We are open.....down as usual lately.......where we close nobody knows. Nvidia is down by about +4%. The GREAT earnings are money in the bank for later. The usual suspects in the market being down today......Ukraine....the FED....Inflation. ALL of these items involve the.......you got it.....government.
With the media in full on RUSSIA, RUSSIA, RUSSIA mode........markets are responding negatively as you would expect. What will happen? No one has the slightest clue. The real question for investors is.....does this even matter? Most Investors Should Ignore the Risk of Major Macro Events https://behaviouralinvestment.com/2...should-ignore-the-risk-of-major-macro-events/ (BOLD is my opinion OR what I consider important content) "The Russian army’s intimidating presence on the border with Ukraine is the latest macro event that has investors concerned about equity markets. It is also the latest macro event that most investors would do well to ignore*. We worry about specific, prominent issues because we want to protect against the losses that may occur if our worst fears are realized. The irony is the most sure-fire way for investors to make consistent and substantial losses is by lurching from one high profile risk to the next, making consistently poor decisions along the way. We have all seen the charts extolling the virtues of taking a long-term approach to equity investing. They show how markets have produced strong returns in-spite of wars, recessions, and pandemics. They are a great illustration of the benefits of a long-term approach, but they don’t tell us everything. What they fail to show is all those critical issues that worried investors but never came to pass. We are always confronting the next great risk to markets; the key to successful investing is finding ways of drowning out this noise. There are two key reasons why this is incredibly hard to do: First is how the media and industry serve to stoke rather than quell damaging behavioural impulses by obsessing over the latest macro risk. It’s far more interesting to speculate over the potentially dramatic implications of a given situation, than to repeat some boring lessons about sensible investor behaviour. Second is that because some events have mattered in the past and some will matter in the future, we feel compelled to act on everything – just in case the current issue really does have an impact. Imagine if disaster strikes after we told everyone to disregard the risk. Even though we can be certain that there are some events that will cause dramatic (short-term) losses for risky assets; discounting them is absolutely the best course of action for most long-term investors. This is for a host of reasons: We cannot predict future events: Pre-emptively acting to deal with prominent risks that pose a threat to our portfolios requires us to make accurate forecasts about the future. Something that humans are notoriously terrible at. We don’t know how markets will respond: We don’t only need to forecast a particular event; we also need to understand how markets will react to it. What is in the price? How will investors in aggregate react? Even if we get lucky on point one, there is no guarantee we will accurately anticipate the financial market consequences. Take the coronavirus pandemic – if at the start of 2020 we had been able to see into the future and look at the economic data for the year ahead, we would have almost certainly made a host of terrible investment decisions. In investing, even foresight might not be enough to save us from ourselves. It is worth pausing to reflect on these first two reasons. Forecasting events and their impact on markets is an unfathomably complex problem to solve. We are incredibly unlikely to succeed in it. 2016 is useful example of this problem. For both the US election and Brexit (two macro risk obsessions at the time) investors were wrong footed by both elements – the forecast of the votes (even though they were binary) and the market reaction to them. Years and months were spent pontificating over positioning for those events, and many very intelligent people got everything wrong. When questions are posed such as: “What are you doing in your portfolio about Russia / Ukraine?” It is useful to unpack what is really being asked here, which is: “With limited information and a huge degree of uncertainty and complexity, have you made an accurate assessment of the likely outcome of the tense political / military stand-off between two countries, and then judged the market’s reaction?” The answer should be no. If the answer is yes, then we are displaying a huge degree of overconfidence. We are poor at assessing high profile risks: We tend to judge risks not by how likely they are to come to pass, but how salient they are. This a real problem for macro events because the attention they receive makes them inescapable, so we greatly overweight their importance in our thinking and decision making. This is why the media and industry focus on them is so problematic – it makes us believe that risks are both more severe and more likely to come to fruition. We need to be consistently right: Even if we strike lucky and are correct in adjusting our portfolio for a particular event, that’s not enough – we need to keep being right. Making a bold and correct investment decision about a single event is one thing, but what about the next one that comes along? We need to make a judgement on that too, we can’t undo all our prior good work. Over the long-run being right about any individual prominent macro event is probably more dangerous than being wrong, because it will embolden us to do it again. Most events will not matter to our long-term returns: Daniel Kahneman’s comment that “nothing in life is as important as you think it is, when you are thinking about it” could be used in relation to short-term events and our long-term outcomes. In the moment that we are experiencing them macro events can feel overwhelming and all-encompassing, but on a long-term view they are likely to fade into insignificance. It is not that macro events are never significant for markets. There will be incidents in the future that will lead to savage losses in equities; we just won’t be able to predict what will cause them or when they will happen. Trying to anticipate when they will occur, rather than accepting them as an expected feature of long-term investing, will inevitably lead to worse outcomes. If we find ourselves consistently worried about the next major risk that threatens markets, there are four steps we should take: 1) Reset our expectations: Investing in risky assets means that we will experience periods of severe drawdown. These are not something we can avoid, they are an inevitability. They are the reason why the returns of higher risk assets should be superior over time. We cannot have the long-term rewards without bearing the short-term costs. We need to have realistic expectations from the start. 2) Check we are holding the right investments: The caveat to ignoring the risks of major macro events is that we are sensibly invested in a manner that is consistent with our long-term objectives. If we have 100% of our portfolio in Russian equities, it might make sense to be a little anxious about recent developments. The more vulnerable our investments are to a single event, the more likely it is we have made some imprudent decisions. 3) Engage less with financial markets and news: There is no better way to insulate ourselves from short-term market noise and become a better long-term investor than to disengage from financial markets. Stop checking our portfolio so frequently and switch off the financial news. 4) Educate ourselves about behaviour, not macro and markets: What really matters to investors is not the latest macro event or recent markets moves, but the quality of our behaviour and decision making. We need to shift our focus. The asset management industry can do a lot to help here because at present it does little but promote noise and unnecessary action, inflaming our worst behavioural tendencies. Provided we are appropriately diversified, the real investment risk stemming from major macro events is not the issue itself but our behavioural response to it – the injudicious decisions we are likely to make because of the fears we hold. We need to find a way of worrying less about markets and more about ourselves. * As I hope is obvious, this observation is purely from an investment decision making perspective. Macro events will often have profound human consequences, which we should absolutely not disregard. " My COMMENT What a beautiful little article. This pretty well sums up this Ukraine event and most other news driven markets. A great PRIMER for long term investors that are getting sucked in by the constant media attention to the current world events.
What I consider even a bigger world event that is happening right now.....and mostly being ignored by investors....is the TOTAL COLLAPSE of the Covid narrative and pandemic. No the science has NOT changed.......but.....we are suddenly seeing massive changes in how we are going to approach this disease going forward. The reason......people are fed up and tired of being told what to do in their daily lives........we are not stupid. We are able to evaluate and manage our lives with this risk factor. The quickly escalating loosening of restrictions and mandates will have a MASSIVE impact on our economy and investors going forward.....much more than the Russia/Ukraine situation.
Here is the general economic news of the day.....which no one will care about. Jobless claims: Another 248,000 Americans filed new claims last week https://finance.yahoo.com/news/weekly-unemployment-claims-week-ended-feb-12-2022-185812481.html (BOLD is my opinion OR what I consider important content) "New weekly jobless claims unexpectedly rose last week, ending a three-week streak of improvements. The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics from the print compared to consensus estimates compiled by Bloomberg: Initial jobless claims, week ended Feb. 12: 248,000 vs. 218,000 expected and a revised 225,000 during prior week Continuing claims, week ended Feb. 5: 1.593 million vs. 1.605 million expected, and a revised 1.619 million during prior week Even with the rise in filings last week, jobless claims hovered near pre-pandemic levels, given that 2019's weekly average of new claims was approximately 220,000. In February last year, jobless claims were still coming in at a weekly rate of about 800,000 as virus-related pressures weighed on the labor market. Initial jobless claims edged higher in January to near 300,000 around the time that Omicron cases surged to a record level in the U.S. Though the virus-induced impact appeared as a brief bump higher in the weekly jobless claims data, the latest monthly jobs report showed surprising resilience. Non-farm payrolls soaring by a much greater-than-expected 467,000 in January while the labor force participation rate rose more than expected. "The Omicron wave triggered a brief but startling spike in initial jobless claims, but payroll growth slowed only marginally in January, and the initial data for February from Homebase point to a rebound," Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note. "At the same time, we are becoming increasingly convinced that the long-awaited rebound in labor participation is now underway, especially among women, who left the labor force in disproportionate numbers when schools and child care were closed." "Participation is unlikely to return to its pre-COVID level, thanks in part to early retirement among older people, who have seen big increases in the value of their homes and other assets, but we hope it will rise far enough to ease the pressure on wage growth," he added. This week's jobless claims data also coincides with the survey week for the February jobs report, serving as an advanced indicator of the strength of the labor market heading into that print. But while labor market data remain an important signal of the health of the broader economy, for policymakers, these reports have been overshadowed by the decades-high prints on inflation emerging as of late. With consumer prices soaring at the fastest rate in four decades, Federal Open Market Committee (FOMC) members have now appeared to shift their focus to bringing down inflation rather than further stoking the labor market, which has already shown significant progress in bringing many back to work and providing ample opportunities for workers to switch jobs. "At the January meeting, the FOMC strongly signaled conditions were ripe for rate hikes starting in March by stressing the risks of persistent, above target inflation and the progress made in the labor market," Sam Bullard, managing director and senior economist at Wells Fargo Corporate and Investment Banking, wrote in a note. "For now, we continue to think the most likely outcome is that the Fed will act in a 'measured' way, with 25 bps hikes."" AND U.S. Housing Starts Drop 4.1% in First Decline in Four Months https://finance.yahoo.com/news/u-housing-starts-drop-4-134201795.html (BOLD is my opinion OR what I consider important content) "(Bloomberg) -- New U.S. home construction fell in January for the first time in four months, indicating pandemic-related labor absences and winter weather tempered recent progress on building activity. Residential starts dropped 4.1% last month to a 1.64 million annualized rate, according to government data released Thursday. Still, applications to build rose to an annualized 1.9 million units, the highest since 2006. High materials costs and difficulty attracting skilled labor remain headwinds for builders, inhibiting new construction and aggravating home shortages across markets. Moreover, sky-high prices and the recent rise in mortgage rates risk hampering affordability. At the same time, the increase in building permits and a pickup in the number of homes authorized but not yet started suggests residential construction will remain healthy in coming months. “Despite a somewhat slower start to 2022, builders have continued to make progress on their backlog of homes, and consumer demand continues to outpace supply,” Kelly Mangold at RCLCO Real Estate Consulting, said in a note. The median estimate in a Bloomberg survey of economists called for a 1.7 million pace of housing starts in January. New construction fell sharply in the Midwest, probably a reflection of winter. Starts of single-family homes in the Northeast also plunged. Single-Family Homes Single-family starts declined 5.6% in January to an annualized pace of 1.12 million units as multifamily starts -- which tend to be volatile and include apartment buildings and condominiums -- decreased to 522,000. The number of one-family homes authorized for construction but not yet started climbed 5.6% to 151,000 in January, one of the highest levels in 15 years. While residential construction will likely be underpinned by growing backlogs, sales could take a hit from higher borrowing costs. A recent survey showed a record-low 25% of Americans said now is a good time to purchase a house." MY COMMENT BOTH of these aspects of the economy are distorted at present. The labor and employment markets are completely distorted and impossible for anyone to really know what is going on and why. As usual.....I will say....we are going to need at least 12-18 months to see this resolve. Hopefully the restoration of freedom and personal rights and the lifting of pandemic mandates and restrictions.....will speed up the return to normal. As to housing.......we are in a big mess....."IF".....you are a potential buyer looking to get into a house. Prices are high and will NOT drop in the hot markets. At the same time.....mortgage rates are going higher in general over the next couple of years......another issue that buyers will have to deal with.
Well I am off to work on a few tax returns. I was able to get the final tax statements that I needed from Schwab last night. If you are waiting for a Schwab tax statement.....they are saying that they will be sent out of February 18.....but they are generally available online right now.
Poor Cathie Woods.......she is a media victim. They love to build someone up and than knock them back down. The GLORIFICATION of her by the media was way over blown.......and.......her recent fall from grace is also overblown. It is interesting to watch. It is also NOT unexpected.....her funds are EXTREMELY volatile and high risk. You would think that anyone investing with her would know this....if the did any research or thinking about her investing concept and strategy. I would personally not take that risk......but others.....why not, if that is how you want to invest and you agree with her concept.
we should get permission from the emmett kelly family to use his name and likeness and create a clown fund.
I like it....the Clown fund......kind of like the clown market that we are in right now. Can you imagine.....I was in the red today. I did have ONE stock in the green.....Costco. I also got beat by the SP500 by 0.55%. When the markets are focused on and reacting to outside pressures that have nothing to do with business....this is what you get. What do you do.....nothing.
This is a long but interesting little article. Too bad Norway does not run our Social Security Trust Fund. The Norway Model https://www.fortunesandfrictions.com/post/the-norway-model (BOLD is my opinion OR what I consider important content) "Come for the fjords and fårikål (mutton and cabbage-stew), but stay for the most impressive pension fund on earth. You'll need to be in Norway for longer than a quick jaunt (people aren't eligible unless they've resided in the country for at least three years), but once you're in, you'll stake claim to your share of a government retirement program with an astounding $1.3T, for 5M citizens. For context, Social Security in the U.S. has $3T, for 330M citizens. It's all thanks to prudent financial decision-making after Norway discovered an abundance of oil back in 1969, and the country designed an investment strategy to grow their newfound wealth. Currently, more than half of the $1.3T is from portfolio growth alone! Like most pensions, they have a long-term investment horizon, as the fund is intended to exist in perpetuity, meaning they can buy assets that have higher risks and higher expected returns. The Norway Pension Fund Global is the single largest owner of global stocks in the entire world. Take any institutional investment class, and you'll learn about it: The Norway Model. The WSJ's Jason Zweig wrote a tremendous article about it back in 2013. The Norway Model is characterized by minimal use of expensive products, like private equity and hedge funds, and focuses instead on keeping fees low, and diversifying across publicly traded stocks and bonds. It uses passive management – meaning the investment decision-makers don't purport to have the expertise to pick which stocks will outperform which other stocks. They just buy a little bit of every stock, which is an approach steeped in academic rigor. Norway's pension fund currently has money in over 9,100 stocks, across 69 countries! Most institutional investors do not follow The Norway Model, but instead follow The Yale Model. The Yale Model is characterized by usage of expensive alternative assets like hedge funds and private equity. David Swensen had a legendary career as Yale's endowment manager, until he passed away too soon, last May. The investment approach is sometimes called The Swensen Model because of him, and it's also sometimes called The Endowment Model because most endowments have since copied him. Dozens of decision-makers at elite institutions today worked under David at Yale, before leaving to manage endowments elsewhere – like at Princeton, MIT, Stanford, Wesleyan, and Bowdoin. If you're interested, he quite literally wrote the book on institutional investing. Likely unsurprising to F&F readers – I can't broadly advocate for Yale/Swensen investing. In aggregate, the approach with the highest probability of a successful outcome humbly places small bets on thousands of opportunities, seeking to capture the return of global capitalism, rather than placing larger bets on a smaller number of opportunities. Norway, not Yale. That said, there are select few institutions for whom The Yale Model can work. Like, for instance...YALE It is access to certain people, deals, and funds that make investing in expensive, private products potentially worth it. An institution like Yale has this access, and these connections, in spades. It is the institutions who don't have elite access, most of whom have, like lemmings, followed Yale into this investment approach, whose communities and alumni bases are being poorly served. Not everyone is Yale. The data is out there. Investors should be more like Norway, and less like Yale. One thing I love about the Swensen story is that he actually agreed with this. What he was doing for Yale was not what he was broadly advocating for others. From his obituary in the New York Times, about his second book: Mr. Swensen was as concerned about the small investor as he was about his endowment. In his book “Unconventional Success: A Fundamental Approach to Personal Investment”(1995), he advised people to keep their costs low and to stick to exchange-traded funds, which invest across an entire index of stocks, rather than investing with money managers or mutual funds that select individual stocks, and where the costs can erode profits. It was virtually impossible for the average investor to get into the best private funds, he said. Private markets are very different than public markets. Public markets (stocks and bonds) are like grocery stores. Grocery stores have lots of informed buyers, and aisles of options. This creates a boring marketplace, where good products have high prices, and crappy products have low prices, and the spread in price is what makes anything a reasonable purchase for the right person. Sellers can't charge much more than the going-rate, or else buyers will switch products. Buyers can't consistently find great deals, or else sellers wouldn't make a profit. It's a snooze. Same with stocks and bonds. Their prices shouldn't be "considered fair" because companies offer similar outlooks (they don't), but because prices adjust for how great or crappy a company is: it's the grocery store equivalent of lobster vs. tilapia, or filet mignon vs. hamburger meat. Therefore, it should be difficult to imagine a world, with so much information available about public companies, where it's worth paying someone a high fee to guess the future winners and losers. Prices already reflect quality. It's a snooze. Private markets are more akin to shopping at a rural thrift store. In private markets, there is less commoditization of products, and more deals to be found – but you need the time and expertise to find it. You also need to know that it even exists, or know the people who know it exists. Investors are trying to access deals, and buy parts of businesses, that don't trade on stock exchanges, and aren't necessarily written about in the news. There's less information available. You can find a gem. The network and alumni base at a place like Yale has a competitive advantage in this pursuit. Not all institutions have fallen into the trap of investing like Yale without the resources of Yale. It's worth mentioning Houghton College, and this New York Times article from 2017: Houghton emerged in the top quartile of all endowments...with a return of 11.85%... How did tiny Houghton do it? The answer is pretty simple: Houghton got out of hedge funds and all alternative investments a year and a half ago, and moved the entire portfolio to a mix of low-cost index funds and mutual funds at the fund giant Vanguard. Even more notable is the manager of Nevada's pension fund, Steve Edmundson, who currently manages $54B! From his 2016 exposé in the WSJ: Steve Edmundson has no co-workers, rarely takes meetings and often eats leftovers at his desk. With that dynamic workday, the investment chief for the Nevada Public Employees’ Retirement System is out-earning pension funds that have hundreds on staff.♞ His daily trading strategy: Do as little as possible, usually nothing. The Nevada system’s stocks and bonds are all in low-cost funds that mimic indexes. Jason Zweig's aforementioned article about The Norway Model was written nine years ago, and I've kept it in my back pocket the entire time. The message is what the world needs: Norway, not Yale. And so unsurprisingly I thought about it, when nine years later, just last week, Jason's WSJ colleague Ben Cohen wrote a spectacular article about the Norwegian ski-jumping team, and yet another message the world needs: Ben writes that Norway is the only global ski-jumping team to have merged its men's and women's teams for training. “We just did it,” said Clas Brede Brathen, the manager of Norway’s ski-jumping team, “because it felt like the obvious thing to do.” And as Ben continues, they don’t think of combining the men’s and women’s squads as some token gesture of solidarity. What do the Norwegian team think about the diversity of thought, opinion, and skill? “It’s a competitive advantage,” said Christian Meyer, the Norway women’s coach. “Definitely.” One thread between Ben's article now, and Jason's article nine years ago, is that they both question a tradition that so desperately needs revision.♜ Ben describes the current landscape of Olympic ski-jumping: Men have three Olympic medal events. Women have one. Men have a team competition. Women don’t. Men jump on a normal hill and a large hill. Women only get the normal hill. Men can ski fly. Women can’t. Ski jumping is almost literally a sport with a glass ceiling. What's so familiar about the Norwegian ski-jumping teams joining forces is that the evidence says to not follow the herd. Their approach is modest, and embraces that other people might know something that they don't. And yes, their country's pension invests with this same methodology. Successful ski-jumping relies heavily on data, and Ben continues to describe this sport as if it combines the Moneyball-elements of baseball with the aerodynamic complexities of bobsledding. [It] requires precision, objectivity and numerical calculations. Other sports reward scouting. This one depends on testing. Equipment must be tweaked. Suits can always be optimized. There is no such thing as overkill for people launching themselves down the side of a mountain. The men improve because of the additional data shared with the women, and vice-versa, but also the neuro- and athletic-diversity. “Probably most of the men’s [Norwegian] team didn’t understand how this could profit their development,” Brathen said. “But after quite a short while, they saw that these ladies have another approach to top sport. They are a bit more, let’s say, systematic and reflective.” The men quickly realized they had more to learn from the women than the other way around. When there are evidence-based ways to enhance the probability of success, adopt them. It won't be surprising to you that Marius Lindvik, a Norwegian, won the gold medal in the large hill event earlier this week: Thanks to a well-crafted strategy based in humility, and one focused on improved outcomes rather than adhering to outdated, legacy methods, he shares this individual gold with all of his teammates. That approach sounds familiar." MY COMMENT It is amazing to me that ANY college fund or any sort of endowment uses active management. It is totally obvious that better returns are PROBABLE with simple Index investing. Of course......the obvious.........is never first choice in most endeavors.
Just for fun....because it is irrelevant.....here is the reasoning for the markets today. Stock market news live updates: Stocks tumble as tensions at Russia-Ukraine border intensify https://finance.yahoo.com/news/stock-market-news-live-updates-february-17-2022-235447137.html (BOLD is my opinion OR what I consider important content) "Wall Street’s main benchmarks fell sharply Thursday as investors grappled with renewed anxiety over geopolitical tensions between Russia and Ukraine following a warning from President Joe Biden that military action by the Kremlin appeared imminent. The S&P 500 plunged more than 2% to 4,380.04, while the Dow Jones Industrial Average shed 623 points — or 1.8% — to 34,311.18, recording its worst day since Nov. 26, 2021. The Nasdaq Composite erased nearly 2.9%, falling to 13,716.72. The Russia-Ukraine conflict also weighed on oil and bond yields. Crude oil declined 2.15% to $91.65 per barrel, while the 10-year U.S. Treasury benchmark fell 7.5 basis points to yield 1.97% U.S. President Joe Biden said on Thursday the threat of a Russian invasion of Ukraine was "very high" and “every indication [the White House had] is that [Russia is] prepared to go into Ukraine.” The conflict has added a fresh headwind for markets already bracing for the Federal Reserve to raise interest rates as it looks to tighten monetary conditions to mitigate surging inflationary pressures. Fears that the Kremlin would green light a move to force in on its neighboring country build on the existing worries around central bank policies due to the potential of military action to exacerbate inflation and spur other economic disruptions. “When you have a risk-off environment that we’ve been seeing all year, adding on Ukraine is certainly not going to help the situation, so I’m not surprised to see heightened sensitivity,” Barrett Asset Management Chief Investment Officer Amy Kong told Yahoo Finance Live. “In general, we have seen through time and through stock market history, that geopolitical events have stressed the market.” Kong added such news are typically met with shock and panic, but in due time as investors digest whether such events will impact the fundamentals of the market, if the answer is no, in the long run that anxiety dissipates to a degree. “If it were to get worse — which is a big if — a very strong stagflationary wind would blow through the global economy,” Mohamed El-Erian, president of Queens College at Cambridge University, told Yahoo Finance Live. “The marketplace now is pricing somewhere between we get a good diplomatic resolution, or we stay in this uncomfortable no war and no peace. We’re not really pricing in the possibility that this may be an armed conflict.” Stagflation occurs when economic growth slows sharply and inflation rises. "Markets continue to watch events in Ukraine, cycling back and forth between risk-on with the lessening of tensions and risk-off as tensions increase," Independent Advisor Alliance Chief Investment Officer Chris Zaccarelli said in a note. "This morning markets are concerned about the Russian troop buildup and a lack of trust in Putin’s declaration that they are beginning to remove troops from the region." Markets jumped earlier this week on false reports Russia withdrew some troops from the Ukrainian border, but fears of imminent military action have since resurfaced after NATO officials said Russia was continuing its buildup of troops. The Biden administration said Russia has added as many as 7,000 military personnel to Ukraine’s border. “We have excellent intelligence and if the Russians in fact are removing those troops, we will see it,” John Ed Herbst, former U.S. ambassador to Ukraine, told Yahoo Finance Live on Tuesday. Investors also continued to weigh minutes from the Fed’s last policy-setting meeting that indicated officials were weighing a near-term increase on short-term borrowing costs but did not suggest a 50 basis point hike was on their agenda. In recent weeks, the prospect central bank policymakers could scale up their hiking cycle on a string of recent red-hot inflation prints and stronger-than-expected jobs data have weighed on stocks. “With markets signaling the Fed’s latency on monetary policy action is a growing concern, investors were looking for any clues in the Fed minutes that allude to more aggressive policy changes in the near future,” Allianz Investment Management senior investment strategist Charlie Ripley said in a note. “In markets, timing is everything, and the delayed reaction from the Fed has investors convinced that aggressive policy tightening is on the horizon.” “While not offering much to change that view, the Fed minutes did indicate a faster pace of tightening relative to the last hiking cycle is warranted,” Ripley said. “On balance, there was nothing in the minutes that suggested the Fed would be more aggressive than what the market has already priced in.” On the economic data front, first-time unemployment filings unexpectedly ticked higher in the latest weekly data, capping a recent downward trend in jobless claims that signaled Omicron-related pressures on the labor market were beginning to abate. The focus on geopolitical events has overshadowed recent economic data to an extent, Zaccarelli said, though adding the release of last week’s figures, which showed that jobless claims are up a worse-than-expected 10% this week – contributed to some of the volatility. Construction on new residential homes fell in January for the first time in four months, also reflecting how COVID-related labor shortages weighed on recent progress in building activity. “The supply chain problems holding back homebuilding will likely improve this year, but labor shortages will be a more persistent constraint on new home supply,” Comerica Bank chief economist Bill Adams said in a note." MY COMMENT WHATEVER........this stuff makes for a very boring market. Day after day....the same thing. As an actual long term investor....there is nothing for me to do except SIT AND WAIT it out.
https://www.nbim.no/en/the-fund/investments/#/ Norway sovereign fundo (composition), you can check it here.
@WXYZ do you have any specific things you focus on when making a decision to sell a company? Do you give a company a few quarters or months of mediocre/ poor performance before making the call to sell? I realize it's probably unique for each company and the reasons can vary (management change, no longer a leader in their field, etc) but I'm curious what you pay attention to.
There's already one of those. The BUZZ ETF created by Dave Portnoy is all about trending (basically WallStreetBets popular pump and dumps) stocks. Here's how it's done: Here's the holdings, which they (surprisingly) wisely balanced with some actual real companies like AMZN
TravelWC. Well if you read back in this thread you can see a few times that I have sold things and some of my reasoning. Once in a while I might buy something that is NOT a long term hold.......like a momentum trade on a stock split........in that case I try to have a plan going in and I try to stick with that plan. BUT.....most of the time....the vast majority of the time.......I do not trade and I am long term. Everything in my Model Portfolio on here is intended to be EXTREMELY long term. I am willing to hold a long time before selling. There was a chart in an article a few pages back showing what you would have made if you held each of the stocks for 30 years. During that time nearly every one of those companies had time periods....often years....where they had issues. BUT.......if you held on they came back and thrived. So.....as long as a company meets my general criteria for investing......GREAT MANAGEMENT, ICONIC PRODUCTS, WORLD WIDE MARKETING, DOMINANCE, ETC, ETC.......I try to avoid selling over short to medium term performance. In addition....selling generates TAXES....either short term gains taxed as income or long term gains taxed at the capital gains rates. Another reason to be wary of selling often or too quickly. Probably the most likely reasons for me to sell something is a BAD management change.....or....some devastating event that makes a company toxic to me. EVERYONE.....including me....needs to be wary of the human impulses to sell things too often and too quickly.
The markets today have been struggling for direction since the open. But now it looks like that direction has been more firmly established for today.....and it is down for now. with the news driven issues going on right now I would guess that we will end up down for the day.....but it is very early and things can change quickly. So who knows.
I think way too many investors are way too analytical today. It becomes a mechanical process that consumes everything else. Taking time to just sit and read or think is important to any investor. Also a good understanding of human behavior and an ability to see the reality of what is going on around us. As a small business owner these are good skills to have and are usually present if you are successful. How P.J. O’Rourke Can Help You Invest Better Sometimes non-investment reading can be your best training material. https://www.fisherinvestments.com/en-us/marketminder/how-pj-orourke-can-help-you-invest-better (BOLD is my opinion OR what I consider important content) "“What should I read?” That is a question we often get from our readers, colleagues, family and friends as they seek to hone their investing knowledge and skills. My default answer has always been, “people you don’t agree with.” After all, confirmation bias underlies many investing errors (and a whole lot of non-investing mistakes, for that matter), and the only way to fight it is to confront it head on. Read competing arguments, weigh the evidence and be open to being convinced. We are all human, and no human is right all the time. Reading a well-reasoned piece from your ideological opposite can help you spot the logical fallacies in your own thinking, expand your horizons and make you better. But this week, poring over the many tributes to the legendary P.J. O’Rourke, I realized there is another, perhaps even better answer: Read the humorists. They will teach you much more about observation, critical thinking and defying conventional wisdom—almost always the key to investing successfully—than the economists, sociologists and political pundits that dominate today’s landscape. By “humorist,” I don’t mean comedian, although the two can overlap at times. A comedian’s job is to tell jokes and make you laugh. A humorist, by contrast, uses wit and satire to comment on life, society, current events and the human condition. They spot the funny, incongruous and absurd in the everyday and build stories around it. They write without taking an emotional stake in either side of an argument—rather, they are detached, on the sidelines and not beholden to any audience. They are Joan Didion plus directness and irony. The best ones think freely and deeply, sport a devil-may-care attitude and write with a razorblade rather than a pen. They take no prisoners and relish standing out from the crowd. They don’t cower at criticism but rather use it as fuel. If everyone agrees with them, after all, they probably aren’t doing their job correctly. No, you won’t learn basic investing concepts from The Portable Dorothy Parker. Nor will H.L. Mencken’s Chrestomathy teach you to spot bear markets early on. P.G. Wodehouse offers no lessons in security analysis, and Robert Benchley won’t help you understand when and why growth stocks beat value. But in their writing, these and other great writers demonstrate the qualities that most successful investors share: an eagerness to challenge conventional wisdom. The wisdom to see that if Group A says one thing and Group B says the opposite, then the truth probably lies in some underconsidered third option. The ability to spot seemingly mundane, overlooked things of great significance. The clarity to identify potential downstream consequences—O’Rourke’s essays are a masterclass in that. Several years back, I got to write a book with Ken Fisher called Beat the Crowd. It was all about how to be a contrarian investor—how to take advantage of the knowledge that markets usually price all widely held expectations, then do something different. The main lesson we sought to instill: It isn’t that stocks do the polar opposite of what the crowd expects, but rather that if the crowd is focused on X or its opposite (C), then stocks have probably already priced it in and are focusing on G or P (not Y—markets don’t follow rules). So the key to getting ahead is to figure out what stocks haven’t yet priced and assess whether those somethings are likely to be positive or negative for corporate profitability over the next 3 – 30 months. Sometimes that means spotting the flaws in conventional thinking. Other times that means looking where the crowd isn’t. The humorists have these qualities in spades. You read them not to learn what to think but for an object lesson in how to think. How to spot the absurdities in life and mainstream logic. How to ferret out contradictions in conventional wisdom. How to see and find the significance in the small things most overlook. How to take in the landscape with a gimlet eye. The more you read their work and internalize their approach, the more you can then turn and use those same tactics when assessing the popular takes on economic data, market trends and forecasts. One of the biggest mistakes people make when approaching investing, in my view, is presuming quantitative analysis is the be all, end all. Don’t get me wrong, evaluating data is important. But qualitative analysis is as important, if not more so. Because if you can’t deconstruct and evaluate others’ arguments, how can you determine whether and where the crowd is wrong in its thinking? How can you find the hole in their logic that you can then exploit to make better investment decisions? How can you identify the potential second- and third-order consequences of new laws and regulations? Humorists are responsible for some of the best qualitative analysis ever printed. Read them all, don’t take offense, open your mind and learn the tricks of their trade. In my view, you will be a better investor for it—and, just maybe, entertained in the process." MY COMMENT I think many of the worlds greatest investors through history have an ability to see what others are not seeing. They are nonconformists. They have the strength to follow their own path and not be concerned about how and what others are doing. That is why I like to say.....ALL investing is personal. Every investor has to invest how and why they think is right. Every person is different. Each investor has to find what works for them and have the conviction and confidence to simply do it over, and over, and over, for life.....as long as it works. SCREW everyone else....if it works for you and you are achieving your goals.....JUST DO IT.
I like this commentary from a FED member. Fed's Evans says policy "wrong-footed," but may not need to be restrictive https://finance.yahoo.com/news/feds-evans-says-policy-wrong-154103854.html (BOLD is my opinion OR what I consider important content) "NEW YORK (Reuters) - Current high inflation requires a "substantial repositioning" of Federal Reserve policy, but not so much that it will restrict the economy and wreck employment, Chicago Fed president Charles Evans said Friday. Evans, in prepared remarks, laid out the case that price pressures still stand to ease on their own without aggressive Fed interest rate increases. He did not give details on what he thinks the Fed should do at its March or subsequent meetings through the year, or wade into the debate over whether officials should start with a larger than usual half percentage point increase to jump start the process. But he said his comments were meant to provide "discipline against scary guesses that the world is about to end," with the Fed losing control of inflation and needing to risk sharp rises in unemployment or even a recession to control it. "Our present monetary policy setting is wrong-footed against the current, sharp increase in inflation," Evans said at a conference organized by University of Chicago Booth School of Business. However, stripping out pandemic and supply chain effects that are likely to fade, "by my reading underlying inflation appears to still be well anchored at levels consistent with the Fed’s average 2 percent objective," he said. As a result, "I see our current policy situation as likely requiring less ultimate financial restrictiveness compared with past episodes and posing a smaller risk" to jobs and growth, than was needed to fix bouts of inflation in the 1970s and 1980s, he said. "We don’t know what is on the other side of the current inflation spike... We may once again be looking at a situation where there is nothing to fear from running the economy hot," and capturing benefits for workers, he said. Evans was commenting on a paper delivered at the same conference which noted the benefits of a new Fed strategy. That strategy, which Evans helped author, tries to capture jobs gains by taking more risk with higher inflation. The spike in prices during the pandemic has brought that approach into question." MY COMMENT I had to interrupt this post......LOL.....to get a bid on one part of our house projects. I tend to agree with the above. I think the underlying economy is WEAKER than most people realize and the the economic trend world-wide right now is DEFLATIONARY. I definately think the FED needs to stop tapering and raise rates back toward normal. BUT....it needs to be done with moderation and slowly......I would say at the rate of 0.25% about each quarter.....for about 6-8 quarters minimum....but.....it the economy needs to be evaluated each step of the way.
