Morning Download from Invincible Money 

Personal finance + economics + markets

Good morning investors! I’m going to start tweeting personal finance and market info on my Twitter, so if you use it, let’s connect here.

Today we cover:

1. U.S. home prices are steady. U.K. not so much

2. OpenAI lawsuit

3. Threads hits 100 million!

4. VC aren’t into crypto

5. How DCA can make you rich

📊 Economy 

U.S. home prices steady

Mortgage rates have been rising steadily in recent months, but home prices have not come down in tandem. In fact, they hit new highs in some markets. This is because the housing market is still facing a number of supply constraints, such as a limited inventory of homes for sale.

For example, new listings are down ~25% from a year ago because no one with a 4% mortgage wants to sell and get a new house with a 7% mortgage.

Result: Homebuyers are still willing to pay high prices for homes, even with higher mortgage rates.

What now? This trend is likely to continue in the near future, as the Federal Reserve continues to raise interest rates in an effort to combat inflation.

Here are some useful stats:

• The average 30-year fixed mortgage rate was 6.81% in the week ending July 6, 2023, up from 5.55% a month earlier.

• The median price of an existing home was $396,100 in May 2023 (-3.1%), down from $408,100 a year earlier.

• The National Association of Realtors (NAR) predicts that home prices will continue to rise in the coming months, but at a slower pace than in recent years.

• The NAR also predicts that mortgage rates will continue to rise, but they will likely peak in the next few months before starting to decline. (CNN)

U.K. housing and inflation

The U.K. is having a different experience where home prices fell by 2.6% in June, the most since 2011. The U.K. is also experience the most stubborn inflation, sitting at 6.5% in May, but coming down from the peak of 11.1% a year ago.

📰 News

Sarah Silverman and others sue OpenAI. Whenever ChatGPT gives you an answer, it is pulling that data from somewhere and all that data ain’t free. The old way (Google) was to link to it so it’s sourced and easily accessed, but times are changing.

This is an important case to watch since OpenAI is using data sets that belong to other people and companies. It has yet to be determined how those people will be compensated for having their data used to train LLMs (large language models).

Meta’s Threads breaks a new record, adding 100M users in 5 days! ChatGPT was the previous record holder taking a laborious 3 months to reach 100M. Ugh.

However, it’s way too early to tell what the engagement and staying power will be.

But so far it doesn’t look great for Twitter:

📈 Stocks

S&P 500 4,409.53 (+0.24%)
DJIA 33,944.40 (+0.62%)
NASDAQ 13,685.48 (+0.18%)
VIX 15.07 (+1.62%)

Most Actives

🇬🇷 Helen of Troy [HELE +18.49%] is a $3B provider of consumer products around the world. They make all sorts of stuff like coffer makers, hair care products, water filtration and household cleaning products under brands like Revlon, Vicks, Honeywell and Braun.

Results: They were up big after posting better than expected earnings of $1.94 EPS (vs $1.60 expected) on quarterly sales of $465.4 million (vs. $474.7 million expected).

💾 Palantir Technologies [PLTR +6.26%] is up 140% YTD largely due to their long-time use of A.I. to sort through data. The stock is a bit pricey at 17x earnings and a 1% profit margin, but revenue is expected to grow by 16% in the next year.

New product: If their AIP (A.I. Platform), which is their own LLM (large language model), used in generative AI chatbots, is a success, it could add to the earnings. The CEO said “the demand…is nothing I’ve ever seen in 20 years.”

🚙 Fisker Inc. [FSR +17.17%] announced a $340 million convertible debt plan, which the market liked, sending the stock up 17%.

📚 What I’m reading

Nick Huber’s Sweaty Startup YouTube and his newsletter are interesting for entrepreneurs. His latest video is about the benefits of using Twitter, which is timely considering what’s happening with Threads.

Noah Kagan interviews entrepreneurs and in this video he talked with Jean Paul DeJoria who went from homeless to selling his company for $5.1 billion.

🔐 Crypto

Bitcoin $30,362.42 (+0.6%)
Ethereum $1,877.58 (+0.7%)
Total market cap $1.23 (+0.6%)
* Prices as of July 10th, 7:20 PM EST

VC funding down 98%

Bitcoin and Ethereum are having a great year, but Venture Capital doesn’t have much appetite to get more into crypto after 2022 so they aren’t raising more funds. However, those same VC funds are still sitting on a lot of cash from previous raises, so good crypto projects are still being funded.

Are they over crypto? I think they’ve just moved on to the new shiny thing - A.I.

Here’s a breakdown of some of the projects getting investment.

💵 Personal Finance

The most efficient way to invest

During my years as a financial planner, I noticed there was one thing that set aside wealthy clients from others:

Dollar cost averaging (DCA) is an investment strategy where you invest a fixed amount of money on a regular basis, regardless of the share price. This helps you to average out your cost per share and reduce your risk over time.

For example, if you invest $100 every month in a mutual fund, and the price of the mutual fund fluctuates between $5 and $15 per share, you will buy more shares when the price is low and fewer shares when the price is high. This will help you to average out your cost per share and reduce your risk.

Some of the benefits of DCA:

• It can help you to average out your cost per share and reduce your risk.

• It is a simple and easy-to-follow strategy.

• It can help you to stay disciplined in your investing.

In other words, “set it and forget it.” For more people it’s the “forget it” part that’s the hardest because we want to feel like we’re doing something so we trade and tinker, resulting in a lower return.

Fun fact: 95% of people lose money trading. Don’t be one of them. Counterintuitively, doing nothing is often the best option.

💰 Be a Better Investor

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.