The Long Term Investor

I like this little article.

On Inflation and Portfolios, Think Ahead—Not Behind
Positioning portfolios for what just happened is rarely a winning tactic.

https://www.fisherinvestments.com/e...flation-and-portfolios-think-ahead-not-behind

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

"As US inflation journeyed toward its nearly 40-year high of 6.8% y/y in November, seemingly the entire country has focused on higher grocery bills and the pain at the pump. Now another conundrum is surfacing in headlines: What can people do to keep their savings from losing purchasing power? As Wall Street Journal columnist Jason Zweig’s latest piece highlighted, some are flocking to a complex stock fund that boasts 7% yields, with little regard for how that payout is generated (spoiler alert: it isn’t pretty) and the risk of loss magnified by the fund’s leverage. Others tout niche government savings bonds limited to relatively small sums, inflation-linked Treasurys, high-dividend stocks and other high-yielding securities—some fringe, some mainstream. We could poke holes in any and all of these, but we think there is a deeper issue to address: the fundamental flaw of basing forward-looking investment decisions on backward-looking information.

For folks frustrated at seeing inflation erode their cash reserves, emergency funds and perhaps even the fixed income portions of their portfolio, we understand the desire for a shield. We also understand why people might feel the urge to get creative, what with savings accounts paying around half a percent and even 30-year US Treasurys a paltry 1.81%.[ii] Yet we see two problems at work—one practical, one philosophical. The practical flaw is that none of these alleged hedges are quite as magical as some proponents allege. US Treasury Inflation-Protected Securities (TIPS) have basically zero default risk, but their yields are negative across the entire TIPS yield curve. That doesn’t mean you pay to own them, but it does mean you are buying at a premium, and the inflation-adjusted interest and principal payments may not be enough to offset that. Inflation-linked savings bonds (I-bonds), meanwhile, are generally limited to $10,000 in annual purchases per citizen, have lock-up periods and carry early redemption penalties—which runs counter to the purpose of an emergency fund. High-dividend stocks, meanwhile, offer return of investment rather than return on investment—their share price falls by the amount of every dividend issued. We like dividends just fine, as they are part of stocks’ total return, but they are technically zero-sum if you don’t reinvest them, not an inflation hedge.

Moreover, we think there is a deep fallacy at the heart of the great inflation hedge hunt: trying to position your portfolio to compensate for an inflation rate that represents price increases over the prior 12 months. Those price increases sting, but you can’t go back in time and hedge against them. That ship has sailed. Arguably, if you owned a diverse portfolio of stocks over the past year, strongly positive 2021 returns already hedged you against that inflation plus quite a bit.

What matters is what happens looking forward. What if inflation eases and you are trapped in an illiquid security—or one with high default risk—for no good reason? What if you bought that security at a premium because you traded on one of the most widely known pieces of information on Earth (the current inflation rate)? What if you let all your core goals and financial needs take a back seat to your inflation fears, but those fears don’t pan out?

To see this more clearly, strip away the emotions that accompany inflation and think of this as you would any other stock market trend or alleged risk. Markets are forward-looking indicators—they move ahead of widely expected economic developments. They also aren’t serially correlated, so one day, week, month or year’s movement doesn’t predict the next. Repositioning for fast inflation now could be akin to leaving stocks deep into a bear market or selling a troubled country or company’s bond a week before debt restructuring talks are due to begin. Getting over the recent past and looking forward—to probabilities, not possibilities—is always the right move.

Is it possible you might need something to hedge against 7% inflation over the next year or two? We guess—anything is possible. But probable? No, not from our vantage point. For one, as the recent past illustrates, high inflation doesn’t auto-kill bull markets. Also, as we have shown in more detail in our past coverage, the issues fueling this summer and autumn’s inflation appear to be slowly working themselves out. Oil production is up, sea freight rates are easing and factory output is recovering. Companies are moving more small goods by air instead of the ocean. Multiple automakers report semiconductor shortages are easing. None of this necessarily points to falling prices, but it does suggest this year’s big increases are mostly unlikely to repeat, likely negating the need for a big inflation hedge over the foreseeable future.

When making portfolio decisions, reacting is rarely a winning tactic. Recency bias makes humans believe the future will resemble what just happened, but life—and investing—rarely works like that. Looking forward and weighing reasonable probabilities, in our view, is a much sounder approach."

MY COMMENT

HINDSIGHT INVESTING. A sure LOSER of a strategy. By the time everyone decides to jump on some bandwagon the ship has sailed. This is hindsight market timing.

Why not just pick a realistic long term strategy that is PROVEN to work and just stick with it?

 

This little.....daily....article is a pretty good summary of the markets today.

Stock market news live updates: Stocks gain, recouping losses from Monday's sell-off

https://finance.yahoo.com/news/stock-market-news-live-updates-december-21-2021-233637147.html

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

"Markets opened higher on Tuesday as investors weighed news the White House would step in to help fight Omicron with the deployment of military personnel to hospitals and the purchase of 500 at-home tests that will be available for Americans to order.

All three major U.S. indexes were in the green at the start of trading in a turnaround from declines in the previous session ignited by renewed fears that swelling Omicron case numbers could derail economic recovery and worsen inflationary pressures.

The Dow was up nearly 300 points, while the Nasdaq Composite rose 1%. The S&P 500 gained nearly 40 points at the open.

“We're seeing broad-based sell-off in risk assets, but ultimately if we think about the longer arc of time, I'm not sure these are going to meaningfully change our outlook for 2022 in terms of investing,” Meera Pandit, a global market strategist at JPMorgan Asset Management told Yahoo Finance Live.

“On the virus side, ultimately what we’ve seen with prior surges and prior variants is that market sell-offs tend to be somewhat contained to a period of time, so we do expect that as we get better and better at dealing with some of these challenges from the economic and market perspective, things will likely settle down despite some of the public health challenges we have ahead.”

With virus fears triggering more restrictions and cancellations, concerns around Omicron’s spread weigh on traders still reeling from the Federal Reserve’s hawkish shift last week to more quickly withdraw monetary support and boost forecasts for rate hikes next year.

To add to their plate, investors are also processing an unexpected blow to Biden's economic agenda after Senator Joe Manchin (D., W. Va.) quashed the administration’s long-deliberated Build Back Better Act, citing concerns about inflation, the national debt and ongoing pandemic in an interview on Fox News Sunday.

The news sent solar energy and electric vehicle stocks plummeting in a sell-off that placed Tesla (TSLA) below $900 for the first time since October. The stock closed down 3.5% at $899.94.

“When we think about Build Back Better, we are likely to face a fiscal cliff regardless last year with less fiscal spending than we’ve seen over the last two years,” Pandit also told Yahoo Finance Live. “But the Build Back Better bill was expected to be phased in over a number of years, so while it will be somewhat of a headwind for growth, I think it’s right now very much an indication of sentiment more than anything.”

Even with a holiday-shortened week of trading, investors are tuning into a packed economic release schedule. The Conference Board is set to release its latest consumer confidence index on Wednesday, expected to show an only modest uptick for the month of December.

The Bureau of Economic Analysis will also publish fresh prints on Personal Consumption Expenditures (PCE) Thursday, a key measure of price changes in the economy. Consensus data compiled by Bloomberg showed PCE is projected to climb at a 0.6% month-over-month rate in November.

The new inflation data will be a central focus among investors in the coming days.

“There’s a number of headwinds coming at us now,” Oxbow Advisors managing partner Ted Oakley told Yahoo Finance Live. He said investors are pricing in “peak hawkishness” from the Federal Reserve and inflation.

“Lastly, you just had such a speculative market that it’s easy for it to start getting some selling,” he added.

10:39 a.m. ET: AT&T greenlights Microsoft acquisition of ad unit
AT&T (T) has agreed to sell its Xandr global advertising platform to Microsoft (MSFT). The telecom giant said in an announcement of the deal Tuesday that Xandr's technology "strategically complements Microsoft's current advertising offerings." Further details about the acquisition were not immediately disclosed.

The move comes amid investor concerns that AT&T was struggling to pay off its debt after the firm poured billions into becoming a one-stop-shop media company, satellite TV provider and advertising platform. Xandr was created under former AT&T CEO Randall Stephenson following the $1.6 billion purchase of advertising company AppNexus in 2018.

Shares of AT&T were up 2.07% in early trading to $24.69 a piece, while Microsoft traded at $320.05 per share, up 0.04%.

9:53 a.m. ET: Memory chip maker rallies after earnings beat
Shares of Micron Technology (MU) climbed after the maker of memory chips surpassed analyst estimates for second-quarter sales. The company is anticipating chip shortages will ease in the second half of 2022 and businesses are positioned to rebound.

The stock ticked up as much as 9.5%, posting its biggest intraday percentage gain since April 2020, according to Bloomberg. Shares traded at $88.80 a piece in the early session, up 8.25% after market open.

Micron is “a compellingly growth at a reasonable price (GARP) beneficiary of secular data center, 5G, metaverse, auto trends and a catch-up candidate after underperforming” BMO Capital Markets wrote."

MY COMMENT

Short term events.....equals.....short term thinking. A LOSING strategy in investing. I like to know what is going on and why....but.....at the same time I just sit on my portfolio and do nothing. That is how long term investing works. That is how it has ALWAYS worked.

 

It was nice to come home this afternoon after the close and see a very STRONG day. I was GREEN. AND....I beat the SP500 by 0.50%. After the gins today I am about 3% from my all time high. Not a bad place to be with SEVEN market days left in the year.

My BIG winners today were......Nike +6.15%.....Nvidia +4.89%.....and Tesla +4.29%. Of course Nvidia and Tesla have a good ways to go to make up for their recent losses.

 

My entire Tesla position is now showing a gain of 4.15%. That is after the gain today. I started the day with my Tesla position having ERASED all my gains and being slightly in the negative. It will be a BIG HELP when ELON is done with his selling to raise money for taxes.

 

I like this phrase......."TURNAROUND TUESDAY".

Turnaround Tuesday on Wall Street: Stocks rebound

https://www.cnn.com/2021/12/21/investing/dow-stock-market-today/index.html

"The Dow and the broader US stock market were in the green on Tuesday, as the market bounced back from a sharp selloff at the start of the week.

Once again the steep losses of more than 1% for each of the major indexes are being quickly followed by green arrows across the board.

The Dow (INDU) finished up 1.6% or 561 points, while the S&P 500 (SPX) rose 1.8%. The Nasdaq Composite (COMP) closed 2.4% higher.

All three benchmarks snapped a three-day losing streak and notched their best performance in about two weeks.
But things aren't too dire in the market: the indexes are all on track for decent gains this year. Both the Dow and the S&P will outpace last year's performances.

But that said, the catalysts driving stocks lower on Monday are still present:

The losses came on the heels of soaring Covid cases as the Omicron variant is slamming Europe and the United States, where governments have responded by tightening restrictions.

On Tuesday, the US Centers for Disease Control and Prevention suggested that Omicron cases will likely cause higher infection rates than we've seen with previous peaks.

President Joe Biden Tuesday afternoon said vaccinated Americans can still celebrate the holidays together, especially if they've received a booster shot. The administration has also been adamant that federal lockdown recommendations aren't in the cards this time.

Although this may bring back memories of the Delta case surge of the summer, some analysts are betting that the Omicron spread might be less severe.

"This strain of Covid appears to be much weaker in severity than the Delta strain, even if it is more transmissible," said analysts at Bespoke Investments. And that would mean less economic disruption.

On top of that, there's drama in Washington after Democrat Sen. Joe Manchin said he would oppose President Joe Biden's $1.75 trillion "Build Back Better" bill.

Thinner trading volume in the final weeks of the year can also mean that market moves are exacerbated. So more volatility could lie ahead.

That said, the CBOE volatility index (VIX), or VIX for short, was down nearly 8%.

"Investors may be getting into a speculative mood," said JJ Kinahan, chief market strategist at TD Ameritrade.
"Additionally, cryptocurrencies which have recently been correlated with 'risk on' investments are seeing rallies as well."
Bitcoin was up more than 3% around the time of the stock market close, according to Coinbase."

MY COMMENT

A very nice day. Lets hope for the final two days of the week to show some CARRY THROUGH from today to end the week and kick us into the Christmas weekend.

For any that might have been freaking out yesterday or a few days ago. Imagine that you panicked at the down days we have seen lately and sold off everything to preserve your funds. You would have missed the STRONG buy-back today. This is the trouble with short term market timing. There is ABSOLUTELY no way to know when the markets are going to sink and when they are going to EXPLOSIVELY bounce back. You end up siting in cash waiting for a sign that the trouble is over. Usually that sign comes after you have MISSED some really strong gains and are now behind the markets. It is a losers game.

The key to being able to sit out the market drops is PROPER portfolio risk matched up with your risk tolerance. It is important to NOT have short term money at market risk. Risk tolerance is much easier if your money at risk in the markets is long term money......a minimum of FIVE YEARS.

It is ALSO important that your.......potential.....portfolio risk.....matches your risk tolerance. You dont want to be a person with a medium or low risk tolerance.......and......an ULTRA HIGH RISK portfolio. This requires a level of reality based rational thinking in evaluating your own mental and psychological state and the ACTUAL risk of your portfolio.

There used to be a broker rule.......KNOW YOUR CUSTOMER. Now that few people are using brokers to do their investing for them....the new rule is........KNOW YOURSELF.

 

We are now into the very light volume holiday market days. The markets will be subject to moves and swings caused by the light volume.

We start the day today with the averages lightly positive. It FEELS like an UP day to me today.....but we are siting near unchanged and VERY SLOWLY and VERY SLIGHTLY trying to move up. At least we are not starting the day down 300 to 500 points on the DOW.

 

Speaking of the latest market drop days above.....I like this little article.

Thoughts on Stocks’ Latest Pullback
New restrictions hit sentiment, but they remain a far cry from early 2020’s sweeping lockdowns.

https://www.fisherinvestments.com/en-us/marketminder/thoughts-on-stocks-latest-pullback

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

"Stocks had another rocky day Monday, bringing the S&P 500’s pullback to -3.0% in three trading days. While short-term negativity can strike for any or no reason, most headlines blamed the Omicron variant’s surging case counts and a wave of new restrictions in Europe, not to mention anecdotal evidence of the virus curbing economic activity in major US cities. The prospect of stalling consumption and more supply chain hang-ups seemingly have investors globally in the doldrums. As ever, we don’t think it is possible to predict short-term volatility or how governments will respond to rising cases, as the political calculus varies from country to country. However, we do have compelling evidence that renewed restrictions don’t automatically sink stocks.

The variant may be different, but COVID policy throughout Europe this autumn looks a lot like it did a year ago, when the UK and most of the Continent were battening down the hatches in hopes of containing COVID’s second wave. The partial lockdowns ramped up in October, November and December 2020, and most countries extended them in full or in part through April 2021. They weren’t a repeat of the draconian, global measures in early 2020, but they were enough to deliver a temporary setback to the recovery. In the UK, GDP growth slowed from 17.4% q/q in Q3 2020 to 1.1% that Q4, then output contracted -1.4% in Q1 2021.[ii] German GDP followed a similar path, progressing from 9.0% q/q in Q3 2020 to 0.7% in Q4 and -1.9% in Q1 2021.[iii] As did Spain, growing 16.8% q/q in Q3 2020 before slowing to just 0.2% in Q4, then shrinking -0.6% in Q1 2021.[iv] France and Italy each contracted in Q4 2020 and barely grew in Q1 2021. The broader eurozone, which is about 15% of global GDP, shrank -0.4% in Q4 2020 and -0.2% in Q1 2021—a mild but true double-dip recession.[v]

Yet stocks moved on well before that damage became apparent, finishing 2020 with a bang. As Exhibit 1 shows, European and global stocks did endure a brief pullback in October 2020, falling -9.4% and -7.4%, respectively.[vi] But they bounced fast, hitting new highs a week and a half after their lows. Even with its deeper pullback, the MSCI Europe Index soared 20.3% from 9/30/2020 to 3/31/2021, edging out the MSCI World Index’s 19.6%.[vii] Stocks quickly priced in the new restrictions’ likely impact, then moved on.

Exhibit 1: European and Global Stocks During COVID’s Second Wave


Source: FactSet, as of 12/20/2021. MSCI Europe and MSCI World Index returns with net dividends, 9/30/2020 – 3/31/2021.

Note, that doesn’t mean we think stocks will repeat this feat during the Omicron wave. COVID restrictions are but one variable at play right now, and any number of things could bog down sentiment. Again, short-term wobbles are unpredictable. But it does show new restrictions—even those causing economic contraction—aren’t auto-bearish. Plus, as it stands, this year’s restrictions largely remain looser than restrictions a year ago, which were much looser than early 2020’s lockdowns. The likelihood of a return to those dark days still looks very, very low.

Reacting to fearful headlines and short-term volatility is always an error, in our view. Capturing market-like returns over time—and achieving stocks’ long-term growth—is all about having the discipline to avoid getting fooled by temporary rough patches. This bull market hasn’t had a correction yet (a sharp, sentiment-fueled drop of -10% to -20%), and its ride higher has been unusually calm. Maybe that changes and this is the start of correction number one (or maybe not). If it is, remember corrections are normal and expected in bull markets, and their unpredictable nature makes them impossible to time with precision—at the beginning or end. Those who try often get whipsawed, selling after a decline and missing the recovery. If you are investing for long-term growth, those missed returns can be a setback.

So stay cool. Bull markets end one of two ways. Either they finish climbing the wall of worry and run out of steam when investors are euphoric, or something hugely bad and unseen wallops them beforehand. Neither condition is present today, in our view—rather, sentiment has downshifted amid a slew of false fears. We think that is a call for patience and discipline, lest you make a counterproductive knee-jerk reaction."

MY COMMENT

YES.....we are STILL in a BULL MARKET. I would not put too much emphasis on the daily fear mongering of the media. Stocks and funds have an amazing ability to quickly discount the negative.....adapt and move on. I have seen many times in my life when stocks did just fine when the economy was struggling. I have seen many times when stocks did just fine when there was constant negativity in the daily news.

Investing is NOT a process of following the news. Investing is a process of following the long term business fundamental results of the specific companies that you happen to own. It is a process of discipline and rational thinking. It is actually very simple in concept.....yet....very difficult for the human brain to accept.

 

This is a pretty amazing list of investor advice and knowledge.

50 laws of investing

https://www.evidenceinvestor.com/50-laws-of-investing/

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

I could BOLD much of this list......so....I have BOLDED those that zi consider the best of the best.

"Investing isn’t easy, but nor is it particularly complicated (or at least it shouldn’t be). To quote William Bernstein in The Four Pillars of Investing, the body of knowledge that the individual investor, or even the professional, needs to master is pitifully small.”

That’s why, when Ben Carlson and I wrote Invest Your Way to Financial Freedom, we deliberately made it short enough to read in a single sitting.

But can investing be simplified even more than that? Well, I’ve given it a go, and here’s the result — 50 laws of investing.

They’re in no particular order, and it’s not an exhaustive list. But if you invest with these basic laws in mind, you won’t go too far wrong.

1. Forecasts are almost invariably inaccurate and best ignored.

2. The biggest mistake is not learning the habit of regularly putting money away.

3. The fund industry is not your friend; its best interests and yours are fundamentally misaligned.

4. The best strategy is the one you can stick with through thick and thin.

5. Consistently identifying, in advance, the best-performing funds is almost impossible.

6. Most of what happens in the markets in the short term is random noise.

7. Luck and skill, in others and ourselves, are easily confused.

8. Most of what passes as investor education in the media is really sales and marketing.

9. Diversification affords the best protection against our inability to predict the future.

10. Compounding cuts both ways: costs compound as well as returns.

11. You either learn to control your emotions or allow your emotions to control you.

12. We attach less importance than we should to evidence that contradicts our beliefs.

13. People prefer a pundit who is confident to one who is accurate, and pundits are happy to oblige.

14. However much, or little, you have to invest, the best place for it is a low-cost index fund.

15. The most important attribute of all is emotional discipline.

16. The only certainty is uncertainty and you should expect the unexpected.

17. The longer you invest for, the better your chances of success.

18. How much experience a fund manager has tells us little: some lag the market their whole career.

19. Saving is a bigger priority than investing: you shouldn’t invest until you’ve saved.

20. The only factors worth focusing on are those you have a degree of control over.

21. However ready you feel for your first bear market, it will still be very scary when it comes.

22. No one can predict short-term movements in the stock market.

23. There is no reward without risk; if it seems too good to be true, it probably is.

24. Instead of trying to to beat the market, it’s better to focus on not being beaten by it.

25. Most investors, and even many professionals, don’t actually know how they perform.

26. The iron rule of financial markets and fund performance is reversion to the mean.

27. Actively managed funds perform little or no better in bear markets than in bull markets.

28. It’s very hard to understand something if you’re paid a small fortune not to understand it.

29. If you aren’t humble, the markets will eventually find a way to humble you.

30. Every time is different; nobody knows how any given situation will unfold.

31. The less you to pay to invest, the more you keep for yourself.

32. It is easier to recognise failings and biases in others than in ourselves.

33. That the average indexer will outperform the average active investor is a mathematical fact.

34. A knowledge of psychology and history is of more use than expertise in economics.

35. Saying you’ll buy when prices have fallen is easier than actually doing it.

36. Pain is inevitable and your success depends on your ability to endure it.

37. Market bubbles seem obvious in hindsight but are very much less so in real time.

38. The biggest risk most investors face is running out of money before they die.

39. The industry sells complexity, but simple solutions are almost always better for consumers.

40. More money is lost anticipating market crashes than in actual crashes themselves.

41. The best results are achieved by those who know what they don’t know.

42. There is very little correlation between the stock market and what’s going on in the economy.

43. Investors have a bias towards action but the best course is usually to do nothing.

44. History doesn’t crawl, it leaps: world-changing events can happen overnight.

45. The media needs something new to say; everything you need to know has been said already.

46. The most boring assets can make the best investments, the most exciting the worst.

47. The longer you invest for, the more successful you are likely to be.

48. Performance comes, performance goes; but fees never falter.

49. The fact that trends and cycles exist doesn’t make them easy to predict or navigate.

50. Though it’s billed as “settling for average”, indexing is a way of ensuring above-average net returns."

MY COMMENT

I should just give up and BOLD the entire list above. I AGREE with every one of them. This list is a perfect starting point for any investor. It is also a telling compilation of human behavior and psychology. Understand these ideas and you will be a very sucessful investor. Ignore them and you will have a good chance to FAIL.

 

the markets continue to linger near the unchanged level today. Not a surprise. SO....changing the subject to REAL ESTATE. With the potential for rising mortgage rates we "MIGHT" see a real buying FRENZY this coming year.
Existing home sales rose in November

https://finance.yahoo.com/news/existing-home-sales-november-2021-150006550.html

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

"Existing home sales rose 1.9% to a seasonally adjusted 6.46 million million units in November from a month earlier, according to the National Association of Realtors (NAR). The number of sales was down 2% from the same month a year ago when there was a surge of buying fueled by pent-up demand from the COVID-19 pandemic. The results were lower than analyst expectations of a 3% month-over-month increase to 6.53 million units, according to Bloomberg consensus estimates.

“Home buying continues to be strong in November,” Lawrence Yun, chief economist at NAR, said during a press conference releasing the new data, attributing the activity “to continued improvement in the job market (each month there’s more job creation)” and the stock market even though there’s volatility. Rising rents is also a factor, he added.

Year-to-date existing homes sales was up 10% from the same period last year, indicating that 2021 will be another strong year for the housing market.

The increase was not surprising given recent pending home sales activity. “The 7.5% jump in October pending home sales should result in a sturdy gain for November existing home sales (6.55 million vs. 6.34 million) given that the former typically leads the latter by a month or two,” said Deutsche Bank in a research note ahead of the results.

The median existing-home price for all housing types in November was $353,900, up 13.9% from November 2020 ($310,800), as prices increased in each region, with the highest pace of appreciation in the South region.

The rising prices are attributed to more expensive homes being sold across the U.S. Sales of homes priced between $500,000 and $750,000 were up 31%, while homes between $750,000 to $1 million were up 37% and homes above 1 million was up 50%, according to NAR.

Total housing inventory at the end of November was 1.11 million units, down 9.8% from October and down 13.3% from one year ago (1.28 million). Unsold inventory sits at a 2.1-month supply at the current sales pace, a decline from both the prior month and from one year ago. That's compared to a 2.3-months supply the same time a year ago.

The market is still very tight when it comes to homes available for sale, Yun said. While more new listings are coming on the market, homes "are being snatched up quickly," he added.

“The prospect of higher interest rates in 2022 is accelerating the decision for buyers in an otherwise slower season. However, the low number of homes for sale remains the principal challenge, stumping both existing homeowners looking for their next house and first-time buyers seeking a place to call their own,” said George Ratiu, manager of economic research for Realtor.com, in a statement ahead of today's existing home sales. “There are fewer than half as many homes on the market now compared with two years ago. As we head into December’s holidays, and Americans get together for family celebrations, many sellers are likely to postpone listing their property until next year, further tightening available supply."

MY COMMENT

Lets see......higher prices.....low inventory.....higher rates coming for mortgages......the PEAK of the young generations in the home buyer stage of life......the PEAK of the young generations in the child bearing years....etc, etc, etc. A perfect storm for ANOTHER MASSIVE year of house price increases and the potential for a BIG buying FRENZY.

 

Dont try to REVERSE JINX us oldmanram. Screw the week.....just be happy with your MICRON gain. A nice Christmas present. I got the same thing for Christmas with my NIKE earnings bump up.

 

Thank God. We can now get back to "normal" in TESLA.

 

NOW we got something going on. Two days in a row. STILL time for a nice Santa Clause rally from now to year end. But....enough of that.

I was nicely in the GREEN today again. Plus I got a minor beat on the SP500 by 0.08%.

I am AVOIDING computing my year to date gain. I am trying to have the discipline to not look till year end. I know that I am still ahead of the SP500 which as of this moment is at +25.04% year to date and probably about 1.5% more when you figure TOTAL RETURN.

It was nice to see TESLA back to winning today. My total gain in my TESLA position is back up to +12%.......so I now have a bit of a cushion again, although not as much as before ELON started to sell his shares.

 

HERE....is my Christmas present to the board......sorry.....not too exciting. The Rolex watches that I was going to buy for all the active posters......are irretrievably lost in the supply chain shortages.

"Every Christmas season, I have composed a “review and outlook” for the economy set to the
rhythm and meter of Clement Moore’s classic, “A Visit from St. Nicholas.”This, my 38th
annual rendition,is primarily a “review” of some exceptional effects of some of the policy
responses to the Covid pandemic.

TWAS THE NIGHT BEFORE CHRISTMAS
by
David H. Resler"

https://assets.realclear.com/files/2021/12/1937_christmas.pdf

"Twas the night before Christmas, now just hours away,
But Santa had problems with his magical sleigh.
His reindeer were hungry and not ready to fly,
Their feed was lost in the broken chain of supply.

Ships by the score were for weeks unable to reach
The east port of Savannah or the west in Long Beach.
When, at last,Santa found food for his hungry herd,
Their long wintry ride now could proceed undeterred.

And so,he set out on this cold Christmas eve night,
Determined to bring the world great joy and delight.
But as large snowflakes below him drifted and swirled,
He began pondering the weird state of the world.

He saw it firsthand o’er the long Texas border
Where the scene was one of chaotic disorder.
The lack of control seem’d such a sorry disgrace,
With thousands of refugees all over the place.
So much has changed during these last harried two years,
As Covid panic took hold on great waves of fear.
Governments had decreed’ cross states, cities and towns,
Strict new sets of rules and most distressing lock downs.

By,in effect,putting so much commerce on ice,
These actions would exact a brutally high price.
But no mandated rules or strictures unbending,
Have done much to hasten the pandemic’s ending.
When Big Pharma brought out new vaccines at “warp speed,”
We hoped a jab or two would be all that we’d need.
But then came Delta and its breakthrough infections,
As the new caseload spike raised fears and dejection.

In this new Covid world,there’s unending distress,
That’s made our whole economy one giant mess.
Of great concern is the high rate of inflation
Caused by the Fed’s excess of money creation.
For nearly two years the Fed had propped up demand,
And let its balance sheet too rapidly expand.
It also misjudged inflation’s early uptick,
Blaming transitory factors it said wouldn’t stick.
But now the Fed Chair’s singing a bit diff’rent tune,
Admitting high inflation won’t go away soon.
So the odd snow tilt to an earlier tight’ning,
A prospect the markets will likely judge fright’ning.

Meanwhile,Joe Biden’s urging a new spending spree.
Claiming his “build back better” plan will be debt-free.
But most of us know that simply cannot be true,
There will always be some cost whatever they do.
In truth, big-spending plans are needed no longer
But more freedom would likely help things get stronger.
The aid that’d been given those whose jobs had been lost,
Brought unforeseen dangers and surprising high cost.
For when lock downs were eased,some still chose not to work
Preferring instead to keep their jobless-pay perk.
So supply behind demand continues to lag,
And the broken supply-chain’s an on-going drag.

But the state of the world Santa could ponder no more,
It was time to get back to his Christmas eve chore.
And I heard him cry out in a voice loud and clear,
“To all, Merry Christmas and Happy New Year!”"

 

HERE.....is the financial media line about the market action today....hindsight, of course......since the markets are NOW closed for the day.

Stock market news live updates: Stocks post a back-to-back session of gains as consumer confidence, 3Q GDP top estimates

https://finance.yahoo.com/news/stock-market-news-live-updates-december-22-2021-231551382.html

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

"Stocks traded higher on Wednesday to extend gain from Tuesday's session, when the major equity indexes rallied after three consecutive sessions of declines.

The S&P 500, Dow and Nasdaq rose in intraday trading after opening mixed, with the moves higher coming amid a slew of upbeat economic data. Third-quarter U.S. gross domestic product (GDP) was revised higher in the latest estimate from the Bureau of Economic Analysis to show a 2.3% annualized increase in economic activity from the 2.1% rise previously report. And consumer confidence jumped more than expected this month, and "expectations about short-term growth prospects improved" among Americans, according to the Conference Board's latest report.

With trading volume relatively light during the holiday-shortened week, investors have also continued to assess a multitude of developments on the Omicron variant and its potential impact on economic activity. These updates have come alongside expectations for tighter monetary policy next year from the Federal Reserve.

Omicron has overtaken other coronavirus variants to become the dominant strain in the U.S., and now accounts for about three-quarters of new infections. Against this backdrop, President Joe Biden on Tuesday announced a series of new measures to address the virus, including opening additional federal COVID-19 testing and vaccination sites and sending 500 million at-home rapid tests to Americans for free beginning next month.

"I think this is a perfect time to remind everybody that the market is a leading indicator. So the market is going to go down, the market is going to bottom before the bad news peaks," Liz Young, SoFi head of investment strategy, told Yahoo Finance Live on Tuesday. "We likely haven't heard all of the bad news yet. We certainly haven't hit a peak in the Omicron cases."

"But what we're seeing in the action [Tuesday] is that, we've had three days of a sell-off. And some of that I think was overdone, especially in a lot of these areas that are positioned to do well in a reopening environment," she added. "You have to have some money in the market in areas that should do well in that particular way. Airlines are one of those, cyclicals are more of those. When we look at the pattern in the market today, I think this makes sense for what's ahead for the next 6 to 12 months."

Other strategists agreed that investors should brace for more choppiness heading into the end of the year.

"I think you naturally are getting a little bit of this bounce after we've had a couple choppy sessions. But also the market is trying to price and digest the new information we're getting here," Anna Han, Wells Fargo securities equity strategist, told Yahoo Finance Live on Tuesday. "We had some news on Build Back Better getting delayed, we have more information on Omicron. These are the things you're seeing combine with low liquidity as we get into year-end, so we're not surprised to see the volatility."

During a question and answer session during his remarks Tuesday, Biden said he and Senator Joe Manchin (D., W. Va.) were "going to get something done" on the White House's about $1.8 trillion Build Back Better social policy bill. Manchin had told Fox News earlier this week he could not back the legislation in part given persistent inflation concerns, suggesting the bill would be scuttled in absence of support from the moderate Democratic lawmaker.

12:58 p.m. ET: Pfizer receives FDA authorization for antiviral COVID-19 pill
Pfizer (PFE) became the first drugmaker to receive authorization from the U.S. Food and Drug Administration for its COVID-19 pill, which will allow users to treat the coronavirus at home amid the spread of Omicron.

Based on Pfizer's clinical trial data, the antiviral pill was 90% effective at preventing hospitalizations and deaths in high-risk patients. The FDA's authorization allows those at least 12 years and older to receive treatment for COVID-19 through the pill outside of a hospital setting.

Shares of Pfizer gained more than 2% in intraday trading Wednesday afternoon following the announcement.

10:50 a.m. ET: Stocks turn positive after strong economic data
Stocks took a turn to the upside intraday on Wednesday, after data on U.S. GDP and consumer confidence each topped estimates.

10:06 a.m. ET: Existing home sales rose 1.9% in November, missing estimates
Sales of previously owned homes rose at a slower-than-anticipated rate last month, but still held up even as housing inventory remained lower and prices remained elevated.

Existing home sales increased by 1.9% to reach a seasonally adjusted annualized rate of 6.46 million units in November, the National Association of Realtors said Wednesday. Consensus economists were looking for a 2.9% increase, according to Bloomberg data. Existing home sales in October had risen at a 0.8% monthly rate.

10:01 a.m. ET: Consumer Confidence increased more than expected in December: Conference Board
Consumer confidence increased by a greater-than-expected margin in December, according to the Conference Board's latest index.

The institution's headline index crept higher to 115.8 in December, based on the latest release. This was above the 111.0 expected, according to Bloomberg consensus data. The index was upwardly revised to a reading of 111.9. in November from the 109.5 previously reported.

"Consumer confidence improved further in December, following a very modest gain in November,” Lynn Franco, senior director of economic indicators at The Conference Board, wrote in a press statement. “Expectations about short-term growth prospects improved, setting the stage for continued growth in early 2022. The proportion of consumers planning to purchase homes, automobiles, major appliances, and vacations over the next six months all increased.”

“Meanwhile, concerns about inflation declined after hitting a 13-year high last month as did concerns about COVID-19, despite reports of continued price increases and the emergence of the Omicron variant," Franco added. Looking ahead to 2022, both confidence and consumer spending will continue to face headwinds from rising prices and an expected winter surge of the pandemic.”

8:30 a.m. ET: Domestic GDP expanded at an upwardly revised 2.3% annualized rate in third quarter, according to latest estimate
U.S. gross domestic product increased at a 2.3% annualized rate during the July through September quarter, according to the third and final estimate from the Bureau of Economic Analysis.

This was upwardly revised from the 2.1% rise previously reported. Still, it marked a deceleration from the 6.7% jump posted in the second quarter, and 6.3% advance in GDP posted in the first three months of the year.

The upward revision to headline GDP came as personal consumption, the biggest contributor to domestic economic activity, rose 2.0%. This was greater than the 1.7% increase previously reported in the second estimate.

Core personal consumption expenditures — the Fed's preferred inflation gauge — rose 4.6% on a quarter-over-quarter basis. This was also above the 5.9% quarterly increase previously reported."

MY COMMENT

ALL the negativity got way too far ahead of reality lately. We continue to see much of the economic data being positive. We continue to see that OMICRON is STILL extremely MILD. Consumers are feeling upbeat and are still buying things and houses.

The markets......ARE.....leading indicators and I believe they have totally shaken off Omicron and inflation. There are still going to be lots of bumps in the road and many up and down days......but....the markets know that the general forward direction is POSITIVE.

 

I am looking for another positive day for the markets tomorrow. WHY? Just BECAUSE......and.....why not. PLUS.....we deserve it.