In the automotive hobby world, there are all different niches, from rock crawling and drifting (Tokyo Drift), to formal racing, like Nascar and F1(I’m learning to love this kind of racing). However, one specific niche that comes to mind as I launch my first newsletter is desert racing.

In this niche, teams from all over the world compete to see who can navigate through heavy sand and over steep dunes, which is relatively harsh terrain. However, each team brings two vehicles, the race vehicle and the second one, a pre-runner.

There are two purposes for a pre-runner: 1) To test and learn the track to find the most efficient way around it, and 2) if something breaks, you can still show up for race day with no harm to foul.

Think of this newsletter as my pre-runner.

(Ignore the mistakes, lol.)

Markets:

I'm relatively bullish on the market from now until the end of the year. However, I believe the market will decline in the intermediate term. Assets are in a trend that people call a “bear market.” However, in the future, this section will be more elaborate.

(I plan to add a digital interactive tool here. It’s currently under construction)

Economics:

Over time, I will undoubtedly share my perspective on what is happening in the economy in specific detail, However, today, I will just give you a brief sentiment. I am positive that what is happening now is what needs to happen. And the economy will follow that course until conditions return to normalcy(which I will also elaborate on in future content). To leave you with a small piece: although we are waiting for unemployment to catch up to prices in terms of its trend, Inflation seems to be reversing and coming down.

This is something the market and consumers are waiting for.

(I plan to add a digital interactive tool here. It’s currently under construction)

Positive Under Currents:

1. Even when companies get sad, they spend money to make themselves happy. To draw a strange comparison, this behavior is similar to someone going through a rough breakup. When that happens, people tend to do various activities to cheer themselves up. Their goal is simple. It’s to move forward.
2. People will do various things to make themselves feel better: they go on a shopping spree, work out, or consume an unnecessary amount of chocolate, for example. Companies exhibit that same behavior during slow economic times. They spend a lot on capital expenditures during recessions. They do it with hopes of returning efficiency through higher productivity. And in times like this, some of the very best innovations are made. I mean, some of the juiciest types of innovations. The kind that increases productivity in ways I feel like I can’t begin to imagine. And to be frank, the other alpha in this fight is inflation.
3. Companies better take their gloves off; inflation is everywhere, there’s still a war, and there’s likely going to be an invasion in a few years.
4. https://www.marketwatch.com/story/inflation-will-drop-significantly-next-year-goldman-sachs-economists-forecast-11668417681
5. There are some positive changes in voting forums as of late, not political ones, but at company shareholder ones. The growing trends are significant and meaningful. It’s becoming more diversified as investors are becoming more knowledgeable, not just in climate, but in total cost, as well (i.e. mental health). A new shift is occurring in proxy voting.
6. In this voting forum, the standard operating procedure is the mutual fund manager elects the vote in company proxy. Typically, this is done because managers felt individual mutual fund investors would vote counterproductive for their targeted performance. However, now investment managers have been allowing mutual fund investors the option to make the election themselves.
7. More people voting on an initiative is better than a few, despite a few being the best at solving problems. For initiatives focused on social matters, for me, it feels like its better to have more voices than not.  
8. https://www.wsj.com/articles/proxy-voting-what-11641594493

Negative Currents:

1. Wal-Mart and Target: Wal-Mart did great; Target was terrible. After listening to both quarterly calls, it sounded like both CEOs were standing on each side of the same coin. Typically, this doesn’t happen in the marketplace, where people pick one brand as a substitute for the other unless something criminal happens … nothing illegal happened. This pivot was meaningful because a real uncomfortable change occurred in the real world. Here’s how: a segment of society that once felt oneway about their lifestyle choices now has to judge another. Inflation is an animal.
2. This just so happens to be a sign of deterioration.
3. (This is a reflection back on retail earnings week.)
4. Tech is getting old enough to downsize: Forbes released a piece about
5. out how tech companies have reduced the size of their commercial real estate footprint. The National Office Vacancy is 12.5%, up from the prior 9.6. In the real terms, that’s thousand sqft which equates hundreds of buidlings. Most of that was occupied Tech companies prior. Companies that provide hardware to their employees to work from home realize that many of their workers prefer to have that as part of their weekly routine. Commercial real estate has been a catalyst to wealth creation.
6. This is a sign in terms of commercial use in the Tech industry has matured. And like human adults, they don’t get bigger anyway way physically. We might as well call the indusry a senior citizens. Senior’s downsize their living space.
7. This feedback loop seems to be cycling downward. However in the downward spiral urbanization will occur. It carries ingredients of urbanization, large inside spaces and a generally established utiliies infrrustcture. People are there temporarily throughout the day. That will change because people will now likely live in those spaces.
8. That's urbanization.
9. https://www.forbes.com/sites/jackkelly/2022/11/16/lyft-meta-salesforce-and-other-tech-companies-are-downsizing-their-real-estate-why-this-is-good-news-for-remote-workers/?sh=428c41007cba

Firm Updates:

1. YCHARTS: I spoke with Ycharts and will likely go into contract with them at the first of the year. Although this is my first time using the software, it appears to be a great tool. The primary reason I got it is for the ability to access and manipulate data easily. This is good for the content I plan to share with readers and for conducting higher-level research for institutional clients. Data aside, I can use it for institutional clients to build Investment Policy Statements (IPS) for qualified retirement plans. This was a hidden value that I didn’t anticipate.
2. SERVICE BLUEPRINT: I did some updates to it. It looks more complete, minus the disclosures. Take a sneak peek below:

3. Mechanical Financial can now open accounts. Here is a list of account types currently available:

This content is for informational purposes only. Mechanical Financial, LLC does not intend to give financial advice or an investment recommendation. This material does not include enough information to make an informed investment decision. If you have any questions, contact the publisher, Mark Dyer, Managing Member, COO, at mark.dyer@mechanicafinancial.com or 916-517-8981.

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