Yes, I do think they are sustainable. Not only that, but places like Boston will continue to be a Mecca for the Innovation jobs that represent 90% of the high paying jobs getting created in the country. The reason why is that despite the high housing prices in Boston, the city has Universities like Harvard, MIT, Tufts, Northeastern, Boston U, and many others there. They have 300,000 students that descend on the city every year to go to school and that brings the average age down by 10 years when school is in session. Millennials have flocked to Boston for its walkable cities and the high rate of job acquisition. Tech, FinTech, and Biotech companies have headquarters or satellite offices there, because it is a Mecca for tech and health sciences research partnerships between the major top notch universities, the government, and the corporations. And they get a steady supply of gungho and smart students to help them experiment and work at these technologies. In short, Boston is an East Coast version of the West Coasts Silicon Valley/San Francisco areas. So from a long term macro perspective, Boston is hot and will stay hot for a very long time to come.
But in the short term, I wonder if pricing hasn't gotten ahead of itself. All this heroin the Fed has injected into the markets with low rates and QE has juiced prices of all assets beginning with housing. So everything just looks too frothy.
Did I tell you I bought gold? I started buying early last week and was going to work up to a 5% portfolio position to hedge against tail risk, but I only got to a 1% position when the Suleimani assassination news broke and gold lifted by several percentage points in a few days. Since then, I'm in a holding pattern and hav cash waiting to deploy when the prices come back down from the initial FUD factor from the Iran/US conflict. I keep thinking that with rates this low and likely to go lower and QE continuing all over the world and a recession imminent, gold is a great place to be as rates after inflation are essentially negative. That means the carrying cost of gold is more lucrative than holding negative yielding bonds, after true inflation is taken into account. Plus, the dollar is going to weaken this year. how can it not? The Congress and Trump are running massive deficits and debt is soaring, while the dollar is weakening. It's almost a perfect scenario for gold to outperform cash and bonds, while avoiding the massive risk of stock market and real estate overvaluation. |
