The Long Term Investor

Well....I am pleased that Amazon is at about +6% for the year as we approach year end. I think there is potential for the stock to get into the +10-14% range by year end. They ARE putting a bunch of money into company infrastructure and employees.....which I think is a good thing. The other BIG POSITIVE for the company is their WEB SERVICES business which is doing very, very, nicely and keeping the company profitable at this point.

On the other hand......and not necessarily a negative.....they are in the middle phase of their company life. They are no longer a young start up go-go company....they are now a semi-mature company. There will be a time......and it is probably starting now.....that they will simply be a mature BIG RETAIL company.

Does that mean that I am going to sell the stock......NO....definitely not. No company....especially a retailer type company goes straight up all the time. AND.....the WEB SERVICES business gives them a nice cash cow for times when the retail is lingering. PLUS....I am content to hold the worlds most DOMINANT retailer for the long term.......every stock does not have to act like a TECH COMPANY in it's stock price. I very much LIKE companies that are consumer oriented and outside the big tech world in their primary business.

The short term good news....with their gain at the moment today.....they are NOW year to date +7.52%.

 

Tapering......already in the rear view mirror.

The Decidedly Non-Tantrum-Inducing Fed Taper Is Here
In the end, the Fed’s quantitative easing taper was kinda boring.

https://www.fisherinvestments.com/e...idedly-non-tantrum-inducing-fed-taper-is-here

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

"The Fed officially tapered its quantitative easing (QE) bond purchases today, and far from triggering a tantrum, it ended up being a giant snooze. Instead of being rocked by the news, the S&P 500 flipped from slightly negative on the day before the announcement to close up 0.7%. The 10-year US Treasury yield rose all of 4 basis points on the day, from 1.55% to 1.59%.[ii] Most commentary on the move was laced with sleep aid, with the notion of a “taper tantrum”—prevalent mere months ago—largely disappearing down George Orwell’s famous memory hole. About all pundits could conjure up in the way of angst were questions about when the Fed would hike rates. Let this be a lesson: Markets pre-price widely expected events, including monetary policy decisions, which don’t have a preset market impact.

We don’t often give central bankers kudos, but we would like to start by presenting Fed head Jerome Powell and friends the (ironically named) Mark Carney Award for Acting in Accordance with Forward Guidance, rather than saying A but doing B at the last minute.[iii] The minutes from the Fed’s July meeting revealed monetary policymakers “judged that it could be appropriate to start reducing the pace of asset purchases this year.”[iv] In his late-August (virtual) address at the (virtual) Jackson Hole central banker confab, Powell reiterated that stance and said he believed inflation had made enough “substantial further progress” to warrant tapering. Minutes from September’s meeting teed up this month as Taper Decision Day and outlined a potential path for “monthly reductions in the pace of asset purchases, by $10 billion in the case of Treasury securities and $5 billion in the case of agency mortgage-backed securities (MBS).”[v] That is precisely what the Fed announced today, with the reduction beginning this month. The policy statement left some wiggle room to change course in the future if economic data veer unexpectedly,[vi] but otherwise, QE is set to conclude in June.

And that was that! No fireworks. No big market swings. The tantrum pundits wrote about repeatedly over the summer just hasn’t happened. The S&P 500 is now up 5.1% since those July meeting minutes were released in mid-August.[vii] 10-year Treasury yields are up 33 basis points.[viii] That is even smaller than its move during 2013’s taper talk, which we view as the alleged tantrum that wasn’t. In our view, this echoes the general non-reactions to the Bank of England’s (BoE’s) decision to halt QE outright, the European Central Bank’s taper that chief Christine Lagarde swore wasn’t a taper, the Bank of Canada’s quiet tapering for most of this year, and the Reserve Bank of Australia’s abandonment of its “yield curve control” policy, which set official targets for 3-year yields. None of these moves caused a big ruckus in stocks.

We think this speaks volumes about how markets work. All the hype about 2013’s alleged taper tantrum, warranted or not, set expectations globally for a tantrum this time around. But markets have a long history of pre-pricing popular expectations, then doing something different. All those taper tantrum fears were self-tapering, evidently.

In a perfect world, people would learn the lesson and stop fearing the Fed’s every move toward “tightening,” which we use scare quotes for because ending QE is the opposite of tightening. (More on that here.) But given the shifting focus to rate hikes, we rather doubt it. On the bright side, the heightened focus on a policy lever the Fed won’t pull for several months at least means it, too, will likely be fresh out of surprise power whenever the time comes. We wouldn’t sweat it.

In our view, this whole central bank obsession is misguided. Monetary policy is but one variable affecting the economy, which is far too complex for the Fed to control by tweaking one rate here and another rate there. The US economy is too messy and decentralized, which is a good thing—albeit a factor in recent supply chain disruptions. Moreover, no set level or direction for interest rates is inherently good or bad for the economy or stocks. The appropriateness of any policy depends on prevailing conditions at the time, including the yield curve. The thing we think everyone misses about QE is that it flattens the curve, while tapering and ending it enable the curve to steepen by removing some downward pressure on long rates—hence we see today’s move as an incremental positive. Aggressive rate hikes down the road could invert the yield curve, but there is no indication that will be a risk any time soon.

The good news is, you don’t need to identify any of this in advance. Yield curves aren’t timing tools. The global yield curve’s extremely shallow inversion in 2019 didn’t cause a bear market or recession. Other, deeper inversions have presaged tough times, but they weren’t triggers—just warning signs. The allegedly flattening sections of the curve that pundits have flagged more recently—be it the 2-year – 10-year spread or 5-year – 30 year span—are largely meaningless. Banks get most of their financing at overnight rates, not via 2-year and 5-year time deposits.

We suggest looking at the bigger picture. The economy is still growing despite the supply chain headaches and other headwinds, and central banks haven’t done anything to make that less likely over the foreseeable future. With sentiment still hung up on the mere possibility that these institutions could eventually upset the applecart, expectations are staying in check, likely leaving plenty of room in this bull market’s wall of worry."

MY COMMENT

EXACTLY. I hear NOTHING about tapering today. The financial media has already moved on....there are NO clicks to be had with this issue. Think back on all the.....fear mongering, drams, turmoil and gnashing of teeth......by the media on this issue over the past 6-12 months. Think back on the many times that all the DRAMATIC attention to this issue caused short term market fluctuations and short term or fearful investor reaction. In the end it ends up like most topics that are RELENTLESLY fear mongered in the media.......NEVER_MIND.

A CLASSIC example of why any long term investor is SMART to simply ignore all the so called experts and .....especially......the financial media.

SO......we move on from here......"another disaster averted".......yeah right......in the end the only disaster is to th accounts of investors and traders that got caught up in all the BS on this issue and allowed it to control their behavior to the detriment of their money and personal financial security. In the end the RATIONAL POSITIVE VIEW......wins out over the IRRATIONAL NEGATIVE view.

 

WELCOME back Dax. Sounds like you are doing well.....nothing wrong with a +12% year to date gain. You are young and have the power of time and compounding on your side. Slow and steady wins the race. As a young guy with good risk tolerance and a good understanding of investing you can certainly take more risk.

I will say however.....young guys in general......should BEWARE the temptation to.....chase returns. I think you are too smart to get caught up in that game. You appear to be taking a very realistic and reasonable approach to considering stocks to add to your portfolio.

 

YOU are so right Ragin Cagin. Some day....eventually......they will split and there will be a HUGE rally in the stock. AND....at some point....they do need to start to give money back to share holders with a nice dividend. I have NO PROBLEM as a shareholder taking my....."dividend".....in the form of money being invested in company infrastructure and employees. I would much rather see a company invest in their future than do WORTHLESS stock buy-backs.

 

I am sure you know this Zukodany.....but there are fantastic deals to be had on vintage and antique Grandfather clocks. We bought a new one, which was beautiful, about 35 years ago......we gave it to one of our kids a year or two ago. The nice thing about the antique and vintage clocks is they are out of favor now with younger people.

I have good memories of my grandmothers house and the couple of clocks that she had with the weights and pendulum and chime throughout the day and night. One of the few things I have from her house is a Seth Thomas mantel clock that has a nice chime.

 

Trahn......your post is so true. I do agree with your analysis on APPLE. In fact......I dont think you can go wrong with owning ALL of the companies that you mention.....Apple, Microsoft, Amazon, Google and Telsa. Of course I am prejudiced......since I own them ALL.

Happy investing........back to you and your boys Trahn. What you are doing to provide for the future of your children is commendable. WELL DONE.

 

WOW, WOW, WOW,......a really BIG day today. I suspect that most of the investors posting on here are doing very nicely so far today. Too bad it is not the end of the day....right now. I just looked at my account and EVERYTHING is green with nice gains in......Amazon +2.28%....Nike +1.29%....Costco +2.36%....Nvidia +7.48%....Home Depot +1%....Google +1.59%.....and....Tesla +2.27%.

Yes.....I am celebrating WAY TOO EARLY in the day. Someone has to PUSH and CHEER-LEAD this market. I am assuming that Emmett made a few calls this morning........no one wants a middle of the night visit from one of the clowns. WAY TO GO....Emmett.

So....just to tempt the fates.....we are all set up for a great close to the week......we are all set up for a great close to the year. There is money to be made.....and....WE are ALL going to make it.

 

Just to sum up what we already know.

Stock market news live updates: S&P, Nasdaq pop to new records after Fed; Tesla rockets higher

https://finance.yahoo.com/news/stock-market-news-live-updates-november-4-2021-221850383.html

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

"Stocks opened mixed Thursday, with tech stocks and the broader market setting new highs as investors digested the the Federal Reserve's decision to begin paring back some of its monetary policy support as the economic recovery progressed.

Although the Dow slipped, tech stocks were boosted by Tesla, which set a new record high above $1200 per share, and helped the Nasdaq set a fresh record. The S&P 500 also eked out a new high.

A day earlier, all of the major benchmarks set records, with the Fed's latest monetary policy decision compounding with optimism over a slew of stronger-than-expected quarterly corporate earnings results.

The Fed's decision on Wednesday unfolded the way many investors had been expecting, wherein the central bank formally announced it would begin tapering its pandemic-era asset purchase program starting this month. That came as Federal Open Market Committee members deemed that the economy had made "substantial further progress" in recovering to warrant the gradual removal of this policy support.

But importantly, the newly announced contours of the Fed's tapering plan appeared to appease equity traders.

"The Fed has baked in some flexibility in their tapering," Ryan Nauman, Zephyr market strategist, told Yahoo Finance Live on Wednesday. "They were very clear that in November and December how much they were going to taper. After that, they did not put in a dollar amount on it."

Specifically, the Fed said it would begin reducing its asset purchases this month by a total of $15 billion, and then by another $15 billion in December, but said the outlook for the pace of tapering in the future would depend on "changes in the economic outlook." Fed Chair Jerome Powell also reiterated his prior stance that the ultimate end of the tapering process next year would not automatically signal the start to interest rate hikes.

"So they added some flexibility, and a lot of it has to do with the uncertainty around inflation," Nauman added. "And even though they said inflation is transitory, they added that word 'expected,' which kind of hedges their bets a little bit and buys them some more flexibility. And finally I think that [last] piece ... is the timeline. They added more transparency, more clarity to the timeline and the markets really liked that ... that transparency showing that they're expecting inflation to start slowing during mid-2022, Q2, Q3."

Separately Wednesday afternoon, third-quarter earnings season rolled on with a parade of names across industries reporting results. Booking Holdings (BKNG) share rose after third-quarter results pointed to a pick-up in travel trends especially in Europe, with revenue jumping 77% over last year to top Wall Street's estimates. Semiconductor company Qualcomm (QCOM) also posted better-than-expected quarterly earnings, revenue and guidance, suggesting strong demand was buoying the company despite a global chip shortage and supply chain snarls. Etsy (ETSY), on the other hand, offered a lower-than-expected forecast for the holiday shopping season, with the e-commerce site losing some momentum after a surge in online sales over the course of the pandemic.

10 a.m. ET: US trade deficit hits new high

The Commerce Department said U.S. the trade gap surged 11.2% to a record $80.9 billion in September. Exports tumbled 3.0% to $207.6 billion in September. Goods exports plunged 4.7% to $142.7 billion. The decline was led by industrial supplies, with crude oil exports decreasing $1.0 billion. Imports rose 0.6% to a record $288.5 billion. Goods imports rose 0.8% to $240.9 billion, also a record high."

MY COMMENT

YEP......nothing new here....and that is a good thing. At this point.....no news is good news. If we can hang with the economy and news as they are right now....there is NOTHING in the way of the markets. BUT....looking forward the next big event will be the forth quarter earnings. I am probably geting ahead of myself since we are STILL in the middle to third quarter reporting.....although they will be winding down over the next 3-4 weeks. It has been a very successful earnings period for investors with the reports BEATING the expectations.

 

Here is the economic news that no one will care about since we are seeing a big rally today.

Weekly jobless claims better than expected in another sign of healing for employment

https://www.cnbc.com/2021/11/04/us-weekly-jobless-claims.html

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

"Key Points

• Weekly jobless claims totaled 269,000 last week, the lowest pandemic-era total and better than the 275,000 estimate.
• Continuing claims declined to just over 2.1 million. Both totals were the lowest since March 14, 2020.
• Productivity plunged 5% in the third quarter, the biggest slump since 1981.
• The trade deficit expanded to $80.9 billion, a fresh record amid growing gaps with China and Mexico.

The U.S. unemployment picture improved again last week, with initial filings for unemployment insurance falling to another pandemic-era low.

First-time claims dropped to 269,000 for the week ended Oct. 30, down 14,000 from the previous period and better than the Dow Jones estimate for 275,000, the Labor Department reported Thursday.

The decline in filings comes amid a rollback in special programs initiated during the crisis, with the total of those receiving benefits under all programs dropping another 157,731 to 2.67 million.

As the jobs picture clears up, the four-week moving average for claims, which helps smooth weekly volatility, fell 15,000 to 284,750. A year ago, the average was 791,000, and it was 225,500 in March 2020 just before the Covid pandemic declaration sent more than 20 million Americans to the unemployment line.

Continuing claims, which run a week behind the headline number, declined 134,000 to just over 2.1 million.

All of the jobless totals are the lowest since March 14, 2020.

“The fifth straight weekly drop in jobless claims, to a new pandemic low, is consistent with all the other evidence pointing to labor market tightness,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics. “With demand reviving post-Delta, the bar for layoffs is high and rising. Claims appear to be on course to reach the pre-Covid level early next year.”

The claims report comes a day before the Labor Department’s closely watched nonfarm payrolls count, which is expected to show growth of 450,000 for October.

Though the most recent claims report falls outside the survey week the government uses for its official count, the declining total represents a jobs market healing from the pandemic abyss but also facing a series of unique obstacles.

American businesses have been hit with a chronic labor shortage that has caused a number of ills, including shorter hours, less product on shelves and escalating inflation. Responding in part to the rising price pressures, the Federal Reserve on Wednesday said it would begin reducing the amount of support it is providing for the economy by slowly tapering its monthly bond purchases.

In other economic news Thursday, U.S. productivity growth was worse than even the expected decline of 3.2%, falling 5% for the biggest quarterly drop since the second quarter of 1981, the Bureau of Labor Statistics reported.

At the same time, unit labor costs soared 8.3%, which is a combination of the productivity decline plus a 2.9% increase in hourly compensation. That increase was more than the 7.4% Dow Jones estimate.

“The biggest drop in productivity since 1981 is a consequence of the Delta Covid hit to growth, and it tells us nothing about the underlying trend,” Shepherdson said. “We remain optimistic that productivity growth will average 2%-plus over the next couple years, at least, as firms use some of their abundant resources to start rebuilding the capital stock, following a cycle in which businesses persistently under-invested.”

Also, the trade deficit for goods and services totaled $80.9 billion in September, an increase of $8.1 billion monthly and a fresh record. The growing shortfall came as the deficit with China increased by $3.4 billion, or 12%, and the shortfall with Mexico grew by $2.3 billion, or 35.4%."

MY COMMENT

Somewhat of a mixed bag. Nice to see that if you end the.....free money.....people will start to dribble back to work. The productivity numbers and wage numbers are a KILLER to small business......the GUTS of the USA economy. I am assuming that these represent a TRANSITORY event.

 

Anyone UP for another little bit of positive news today?

The Ten Year yield is nicely DOWN after the start of tapering. Current yield is 1.537%.

Mortgage rates are down a bit too....and remain at historically low levels.