The Long Term Investor

SMALL market day today......not real exciting........I am sure MOST of the professionals and probably many people that work on the fringes of wall street are taking this week off as well as next week. Makes for very shallow market days.

EARLY CLOSE today......1:00PM for the New York and NASDAQ exchanges. (eastern time) US bond markets and over the counter markets.....2PM today. (eastern time)

 

For myself......I see no reason to own the NASDAQ 100. Eighty eight of the stocks in the NASDAQ 100 are also in the SP500.........so by owning the SP500 I own nearly ALL of the companies in the NASDAQ 100. SO my opinion is there is no benefit to own BOTH indexes. The weighting is different in the two indexes. Divided yield for both is about the same......1.53% for the NASDAQ 100 and about 1.63% for the SP500.

 

SO......lets talk about LONG TERM INVESTING. Here are the TOP TEN long term investment stock for the past 30 years.....1990 to 2020. Of course.......DISCLOSURE......being on this list does not mean these companies are something you should run out and buy today. You know what they say about statistics.

This data ASSUMES an investment in each company of $10,000 in 1990 and holding the stock for the next 30 years:

Top stock performers over the last three decades:

• Amazon.com (AMZN)
• Monster Beverage Corp. (MNST)
• Jack Henry & Associates (JKHY)
• Cerner Corp. (CERN)
• Best Buy Co. (BBY)
• Ross Stores (ROST)
• Kansas City Southern (KSU)
• UnitedHealth Group (UNH)
• Altria Group (MO)
• Idexx Laboratories (IDXX)

Interestingly ONLY ONE of the companies is a tech company. HERE is the list with the current value of that original $10,000 investment TODAY:

Top stock performers over the last three decades:

• Amazon.com $21.3MIL
  
• Monster Beverage Corp. $21.2MIL
  
• Jack Henry & Associates $21.2MIL
  
• Cerner Corp. $14.2MIL
  
• Best Buy Co. $10.9MIL
  
• Ross Stores $8.1MIL
  
• Kansas City Southern $7.8MIL
  
• UnitedHealth Group $6.3MIL
  
• Altria Group $6.2MIL
  
• Idexx Laboratories $5.0MIL

MY COMMENT

As I said this is statistical data so NOT justification to......necessarily....buy any of these companies today. Simply HINDSIGHT data. I am posting this for CHRISTMAS FUN and because I find it interesting as RAW........and meaningless......data. To a certain degree it does show the POWER of long term investing and compounding.

I CONTINUE to be fully invested for the long term as usual. (copyright)

 

NOT a bad idea Emmett. I need to set up a DYNASTY TRUST that will last at least 1000 years first. Than I can continue to CONTROL my descendants for that 1000 years and......yes......put it on the stone. I will require them to TOAST ME with that phrase at the annual trust meeting. GOOD IDEA....I love it. This is why I am on this broad....you never know what ideas you will get.

ACTUALLY....it is all about "branding" and "marketing"......as a business grad student in college I tended to focus my courses on the marketing side of things in addition to a secondary interest in employee practices and general management. A tie-in with my BS degree in Psychology. SO.....that is part of my "posting identity" and persona.

ACTUALLY.....I just got another idea.....I need to copyright that phrase so.

"I continue to be fully invested for the long term as usual" (copyright 2020:the person posting as wxyz on the stockaholics board)

 

SO......now that I have copyrighted that phrase.......the use of the phrase "I continue to be fully invested for the long term as usual" on this board or any other site or in any other way is strictly prohibited without the express written consent of the person known as WXYZ on the stockaholics board. My lawyers will be contacting you shortly EMMETT.

In fact in this ENTIRE thread....."all original content in The LONG TERM INVESTOR thread on the STOCKAHOLICS board" is (copyright 2020:by the person posting under the name WXYZ on the Stockaholics board)

 

Since you are a GOOD GUY.....and....in fact very dignified....... Emmett....I grant you a limited license to use the phrase "I continue to be invested for the long term as usual" on this board. Revocable at will.....of course.

MY Christmas present to you......Merry Christmas.

 

AND.....you do achieve that rule. I TRY to also do so......being human.....I get carried away and fail once in a while....but I try. EVERYONE posting or lurking on this thread DESERVES respect.....regardless.....of their views or investing style. It is ALL about being an online community and learning from all the various investing styles. As I have said many times in the past...ALL ARE WELCOME to post or discuss on this thread REGARDLESS of their investing/trading philosophy or style.

 

No......actually I dont agree. I dont want the tech and consumer service (also tech) focused........NASDAQ 100 in my portfolio. I ALREADY have TRIPLE the fang stock exposure in my portfolio......I own most of them....and...they are all in my SP500 Index fund and also in my Fidelity Contra Fund.

RETURN is......somewhat......a function of RISK. I use the funds in my portfolio to try to REDUCE risk and exposure to only one or two areas of the markets. I am very much content to own what I own including the SP500 Index. SO....for me it is not prudent. For others.......certainly.......if they wish.

 

A green day....not the band.....today. But....got beat by the SP500 by .10%. Looks like I just about made up for yesterday. Speaking of yesterday.....as I said yesterday.....one step forward, one step back. Looks like that is how things are going to go this month.

FOUR trading days left in 2020.......looking forward to putting this rear in the books and moving on to 2021.

Interesting little "prediction" article:

Stocks ready to close out powerful 2020 as risks loom in January

https://www.cnbc.com/2020/12/24/sto...t-powerful-2020-as-risks-loom-in-january.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• Stocks are expected to close out 2020 in the week ahead with double-digit gains, but as the market moves into 2020 the rate of advance could slow.
• The market is expected to gain in 2021 but not at the same pace it’s been rising since the bull market began nice months ago.
• January holds some hurdles for stocks, especially the Jan. 5 Senate run off election in Georgia.

At the close of trading next Thursday, the bull market will be ready to run into 2021 but probably at a slower pace.

January is the month that Wall Street tradition says sets the tone for the year — “so goes January, so goes the year,” as the saying goes. This January could be challenging, with the spreading pandemic slowing the economy and the important Georgia Senate run off elections on Jan. 5.

On Jan. 20, Joseph Biden will be sworn in as president.

“It’s a market that’s on end-of-year auto pilot,” said Sam Stovall, chief investment strategist at CFRA. In three of every four years, the market sees an end-of-year Santa rally, but Stovall is also waiting to see trading in the first five days of January for signs of how the market could trade in 2021.

If the market is higher in the first five days, history shows the S&P 500 has been up 82% of the time for the full year with an average 12.5% gain, he notes.

“There are things we could worry about in January. If they were real worries, the market would be reacting already or treading water already,” Stovall said. “What spooks me is the market is setting itself up. It’s a correction in search of a catalyst, and we don’t know what the catalyst is just yet.”

Some strategists expect a pullback early in the year, but the consensus is that the market ends 2021 higher. The average expectation for the S&P 500 at year end 2021 is 4,056, according to a CNBC survey of strategists.

Stovall said the market has gotten pricey, and there are signs of froth. The 12-month forward price-to-earnings ratio for S&P 500 companies is at a 41% premium to the average multiple of 16.7, going back to the year 2000.

“I don’t feel strongly that the first few days of January has to set the direction for the market for the balance of the year,” said Michael Arone, chief investment strategist at State Street Global Advisors. “If in fact [stocks] do rally, it’s more of a sign of strength. But if they suffer a hiccup, I wouldn’t throw in the towel.”

The outcome of the Georgia races is a wild card for stocks, and it could trigger a market reaction no matter what the outcome. Should there be a surprise and Democrats win both seats, the Senate would be split evenly between Republicans and Democrats. That would leave Vice President-elect Kamala Harris to cast the tie-breaking vote.

Some strategists say the market could sell-off if Democrats win, since investors fear the party would have the votes to pass tax hikes that Biden favors. On the other hand, a GOP win could spark a relief rally.

But Stovall said the market could rally on a Democratic victory if investors were to consider the prospect for a bigger infrastructure and stimulus package favored by Democrats.

Arone said uncertainty about the current $900 billion fiscal stimulus package approved by Congress this past week could become a concern, if President Donald Trump decides to veto it or not sign the bill.

The president criticized the package and said individuals should receive more than the $600 that would go to many adults and children as part of the relief.

The bill extends aid for millions of Americans on unemployment, and those benefits run out Dec. 31 unless it is signed.

“We’re up against deadlines, as opposed to it just being a political thing,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “There are actual deadlines on benefits that are expiring. Because of the deadlines, the market assumes it will get passed.”

But the concern will hang over the market until it is resolved.

In the four-day holiday week ahead, trading is expected to be quiet. There are few economic reports; jobless claims on Thursday will be watched closely. In the following week, the December jobs report is expected to show a weaker labor market, and some estimate only about 100,000 jobs or fewer were added.

9-month old bull
The S&P 500 heads into the final week of the year with about a 15% gain for 2020, but from the March low the index is up about 65%. The bull market turned nine months old this past week.

According to CFRA’s Stovall, that nine-month gain is more than twice the average nine-month gain of 32.2% for all bull markets since World War II. In the remaining course of the bull markets, their average compounded growth was just 20.3%, showing a slowdown in the rate of gains.

“Following these typical jackrabbit starts, bull market advance rates typically slowed, posting smaller compound annual rates during the remainder of their bull-market runs,” Stovall noted. Based on past bull markets, he said the returns could slow during the rest of this bull run to about half of their current gain."

MY COMMENT

I do not see the BULL MARKET as being only 9 months. I see it as being the past FOUR YEARS.......plus.....much of the prior eight years. In my opinion.....we HAVE NOT seen a REAL BEAR MARKET since 2009. I ALSO dont see the outsize gain that we have had since March of 2020 as being comparable to ANY other bull market year or return. It is ALL an ABERRATION due to the government mandated closure of the economy.........a once in 250 year event. So....I dont think you can draw ANY conclusions from the past year.

I DO think the GEORGIA elections will be a watershed event.......for the negative or positive....depending on who wins. OBVIOUSLY.....I am seeing a win by both Dems as the negative.

What I see as the DEFINING CRITERIA for 2021 is how quickly the TRUMP agenda and economic policies......tax cuts, regulation cuts, market cheer-leading, minimal focus on the green "stuff", etc,etc..........are JETTISONED and replaced by the Dems. For perhaps the first half of the year we will STILL be under the OVERHANG of the Trump policies. The sooner they are reversed.....in my opinion.....the sooner the economy will SUFFER.

As to future government stimulus.....as usually used by the Dems......like the Obama shovel ready jobs bill.....NOT productive and not going to do anything positive. If we get into any of the Dem "crazy woke stuff".......the more we see it happen.......the worse it will be for the general economy.

At BEST I believe we are facing four years of a continuation of the deflationary stagnation that we saw with Obama. WORST CASE.....depends on Georgia and how crazy they actually want to get. The more we get into classic Dem Keynesian economic theory and politics....the worse it will be.

NOW.......the above is mostly talking about the general economy. As to how it all impacts stocks......it is very much up in the air. As a long term investor that WILL be FULLY invested through this entire upcoming term.....I am putting my HOPES on the fact that the stock markets often DIVERGE from the general economy and general economic conditions.

In other words......inflation, stagnation, deflation, high unemployment, falling wages.....not my problem. As an investor they may or may not impact my returns. My suspicion is that they will NOT impact investors....much.....and in that case.......NOT MY PROBLEM. Yes.....harsh....but true....it is NOT my problem what people want to do to themselves or what policies they vote into office.

AS one person I have ZERO power to dictate any economic or social policy.....so if these things have a NEGATIVE IMPACT on the general economy........not my problem........I am totally isolated from EVERYTHING but the stock markets and how they perform. IN FACT.....I am even totally isolated from the stock markets since I DO NOT depend on that money for anything other than savings. In the type of environment that we are likely to see over the next four years.......it is ALL ABOUT.......me, me, me, me. Worrying about anyone else or the country will just give me HIGH blood pressure.

 

Chris.....nothing wrong with what you are saying.....it is just a matter of personal preference. For me I prefer what the SP500 will historically give me considering what I......try to do and how and why I do it.

 

YES.....I saw that earlier.....Andyvds...interesting.

https://www.nytimes.com/2020/12/24/technology/china-jack-ma-alibaba.html

"For all of China’s economic success, a long-running resentment of the rich, sometimes called the wealthy-hating complex, has long bubbled below the surface. With Mr. Ma, it has emerged with a vengeance.

“An outstanding people’s billionaire like Jack Ma will definitely be hanged on top of the lamppost,” an online commentator wrote in a widely circulated social media post, referring to the famous lynching slogan in the French Revolution, “À la lanterne!” The article was liked 122,000 times on the Twitter-like Weibo platform and read more than 100,000 times on the messaging and social media app WeChat.

The Communist Party seems more than willing to tap into that resentment. This could mean trouble ahead for entrepreneurs and private businesses under Xi Jinping, China’s top leader, who values servility and loyalty above everything else."

https://finance.yahoo.com/news/chinas-e-commerce-titan-alibaba-022242042.html

MY COMMENT

I dont care who you are....you are NOT going to win a fight against the worlds most BRUTAL DICTATORSHIP....China.

I hope he has a good escape plan and BIG ASSETS stashed away in a safe country.

THIS sort of thing is the BIG......and obvious.....issue with investing in Chinese companies.