Here is some earnings content....as well as the story of the day for the markets at the open. Stock market news live updates: Stocks drift below record levels as earnings roll in https://finance.yahoo.com/news/stock-market-news-live-updates-october-21-2021-221556300.html (BOLD) is my opinion OR what I consider important content) "Stocks edged lower Thursday, with the major indexes hovering slightly below all-time highs as a parade of strong earnings results helped buoy equity prices earlier this week. The Dow dipped by about 100 points, or 0.3%, shortly after market open. The 30-stock index had set a fresh record intraday high during the regular trading day on Wednesday, marking its first all-time high since mid-August. The S&P 500 also logged a sixth straight day of gains in its longest winning streak since the start of July. Bitcoin prices (BTC-USD) held near its all-time high of over $66,000 reached earlier on Wednesday. Estimates-topping earnings results from companies from Verizon (VZ) to Anthem (ANTM) and Abbott Laboratories (ABT) extended a streak of strong quarterly reports kicked off by the big banks last week. Tesla (TSLA) shares dipped in early trading after the electric-vehicle maker posted profits that exceeded estimates but revenues that fell short. With stocks trading near record levels, these kinds of earnings beats will need to be maintained in order to fuel further appreciation, some strategists said. "Both the fiscal stimulus and monetary stimulus has been driving markets really since the ricochet off the bottom of COVID," Michael Vogelzang, chief investment officer for Captrust, told Yahoo Finance Live on Wednesday. "What we're looking at now is, the easy work is done. The Fed is beginning to taper shortly, we expect. We don't expect interest rates to rise much from here. But what it means is that the market is reasonably valued. It's not cheap by anyone's estimation. And in order to progress here ... we're going to have to see stronger earnings growth, and continued strong earnings growth." "We've seen the peak cycle acceleration," he added. "Now it's the hard work – can we continue to create profit growth in our various companies? Can the market and the economies around the globe work through some of the logistical issues?" So far this earnings season, many goods-producing companies have highlighted concerns over rising input prices and ongoing supply chain disruptions. Tesla noted in its earnings release that "a variety of challenges, including semiconductor shortages, congestion at ports and rolling blackouts, have been impacting our ability to keep factories running at full speed." And Procter & Gamble (PG) earlier this week estimated it would see over $2 billion in expenses this fiscal year related to rising commodity and freight costs. However, investors have so far at least momentarily looked through these concerns, and clutched to optimism that these pressures will prove temporary. "What we have done, in large part, by having massive aggregate demand outpacing aggregate supply is likely not destroyed demand. We likely delayed demand," Art Hogan, chief market strategist at B Riley-National, told Yahoo Finance Live on Wednesday. "And I think that elongates the economic cycle into '22." "It means we're going to have above-mean economic growth or GDP growth in '22, higher than we're estimating right now, likely, as we start seeing some of that supply response come online," he added. "I certainly think that when we look at those companies that have to discuss things like margin degradation because of supply chain logistics and not having pricing power, you're definitely going to have that environment where you have winners and losers." 10:00 a.m. ET: Existing homes sales bounced back in September, jumping far more than expected Existing home sales rebounded in September after a dip in August, jumping by the most in a year as demand for housing remained robust. Sales of previously owned homes were up 7% in September month-on-month, the National Association of Realtors (NAR) said in a new report Thursday. This was the biggest leap since September 2020, and brought sales to a seasonally adjusted annual rate of 6.29 million units. Consensus economists were looking for an only 3.7% rise in September, according to Bloomberg data. In August, existing home sales had dropped by 2% in their first decline since May. "Some improvement in supply during prior months helped nudge up sales in September," Lawrence Yun, NAR's chief economist, said in a press statement. "Housing demand remains strong as buyers likely want to secure a home before mortgage rates increase even further next year." 9:51 a.m. ET: WeWork opens at $11.28 per share after hitting public markets via SPAC merger Co-working company WeWork opened for trading at $11.28 per share after making its public debut via a merger with the special-purpose acquisition company BowX Acquisition Corp. The combined company is now trading under the ticker "WE" on the New York Stock Exchange. The SPAC had closed Wednesday at $10.38 per share. The listing comes after a series of stumbles for WeWork, which resulting in the ousting of its co-founder Adam Neumann after a failed attempt to go public via a traditional initial public offering in 2019. The SPAC merger gives the company a valuation of about $9 billion, versus an as much as $47 billion valuation after a an investment by SoftBank in the private markets." MY COMMENT I guess it is time for me to take a look at my portfolio and see what is going on at the moment. I believe the day will end much stronger than the open is showing. We are seeing good strength in the NASDAQ and now....the SP500 is slightly positive. The DOW is also....trying....to get positive. Netflix is UP....Tesla is UP....Tractor Supply had great earnings....the economic data is positive today,......earnings continue to be very nice......the re-opening continues and will build, build, build over the next 6-12 months.
Ok...I just looked and it is a nice moderate UP day for me. In fact it has the potential to go well beyond "moderate". The SP500 is now positive for the day and is just under a +21% gain year to date. That is a very nice number with two and a half months left in the market year. In my view there is GOOD potential for a nice year end rally of anywhere from 4-8%. "If"...it happens it will either come suddenly and explosively....or......it will happen in STEALTH mode and people will suddenly realize that the gains have been piling up over a number of weeks. My guess is the "stealth mode".....as people continue to have lingering doubts and negative feelings that are DISCONNECTED from the actual positive reality. I really dont care how or why it happens......I just want it to happen and put the cherry on top of a really good year. We missed out on a Santa Clause rally last year.....so the markets OWES US one for this year.
Next week is HELL week for me. I will be starting the actual work in my kitchen for the new counter-tops and back splash. I will have the appliance people here on Monday to remove the stove. The electrician and plumber will be here on Tuesday to remove the under counter lights, open up all the switches and outlets, install some additional lights, and remove the faucet and sink plumbing. Just to add to the CHAOS I have the tree people coming to do pruning and shaping on some live oak trees at the same time. the week after we have the actual fabricator coming for three days to put in the new grartzite counters and backsplash. The week after, I have the plumber and electrician coming again to put the plumbing and faucet back in place and re-install the under counter lights, reinstall all the outlets and switches, etc, etc. The stove installer and stove service tech...two different appointments......will come just before Thanksgiving. So far....I have everything lined up and scheduled. It will be interesting to see if my scheduling DISINTEGRATES.....or....falls into total chaos. It will be very exciting for the dogs.
Yes tsla shares are accurately reflecting its earning report… That in and by itself is a good sign of how the market is acting now… nflx seems to be on track as well.. looks like the little sell off trend that we had yesterday didn’t take away from its overall market reaction. About a month ago we had excellent earning reports from a slew of big companies which reflected in their respective stock decline. Likely because the overall sentiment was that a looming correction is at bay. That was then. And this is now
I have been out and about and paying ZERO attention to the mid day markets......as usual. I just looked and saw that the "moderate" gains that I had earlier in the day have now evolved into NICE gains. Hoping they can hold on or grow to the close. I am now at a new all time high....again. I am also pushing +23% year to date. We need to keep this little SP500 streak alive and push it to the end of the week and beyond.......GO EARNINGS.
It is about time....I cont believe they ever allowed this BLATANT appearance of conflict of interest.......if not outright conflict of interest to happen. Even Powell as chair of the FED was actively investing and making trades. Fed Bans Stock Trading, Restricts Other Investing by Senior Officials https://www.newsmax.com/finance/str...-trading-jerome-powell/2021/10/21/id/1041476/ (BOLD is my opinion OR what I consider important content) "The U.S. Federal Reserve on Thursday banned individual stock purchases by top officials at the central bank and unveiled a broad set of other restrictions on their investing activities roughly six weeks after reports of active trading by some senior policymakers triggered an ethics uproar. The new rules will limit the types of financial securities the Fed's top officials can own, including an outright ban on purchases of individual stocks or holding individual bonds. It also requires advance notice and approval of any transactions, and stipulates investments be held for at least a year. "These tough new rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve," Federal Reserve Board Chair Jerome Powell said a statement. In a press release the Fed said the new rules were meant to "help guard against even the appearance of any conflict of interest in the timing of investment decisions." The new rules come after two of the 12 regional Federal Reserve bank presidents resigned after reports of their active trading during 2020, when the Fed launched a massive effort to fight the economic impacts of the COVID-19 pandemic." MY COMMENT This article really takes it easy on POWELL....by NOT mentioning that ......he too.....was making stock trades during his term. What planet are these people on...that they did not see this as being a problem a mile away. Yes....I know.....they are on the ELITIST.....planet. It never occurred to them at all. How long have FED members and leaders been doing this stuff? I would bet they have been doing it for DECADES.
Poor IBM......they continue to struggle. I owned this stock during their ICONIC days for a long time. BUT...that is far in the past now. US STOCKS-Dow hit by IBM results, Nasdaq rises on gains in Big Tech https://finance.yahoo.com/news/us-stocks-dow-hit-ibm-161941008.html (BOLD is my opinion OR what I consider important content) "Oct 21 (Reuters) - The Dow on Thursday eased from a record high hit in the previous session as IBM shares fell after its quarterly report, with the potential impact of supply chain disruptions and labor shortages on profits taking the center stage this earnings season. The benchmark S&P 500 index edged lower, but was just about 10 points short of its early September record, while the Nasdaq drew support from a rise in mega-cap growth companies. "Stocks are climbing to new highs and anytime the market is trading at or near its all-time high, it is not unusual to see a little bit of more intraday volatility...and it should not concern investors," said Tom Mantione, managing director, UBS Private Wealth Management in Stamford, Connecticut. Six of the 11 major S&P 500 sectors were trading lower, with energy stocks falling the most. IBM tumbled 8.2% after it missed market estimates for quarterly revenue as its managed infrastructure business suffered from a decline in orders. Investors are keeping a close eye on growth outlook from companies facing rising costs, labor shortages and supply chain constraints, with analysts expecting profit of S&P 500 companies to rise 33.7% from a year earlier, according to Refinitiv data. "They (supply chain constraints) definitely are a concern. Things like semiconductor chips in particular have held back the economy to some degree and have put some upward pressure on inflation," said Jon Adams, senior investment strategist for BMO Global Asset Management. Tesla Inc erased early declines to rise 3.0% as investors digested the EV maker's upbeat earnings, despite the company warning of supply-chain hurdles. Other growth stocks including Facebook Inc, Microsoft Corp and Amazon.com Inc were higher by early afternoon trading. Data showed the number of Americans filing new claims for unemployment benefits dropped to a 19-month low last week, pointing to a tightening labor market, though a shortage of workers could keep the pace of hiring moderate in October. At 12:00 p.m. ET, the Dow Jones Industrial Average was down 111.47 points, or 0.31%, at 35,497.87, the S&P 500 was down 2.15 points, or 0.05%, at 4,534.04 and the Nasdaq Composite was up 38.84 points, or 0.26%, at 15,160.52. American Airlines rose 1.2% after posting a smaller-than-expected quarterly loss, while Southwest Airlines Co fell 1.5% after it said it expected current quarter profits to remain elusive. HP Inc gained 5.9% as brokerages raised their price targets on the stock after the personal computer and printer maker forecast upbeat fiscal 2022 adjusted profit and raised its annual dividend. Declining issues outnumbered advancers for a 1.60-to-1 ratio on the NYSE and for a 1.22-to-1 ratio on the Nasdaq. The S&P index recorded 48 new 52-week highs and no new low, while the Nasdaq recorded 84 new highs and 24 new lows." MY COMMENT Poor IBM. But.....no one my age feels sorry for them. They were totally ARROGANT A-HOLES during their dominant years. Everyone I knew had to deal with them....but HATED them. OTHERWISE....the earnings by other companies above......in general....continue to come in very nicely. AND....the markets are responding. In fact today at the close the SP500 and NASDAQ were BOTH solidly UP for the day.
REALLY in the green today. What an amazing day for my little portfolio. I had a single stock that was down today......PG. I also got in a big beat on the SP500 by 0.82%. My BIG day was driven by two types of holdings......the big tech.......and.....the big retail stocks. On the tech side of things my big winners of the day were.....Microsoft +1.09%....and....Nvidia +2.66%. The non tech side of my portfolio was AMAZING today with the leaders being......Nike +2.35%.....Costco +1.59%.....and Home Depot being +1.78%. I bet Zukodany is making some money on his recent addition to his shares of Nike.......impeccable timing.
The SP500 has now been UP for SIX market days in a row. EARNINGS are DRIVING the markets. They are PUSHING everything else out of the way. We are in the middle of a little HALLOWEEN RALLY.
As to EARNINGS....we will see minimal reports tomorrow. Only 26 companies are due to report. Notable names include.....American Express and Schlumberger. Also reporting will be one of my holdings....Honeywell. This week we will have had 325 companies report. Next week we get into the GUTS of earnings season with 908 companies reporting. Over the next few weeks we will be in the PEAK of the earnings. It is amazing how many banks there are....day after day of big numbers of banks reporting. Not that I care.....banks are one of the category of stocks that I do NOT buy. They are just too ERRATIC for my taste.
Here is another earnings report today...for those that own this company. Chipotle earnings beat, sales surge as dine-in customers return to restaurants https://www.cnbc.com/2021/07/20/chipotle-mexican-grill-cmg-q2-2021-earnings.html AND....one more that is a semi-big one. Snap shares drop 25% as revenue falls short, Apple privacy bites ads business https://finance.yahoo.com/news/snap-revenue-falls-short-apple-201156331.html WOW what a big HIT.....the shares of SNAP are down by 25%....after the bell. I dont follow this company but just from a cursory look....the numbers are dismal to me. They did see daily active users UP and their net loss was lower than a year ago.
The SP500 is on a ROLL....the average set a new all time high today at the close. Stock market news live updates: Stocks end mixed, but S&P 500 sets new high after jobless claims drop to new COVID-era low https://finance.yahoo.com/news/stock-market-news-live-updates-october-21-2021-221556300.html (BOLD is my opinion OR what I consider important content) "Stocks were mostly higher on Thursday, with the S&P 500 rising to log an all-time high as a parade of strong earnings results and economic data helped buoy equity prices. The S&P 500 gained 0.3% to reach record intraday and closing highs, led by outperformance in the consumer discretionary and information technology sectors. A better-than-expected report on new weekly jobless claims also helped boost risk assets, with these improving to a fresh pandemic-era low. The Dow dipped but came off session lows. The 30-stock index had set a fresh record intraday high during the regular trading day on Wednesday, marking its first all-time high since mid-August. Netflix and Tesla also logged record highs on Thursday, helping pull the tech-heavy Nasdaq up by 0.6%. Bitcoin prices (BTC-USD) pulled back from an all-time high of $66,000 reached earlier on Wednesday. Estimates-topping earnings results from companies from Verizon (VZ) to Anthem (ANTM) and Abbott Laboratories (ABT) extended a streak of strong quarterly reports kicked off by the big banks last week. Tesla (TSLA) shares pushed higher after the electric-vehicle maker posted profits that exceeded estimates on the back of record quarterly deliveries, though revenues fell short." .......... "2:12 p.m. ET: It's still an 'equity friendly' investing environment for stocks: Strategist Even as concerns over inflation and the global economic outlook remain at the forefront of investors' attention, the overarching backdrop for equities remains strong due to two key factors, according to at least one strategist. "We're continuing to believe that we're in what we're calling an 'equity friendly' investing environment. We're right in the middle of earnings ... and two key drivers to the market are always earnings and interest rates," Leo Grohowski, BNY Mellon chief investment officer, told Yahoo Finance Live. "Coming into the third quarter, we had a lot of [earnings] warnings. In fact we had the third-highest warnings of any quarter in the last 10 years. So I think expectations were measured. And so far, with about 20% of the [S&P 500] companies in, we're running about 80% better than expected. So earnings we believe will continue to move forward at a nice clip." "And the key is interest rates. Our thought has been the 10-year doesn't get higher than maybe 1.75%, 2% by the end of the year," he added. "That supports market multiples at around the 23 level ... [getting] us to a market forecast of 4,600 to 4,700 this year. So we're continuing to be constructive on the equity market based on the earnings and interest rate market." " MY COMMENT AS USUAL.....all of the "experts" telling us that earnings were going to be bland......were WRONG as usual. FUNNY....how all these people continue to be quoted as "experts" when their predictions tend to be WRONG more often than they are right. The financial media doe not care......they just want JUICY QUOTES for their day to day articles. the lesson for investors.....especially long term investors......trust in yourself. IGNORE all the so called experts. It you invest in a realistic and rational fashion.....you will do just fine over the long term.
It is interesting that the current rally is IGNORING the Ten Year Treasury yield which is now at 1.694%. It is STILL near the bottom of the past 100 years....but....the markets usually are FREAKING out when it gets to this level. The little quote above even is talking about the Ten Year rate as high as 2%....NOT MATTERING. Now that is REALITY in my view.
OK.....I post all the moves that I make in my accounts on here when they are made. This morning a bit after the open I bought some TESLA stock in ALL of the accounts that I manage. I bought at $898. I spent some time last night looking at the latest earnings and all the news that I could find on Tesla and decided to sell a little bit of my PG in each account and put that money into Tesla as a long term holding. The last time I bought Tesla I did so as a medium term trade based on three factors that I listed back in this thread. Those factors were ALL met when the stock went into the SP500.......so later, I sold all shares to lock in about a 150% gain....if my memory is right......and complete that medium term trade. That trade lasted less than a year. The NEW Tesla holding will be a long term holding. I believe the latest earnings and the future plant openings and the future prospects of the company NOW make it a stock that meets my criteria for a long term BIG CAP GROWTH holding. I like to get into companies like this when the future is CLEAR....but it is still young in their growth curve.....with MUCH future growth to come. For me that time is now. The new Tesla holding in each account is about 2% of the entire account value.....so not exactly a big bet. I did not want to GUT my PG holding.....so I limited the new buy to 2% of each portfolio. I used the PG holding as the source of funds since that is my worst performing stock. At the moment......yes.....I have a gain. YEA.
The markets have been IGNORING the Ten Year treasury yield increase over the past few days. Today......they decided to see the yield and have a minor freakout. Or as an alternative excuse you could use the SNAP earnings which were NOT GOOD. WHATEVER.
This is a very nice little article. Bull Market Bounciness Isn’t a Call to Action Volatility calls for discipline, not action. https://www.fisherinvestments.com/en-us/marketminder/bull-market-bounciness-isnt-a-call-to-action (BOLD is my opinion OR what I consider important content) "The past several weeks have seen some volatility return, with global stocks falling -5.5% from September 6 to October 4’s low, then rebounding to close less than 1% from where they started today. Still, we see pundits suggesting now is the time to raise cash, arguing the likelihood of more negativity is high. Holding more cash in anticipation of rocky stretches may sound sensible, but doing so could cost you dearly. Let us review. There are myriad reasons for holding cash, some more beneficial than others. For example, cash is a near-necessity in a right-sized emergency fund or for a known or planned expenditure—two scenarios where any volatility is likely a huge problem. Cash also can make sense as part of a defensive strategy during a bear market, perhaps alongside bonds and other securities, depending on market conditions. However, we think it makes sense to go this route only if you see a bear market forming and have based your assessment on careful fundamental analysis, not merely recent returns. In our view, pundits’ reason for raising cash now is less beneficial. Some see recent volatility as a call to pare back stock holdings to “protect” capital while also building up some “dry powder” to put to work after a decline. That sounds nice in theory, but in our view, it falls apart in practice. Volatility doesn’t announce its arrival or departure, and a short negative spell doesn’t beget more market bounciness. As we wrote throughout the year, markets had been relatively calm in 2021—until September. But last month’s dip doesn’t say anything about future market movement. Yes, more negative volatility is always possible, and if stocks fall anew, recent calls to hold cash for future buying opportunities will look prescient. But volatility goes both ways. If markets go through a stretch of positive volatility, that better buying opportunity you are waiting for may be in the rearview already. Take the 1990s bull market. Though the S&P 500 endured some sharp pullbacks in 1997 and a big correction in 1998, those bouts of negativity didn’t end the bull market, which charged on until its peak in March 2000. To illustrate the potential opportunity cost, Exhibit 1 shows the returns investors would have missed if they went to cash at the start of a pullback or correction but didn’t buy back in during the rest of the bull market. Exhibit 1: Reacting to Negative Volatility Can Be Costly, 1997 – 2000 Source: FactSet, as of 10/20/2021. S&P 500 Total Return Index, 12/31/1996 – 3/24/2000. More recently, 2018 featured two periods of sharp negative volatility, including a late-year correction that left US stocks down for the year. However, unless they perfectly timed the beginning and ending of those downturns, investors who built up cash to deploy at a “better” time risked missing out on a stellar 2019. (Exhibit 2) Exhibit 2: Reacting to Negative Volatility Can Be Costly, 2018 – 2020 Source: FactSet, as of 10/20/2021. S&P 500 Total Return Index, 12/31/2017 – 2/19/2020. Now, to address the elephant in the room: Yes, a bear market struck within two months of 2019’s end. For those who had loads of cash, this was your ultimate buying opportunity. But we strongly doubt too many people with “dry powder” were rushing to deploy it in late March 2020, when pessimism and fear of a new depression reigned. Mostly, we saw lots of pundits and investors arguing for months and months thereafter that the new bull market was disconnected from a dire reality—and sure to reverse before long. That brings us to a critical point: If you up your cash holdings with the intent of deploying them at a “better” time, you also have to determine when to buy back in. With hindsight and a chart, the ideal reentry points—a market trough—look obvious. But in the moment, many investors attempting to time the market fail to do so, in our experience. Stocks are the rare thing people tend not to want to buy when they are on sale. Sentiment is usually dour following a market decline, and it gets more so the further stocks fall. Hence, many investors seek confirmation the worst has passed before acting. But stocks don’t sound an “all-clear” signal, and those waiting for one may end up missing the very buying opportunity they were waiting for. In our view, enduring those volatile days, weeks or months helps ensure you don’t miss a bull market’s returns over the longer run. Again, if you see an actual bear market forming, it can make sense to reduce your stock exposure significantly. Those declines are typically long, deeper than -20% and grinding. Since they begin and end for fundamental reasons, if you are careful and disciplined, you can mitigate the risk of getting whipsawed. That isn’t the case with corrections or pullbacks, which are sentiment-driven. That is why they defy predictability—sheer irrationality at work. They are also normal during bull markets. During bull markets, the S&P 500’s average annualized return is 21%—a figure that includes all of the unpredictable pullbacks and corrections over the past 90 years.[ii] To us, that is the reward for dealing with volatility. Rather than get hung up on the prospect of near-term dips, we recommend taking a higher-level view and focusing on market cycles. As Fisher Investments founder and Executive Chairman Ken Fisher has said, “If you aren’t in a bear market, you are in a bull market.” Investors who need long-term growth must participate fully in bull markets to reap their gains, which includes enduring a lot of uncomfortable volatility. To instill discipline, we suggest investors reframe how they treat market pullbacks. Rather than as a call to action, view them as the price to pay for bull markets’ long-term returns." MY COMMENT I agree with the above article. This is a description of why "I" stay fully invested all the time. It is impossible to know when to go to cash and when to get back in. It never happens.....and...if it does it is just luck. Volatility and corrections are the price you pay for achieving ALL the market gains. AND....if you do not achieve ALL the market gains....you will severely lag the un-managed averages over the long term. In fact.....I dont even believe it is possible for MOST people to predict and see BEAR MARKETS and time when to sell and when to buy back in. People will either sell too early or too late....and they will just about ALWAYS.....decide to get back in after the explosive early gains have already happened. What this is.......is.....simply MARKET TIMING. It does not work. A few people will hit it right.....by LUCK....but the research shows that it is not possible to achieve and WILL result in lower returns. I would ALSO call what the article above is describing......INVESTING BY PUNDIT......a SURE way to screw yourself and your returns.
AS USUAL.........HERE is my current PORTFOLIO MODEL. I am once again posting my PORTFOLIO MODEL. My initial criteria to start the process to consider a business are.......BIG CAP, AMERICAN, DIVIDEND PAYING, GREAT MANAGEMENT, ICONIC PRODUCT, WORLD WIDE LEADER IN THEIR FIELD, LONG TERM HORIZON, etc, etc, etc. PORTFOLIO MODEL "Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 55% of the total portfolio and the fund side at about 45% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing. As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 10 stock portfolio. At the same time the funds double and triple up on my individual stock holdings............that I consider the BEST individual businesses in the WORLD. STOCKS: Alphabet Inc Amazon Apple Costco Home Depot Honeywell Microsoft Nike Nvidia Proctor & Gamble Tesla MUTUAL FUNDS: SP500 Index Fund Fidelity Contra Fund CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (71). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)" MY COMMENT This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my ten stock holdings there is MUCH doubling and tripling up on the stocks. THAT is INTENTIONAL. I strongly subscribe to the view of Buffett and some others that TOO MUCH diversification kills returns. I do NOT believe in the current diversification FAD that most people seem to now follow.......or think they are following. I DO NOT do bonds and think the current level of bonds held by younger investors.....those under age 50.....is extremely foolish.I DO NOT do market timing or Technical Analysis.
One of my stocks reported before the bell today.....HONEYWELL. Honeywell (HON) Q3 Earnings Surpass Estimates, Revenues Miss https://www.nasdaq.com/articles/honeywell-hon-q3-earnings-surpass-estimates-revenues-miss-2021-10-22 (BOLD is my opinion OR what I consider important content) "Honeywell International Inc. HON has reported mixed third-quarter 2021 results, wherein earnings surpassed estimates but revenues lagged the same. Earnings & Revenues Adjusted earnings were $2.02 per share, surpassing the Zacks Consensus Estimate of $2.01. The bottom line soared 29.5% year over year. Honeywell’s third-quarter revenues were $8,473 million, missing the consensus estimate of $8,708 million. The top line increased 9% year over year on a reported basis and 8% on an organic basis. The rise was driven by strength in warehouse and workflow solutions, productivity solutions and services, and gas analysis businesses along with strong demand for building products as well as process solutions services and thermal solutions. It was also supported by a recovery in commercial aftermarket demand and solid growth in business and general aviation original equipment demand. Segmental Breakup Coming to operating segments, Aerospace’s quarterly revenues were $2,732 million, up 3% year over year. Honeywell Building Technologies’ revenues increased 5% to $1,370 million. Performance Materials and Technologies’ revenues totaled $2,510 million, up 11% while that for Safety and Productivity Solutions increased 18% to $1,861 million. Honeywell International Inc. Price, Consensus and EPS Surprise Honeywell International Inc. price-consensus-eps-surprise-chart | Honeywell International Inc. Quote Costs/Margins The company’s total cost of sales in the reported quarter was $5,746 million, up 6.7% year over year. Selling, general and administrative expenses were $1,152 million, up 4.4%. Interest expenses and other financial charges were $90 million compared with $101 million a year ago. Operating income in the third quarter was $1,575 million, up 20.1% on a year-over-year basis. Operating income margin was 18.6%, up 180 basis points. Balance Sheet/Cash Flow Exiting the third quarter, Honeywell had cash and cash equivalents of $11,087 million compared with $11,427 million in the previous quarter. Long-term debt was $14,346 million, lower than $16,138 million recorded at the end of the previous quarter. In the first nine months of 2021, the company generated $3,375 million in cash from operating activities compared with $3,426 million in the year-ago period. In the first nine months of 2021, capital expenditure was $614 million compared with $615 million incurred a year ago. Free cash flow in the quarter was $911 million, up 20% year over year. Outlook Honeywell updated guidance for full-year 2021. For the year, the company anticipates earnings to be in the range of $8.00 to $8.10 per share compared with $7.95 to $8.10 guided earlier. It anticipates revenues to be between $34.2 billion and $34.6 billion, with organic revenues expected to be up 4-5%. It previously anticipated revenues to lie in the range of $34.6 billion to $35.2 billion. For 2021, it expects operating cash flow in the range of $5.9 billion to $6.2 billion, and free cash flow to be between $5.3 billion and $5.6 billion." MY COMMENT Some very nice earnings above for Honeywell. Unfortunately the markets are FOCUSED on the........outlook.......as usual.....and the stock is being punished. It is down a bit over 2%. The revenue miss did not help either. BUT....this is a well run company with a very diverse consumer and industrial and governmental business base. I have no doubt holding this company as a long term holding. I also like that it is not a tech company although all of its products use tech. My portfolio is tech heavy and I value my holdings that are NOT tech companies.......Nike, Costco, Proctor & Gamble, Home Depot, Honeywell.......and even the newly purchased.....Tesla. (Obviously Tesla is both a manufacturing company with strong tech overtones....so a hybrid)
