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  • Writer's pictureDoug MacGray

Rodman Gregg, New Homes, Shareholder Clout, and a Mirror to Nowhere

May 27, 2024


HAPPY MEMORIAL DAY!: We get a three day weekend thanks to those who served the U.S. in the armed forces and are no longer with us. In this morning's local paper, I read the obituary of Rodman Gregg, age 102, who passed away last week. When Pearl Harbor occurred, he was stationed at Camp Upton army base, New York "where that cold winter his unit slept outside in tents." He was then moved to the South Pacific where he helped build gun emplacements on Bobcat Island. He was then moved to the European Theater where he landed in the south of France in 1944 with the 7th Army which fought its way into Germany. He was in the battle of Metz, liberated Landsburg concentration camp and ended the war in Innsbruck, Austria. After a long, productive, post-war life, he passed away last week after a short illness. Thank you Rod for your service.


EXPENSIVE HOMES:  I have been closely observing some people who are in the first-time-homebuyers' market. It is tough. Mortgage rates have been hovering around 7% for a while. Currently 30% of homes sell above listing price (much more in some markets).  NBC recently came up with what it calls the Home Buyer Index which is represented as a number between 0 and 100. The higher the number, the more difficult it is to purchase a home. If the index is low, there are low interest rates and ample homes for sale. In their first release ever, the NBC Home Buyer Index comes in at 82.5, so very difficult. Looking back on recent data, NBC said the index for April was 82.4.


BUSINESS ACTIVITY INCREASES:  Standard and Poors (S&P) keeps a global index to track overall business activity in both the services and manufacturing sectors. In May, the overall index rose from 51.3 to 54.4, a substantial and surprising jump. That is the highest it has been in two years. Manufacturing rose from 50.0 to 50.9.


STOCKS END FLAT ON VOLATILE WEEK: U.S. stocks sank on Thursday when S&P Global indices tracking overall business activity and manufacturing activity rose sharply. This stoked inflation fears. However, tech stocks rallied, especially Nvidia, buoying the S&P to a flat week despite the negative volatility. Many of the S&P 500 companies are reporting strong earnings and strong guidance, but inflation and interest rates still weigh heavily on investors' minds each week.



LONGER-TERM PERFORMANCE:  Below are the annualized three-year and five-year numbers for these same indices.  



TRAVEL:  According to the TSA, current travel is tracking in at about 12% higher than 2019.



GROWTH OF THE 'BURBS':  According to the U.S. Census Bureau, 90% of U.S. population growth last year took place outside of the U.S.'s largest cities (124 of them). One third of those 124 cities declined in population last year. In total, the 124 largest cities grew by 0.23%, less than half the rate of the country at large. New York City lost another 78,000 residents and has decreased by 6.2% since 2020.  


JPMORGAN RESPONDS TO SHAREHOLDER APPEAL:  Shareholders are owners of companies. As such, they have certain rights to be heard and insert proposals to be voted on at shareholder meetings. They can apply pressure to get companies to start or stop doing things. A recent example was reported by Reuters. A family trust that owned some JPMorgan stock filed a resolution to get the bank to stop using political tests for customers. JPMorgan said that it has never done that, but because it purchased a company called "WePay" that did discriminate, language allowing JPMorgan to discriminate based on political and religious beliefs was in some corporate documents and forms. JPMorgan responded by saying its practice has never been to discriminate, and it promised to remove the offending language from all its forms. The family trust shareholder agreed to withdraw its resolution. This is one example demonstrating that shareholders have clout, and they use it. 


ANOTHER EXAMPLE OF SHAREHOLDER CLOUT:  One fund family we use is called Eventide. It is a faith based fund family, and one of its core ideals is to, through its investing, respect the value and freedom of all people. Eventide ran into a problem in the solar industry. Eventide also likes to invest in companies that are using innovation to improve the environment, and solar power companies fit that impulse. But Eventide ran into a problem. There was not one solar panel company that could demonstrate a clean supply chain, one that did not use forced labor. Instead of abandoning the solar panel industry, Eventide got to work by directly engaging companies who have power to change sourcing and asset managers who have power to move capital. They proposed a phased approach to rid the solar panel supply chain of forced labor, and significant progress has been made, although there is a lot of work left to do. 


WHY?:  I rented a truck this weekend to help with a move (see below). Here is the cab of the truck. See the rear view mirror? Why is that there? All you can see in the rear view mirror is the back of the cab!



NEXT MAN UP:  Six years ago, my daughter asked if she could keep most of her furniture and other items into our garage "for six months" so she could go on a short stay to California. Six years later, and a husband and a child later, she is finally returning to the East Coast. Long ago, we took our garage back by moving her "six month" stuff to the basement. They are moving to a new home next month. A few weeks ago, my wife and I were talking with a friend John whose dad had recently passed away. He was helping to get his mom moved to a smaller place, and they didn't know what to do with all the furniture in the home. We said our daughter and son-in-law were moving to a home and they didn't have nearly enough furniture to fill it. It was perfect timing. Well, this weekend we had to move all the furniture out of that house and move it to, you guessed it, our garage! This time it will only be a few weeks as they close on their house in June. We had two young men (my son Logan and John's son) lined up to lift the heavy stuff. At the last minute we learned John's son couldn't make it, so I was the next man up moving the dining room suite, a big heavy desk, and various other items. It all worked out, and my back is still in tact.



Have a great week!


Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.



Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545


"Those who have long enjoyed such privileges as we enjoy forget in time that men have died to win them." Franklin D. Roosevelt


"It is fine to be zealous, provided the purpose is good." Galatians 4:18


SOURCES:


(c) 2024 A.D., Stonecrop Wealth Advisors, LLC, All Rights Reserved


*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.


Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.

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