The Long Term Investor

the day must have gone well after I left. I came back to a nicely green account......another all time high by a bit. BUT...got beat by the SP500 by .18%. Very satisfied to get the green today.

 

Looks like AMAZON did well on their earnings.....but....I dont see anything about a stock split.....BUMMER.

Amazon Q1 earnings top estimates, revenue up 44% year-over-year

https://finance.yahoo.com/news/amazon-q-1-earnings-201758948.html

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

"Amazon (AMZN) reported better-than-expected first-quarter results on Thursday, with quarterly revenue surging past $100 billion again.

Here’s what the company reported in its fiscal first-quarter results, compared to consensus estimates compiled by Bloomberg:

• Revenue: $108.5 billion vs. $104.57 billion expected
  
• Earnings per share: $15.79 vs. $9.69 expected
  

Revenue increased 44% to $108.5 billion in the quarter versus $75.5 billion in the same quarter a year ago.

During the first quarter, Amazon’s core online stores business saw its net sales grow 44% to $52.9 billion compared to $36.65 billion in the year-ago quarter. Outside of e-commerce, Amazon Web Services' net sales grew 32% from a year ago to $13.5 billion.

"A lot of people were wondering if the stay-at-home theme is still intact, especially with the vaccine rollout, but what this company has proven today, is that a lot of these gains that they made in a pandemic will be potentially lasting. I mean there is a structural shift in consumer behavior that will benefit Amazon, not just on the e-commerce side but the cloud business," CFRA analyst Tuna Amobi told Yahoo Finance Live.

For the second quarter, Amazon said it expects revenues to be between $110 billion and $116 billion, an increase between 24% and 30% from the same period a year ago. Amazon, which recently revealed it has more than 200 million paid Prime members globally, will host its Prime Day during the second quarter.

CFRA's Amobi expects Prime Day to be "huge," which he notes is consistent with prior years, which have set new records.

"We have no reason to believe that this year is going to be any different, especially with those kinds of membership growth," he said, adding that "all of the building blocks are in place" for Prime to be a "major profit center."

Amobi, who has a price target of $3,800 on Amazon's stock, said it's possible the stock could hit "way above" his price target, suggesting that it might not be "too long before we'd be looking at potentially at a stock that would be trading way over $4,000."

Shares of Amazon rose nearly 3% in the after-hours session to last trade near $3,574."

MY COMMENT

ANOTHER blow out quarter for Amazon. AND....yet another company that is PROVING that the numbers they are doing is NOT all due to the pandemic.

Too bad there was no stock split. It would certainly mean money to the shareholders if they would split this stock.........perhaps as much as 10-20% gain leading up to a split. These companies need to wake up and give their shareholders something. The stock buy-backs they do are worthless.

 

Here is a bit about the AMAZON stock split.....which is not happening as of this moment. Hopefully they will do a split some time this year.

Amazon Would Need a Pretty Big Split to Get Into the Dow Average

https://finance.yahoo.com/news/amazon-pretty-big-split-dow-162648325.html

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

"It’s a speculation that often blows up around earnings season: now would be a good time for Amazon.com Inc. to split its shares, as a prelude to getting into the Dow Jones Industrial Average.

One byproduct of the stock’s relentless surge is that it would take a big split to pull it off.

At more than $3,450, the online retailer’s shares trade far too high to be put in the Dow, where the price tag of the stock is what determines its weighting. Even a 10-for-1 split, taking the shares to around $345, wouldn’t make it a shoo-in.

“The main problem for the Dow index is that it’s price weighted so it matters what the price is -- not the market cap,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

The Dow is a 124-year-old stock gauge made up of 30 blue-chip companies that cover all industries except for transportation and utilities. Inclusion -- or ejection -- from the measure tends to make a splash: in August, Exxon Mobil Corp., Pfizer Inc. and Raytheon Technologies Corp. were kicked out of the gauge, making way for Salesforce.com Inc., Amgen Inc. and Honeywell International Inc.

A 10-for-1 split would make Amazon.com the Dow’s third-biggest weighting, behind UnitedHealth Group Inc. with a price tag of almost $400 and Goldman Sachs Group Inc., recently trading near $350.

Keith Lerner, chief market strategist at Truist Advisory Services, says Amazon.com’s potential inclusion would be more about prestige than anything else, considering the Dow is one of the most commonly quoted indexes.

“Getting into the Dow is symbolic more than anything and it just shows you that you are a leading company on a global stage and a leader in your industry,” he said, adding that a split could make its shares more accessible to retail investors.

Independent Advisor’s Zaccarelli agrees that should a potential split bring its per-share price down to between $100 and $300, it could make the stock more attractive to mom-and-pop investors. That’s because retail investors “do care what the actual dollar price of the stock is,” though institutional investors “could care less.”

To be sure, big stock splits are not unheard of when it comes to companies angling for a place in the Dow. Apple Inc., for one, announced it was splitting its shares 7-for-1 in April 2014, nearly 11 months before being added.

The economic benefit from stock splits is almost non-existent. But for retail investors who tend to shun high-priced shares, a stock that suddenly becomes cheaper on face value tends to draw interest, even if just temporarily. It’s perhaps one reason why stocks have historically outperformed the market right after a split announcement.

After studying 450 splits among S&P 500 members over the past 20 years, Morgan Stanley found that the stocks tended to beat the market by a median 2.4% between the announcement and the effective date, with a 68% hit rate.

But, inclusion in the index “hasn’t seemed to be a focus for some of the tech giants,” said Giorgio Caputo, senior fund manager at J O Hambro Capital Management. “They certainly don’t lack for index representation at this point.” The sector makes up 26.9% of the S&P 500, the index’s largest weighting.

Shares of Amazon.com were little changed Thursday, with the e-commerce firm approaching record highs ahead of its earnings results, scheduled to be released after the market closes. Some investors are speculating the company could take that as an opportunity to announce a stock split, dividend or buyback program.

A stock split is something that seems nearer than something like a dividend or buyback, Telsey Advisory Group analyst Joe Feldman said on Bloomberg TV and Radio.

MY COMMENT

The new CEO needs to make a decisive move and get a stock split in the works. It will reward long term shareholders. It will attract a lot of retail money. It would bring some excitement to the markets and the BIG CAP tech stocks in particular.

 

I heard that TODAY was the largest earnings day of the reporting season. The SP500 alone....has about 50 stocks reporting today. After today earnings will start the long taper into May.

 

The.....wrong.....story line of the day that is being pushed is......Stocks are booming because of earnings driven by the pandemic and people staying at home.....and....comparison to numbers put up in the pandemic. This is the EXCUSE today for the averages IGNORING the AMAZING EARNINGS that are happening every day now. BUT.....we have heard the same sources talking down the markets for the past three quarters. Earnings are going to be bad for the 2nd, 3rd, 4th, quarters of 2020.....earnings are too good for the 1st quarter of 2021.....it ALL MUST be the pandemic. Well the REALITY....earnings were great for ALL of 2020 after the first quarter compared to what was being touted by the media. The story line about the current earnings.....being TOO pandemic dependent....is simply....BALONEY.

Earnings are beating expectations at a record rate: Morning Brief

https://finance.yahoo.com/news/earn...at-a-record-rate-morning-brief-100229838.html

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

"Analysts have never been this far behind the curve.

We're about halfway through earnings season and stop us if you've heard this before: companies are beating earnings expectations left and right.

On Thursday, results out of Caterpillar (CAT), McDonald's (MCD), and Domino's (DPZ) — in addition to Amazon's (AMZN) report after the bell, though big tech beating estimates is almost a foregone conclusion — all topped expectations.

Caterpillar's results are a great example of just how far away from expectations results have become. Levered to the strength of the global industrial economy, Caterpillar sells expensive gear that requires a certain confidence from buyers about what prospects for demand look like. Buying a backhoe is not like buying a Peloton: you've got to really know you're going to use it.

So to see Caterpillar report revenues that were almost 10% higher than forecast shows how large the disconnect is right now between both what Wall Street is forecasting and also what companies themselves are willing to say confidently about their business. Neither analysts nor executives, in other words, are leaning into the re-opening boom.

And while it seems that almost every earnings story has sort of followed this same arc, data also confirms that this is not just our imagination: corporate earnings have never been this far out of line with expectations.

Data out of the team at Refinitiv published Thursday showed the rate at which companies were beating estimates and the magnitude by which they were beating expectations through Thursday morning's results were the best on record.

Some 86.8% of S&P 500 companies reporting results beat Wall Street forecasts and are doing so by an average of 23.5%. Both are the largest ever recorded gaps, according to Refinitiv's data, which dates back to 1994. Overall S&P 500 earnings growth is currently on pace to total 44.7% in the first quarter, which would be the best in over a decade.

We can, of course, debate the merits of formulating a forecast for a company's results each quarter. It is also important to note that many companies pulled guidance during the throes of the pandemic and haven't quite updated their thinking.

And what companies do or do not say about their outlooks helps in a big way to inform the estimates formulated by analysts. As we noted last year, the pandemic left many in the investment world flying blind. Only now is the fog starting to clear. It thus comes as little surprise there are some growing pains as visibility into the corporate world's future is regained."

What to watch today
Economy

• 8:30 a.m. ET: Personal income, March (20.1% expected, -7.1% in February)
  
  
• 8:30 a.m. ET: Personal spending, March (4.1% expected, -1.0% in February)
  
  
• 8:30 a.m. ET: Personal consumption expenditures deflator, month-over-month, March (0.5% expected, 0.2% in February)
  
  
• 8:30 a.m. ET: Personal consumption expenditures deflator, year-over-year, March (2.3% expected, 1.6% in February)
  
  
• 9:45 a.m. ET: MNI Chicago PMI, April (65.3 expected, 66.3 in March)
  
  
• 10:00 a.m. ET: University of Michigan consumer sentiment, April final (87.5 expected, 86.5 in March)

Earnings

• 6:30 a.m. ET: Clorox (CLX) is expected to report adjusted earnings of $1.46 per share on revenue of $1.86 billion
  
  
• 6:55 a.m. ET: Colgate-Palmolive (CL) is expected to report adjusted earnings of 79 cents per share on revenue of $4.27 billion
  
  
• 7:00 a.m. ET: Charter Communications (CHTR) is expected to report adjusted earnings of $4.24 per share on revenue of $12.48 billion
  
  
• 7:30 a.m. ET: Chevron (CVX) is expected to report adjusted earnings of 90 cents per share on revenue of $32.40 billion
  
  
• 7:30 a.m. ET: Exxon Mobil (XOM) is expected to report adjusted earnings of 60 cents per share on revenue of $58.92 billion
  
  
• 7:40 a.m. ET: AbbVie (ABBV) is expected to report adjusted earnings of $2.78 per share on revenue of $12.77 billion
  
  
• 7:45 a.m. ET: Goodyear Tire & Rubber Co. (GT) is expected to report adjusted earnings of 16 cents per share on revenue of $3.44 billion

MY COMMENT

Some big companies....above....reporting today. YES.....we are seeing record earnings across.......ALL....sorts of businesses. It is just temporary insanity that the media and others.....probably with an axe to grind.....are....en-mass.....talking down the company results and the markets. Sooner or later these people ARE going to actually cause a loss of confidence and a correction.

I am seeing more and more CONFORMITY in the financial media every week. The....."story line of the day".....is rampant....everywhere in the media. Either pure herd behavior.......or.....touting some story line being put out by those that profit on the short term volatility........or both.

BUT.....regardless of what is causing this CONFORMITY in the story-line and total lack of diverse independent thinking.....investors that use their brain and their own eyes and have confidence CAN and WILL see what is actually happening. We are in the middle of an EARNINGS BOOM......there is NO WAY this event is simply a pandemic driven business boost.

 

AMAZON.....one of the most iconic companies in the world. In my opinion.....STILL....a must have for any investor. I dont see any company that is a threat to what Amazon has created.

Why Amazon is the 'perfect' moneymaking machine

https://www.cnn.com/2021/04/30/investing/premarket-stocks-trading/index.html

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

"Throughout the pandemic, Amazon (AMZN) has had no trouble generating huge returns. Once the Covid-19 crisis passes, it's in great shape to make even more money.

What's happening: The internet giant's profits more than tripled to $8.1 billion in the first three months of 2021. Shares, which are near an all-time high, are up 2% in premarket trading.

"Amazon has the almost perfect business for the world right now," said James Harris, global chief strategy officer at Mindshare Worldwide. "The world's leading e-commerce platform, a growing cloud business and a smaller but growing advertising capability all working in unison. It's a compelling offer."

A closer look at the numbers reinforces his point.

On retail: Demand for online shopping doesn't appear to be slowing, with revenue from Amazon's consumer business growing 39% in North America last quarter and 50% internationally.

Amazon now has more than 200 million paying subscribers to its Prime service worldwide. They're streaming more videos, and are set up to deliver the company another windfall during its Prime Day promotional event later this quarter.

On cloud: Amazon Web Services, which provides cloud computing services, posted net sales of $13.5 billion during the quarter, up 32% year-over-year.

And as more companies tap the technology to manage workers who are splitting time between their homes and the office, the outlook looks strong.

"During Covid, we've seen many enterprises decide that they no longer want to manage their own technology infrastructure," Chief Financial Officer Brian Olsavsky said on a call with analysts Thursday. "We expect this trend to continue as we move into the post-pandemic recovery."

On advertising: Revenue from ads is accelerating, too, as advertisers try to target consumers who are spending more time online. The company's share of the US digital ad market surpassed 10% in 2020, according to eMarketer. The research firm expects revenues from this business to hit $20 billion this year and surge past $30 billion by 2023.

"As consumers shift more [spending] online, trade spending and shopper marketing will rapidly follow, with the bulk flowing to Amazon," said eMarketer analyst Eric Haggstrom.

That's all great news for CEO Jeff Bezos, who is once again the world's richest man with a net worth of $202 billion, according to the Bloomberg Billionaires Index. Though Bezos is set to hand the reins to Andy Jassy later this year, his 11% stake in Amazon should keep minting money.

Watch this space: Amazon continues to face the specter of antitrust action, and repeatedly grabs political attention for its treatment of workers, though it recently defeated a union drive in Alabama. But without government intervention, the company's dominance is only poised to grow.

Big picture: Amazon was the last Big Tech company to report earnings for the beginning of 2021. In aggregate, the results from these firms are even more eye-popping. Together, Facebook (FB), Amazon, Apple (AAPL), Google (GOOGL) and Microsoft (MSFT) earned nearly $75 billion during the first three months of the year.

Let's say that again: almost $75 billion. With a B."

MY COMMENT

NO....doom&gloom.....in this little article. Simply the TRUTH.....that is as obvious as the nose on your face. I dont care what new era we are in.....or about the pandemic......or whatever cliff the media lemmings are rushing to today......the BIG CAP BIG TECH companies are booming and will continue to boom. These companies and their stocks are the WORLD leaders of the economy. They will continue to put up even better earnings as the re-opening continues. As usual.....the ONLY event that could derail this future......is some......dumb..... action by government.

 

A big danger that we ARE seeing right now is the potential for SELF IMPOSED punishment. For some reason.......the markets........are determined to talk themselves into a sell off. ALL the analysts and other....so called....experts are being proven to be absolutely WRONG every day on the earnings. The investment INDUSTRY is being shown to be fools. So......what we are seeming must be wrong....it must be caused by the pandemic spending......it must be simply unsustainable. They are all siting around looking for excuses which they jaw bone every day.

This is what is going on right now in the averages being DOWN and performing in fits and starts in the face of the greatest earnings reporting in history. LOOK OUT.......there is a MONSTER under the bed.....there is a BOGYMAN just around the corner. We are in the middle of a self created DELUSION.....a REFUSAL to see reality.

THIS.....is the greatest DANGER to the markets at the moment.......the creation of a........negative.....SELF FULFILLING PROPHESY.

 

HERE are some general investing comments from Charlie Munger.....I think he probably knows a little bit about sucessful investing.
21 brilliant quotes from legendary investor and polymath Charlie Munger

https://finance.yahoo.com/news/21-b...or-and-polymath-charlie-munger-133315723.html

“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero. You’d be amazed at how much Warren reads — and at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”

"Without the method of learning, you're like a one-legged man in an ass-kicking contest. It's just not going to work very well."

“I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than when they got up and boy does that help—particularly when you have a long run ahead of you.”

“I think that a life properly lived is just learn, learn, learn all the time.”

“Acquire worldly wisdom and adjust your behavior accordingly. If your new behavior gives you a little temporary unpopularity with your peer group then to hell with them.”

“Live within your income and save so that you can invest. Learn what you need to learn.”

“Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.”

“There are huge advantages for an individual to get into a position where you make a few great investments and just sit on your ass: You are paying less to brokers. You are listening to less nonsense. And if it works, the governmental tax system gives you an extra 1, 2 or 3 percentage points per annum compounded.”

“I have a friend who’s a fisherman he says, ‘I have a simple rule for success in fishing. Fish where the fish are.’ You want to fish where the bargains are. That simple. If the fishing is really lousy where you are you should probably look for another place to fish.”

“Mimicking the herd invites regression to the mean (merely average performance).”

“The world is full of foolish gamblers and they will not do as well as the patient investors.”

“It takes character to sit with all that cash and to do nothing. I didn’t get to be where I am by going after mediocre opportunities.”

“I find it much easier to find four or five investments where I have a pretty reasonable chance of being right that they're way above average. I think it's much easier to find five than it is to find 100. I think the people who argue for all this diversification — by the way, I call it ‘deworsification’ — which I copied from somebody — and I'm way more comfortable owning two or three stocks which I think I know something about and where I think I have an advantage.”

"Usually, I don’t use formal projections. I don’t let people do them for me because I don’t like throwing up on the desk, but I see them made in a very foolish way all the time, and many people believe in them, no matter how foolish they are. It’s an effective sales technique in America to put a foolish projection on a desk."

"I think the reason why we got into such idiocy in investment management is best illustrated by a story that I tell about the guy who sold fishing tackle. I asked him, 'My God, they're purple and green. Do fish really take these lures?' And he said, 'Mister, I don't sell to fish.'"

“Capitalism without failure is like religion without hell.”

“We’ve had enough good sense when something is working very well to keep doing it. I’d say we’re demonstrating what might be called the fundamental algorithm of life — repeat what works.”

“I spent a lifetime trying to avoid my own mental biases. A.) I rub my own nose into my own mistakes. B.) I try and keep it simple and fundamental as much as I can. And, I like the engineering concept of a margin of safety. I’m a very blocking and tackling kind of thinker. I just try to avoid being stupid. I have a way of handling a lot of problems — I put them in what I call my ‘too hard pile,’ and just leave them there. I’m not trying to succeed in my ‘too hard pile.’”

“I think life is a whole series of opportunity costs. You know, you got to marry the best person who is convenient to find who will have you. Investment is much the same sort of a process.”

"Another thing, of course, is life will have terrible blows, horrible blows, unfair blows. Doesn’t matter. And some people recover and others don’t. And there I think the attitude of Epictetus is the best. He thought that every mischance in life was an opportunity to behave well. Every mischance in life was an opportunity to learn something and your duty was not to be submerged in self-pity, but to utilize the terrible blow in a constructive fashion. That is a very good idea."

“You don’t have a lot of envy, you don’t have a lot of resentment, you don’t overspend your income, you stay cheerful in spite of your troubles, you deal with reliable people and you do what you’re supposed to do. All these simple rules work so well to make your life better.”

MY COMMENT

The above are my thoughts for the day......for......investing and life. I will, once again, be out for the day and miss the market short term action......no loss. I am off on a little art tour. No reason to be GLUED to the markets today....they can do whatever they wish. I will simply take the results that I am given.......and.....move on into the longer term future where I KNOW what the results are going to be......for investors.

 

GLAD....that I missed the entire day today......what a waste of a perfectly good day....to go along with the waste of a perfectly good week. At least I got to see some great American impressionistic and modernistic art instead.

For the day I was in the red as I expected....with the refusal of the short term markets to recognize historic earnings gains. I did happen to beat the SP500 today by .25%.....so not a total loss. As usual lately.....I am not once again.....hovering just below my most recent all time high.

The current results:

DOW for the year +10.68%
DOW for the week (-0.50%)

SP500 year to date +11.32%
SP500 for the week +0.02%

NASDAQ 100 year to date +7.55%
NASDAQ 100 for the week (-0.58%)

NASDAQ year to date +8.34%
NASDAQ for the week (-0.39%)

RUSSELL year to date +14.77%
RUSSELL for the week (-0.24%)

The SP500 won the week with the ONLY positive week of any of the averages.

 

BEST MONTHLY GAIN SINCE NOVEMBER. Sounds pretty impressive.....but....after all we are just talking about since.....5 months ago. Not exactly a historic record breaker. BUT.....everything does not have to be some historic record......we had a really nice month.

Stock market news live updates: S&P 500 retreats from record high, but posts 5.2% gain in April for best month since November

https://finance.yahoo.com/news/stock-market-news-live-updates-april-30-2021-221727019-221416577.html

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

"Stocks fell Friday after a record-setting session a day earlier, with stocks taking a pause after strong earnings results and more encouraging economic data helped fuel the latest leg higher in risk assets. Still, however, the three major indexes posted strong gains for the month of April.

The S&P 500 dropped about 0.7%, after the index closed at an all-time high of more than 4,200 on Thursday. The index's monthly gain came out to 5.2%, or its best since its nearly 11% rise in November 2020. The Dow and Nasdaq each also retreated during Friday's session. However, the Dow was still up more than 2.5% in April, while the Nasdaq gained more than 5%.

Shares Amazon (AMZN) bucked the trend and jumped to a record high after reporting first-quarter results and current-quarter guidance that exceeded expectations, with online shopping still booming even as more in-person businesses reopen. Shares of Twitter (TWTR), on the other hand, sank after its current-quarter revenue guidance fell short of estimates, disappointing investors who had hoped to see a stronger pick-up in the company's ad sales to match trends seen at peer social media companies like Snap (SNAP) and Facebook (FB). Overall, companies comprising about two-thirds of the S&P 500 market capitalization have so far reported results, and 84% of these have topped estimates, according to data from Credit Suisse analyst Jonathan Golub.

Equities have climbed to new highs this week amid these signs of rebounding corporate profits and economic activity, and after more dovish messaging from the Federal Reserve. A new report Thursday showed U.S. gross domestic product increased at a 6.4% annualized rate in the first quarter, bringing overall output within striking distance of its pre-pandemic levels.

Though concerns over rising inflation during the economy and possible eventual tax hikes remain, investors have at least temporarily set aside these fears until more developments emerge on both fronts.

"The economic backdrop is still very encouraging. I think there's a lot of really strong tailwinds behind this recovery, whether it's the vaccination story, the fiscal stimulus story, and very clearly an earnings season that's done very well," Jack Manley, JPMorgan Asset Management global market strategist, told Yahoo Finance. "But it wouldn't necessarily surprise me if markets moved more or less sideways moving forward."

"I think what we're going to see, as we've seen throughout the course of this year, is a continued story of winners versus losers," he added. "So we still have to be careful about security selection, about sector selection, moving forward. And to me, I think a lot of that has to do with this continued rotation into some of the more cyclical parts of the market."

Others struck a similar tone.

"This positive backdrop does not mean that the current period of low volatility will persist. We expect bouts of market turbulence, as investors fret over rising inflation and the uneven global progress in combating the pandemic," Mark Haefele, chief investment officer of global wealth management at UBS, wrote in a note Thursday. "With global stocks close to record highs, the market is also likely to be vulnerable to disappointing news on the economy or COVID-19." "

MY COMMENT

Unfortunately everyone wants to hedge their language....just in case there is a market drop. A 5% gain in a month is a hot gain........and.....very welcome. NOTHING wrong with that.

UNFORTUNATELY the markets and.......some......continued to disrespect the massive earnings gains we have been seeing in most if not ALL of the market leading businesses.

BUT.....you cant have everything all the time....sooner or later the markets will catch up to the earnings news......at that point we will be talking about the best month in the markets since......April.

 

As I was driving today I was listening to the radio and thinking about the markets. In particular....the short term markets versus the long term markets. The short term......as least for the retail investors tends to be IRRATIONAL. For the professionals....the big banks and trading houses.....the short term is all about playing very slight price differences minute to minute.....mostly news based stuff.

For the long term.....this is where the little guy....the retail investor SHINES.

Imagine having a book....like BIFF in......BACK TO THE FUTURE......that tells you what the markets are going to do over the long term 15-30 years out. It would be a pretty EASY way to make money. The probabilities would be STRONG in your favor.

WELL....that is pretty much what we have. HERE is that book......RATIONAL INVESTMENTS in stocks and funds will generally.......to a PROBABILITY....end up nicely positive over the long term....15-30 years. We KNOW that for any one year the SP500 has about 65% to 70% odds of being positive for the year. We ALSO know that....the SP500 over the longer term......WILL .......return about 10-11% average total return.

SO as long term investors we are given a gift.....knowledge that our investing over the longer term is extremely.....PROBABLE....to be positive......at least if you invest in or track the returns of the SP500.

BUT....like many gifts....there is a catch. In order to get those returns the investor has to agree to......just sit and do nothing for 15-30 years. They have to agree to stay fully invested for that time.......to avoid market timing and trading. SIMPLY....sit and do nothing. That is the catch.

AND....the SAD THING IS......this is nearly impossible for many people to do. No matter how much of a pot of money you place out there at the end of the long term.....with the stipulation that you have to just sit and do nothing........people can not do it.

 

Here is part of the reason for the inability of stocks to live up to the spectacular earnings.

Investors move into cash at fastest rate since March last year

https://finance.yahoo.com/m/cdd9ae3d-2f80-3673-be2b-003d68603fa7/investors-move-into-cash-at.html

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

"Investors have topped up their cash holdings at the fastest rate since March 2020 as debate intensifies over whether stock markets will continue rallying now the US economic recovery from the pandemic is firmly under way. Data from fund flow tracker EPFR showed investors moved $57.3bn into cash in the week to Wednesday. Analysts at Bank of America said this was the largest amount since the market turmoil of last year, when the coronavirus crisis gripped markets and the S&P 500 blue-chip share index lost a fifth of its value during March."

MY COMMENT

Sell in May and go away. Sounds good....if you choose to invest according to platitudes......and....if stocks actually drop........and....if you can figure out when to get back in......and.....if you are willing to earn NOTHING on your money in the meantime.......or.....if you want to gamble on some other asset.

 

THIS is part of the reason we will NOT see employment numbers hit where they were pre-pandemic......and.....will not see significant inflation. Of course......MY....definition of significant inflation is 4% and above......in line with historical norms for a growing economy.

GM to invest $1 billion in Mexico for electric vehicle production, angering UAW members

https://www.cnbc.com/2021/04/29/gm-...n-mexico-for-electric-vehicle-production.html

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

"Key Points

• General Motors plans to invest more than $1 billion in a plant in Mexico to produce electric vehicles.
• The facility will begin producing at least one EV beginning in 2023, GM said.
• United Auto Workers Vice President Terry Dittes, who leads GM members, called the investment a “slap in the face” to the union members and U.S. taxpayers.

DETROIT — General Motors plans to invest more than $1 billion in Mexico to produce electric vehicles, the company announced Thursday.

The investment in its Ramos Arizpe production complex is the first major announcement by the automaker for EV production in Mexico following billions of dollars in confirmed investments in the U.S. and Canada.

The facility will begin producing at least one EV beginning in 2023, GM said. The company declined to discuss what vehicle or vehicles will be produced there. The plant as well as supporting facilities currently produce the Chevrolet Equinox and Chevrolet Blazer as well as engines and transmissions.

GM’s announcement comes amid a push from the Biden administration for automakers to increase American manufacturing, including EVs. GM did not announce whether the EVs would be imported to the U.S., however current products produced at the plant are sold in America.

United Auto Workers Vice President Terry Dittes called the investment a “slap in the face” to its union members and U.S. taxpayers as the company is one of many lobbying for government incentives to support EVs.

“At a time when General Motors is asking for a significant investment by the U.S. government in subsidizing electric vehicles, this is a slap in the face for not only UAW members and their families but also for U.S. taxpayers and the American workforce,” he said in a statement.

Dittes said taxpayer money “should not go to companies that utilize labor outside the U.S. while benefiting from American government subsidies.”

In the release, Francisco Garza, CEO of GM’s operations in Mexico, thanked the federal and local governments for “promoting” the investment. The company did not disclose specific details of the government support.

Jim Cramer on Biden infrastructure plan: We are really behind other countries in electric vehicles
The investment includes new capacity for battery packs and other electronic components such as electric motors, which will begin during the second half of this year. It also includes a new paint shop, which is scheduled to begin operations in June, according to a translated press release from the company.

The Ramos Arizpe plant is expected to be GM’s fifth manufacturing site in North America to produce electric vehicles following announcements for two plants in Michigan and others in Tennessee and Ontario, Canada.

GM is expected to continue to build or convert plants to EV facilities globally as it moves to become an automaker that exclusively offers electric vehicles by 2035. That includes at least 30 new EVs by 2025 under a $27 billion investment plan in electric and autonomous vehicles during that time frame."

MY COMMENT

Good news for shareholders. This company and many others will not be FOOLS. FORGET TAXES.......if I can manufacture in a third world country and pay a few dollars per hour, little to no benefits, avoid government regulation, avoid paying social security, buy goods and services for the plant or facility at greatly reduced third world rates, get third world "green" avoidance benefits.......that is GOOD FOR ME........and......my shareholders.

We are going to see a FLOOD of businesses and companies flee to foreign countries.....regardless of taxes. The good news for the USA......it will help to hold down full employment......and....inflation.

Another example:

Officials bemoan U.S. Steel plans to scrap $1.5B Mon Valley Works upgrade

https://www.post-gazette.com/busine...plant-upgrade-pittsburgh/stories/202104300104

The added benefit of reducing carbon output. Come to think of it.......that is another benefit of moving to a foreign third world country for manufacturing. If I was a shareholder I would love seeing my management making sound financial decisions to create shareholder value.

AND....more good news for shareholder value and the fight against inflation.

Wisconsin amends Foxconn’s contract to reflect radically smaller project

https://www.theverge.com/2021/4/20/22393679/wisconsin-foxconn-contract-amendment-shrink


I have a little prediction that will be a big impact on the issue of.......inflation. We are going to struggle to get unemployment down below about 5-6% going forward.

 

For the new investor or those that are just starting out.

Here’s what these Gen Z investors learned when they opened robo-advisor accounts

https://www.cnbc.com/2020/06/08/gen...of-investing-know-how-from-robo-advisors.html

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

"Gen Z may also be Gen DIY.

“There’s an underlying assumption that almost any task can be taught or learned by yourself,” said Jonah Stillman, co-author of Gen Z @ Work.

“I grew up with YouTube: I can log on and learn to play an instrument, write code or tile a bathroom floor,” said Stillman, who is 20.

Members of Gen Z apparently have the same attitude toward investing.

“Why would I go to someone for financial advice when I can find what I need online?” Stillman asked.

This generation’s love of tech and alternative solutions make robo-advisors — an automated, low-cost way management service — a perfect fit, Stillman says.

Whereas their grandparents would be mystified at the idea of texting money by phone, Gen Z was quick to start using Venmo.

“It’s DIY, it’s tech, it’s an alternative to an older model,” Stillman said.

Another draw: the low bar to participation. “It’s cheap and accessible,” Stillman said.

Linda Zhang, senior advisor at SoFi, and CEO and founder of investment firm Purview in New York, agrees that robo-advisors might be a better fit than traditional brokerage firms, which may have high minimums.

The biggest misconception is fear of complexity, says Zhang. Gen Z might think investing is hard and confusing. “You can start simple,” Zhang said. “Invest in market indices, and figure out how much risk you are comfortable with.”

Two things to check: Since fees cut into your gains, look for low monthly maintenance fees. Don’t forget to compare features. Some apps, like Acorns, offer the ability to open an individual retirement account; others have access to live-person support staff.

Don’t think you’re giving up some essential part of the experience because there’s less human involvement, says Eric Bronnenkant, a certified financial planner, CPA and head of tax at Betterment.

Investing apps are designed to make it easy to open an account and manage your portfolio, he says.

Here are five lessons from Gen Z investors who learned a thing or two about investing when they opened accounts on robo apps such as M1 Finance or Betterment.

1. ‘I was shocked …’

Drew Cheneler, 22, says he was just messing around when he first opened an account with online broker Robinhood.

Cheneler, an active duty service member and personal finance blogger, thought he’d be at ease buying and selling stocks or index funds — his parents had talked to him about investing — but he wasn’t prepared for the feeling of catapulting into the markets.

Turns out, there’s a world of difference between reading about something and actually doing it.

Cheneler was a 19-year-old college freshman at the time. “I didn’t expect to be able to buy a stock that same day,” he said. “I was shocked at how easy it was.”

2. ‘OMG, I lost $2!’

Cheneler didn’t expect to lose money. In the beginning, he was enjoying commission-free trades and bouncing in and out of stocks pretty quickly. “I didn’t understand the whole long-term mindset,” he said.

He laughs when he remembers his 19-year-old self. “OMG, I lost $2,” he said. “I sold everything.”

Now if he sees that market swings have reduced his balance by a few hundred, he knows the market will go back up. He also considers it a buying opportunity.

3. Taxes?

Brendan Whitaker, 24, learned to research stocks and set aside small amounts of money to invest.
The biggest thing, says Brendan Whitaker, 24: “There’s this major tax consequence.”

It wasn’t really about the money. Whitaker, who lives in Greensboro, North Carolina, says it was a pretty small amount. “I was more shocked I had to report my trades to the IRS,” he said. “It’s a whole other world of bureaucracy and paperwork.”

Whitaker had been bouncing in and out of individual stocks, taking advantage of commission-free trades. “As soon as tax season starts approaching, they send out tax notices,” he said.

At the time, Whitaker had just started his own brand strategy firm, and it was his first time filing taxes.

“I hadn’t thought about it until it was something I had to deal with,” he said. “Now I know how to do everything properly.”

4. When the market swings

Some aren’t prepared for the tide of emotions that investing can spark.

Suzanne Ctvrtlik, 23, a freelance graphic and web designer in Houston, opened a Roth IRA.

“Say you invest $500 in your IRA every month,” she said. “Being able to stomach if it goes up or down a little, riding those highs and lows for the first time.”

Eventually your emotions calm down when you learn to detach a little, says Ctvrtlik, who also has a YouTube personal finance channel. Originally, though, she was surprised at the intensity of her response.

What made the difference, Ctvrtlik says, is continuously investing. “Watching it go up and down, and just realizing it does change over time.”

5. The earlier, the better

The top thing that still amazes Cheneler about investing is the difference when a person first starts investing makes.

If someone waits till they finally understand the need to open a retirement account, Cheneler says, they’ve lost valuable investing time.

“It’s pretty insane, the difference between starting at 19 versus 25 or 26,” he said. “No way a 26-year-old can catch up to the number I started with.”

MY COMMENT

YES.....start the process. Learn to enjoy saving and making money through investing. the earlier the better to MAX potential lifetime gains. PAY YOURSELF FIRST.....secure your future. Everyone makes mistakes.....not a big deal.

As time goes by.....5 years.....or better ten to fifteen years......the emotional impact of market changes will lessen.

 

In my little slice of the world we are in a real estate LISTING BOOM......we now have 15 active listings out of 4200 homes. We are NOW seeing the May peak listing season. Here........in my area......we see listings peak in May and June as school ends and people list in order to move for job needs.

About ten days ago we bumped up to 13 active listings......they sold down to 3 in about a week. I suspect that the current 15 listings....will quickly be sold down. At least potential buyers have 15 homes to choose from instead of the usual 3 or 4. the nice thing is......there are NOW listings from the $500,000 range to the $8MILLION range. There are 11 of the 15 listings between $500,000 and $900,000. Buyers in this range will now have a little more choice.....and can perhaps take a......WHOLE DAY....to consider what to buy.

In my little neighborhood.....about 85 homes.....we now have a listing. It should be a good indicator of what my house is now worth since it is.....identical......to my home in floor plan, style, and construction. The bathrooms are upgraded and it has a pool....which I dont have.....the listing price $1.5MILLION.

 

HIGH PRAISE for a stock that many of us know and love......to own.

Selling Apple shares was 'probably a mistake' and Munger knew it: Buffett

https://finance.yahoo.com/news/sell...was-probably-a-mistake-buffett-195811746.html

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

"Warren Buffett conceded that selling some shares of Apple (AAPL) in Berkshire Hathaway's portfolio last year was likely a mistake, with the company remaining a tech leader providing massive utility to users around the world.

"The brand and the product, it's an incredible product. It's a huge, huge bargain to people. I mean the part it plays in their lives is huge. I mean, I use it as a phone but I'm probably the only guy in the country," the famed value investor said of Apple during Berkshire Hathaway's annual shareholder meeting on Saturday. "It is indispensable to people."

"I sold some stock last year, although our shareholders still saw their shares go up because we repurchased shares," he added. "But that was probably a mistake."

"Charlie in his usual low-key way he let me know that he thought it was a mistake too, didn't you Charlie?" Buffett asked his long-time business partner and friend, who sat by his side during the meeting. Charlie Munger replied: "Yes."

Berkshire owned 907,559,761 shares of Apple as of the end of December for a total market value of $120.4 billion. That gave Berkshire 5.4% ownership in the firm. By contrast, the firm spent just $31 billion accumulating this stake since late 2016.

That holding was the largest by market cap in the Berkshire portfolio, comprising 44% of its disclosed assets as of the end of last year, according to Bloomberg data. And that came even after the firm pocketed $11 billion after selling a small portion of its position in 2020.

"It's an extraordinary business. But I do want to emphasize that in his own way, it's a different way, but Tim Cook ... he's handled that business so well," Buffett added of Apple's CEO. "He couldn't do what Steve Jobs obviously could do in terms of creation. But Steve Jobs I don't think really could do what Tim Cook has done in many respects."

Since beginning to build Berkshire's stake in Apple in 2016, Buffett has used multiple occasions to tout the company. In his latest annual letter to shareholders, Buffett named Apple as one of the most valuable assets for Berkshire alongside the firm's insurance operation and BNSF Railway, thanks in part to its share repurchases that helped boost Berkshire's ownership stake without additional cost to the company.

At the start of the 2021 Berkshire Hathaway shareholder meeting, Buffett also presented a slide with the 20 most valuable companies in the world by market capitalization as an example of America's strength in generating high-value corporations. Apple topped the list with a valuation of more than $2 trillion.

Shares of Apple surged 81% in 2020, outperforming the other mega-cap tech stocks including Amazon (AMZN), Alphabet (GOOGL) and Facebook (FB). Shares have edged lower by about 0.9%, but recently set an all-time high in late March.

MY COMMENT

YES......another must own stock....for many. I was not persuaded that Tim Cook was the right man for the CEO job for a good while.....but.....he has now settled into the role and is doing SUPERIOR work running the company. The stock split was great management....boosting the company in the public eye.....and.....kicking the share price UP for shareholders. AMAZING product line.