Distance to a Dollar Store
3 out of 4 New Yorkers (15.2 million) live within 5 miles of a dollar store.
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Eco-lifestyle Consumerism
Eco-lifestyle consumerism of dubious values seems to be all the rage these days. Many smart marketers have figured out that it’s easy to sell new products to urban consumers who feel guilty about their consumption and ecological impact.
The newest one is buying into “community solar farms” that are these vast areas of farm land covered by solar panels that sell into the grid. The consumer pays a little extra on his or her bill – or maybe about the same with tax credits – and they subsidize the construction of these urbanized farm fields or former forests. They argue it’s carbon-free energy, although it’s heavily backed up fossil generation of the grid. The fossil plants work “less hard” with “less load” so they burn less fuel when assisted by the solar, but it’s still all supported by our fossil-fuel grid while using up valuable farm land and forest land. If we took land that was going to be a solar farms and put it into traditional non-urban uses, what would be the impact on the climate? It would at least be less ugly solar farms to look at.
Geothermal heat that uses refrigerant to pump or dump heat out of the earth using large quantities of electricity is also a popular thing – it’s a new high-end product that can be sold by well drillers – who traditionally could only market their service to rural dwellers beyond the city water supply. I’m equally cynical about this technology, because it uses incredible amounts of electrical energy to power it – theoretically from renewable sources – but rarely that’s case as intense amount of energy to power a geothermal system comes from the fossil-fuel grid.
I don’t discredit the early pioneers in this green technology, but I think it’s valid to ask questions, even if we shouldn’t be necessarily defending the status quo. Certainly, we should be doing everything to get solar panels on existing buildings, as solar is proven technology that is simple and inexpensive. It doesn’t consume land on existing structures, it is long lasting, even if it’s as toxic as the rest of electronics it powers. I think we should increase efficiency standards on new buildings and furnaces, work to do more to improve energy efficiency on existing buildings. Geothermal should be considered as an alternative to air-source heat pumps both in existing and new buildings, but it should not be promoted as a way to “consume more” with “zero impact”.
It’s stupid to ignore the climate crisis we are all facing. But throwing money at so-called green technologies that do little to actually address the problem of over consumption and over population isn’t necessarily a good answer.
The K Shaped Economy 💠
A K-shaped economy describes an uneven recovery or growth period where different segments of the population or industries experience vastly divergent financial outcomes. While one group thrives and moves upward (the top arm of the “K”), another group struggles and falls behind (the bottom arm).
- The Upper Arm: High-income earners and wealthier households have seen continued income growth, a strong accumulation of assets (like stocks and real estate), and surging wealth.
- The Lower Arm: The bottom 80% of consumers—or those in lower- and middle-income brackets—face financial strain. This group has been disproportionately burdened by inflation, prohibitively high housing costs, and rising credit card debt.
How this Impacts Consumer Spending and Retail 👟 💎
- The Upper Arm: Luxury goods, premium travel experiences, and high-end services are seeing a boom. Major companies report that upper-income consumers continue to spend confidently. For instance, premium class ticket sales for airlines like Delta have surged, while main cabin sales have dropped.
- The Lower Arm: Lower-income shoppers are forced to be hyper-budget-conscious. They are pulling back on discretionary spending, relying on credit, and searching for basic affordability rather than premium goods.
Winners and Loosers 🥇 😩
- The Upper Arm: Technology sectors (especially artificial intelligence) and companies catering to affluent clientele consistently post strong earnings.
- The Lower Arm: Certain retail sectors, low-cost carriers, and budget-oriented businesses face tighter margins and lower revenues as their customer bases get squeezed.
Targeted advertising feeds my anxiety 🤖 🙉
Few things I find more creepy is targeted advertising. It attempts to “target” based on machine learning, which looks at interactions on social media, webpages browsed and search terms to find what is most marketable for the user, not what is most relevant to the user.
The amount of data that feeds into targeted advertising is quite creepy. And often it makes judgements about a person that are quite wrong, as it’s only looking at population averages with a similar profile, and trying to make an educated guess at what products can be sold to that person. Yet, one isn’t defined by what advertisers think they can sell to you, and you shouldn’t take too seriously what people are paid to put in front of you.
Every time I mention my anxiety, I am fed a steady diet of advertisement for Better Help online mental health services, and the free-to-call 988 anti-suicide hotline. Targeted mental health advertising is downright creepy! When I was concerned about my excess peeing and pooping — from all the water and fiber in food — I was fed a steady diets about prostate and stomach cancers. Maybe because of my google searches, but long after my doctor visit and tests confirmed I was mostly clean, it was still creeply messaging to me. And then since I’ve gotten interested in healthy eating, I see constant advertising for services for people with anorexia, and granola bars and other highly-processed “health foods”. Not foods that are actually healthy, but come with good mark-up for the food processors.
Since I’ve mentioned my issues with new landlord and my search for rural property, I’ve now been getting fed a steady diet of advertising about landlord tenant management software and speculative real estate investments. Then there has been a steady batch of advertising I’ve been consuming about moving services, and extended stay places, as if soon I am to become homeless. I don’t think my current living accommodations are sustainable forever, but I really don’t think I’m in immediate risk of homelessness, despite the bit of a game my new landlord played over the rent check. Ironically, no advertising for land or property, despite all the time I spend on Zillow and studying the property tax rolls.
Then there are conflicting advertisements I keep seeing between investing for high-net worth individuals and services directed to the poorest of poorest people, such as those on welfare and section 8 housing. I’m not neither — I don’t have a million in investable assets as much are locked up in retirement accounts, nor do I get welfare benefits. I’m closer to the prior then the later but not there, yet — and I’ll probably blow it on land and livestock. Some of it’s my personal interest in ways of being frugal and a responsible investing, but it’s fascinating to see the conflict. Discount cellphone providers like Mint Mobile still really want my business, and so do discount internet providers for low-income persons. But the real reason I choose not to have internet at home isn’t poverty, but it’s for the sanity of not having all that commercial crap in my apartment and to save a bit of money.
I know I’m not defined by commercial advertising, which exists solely to sell products to me but it creeps me out how much it knows about me and how it tries to sell me things based on things I have searched or explored on the internet.
Large Cap Stocks and Market Concentration
In recent years, value stock investors have been quick to point out the risks of index funds that use market-cap weighting (like those tracking the S&P 500) allocate money based on company size. While large caps (especially mega-cap tech) dominant market performance, smaller companies have historically provided higher long-term returns to compensate investors for taking on higher volatility and risk—a concept known in finance as the size premium.
When a few massive tech giants outperform the rest of the market, as is case currently, they consume a massive percentage of the index. In these times, a so-called “diversified” fund becomes heavily reliant on just a handful of stocks. With the current market, SP 500 based indexes mean 30%+ of your money is in just 10 companies. This means the fund will swing wildly based on the performance of a few mega-cap stocks.
Alternatives to indexing based on S&P 500
- Equal-Weight Funds: Invest in versions of the index where every company gets the same exact dollar allocation. This heavily biases you towards small caps.
- Factor Investing: Allocate a portion of your money to value or small-cap funds to balance the mega-cap growth exposure. This gives you some additional small caps without over weighting to small caps.
- International Diversification: Add foreign stock indexes, which typically have less mega-cap tech concentration.
But are large cap stocks dominating the S&P 500 index necessarily a bad thing?
- Large-Caps (e.g., S&P 500): These are mature, stable businesses with global operations and massive balance sheets. They excel during economic slowdowns, periods of high interest rates, or when specific sectors like mega-cap technology experience exponential, monopolistic growth.
- Mid-Caps (e.g., S&P MidCap 400): Often called the “sweet spot” of investing, mid-caps offer a blend of financial stability and room to grow. Historically, they have frequently outperformed both large and small caps over rolling 20-year periods by avoiding the bureaucracy of giant corporations and the high failure rates of tiny ones.
- Small-Caps (e.g., Russell 2000): These are younger, nimble companies with high growth potential. They are highly sensitive to the domestic economy and tend to massively outperform during the early stages of an economic recovery or bull market, fueled by low interest rates and easier access to capital.
| Factor | Large-Caps | Mid-Caps | Small-Caps |
|---|---|---|---|
| Long-Term Growth Potential | Moderate | High | Very High |
| Volatility & Risk Profile | Lowest | Moderate | Highest |
| Economic Sensitivity | Global trends | Balanced | Highly sensitive to domestic economy |
| Historical “Size Premium” Winner | Underperforms over multi-decade cycles | Structurally strong risk-adjusted returns | Outperforms over long historical cycles |
Small caps are not necessarily better …
- The “Size Premium” Volatility: While small caps can generate higher geometric returns over 30+ years, they can go through brutal decade-long stretches of underperformance where large caps dominate completely.
- Interest Rate Sensitivity: Small and mid-cap companies typically rely more on floating-rate debt. When central banks raise interest rates, their borrowing costs skyrocket, allowing cash-rich large caps to easily outperform them.
- Survivorship Bias: Small-cap indexes suffer from higher churn. When a small company becomes wildly successful, it graduates out of the small-cap index and moves into mid or large-cap territory, leaving the small-cap index to continually cycle through unproven businesses.
