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Hodges Friday Fast Five

"In the investment business, you go to school every day, but never graduate." - Don Hodges

Friday Fast Five - 9/23/2022

by Hodges Investment Team, on Sep 23, 2022 7:00:00 AM

Five interesting things that Hodges Capital research analysts discovered this week...

#1 FIXER UPPER? Higher mortgage rates may push homeowners to repair and remodel existing homes rather than buy another home. According to data published by Truist, there are roughly 128 million existing houses in the U.S., with about 5 million turning over in a typical year. Higher rates should slow turnover in existing homes. Furthermore, approximately 37% of homes in the U.S. are owned outright, having no mortgage, and 90% of existing mortgages are fixed, which could insulate existing homeowners from higher mortgage rates.

#2 ORGANIZED RETAIL CRIME: According to the 2022 National Retail Security Survey, issued by NRF, the total loss of stolen goods hit $94.5 billion by the end of 2021, up from losses of $90.8 billion in 2020.

#3 GOODWILL: Deutsche Bank pointed out that after years of record-setting deals, nearly 25% of all companies in the S&P 500 have goodwill greater than shareholder’s equity.

#4 WEALTH: Credit Suisse predicts there will be over 87.5 million people with $1 million or more in wealth by 2026, up from 62.5 million in 2021. China alone will nearly double its millionaire population, from 6.2 million to 12.2 million, despite regulatory crackdowns on tech and strict pandemic restrictions.

#5 GOLD: Per Strategas, Gold & 10-Year Real Rates have a -0.90 correlation going back to 2003 on a weekly basis. Higher real interest rates create a higher opportunity cost to hold non-interest-bearing assets like gold, given its negative carry profile being that it pays no dividends nor interest. Gold is currently down over -17% from its 52-week high reached on 3/8/2022, while 10 Year Real Rates are up +170 bps during that same time period.


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This discussion is not intended to be a forecast of future events and should not be considered a recommendation to buy or sell any security. Past performance is not indicative of future results. Investing involves risk. Principal loss is possible. Investing in smaller companies involves additional risks such as limited liquidity and greater volatility. No current or prospective client should assume that information referenced in this communication is a recommendation to buy or sell any security or is a substitute for personalized investment advice from your individual advisor. HCM does not provide tax or legal advice. Consult your tax or legal advisor for any related questions.

All information referenced herein is from sources believed to be reliable and is provided as general market commentary and does not constitute investment advice. This material was created for informational purposes only and the opinions expressed are solely those of HCM. HCM shall not in any way be liable for claims and makes no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information. The data and information are provided as of the date referenced and are subject to change without notice.

Hodges Friday Fast Five

We aim to help investors separate the news from the noise by providing our perspective. Every Friday the Hodges Private Client research analysts list the five most interesting things they discovered that week. Subscribe to receive the Hodges Friday Fast Five in your inbox every Friday. 

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