Moody Markets

Happy Wednesday!

No Newsletter next week - enjoy some very dry turkey with your family.

Bonus Content: We generated a “Cute Turkey Writing Covered Calls on Robinhood” and here’s what we got ⬇️

This is not investment advice and is intended for entertainment purposes only

What am I HODLing: Moody Markets

In the last week, two major developments took place in the market:

1. Moody’s downgraded the United States as a borrower

2. WeWork ($WE) filed for bankruptcy

It’s likely that neither of these has detrimental effects on your life, but both bring up some key points of thought coming out of a post-low-interest rate environment.

Moodys is a rating agency which essentially means they supply research and assign a creditworthiness ranking to borrowers. They are one of three major rating agencies and the last of the three to ever talk of downgrading the United States as a borrower.

And yes the U.S.A. is a borrower of a lot of money. We have a national debt of $33 trillion currently.

Moody’s lowered their outlook on the United States to negative from its previous status: stable. They proceeded to affirm the nation’s rating at Aaa, which is the highest investment-grade notch.

How bad is this?

The United States is deeply in debt right now and the interest rate environment remained hawkish throughout 2023.

The other two ratings agencies have downgraded the U.S. before during times of debt limit and economic uncertainty - so this isn’t the first time we’ve seen something like this.

If you are an investor with a long-term time horizon, this may cause some turbulence for your returns in the short run but ultimately isn’t the end of the world long-term.

If you’re an investor in $WE… 🌚 GOOD NIGHT MOON

WeWork reached unicorn status (Billion Dollar valuation for a startup) and was the total Bell of the Ball until it all started to crumble when their IPO was a nightmare.

WeWork founder, Adam Neumann, known for his charismatic and opulent personality, walked away from the company a billionaire. He had the grand idea of building the first in-person social networking through co-working spaces but ultimately has been a painful last four years of trading publicly.

WeWork thrived in a Venture Capital environment where debt was cheap and valuations were what one may say, EXTREMELY optimistic. Now things are tightening and if I was a betting woman I’d say we have many more bankruptcies similar to this one coming our way.

Final Thoughts:

It’s a tight time economically right now, but there is always a light at the end of the tunnel.

But hang on for dear life if you’re a WeWork investor.

What am I Reading?

This Monday was the second of three total Stonk Enjoyers Book Club!

We are wrapping things up with the last meeting before New Years to finish the entire book.

Here are the details:

• Current Book: Elon Musk by Walter Isaacson

• Next meeting: 12/18/23 at 5 PM PST

• Location: X Spaces

• Discussing up to CH 45 to the End!

Meme of the Week

Credit @TheDividendDog