put homeownership out of reach for many.
First-time homebuyers are already staring down the barrel of the priciest housing market in history—home prices rose 20% YoY in February—and things are getting worse as the average rate on a 30-year fixed mortgage topped 5% this week for the first time since 2011 (with the exception of 2 days in 2018).
A year ago the rate was 3.32%. As we noted on Sunday, and as the image above illustrates, this has an ENORMOUS impact on affordability!
GRIT’S TAKE: To repeat what we said on Sunday—at this stage in the cycle, consider house ownership more of a necessary evil rather than an investment.
GRIT’S ACTION: I think those dumb bidding wars are finally going to take a pause…!
Under the Radar
SCALING ACROSS MULTIPLE BLOCKCHAINS. As it looks to continue its rapid growth, Liquid Meta is building out the tech it needs to operate across multiple blockchains. The Meta Bridge platform is a simple and automatic way of deploying liquidity not only efficiently, but securely, by mitigating the risks of being hacked*!
EXPOSURE TO EXPLOSIVE MARKETS. Blockchain Foundry is at the forefront of innovation in the blockchain and NFT markets. From helping enterprises with opportunity audits, consulting, DeFi, token service to a custom-built NFTGen pipeline that will enable much more than what is offered with your typical NFTs, Blockchain Foundry is the gateway to the decentralized universe*.
CARBON CREDIT NFTs. With the global push to net-zero by 2050, carbon credits represent an asset class with an expected trillion dollar value. DeepMarkit’s proprietary platform, MintCarbon.io, is a game-changing and proprietary SaaS platform being built for holders to tokenize their offsets into NFTs for democratized listing and trading on decentralized exchanges globally, rather than the archaic way that it’s done by banks today*!
HELIUM EARLY MOVER. With applications in MRI machines, semiconductors, hard drives, fiber optic cables, nuclear reactors, space vehicles, satellites, and particle accelerators, Helium dependency is multiplying throughout the high-tech economy. Desert Mountain Energy is an early mover with over 85,000 acres of key helium prospects under lease in the world’s richest helium-producing regions*!
*This is sponsored advertising content.
2. DEALS
Battle for Spirit Airlines
In February Frontier announced a deal to buy Spirit Airlines for $2.9B (or $24 a share) which would have created the 5th largest US airline.
This week JetBlue swooped in with a (37%) sweeter offer to purchase the discount airliner for $3.6B (or $33 a share), which would similarly create the US’ 5th largest airline.
JetBlue has been trying to expand and gain a bigger foothold in the industry to compete with the 4 major airlines—it tried and failed to buy Virgin America in 2016—but shareholders don’t seem to be convinced Spirit is a good fit as the stock has dropped ~15% since the news broke.
Spirit shareholders, on the other hand, are thrilled to be at the center of a bidding war: the stock rose 22% on the news and has held this new level.
GRIT’S TAKE: Regardless of which suitor Spirit selects (if any) after evaluating the proposals, any merger will have to clear regulators who have been tough on antitrust enforcement under the Biden administration.
GRIT’S ACTION: My only airline holding CargoJet (CJT-TSE) is up +12% in the last month!
3. STOCK MARKET
Elon takes Twitter by storm
A week ago, Elon Musk—noted free speech advocate and Internet troll—was considering building a social media platform from scratch, DIY style.
Then he remembered he’s literally the richest man in the world and decided to buy a piece of one instead by acquiring 9.2% of Twitter, his preferred avenue for infuriating Blue Checkmarks.
Musk was immediately appointed to the board of directors where he will serve until 2024. Throughout his term, he won’t be allowed to own more than 14.9% of the company, and his interest is considered “passive”.
This would imply that Musk—one world’s most influential leaders—won’t try to control or influence the company.
Given his track record of respecting authority, Tweet history, and addiction to trolling, I don’t think anyone is buying the “passive interest” bit.
GRIT’S TAKE: In fact, he’s already having an immediate impact: Twitter has confirmed it’s working on the forever elusive ‘edit button’. We talked about it on Wednesday’s Livestream—check it out here!
GRIT’S ACTION: Am I buying Twitter stock? Find out here at 14:49
4. COMMODITIES
Farmland is the latest inflation hedge
Inflation is at its highest level in 4 decades and investors everywhere are looking for places to hide.
Over the past year—as commodity prices have risen—prices for US Midwest farmland have surged by as much as 30% and the bids at auctions for available grounds are growing.
Last month demand picked up as sanctions on Russia have thrown a wrench into critical commodities like wheat and corn and have world food prices at record highs (the UN Food Price Index increased 24% YoY last month).
In Iowa, for example, the latest buyers pool for farmland was made up of 35% investors vs 65% farmers. In 2019 investors comprised only 19% of buyers.
GRIT’S TAKE: Right now institutional investors own an estimated 2% of the $3T US market, but the US Department of Agriculture estimates that 70% of US farmland will change hands over the next 20 years, and big institutions are expected to gain significant market share as a result.
GRIT’S ACTION: True story, a year ago I invested in one of the largest organic blueberry farms in BC, Canada and I am now up 60% on paper! Subscribe to my paid newsletter to find out about other private deals like these!
5. CRYPTO
Terra buys the dip (again)
Ho hum—just a day in the life of a crypto billionaire! Honestly, the most surprising thing on this list is that he actually vacuums the house himself.
Anyway, Terra is executing the MicroStrategy—which has a $5.2B market cap while holding $5.4B Bitcoin—playbook better than MicroStrategy is after adding another 5,040 (~$230M) to its balance this week.
The move comes on the heels of a separate $135M BTC purchase last week.
This is all part of Terra’s plan to build a $10B Bitcoin reserve to back its TerraUSD (UST) stablecoin, which—as co-founder Do Kwon puts it—will “open a new monetary era of the Bitcoin standard”.
Terra still has a ways to go to get there: reserves currently total 35,768 BTC, or ~$1.6B.
GRIT’S TAKE: Terra’s LUNA token has outperformed many other cryptocurrencies recently, making all-time highs this week and solidifying its spot in the top 10 by market cap (8th, $37.5B).
GRIT’S ACTION: You know how I feel about crypto = buy, buy, buy!
6. ENTERTAINMENT
The Green Monster is going green
Longtime GRIT subscribers know how I feel about carbon credits—I’ve been pounding the table on this asset class since June 2021 and have invested in more than one carbon deal.
Since then demand for offsets has exploded and prices are expected to increase 50x by 2050!
This week carbon credits got a mainstream boost from an unlikely source: the Boston Red Sox.
The team announced it would allocate a portion of each ticket sold to purchasing carbon credits through contributions to the Aspiration Planet Protection Fund in an effort to make games at Fenway Park carbon-neutral.
GRIT’S TAKE: Aspiration—a Certified B Corporation—is in the process of going public via SPAC merger.
GRIT’S ACTION: I made some great $$$ investing in two private carbon deals in the last year. Early innings for this theme!
WallStreetBets sentiment this morning:
*SOURCES
1. CNBC
3. CNBC
4. FT
6. WCVB Boston
Disclaimer: The publisher does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.
Grit Capital Corporation is a publisher of financial information, not an investment advisor. We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.
THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.
No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.
Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.
The publisher, its affiliates, and clients of the a publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.
Neither the publisher nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.
By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.