The Long Term Investor

BUSY runing around today dealing with the impact of the BIG FREEZE. Irrigation repair guy, workers removing dead plants, etc, etc. So I have generally NOT been paying any attention to the markets other than seeing that they are down....so far today.......the benefits of being a long term investor.

Here is a relevant little article for today.

Fed likely to forecast biggest economic boom in a generation

https://www.reuters.com/article/us-...om-and-hopes-for-no-burns-marks-idUSKBN2B90KE

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

"WASHINGTON (Reuters) - Federal Reserve officials are due to issue new economic projections on Wednesday, with GDP growth likely to be a blow-out number that sets the stage for an historic experiment by U.S. central bank policymakers.

Fed Chair Jerome Powell and his colleagues are betting the economy can take off from the COVID-19 pandemic without generating excessive inflation, and have vowed to keep interest rates at rock-bottom levels and a spigot of money flowing for an extended period as they lean into a potential economic boom in a way not seen since the early 1970s.

In each of the quarterly forecasts released since June, the median GDP growth projection of Fed officials has been slightly above the median of private forecasters polled by Reuters. If that holds, it would translate into expected growth this year of more than 6.2% - the highest annual rate in 37 years.


But when they issue their policy statement at the end of a two-day meeting on Wednesday, Fed officials are expected to restate what they’ve promised for months now: to keep the central bank’s benchmark overnight interest rate near zero and cash flowing into the economy until Americans are back to work, trusting that inflation will remain contained, as it has been for about 30 years.

The economic projections and policy statement are scheduled to be released at 2 p.m. EDT (1800 GMT). Powell will hold a news conference shortly after, an event that could prove tricky for the Fed chief.

Markets predict the Fed may be forced to act sooner than expected. Some policymakers could even hint at that if new projections show more of them anticipate a rate increase sometime in 2023, rather than a year or more later.

If a majority see a 2023 hike, “Powell will have his work cut out for him” explaining how that meshes with a promise to get the economy back to full employment before reducing the crisis support rolled out when the pandemic struck, Tim Duy, chief U.S. economist for SGH Macro Advisors, wrote this week.

Still, investors are already betting on earlier hikes, and some economists are also raising a red flag along with their forecasts. Morgan Stanley, among the more bullish in predicting the economy will have fully escaped its pandemic hole by September, sees the Fed’s approach producing a “hotter but shorter” business cycle that is likely to prompt it to tighten monetary policy early next year.

Benchmark U.S. Treasury yields hit a fresh 13-month high and U.S. stocks were trading largely lower on Wednesday as investors awaited the outcome of the Fed meeting.

The coming cycle would be less like the last three expansions - the one ended by the pandemic lasted a decade - and more like the period after World War Two when the intervals between recessions were shorter and intervening growth stronger.

That epoch ended when then-President Richard Nixon encouraged loose monetary policy ahead of his 1972 re-election. Arthur Burns, who was the Fed chief at the time, kept interest rates low as the economy accelerated, and is often blamed for the ensuing rampant inflation that dogged the country for a decade.

This time is different, Fed officials argue. Indeed, Powell’s legacy may hinge on whether inflation remains tame as the economy recovers, or whether prices spike, forcing the central bank to pull back its support - perhaps with millions of Americans still out of work.

Their arguments are well-rehearsed. Inflation and unemployment don’t behave as they used to; lower levels of joblessness can now coexist with low inflation.

The Fed made substantial changes to its policy statement last year encompassing that thinking, and the guidance issued in December is expected to hold for now. It pledged to continue its monthly $120 billion of bond purchases until there was “substantial further progress” towards full employment and 2% inflation. Moreover, it said interest rates would not increase until those goals were actually met.

None of those things have happened yet, a point Powell has stressed recently and will likely again on Wednesday. The economy remains about 9 million jobs short of its pre-pandemic level; the Fed’s preferred measure of inflation, at 1.5%, is well short of its goal; a new index of slow-moving inflation expectations is also below target.

‘CLEAR-EYED’

Still, it is a pivotal moment as Fed officials issue forecasts incorporating a bounty of new information.

Since their December projections, more than 100 million COVID-19 vaccines have been administered in the United States and daily deaths due to the virus have fallen by two-thirds. Optimism has spiked, and states have begun lifting restrictions on businesses and reopening schools. Washington also has approved two new relief packages worth about $2.8 trillion, money now rolling into household and business bank accounts.

Much has changed since the Burns era, when wages and inflation were tightly linked, the economy relied more on manufacturing and imported oil, and unforeseen shocks from an oil embargo were just ahead. [Related graphic: here]

The Fed’s new approach, moreover, isn’t an in-the-moment response to political pressure, but a policy shift meant to reflect changes in the economy officials spent years studying.

With an emphasis on job creation and downplaying inflation, the new framework seemed well suited for the job market crisis spawned by the pandemic. The issue now is how it meshes with an economy that may recover faster than thought possible.

Analysts at BlackRock have praised the Fed for being “clear-eyed” about the economy’s problems during the pandemic and in its response to it.

But, wrote Rick Rieder, BlackRock’s chief investment officer of global fixed income, “at some point, the financial stability risks that emanate from an extremely low policy rate, coupled with the real economy boom that we expect, could in fact force the Fed’s hand.”"

MY COMMENT

YES......even this little article has some of the recent fear mongering. It is.....VERY CLEAR.....that the FED is NOT going to do anything. BUT....the crazy markets STILL have to react. Probably the greatest danger is that POWELL will phrase something a little ODD at the news conference or will say something that the media will jump on and apply.....their own spin.......and off they go with even more FEAR&PANIC. THIS short term thinking and MEDIA MANIA....is way out of control. Thank GOD for being a long term investor and avoiding any concern for this short term......"stuff".

 

I dont remember......but.....if you are new.....WELCOME....Redpoint.

I looked at the averages a minute ago and with what I saw....green across the board.....I know what the FED said without looking. When I did look I saw that they did EXACTLY what they have said.......at least 500 times......over the past week. BUT....there is 30 minutes left....so there is plenty of time for the markets to CRASH......at least two or three times.......and recover two or three times. ACTUALLY......with the INSANE......literally....action lately.....30 minutes is enough time for at least one BEAR MARKET.....followed by a BULL MARKET.

Stock market news live updates: Stocks up after Fed raises economic outlook, but suggests near-zero rates through 2023

https://finance.yahoo.com/news/stock-market-news-live-updates-march-17-2021-221231617.html

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

"Stocks took a leg higher Wednesday afternoon as investors digested a key monetary policy decision and upgraded economic outlook from the Federal Reserve. Treasury yields climbed, and the yield on the benchmark 10-year Treasury note jumped to more than 1.65%.

The S&P 500 rose about 0.2%, while the Dow traded nearly 200 points higher to build on earlier gains. The Nasdaq briefly turned slightly positive. The CBOE Volatility Index, or VIX, hovered around 20 after dropping to a pandemic-era low of 19.3 on Tuesday, or the lowest level in a year following months of virus-related anxiety in the markets.

Investors closely eyed the Federal Reserve's March monetary policy decision Wednesday afternoon, focusing specifically on the central bank's updated economic outlook. The Fed's updated economic projections showed that officials still expect no change to monetary policy this year, and anticipate that borrowing costs will remain near zero through at least 2023, with the median outlook among Fed officials unchanged from the December forecast. However, seven of the 18 Federal Open Market Committee Members said they see at least one rate hike by 2023, up from the five who forecasted such an outcome in December.

The Fed also upgraded its outlook for unemployment and inflation in the U.S. over the next several years. FOMC members now expect the unemployment rate to dip to 4.5% by the end of this year with inflation of 2.4%. Three months earlier, the Fed expected an unemployment rate to improve to only 5.0% with core personal consumption expenditures rising by just 1.8% by year-end. Real GDP growth will likely come in at 6.5% this year, the Fed projected, up sharply from its previous 4.2% growth forecast.

The projections helped to elucidate the central bank's assessment of the economy in recovery, and offered another signal to investors about how soon a tweak to the current monetary policy posturing might take place. For now, the Fed has signaled it will keep monetary policy loose, with benchmark interest rates near zero and asset purchases at a clip of $120 billion per month, as the economic recovery takes place.

Heading into Wednesday's monetary policy decision, fears that a rapid rise in inflation might prompt a quicker-than-expected tightening of monetary policy kept investors on edge over the past month, spurring a selloff in technology names throughout the past month and accelerating a rotation into cyclical stocks like energy and bank shares.

"The Fed certainly gave the market some meat to chew on, raising its economic growth forecast for 2021 significantly to 6.5%. The implication of this projection is that, at some point in 2022, U.S. GDP will exceed its pre-pandemic path," Seema Shah, chief strategist of Principal Global Investors, wrote in an email to Yahoo Finance.

"Despite this very strong outlook, the Fed played down the risk from inflation, with their projections showing a very modest and, importantly, only temporary overshoot of their 2% target – certainly a more subdued inflation outlook than many investors were fearing," Shah added. "Equity markets should find some reassurance in those forecasts, although there will likely be some bond market fright from the latest dot plot which showed that a few more members of the FOMC think they may start raising interest rates in 2023."

—

2:18 p.m. ET: Stocks turn higher after Fed suggests rates to stay on hold through 2023
Here's where markets were trading as of 2:18 p.m. ET:

• S&P 500 (^GSPC): +1.66 points (+0.04%) to 3,964.37
• Dow (^DJI): +162.14 points (+0.49%) to 32,988.09
• Nasdaq (^IXIC): -24.21 points (-0.17%) to 13,448.15
• Crude (CL=F): -$0.23 (-0.35%) to $64.57 a barrel
• Gold (GC=F): +$4.90 (+0.28%) to $1,735.80 per ounce
• 10-year Treasury (^TNX): +2.7 bps to yield 1.65%"

MY COMMENT

SIMPLY.....choose one.......pathetic, moronic, sick, dumb, idiotic, disgusting, insane, crazy, manipulative......etc, etc, etc. that is the CRUX of the markets lately as well as the MEDIA coverage. My one word.....EMBARRASSING. You know......sooner or later.....they are going to talk the economy into a recession and the markets into an extended BEAR MARKET. Not because there is anything wrong.....but....because they are scaring people and fragmenting the public with their FEAR MONGERING and sensationalist reporting. ALTHOUGH........I should not call it reporting.....is is simply....at best......opinion.....at worst.....outright lying to the public to try to get readers. AND what is really pathetic is that......this is the business and financial media........NOT the general media. Dont even get me started on the general media.

 

As usual today......running around. I am off to a rehearsal. Have a good market close and make some money today.....EVERYONE.

 

ANOTHER....nice green day today. LOST out to the SP500 by .02%. Basically even....but not quite.

 

This is a nice little story. The POOR tech stocks......no one loves them. What have you done for me lately? OF course.....these are STILL the most DOMINANT companies in the world.

Investors really hate tech stocks right now— but should they?

https://finance.yahoo.com/news/inve...ocks-right-now-but-should-they-194148090.html

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

"There is no love for hot tech stocks right now, but strategists say eventually that will change because commonsense says it should change.

Nevertheless, the lack of love for tech is growing palpable as positions are slashed amid the rise in 10-year yields and a rotation into value stocks.

Fund managers cut their tech weighting to the lowest overweight position since January 2009, according to a new survey out this week from Bank of America. The survey found that while 34% of fund managers view being long tech as a crowded trade, the figure is sharp decline from the 80% polled in Sept. 20.

The somewhat bearish assessment of tech on the Street reflects noticeable sell-offs in proven tech winners this past month.

The NYSE FANG+ Index — which tracks the performance of household name tech stocks such as Facebook, Apple and Tesla —has dropped 8% since hitting a record closing high on Feb. 17. Some individual tech sell-offs have been more jarring. Tesla shares are down 13% inside of a month, Salesforce is off 14% and Zoom has shed 24%.

"At the core of the lingering tech bear thesis, high flying tech stocks are crowded names with broken technicals and no traditional valuation support," opines Wedbush tech analyst Dan Ives, who adds what traders are witnessing is a "painful, brutal valuation digestion period."

Painful indeed.

Bullish bias in tech

But there are longer term positive catalysts in play for tech stocks that could return to focus soon given cheaper valuations, strategists point out. The most obvious is the ongoing shift to the cloud. It's a transition that is only likely to intensify with corporate budgets loosening up post-pandemic and a pivot to hybrid workforces.

"Today we estimate 35% of workloads are on the cloud with a doubling of workloads on the cloud expected by 2023 across the enterprise landscape on an eye popping trajectory. While valuations will continue to be an emotional bull/bear debate, the fundamental growth on the horizon for these next generation technologies is unprecedented as this 4th Industrial Revolution begins to take hold," Ives contends.


The bears are out on tech stocks.
Ives is particularly bullish on DocuSign, ZScaler, Microsoft, Salesforce and Nuance as plays on the move to the cloud.

Meanwhile, a historical look at tech valuations and economic growth support a bullish bias in tech names over a longer period of time.

"Since 1947, the annualized excess outperformance of the technology sector has been 2.7% greater (i.e., 3.4% versus 0.7%) when real GDP growth was above average compared to when it was below average," points out The Leuthold Group chief investment officer Jim Paulsen.

Paulsen — a long-time market historian — doesn't stop there in trying to make his case for tech.

He adds, "Since 1950, tech stocks have thrived when the 10-year bond yield has been lower than 5%, beating the overall market by a 5.8% annualized pace and outpacing 61% of the time. For all quarters since 1947 when bond yields have increased, Tech stocks outperformed on average at a 4.9% annualized clip while trailing the overall stock market by an average annualized 1.8% during quarters when yields declined."

So hang in there tech investors — time and fundamentals are on your side.

MY COMMENT

YES......time and fundamentals. AND....being the most dominant, largest businesses in the world. These factors......might......actually mean something. In spite of.....my tech emphasis.....I now find myself at about 2.5% from my portfolio all time high. So....this is my starting point for the rest of the year. Onward and upward.

 

WELL.....not unexpected. JOBS.......got hammered short term by the weather in February.......and....more imprtantly by the policies of our government which are UNIFORMLY anti-job creation.

Jobless claims unexpectedly jump despite relaxed economic restrictions

https://www.cnbc.com/2021/03/18/weekly-jobless-claims.html

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

"Key Points

• Jobless claims totaled 770,000 for the week ended March 13, an increase from 725,000 during the previous period.
• The total was well above the 700,000 Dow Jones estimate as the jobs market looks to recover from the Covid-19 pandemic.
• A manufacturing report from the Philadelphia Fed showed that growth is still powerful, with the highest expansionary reading in nearly 50 years.

First-time claims for jobless benefits showed an unexpected jump to 770,000 as the labor market tries to recover from the Covid-19 pandemic that sent more than 22 million Americans to the unemployment line a year ago, the Labor Department reported Thursday.

Economists surveyed by Dow Jones had been looking for a total of 700,000 for the week ended March 13. The total represented an increase from the previous week’s upwardly revised 725,000.



The report came amid hopes that the U.S. jobs market is showing real recovery signs from the coronavirus crisis, which saw huge swaths of the economy shut down or curtail activity and has been particularly burdensome to those working in services-related jobs.

Texas, Florida and Mississippi are among the states that have either eliminated or sharply reduced restrictions due to the pandemic. Pennsylvania is due to cut back on its business limits in early April, and other states are expected to follow suit despite warnings from some health officials about premature reopenings.

Continuing jobless claims, which run a week behind the headline number, were little changed at 4.12 million.



With coronavirus cases either falling or plateauing and hospitalizations and deaths down sharply, multiple states have begun reopening. In addition, the U.S. vaccination rate has been running around 2.4 million a day, providing further hope that the pandemic’s impact on national health and the economy is waning.

More people returning to work meant a sharp decline in the total of those receiving benefits under all programs. That number dropped by nearly 2 million to 18.2 million for the week ended Feb. 27, owing largely to a pronounced slide in those getting benefits under pandemic-related programs.

A separate report Thursday morning showed that manufacturing continues to rebound sharply.

The Philadelphia Federal Reserve’s manufacturing outlook registered a reading of 51.8, representing the percentage point difference between firms reporting growth against those seeing a decline. It was the highest reading for the index since April 1973.

This week’s jobless claims number entails the survey week that the Bureau of Labor Statistics uses to compile its nonfarm payrolls report, suggesting that March’s gains could be muted.

The economy has added 545,000 jobs in 2021, and the unemployment rate has nudged down to 6.2%.

At the state level, Texas saw an unadjusted increase of 21,003 filings last week, a month after the state was battered by unseasonably harsh winter storms that saw mass power outages and other damage.

Illinois also saw a substantial increase with a rise of 17,147, while Ohio dropped by 14,7000.

Despite the labor market gains, the Federal Reserve indicated Wednesday that it plans to continue its easy monetary policy well into the future. The Fed said it will hold short-term borrowing rates near zero until the economy reaches full employment that is inclusive across income, race and gender lines.

MY COMMENT

YES........the inflation KILLER.......weak jobs is still happening. No doubt the weather had something to do with this data. BUT....even more important....government policy that has been implemented is distinctly anti-job. On top of that.....virtually ALL government policies that are being floated for the near future are ALSO very much....anti-job creation.

The manufacturing data is great. BUT.....the same policies that are going to kill jobs will also SEVERELY hurt manufacturing here in the USA as we go forward. FOR now......I will celebrate the good data and worry about the future later. Actually......I dot worry about the future since I have ABSOLUTELY no control over any of this stuff anyway.

 

AND....the interest rate drama and.......short trading manipulation.....continues to be in the news. All I can say is......any company that has not already taken advantage of the historic low rates......even today's rate.......is guilty of management malpractice.

As to the oversize impact of this rate .......drama.....on the tech side of the market......not concerned in the slightest. This and many other reasons are why I invest in the BEST OF THE BEST......when it comes to tech. I think the BIG FIVE in the tech world will NOT be impacted by this interest rate.....tempest in a teapot.

Short term......OMG.......long term.....boring blather.

 

So.....now to get into some.....HERESY. ACTUAL discussion of the potential for NVIDIA to disappoint investors going forward over the long term.

Nvidia. I own this stock....but....it, Tesla and Snow are the three companies that I own that I believe have the MOST potential to disappoint. Although.....I would not be disappointed......... since I see these companies through the lens of REALITY. I have followed Nvidia for the past ten years or so. Over that time I have owned the stock three times. Twice in the past I have sold the stock after what I considered....failure to perform up to expectation and hype.

My concern with Nvidia is that I have seen the same type of stock behavior with other tech and chip companies in the past. Cisco is a good example as are AMT and INTEL........and.....many other tech names. Companies like Nvidia are successful companies......but.....they are constantly being touted as the.......NEXT BIG THING. Often this sort of company.....NEVER gets to the top. They are currently RIDING the wave of.......HUGE support by younger investors. BUT......the results I have seen with them over the past ten years and their inability to break through to become a DOMINANT BIG CAP company in the top tier.......makes me realize.....that there is a significant chance that they will simply continue on as they have been up to now.......a nice business......but.....not a world wide dominant company that ever reaches the HYPE POTENTIAL.

Nvidia is .....no doubt.....going to continue to be a successful company.....but......are they going to ever become a dominant world wide leader in their field that has 10.....20.....30....year staying power.........a long term powerhouse type of company? WELL......that is very much up in the air. These sorts of chip companies tend to go from boom to bust......up and down. Their products are.....commodities......and react like commodities in the market place.....they tend to be boom and bust....cycle to cycle. BOTTOM LINE.......I like them as a holding....but I would not bet the farm on Nvidia.

 

This little bit of information......probably.....increases my chances to invest......as a short to medium term trade.....in the COINBASE IPO (direct listing). If I do this trade it will PROBABLY be 100 shares at the open on the initial day of trading......and....it will be a MOMENTUM trade. I see the information below as a POSITIVE for the momentum that I......MIGHT.....attempt to ride for a short time.

In Sign of the IPO Times, Coinbase Chooses Reddit Over a Road Show
Coinbase CEO Brian Armstrong's decision to take to Reddit before its direct listing is a rebuttal to the traditional road show process.

https://decrypt.co/61814/in-sign-of-the-ipo-times-coinbase-chooses-reddit-over-a-road-show

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

"In Brief

• Coinbase's decision to take to Reddit is a first for any company on the cusp of going public.
• The Reddit forum appears to be a rebuttal to the "road show" that's a hallmark of traditional IPOs.

In a first for a company going public, cryptocurrency giant Coinbase announced on Wednesday it will answer questions from potential investors via a Reddit "Ask Me Anything" thread.

"Hey Reddit, I’m Brian Armstrong, CEO and Cofounder of Coinbase. I believe that everyday investors should have access to the same info as large investors," wrote the company's CEO, explaining that the company would take questions for three days, and then respond via a video posted to the social media platform.

Armstrong's post has already prompted a flurry of questions from Reddit users, including ones about how the company will add new cryptocurrencies to its platform, how it regards competitors, and whether so-called decentralized exchanges pose an existential threat to the company.

Armstrong's decision to take to Reddit before it goes public is unusual, and comes at a time when the traditional initial public offering process has come under scrutiny like never before. Critics of IPOs, which involve banks charging fat fees to line up rich investors who get first crack at publicly-traded shares, say the process is too expensive and lets Wall Street insiders cash in at the expense of retail investors.

This has led more companies, including Coinbase and Roblox, to pursue direct listings—which involve floating existing shares on the market without using underwriters—or to go public via a SPAC, which involves getting acquired by a so-called "blank check company" that is already public.

In the case of Coinbase, Armstrong's Reddit post appears to be a rebuttal of the "road show"—another fixture of the traditional IPO process. Road shows involve top executives conducting a whirlwind series of meetings with deep-pocketed investors to tout their company's prospects before the firm goes public.

The road show process can serve as a valuable way for investors to vet a company but, as with other aspects of a traditional IPO, the benefits accrue almost entirely to those who are already rich and informed. In this context, Coinbase's Reddit gambit amounts to a populist alternative to the road show.

The Reddit decision is also on brand Armstrong, who has long been a devout reader of the social media platform, and who has many times intervened personally in Reddit discussions about Coinbase. For the company, taking to Reddit may also serve to burnish its appeal with cryptocurrency enthusiasts, many of whom are likely to regard buying Coinbase shares as a new means of gaining exposure to the broader crypto industry.

The decision could also prove a risky one, however. Coinbase has long attracted ire on social media—especially Reddit—over frequent outages on its platform, and what many allege are poor customer service operations. As such, the Reddit forum may turn into a platform for Coinbase critics to vent.

The company appears to have anticipated such a development, though, as Armstrong's Reddit post notes Coinbase won't respond to questions that contain "any NSFW language [or] comments that are offensive or hateful." He also explains that, for legal reasons, Coinbase can't address comments about the company's valuation, non-public financial statements or its plans to list new cryptocurrencies.

Coinbase's Reddit forum is also unusual in that it comes during a so-called "quiet period," which refers to a period of time ahead of a public listing during which regulators strictly limit what a company can say to the media, and forbid it from making marketing claims.

As the Reddit forum is the first of its kind, it's likely the company would had to obtain permission from the Securities and Exchange Commission to host it in the first place. Coinbase did not reply to a request for comment about its decision to launch the Reddit forum. The SEC declined to comment.

MY COMMENT

Of course this could backfire. AND.....like any new IPO.....there will be lots of hype. PLEASE.......anyone else......investing in this as a new IPO has great potential to gain......BUT ALSO.....great potential to lose money over the short term. SO.......be careful....if you are considering this company for any sort of short term trade.

I HAVE NOT fully decided whether or not I will buy this stock on the opening day. I will probably not decide till the evening before it happens. I want all the information to stew around in my brain till the last minute. This trade is made even more risky by the market forces and drama that is going on right now......yields, inflation, etc, etc. The short term markets are very MANIC/DEPRESSIVE right now and like anything short term.....a trade in this company or any other.....can get caught up in a BIG UNDERTOW of market forces that have nothing to do with the company or the trade.

I am NOT a trader.....but.....once in a while I will do a short to medium term trade. They usually involve some sort of MOMENTUM PLAY. I REMAIN a fully committed.....long term investor......even if I do this trade. I will be curious to see how the REDDIT "road show" goes and the TONE of the interaction.