Summary of my macro outlook; How Painful Should Your Workout Be?; Training for my seventh 24-hour World's Toughest Mudder; Free session at Barry's Bootcamp
1) Picking up where I left off in my past two e-mails, sharing excerpts from my presentation at the Stansberry Research conference in Las Vegas...
Many bearish investors think America's national debt is going to cause a crisis and are thus positioning themselves defensively in the market.
It is indeed high and rapidly rising, doubling from roughly $1 trillion in 2022 to $2 trillion in 2023 (per this New York Times article: U.S. Deficit, Pegged at $1.7 Trillion, Effectively Doubled in 2023). As a result, our government debt to GDP is fourth highest among OECD countries, as you can see from this chart I presented:
I agree that this is a problem we need to address – but I don't think a calamity is imminent, so it's not affecting my generally constructive outlook for stocks.
One reason for my complacency is that when I was running a hedge fund more than a decade ago I put on a trade that would pay off if Japan had a debt crisis. Japan's debt to GDP was similar to America's today and appeared unsustainable – yet despite nearly doubling since then, there has been no crisis. (It seems like every self-respecting hedge fund manager has, at some point, put this trade on and lost their money – so much so that it has a name in the industry: "The Widowmaker.") And we're in a much better position than Japan as we boast the world's reserve currency, better demographics, and a more vibrant, growing economy.
Another reason is that, if needed, the U.S. has the ability to raise taxes to reduce the deficit and/or pay down debt, as this chart shows:
Additionally, American households are in excellent shape. They saw their wealth grow a record 37% between 2019 and 2022 thanks to rising stock indexes, climbing home prices, and repeated rounds of government stimulus. Here's the chart I showed last week:
Households also have more than $4 trillion of cash in the bank:
And the value of Americans' homes is at an all-time high of $52 trillion:
When you subtract $20 trillion of mortgage debt, Americans have $32 trillion of equity in their homes:
Lastly, consumer spending, which accounts for 70% of GDP, has completely recovered from the pandemic to reach an all-time high:
So here was my summary of the macro situation and outlook:
2) I just finished my last day of hard twice-a-day workouts to try to get my body at least semi-prepared for my seventh 24-hour World's Toughest Mudder (aka, "sufferfest"), which starts in 12 days at a farm outside of Dallas. (Here's a link to my write-ups of my first four races.)
Normally I stop training and taper about seven to 10 days out... but I'm doing a day-trip to Baltimore today, attending the Robin Hood Investors Conference tomorrow and Wednesday (it's not too late to register!), and flying to Europe Wednesday night for a week-long trip to Zurich, London, Edinburgh, and Vilnius.
As such, this NYT article is on my mind: How Painful Should Your Workout Be? Excerpt:
Across sports, the top athletes seemed to spend about 80% of their training time at a relatively low effort. The other 20% was very hard. This "polarized" training distribution, as it has come to be known, enabled athletes to rack up large quantities of training without burning themselves out while still reaping the benefits of high-intensity workouts.
This 80/20 split allows professionals and weekend warriors alike to balance pleasure and meaning. During the low-intensity training the athletes chat with friends, enjoy the scenery, and generally have a pleasant time. The high-intensity training is hard, but researchers have found that elite athletes rate these workouts as the most satisfying. If you're exercising four times a week, for example, choose one day to push hard and keep the other three easy.
This reflects what I do – a lot of easy exercise (tennis, skiing, riding my bike around the city, and easy jogging), with two or three high-intensity workouts per week with my running group, personal trainer and, for the past month, Barry's Bootcamp.
Barry's is a 50-minute workout consisting of four eight-to-13-minute sessions, alternating between two on a treadmill and two on the floor with a bench, bands, and/or weights. It also has the usual energetic trainer, dark room with pulsating music, etc. (see photos below of the reception area with juice/smoothie bar and workout room).
I've found that super-high-intensity one-hour workouts prepare my body well for my long races. However, I really have to push it to the max – my average heart rate during these workouts is 150, with peaks at 188 to 194 when I'm doing sprints on the treadmill at 11 or 12 mph, which I can only sustain for 30 seconds. Of course, everyone goes at their own pace – you can go as hard or as easy as you want.
Barry's had a 20% discount for new members... so after I liked my first workout, I signed up for eight sessions that I used over the past month for $225.72, or $28.22 per session. That's a very good price.
I asked at the front desk if they would give my friends a free session like they did for me and the young woman behind the desk, Serena, said sure.
If you want to check it out, here's all you have to do:
- Create an account here.
- E-mail Serena at s.gonzalez@barrys.com, tell her you're a friend of mine, and she'll credit your account with one session.
- Book it and go!
My wife took advantage of this offer, tried it for the first time yesterday, and really liked it.
There are Barry's studios in 15 other countries, 16 states, and 12 in New York state – eight of which are in New York City (I go to E. 86th) (locator here):
Best regards,
Whitney
P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.