Investor Alert: Sky Quarry Inc.

The Government Has You Right Where It Wants You [Morning Reckoning] June 20, 2024 [WEBSITE]( | [UNSUBSCRIBE]( The Whys of Home Ownership Asti, Northern Italy June 20, 2024 [Sean Ring] SEAN RING Good morning Reader, Many financial commentators, including my esteemed colleague, James Altucher, poopoo the idea of owning a home. They have good reasons to do so. Homeownership has become exceptionally expensive in desirable areas, and many houses have become money pits. As a recent homeowner, I can attest to the benefits of owning your own property when done right. By 'right,' I mean being mindful of your budget, choosing the right location, and having a financial cushion for unexpected expenses and improvements. But first, let’s go through the reasons not to own a home. [URGENT: Unclaimed Giveaway Offer]( We have an item of considerable value on hold for you in our warehouse. Valued at nearly $300, this [special item]( is an opportunity you wanted to miss. [Click here to see how to claim yours now.]( [LEARN MORE]( It’s Too Expensive One primary deterrent to homeownership is the sheer cost. In many markets, housing prices have skyrocketed, making it increasingly difficult for average earners to afford a home. However, it's important to remember that with careful planning and financial discipline, homeownership is still within reach for many. This expense isn't limited to the purchase price alone but extends to maintenance, property taxes, and unexpected repairs. The financial commitment required strains budgets, especially for first-time buyers who don’t have significant savings or equity from a previous property. With rising living costs, allocating a large portion of income to housing leaves little room for other essential expenses and savings goals, such as retirement or children's education. Mortgage Rates Are Too High In recent years, mortgage rates have significantly increased. High rates mean higher monthly payments, reducing affordability for many. This situation discourages prospective buyers who might otherwise take the plunge into homeownership. Higher rates can also impact the total amount of home loan one can qualify for, leading to compromises on the type and location of the property. The volatility of interest rates adds another layer of uncertainty, making it challenging for buyers to plan their finances accurately. For those with variable-rate mortgages, fluctuating rates can lead to unexpected spikes in monthly payments, causing financial distress. Ongoing Costs Are Punitive Owning a home is not a one-time expense. Ongoing costs like utilities, insurance, and property taxes add up quickly. Maintenance and repairs are inevitable, and these costs are usually frequent and substantial. Regular maintenance, such as plumbing, electrical work, and roof repairs, requires time and financial resources. Unexpected issues, like a broken furnace or water damage, can lead to significant, unplanned expenditures. Homeowners must also consider the cost of landscaping, pest control, and other services to keep the property in good condition. These continuous financial demands can strain budgets and create stress for homeowners. You Can’t Move Homeownership ties you to a location, which is a significant drawback for those whose careers require frequent relocations or who simply enjoy the freedom to move around. Selling a home is usually lengthy and complex, making it difficult to move on a whim. Market conditions, such as a downturn in the housing market, further complicate selling, potentially leading to financial losses. The emotional and logistical aspects of moving—finding a new home, adjusting to a new community, and dealing with the physical move—can be daunting. (Trust me, we didn’t factor in this cost… and it’s enormous.) This lack of flexibility is a significant disadvantage in a rapidly changing job market or personal life circumstances. And finally… The Government Has You Right Where It Wants You There’s a perception that owning a home places you under the government's thumb, with property taxes being a continual financial obligation. Additionally, government policies and zoning laws significantly impact property values and the feasibility of making home improvements. Changes in tax laws or property assessments can lead to unexpected increases in tax bills. Zoning regulations restrict homeowners' ability to modify their property to suit their needs or increase its value. Moreover, local governments often impose fees for various services and permits, adding to the financial burden. This perception of control and unpredictability is unsettling. So why would you ever buy a house? Here are a few reasons: Buying Well (You Didn’t Pay More Than 3x Your Income) In an [earlier edition of the]( Reckoning]( I wrote: Never spend more than three times your gross annual income on a house. I’m in the process of buying a house right now and I’m well within this rule. My down payment is ready and won’t empty my account, and my monthly payments are easily manageable. Far too many people only calculate what their monthly payments would be at the current rate of their mortgage. But if you’ve got an adjustable-rate mortgage, that could easily end in tears. There’s no need to overpay for a McMansion. The key to intelligent homeownership is buying within your means. If you’ve purchased a home that costs no more than three times your annual income, you’re less likely to be financially overextended. This approach allows you to comfortably manage your mortgage and other expenses. Following this rule ensures that housing costs remain a manageable portion of your budget, leaving room for other financial priorities. Additionally, buying within your means reduces the risk of foreclosure and financial distress, giving you greater peace of mind. It also allows for the flexibility to handle unexpected expenses without jeopardizing financial stability. This strategic planning gives you a sense of control and empowerment over your financial future. Increasing Your Down Payment Lessens the Sting of High Mortgage Rates A higher down payment reduces the principal amount of your mortgage, reducing the interest you pay over the life of the loan. This strategy makes homeownership more affordable even when mortgage rates are high. It also means you’ll build equity faster. Putting down a larger sum upfront lowers your monthly payments, making your financial obligations more manageable. Additionally, a substantial down payment can sometimes lead to better loan terms and lower interest rates, further enhancing affordability. Building equity quickly provides a financial cushion, which owners can use for future investments or emergencies. Maintenance Capital Expenditure Regular maintenance and upgrades enhance the value of your property over time. Wise capital expenditures prevent more significant, more costly issues down the line and ensure that your home remains a valuable asset. Regular maintenance keeps the house in good condition, preserving its market value. Upgrades, such as energy-efficient appliances, modern fixtures, and landscaping improvements, can increase the property's appeal and value. Preventative maintenance, like roof inspections and HVAC servicing, reduces the risk of major repairs, saving money in the long run. These investments maintain and boost your property's worth, making it a more valuable asset over time. These costs sound onerous, but if you own an asset, you’ve got to keep it well. You Can Still Move, But Smarter While homeownership does tie you to a location, it doesn’t mean you’re immobile. Renting out your home is viable if you need to move temporarily. Additionally, selling a well-maintained property in a good market can provide the capital required for your next purchase or move. Renting out your home offers flexibility and can generate additional income. Selling strategically during favorable market conditions ensures you maximize your investment return. Moreover, advancements in technology and services, such as property management companies, make renting your home more manageable. These options provide mobility while still enjoying the benefits of homeownership. The Government Isn’t Nearly As Big a Problem As You Think While it’s true that property taxes and regulations are part of homeownership, they’re not insurmountable obstacles. Many homeowners benefit from tax deductions on mortgage interest and property taxes. Furthermore, government programs often assist first-time buyers, making homeownership more accessible. Tax benefits significantly offset the cost of homeownership, providing financial relief. Government incentives, such as grants and low-interest loans, help make home-buying more attainable for many. Additionally, understanding and navigating local regulations can minimize their impact. Proper planning and knowledge make the perceived government burden manageable and less daunting. Again, get an accountant and lawyer who understands these things and can advise you on the best course of action. Wrap Up Buying a home is deeply personal and situational. Weighing the pros and cons helps prospective homeowners make informed choices that align with their financial goals and lifestyle preferences. Despite the challenges it may present, homeownership remains a cornerstone of economic stability and personal achievement for many. For those who buy wisely and plan strategically, the rewards of owning a home can far outweigh the drawbacks. It’s essential to approach homeownership with a clear understanding of the financial commitments and responsibilities involved, ensuring a prosperous investment in your future. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( [Man who Predicted Trump’s Win in 2016 Issues 2024 Prediction]( [Click here to learn more]( In 2016, even though surveys were giving Hillary Clinton more than 99% chance of winning right up until election night… Former advisor to the CIA, the Pentagon and the White House Jim Rickards predicted Trump’s win. You won’t believe what he’s predicting now. [Click here to see it because it’s a SHOCKER…]( And it could have huge implications for the financial markets. [LEARN MORE]( In Case You Missed It… Why "Bad" Earnings Spark Big Rallies Greg Guenthner, Editor [Greg Guenthner] GREG GUENTHNER Good Morning Reader, We’re just about to be ending this quarter which means… earnings season is coming. It’s once again that magical time of the quarter when investors become confused, angry (or both!) when stocks don’t react as they expect after filing their quarterly updates. Why are earnings so tough on armchair investors? It might have something to do with all the confusing numbers and analyst estimates floating around. Or maybe it’s because the financial media stirs the pot by quick-calling after-hours reactions, only to update their coverage when a stock abruptly changes direction following the conference call Q&A. But the most frustrating part about earnings season is that stocks don’t react appropriately once the numbers hit the wire – at least, not in the minds of most investors. More often than not, a stock will behave differently than one might logically expect, even when earnings perfectly adhere to analyst expectations. Unfortunately, there’s no quick fix that will make earnings season more palatable for the average investor. Companies will continue to dish out fresh reports every three months, and investors and traders will simply have to do their best to navigate the uncertainty. As long as you’re involved in markets, you’ll have to deal with the occasional earnings shenanigans. So it’s best if you learn to embrace the madness… Today, I’ll show you that it is possible to ride the earnings wave without losing your mind. The secret to earnings zen doesn’t involve scouring estimates, analyst reports, or insider transactions. You simply need to learn how to put the earnings announcements into context with the forces affecting a stock’s price and trend. Let’s check out a couple of recent high-profile earnings reactions that have frustrated the investing masses… A Tale of Two Mega-caps… Earnings are hard to predict… We can see stocks like Tesla Inc. (TSLA) rally off 52-week lows after reporting an earnings miss. On the flip side, a stock like Meta Platforms Inc. (META) can crater after beating both top and bottom-line estimates. Moves like these are why so many people are distrustful of the stock market. They have no idea what to make of price action not matching up with top and bottom-line numbers parroted on the financial news. The Tesla news alone unleashed more than its fair share of angry comments across social media… Demand for EVs is falling off a cliff! Tesla’s free cash flow flipped negative! Profits are hitting 3-year lows! But none of these facts prevented Tesla shares from rocketing off their lows as traders appeared blissfully unaware that anything could be wrong with the company’s business prospects. Meanwhile, Meta has been a Wall Street darling since it bottomed in early 2023. Shares were up 450% from their 2022 lows ahead of its earnings announcement last week. The stock was also up 40% year-to-date ahead of earnings — the opposite action we had seen from Tesla during the first quarter. While Tesla’s financials were a mess, Meta actually posted some impressive numbers. The company beat earnings and revenue expectations for the quarter, extending its fiscal comeback from the dark days of its metaverse pivot in late 2021 - early 2022. But slightly lower second-quarter expectations stuck out to investors despite the strong Q1 showing. After a perfect start to the year, sellers came out in full force and sent the stock lower by double-digits to its worst showing in 18 months. What Did You Expect? To truly understand why the market reacted as it did, we have to zoom out and place the earnings into the context of the bigger price trends shaping these two popular stocks. On one hand, we have sputtering TSLA shares. TSLA broke from its Magnificent Seven brethren in late December and spent most of the first quarter digging itself into a deep hole. Most investors expected the worst. In fact, sentiment couldn’t have been more bearish heading into last week’s announcement. Combine that with the strong downtrend and breakdown to fresh lows, and you have a recipe for a big bounce on mediocre results. Tesla only needed a report that was slightly better than apocalyptic to spark a short covering rally. And that’s exactly what happened! The opposite was true for Meta. The stock was on a historic run, posting one of the best-looking charts amongst the mega-caps extending back to the 2022 bear market lows. This strong uptrend plus the fact that Meta shares extended to new all-time highs following its previous earnings beat left little room for error. Anything less than a “perfect” earnings report would of course entice investors to take profits — which is exactly what happened. Tesla just needed to prove the wheels weren’t falling off their cars to attract buyers, while Meta needed to dazzle analysts and investors to maintain its Heck, even if this premarket drop holds, META shares won’t completely fill the earnings gap higher from early February (the stock jumped 20%-plus following its last quarterly earnings release). Bottom line: earnings reactions are all about expectations — just not the expectations everyone talks about. You have to separate the financials from how the herd feels about a stock. The best way to do that is to analyze prices and trends. Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Sean Ring] [Sean Ring, CAIA, FRM and CMT]( is a former banker and financial educator and is the editor of the Rude Awakening. Sean has trained interns and graduates from Goldman Sachs, Morgan Stanley, Citi, Bank of America, Standard Chartered Bank, DBS (Singapore), the Abu Dhabi Investment Authority (ADIA), Bank Indonesia (the central bank), HSBC, Barclays, RBS, and BlackRock. He knows the global economy is being corrupted by forces that most people can't understand and has used his unique and worldly experiences to help people navigate the markets. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your The Daily Reckoning subscription, you can ensure its arrival in your mailbox by [whitelisting The Daily Reckoning.](