The Long Term Investor

I am late to the party on the AMAZON earnings.

Amazon posts third $100 billion quarter in a row, but still misses expectations

https://www.cnbc.com/2021/07/29/amazon-amzn-earnings-q2-2021.html

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

"Key Points

• Amazon fell short of analysts’ estimates for revenue in its second-quarter results.
• It also gave weaker-than-expected outlook for third quarter revenue, which Amazon CFO Brian Olsavsky blamed on tough year-over-year comparisons to its business during Covid-19 lockdowns.

Amazon shares fell more than 7% in extended trading on Thursday after the company reported its first revenue miss in three years and gave weak third-quarter guidance.

Here’s how the company did:

• Earnings: $15.12 vs $12.30 per share, according to analysts surveyed by Refinitiv
• Revenue: $113.08 billion vs $115.2 billion, according to analysts surveyed by Refinitiv

Amazon’s revenue grew by 27% year over year to $113.08 billion. That’s a significant slowdown from the second quarter of 2020, when sales skyrocketed 41% year over year.

On a call with reporters, Amazon CFO Brian Olsavsky blamed tough year-over-year comparisons to its business during Covid-19 lockdowns. In mid-May of last year, Amazon saw growth rates jump to between 35% to 45%, he said.

“We’re starting to lap that and that’s why you see some of the growth rate coming down,” Olsavsky said, adding that Amazon expects to see slower growth continue for the next few quarters.

For the third quarter, Amazon said it expects to book sales between $106 billion and $112 billion, representing growth of 10% to 16% compared to the same period last year. That’s well below consensus estimates of $119.2 billion.

“Our customers are safe and healthy and ordering from us. And we know that there’ll be more vacations or be more mobility. They’ll be things that probably people shied away from last year and that’s all good,” Olsavsky said on the call with reporters. “But it does tend to lead them to do other things besides shop. So we’re just adjusting our run rates in the, in the period that we see that happening.”

The guidance echoes similar warnings from Facebook and Apple, who said in quarterly earnings earlier this week that revenue growth rates would decelerate from pandemic highs.

Amazon said its operating profit in the third quarter will be in the range of $2.5 billion and $6 billion, a notably wide gap. That’s still a step down from the $6.2 billion of costs it incurred from things like coronavirus safety measures in the third quarter of 2020.

Olsavsky said in a call with investors that Amazon is in the midst of a multiyear investment cycle, which includes spending heavily to increase warehouse capacity across the country. Most of Amazon’s 2021 spend and building openings are planned for the second-half of the year, he added.

The June quarter reflects the last full quarter of Jeff Bezos’ tenure as CEO. On July 5, Bezos handed the role of CEO over to Andy Jassy, who previously led AWS. Bezos is now executive chairman. Like Bezos, who hasn’t participated in an earnings call since 2009, Jassy was absent from Thursday evening’s conference call.

In a statement, Jassy thanked Amazon employees for their work during the coronavirus pandemic, and added, “I am very excited to work with you as we invent and build for the future.”

While Amazon’s second-quarter sales disappointed, earnings trounced expectations, helped by its highly profitable cloud-computing, subscriptions and advertising businesses. Amazon’s “other” unit, which includes advertising and other services, grew revenue 87% year over year during the period.

Amazon Web Services grew its revenue 37% in the second quarter, faster than 32% growth in the previous quarter. AWS revenue came in at $14.81 billion in the quarter, surpassing analysts’ estimated $14.20 billion.

Amazon’s headcount continues to swell. At the end of the third quarter, Amazon employed 1.33 million people worldwide, up 52% year over year.

A rise in the Covid-19 delta variant cases has pushed some Silicon Valley companies, including Facebook, Google, Uber and Twitter, to rethink their return-to-office plans and mandate vaccinations for employees or close offices again. Olsavsky told reporters that Amazon hasn’t adjusted its plans to have employees return in September. The company will not require employees to be vaccinated, he said."

MY COMMENT

WAY to go Bezos....BAIL OUT.....when you know there is going to be a miss and stick it on the new CEO. I like the earnings per share....and....the cloud, subscriptions and advertising growth and earnings. These areas are a big future for the company. the company has added a HUGE number fo employees over the apst year.....and is in the process of building massive fulfillment centers all over the country. A company that REALLY is not afraid to spend money on capital projects for future growth. This is a company with long term thinking.

Revenue dos not bother me at all.....there is no way to EQUAL a quarter last year when people were sitting at home with nothing to do and the convenience of shopping online. My grade would be SATISFACTORY++.

 

One additional article as we continue with no correction. It never hurts to be prepared.

9 Questions For The Bull Market

https://awealthofcommonsense.com/2021/07/9-questions-for-the-bull-market/

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

"Bull markets are way more fun than bear markets but they can also warp your brain.

Here are 9 questions I’m pondering at the moment in one of the great bull markets of my lifetime:

1. What if I’m not as smart as I think I am? During a bull market it begins to feel like everything you touch turns to gold. Bull markets can make you feel like a genius (just like bear markets make you feel like an idiot).

It’s important to remain humble the more the markets go your way.

2. What am I wrong about that I currently believe with certainty? I’m not 100% certain about too many things when it comes to markets and investing.

But there are certain things I am fairly confident about right now that will likely prove to be wrong in the future. This is just the way things work in the markets.

Some people think crypto is going to change the world forever. Others assume it’s a joke that’s destined to fail.

Some people think interest rates will eventually scream higher from here. Others assume low rates are here to stay.

Some people are positive we’re in one of history’s great bubbles. Others assume this time really is different in many ways.

Something you feel strongly about right now is going to look silly in the future.

It’s important to keep an open mind about what could happen in the markets.

3. What will look obvious with the benefit of hindsight? It seems obvious now that stocks should have rallied furiously following the pandemic crash.

The Fed threw the kitchen sink at the credit markets, people got checks from the government, unemployment benefits more than made up for lost wages and degenerate gamblers had nothing better to do with their time than invest.

Of course the stock market is higher!

But a doubling of the stock market in 15 months wasn’t on anyone’s radar in March or April of 2020. Most people thought it was only a matter of time before new lows were made.

If the stock market continues to charge higher it will seem obvious in hindsight

If the stock market falls out of bed it will seem obvious in hindsight.

If inflation is transitory or remains high or falls somewhere in between it will seem obvious in hindsight.

It’s important to remember the past is clean while the future is a mess.

4. Do I have a plan or a portfolio? There is a huge difference between holding a handful of investments and an actual investment plan.

A portfolio involves buying securities, funds and other types of investments. A plan involves creating a decision-making framework to guide your actions.

You can do just fine for yourself with a portfolio of investments when things are going well.

It’s important to remember that a portfolio doesn’t help all that much if you don’t have a plan when things get harder in the markets.

5. Am I making good decisions or just getting lucky? There is nothing wrong with getting lucky in the markets. Businesses still accept money made by luck.

But luck is not a repeatable process.

It’s important to be honest with yourself about where your performance is coming from during a bull market.

6. How did I react during past downturns? Past performance is not indicative of future results but past behavior is a pretty good barometer of future behavior.

Did you bail out in March 2020? Did you want to bail out? Did you buy? Did you stand pat? Did you rebalance?

It’s important to take inventory of your past behavior during turbulent markets because it’s a decent approximation of how you’ll react the next time around.

7. How disciplined is my investment approach? During bull markets it feels foolish to sell anything. During bear markets it feels foolish to buy anything.

Discipline and risk management feel worthless when stocks seemingly do nothing but go up.

It’s important to remember you can’t just be disciplined when you feel like it.

8. Is my portfolio durable enough to handle a variety of market environments? A portfolio that’s positioned exclusively for bull markets will probably do just fine the majority of the time.

But you still have to prepare for the eventual correction or bear market.


It’s important to remember markets don’t always go up.

9. What is my plan for the next downturn? The Corona crash was over so fast, most investors who weren’t prepared for it were offered a mulligan.

It wasn’t some drawn-out bear market like the 2008 crash that took years to recover from. Investors were made whole in a hurry. Quick gains can paper over a lack of investment planning.

Maybe extended bear markets are a thing of the past but you have to account for market downturns no matter how long they last.

I’ve talked to a number of investors that had no idea what to do during the crash because they didn’t have a plan ahead of time. Even a subpar plan is better than no plan.


It’s important to prepare for a wide range of market outcomes, both good and bad."

MY COMMENT

Prepare, prepare, prepare.......for the long term. Have a plan and have investing GOALS. AVOID all the negative behaviors and thinking that kills returns....many of them are psychological. Remember corrections and bear markets are......NORMAL. There is a very large number of investors out there right now that have never experienced a real bear market that lasts for a year or two.

 

The Robinhood IPO....who cares.....a small BUST. NOW....reality sets in for them as a public company.

 

NOW.....AMAZON....down by 7.4% after hours. AND.....I did not get my stock split......I WANT my stock split.

 

WELCOME......LONGGONE. New posters are the lifeblood of any site.....so if you are inclined....feel free to continue to post as a regular. Same for everyone else.

Well I will answer your question....but with some QUALIFICATIONS.

FIRST..... the research shows that Market Timing does NOT work. The research also shows that all in all at once investing has the highest probability of success. I ALWAYS....personally....follow both of these theories. SO my bias is to buy......when I am ready to buy and NOT wait for some future market drop or correction.

SECOND.....I am a very LONG TERM investor......so I just buy a stock when I have the funds and have decided to add it.....I NEVER wait for some future buying opportunity. I have seen people wait for years for the buying opportunity that never happens.

I am among those that think we are PAST DUE for a correction and that there is a good chance of one in the Aug to Oct time period......but if I had something I had decided to buy......I would do what I ALWAYS do and simply buy it.

BUT.....that is just me........I HATE to have money siting and not exposed to the markets. I dont have a crystal ball.....no one does......so I prefer to be in the markets FULLY INVESTED......ALL the time. I also STRONGLY believe that the long term direction of the markets is ALWAYS......UP. I have learned to NEVER obscess over what I bought some stock for.......I just buy it and FOCUS on the future and making money.

NOW....if I was going to buy AMAZON right now.......and I was inclined a LITTLE BIT toward market timing.....I MIGHT wait till Monday or Tuesday to see if it drops a BIT MORE. BUT.....it is just as likely to go up......NO ONE KNOWS.......and....NO ONE can predict one way or the other.

BOTTOM LINE.....how you buy, when you buy, how you invest......is a purely personal choice and decision.

 

My last stock this week....just reported earnings......PG.

Procter & Gamble earnings beat, but company warns cost pressure will weigh on future profits

https://www.cnbc.com/2021/07/30/procter-gamble-pg-q4-2021-earnings.html

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

"Key Points

• Procter & Gamble topped analysts’ estimates for quarterly earnings and revenue as consumers bought more premium health and personal care products.
• The company warned that increasing commodity and freight costs could hit its earnings by roughly $1.9 billion in the year ahead.
• The maker of Tide, Charmin and Pampers is on track to raise prices on some products this fall in response to the rising costs.

Procter & Gamble on Friday topped analysts’ estimates for quarterly earnings and revenue as consumers bought more premium health and personal care products.

But the company warned that increasing commodity costs could hit its earnings in the upcoming year. Last week, rival Unilever also noted that it is facing higher costs for packaging, ingredients and transportation.

P&G shares jumped 1% in premarket trading on the news.

Here’s what P&G reported for the quarter ended June 30 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $1.13 vs. $1.08 expected
• Revenue: $18.95 billion vs. $18.41 billion expected

P&G reported net income for the quarter of $2.9 billion, or $1.13 per share, compared with $2.8 billion, or $1.07 per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings per share of $1.08.

Net sales rose 7% to $18.9 billion from $17.7 billion a year earlier. That beat Wall Street expectations for $18.41 billion. Organic sales climbed 4%.

P&G reported the strongest growth in its beauty and health-care businesses, as consumers prepare to head back to the office and return to social gatherings.

The health business saw organic sales climb by 14%. Much of that growth came from oral care products, such as Oral B toothbrushes.

P&G’s beauty segment reported organic revenue growth of 6%. The company saw continued demand for its premium SK-II brand. But it said some of the gains were offset from lower selling volumes in North America due to inventory issues.

The company’s fabric and home-care segment, which includes Dawn and Cascade dish detergents, reported organic sales growth of 2%. Growth has been slowing in this segment as consumers buy fewer cleaning supplies for their homes.

The company’s grooming segment, which includes Gillette and Venus, saw organic sales growth of 6%.

Baby, feminine and family care was the only segment with declining organic sales, reporting a 1% drop from a year earlier. The birth rate in the U.S. fell for the sixth consecutive year in 2020, weighing on purchases of diapers, baby formula and other child-care products.

For fiscal 2022, P&G is calling for fiscal year sales to grow 2% to 4% from the prior year. Organic sales are forecast to rise in the same range.

It’s calling for core earnings-per-share growth of 3% to 6% from the previous fiscal year’s $5.66.

P&G said its current outlook estimates taking a roughly $1.9 billion after-tax hit from higher commodity costs and freight costs.

Analysts surveyed by Refinitiv had been looking for adjusted earnings per share of $5.90 in fiscal 2022 on sales of $78.17 billion.

“Everybody is seeing that right now, the key will be how you deal with it,” outgoing Chief Executive David Taylor told CNBC’s “Squawk Box” on Friday. “While we are facing tough [comparisons] and higher costs going into the year, the momentum is very strong.”

P&G announced Thursday evening that Chief Operating Officer Jon Moeller will become CEO in November, replacing Taylor, who will become executive chairman. Taylor, 62, had been CEO since Nov. 1, 2015.

It will now be Moeller’s job to find ways to combat the cost pressures and to come up with a strategy to keep P&G’s momentum going and its organic sales growing year after year. For the past three years they have grown upwards of 5% to 6%.

The company — whose portfolio includes Tide detergent, Charmin toilet paper and Pampers diapers — is on track to raise prices on some products this fall in response to higher commodity costs. Rival Kimberly-Clark, which makes Huggies, has announced price hikes on various items.

After the price increases go into effect, P&G is planning to hold market share by trying to increase consumers’ perception of the value of its products and introducing new or upgraded items. Companies such as P&G and Kimberly-Clark are betting consumers will be willing to pay more for the brand version, instead of opting for a cheaper private label.

Chief Financial Officer Andre Schulten said during a media call that about 75% of P&G’s products are considered superior or premium, so consumers are already showing a willingness to pay a higher price for those goods.

“We believe that where we need to take pricing, we’ll be able to take pricing,” he said.

P&G shares are up less than 1% year to date. The company has a market cap of $341.4 billion."

MY COMMENT

This company is my LAST old time conglomerate holding. They are a BALANCE to all my tech holdings and more risky companies. A PURE consumer product company. I like them and WILL continue to hold this company for the long term....although I will not add to the position going forward other than reinvesting dividends.

 

PG above is my last earnings report for a little while. My next companies to report will be HD on Aug 17 and NVDA on Aug 18. After that it will be COST on Sept 23 and NKE on Sept 27. I believe....if my memory is right....that that will be the end of earnings for my holdings. So far.....I am seeing SUPERIOR EARNINGS in all my stocks.

AS USUAL.....the market obsession with forward looking information......makes the short term irrelevant and prevents most stocks from having a big bump up on earnings in the current environment. Most companies are STILL being very WARY on forward outlook....with mask and vaccine mandates up in the air....the FED up in the air.....and year over year comparisons to the pandemic numbers.

BUT....being very LONG TERM.....I really do NOT care about the immediate markets.....I m looking for FUTURE growth and market GAINS.....2-10 years down the road.....if not longer.

I have the BENEFIT of......NEVER needing to use my stock market money for living expenses......so I have the BENEFIT....of ALWAYS being very long term in outlook.

 

I LIKE your housing numbers Emmett. Feels good.......doesnt it. Your house has doubled in ONLY 10 years. That is amazing growth for a home. Part of my "four legged stool" view of NET WORTH. You and your wife made good decisions in the past and now they are paying off. Another long term investment.

NET WORTH
1. Real property in the form of a home.
2. Stocks and investments.
3. Personal property, collectables, art, antiques, etc.
4. Social Security benefits, pension, 401K, IRA, annuities, etc.

 

I agree duckleberry.

That is why I am not spending a lot of time posting or talking about it today. The amount of REVENUE and EARNINGS that company produces are HISTORIC. It is an ICONIC holding for any investor. I ESPECIALLY like the fact that the company.....at least so far.....does not SCRIMP on investing money in facilities and future growth. They are RELENTLESS.

BUT....they are very EARLY under the new management.....so it will take a little time to see if the new management is going to ALTER the past habits of the company and if the new management can continue the past WILD SUCCESS. Management changes can QUICKLY alter the culture and psychology of a company.....I have seen it happen many times. APPLE is a good example as is MICROSOFT. That is the largest.....unknown...... ISSUE I see for the company going forward.

AMAZON....needs to split those shares......their price is a BIG DRAG on the stock for shareholders and creating shareholder value. They seem to have a real BLIND SPOT when it comes to doing a stock split.

 

SO....we are open today with negative averages......as expected after the Amazon and other earnings. We take a week or two to digest this info and than we MOVE FORWARD in spurts....as usual.

 

I like this little article...so true. It....even....has lots......I MEAN LOTS...of charts for Emmett. But just having charts does not make it Technical.

The Long and Winding Road to Wealth

https://compoundadvisors.com/2021/the-long-and-winding-road-to-wealth

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

"As children we’re taught that the shortest distance between two points is a straight line.

Many expect investing to be the same, with high and consistent returns bringing you from point A (starting out) to point B (wealth).

But markets don’t operate in the same realm as the physical world. There is no straight line when it comes to risky investments. Instead, the road to wealth is a long and winding one – two steps forward, one step back – repeated indefinitely.

Let’s go back 20 years to see this road from the perspective of an investor…

It’s July 2001 and you invest all of your hard-earned savings in the S&P 500 ETF ($SPY), $10,000, hoping to earn the long-term rate of return on stocks (roughly 10% per year).

You check back at the end of August and things aren’t going so well. The U.S. economy is mired in a recession and you’re already down 6.6%, bringing your $10,000 to $9,338.


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A few weeks later, the largest ever terrorist attack on American soil occurs (9/11), and the stock market closes for a week.

When it reopens on September 17, you once again take a look at your account. It is now down 14.7% in just over 2 months, bringing your balance down to $8,532.


It would rebound from there, and by year-end you take a look again to find your account back up to $9,418, 5.8% below where you started.


Unfortunately, that rebound would prove to be short-lived, as stocks took another turn lower in 2002. They would finally bottom on October 9, 2002, but not before pushing your initial $10,000 down to $6,505, a 35% decline in 15 months.


But you held on, and two years later (November 2004), you were finally back to even. Your return at that point was 0% after 40 months of agony, but it felt good to be back in the green.


With some bumps along the way, the next few years would be prove to be good ones, and by October 2007, your account had moved up to $14,240. This was a 42% increase from where you started, or 5.8% annualized. Not the 10% you were hoping for, but much better than where things stood five years earlier (-29% annualized).


The good times, however, did not last. The U.S. would move back into recession in early 2008 and by October the financial crisis was in full effect, pushing your account back below $10,000 once again.


When the bear market finally ended in March 2009, it proved to be the worst since the Great Depression, with the S&P 500 declining over 57%. As a result, your account value fell below its low in October 2002, now 36% lower than where you started in 2001. All hope of ever getting back to even seemed lost, let alone earning a decent return on your money.


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But just six short months later, everything had changed. The U.S. recession had ended and stocks came roaring back. Your $10,000 was there again. A 0% return over 8+ years, but considering where you were back in March, this seemed like a miracle.


A few years later, you reached the 10-year mark, and things were looking even better. Your account had moved up to $13,010, 30% above where you started. The 2.7% annualized return at that point was much lower than what you would have earned in bonds, but at least it was positive.


Right on cue, though, your mettle would be tested yet again. The European debt crisis was rearing its ugly head and fears of a “double-dip” recession gained traction. The resulting decline pushed stocks down over 20% and your balance headed back towards $10,000 once more.


But the fears soon abated and the U.S. expansion continued. Less than a year later (August 2012) you were back at new highs, finally surpassing the previous high from October 2007. You were tempted to sell and “quit while you were ahead,” but you resisted the urge and stuck to your long-term plan.


And it’s a good thing you did, because one of the strongest bull markets in history would follow, bringing your account balance up to $33,400 by September 2018, a respectable 234% gain from your initial investment (7.3% annualized).


But then, without any warning, another 20% decline blew in. The stated impetus: fears over rising rates, tightening Fed policy, and a trade war with China.


But just as had occurred in 2011, the concerns didn’t last, and the market moved right back to new all-time highs. From there, the gains would continue. By February of 2020 your account was up to $39,630, a 296% gain from where you started (7.7% annualized). The U.S. expansion was now the longest in history and everything seemed to be pointing to another strong year.


Then, out of nowhere, the global pandemic hit, leading to the fastest bear market in history. Fears of a second Great Depression were running wild. Your account was now down to $26,260, giving back 3 years’ worth of gains in a month. There was every reason in the world to sell, but somehow you held on.


And it’s a good thing you did, because without any clear signal (see rule # 17: “no bell was rung”), stocks would reverse course in dramatic fashion from there. The fastest bear market in history became the shortest and the “second Great Depression” fears never materialized as the downturn hit a low soon after it began (shortest recession in history at 2 months).


By August 2020, your account was back at new highs, in a V-shaped recovery for the ages.


You held on from there and hit the 20-year mark in July 2021, with your account more than 5x higher than where it stood when you first started. It wasn’t a straight line, far from it, but the 8.6% annualized return you earned was worth the wait.


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Still want a straight line? You’re not alone. And one does exist in the form of a risk-free savings account. The problem? With a current yield of 0.06% (national average on savings accounts), this is far below the rate of inflation (loss of purchasing power), and it would take 1,200 years for you to double your money. A straight line, yes, but certainly not a path to real wealth.

To be sure, the last 20 years were difficult ones for equity investors, particularly the first 10. But every 20-year period has its ups and downs…


The names and dates may change, but the story remains the same: two steps forward, one step back. That is the essence of the long and winding road to wealth.

For every investor, that road looks different. There isn’t a single path to follow because we all have unique temperaments and circumstances that invariably change over time. We also have different starting points, further inserting randomness into an already unpredictable endeavor. Some may start at the bottom of a cycle (March 2009) while others may start at the top (March 2000). Some start investing early in their careers, while others start later in life. Some can take a high degree of risk, while others can handle only so much.

All these factors and more ensure that no two paths are alike. And that’s okay, as there isn’t one “right way” to invest. There’s only the right way for you.

Find the road you can stay on the longest and it will make all the difference in the world, allowing the magic of compounding to work wonders. Embrace the twists and turns along the way, without which there would be no reward."

MY COMMENT

THE ESSENCE....of long term investing above. ALSO....the RANDOMNESS of results depending on when you happened to start investing. The KEY......of course......the POWER of TIME and COMPOUNDING. It is all about SIMPLICITY and having the confidence to simply stay invested and wait. This is EXQUISITELY DIFFICULT...for most people.

 

YEP...oldmanram...and...some times it is three steps forward and six steps back. Just the.....short term..... PRICE......we all pay for achieving WEALTH over our lives for the benefit of our FAMILY.

 

Oh by the way Emmett....yes....you did a good job of managing the markets the other day. Perhaps we should make you our PERMANENT market manager. NOW.....ABOUT TODAY.....

 

For those that are looking for some opinion on the Robinhood IPO.

Robinhood Has the Worst Debut Ever for IPO of Its Size

https://finance.yahoo.com/news/robinhood-flirts-worst-debut-ever-172454124.html

MY COMMENT

SORRY....I dont really care about this company....but.....what will count is how it does on FUNDAMENTALS from this point going forward...just like every company. Did anyone buy shares?