The Long Term Investor

Good.....andyvds. I was curious. I think it is fine for people to take risk as long as they appreciate what they are doing. Obviously my own portfolio is very concentrated toward the big tech also. In my view.......that is the future.

 

That is an interesting trading idea TomB16. I am sure there must be traders that specialize in this sort of trading as a "niche" in the trading world. An interesting concept........and a good observation.

 

I HOPE this is the last thing I post about the OMI variation. It appears now that EVERYONE is.....quickly...... walking back their prior DOOM&GLOOM statements of a few weeks ago.

WHO, US Scientists Say Omicron No Worse Than Other Virus Variants

https://www.newsmax.com/newsfront/who-scientists-omicron-covid/2021/12/08/id/1047786/

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

"The omicron variant appears to be no worse than other coronavirus strains, top scientists from the WHO and the United States told AFP, while cautioning that more research is needed to judge its severity.

The hopeful assessments came as global concern grew over the heavily mutated variant, which has forced dozens of nations to re-impose border restrictions and raised the possibility of a return to economically punishing lockdowns.

While it is likely more transmissible than previous variants, "the preliminary data don't indicate that this is more severe," the World Health Organization's second-in-command told AFP.

"In fact, if anything, the direction is towards less severity," WHO emergencies director Michael Ryan said in an interview on Tuesday, insisting though that more research was needed.

Ryan also said it was "highly unlikely" that omicron could fully sidestep protections provided by existing Covid vaccines.

"We have highly effective vaccines that have proved effective against all the variants so far, in terms of severe disease and hospitalization... There's no reason to expect that it wouldn't be so" for omicron, he added, pointing to initial data from South Africa, where the strain was first reported.

However, Ryan acknowledged that it was possible that existing vaccines might prove less effective against omicron, which counts more than 30 mutations on the spike protein that dots the surface of the coronavirus and allows it to invade cells.

Top US scientist Anthony Fauci echoed the WHO's view, saying omicron did not appear worse than prior strains based on early indications -- and was possibly milder.

The new variant is "clearly highly transmissible," very likely more so than delta, the current dominant global strain, Fauci told AFP.

"It almost certainly is not more severe than delta," he said. "There is some suggestion that it might even be less severe."

But he noted it was important to not over-interpret the data because the populations being followed skewed young and were less likely to become hospitalized. Severe disease can also take weeks to develop.

"Then, as we get more infections throughout the rest of the world, it might take longer to see what's the level of severity."

The detection of the first omicron cases two weeks ago coincided with surges in infection numbers across the world, and the variant added fuel to concerns about a global Covid resurgence.

Omicron has so far been found in 57 countries around the world, the WHO said. No deaths have yet been associated with the variant.

Ryan stressed the need for all countries to help detect omicron cases and research its behavior.

"The more and better data we collect in the next two weeks, (the better chances) of a clear conclusion regarding the implications of this variant," he said.

As European Union health ministers met Tuesday to find ways to coordinate their response, Norway announced it will tighten restrictions to combat its surge.

A suspected outbreak of omicron last week among dozens of partygoers who had all been vaccinated led to new restrictions in and around the capital Oslo.

Neighbouring Sweden also said Tuesday it would launch a series of anti-Covid measures.

Elsewhere in Europe, Poland said that from December 15, it will restrict the number of people allowed in churches, restaurants and theatres, and make vaccination compulsory for healthcare workers, teachers and the military from March 1.

While the positive initial assessments of omicron helped lift the mood, especially among global markets as fears of another economic downturn subsided, the variant's emergence has highlighted that the fight against the pandemic is far from over.

Covid-19 has officially killed more than 5.2 million people around the world since it was first declared in late 2019, although the true toll is likely to be several times higher.

Scientists and health experts say vaccinations and continued social distancing remain key to defeating all variants of the virus, including omicron.

"The virus hasn't changed its nature," Ryan said. "The rules of the game are still the same."

But vaccine requirements have sparked resistance in many countries, either because of misinformation and conspiracy theories or the economic and logistical impact of such mandates.

Around 4,000 people protested in Brussels on Tuesday against a plan by the Belgian government to make vaccines compulsory for health workers from early next year.

"We are in favor of vaccination, but why only health workers?" said nurse Perrine.

"Because everyone must be vaccinated, it is everyone or no one.""

MY COMMENT

WELL.....I guess wee now have to BAN travel from 57 countries. What a HUGE joke these people are. A few weeks ago the WHO, Dr F., and all the rest were total.....DOOM&GLOOM. Now they all have to quickly walk back that BALONEY so they can claim later they were right all along and are the......"experts".

The impact of the FEAR MONGERING on the world, freedom and the financial markets is massive. They are driving people CRAZY this this constant GARBAGE. Including the latest pronouncements that I am seeing in this article and elsewhere......that....YES.....the vaccines will work against this variant.

We need to STOP the knee-jerk IDIOCY and let the world and people be FREE in their lives. We have plenty of ammunition to now deal with this virus.......STOP THE INSANITY. This is definately good news for investors going forward.

 

I looked at my account and it was ALL in the red except for one stock. BUT....we are early in the day and after the HUGE run up we saw over the past couple of days.....it is normal to expect some profit taking and portfolio adjustments.....mostly by the investing professionals.

 

When we were kids......in high school and college.....my parents would give us 5 shares of some stock for Christmas and once in a while a birthday......in addition to our regular presents. I was very interested in investing even at that age and it sparked my lifelong investing interest. My sibling.....no impact......in fact I have handled their investing account for many decades now since they are not interested and trust me to take care of it.

An Expert’s Guide to Gifting Stocks
Whether you’re giving to a child or a nonprofit organization, the gift of stocks will have a lasting impact.

https://www.worth.com/experts-guide-gifting-stocks/

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

"When you ask your children or grandchildren what they want for the holidays, their list probably includes toys, electronics and items you don’t even understand. Most likely, they will enjoy the present for a few days and move on to the next thing. Wouldn’t it be great to give a gift that will last a lifetime? Have an impact? Give the gift of sharing in the growth of our economy over the decades ahead. Give the gift of stocks.

What Are the Benefits of Gifting Stocks to Children?

I understand the joy on a child’s face when they get a train set or a bicycle. But will they shout with joy when you explain that they now own a portion of the earnings and cash flow from a bunch of companies? Probably not.

The joy from gifting a stockwill not be immediate. But teaching a child about investing is an opportunity to talk about what the future may bring them, how people and companies create wondrous new technologies and what their role might be in that growth and innovation. That can be exciting. It’s a chance to discuss the benefit of delaying gratification today for a better tomorrow.

Gifting stocks teaches the importance of saving and investing for the future. Patience. Discipline. Old-fashioned ideas, but like the compounding of interest, they have such impact over time.

What Are the Best Ways to Gift Stocks to Children?

1.Custodial (UTMA) Accounts

Open up a custodial brokerage account for the child you’re gifting to. Discuss the products or services they like and the companies behind them. It will also be fun to discuss the performance of the stocks you choose. Perhaps you can have an “investment committee” meeting once a month. For extra credit, compare the return of the individual stock with an S&P Index fund.Both you and your kids might be surprised by the lessons you learn.

2. 529 Plan

Most parents are thinking about saving for their kids’ college education. The most efficient way to start saving: Open a 529 college savings plan account with your child as the beneficiary. Relatives or even friends can also make gifts. You can invest in diversified stock funds, the earnings grow tax-free and qualified withdrawals are free from federal and state income taxes.

3. Custodial Roth IRAs

Many kids earn money from part-time or summer jobs, such as working as a camp counselor. If they have earned income, a parent can make a gift to a custodial Roth IRA. Let’s say a child earned $1,000 over the course of a year. They can keep that money, while you gift $1,000 to their Roth IRA, which can be invested in stocks. The money grows tax-free. They will thank you in 50 years.

Wow, 50 years! That won’t bring an immediate scream of joy. I did this for my girls with their first jobs and often got a “thanks mom, what’s for dinner?” But now that they are in the working world and are contributing to their own 401(k)s, they appreciate the Roth IRAs.

Other Considerations for Gifting Stocks

Can I Gift Stocks to Nonprofits?

Giving stocks that have appreciated quite a bit over the years to a nonprofit is a very effective strategy. By gifting these securities directly, you eliminate paying the capital gains you would have incurred if you had sold the securities and donated the cash proceeds, which may increase the amount available for charity by up to 20 percent.

What About Cryptocurrencies? Do Those Make Good Gifts?

That’s a little trickier. I would stick with traditional stocks or funds that have a long history of creating wealth. Cryptocurrencies are more speculative—maybe not a great gift.

So, as you are finalizing your holiday gift list, add stocks next to the socks. Giving the gift of stocks will have a lasting impact on a child or nonprofit organization. "

MY COMMENT

There is no better way to spark interest in investing......and....at the same time....educate your kids to the power of investing for the future. Some kids will take to it and others will not. BUT....this sort of education of the next generation.......should be on the mind of every parent. For many kids what it sparks will be a lifelong present from their parents that they will understand and appreciate as they get older.

 

I like this little article and it's long term investing message.

This Bull Market Hasn’t Always Been Easy

https://awealthofcommonsense.com/2021/12/this-bull-market-hasnt-always-been-easy/

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

"This was perhaps one of the easiest predictions I’ve made in recent years:


ARKK cannot outperform at this pace forever. There is bound to be a misstep or the style will simply fall out of favor for a period of time.

Cathie Wood’s flagship fund would peak just weeks later. The ARK Innovation ETF was down as much as 40% from its peak in early February of this year.

Wood was outperforming at such an amazing clip that it was bound to come to an end at some point. While ARKK is in a full-fledged crash, the S&P 500 is almost back at all-time highs and barely fell 5% in the recent correction.

Before you go patting me on the back, I wasn’t completely right about what would happen next (yet):


Many of the investors chasing the hot dot will head for the exits at that point. Investors don’t have a great track record when it comes to chasing the hottest fund of the day.

While ARKK has spent most of this year crashing, investors haven’t redeemed the fund en mass just yet.

Consider the fact that assets in the fund peaked at around $28 billion in mid-February. Through the close on Monday, ARKK was down around 39% from all-time highs. If we applied that 39% sell-off to the AUM in the fund we would expect to see a little more than $17 billion remaining in the fund. The actual AUM as of the close on Monday was a little less than $16.2 billion.

So investors have redeemed close to $1 billion from the fund. That’s a lot of money but not exactly people rushing to the exits after someone screamed fire in a crowded building.

That could still happen here. If ARKK’s performance underwhelms for an extended period of time it’s possible AUM could fall in a hurry. The longer this lasts the harder it will be for underwater investors to hang on.

But this isn’t the complete disaster many were hoping for.

I’m stereotyping here, but it seems like it’s mostly older, more experienced investors who assume younger, more inexperienced investors will be the ones who bail from the likes of a fund like this.

For a number of years now more seasoned investors have been warning the noobs out there:


I’ve seen this movie before and I know how it ends.


Unless things are different this time…just wait, you’ll see.


The easy money has been made.


All of these new investors are going to panic during the next bear market.


Now, there is likely some truth or at least partial truth to these statements.


Every new generation of investors has to learn the same lessons as the previous generation. We’re all human after all.

But experience alone isn’t always enough to make you a successful investor. Experienced investors panic all the time. Who do you think holds all of the money that actually moves the markets?

They also miss big trends, hold onto legacy positions for too long, become overconfident in their assertions and can’t see how the world is changing around them.

And while it seems like younger investors have had it easy, there have been plenty of corrections during the current bull market. It’s not like downturns have been outlawed.

Since the last great crash of 2008 there have been plenty of corrections in the S&P 500:


That’s six double-digit corrections since the bottom in 2009, with an average drawdown of nearly 19%.

Sure, these corrections have been relatively short-lived. They can be measured in months rather than years. But there have still been plenty of losses to speak of.

And the S&P 500 has been one of the best performing segments of the stock market in this time.

Look at all of the bear markets in the small cap Russell 2000 index since 2009:


Every time the Russell 2000 has experienced a correction over the past 13 years or so, it’s been a bear market. The average loss is close to 30%. Small cap investors have lived through plenty of pain, even in a rising market environment.

And how about cryptocurrencies which certainly skew younger when it comes to the investor base.

Bitcoin just had its seventh crash of 30% or more since 2017, including a monumental 80% blow-up from the peak in 2017. The S&P 500 has fallen 30% or worse just once in that time.

The youths have been hodling Bitcoin for every single one of these crashes.

Yes, the gains have been wonderful in many parts of the market during this cycle but it’s not like things have gone up in the straight line the entire time. There have been plenty of opportunities to bail.

And who’s to say older investors will be able to navigate whatever comes next any better than new investors?

There are plenty of be older investors who are experts on an earlier version of the world.

Michael Lewis once wrote that it’s young people who are the first to spot new trends when they crop up, especially when it comes to technology:

A child still has time to save himself. To a child, being on the wrong end of the trend is not a sign that it’s time to dig in and defend the old position; it’s a signal to cut and run. Progress depends on these small acts of treason.

We’re all shaped by our experiences and formative years when it comes to how we view the markets.

There are investors right now who are expecting a repeat of 1970s stagflation because they remember those days. There are also investors who expect a repeat of the 1990s boom that followed the boom of the 1980s. Then there are those who are positive this is the second coming of the dot-com bubble peak in 2000.

Maybe there’s some truth in every one of these historical analogies. Or maybe they’re all wrong. We’ll see.


Every investor assumes it will be someone else that’s left holding the bag when the excrement hits the fan.

Young people do have to pay their tuition to the market gods at times. There’s no shame in that. But those youngsters also have time on their side to make up for those mistakes.


The most harmful mistakes often come from more experienced investors who assume they have the markets all figured out."

MY COMMENT

YES....investor behavior never changes. Even with experience we are all subject to the same market and psychological forces. In general.....I actually think the average.....little....retail investor does a pretty good long term job of staying invested. It is usually the .....professionals....that are running around like a chicken with it's head cut off.....every time there is some little market blip.

YES......as a kid I did see some chickens in the situation above......it is STILL a very startling memory.

 

Well......I will post more later. I have a couple of other articles in mind as good material for this thread. I have to get dressed....I have a video call coming up and I dont want to be siting in my bathrobe.

Hopefully....when I make it back the markets will have turned positive.

 

NICE.....to see all the averages in the GREEN today by the close. BUT....iit did not help me....I ended up in the red.......minimal....but still in the red. I also got beat by the SP500 today by 0.60%.

It was one of those days that the particular stocks that I own did not equal the results seen in the averages. I STILL consider it a GOOD DAY.....since the averages being in the green is a good thing.......and.....gives us a chance for a nicely POSITIVE week.

 

I like this little article. It is a pretty good look ahead at all the various issues of 2022. Of course.....a long term investor will simply hold all year....but....it is still good to have some psychological advance warning of issues that might come over the year.

2022 U.S. Market Outlook: Under Pressure

https://www.schwab.com/resource-cen...2-us-market-outlook-under-pressure?cmp=em-QYC

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

"Bear with us as (no pun intended) you read this longer-than-usual outlook!

The 2020 COVID recession was sharp, but short at only two months; while the rebound in activity has also been sharp, but uneven across economic metrics. Overall gross domestic product (GDP) moved from the recovery phase to the expansion phase as of the second quarter of 2021. As highlighted in the visual below, the question heading into 2022 is where we go from here—especially due to the stark reminder on this year’s “Bleak Friday” that the pandemic is nowhere near behind us.

Oh c’mon omicron!
How many times over the past 18 months have we started to breathe signs of relief that the pandemic was rounding the corner to becoming endemic, only to be hit by second or third waves, the delta variant and now the omicron variant?

Based on initial World Health Organization (WHO) findings, the omicron variant spreads more quickly, can cause more serious cases, and/or may decrease the effectiveness of vaccines and treatments. What we’ve learned from the delta variant is that it’s difficult to arrest the spread. What the entire world has learned throughout the pandemic, however, is that it’s the restrictions and/or lockdowns imposed that cause the most economic damage; while countries have vastly different reaction functions.

The rub at this stage in the global recovery is that the economic, supply chain, and inflation backdrop is significantly changed relative to prior waves/variants. The pandemic has exposed instability in complex global supply chains; possibly ushering in a coming secular environment of pervasive supply shocks, vs. the demand shocks that were more commonplace for much of the past two decades. Expect more talk about companies switching from just-in-time inventory management to just-in-case. We all have to wait to see if the effects of omicron are significant; and whether they do more damage to demand, or exacerbate supply chain problems.

What say you LEI?
Without yet possessing more detailed analysis of the threat of omicron, we’re left with more traditional ways to judge the economic landscape for the coming year. As shown below, the Leading Economic Index (LEI), shows that the U.S. economy remains strong and well above the pre-pandemic high. The average span between LEI highs historically, and recession (gray bars) starts has been 12 months. While there is no sign of an imminent peak, a more serious economic threat wrought by omicron, or any number of other threats, could put a dent in leading indicators.

LEI Not Yet Looking Back


Source: Charles Schwab, Bloomberg, The Conference Board, as of 10/31/2021.

Consumers’ strength being tested
Consumer spending drives 70% of overall U.S. real GDP; with the metric of retail sales a proxy for consumption. As shown below, thanks to copious fiscal and monetary stimulus, consumer spending has been on fire; but with significantly different trajectories for goods and services consumption. The wholesale economic lockdown imposed in the spring/summer of 2020 led to an unprecedented divergence; while 2021’s reopening phase led to the start of a convergence. Virus trends hold a key to whether the convergence gets arrested.

Goods/Services Divergence/Convergence


Source: Charles Schwab, Bloomberg, as of 10/31/2021.

One thing is for sure is that the future for certain pockets of goods consumption looks a bit bleak given elevated inflation. As shown below, buying intentions for large-ticket items, including vehicles, houses and household durables have imploded.

Implosion in Buying Intentions


Source: Charles Schwab, Bloomberg, as of 11/30/2021.

The virus, and this year’s inflation surge, have also put a big dent in broader measures of consumer confidence. There is one consumer-based spread that bears watching heading into 2022, as it could represent the first heads-up for a possible recession. Consumers’ confidence about their present situation has weakened, but there’s been an even greater deterioration in their expectations for the future; resulting in a historically wide spread between the two, as shown below (a consistent recession warning in the past).

Consumers Less Optimistic About Future


Source: Charles Schwab, Bloomberg, as of 11/30/2021.

Labor market: headline strength, with confirmations still lingering
Key to the 2022 outlook for the consumer, but also the broader economy and inflation, is the labor market. As shown below, total nonfarm payrolls have made a remarkable recovery since the trough in April 2020; but remain 4.2 million below the pre-pandemic peak. At the same time, the breadth of gains is lessened given the still-anemic labor force participation rate, which (as shown below) has moved sideways since August 2020 and is well below its pre-pandemic peak. While we think that the participation rate has room to increase in 2022—boosted by stronger business capital spending and a broadening out in job creation—the climb will likely be slow.

Strong Payroll Recovery Not Matched by Strong Participation


Source: Charles Schwab, Bloomberg, Bureau of Labor Statistics (BLS), as of 10/31/2021.

Participation vs. resignation
A slower improvement in participation is due to the unfortunate reality that, per the U.S. Census Bureau, 2.5 million individuals are still hesitant to re-enter the workforce because of the virus. Another large slate—estimated by the St. Louis Federal Reserve to be nearly 3 million—has retired early. Finally, a third cohort is reassessing their work/life balance.

In the face of the omicron variant news, it’s clear that the virus will continue to be a factor in the trajectory of labor force participation. A major side effects of the pandemic continues to be workers’ desires and newfound chances to change jobs. With that has come a delay in workforce re-entry and a subsequent strain on businesses’ abilities to fill roles. This, along with early retirements, has culminated in what has been dubbed the “Great Resignation.”

As shown below, job openings remain much higher than any pre-pandemic rate; while the quits rate recently hit a record 3%, signaling workers’ confidence in finding better/higher-paying jobs. While we think both job openings and quits will remain elevated in 2022, current levels are likely unsustainable—especially if some pressure is eased by virtue of a rising labor force participation rate and net job creation.

Power Back to the Worker


Source: Charles Schwab, Bloomberg, Bureau of Labor Statistics, as of 9/30/2021.

The main benefit of elevated job openings and quits has been rising wages. As shown below, the median wage is increasing at annual rate of more than 4% per the Atlanta Fed’s wage tracker; with the lower end of the income spectrum experiencing the fastest wage gains. While we expect wage gains to remain firm, the best days for low earners may be nearing, especially as they continue to find jobs, effectively closing the gap, and as productivity (hopefully) improves.

Wage Growth Wakes Up


Source: Charles Schwab, Bloomberg, as of 10/31/2021. Atlanta Fed's Wage Growth Tracker is a measure of the nominal wage growth of individuals.

Inflation: putting the genie back in the bottle(neck)
Strong wage growth is a key input for the hot inflation environment; and rampant uneasiness is justified, given the Consumer Price Index (CPI) is well above the five-year average of its annual change. That is the widest spread since 1980, as shown below.

Inflation’s Sting


Source: Charles Schwab, Bloomberg, as of 10/31/2021.

Tying inflation to aforementioned trends in consumption, as shown below, core (ex-food/energy) goods inflation has by far been the primary driver of headline core inflation. That makes sense for several reasons:

• The world was effectively forced to shift spending to goods at the expense of services when the pandemic hit.
• Even as restrictions eased this year, goods demand didn’t fade markedly given the services sector faced rolling restrictions.
• Factory shutdowns in Asia (due to the spread of the delta variant) roiled supply chains, pushing goods prices up at an even faster rate.

Inflation Remains Narrow for Now


Source: Charles Schwab, Bloomberg, as of 10/31/2021.

For those reasons, there has not yet been an equivalent surge in core services inflation, which contrasts with the hyperinflation of the 1970s and early-1980s. We believe services inflation has room to rise in 2022, but it could very well be curtailed by the omicron variant; while several forces could put downward pressure on goods prices:

• Reverse base effects: year-over-year changes in the first half of 2022 will be against 2021’s surge in prices, which could bring down CPI growth rates, especially if auto and hotel prices (culprits in 2021’s inflation surge) continue to drop.
• Supply side relief: freight shipping costs have rolled over, the number of containers sitting on docks has dropped, and factory production around the world is improving.
• Boomerang effect: companies’ double-buying efforts to satisfy recent demand is resulting in a swift inventory rebuild, which could bring about an eventual supply glut and attendant cooling in prices.

Mind the generation gap
There are rampant fears of stagflation akin to the 1970s-1980s, but the good news for now is that unemployment is not on the rise. As shown below, the toxic mix of high inflation and a surge in the unemployment rate brought the economy to its knees starting in the 1970s. The combined rate—known as the Misery Index—climbed above 20% at the height of the 1970s’ crisis, more than double the current rate.

Rise in CPI Pushing Up Misery Index


Source: Charles Schwab, Bloomberg, as of 10/31/2021.

A major driver of 1970s’ stagflation was persistently soaring unit labor costs, which weighed on companies’ productivity and profit margins. As shown below, the spread between productivity and labor costs moved in lockstep with profit margins back then; but for now, margins are bucking the latest decline in productivity.

Profit Margins Not Yet Dented by Higher Labor Costs


Source: Charles Schwab, Bureau of Economic Analysis (BEA), Bloomberg, as of 9/30/2021.

Some of that is attributable to globalization and the long-term decline in effective corporate tax rates, with which margins have become inversely correlated over the past couple decades. Yet, in the last year, the main driver of stronger margins was companies’ slashing of both labor and capital during the depths of the pandemic. The faster-than-expected recovery in both demand and pricing power resulted in a goldilocks environment for fundamentals, thus delivering a solid foundation for stock market returns.

We don’t expect productivity to continue its recent weakening trend relative to unit labor costs; but we also don’t think profit margins’ current levels will persist in 2022. That should result in a relatively benign convergence for both series in the chart above. Key to watch will be whether we transition into a “counter-cyclical” inflationary environment, in which companies’ pricing power would fade alongside consumer demand. We do know that the pandemic boosted productivity in certain economic segments, but also unleased a labor market mismatch; while massive stimulus arguably kept many “zombie” companies afloat.

Also important to keep an eye on is whether inflation continues to affect business confidence. As shown below, inflation has been a relatively dormant issue for the past decade, but companies are now facing strains from higher prices and the inability to find skilled workers. An easing in supply chain pressures should help to alleviate costs, especially for small businesses.

Inflation’s Surging Impact on Small Business Confidence


Source: Charles Schwab, Bloomberg, National Federation of Independent Business (NFIB), as of 10/31/2021.

Throughout history, CPI increases of recent magnitudes were typically accompanied by weakness in the stock market. In the pandemic era, asset inflation preceded real economy inflation, with an attendant record-breaking surge in household net worth. The weight of the stock market in terms of the economy, as well as its influence on confidence, cannot be overstated. The next significant drop in asset prices could deliver an outsized hit to economic growth, as was the case in 2001. That year’s recession was a direct result of the bursting of the tech stock bubble in 2000.

Tapering to pick up speed?
Top of mind heading into 2022 is whether the Federal Reserve will speed up the pace of tapering. The Fed announced a pace of reduction of balance sheet additions of $15 billion per month ($10 billion of Treasuries and $5 billion of mortgage-backed securities), but only for November and December. The emergence of the omicron variant put downward pressure on yields, and a knee-jerk assumption of less tightening to come, with an expected three hikes by the end of 2022 shifting to only two.

For now, the Fed plans to complete tapering before it begins hiking rates. Assuming no significant hit to economic activity from omicron, or a retreat in inflation pressures, we do expect the Fed to up the pace of tapering heading into 2022. Based on history, it’s not the timing of the first rate hike that matters, it’s the trajectory and speed once rate hikes begin.

As shown below, in terms of the first year of Fed tightening cycles (middle field) stocks historically performed best under “non cycles” of rate hikes—when no more than two hikes were instituted, before the Fed halted. Stocks also had little trouble digesting “slow” rate hike cycles—when the Fed took a break by waiting at least one FOMC meeting in between each hike. Worst case for the market was during “fast” rate hike cycles—when the Fed hiked rates at most FOMC meetings. As shown in the left field, stocks typically did well in the year leading up to the initial rate hike.


Source: ©Copyright 2021 Ned David Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html. For data vendor disclaimers refer to www.ndr.com/vendorinfo/. Data is indexed to 100 at date of first Fed rate hike. Past performance is no guarantee of future results.

A relationship that bears watching, and may help lay to rest the debate about whether inflation will turn out to be ultimately transitory, is between bond yields and stock prices. As shown below, for three decades starting in the late-1960s, they were mostly negatively correlated. That was an era punctuated by greater frequency of supply shocks, and an over-arching inflationary backdrop. For the two decades that followed, bond yields and stock prices were mostly positively correlated. This has been an era punctuated by a few demand shocks, but very few supply shocks; and an over-arching disinflationary backdrop.

Long Cycles of Bond Yield/Stock Price Correlations


Source: Charles Schwab, Bloomberg, as of 11/26/2021. Correlation is a statistical measure of how two investments have historically moved in relation to each other, and ranges from -1 to +1. A correlation of 1 indicates a perfect positive correlation, while a correlation of -1 indicates a perfect negative correlation. A correlation of zero means the assets are not correlated. Past performance is no guarantee of future results.

After a brief dip into negative territory in mid-2021, the correlation is back in positive territory again. Any sustainable move back into negative territory could signal an inflation regime shift akin to what developed in the late-1960s; which ultimately led to significant policy errors in the 1970s.

A policy error remains a risk for 2022; especially if stock market participants’ optimism continues to be boosted by the (perhaps-erroneous) assumption that the Fed will always have the market’s back. This may be particularly relevant for the younger cohort of investors who have been “educated” about the stock market only during the pandemic era.

Alerting to risks means we don’t get it?
I was recently a guest on Scott Galloway’s very popular Prof G Podcast, and we chatted a bit on the younger cohort of retail traders. Scott has rightly been reinforcing that “for their entire life, the market has gone up [and] if you say otherwise, you just don’t get it.” Scott also noted something I experience quite frequently on Twitter: “There is a surrender-to-the-narrative-or-else attitude online, and it’s really frightening, because if you say Bitcoin is overvalued, or Tesla is overvalued, or whatever popular SPAC is overvalued, these trolls in anonymous accounts come out of the woodwork and start attacking you.”

Narratives—even those bordering on the absurd—can push markets higher than fundamentals justify. At Schwab, we try to live in a world of fundamentals, data, investor sentiment and history; and spend less time focusing on pure narratives. Heading into 2022, what history says about valuations, earnings and sentiment is mixed-to-concerning.

Earnings’ fire becoming less hot in 2022
S&P 500 earnings have been on fire since mid-2020; with a sharp v-recovery into the second quarter peak. Earnings growth, although still strong in an absolute sense, is expected to descend through at least the first half of next year. As shown below, there is a close historical relationship between the growth rate in S&P 500 earnings and the year-over-year change in the index itself. This in and of itself isn’t a warning of impending doom; but is perhaps a message to curb your enthusiasm about future equity market returns remaining as robust as the pace of the past 20 months.

Earnings Growth Rate Tied to S&P 500 Returns


Source: Charles Schwab, I/B/E/S data from Refinitiv, as of 11/26/2021. 4Q08's reading of -67% is truncated at -40%, 4Q09's reading of 206% is truncated at 80%, and 2Q21's reading of 96% is truncated at 80%.

In addition, upward earnings revisions (by Wall Street’s analysts) have taken a turn for the worst, as shown below. This supports our view that companies bucking the broader trend and enjoying higher earnings revisions will continue to perform well relative to the overall market in 2022. It is in keeping with our view that the “quality trade” will persist as a general leader; with the low-quality/highly-speculative trades that dominated the start to 2021 remaining in the rear-view mirror.

Earnings Revisions Under Pressure


Source: Charles Schwab, Bloomberg, as of 11/12/2021. Revisions index measures the number of equity analyst revisions upgrades (positive) and downgrades (negative).

Stocks expensive, unless using “yields lens”
Earnings are a component of many popular valuation metrics. The “heatmap” below shows that most valuation metrics are well into the red (expensive) zone as we head into 2022; with the notable exception of those which measure valuation in the context of low bond yields. (Another take on this, however, is that bonds are expensive, which makes stocks look “artificially” cheap.)


Source: Charles Schwab, Bloomberg, The Leuthold Group, as of 10/31/2021. Due to data limitations, start dates for each metric vary and are as follows: CAPE: 1900; Dividend yield: 1928; Normalized P/E: 1946; Market cap/GDP, Tobin’s Q: 1952; Trailing P/E: 1960; Fed Model: 1965; Equity risk premium, forward P/E, price/book, price/cash flow, rule of 20: 1990. Percentile ranking is shown from lowest in green to highest in red. A higher percentage indicates a higher rank/valuation relative to history.

Honing in on the last row of the heatmap above, market cap/GDP is often referred to as the “Buffett Indicator” given it’s Warren Buffett’s oft-expressed favorite valuation metric. As shown below, never before in the post-WWII era have stocks been as richly valued relative to the size of the economy. This relates back to our concern that the next serious correction or bear market in stocks could have an outsized impact on both confidence and the economy.

Buffett Indicator in Stratosphere


Source: Charles Schwab, Bloomberg, as of 6/30/2021.

Adding salt to that potential wound is the fact that U.S. households currently have more than 60% exposure to equities—about even with the prior peak in 2000, as shown below. It shouldn’t come as a surprise that the higher the equity allocation historically, the lower the subsequent long-term return. This doesn’t necessarily suggest impending doom for equities next year; but it’s a cautionary tale longer-term.

Households’ Exposure to Equities in Rarified Air





Source: Charles Schwab, Bloomberg, ©Copyright 2021 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html. For data vendor disclaimers refer to www.ndr.com/vendorinfo/, 12/31/1951-6/30/2021. Equity allocation (includes mutual funds and pension funds) is % of total equites, bonds and cash. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. Past performance is no guarantee of future results.

Euphoria is not an investing strategy
Just as panic is not an investing strategy, nor is euphoria or FOMO (fear of missing out). SentimenTrader’s Panic/Euphoria Model below shows a recent parabolic increase in euphoria relative to panic. When excessive optimism, heightened complacency, and/or speculative froth is accompanied by healthy market breadth, it’s less of a concern. Given weaker recent breadth trends, the combination bears close watching in 2022.

Euphoria’s Unprecedented Surge



Source: Charles Schwab, SentimenTrader, as of 11/29/2021. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. Past performance does not guarantee future results.

Buying and speculation has increasingly been leveraged by increasing levels of margin debt. Heading into 2022, the ratio of cash at brokers is at a record low relative to record high margin debt, as shown below. Given that margin is being used by a broader cohort of investors, it means that margin calls may come more frequently and after smaller downside moves in stocks; a risk to consider as we head into 2022.

Record High Margin, Record Low Cash Balances


Source: Charles Schwab, Bloomberg, ©Copyright 2021 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html. For data vendor disclaimers refer to www.ndr.com/vendorinfo/, as of 10/31/2021.

What to do
I don’t manage portfolios, but I have much sympathy with what two investing legends have recently said. Leon Cooperman has been very vocal about being “a fully invested bear;” and Julian Robertson believes that “trying to sell short in this market is like being run over by a train that’s going to derail a mile down the road.”

The environment that persisted in 2021 could persist in 2022. As shown below, for all the talk of a “resilient market,” under the surface, the churn in terms of drawdowns was significant. Rotational corrections are preferred over the bottom falling out all at once; but there is a risk that indexes, at some point, reflect more of the weakness that has persisted under the surface.


Source: Charles Schwab, Bloomberg, as of 11/26/2021. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. Past performance is no guarantee of future results.

Macro backdrops that include slower growth, and a move from a loose to tighter monetary policy, tend to usher in higher intra-market correlations and greater tail risks. We continue to recommend a bias toward quality and not trying to time short-term sector rotations. For stock pickers, we believe factor-based investing makes more sense than simple sector-based (or traditional growth/value index-based) investing. In keeping with that, heading into 2022 we have nine out of 11 S&P sectors rated “neutral” with only one “outperform” (Healthcare, representing the best “quality” proxy) and only one “underperform” (Utilities, which represent an overvalued sector even though they still reside in value indexes).

Readers are keenly aware of concerns we have about the investing landscape in 2022. But what should not (never) be inferred is that we suggest investors should be “getting out.” One of my oft-expressed mantras about investing is that neither “get in” nor “get out” is an investing strategy—that simply represents gambling on moments in time, while investing should always be a disciplined process over time.


That discipline should involve diversification—across and within asset classes—and periodic rebalancing. Investors need to remain extremely alert to the risks of monetary policy, inflation, speculative froth, and ongoing virus concerns. But what ultimately matters is not what we know about the future; it’s what we do along the way."

MY COMMENT

This article is a good rational summary of the various issues and economic events facing the markets as we head into 2022. It is really impossible to know how all this.....stuff.....will translate into stock gains or losses. the ONLY way to deal with this.....therefore.....is to be a long term investor and simply hold through it all. That is my mindset....of course.

I find it interesting that the start of the article mentions the OMI VARIATION view of the world as expressed by the WHO a few weeks ago.....all DOOM&GLOOM. OBVIOUSLY....reality has now taken hold and even the WHO today has backed off that view. After all who wants to look like an IDIOT......in the face of FACTS. I am sure all those that were previously spouting maximum DOOM&GLOOM will.......in the future....be saying.......What, I never said that.

Bottom line for me......we are very early in the re-opening and the FED has not even started to taper and raise rates yet. For my money the name of the game......as usual.....in terms of stocks will be.....quality, quality, quality. That is fine with me since this is the BASIS for my entire long term investing strategy. Owning the GREATEST companies in the world will provide the BEST basis for nice gains in ANY YEAR.

I am looking forward to the......NEW YEAR. It will be interesting......and....as usual a great opportunity to observe human behavior in action.

 

We are on a.......THREE TRILLION.....dollar watch for Apple. They are close to achieving the $3 Trillion dollar market cap level. A historic level for any company. A few good days and they will be there.

 

Wile we are waiting for the markets to find their direction today......something that usually happens between about 10:30 and 12:00.......here is a little POSITIVE news.

Glimmers of hope emerge in the supply chain nightmare

https://www.cnn.com/2021/12/09/business/inflation-supply-chains-economy/index.html

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

"Epic port congestion is easing. Shipping prices are falling from sky-high levels. Deliveries are speeding up a bit. There are growing signs that the supply chain mess is finally starting to get cleaned up.

That's not to say the supply chain nightmare is over. It's not. And the situation may not get anywhere near back to normal anytime soon.

Businesses are still grappling with a troubling shortage of truck drivers. Critical components, including computer chips, remain scarce. And the Omicron variant threatens to put renewed pressure on supply chains.

Still, there is evidence that bottlenecks are beginning to unclog. That is encouraging given that unprecedented stress on supply chains has contributed significantly to historic levels of inflation in the United States.

"I'm increasingly confident that the worst appears to be over," Matt Colyar, economist at Moody's Analytics, told CNN. "There is data suggesting that things are improving. But there's still a ton of uncertainty."

The supply chain chaos was largely caused by the pandemic. Logistics networks came under enormous strain when the world economy shut down at the onset of Covid — and then rapidly reopened. Demand for goods skyrocketed and just-in-time supply chains buckled under the pressure. Covid outbreaks and inconsistent health protocols around the world added to the mess.

Factories signal progress

But glimmers of hope can be found in recent economic reports.

For instance, the backlog of orders index in the Institute for Supply Management's manufacturing survey fell to 61.9 in November, down from a record high of 70.6 in May. Backlogs are still growing, but at a slower pace. And supplier delivery rates appear to be improving, albeit from very poor levels.

"It is still going to take a long time for the supply chains across the country to be fully restored, but at least the first steps appear to be in place towards normalcy," Thomas Simons, economist at Jefferies, wrote in a recent note to clients.
The Dallas Federal Reserve Bank's manufacturing index showed the level of unfilled orders ticked lower in November and the amount of time to deliver goods fell.

The improvement in delivery times is encouraging because it is happening even as new orders, production and shipments increase.

"This suggests the improvement is because the surveyed manufacturers' were better able to get stuff out the door, not just because demand cooled down and the phones stopped ringing," said Colyar of Moody's.

Port congestion, shipping prices ease

Improvement has been more dramatic in clearing up the traffic jam of container ships parked outside California ports.
As of Wednesday, there were 30 container vessels anchored off the Ports of Long Beach and Los Angeles. That's down from a peak of more than 80 at the height of port congestion.

The Biden administration has made a concerted effort to ease pressure on ports, including by convincing the Port of Los Angeles to move to 24/7 operations.

In another positive, ocean borne shipping costs fell 5% in November, though they remain "multiple times" higher than pre-Covid levels, according to Oxford Economics.

Barclays says global shipping costs "appear to have peaked."
"We see the rapid decline in container vessels waiting to unload and falling global shipping prices as possibly leading to some easing in supply bottlenecks," Barclays economists wrote in a recent report, "which if continued, could downstream into other modes of transportation later."

White House hails progress on ports

Sameera Fazili, deputy director of the White House's National Economic Council, told CNN she is "heartened" by the fact that long-dwelling containers at the Ports of Los Angeles and Long Beach have come down sharply.

"That's huge. It shows that we've finally restored some fluidity to the system and taken away some of that congestion," said Fazili, who leads coordination of the Supply Chain Disruptions Task Force. "We're happy with the progress but not taking our foot off the gas."

Fazili highlighted that the Biden administration was able to recently convince one leading ocean carrier to commit to offering $100 discounts on containers that are quickly picked up and $200 if they are picked up during off-peak hours.

"We're hopeful that other ocean carriers will see that as a model and seek to emulate it," Fazili said. "That's a very highly concentrated industry and they've seen record-breaking profits."

Some business leaders are also cheering signs of progress.
CEOs "see supply chains starting to open up, although much more slowly than they would like," Joshua Bolten, CEO of the Business Roundtable, told reporters last week.

'Trucking, trucking, trucking'

Others are less optimistic.
"Not only is anyone not seeing a light at the end of the tunnel right now, they are not expecting to see one until well into 2023," Geoff Freeman, CEO of the Consumer Brands Association, told CNN.

Freeman, whose trade group represents companies including Coca-Cola, Kellogg and Procter & Gamble, said the consumer-packaged goods industry has a mostly US-based supply chain, meaning it doesn't feel the benefits of the port improvements as much as others.

"The ports are one modest player in this situation," Freeman said. "For us, it's really about trucking, trucking, trucking. The trucking situation is not getting any better."

The shortage of truck drivers is not new, but it has been made worse by Covid. The American Trucking Associations estimate the industry is short a record-high 80,000 truck drivers.

It's hard to see how supply chains can get back to healthy levels until the truck driver shortage eases.
Freeman encouraged the Biden administration to convince more states to follow in the footsteps of California, South Carolina and Ohio by relaxing state regulations that limit maximum truck weights.

"The White House could be using the power of the bully pulpit here to encourage more states to get in line," Freeman said.
Asked if the White House has considered leaning more heavily on states to relax trucking weight restrictions, Fazili said: "Overweight permits are a state-level decision. When states call us, we make sure they have the information they need to take action."

Fazili added that the administration continues to work with the industry to try to find solutions on trucking capacity.

Chip shortage lingers

There remains a lot of uncertainty over when supply chains can get back to normal, or something close to it.
Most (58%) economists surveyed by the National Association of Business Economics anticipate that the supply of goods will begin normalizing in the first half of next year. And nearly a quarter (22%) say this process has already started or will before the end of this year.

The worldwide shortage of computer chips continues to snarl global supply chains, limiting the production of a range of products, including iPhones and new cars.

The chip shortage is having an "extreme impact" on the autos industry, causing the largest decline in vehicle inventories on record, according to Citigroup. And that has caused prices to surge on new and used cars, contributing to the fastest rate of inflation since the early 1990s.

Commerce Secretary Gina Raimondo told CNN last week that this highly disruptive shortage is unlikely to go away until "deep into 2022."

The Omicron factor

Raimondo also conceded there is reason to worry Omicron will increase stress on global supply chains by making people scared to work in tight quarters like factories.

There's also a risk that Omicron snarls the production and shipment of goods in China and other countries that have zero-tolerance Covid policies.

"That's the worst-case scenario for a global economy struggling to get goods at the rate demand is asking for them," said Colyar, the Moody's economist.

All of this is another reminder of how the world economy remains subject to the whims of the pandemic, for better or worse.
For its part, the Biden administration emphasizes it's not seeking to get back to business-as-usual — because that turned out to be a broken model.

"Covid laid bare that we had really weak supply chains," said Fazili. "Returning to a pre-pandemic norm isn't what we are aiming for here. We are trying to build back stronger and in new ways.""

MY COMMENT

No doubt.....you will not see much of this in the media....even the financial media. They NOW live off of doom and gloom and fear and panic.

BUT.....the media does not create the ACTUAL reality....although they create the reality in people's brains. the supply issues WILL continue to resolve and it will SNOWBALL month by month. These issues are creating the VAST MAJORITY of the inflation issues........and....those issues will ALSO resolve. this is just part of the NORMAL process to re-open a disrupted economy........it TAKES TIME.

 

AMEN....to this little opinion article from......CNN.

Analysis: Did the press overhype the danger posed by the Omicron variant?

https://www.cnn.com/2021/12/08/media/press-omicron-variant-reliable-sources/index.html

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

"When news of Omicron emerged over the Thanksgiving holiday, media organizations scrambled to cover the new variant and what it might mean for the world. The problem, however, was that very little was known about it at the time. And so, the absence of data created a void that was quite unfortunately filled with a lot of speculation.

The speculation about Omicron did not err on the optimistic side of things. Instead, worst case scenarios played out in stories. Scary quotes about a "Frankenstein" escape variant were plugged into headlines, chyrons, and push alerts.

The situation was portrayed as a five-alarm fire. Consuming even a tiny dose of the coverage — whether it was through television, the internet, or even a good old-fashioned newspaper — probably left a not insignificant part of the audience wondering whether the current vaccines would offer any protection at all against the variant.

"When the variant was identified basically nothing was known about the virus other than it contained dozens of mutations. There was no clinical or epidemiological data to provide any kind of context to the public," CNN medical analyst Dr. Jonathan Reiner told me Wednesday, saying that he believes the press had "overhyped the peril" of Omicron. "Yet without any scientific foundation the public was warned that this variant could evade all our vaccines. As a consequence the stock market tanked and governments closed their borders. All of this without any data. ... Now almost two weeks out, thing look less dire."

Indeed, fast forward to present time and the actual data is presenting a different picture.

Pfizer said Wednesday that a booster of its vaccine restores immunity to levels comparable to how its two-dose regiment performs against the original strain of the virus. Researchers in South Africa have said that early indications show Omicron might cause less severe illness than other variants. And it appears that at least one drug company's monoclonal antibody treatment is also effective against Omicron.

Tenor of coverage matters

To be clear, I'm not saying that Omicron doesn't pose challenges to the world, especially given that most people are not boosted and we are on the cusp of the holiday season when people will be traveling and spending time indoors with their loved ones. And it is not to say that newsrooms were wrong to cover Omicron early on. It was, and continues to be, an important story.

But the early tenor of coverage doesn't look so good in retrospect. It placed an emphasis on amplifying the worst fears of the scientific community, particularly the worry that the current vaccines available in the US would prove ineffective against the variant. It hyped conjecture. It fueled panic.

The coronavirus is not going away anytime soon. We are going to be living with it for some time. In the future, when we are almost certainly faced with another variant of concern, newsroom leaders must work better to resist the temptation to portray it in the most frightening terms and wait for data to roll in.

This is, of course, easier said than done. Patience is not something that newsrooms are the best at. And there is a need to fill airtime, get eyeballs reading stories, and satisfy the SEO gods. I'm sure that when news of Omicron emerged during the holiday weekend, when the news cycle slows, these factors were intensified.

But acting cautiously, waiting for data, and not rushing to lean into nightmare scenarios is important — now, more than ever...

Credibility is on the line

This is obvious, but worth repeating: When news orgs play up worst case scenarios that do not come to fruition, the audience is less likely to heed such warnings in the future and they are more likely to grow cynical and simply tune out coverage as noise. In the long run, it pays off to be prudent and to reject the impulse to sensationalize.

We also live in the age of information wars. Already, bad faith actors are using this latest episode of media overreach to suggest the press cannot be trusted on anything. For instance, I was watching Laura Ingraham's show on Fox the other night and she was railing against the media's coverage of Omicron. "COVID FEARMONGERS FORCED TO FACE REALITY," her first chyron declared. Ingraham then slyly transitioned to questioning the entire concept of vaccinating children, something that is supported by scientific data. "COVID FEARMONGERS PUSH JUNK SCIENCE ABOUT KIDS," her second chyron said. In other words, bad faith actors will exploit media missteps for their own dishonest ends...

Let's robustly cover the encouraging news

No one can go back in time to tone down the coverage from two weeks ago. But newsrooms can choose right now to amplify the pieces of encouraging news relating to the Omicron variant. Plenty of it has emerged over the last 72 hours. Such information should receive the same intensity of coverage as the previous coverage from two weeks ago..."

MY COMMENT

It is interesting that this is being said on CNN. The media and others are in FULL RETREAT on their previous statements on this variation. This is GOOD NEWS for investors. It means that we are now back to relative NORMAL. No not normal in terms of there being no issues......but.....normal in terms of all the issues being pretty much known and baked into the investing and business future. As investors....we all know the issues.....and....you can bet that management of any business does too.

I can live with ANY potential issue for stocks or business.....if it is known. It is the unknown,......the black swan....that causes market disruption. At this point we are back to the known as we move forward.

 

Thank you bearmarketcrash......you are making me BLUSH. I appreciate the comments.

I will say.....I do partially do this thread for selfish reasons......it focuses my investing thinking and keeps me involved in the daily economic and business world. I would be doing my reading anyway.....so putting some of it up here is not much of a chore. It helps that I am a.....VERY FAST.....reader. It also serves as a personal investing journal.

As I have said in the past......nothing on here is planed or thought out in advance....it just happens....so that makes it easier. I probably only spend about 30-60 minutes a day on posting here....so it is manageable. I just post and type off the top of my head........it is mostly random stream of consciousness......but.....is fairly consistent since I have been investing for so long in the same way.

Myself......I really APPRECIATE all the other people that post on this thread. It is a big help to have others involved and participating. I welcome and invite ANYONE to post on here about any investing or business or personal experience topic. Thank you to all that participate.

 

One last.....personal comment.....for today at least. One of the primary reason I did this thread was to show people that there is an alternative to the TRADING mentality.......long term investing using the power of compounding. When this thread started it was me and TomB16. (the TomB16 thread is also a great thread) Over time it has grown apparent that there is a HUGE silent majority of investors......here and in the real world......that are long term investors. Actually, most people with their retirement account or 401K.

I am 72 and in good health......but.....who knows. My HOPE is that someday when I am no longer posting because i can no longer do it or am no longer around.....that SOMEONE will take up the mantel and continue this thread.....one of the younger guys....Zukodany, Emmett, Oldmanram, etc, etc, etc. There are many many great young business people and investors on this thread. (I SALUTE you all that participate.) It is hard for them to post due to kids, family, work, etc, etc.

I hope that after I disappear from this thread.......it will continue to be an ACTIVE example for people that are interested in learning about and participating in LONG TERM INVESTING. I hope this thread will continue as a place for investors to discuss long term investing topics and themes. The LESSONS in here are NOT going to change........I have been doing this SAME stuff for over 50 years......my mom and grandfather were investing the same way before me. The people might change....but the lessons will still work and be the same as always.

BUT.....for now....SORRY.......you are not going to get rid of me anytime soon.

Just remember........."I continue to be fully invested for the long term as usual".

 

I can live with just about everything........but......OH NO......NOT THE BEER MARKET.

Supply chain disruption has brought ‘massive change’ to beer market: CEO

https://finance.yahoo.com/news/supply-chain-disruption-beer-market-145210306.html

 

HERE is the economic news of the day.....that no one will care about.

New jobless claims totaled 184,000 last week, reaching lowest since 1969

https://finance.yahoo.com/news/weekly-unemployment-claims-week-ended-dec-4-2021-192034644.html

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

"New initial jobless claims improved much more than expected last week to reach the lowest level in more than five decades, further pointing to the tightness of the present labor market as many employers seek to retain workers.

The Labor Department released its weekly jobless claims report on Thursday. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

• Initial unemployment claims, week ended Dec. 4: 184,000 vs. 220,000 expected and an upwardly revised 227,000 during prior week
  
• Continuing claims, week ended Nov. 27: 1.992 millionvs. 1.910 million expected and a downwardly revised 1.954 million during prior week
  

Jobless claims decreased once more after a brief tick higher in late November. At 184,000, initial jobless claims were at their lowest level since Sept. 1969.

"The consensus always looked a bit timid, in light of the behavior of unadjusted claims in the week after Thanksgiving in previous years when the holiday fell on the 25th, but the drop this time was much bigger than in those years, and bigger than implied by the recent trend," Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in an email Thursday morning. "A correction next week seems likely, but the trend in claims clearly is falling rapidly, reflecting the extreme tightness of the labor market and the rebound in GDP growth now underway."

After more than a year-and-a-half of the COVID-19 pandemic in the U.S., jobless claims have begun to hover below even their pre-pandemic levels. New claims were averaging about 220,000 per week throughout 2019. At the height of the pandemic and stay-in-place restrictions, new claims had come in at more than 6.1 million during the week ended April 3, 2020.

Continuing claims, which track the number of those still receiving unemployment benefits via regular state programs, have also come down sharply from pandemic-era highs, and held below 2 million last week.

"Beyond weekly moves, the overall trend in filings remains downward and confirms that businesses facing labor shortages are holding onto workers," wrote Rubeela Farooqi, chief U.S. economist for High Frequency Economics, in a note on Wednesday.

Farooqi added, however, that "the decline in layoffs is not translating into faster job growth on a consistent basis, which was evident in a modest gain in non-farm payrolls in November."

"For now, labor supply remains constrained and will likely continue to see pandemic effects as the health backdrop and a lack of safe and affordable child care keeps people out of the workforce," she added.

Other recent data on the labor market have also affirmed these lingering pressures. The November jobs report released from the Labor Department last Friday reflected a smaller number of jobs returned than expected last month, with payrolls growing by the least since December 2020 at just 210,000. And the labor force participation rate came in at 61.8%, still coming in markedly below its pre-pandemic February 2020 level of 63.3%.

And meanwhile, the Labor Department on Wednesday reported that job openings rose more than expected in October to top 11 million, coming in just marginally below July's all-time high of nearly 11.1 million. The quits rate eased slightly to 2.8% from September's record 3.0% rate.

"There is a massive shortage of labor out there in the country that couldn't come at a worst time now that employers need workers like they have never needed them before. This is a permanent upward demand shift in the economy that won't be alleviated by companies offering greater incentives to their new hires," Chris Rupkey, FWDBONDS chief economist, wrote in a note Wednesday. "Wage inflation will continue to keep inflation running hot as businesses fall all over themselves in a bidding war for talent.""

MY COMMENT

YES....we continue to slowly improve in drips and drabs. It will take a long time....perhaps another year to get back to normal. BUT....people are starting to HAVE to go to work.....the FREE MONEY is running out.

STEP by STEP.......slowly we will get back to NORMAL. it will be so nice to be back to normal investing with normal issues once we are done with this pandemic OVERHANG. I would say it will take about 12-18 months more. We are seeing more and more little bits of POSITIVE STUFF every day that goes by. Over the long term......this few years of history will just be a TINY blip in a chart of the SP500.