The Long Term Investor

Ok Mizugori

I will go through my process.....but it is probably not going to be what you expect.

First what I do in thinking about any investment is INTUITIVE and INSTINCTUAL....in addition to being very clinical and rational. In the end....I dont care what or how you want to look at a business....it simply comes down to having to make a personal decision.

I am not a BEAN COUNTER.....I absolutely do not believe in plunging in a bunch of numbers into some formula or bunch of formulas and it spits out a decision to buy or not buy a stock.

The first step is some company catching my eye as an investor. USUALLY it is a company that I know or am a customer. I have been a customer of some of my stocks since they were born.....Costco, Nike, Home Depot, Microsoft....are examples. This is my first step....the fact that a business catches my attention as a customer and/or as a business person.

Once in a while I might review a list of companies......like the SP500 or the DOW...... to see if some company catches my eye that I had not thought of. I DO NOT constantly look for new companies since I only hold 10-15 at a time........AND.......my intent is to hold them a very long time. I confine my focus to BIG CAP GROWTH companies........and...those showing the young potential to become BIG CAP GROWTH companies.....I want to see the handwriting on the wall.

Tied in with the above is my background.......I have been around investing my entire life, I have a background as a business owner and am VERY GOOD at business in general.....I believe it is just a talent that I was born with......like any "born" talent. I have a good amount of....."book"....education.......a Psychology degree, Business grad school, a law degree. I am EXTREMELY perceptive in watching and seeing human behavior and business behavior and always have been. The way my brain works as a result of all the above is BUSINESS, BUSINESS, BUSINESS all the time.......it might NOT be a good thing.......but I am constantly looking at everything around me in terms of business, management, and finance, etc, etc.

SO.....ok......once the above causes me to notice a company I will take the following steps to rule it in or out:

1. I find EVERYTHING that I can on the company and their management and business by researching online. I am a very good researcher and it is not difficult to find information of this sort.

2. I use the tools that are available to me as a Schwab customer to evaluate the company and stock. I have access through Schwab to analyst material from....Schwab, Morningstar, Argus, CFRA, Reuters, Vickers, Credit Suisse and others......so I would generally review this sort of material.

3. I will look for any Fundamental Analysis of the financials and the business that I can find online and review that material.

4. In doing the above detailed research I am primarily looking for NEGATIVE ITEMS and ISSUES of CONCERN that I might need to think about or look into further. At any step of the process if I run into anything that I dont like........I drop the company right there. If what I am seeing CONFIRMS my view that this is a GREAT company.....I will continue the process.

5. In general I am looking for companies that are going to DOMINATE in their area for a long, long, time.....I ESPECIALLY LOVE companies that have little to no competition.....which means DOMINANCE. Like Home Depot....only one competitor Lowes......or Microsoft when they started......basically a monopoly to provide operating systems for EVERY PC sold IN THE WORLD......or Costco, they are the ONLY real warehouse retail operation (sorry Sam's Club)......or Nike......they are the DOMINANT KING of the shoe and sports retail area....etc, etc, etc.

6. In researching management......I want to see long term company success and business success by the managers. Hopefully good long term industry experience and hopefully they came up through the ranks or were a founder of the company. I HATE to see celebrity CEO type management.

7. I want to see "consumer", "customer", and "business confirmation" of all the above....a groundswell of customer excitement and acceptance of the business and their products.......BIG MOMENTUM.

8. If all of the above is checking out to me intuitively and instinctively and rationally than I will use this site........https://www.macrotrends.net/.......and others like it to go through ALL the company financials.....line by line......to compare what their numbers look like for at least FIVE YEARS. I am looking for a generally growing business with steadily improving numbers. I am looking for anything that might look like an issue going on with the company and their business. If I see something strange or concerning with some number....I can than follow up with online research to see what the explanation is.

9. If all the above checks out and my "GUT" is STILL telling me that I like the business I might add the stock to my portfolio........as a small position and see how it does over 6-12 months. I have no hesitation to dump a stock that does not seem to be confirming my "investment thesis" for that company that I started with.

You know one important factor is that in my life and with my personality.......I have NEVER been a follower.....I make my own decisions in my own way. I dont care "how" something is supposed to be done.....I do it the way that works for me. In everything I have ever done in life.....sports, school, business, investing, music, etc, etc.....I am the person that everyone underestimates........that in the end is very successful. I am the person that in business or investing or other aspects of life hears all the BS about something and has the guts to ask (either out-loud or to myself)....."WHY".......and usually there is simply no good answer to that.

 

To add to the above....it is RARE that I look into a new company. I am satisfied with the stocks and funds that I own so I have no reason to look for something else. Inactivity and doing nothing are a PLUS to me and do not bother me.

 

A welcome day off for the markets today....and....especially for investors.

The media coverage I have been hearing today about Ukraine is WAY over the top. The worst fear mongering and drama I have heard to date. On the other hand.....when I am out and about and with "real People".......I dont hear anyone talking about Ukraine. It is a non-topic in general daily life.

 

We will have a short four day market week this week. It is a good thing we were closed today.....all the futures are SIGNIFICANTLY negative at the moment. I mentioned a page or two ago that I sold off some stocks and funds in the low six figures in a relatives account for them to use in April to pay taxes. Some might think....gee....why do that when there is another couple of months till tax day. Well.....this money became short term money as soon as they knew what they were going to owe on their taxes. AND....being old school.....I do NOT risk short term money in the markets.

PCE inflation, consumer confidence: What to know this week

https://finance.yahoo.com/news/pce-...arnings-what-to-know-this-week-164350893.html

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

"After stocks endured a second straight week of selling last week, investors will be looking to a slate of fresh economic and earnings data as a catalyst for a potential reprieve.

The U.S. stock and bond markets will be closed Monday in observance of the Presidents Day holiday, so new data releases will be consolidated to the later part of the week. And updates on tensions in Russia and Ukraine will also remain in focus throughout the week after stocks sank to their lowest levels in a month on Friday, amid concerns about the escalating geopolitical conflict.

While the emerging threat of military conflict has overshadowed many other worries in the markets, inflation has still remained a central issue for investors. Inflation has implications both in informing the speed at which the Federal Reserve tightens monetary policy, and the extent to which consumers pull back on spending and slow overall economic activity in response to rising prices.

"I really think most of the Russia-Ukraine volatility occurred in the energy space, particularly with oil. I think the rest of the volatility in the broader market has to do with the Fed tightening conversation," Frances Stacy, Optimal Capital director of strategy, told Yahoo Finance Live on Friday. "We're looking at this sort of aggressive tightening against this backdrop of inflation, and I think that that's what's causing the volatility."

On Friday, the Bureau of Economic Analysis will release its monthly personal consumption expenditures (PCE) deflator, offering a fresh print on the extent of price increases across the recovering economy.

Consensus economists expect the PCE to post a rise of another 0.6% in January, according to Bloomberg data, accelerating from December's 0.4% increase. This would represent a 14th consecutive monthly increase, and bring the index up by 6.0% on a year-over-year basis. This, in turn, would mark the fastest increase since 1982, and also accelerate from December's 5.8% annual rise.

The core PCE index — the Fed's preferred gauge of underlying inflation stripping out volatile food and energy prices — likely also ramped compared to December's index. Consensus economists are looking for a 5.2% increase in core PCE in January, compared to December's 4.9% rise.

Expectations for the latest inflation print suggest the economy has still not yet seen the peak in price increases. And increasingly, central bank officials have come around to the notion that inflation has remained stickier than previously expected, especially as supply chain issues and virus-related disruptions persist.

"Since the December meeting, I would say that the inflation situation is about the same but probably slightly worse," Federal Reserve Chair Jerome Powell said in a January press conference. "I’d be inclined to raise my own estimate of 2022 core PCE inflation ... by a few tenths today."

And the latest print on PCE will likely reaffirm readings from other closely watched inflation prints. The January Consumer Price Index (CPI) jumped by 7.5% year-over-year to represent the largest increase since 1982, accelerating markedly from the 7.0% increase from December. And on the producer side, wholesale prices jumped 9.7% year-on-year in January, ticking down only slightly from December's record increase of 9.8%.

Consumer confidence

Despite the mounting inflationary pressures, however, consumers have largely continued to spend. Retail sales rose by a better-than-expected 3.8% in January, marking the biggest jump since March 2021 and exceeding estimates.

And this steady consumption has come even as consumers increasingly cited inflation as a key concern for their own personal finances. Average hourly wages have also climbed in recent months, but have still not kept pace with inflation.

"The resilience of spending stands in stark contrast to the slump in consumer confidence, with households upping their purchases of big ticket items while simultaneously reporting that now is a particularly bad time to make those purchases," Paul Ashworth, chief North American economist for Capital Economics, wrote in a note. "The surge in inflation is the root cause of consumer angst. Sentiment should improve as inflation falls back later this year, but the current weakness is a reminder that real consumption growth will be muted this year."

The Conference Board's Consumer Confidence Index due for release on Tuesday will help provide a timely snapshot of consumers' thinking following the latest spike in prices at the beginning of the year. Consensus economists are looking for the index to fall to 110.0 for February, which would mark the lowest level since September 2021, when the Delta variant had weighed on consumers' outlooks. The consumer confidence index had been at 113.8 in January.

Earnings season rolls on

Investors will also receive a number of new earnings results this week, with major retailers including Home Depot (HD), Lowe's (LOW), Macy's (M) and The TJX Cos. (TJX) reporting alongside other closely watched names from Coinbase (COIN) to Wayfair (W) and Nikola (NKLA).

So far this earnings season, corporate profits have remained robust, albeit while slowing compared to prior quarters. As of Friday, 84% of S&P 500 companies had reported actual fourth-quarter earnings results, according to FactSet. And the estimated earnings growth rate for S&P 500 companies in aggregate stood at 30.9%, compared to about 40% from the third quarter.

Still, the estimated earnings growth rate for the fourth quarter has trended continuously higher as more companies reported better-than-expected results. On December 31, the estimated earnings growth rate for the fourth quarter had been at just 21.2%.

But while results for many companies have been positive for the final three months of 2021, outlooks have weakened, reflecting lingering supply chain uncertainty, rising prices and other macro concerns. FactSet noted that of companies that held their earnings conference calls between Dec. 15 and Feb. 17, 72% of the corporations mentioned "inflation."

"In terms of earnings guidance from corporations, 71% of the S&P 500 companies (55 out of 77) that have issued EPS [earnings per share] guidance for Q1 2022 have issued negative guidance," FactSet's John Butters wrote in a note Friday. "This is the highest percentage of S&P 500 companies issuing negative guidance since Q3 2019 (73%)."

"Thus, the market may be reacting more to the negative earnings guidance and downward estimates revisions for the first quarter of 2022 than the earnings surprises being reported for the fourth-quarter of 2021," Butters added.

MY COMMENT

I expect the negativity to continue based on the usual fear mongering topics that are being repeated week after week.

Earnings are coming in much better than expected with the earnings growth rate at a very nice 31% with 84% of the SP500 having reported. As to the guidance.....I dont give it much weight at all.....many companies are simply taking the SAFE PATH and giving very cautious guidance. This might very well set us up for a good earnings beat once again when the first quarter ends.

Ah yes.....the Consumer Confidence Poll.....what a joke. This "fluff poll" is worthless. Many consumers simply tell the pollster what they expect that they want to hear.......and based on the current news......that is a negative story. BUT....the reality.....in their ACTUAL lives consumers are spending money and making purchases, big and small.

Here is some more commentary on the gap between what Consumers say and what they do.

A bullish contradiction: Consumers are acting more bullish than they're saying

https://finance.yahoo.com/news/consumers-retail-tker-165319480.html

 

For those that want to OBSESS over.....RUSSIA, RUSSIA, RUSSIA........here is a little tid-bit for you to think about. I really have no opinion on this issue since I think it is irrelevant and I simply dont care one way or the other. (This news is 10 hours old as I post this)

Rouble sinks, stocks plunge as Russia recognizes Ukraine breakaway regions

https://finance.yahoo.com/news/rouble-sinks-past-78-vs-121852090.html

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

"MOSCOW (Reuters) -The rouble tanked on Monday, slipping past 80 against the dollar, while stocks plunged to their lowest in over a year as Russian President Vladimir Putin called for the immediate recognition of two breakaway regions in eastern Ukraine.

Putin signed a decree recognising the breakaway regions in eastern Ukraine as independent entities, upping the ante in a regional crisis the West fears could erupt into war.

The rouble fell to as low as 80.0650 against the dollar during Putin's lengthy televised address to the Russian nation but pared some losses as Putin announced his decision, which he said would find support among Russian people.

The sharp drop in the rouble from levels around 70 to the greenback seen just four months ago is expected to fuel already high inflation, one of the main concerns among Russians, which would dent the country's already falling living standards.

By 1956 GMT, the rouble fell 2.7% to 79.37 against the dollar. It had been as strong as 76.1450 earlier in the session.

Against the euro, the rouble had lost 2.6% to 89.79 after hitting 90.7850, a level last seen in April 2021.

No Russian assets were left unscathed, with stocks cascading to their lowest since early November 2020 and bond yields, which move inversely to prices, soaring to their highest since January 2016.

The dollar-denominated RTS index finished the day 13.2% lower at 1,207.5 points and the rouble-based MOEX Russian index lost 10.5% to 3,036.9 points.

Yields on Russia's 10-year benchmark OFZ bonds hit a high of 10.64%. The cost of insuring Russia sovereign debt against default also surged to its highest since early 2016 and both Moscow and Kyiv's sovereign dollar bonds tumbled.

Goldman Sachs analysts said it now seemed plausible that geopolitical risks in the Ukraine-Russia standoff were starting to have a meaningful impact on global assets.

Comparing the rouble with its high-yielding emerging market peers was a good measure of the amount of risk premium still priced into the rouble, they said.

"On that basis, our latest estimates would put the risk premium from recent escalation at 9% based on Friday’s closing prices," Goldman Sachs said.

DIPLOMACY VS. SANCTIONS

The prospect of a possible summit between Putin and U.S. President Joe Biden, as well as upcoming talks between the United States and Russia's top diplomats on Feb. 24, had given investors a glimmer of hope earlier in the session.

Despite Moscow's repeated denials of Western statements saying that it plans to invade neighbouring Ukraine, Russian assets have been hammered by fears of a military conflict that would almost certainly trigger sweeping new Western sanctions against Moscow.

Washington has prepared an initial package of sanctions against Russia that includes barring U.S. financial institutions from processing transactions for major Russian banks, three people familiar with the matter told Reuters.

Shares of Russia's top banks Sberbank and VTB fell 20% and 17% respectively, underperforming the wider market.

Oil major Rosneft's shares also dropped 13.3%."

MY COMMENT

In the end.........no matter what happens.......it is the economy of RUSSIA that will take the BIGGEST hit. What are we seeing.....Wag The Dog.......The Boy Who Cried Wolf......The Emperors New Cloths? As a long term investor.....I really dont care.....just do something and let the rest of us move on.

 

The end of an ERA and a sad story for those of us old enough to remember....Kmart......the Walmart......of the 1960's to 1980's.

Kmart is down to its last 4 stores in the US

https://www.oregonlive.com/business/2022/02/kmart-is-down-to-its-last-4-stores-in-the-us.html

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

AVENEL, New Jersey — On a busy stretch of Route 35 near Rahway, New Jersey, one of the nation’s last Kmart stores looks like a relic from the past. Its big red K is faded and cracked. Inside this most American of retail stores, popular for K Cafe luncheonettes and Bluelight Specials, a sign promotes 60% off clothing. A dining-room table was on clearance for $89, while Route 66 jeans went for $10.99 and pink ladies’ neck sweaters for $12.49.

But a spacious parking lot was mostly empty with a handful of bargain shoppers scurrying into the store over a couple of hours. Some came out empty-handed. A woman said her elderly mother walks the shopper-barren Kmart aisles for safe exercise. She was checking on her.

Another shopper, Grace Celauro, 69, said, “I came here out of boredom.” She bought two winter coats for her grandchildren. “I don’t know how they stay in business,” she said, scanning the lot.

Kmart blazed to American retail glory beginning in the early 1960s, seeking to dominate the discount retail sector with discounted national brands — a first at the time. At its peak in the 1990s, Kmart operated about 2,400 stores and employed 350,000 in the United States and Canada. Its brands once included PayLess Drug Stores, the Borders bookstore chain, and Sports Authority.

Now with two Kmarts slated to close, that will leave just four stores open in the United States, Kmart death watchers say. One is here in Avenel, and a second in northern New Jersey, in Westwood. The others are on Long Island, N.Y., and in Miami.

‘Retail apocalypse’

“They were quite a happening in the 1960s and 1970s,” said Fred Hurvitz, retailing professor at Pennsylvania State University. “Kmart was growing like crazy.”

Shoppers would wait for Kmart employees to announce a “Bluelight Special” — or daily deals — in specific departments and rush to see what they were, adding thrills to the day’s experience. Hurvitz said that Kmart “did well for 20 or 25 years” and then Walmart, with its efficient supply chain and reputation for low prices, drove it under.

“It’s amazing to remember that [Kmart] started out the same year as Walmart and Target in 1962. Kmart had its day but wasn’t able to define its market as clearly as the other two discounters,” said Vicki Howard, author of “From Main Street to Mall: The Rise and Fall of the American Department Store.” Kmart didn’t have the best bargains or style, Howard said, and if there is nostalgia for Kmart, it speaks to the “current state of affairs in terms of the retail apocalypse.”

The Sears chain merged with Kmart more than 15 years ago under the hedge fund operator Eddie Lampert, who has turned their liquidation into a business plan. Both retailers filed for bankruptcy in 2018. Sears and Kmart stores, operating under the Transformco entity, are still controlled by Lampert and have closed en masse in recent years, leaving valuable real estate behind to be sold or redeveloped.

But even as Transformco shutters Kmart stores, the discount chain lives on in Reddit, YouTube, and Facebook posts with devout followers who are nostalgic or fascinated by Kmart’s demise. A vast trove of Kmart video lives on the internet.

Videos of the last Kmarts

Chris Fitzwater, a 37-year-old from Warren, Ohio, holds “just great memories” of visiting the local Kmart with his great-grandmother and grandmother. They ate at the K Cafe luncheonette. He bought Nintendo 64 games along with football jerseys and sports cards.

One day several years ago, Fitzwater decided to shoot video of the Kmart storefronts and interiors still open. He’d hop in his car and drive for hours to find them. He has posted videos on YouTube. “It was so much fun. When I started filming, there were Kmarts everywhere,” said Fitzwater, who works in a chemical factory. Sadly, the Kmart of Fitzwater’s childhood in Warren closed by the time he began to create his Kmart video archive.

Kmart fans also connect at the Sears Holding Kmart and Sears Fan Group Facebook page. On Feb. 11, Scotty Baker, 50, of Tacoma, Wash., posted Kmart’s Thanksgiving sales fliers for 2012 that advertised a 42-inch RCA Plasma television for $199 and a “buy one, get one free” deal for board games. Among his regular posts last week was “raw footage” video from late January of the last Kmart in Montana — which is slated to close.

Ben Schultz, 23, was too young to have experienced Kmart’s powerful hold on American retailing. Plus, he said, “my family was more of a Target family.” In his teen years, Schultz worked at a McDonald’s in a parking lot in front of a Kmart. “On my lunch break I would wander around there [the Kmart],” he said. “There weren’t many people in there.”

Now a graduate student in public history at the University of Wisconsin at Milwaukee, Schultz has become an expert on Kmarts and the company, putting together a spreadsheet and a map of every Kmart — when it opened and when it closed, with the address and other information.

“Kmart absolutely reigned supreme over the retail-discount market,” he said. “Their focus was to be America’s discount store. They essentially wanted to have a monopoly over the industry and it seemed like it was within their reach.”

Kmart, Schultz said, was to be “so bland that nobody felt it was uninviting. It was a place that could be common to everyone.” A Kmart Corp. annual report showed the chain had revenue of about $37 billion in 1993, near the height of Kmart’s popularity.

But the discount chain’s blandness became a detriment, Schultz believes. “When they tried to change their image, they did not have an image,” he said. “When Walmart and Target came into the community, customers thought they were shopping with their kind of people.”

What’s left of Kmart

Kmart’s store locator on the chain’s website tells shoppers of open stores in each state. But it is often wrong. The web lists five Kmarts in New York: White Plains, Bridgehampton, Manhattan, and two in the Bronx. But the phones were disconnected or not in service at four. An employee answered the phone at the Bridgehampton store, far out on Long Island.

There was a Kmart listed in Marshall, Mich. No one answered the phone. Google showed it “permanently closed.”

Kmart has four stores in Florida, in Key West, Marathon, Key Largo, and Miami, the website says. Recent press reports say that Kmart will close Key West. An employee at the Kmart in Miami said that her store was the only one open in the state. The company did not respond to a request for the number of Kmarts still open in the United States.

Schultz believes there is a reason for the continued existence of the Kmarts in New Jersey and on Long Island. “New York has had a strong stance against Walmart, so that has helped [Kmart]. But they still have to compete with Target and Amazon,” Schultz said. “I have a hard time imagining them staying around much longer.”

The Kmart in Avenel is in a plaza with an LA Fitness, a Bury the Hatchet ax-throwing business, an indoor trampoline park, and a Subway.

Seagulls screeched in the parking lot.

Renee Motz, of Carteret, came out of the Avenel Kmart. She used to shop at other Kmarts, but they shuttered their doors, leaving this one. She doesn’t buy food here but likes bargains on blouses and other clothing. “I’m afraid it might close,” she said. “I hope not.”"

MY COMMENT

Good old Kmart. When we bought our first little HUD house on the wrong side of the tracks in 1974....there was a Kmart a couple of miles away. We would shop there all the time.....same sort of shoppers as currently go to Walmart. Kmart was HUGE back than....I remember well the very cheap prices in the cheesy K Cafe with their plastic chairs and extremely low prices. These stores were very similar to a Walmart with a garden center and everything else. Just shows how you can go from a BIG BOOMING company to NOTHING in a matter of decades. Same story for SEARS..........with their Sears Catalog. As kids......we would spend hours and hours in December going through the Sears catalog toy section trying to figure out what we wanted for Christmas. As a young adult I bought many tires at the Sears tire center and many cheap Kenmore appliances in the store.....not to mention the Craftsman tools. AH........the memories.

 

NOT....going to be a pretty day tomorrow....at least in the markets....LOL.

Ukraine-Russia crisis: Stock futures tank as situation escalates

https://finance.yahoo.com/news/ukra...es-tank-as-situation-escalates-234241354.html

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

"The Presidents Day holiday in the U.S. likely provided little mental relief for traders as the situation between Russia and Ukraine intensified, sending stock futures plunging Monday evening.

Futures on the Dow Jones Industrial Average tanked 431 points as of 7:45 p.m. ET, or 1.3%. The S&P 500 and Nasdaq Composite saw worse slides of 2.3% and 3.4%, respectively.

The U.S. holiday — along which came closed markets for trading Monday — brought several negative developments on the Ukraine-Russia front.

Russian President Vladimir Putin ordered the deployment of Russian troops to two breakaway regions of Ukraine. The move — seen by the West as a provocation — came after Putin recognized their independence.

Sky News reported that U.K. Prime Minister Boris Johnson will unveil a "significant" package of sanctions on Russia Tuesday morning. U.S. President Joe Biden will impose new sanctions on trade and financing in the two territories recognized by Putin, CNN reported.

Mixed sentiment from strategists on the market's next move quickly materialized this evening.

"The reasons stocks are down on that news is that people fear that is the start of a full on invasion of Ukraine. And, if that happens, then we can expect a serious test of the January lows," Sevens Report Research founder Tom Essaye told Yahoo Finance.

Truist co-chief investment officer Keith Lerner told Yahoo Finance, "From a market perspective, we would be careful not to overreact. Recall, we had a similar broad selloff on January 24 on a Monday that reversed intraday. Not to say that tomorrow will be work out the same way, but selling into panic isn’t typically a winning strategy."

Amid the escalating tensions, Goldman Sachs' Dominic Wilson said in a new note that markets are at risk of a severe pullback.

The S&P 500 is at a risk for a 6.2% drop in a full-on crisis scenario where Russian invades Ukraine and global superpowers respond with retaliatory measures such as sanctions, said Wilson.

Sell-offs would be more penalizing for the tech heavy Nasdaq and the small-cap Russell 2000 — Wilson sees 9.6% and 10.2%, worst-case scenario, respective declines.

Other veteran strategists on the Street remain equally concerned on the numerous headwinds now facing stocks in the near-term.

"I think what is most important about the Russia-Ukraine situation is not so much the volatility it's causing on a very near-term basis, but the impact," Charles Schwab chief investment strategist Liz Ann Sonders said on Yahoo Finance Live. "We know in the past that surging oil prices, especially in a waning growth environment, alone, have caused recessions. You add that into the mix the energy crisis happening around the globe already, and the fact we are now heading into a Fed tightening cycle, I think it would probably elevate fears about recession if, indeed, we see some sort of protracted military event.""

MY COMMENT

In terms of our government this is a non-event. New sanctions on trade and financing......"in the two territories".......are meaningless and a joke. In the end....no matter what happens.....our government will be shown to be incompetent and feckless.

I will be busy with my handy-man tomorrow morning......so I will luckily be able to just ignore all the drama. Wait and see how it goes......it will be the wall street professionals.......that are all running around tomorrow selling everything and yelling fire in a crowded theater. As usual.....complete MORONS.

This sort of "STUFF" is one big reason why I dont do ANY International investing.....in the EU or anywhere else. I dont need the insanity of trying to invest in companies of other countries in the modern era. I am content to sit and hold my BIG CAP........ AMERICAN........companies through all the short term insanity.

Of course......I continue to be fully invested for the long term as usual. AND.......NO....... I still dont really care about this Ukraine situation........whatever the markets want to do short term......is not my concern.

 

As the massive media hype begins the futures are siting at.......DOW 484.......SP500 down 71......Nasdaq down 315.

 

We actually saw a pretty good open today......considering......what could have been. A victory for Reason and Rationality. the averages are currently down.....moderately.

I dont intend to spend any time directly talking about Ukraine. It is simply a world event that is going to impact the markets over the short term. There is nothing an investor can do except deal with it by....doing nothing....if that is how you operate. If you are a trader or market timer or something else......well......what you do is up to you.

 

One of my companies reported before the bell today....Home Depot.

Home Depot beats estimates, retailer says it sees sales growth ahead for 2022

https://www.cnbc.com/2022/02/22/home-depot-hd-earnings-q4-2021.html

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

"Key Points

• Home Depot on Tuesday said sales grew 11% in the fiscal fourth quarter, as the retailer topped Wall Street’s expectations and said it sees sales growth ahead for 2022.
• The home improvement retailer said it expects earnings per share growth to be in the low single digits and sales growth to be “slightly positive” in the coming fiscal year.
• The company recently named Chief Operating Officer Ted Decker its new CEO, as of March 1.

Home Depot on Tuesday said sales grew 11% in the fiscal fourth quarter, as the retailer topped Wall Street’s expectations and said it sees sales growth ahead for 2022.

The company said it expects earnings per share growth to be in the low single digits and sales growth to be “slightly positive” in the coming fiscal year.

Home Depot shares were down nearly 5% in premarket trading, as the broader market declined amid Russia-Ukraine tensions.

Here’s what the home improvement retailer reported compared with what Wall Street was expecting for the quarter ended Jan. 31, based on a survey of analysts by Refinitiv:

• Earnings per share: $3.21 vs. $3.18 expected
• Revenue: $35.72 billion $34.87 billion expected

Net income for the fiscal fourth quarter grew to $3.35 billion, or $3.21 per share, from $2.86 billion, or $2.65 per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings per share of $3.18.

Net salesrose to $35.72 billion, topping expectations of $34.87 billion.

Home Depot’s same-store sales climbed 8.1%, higher than the 5% gain that analysts expected, according to StreetAccount. Its same-store sales in the U.S. increased 7.6%.

Sales growth was sharper among home professionals rather than do-it-yourself customers in the fourth quarter, Chief Operating Officer Ted Baker said on the company’s earnings call. Big-ticket transactions, which are over $1,000, were up about 18% compared with the year-ago period, he said.

Home Depot’s transactions fell in the quarter to 402.5 million, but the average ticket rose to $85.11. That’s compared with 416.8 million visits and an average ticket of $75.69 in the year-ago period. Sales per retail square foot also jumped to $571.79 from $528.01 in the year-ago period.

Baker said the increase in average ticket size was primarily due to inflation, as costs of building materials, copper and other commodities rose. He said Home Depot is coping with fast-changing prices. For instance, he said, in the three month period framing lumber ranged in price from $585 to over $1,200 for the same amount.

The retailer has been a clear pandemic winner, thanks to Americans taking on do-it-yourself projects and redecorating their homes. Yet it has had other dynamics work in its favor, too. Millennials, the country’s largest generation, are moving into their first homes or into bigger homes, even as some baby boomers, the second-largest generation, decide to age in place. That’s squeezing supply and driving real estate prices higher. The country’s aging housing stock is causing more repair, maintenance and renovation projects, too — as is the additional wear-and-tear from Americans spending more time at home as they work remotely.

Some investors wonder if home improvement’s hot streak will cool as retailers lap a period of government stimulus, raise prices because of inflation and compete with other spending priorities like dining out and vacation. Mortgage rates are also expected to rise, which may price out potential homebuyers or delay projects once they buy.

Home Depot’s forecast, while positive, reflects more conservative expectations for growth in the quarters ahead. Its outlook is roughly in line with analysts, who expect sales to rise 2.5% and earnings per share to increase 4.7% for the full year, according to Refinitiv.

The company will have a new CEO soon. On March 1, Decker will succeed Craig Menear, who will continue to serve as chair of the board.

Home Depot’s board approved a 15% increase in its quarterly dividend, bringing it to $1.90 per share.

As of Friday’s close, Home Depot shares are up 24% over the past 12 months and have outperformed the broader market. The S&P 500 has risen about 11% over the past year. The stock closed Friday at $346.87, down less than 1%. The company’s market value is $362.22 billion."

MY COMMENT

A very nice BEAT pretty much across the board. This is a great company that is operating on all cylinders right now. I am very pleased with their increase in the professional customer sales growth. This mirrors what I am seeing in my local area with the Home Depot stores seeming to be overrun with small contractors and professional customers. In addition, their guidance is good also.

I dont expect any issues from the fact that there is a new CEO. Looks like a long time company man with extensive management experience at Home Depot.

It is simply ASININE...that the stock is being punished today....but....that is how the markets work....or dont work....over the short term.

 

Here is the background on the new HD CEO....looks good to me.

Home Depot names company veteran Ted Decker as CEO

https://www.cnbc.com/2022/01/27/hom...ceo-craig-menear-will-remain-board-chair.html

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

"Key Points

• Home Depot’s Chief Operating Officer Ted Decker will step into the role of CEO, as of March 1.
• Outgoing CEO Craig Menear will continue to serve as chair of the board.
• The home improvement retailer has gone through a period of tremendous growth during the pandemic, as nesting trends and a strong housing market collided.

Home Depot said Thursday that Chief Operating Officer Ted Decker will step into the role of CEO, effective March 1.

The retailer’s current CEO, Craig Menear, 64, will continue to serve as chair of the board. Menear has been at the retailer for more than 20 years and began as CEO in November 2014.

Home Depot has seen tremendous growth during the pandemic, as nesting trends and a strong housing market inspired Americans to invest in their homes or move to bigger places. That growth has continued, including in the most recent fiscal quarter, even as some consumers hired home professionals in lieu of do-it-yourself projects.

Now, the company will have to prove it can keep those sales going as Americans face rising prices due to inflation and potentially shift their spending toward services such as dining out and traveling.

Outgoing CEO Menear said Decker, a 22-year Home Depot veteran, is the right person to take the helm during a period of growth.

Decker, 58, has risen through the ranks at Home Depot since joining the company in 2000. He previously served as chief merchant and executive vice president of merchandising. He became president and COO in October 2020.

“His ability to blend the art and science of retail is exactly what is needed in the next phase of growth for The Home Depot,” Menear said in a news release. “I have tremendous confidence that he will guide our company to new heights.”

Even prior to the global health crisis, Home Depot was making significant investments in its supply chain and e-commerce business.

Starting in 2018, the company began spending $1.2 billion to open about 150 supply chain facilities over five years — including giant centers geared toward home professionals. The company also expanded its distribution network, with the goal of offering same-day and next-day delivery to 90% of the U.S. population.

Home Depot shares closed Thursday at $356.43, down less than 1%, and are up about 30% over the past 12 months."

MY COMMENT

I am always happy to see a long time company employee and manager promoted.

 

This is a good sign for the general economy.

U.S. business activity accelerates in February - IHS Markit survey

https://finance.yahoo.com/news/u-business-activity-accelerates-february-145129229.html

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

"WASHINGTON (Reuters) - U.S. business activity regained speed in February as the drag from the winter surge in COVID-19 infections diminished, but higher prices for inputs remained a burden amid lingering supply constraints.

Data firm IHS Markit said on Tuesday its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, rebounded to a reading of 56.0 this month from 51.1 in January. It attributed the sharp rise to "employees returning from sick leave, increased traveling and greater availability of raw materials."

A reading above 50 indicates growth in the private sector.

The acceleration in business activity in the survey mirrors the recent improvement in the so-called hard data.

Initial claims for state unemployment benefits have declined from a three-month high of 290,000 in mid-January and retail sales shot up in January.

The United States is reporting an average of 121,134 new coronavirus cases a day, sharply down from more than 700,000 in January, according to a Reuters analysis of official data. The Omicron variant of the coronavirus is driving infections.

The flash composite orders index climbed to 57.5 from 55.2 in January, with customers making additional purchases to avoid future price hikes. Consumer prices notched their largest annual increase in 40 years in January.

The survey's measure of input prices paid by businesses rebounded from January's ten-month low.

The pick up in activity this month was across the board. The IHS Markit survey's flash services sector PMI rose to a reading of 56.7 from 51.2 in January.

Economists polled by Reuters had forecast a reading of 53.0 this month for the services sector, which accounts for more than two-thirds of U.S. economic activity.

Services industry businesses reported increases in orders and employment. They continued to face higher prices for inputs.

Activity also regained momentum in the manufacturing sector, with strong order growth and rising employment. The survey's flash manufacturing PMI climbed to 57.5 from 55.5 in January. Economists had forecast the index for the sector, which accounts for 11.9% of the economy, rising to 56.0.

Manufacturers also reported some easing in the cost of inputs, though prices still remained very high."

MY COMMENT

Step by step.....we will slowly get back to normal over the next 12 months. We need to get the ENTIRE country opened back up and free of restrictions and mandates. After that it will simply be a matter of time for all the distortions of the economy and labor and markets to get back to whatever normal is going to be.

 

I have been holding off on mentioning that the SP500 and the NASDAQ turned positive a little while ago. Of course.....as soon as I finished typing the first sentence of this post the SP500 went red.

Today is a moral victory for the markets.....so far. An indicator that the Ukraine "stuff" is being looked at rationally and was fully BAKED INTO the markets prior to today. Time for everyone......and the markets...... to simply move on from here.

 

Time to get to work with my Handy-man.....to get all the preliminary stuff done today....on my various projects....... so I am ready for the plumbers tomorrow.

 

In spite of stocks trying to hang on by their finger nails at the open....we ended the day about like I expected. Like the markets I was in the RED today with ONLY one positive stock.....Honeywell. Poor Home Depot was punished for having the nerve to put up GREAT earnings numbers. And...the perfect end to a day...I got beat by the SP500 by 0.99%......thank goodness it was not by 1%.

Not that I care about any of the above. What I care about is getting all my project work done today so I am now fully ready for the plumbers tomorrow and the tile people next week to re-do the laundry room tile floor.

 

Ignoring the HUGE ELEPHANT siting over there in the corner of the room.....this is actually what I believe and look forward to as a long term investor.

Every Market Is Oversold’: Wall Street Bulls on Ukraine Crisis

https://finance.yahoo.com/news/every-market-oversold-wall-street-174304844.html

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

"(Bloomberg) -- Wall Street strategists, bullish before Russia’s military buildup near Ukraine’s border, are mostly sticking to their view that stock markets can weather Europe’s brewing security crisis. For now at least.

After a week of volatility, they say loose financial conditions and growing corporate profits will anchor large-cap indexes amid deteriorating relations between Moscow and Western powers. Corporate balance sheets, meanwhile, will prove broadly resilient to higher energy prices and disrupted supplies.

In this view, the Federal Reserve, not geopolitics, remains the principal threat, while outsize hedging activity gives portfolio managers some firepower to ride through the crisis.

U.S. officials said additional American sanctions against Russia are coming after President Joe Biden issued an executive order prohibiting U.S. investment, trade, and financing to separatist regions of Ukraine.

The S&P 500 and the Nasdaq 100 fell Tuesday, while the Stoxx 600 Index pared losses to trade flat.

Easing expectations on the pace of Fed rate hikes may buoy risk sentiment, according to Craig Johnson, chief market technician at Piper Sandler & Co. Traders are now pricing in six 25-basis-point hikes for the full year down from earlier expectations for seven increases in 2022.

Here are five strategists on why stock markets are likely to weather the geopolitical storm.

‘Oversold’

Dennis DeBusschere, founder of 22V Research

Yearend S&P 500 target: 5,040

“Financial conditions have tightened but remain historically easy, earnings growth continues to offset multiple contraction, and just about every major market is oversold.”

“We remain long thematic baskets like pricing power, companies that benefit from higher real rates and improving supply chains. An escalation in Russia/Ukraine could lead to a much quicker tightening of financial conditions and limit the increase in bond yields.”

‘Short-Term Disruptions’

Chris Harvey, head of equity strategy at Wells Fargo

Yearend S&P 500 target: 4,715

“We think geopolitical stress surrounding Russia and Ukraine will add volatility and some near term down-side to risk markets including equities. We believe Fed action will be much more influential longer-term. Geopolitical may cause some short term disruptions but changes in monetary policy will be longer lasting and more pervasive.”

‘Accurate’ Discount

John Stoltzfus, chief investment strategist at Oppenheimer

Yearend S&P target: 5,330 target

“Consider the market’s dip and recovery in previous escalation of hostilities from as far back as the Cuban Missile Crisis, the Gulf War, the annexation of Crimea in 2014. Notwithstanding initial volatility we recall that the U.S. market has in the distant and recent past considered how a geopolitical situation might affect corporate revenue and earnings and arrived at a discount that in hindsight has proven to be remarkably accurate.”

“Markets are resilient in our view for a number of reasons. Fourth-quarter earnings season has surprised nicely to the upside across key sectors which suggest growth is not the problem but rather that supply chain disruptions remain prevalent.”

Recovery Potential

Ed Clissold, chief U.S. strategist at Ned Davis Research

Yearend S&P 500 target: 5,000

“Historically, crisis events have triggered pullbacks, but the market has typically recovered the losses within a few months. Looking at 54 crisis events since 1907, the Dow Industrials have fallen an average of 7.1% during the crisis period, but gained an average of 9.7% in the six months after the crisis ended.”

“Russia-Ukraine risks spiking already high energy prices, meaning the earnings slowdown could be steeper than consensus estimates. Big picture, this does not alter our U.S. stock market outlook for a weak first-half with the potential for a second-half recovery.”

Low Earnings Risk

Dubravko Lakos-Bujas, strategist at JPMorgan Chase & Co.

“Russia-Ukraine tension is a low earnings risk for U.S. corporates. While the path remains unclear with potentially elevated market volatility in the short-term, tightening monetary policy, in our view, still remains the key risk for equities. We’d caution against making hasty changes to global asset allocations right now.”"

MY COMMENT

Agree completely. I have no plan to do anything and am feeling NO panic or fear in the slightest. I have all the time in the world to wait out these little events. Earnings are my ONLY FOCUS.....and they have come in GREAT.

 

Of course.....I see many articles today mentioning that as of the close today the SP500 is in a correction......a loss of 10% or more. Remember.....corrections are NORMAL. They happen EVERY year.

 

Continuing on....with my rose colored glasses firmly in place.

JPMorgan Strategists Say Stock Pessimism Is ‘In Vogue,’ But Wrong

https://www.pehalnews.in/jpmorgan-strategists-say-stock-pessimism-is-in-vogue-but-wrong/1656728/

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

"(Bloomberg) — Doomsday predictions for an financial slowdown that can drag down fairness markets are trendy, however unsuitable, in accordance with JPMorgan Chase & Co. strategist Mislav Matejka.

“We believe one should look through the widespread ‘slowdown’ calls that are currently in vogue, and stay bullish on banks, mining, energy, insurance, autos, travel and telecoms,” Matejka and his group wrote in a observe on Monday. Over the previous six months, and in direct distinction to bearish predictions, “the internals became more bullish again,” they mentioned.

Matejka’s optimistic view was revealed on a risky day for European shares as traders weighed geopolitical developments in Ukraine, and comes after a foul begin to the yr for international fairness markets amid rising inflation and alerts of hawkish pivots by central banks. Europe’s benchmark Stoxx 600 index is down about 5.8% this yr, whereas the S&P 500 has fallen about 8.8%.

The drawdown seen to this point in 2022 seems to vindicate bears, resembling Morgan Stanley’s Michael Wilson, who has been arguing for months that rising charges and a much less forgiving macroeconomic backdrop will mark the top of equities’ ferocious rally. At the identical time, Bank of America Corp. strategists led by Michael Hartnett reiterated on Friday that the rising “rates shock” will morph into “recession shock,” and suggested a brief place in equities.

But JPMorgan’s Matejka disagrees. “We think it is wrong to position for a recession given still extremely favorable financing conditions, very strong labor markets, underleveraged consumer, strong corporate cash flows and banks’ strong balance sheets,” he wrote.

Data launched on Monday confirmed that each producers and repair suppliers within the euro-area noticed output enhance in February. Rising demand and a gradual easing of provide bottlenecks underpinned stronger orders and job development, in accordance with buying managers indexes compiled by IHS Markit.

“Better relative growth expectations in turn support our view that Eurozone earnings growth will be higher” than U.S. development this yr, JPMorgan’s strategists mentioned forward of the info releases, reiterating their chubby place on Europe versus the U.S., and their desire for cheaper, so-called worth shares, versus dearer sectors."

MY COMMENT

There is plenty of positive opinion out there....but you rarely see it. What we will experience over the next......2-4 months.....will be very "transitory". Inflation, the FED, RUSSIA/Ukraine, rate increases......will be old news in 2-4 months. Of course we will than have......NEW......fear mongering topics and issues that the media will harp on every day.

BUT.....much of that type of content is IRRELEVANT to actual investors. It is amazing to me how much of the daily material.....even in the FINANCIAL MEDIA......is politics, social commentary, etc, etc, etc......that has NOTHING to do with business and investing. The National Inquirer form of tabloid journalism has totally infected even the financial news.