The Long Term Investor

I agree with you Tom. I tend to agree with her views and her thoughts on investing and the long term. But...it seems to me she jumps in and out of stocks in a way that does not match up with what she says about investing for the next 5+ years. She seems to be an analytical, fundamental investor.....but than......she jumps in or out of something. At least that is how it seems to me.

 

I was out by the TESLA plant today. It is moving along very nicely. Speaking of Tesla:

Tesla surmounts supply chain woes with blockbuster Q4 deliveries

https://finance.yahoo.com/news/tesla-delivers-308-600-vehicles-161248680.html

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

"Tesla Inc on Sunday reported record quarterly deliveries that far exceeded Wall Street estimates, riding out global chip shortages as it ramped up China production.

It was the sixth consecutive quarter that the world's most valuable automaker posted record deliveries.

Tesla, led by billionaire CEO Elon Musk, delivered 308,600 vehicles in the fourth quarter, far higher than analysts' forecasts of 263,026 vehicles.

Tesla's October-December deliveries were up about 70% from a year earlier and nearly 30% higher from record deliveries the preceding quarter.

"Great work by Tesla team worldwide!" Musk wrote on Twitter.

His electric car company ramped up production in China even though competition rose and regulatory pressure mounted following consumer complaints over product safety.

Tesla ships China-made models to Europe and some Asian countries.

On an annual basis, the automaker boosted its deliveries by 87% from a year earlier to 936,172 vehicles in 2021.

Musk said in October last year that Tesla will be able to maintain an annual growth rate of more than 50% for "quite a while."

NEW FACTORIES

"They have beaten all the odds," Gene Munster, managing partner at venture capital firm Loup Ventures, said on Sunday.

"The first is the demand for their products is through the roof. And the second is they're doing a great job of meeting that demand," he said.

Munster said he expected Tesla's deliveries to grow to 1.3 million vehicles this year despite headwinds in production at its new factories and supply chain problems.

Tesla Chief Financial Officer Zachary Kirkhorn said in October that it was difficult to predict how quickly the company will be able to boost production at new factories in Texas and Berlin, which will use new vehicle technologies and new teams.

Tesla said in October that it aimed to build its first production cars at both facilities by the end of 2021, but it is not known whether it met that target. Tesla did not respond to a question from Reuters about the plants. Its Berlin factory had initially been scheduled to begin production last summer.

Deutsche Bank said in a report on Friday that it expected Tesla to make nearly 1.5 million vehicle deliveries this year, although chip shortages remain a risk to production.

'SUPER CRAZY' SHORTAGES

In 2020, automakers cut chip orders as the pandemic and lockdown measures hit demand. But Tesla never reduced its production forecast with suppliers to support its rapid growth plan, which helped it weather the chip shortage, Musk has said.

Tesla, which designs some chips in-house unlike most automakers, also reprogrammed software to use less scarce chips, according to Musk.

Musk, who previously said, "2021 has been the year of super crazy supply chain shortages," said in October that he was optimistic that those issues would pass in 2022.

The strong sales came even after Tesla hiked U.S. vehicle prices sharply this year to offset higher supply chain costs.

Tesla hit over $1 trillion in market capitalization in October after rental car company Hertz said it ordered 100,000 of its vehicles. The company's shares lost some ground after Musk wrote on Twitter in November that he was considering selling 10% of his stake in Tesla.

Overall, Tesla shares gained 50% last year."

MY COMMENT

KILLER NUMBERS from a killer company. From what I saw today the Texas plant is at least 6-12 months away from producing cars. The end of the huge building was just closed up this past week or two. I dont know....but the fact that the building is now all closed in might mean that they have all the BIG equipment inside now.

This is a good sign for the markets tomorrow.......hopefully.....a nice kick in the pants for Tesla and the SP500.

 

ALL the earnings will start to be reported in mid January. The BIG banks and all the hundreds of other banks will be the first ones reporting as usual. I am sure we will see a lot of speculative articles about earnings over the next couple of weeks. I dont see any reason for earnings to surprise to the down side........the probability........is very much in favor of UPSIDE earnings surprises.

I think my first company reports will be Apple and Tesla and Microsoft on January 25th. But.....I need to map out all the next earnings dates for my ten stocks. I usually put them on my calendar with a note as to whether before the open or after the close.

 

Lets see:

Honeywell on January 27 before the bell.

Amazon and Google February 1.

Nvidia February 22.

Home Depot February 22 before the bell

Costco March 3.

Nike March 16.

I think these are the correct dates for my ten stocks......including the three above.

 

Hello Bigmaix.

NO....I am not making any changes. My goal is to NEVER make any changes if possible. I will have the same ten stocks and same two funds. It would take some sort of catastrophic business failure for me to sell one of my current stocks. I have nothing that I am even considering adding. I really like the mix that I have right now. they are all ICONIC companies that I am very familiar with and very comfortable with. Same answer even if we end up in a BEAR MARKET or a RECESSION.

 

AS USUAL.........HERE is my current PORTFOLIO MODEL.

I am once again posting my PORTFOLIO MODEL. My initial criteria to start the process to consider a business are.......BIG CAP, AMERICAN, DIVIDEND PAYING, GREAT MANAGEMENT, ICONIC PRODUCT, WORLD WIDE LEADER IN THEIR FIELD, LONG TERM HORIZON, etc, etc, etc.

PORTFOLIO MODEL

"Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 56% of the total portfolio and the fund side at about 44% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing.

As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 10 stock portfolio. At the same time the funds double and triple up on my individual stock holdings............that I consider the BEST individual businesses in the WORLD.

STOCKS:

Alphabet Inc
Amazon
Apple
Costco
Home Depot
Honeywell
Microsoft
Nike
Nvidia
Tesla

MUTUAL FUNDS:

SP500 Index Fund
Fidelity Contra Fund

CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (72). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)"

MY COMMENT

This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my ten stock holdings there is MUCH doubling and tripling up on the stocks. THAT is INTENTIONAL. I strongly subscribe to the view of Buffett and some others that TOO MUCH diversification kills returns. I do NOT believe in the current diversification FAD that most people seem to now follow.......or think they are following. I DO NOT do bonds and think the current level of bonds held by younger investors.....those under age 50.....is extremely foolish.I DO NOT do market timing or Technical Analysis.

 

Well......at the end of the day tomorrow........I will have no problem quickly calculating my year to date gain or loss.

 

Sacking. Welcome. I am in the car so will keep this short. I am a fundamental analysis big cap investor. This thread is full of stuff on that topic. It is a treatise on long term investing.

 

Nice day today. Will post more when I get home this afternoon. Listening to business radio and watching the markets on the screen in my car

 

A very SOLID way to start the new year for the markets today. I had FIVE stocks UP and FIVE stocks DOWN......but still got a nice beat on the SP500 by 0.30%. It was a nice GREEN day for me today.

My strong gain today was driven by four stocks that were all up by over two percent for the day. they were.......Apple +2.5%.....Amazon, +2.21%......Nvidia, +2.41%.......and.....Tsla, of course, up by a whopping +13.53% in only one day. Obviously the delivery and production numbers that came out a day ago were the kicker for Tesla.

 

Speaking of Apple being up by +2.5%....here is the story of the day.

Apple becomes first U.S. company to reach $3 trillion market cap

https://www.cnbc.com/2022/01/03/apple-becomes-first-us-company-to-reach-3-trillion-market-cap.html

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

Key Points

• Apple hit a market cap of $3 trillion briefly during trading on Monday.
• The milestone is mostly symbolic but it represents investor recognition of Apple’s success over the past few years as the company has reported several record-breaking quarters of big growth in all of its product lines.
• Apple’s cash flow also makes the stock a safe haven during times of market uncertainty.

Apple briefly hit a market cap of $3 trillion during intraday trading on Monday, before dropping back under the mark shortly afterwards. Apple broke the barrier when its share price hit $182.86.

Apple rose 2.5% on Monday to close at $182.01, just missing closing the trading day at the $3 trillion mark.

The milestone is mostly symbolic but it shows investors remain bullish on Apple stock and its ability to grow. At a market value of $3 trillion, Apple tripled its valuation in under four years. And analysts see plenty of room to run.

Apple showed annual growth across all of its product categories in its fourth-quarter earnings, with revenue up 29% year-over-year. While the iPhone is still the biggest sales driver, Apple’s services business grew 25.6% year-over-year and delivered more than $18 billion in revenue during the quarter.

In December, for example, Morgan Stanley’s Katy Huberty raised the firm’s price target on Apple from $164 to $200, and maintained the equivalent of a buy rating, arguing that new products like virtual reality and augmented reality headsets aren’t yet baked into the share price.

Huberty also said she expects Apple’s App Store revenue to outperform Morgan Stanley’s forecasts for the quarter and for Apple to ship 83 million units during the December quarter, 3 million more than anticipated.

Apple sold 27 million pairs of its newest AirPods model over the holidays, driving 20% year-over-year growth for Apple’s wearables business during the quarter, analyst Ming-Chi Kuo of TFI Asset Management Limited said in a Monday note.

Wedbush analyst Daniel Ives wrote on Sunday that the mark is a “watershed moment” but has more room to grow, especially since Ives values Apple’s services business at $1.5 trillion.

Investors also turned to Apple as a safe haven during recent market uncertainty, thanks to its strong balance sheet and prodigious cash flow, which it uses to invest in new products, stock buybacks and to return capital to shareholders through dividends.

Apple became the first publicly traded U.S. company to hit a $1 trillion market cap during intraday trading on Aug. 2, 2018. It hit a $2 trillion valuation just over two years later on Aug. 19, 2020.

Apple’s peers aren’t far behind. Microsoft is worth about $2.5 trillion, Amazon has about a $1.75 market cap and Google’s market valuation is just shy of $2 trillion.

MY COMMENT

Apple becomes the first one to hit this mark. It will not be too long before we see Microsoft, Amazon, Google, and others making new market cap highs. Amazon would be smart to notice that Apple does not trade at a RIDICULOUS share price. Smart management KNOWS that share price is a significant ANCHOR on a stock when it comes to small retail investors. I dont care what they say about it......no one wants to invest over $6500 and only show two shares on your statement. It is a PSYCHOLOGICAL barrier to people buying the stock.

Apple is the perfect example as to why I invest the way I do in ICONIC BIG CAP companies. These sorts of companies are a very safe haven with their strong balance sheets and prodigious cash flow, varied products and the ability to constantly improve and add new products, stock buybacks and their ability to return capital to shareholders through dividends. Their earning power gives them the ability to survive and thrive in any wort of economic environment.

 

Here is the markets today......in hindsight.

Stock market news live updates: Stocks hit new record highs to kick off new year of trading

https://finance.yahoo.com/news/stock-market-news-live-updates-january-3-2022-124642521.html

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

"U.S. stocks closed at record highs on Monday, as investors built on momentum from last week into at least the first session of the new year. The S&P 500, Dow and Nasdaq each advanced.

U.S. equities posted another year of solid gains in 2021, rising by 27% and delivering a rare third consecutive double-digit annual percentage increase. Within the S&P 500, the energy and real estate sectors outperformed, gaining more than 42% each during the year for these sectors' best annual gains on record.

Still, the blue-chip index's robust overall rise was powered on a stock-by-stock basis by just a handful of mega-cap names. According to Goldman Sachs analyst David Kostin, the five largest components of the S&P 500 (or Facebook, Apple, Amazon, Microsoft, Google) together returned 37% last year – and now constitute about 23% of the entire index.

"In 2022, variables associated with earnings and valuation will determine the performance of the S&P 500 index and its underlying constituents," Kostin wrote in a note Monday. He expects the index to rise another about 7% to end 2022 at 5,100, with his outlook one among several Wall Street predictions calling for a gain to more than 5,000 for the S&P 500 this year.

"From an earnings perspective, decelerating economic growth will limit sales gains for many companies. Consequently, stock return dispersion will be most evident when viewed through the margin channel," Kostin added. "Stocks with high labor cost ratios and exposure to wage inflation will likely underperform."

But for the S&P 500 as a whole, a 27% rise and 29% total return this past year bodes favorably for the coming period. In the 71 years spanning back to 1950, when the S&P 500 posted a total return of 25% or more in a year, stocks rose 82% of the time the next year, according to data from Truist Advisory Services co-chief investment officer Keith Lerner. However, the magnitude of returns could moderate.

"I think that 2022 is going to be a good year that tends to follow a great year," Sam Stovall, CFRA chief investment strategist, told Yahoo Finance Live late last week. "We certainly have a high wall of worry that we're going to have to scale ... in terms of inflation concerns, what the Fed will be doing with interest rates, et cetera."

And indeed, this week investors will be eyeing new economic data including the Labor Department's December jobs report to help show the relative strength of U.S. economic growth in the final weeks of the year, as inflation concerns and labor shortages continued to ripple across the country. Risks around the latest surge of the coronavirus are also weighing, with impacts to the labor market from the Omicron variant potentially set to show in the final monthly jobs report for 2021.


1:28 p.m. ET: Treasury yields climb, 30-year yield rises above 2% for the first time since November
The U.S. Treasury yield curve steepened on Monday as bonds on the long end of the curve rose markedly.

The 30-year yield jumped by nearly 14 basis points around 1:30 p.m. in New York to top 2% for the first time since November, and the benchmark 10-year yield broke above 1.6% for the first time in more than one month.

12:08 p.m. ET: Apple shares gain alongside broader tech rally, as iPhone-maker nears $3 trillion market cap

Shares of heavily weighted tech stock Apple (AAPL) gained more than 2% in intraday trading on Monday, helping lead the Nasdaq's more than 0.6% rise during the session.

The iPhone-maker closed in on the $3 trillion market capitalization mark, and would need a share price of $182.86 apiece to reach that level. The stock gained nearly 34% during 2021, outpacing the broader market.

11:00 a.m. ET: U.S. construction spending rises for ninth straight month in November as homebuilding picks up

Domestic spending on construction rose for a ninth straight month in November, helped in large part by a pick-up in residential home construction.

Construction spending in the U.S. rose at a 0.4% monthly clip in November, the Commerce Department said on Monday. This matched October's rate, which was in turn upwardly revised from the 0.2% monthly increase previously reported.

Private construction led the gain for November, with this spending up 0.6% and. residential construction spending alone jumping by nearly 1%. However, public construction project spending declined by 0.2%. during the month, weighed down by a 0.4% decrease in outlays by the federal government.

10:01 a.m. ET: Final December Markit U.S. manufacturing PMI revised down as shortages weigh on growth

IHS Markit's final December U.S. purchasing managers' index for the manufacturing sector came in slightly lower than previously reported the final monthly print, reflecting supply-side shortages still weighing on goods-producing industries.

The headline PMI ticked down to 57.7 for December from the 57.8 previously reported. This marked the lowest print in a year. Readings above the neutral level of 50.0 indicate expansion in a sector.

“December saw another subdued increase in U.S. manufacturing output as material shortages and supplier delays dragged on," Sian Jones, senior economist at IHS Markit, said in a press statement. "Although some reprieve was seen as supply chains deteriorated to the smallest extent since May, the impact of substantially longer lead times for inputs thwarted firms’ ability to produce finished goods yet again."

9:58 a.m. ET: When looking at year-end price targets, 'you shouldn't be looking for the exact number': Strategist

With Wall Street strategists having cast their expectations about where the stock market is likely to end the year, investors should consider not so much firms' exact price targets, but their commentary around current market conditions, according to at least one strategist.

"When it comes to outlooks, there's something that I tend to think and that is, obviously everybody is putting these out for just a general thought," Michael Antonelli, Robert W. Baird & Co. strategist, told Yahoo Finance Live on Monday. "And honestly when you read an outlook, you shouldn't be looking for the exact number because obviously that is a tough number to pick. What you want to be looking for is how that person thinks about the market and how they think about the economy."

"When I think about the market and economy right now, I think about momentum," he added. "Momentum is one of the most durable factors when it comes to the stock market ... we have a lot going for us right now." "

MY COMMENT

I agree with the above.....we are in a very MOMENTUM driven market right now and over the past year or two. In my view this will continue to be a big factor.....especially.....for my ICONIC big cap stocks.

We are seeing lots of good news as the economy SLOWLY re-opens. But....we wtill have a long way to go. I consider that good news. I would much rather see the re-opening spread out over the next 12-18 months than a big bang re-open. The longer the re-opening the longer the sustained stock rally will last.

As to the MEGA-CAP names....how can you not own these companies? I will ride them for as long as possible.