Everyday prices such as food, housing, and gas have gone up quite substantially in 2022. Food in The United States has gone up about 10% compared to 2021, but some constituents are reporting takeout food pricing increasing by 30%. Similarly, housing has gone up an additional 10% in 2022 largely in part that The United States needs to produce 1.5 million homes per year, and has been unable to do so for over a decade, even in a normal economy. Add in supply chain issues, and raw materials taking an additional six months to ship, one could argue it's a recipe for house prices to be sticky in nature. Additionally, many individuals and corporations refinanced in 2020 to a 2.5% interest rate, and with interest rates rising, it leaves very little motivation for individuals to move out of existing real estate. Since new purchasers cannot afford new housing, the demand for rentals will increase. Additionally, the Federal Reserve continues to raise interest rates, which increases HELOC borrowing costs on landlords, who pass those cost down to consumers. Additionally, the price of oil went negative in 2020, and is currently at unsustainable levels in the long-term. This triple-entente is not good for consumers to spend, on top of corporations tightening the purse strings of a looming recession. One case study many individuals forgot about is when Europe embraced the Euro. When Europe embraced the Euro, many countries such as the Netherlands had their old currency price, but a Euro in front of it with the new currency, which was much higher in value. Real estate will continue to go up, food prices will be sticky, and gas will be back down to normal prices in the next two years. This means that employers will have to pay higher wages in order to attract talent, and many countries not experiencing high food prices, may exhibit a larger immigration influx. Just remember whenever prices are out of whack, like they were with Bitcoin in 2021, they eventually go back down to reality, due to reversion of the mean principle. On the other hand, housing and food prices tend to be sticky (outside of the 2008 crises). It is notable to consider the M1 money supply has not gone down, and increased by 500% from 2020. These prices will be offset by firms cutting spending, consumers cutting spending, and the prices will revert back to the mean at a more acceptable level with the political elections being a catalyst to more sustainable pricing for all.

More often than not, our firm receives a fair number of asks in regards to capital raising, as well as capital introductions. Prior to any firm receiving capital, the founder should be aware that if they are seeking capital from venture capital that he or she needs to understand:

​1) Does the venture capitalist even invest in the area that the company is in? I.e. do not go to a venture capital that does deep tech artificial intelligence investing when your firm is a regulatory agency.

2) Understand at which stage the venture capitalist invests? I.e. SEED, Series A? Do not go into a Series A investor asking for Seed.

3) Understand much capital does the venture capitalists fund have? I.e. $100 million? $10 million?

4) Understand from question #3 how much of that capital has already been deployed? I.e. $10 million/$100 million? This shows if this venture capitalist is just kicking the tires, and not serious.

5) From question #4 also ask them how quickly do they deploy capital? I.e. be prepared to offer them something generous in return or look at it from there perspective in what they would actually invest in.

While these questions are not the exhaustive list, it's also important to notate that many venture capitalists lose money 9/10 times, and there are alternative measures of funding. If you'd like to find out more, please schedule a free consultation with us.

Many companies, startups, and individuals, unfortunately, follow what we would coin a 'Euphoria' buying pattern. Let it be Peloton being overly optimistic about sales, then missing the sales targets without realizing that the sales patterns were associated with a short-term boon of COVID-19. Next, let's get into residential real estate, as it's in a bubble, and our firm does not predict individuals will be back in the office until 2024, which in turn would mean a boon to the cities around 2024. Similarly, Bitcoin in the long-term will have the price go down to zero, but blockchain technology will still exist, as it's a good solution for identity recognition. This also means many venture capitalists diving into firms that use blockchain and machine learning fail to realize that software such as Interactive Brokers works just fine and already allows individuals to trade crypto-currency, so more often than not, there's nothing proprietary in the market, and these investors will, unfortunately, continue to lose their investment 9/10 of the times.

Similarly, all people should know that crypto-currency is not much different than any type of fiat currency, such as the U.S. dollar because Bitcoin in its very nature is backed by nothing. Bitcoin is in a bubble that is already bursting, and we anticipate it to be gone completely within ten years due to China banning it, as well as other government agencies foreseeably into the future. Prices have all one thing in common, which is a reversion to the mean. Firms should always price in recessions, and not be overly optimistic as they were when mass hiring occurred in 2019, as well as a subsequent mass-firing in 2020. In short, our mid-term trend analysis as defined as the end of 2024 is bitcoin continuing to crash, cities returning to normal, residential housing prices starting to go to normal, and companies that had a boon from COVID-19 having their prices go back to normal.​

Legal Disclaimer:
This post does not constitute an endorsement or recommendation to buy or sell a security, as well does not reflect any customer of Investment Sciences' opinions and is for educational purposes only. 

The Covid-19 pandemic has hit many small institutions that unfortunately did not receive adequate capital from the PPP loan, and many landlords were hit particularly hard in regards to the pandemic with little to no solutions. Luckily for our clients and readers, we have come across a loan for landlords and companies still residing in NY. To qualify  for this loan, we have created a checklist for you below, and we do not receive any money from this post.

To Qualify:

• You did not receive more than $500,000 from the PPP loan
• You did not receive more than $150,000 for the EIDL loan
• Your company conducts business in NY and you reside in NY

To qualify for this five year loan, please visit https://esd.ny.gov/ . We hope this helps everybody recover gracefully from the Covid-19 pandemic.

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Enhance Your Financial Portfolio with the Wilcox Model
At our firm, we continually seek out unique and compelling data points to inform our financial instrument analysis. In developing the Wilcox Model, we have incorporated a diverse range of data, including astronomical phenomena such as star positions, sunspots, and moon cycles. While we maintain the proprietary nature of our algorithm, we can share that our back-testing of this model from 2010 to 2016 yielded an impressive 25% return.
Although a 4% annual return might not seem extraordinary at first glance, what sets this strategy apart is its potential independence from broader stock market trends. Integrating a portion of your investment portfolio with the Wilcox Model could provide valuable diversification and risk mitigation.

​Understanding Back-Testing and Investment Positions
Back-testing involves applying a trading strategy or analytical method to historical data to evaluate its effectiveness in predicting actual results. This rigorous process helps us ensure that our models are not only theoretically sound but also practically viable.
When it comes to investment positions, maintaining a “long” position in a security means that you own the security, anticipating that its value will increase over time. Conversely, “short” positions are taken with the expectation that the security's price will decline.
By leveraging advanced back-testing techniques and a keen eye for unique data points, the Wilcox Model offers a robust addition to any investment strategy. Enhance your financial portfolio's performance and resilience with our innovative approach

​(We back tested the results in python):