The Long Term Investor

As we were preparing to open I was thinking about the BIG TECH companies......Google, Microsoft, Amazon, Apple, Facebook, and Nvidia. I was considering their stock prices.

Google is going to split in a few months.....20 for one. At that point EVERY one of these companies will have their shares priced in the $150 to $300 range. The ONLY one that will still be clinging to the outrageous high stock pricing is Amazon.

If you add Tesla....they are in the $800 to $900 range.......also far below the $3000 range where you see Amazon.....plus.....Tesla has now shown that they are willing to do stock splits.

I think this is a BIG mistake for Amazon. They will be the ONLY one of the big tech companies that is NOT AFFORDABLE for the average retail investor. In addition their recent......stock price performance.......over the past couple of years has NOT been the greatest for investors.

I believe this will be a HUGE barrier for Amazon stock performance for going forward. Investors that want to get into the BIG CAP tech world will have all the other companies to consider at a much lower share price and at a much better recent record of share appreciation.

AND......if you go outside the TECH WORLD.....and look at all the other successful BIG CAP companies that are the guts of the American and world economy......they will be isolated as the ONLY company that is siting on that sort of share price. I do not include Berkshire Hathaway since they are not a single company....they are a conglomerate of many different businesses and more like a FUND.

Amazon appears to be completely TONE DEAF on this issue....so far. They need to wake up. They are hurting their business and their shareholders with their continued REFUSAL to split their shares and make their price more affordable.

 

Today is another one of those recent days.....that I would not be surprised to see us end in the green at the end of the day.

 

This is relevant since Putin is chairing an "ECONOMIC"......LOL..... meeting in this photo. I am posting it simply because I find it very interesting.......and at the same time very strange....that anyone would sit that far from the rest of the people in the meeting. This guy has some real issues......besides being a paranoid......and very calculating...... psychopath.

Here is the photo caption:

"Russian President Vladimir Putin chairs a meeting on economic issues at the Kremlin in Moscow on Feb. 28, 2022. (ALEXEY NIKOLSKY/SPUTNIK/AFP via Getty Images / Getty Images)"

 

I dont do any International investing....as such. I dont see any need to go out and put money into FOREIGN companies or FUNDS or INDEXES that focus on foreign businesses. I have total world wide exposure with ALL of the companies that I invest in and I see those companies as FAR SUPERIOR to anything that I might be able to invest in outside the USA.

BUT.....I was wondering how much the average INTERNATIONAL fund or ETF has invested in Russia. I dont have an answer.....but.....even if it is only 5-15% of assets.....what is going on now and into the future could have a really BIG DRAG on performance.

Are there any International Investors on here? Anyone that holds an International Fund? What performance of the assets are in Russia and what has happened to performance over the past few weeks?

 

I like this simple little article....it raises some important questions for investors saving for retirement.

Why so many online calculators are bogus? And where should you look instead?

https://www.usatoday.com/story/mone...trust-online-retirement-calculators/49849705/

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

"As someone who writes about retirement all the time, I'm often motivated to do a personal checkup and see if I'm on track with my savings. And to that end, there's a host of free online tools available to run numbers with.

The problem? Many of them have major limitations. And they could end up causing you unnecessary stress on the road to building your nest egg.

Last week, I decided to use not one, not two, but 10 different online calculators to track my retirement savings progress. And the results were quite eye-opening.

One calculator I used told me that I'd wind up with a $5 million savings shortfall for retirement based on the data I entered. Another told me that I might have $19 million left in retirement plan in my 90s. Clearly, that's a pretty extreme range, and both scenarios are also pretty far-fetched.

Now thankfully, there were several calculators that told me that based on my savings balance so far and the number of years I have before my estimated retirement date, I should be on track to have enough money to pay the bills down the line. But what really surprised me was not just the range of responses I got from these calculators, but also, the many pieces of key information they don't take into account.

All of the calculators I used asked me to enter my current income. But not a single calculator asked me how much of my current income I actually spend.

That's a big deal, because many of these tools estimate your retirement income needs based on your income at present. The logic is that you'll want to maintain your current standard of living to some degree, which does make sense.

But what if you earn a lot more than you spend? That should change the numbers around a lot.

I also noticed that a lot of these tools don't ask you how your retirement plan is invested. Rather, they use their own assumptions about asset allocation. But a very aggressive or very conservative IRA or 401(k) plan could render those formulas useless.

And then there's your plan for retirement itself. Some of the calculators I used -- the better ones -- asked me to estimate how much of my income I was looking to replace during retirement. But not one asked if I'm planning to work during retirement, and what my anticipated earnings might amount to. Someone who's planning to bring home, say, $30,000 a year via part-time work as a senior is apt to be in a different situation than someone not planning to work at all, even if both anticipate retiring with similar savings balances and incurring similar living expenses.

A starting point and nothing more

While an online calculator might give you a snapshot of how well you're doing on the retirement savings front, these tools should be used as a starting point and not gospel. And you should also know that many are designed to grossly overestimate your savings needs and underestimate your income-generating potential during retirement (whether via investments or part-time work). As such, you may end up on the receiving end of dire news when your actual situation isn't as bleak as a calculator might make it out to be.

That's why you shouldn't let a projected shortfall scare you too much, nor should you automatically start celebrating and halt all 401(k) contributions when an online calculator tells you that come age 95, you might still be sitting on $19 million. (Trust me when I say I still intend to max mine out.) Instead, you should really spend some time running through these questions:

• Am I saving roughly 15% of my income or more? That's really a good benchmark to target.
• Am I investing aggressively enough for my age? Being too conservative could limit your savings' growth, even during retirement.
• How much of my income do I actually spend now? If you earn $200,000 a year and live very comfortably off of $150,000, chances are, come retirement, you'll manage to get by on even less.
• What are my actual plans for retirement?Downsizing, working, and relocating could all change your financial picture.

The further away from retirement you are, the harder it is to know if you're on track. There's nothing wrong with using an online calculator from time to time to get a sense of how you're doing. But if you want a more accurate picture of your progress and likelihood to meet your goals, sit down with a financial advisor who has more sophisticated software that accounts for the factors so many free online tools don't take into consideration."

MY COMMENT

I like the questions suggested above as a good starting point to long term retirement planing. One thing is sure.....your retirement will be much better if you start to plan your finances and how to get to your goals by at least age 45 0 or 45. Most people should be able to plan based on actual REALITY by age 40-45.

 

Since it is the start of the week....here is a little article on the issues and media view of the markets today and by extension this week.

Stock market news live updates: Stocks decline amid Russia's invasion, sanctions escalation

https://finance.yahoo.com/news/stock-market-news-live-updates-february-28-2022-125716943.html

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

"U.S. stocks sank and energy prices soared Monday after an escalation of sanctions against Russia amid an ongoing conflict in Ukraine stoked further uncertainty over the outlook for global financial markets.

The S&P 500, Dow and Nasdaq each declined. West Texas intermediate crude oil prices (CL=F) soared to as much as $99.10 per barrel before paring some gains. Brent crude (BZ=F), the international standard, rose to a near seven-year high of more than $104 per barrel. Gold prices jumped while Treasury yields slid as investors piled into safe haven assets.

The market moves Monday came following a tumultuous weekend of fighting in Ukraine as Russia continued its attacks. A new set of sanctions slammed Russia as major Western countries responded to the invasion. And news that Russian President Vladimir Putin had put the country's nuclear deterrence forces on high alert added to jitters across global financial markets.

The U.S., European Commission, France, Germany, Italy, U.K. and Canada issued a joint statement Saturday agreeing to exclude certain key Russian banks from the SWIFT messaging system, which helps facilitate transactions for trillions of dollars globally. The U.S. on Monday also said it was further prohibiting Americans from transacting with the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federations and the Ministry of Finance of the Russian Federation.

The SWIFT bank bans "would make it more difficult (though not impossible) for these institutions to make cross-border payments," Capital Economics group chief economist Neil Shearing wrote in a note Monday. "So far at least the West has stopped short of a ban on energy imports from Russia, which would be the most powerful sanctions they could implement."

"At the same time, the US, European Union, UK and Canada have announced sanctions on the Central Bank of Russia (CBR)," Shearing added. "This is perhaps a more significant move since it will substantially reduce the ability of the CBR to liquidate its foreign assets to support the ruble and help Russian firms service FX-denominated liabilities. Around 40% of Russia’s international reserves are held in the financial systems of the countries that have signed up to these sanctions."

The newest sanctions from the West add to a host of others unleashed against major Russian financial institutions, sovereign debt and key officials last week. The ruble opened lower by about 30% against the dollar in offshore trading, and Russia's central bank more than doubled its benchmark interest rate to a near two-decade high of 20% in a move to try and help counter the currency's depreciation.

"While market fundamentals in the U.S. have seen very minimal deterioration, sentiment-driven concerns are unlikely to change anytime soon. From a market perspective, sanctions against Russia will likely have the largest impact on currency markets, including the ruble, the Euro and the dollar," David Bahnsen, chief investment officer of The Bahnsen Group, wrote in an email Monday morning.

Still, investors have closely monitored for further fallout for global financial markets and corporations. Automakers including Volkswagen, Renault and Finnish tire-maker Nokian Tyers said late last week they were halting or shifting production due to supply chain disruptions and shortages exacerbated after Russia's invasion of Ukraine. And while sanctions have stopped short of curbing energy exports from Russia, the world's third-largest oil producer, traders have remained on alert for any direct or indirect impact of the geopolitical conflict to the already tight global energy markets.

"We continue to think that the overall impact on global supply chains will be relatively small, but the expulsion of some Russian banks from SWIFT means that non-energy trade between Russia and Europe is likely to slump," Capital Economics' Shearing said. "Attacks on infrastructure that carries gas to Western Europe may push up prices further and add to inflation pressure. And the additional sanctions may prompt retaliation from Russia, which could cut energy imports to Western Europe."

10:11 a.m. ET: U.S. goods trade gap yawns to all-time high as imports jump to record

The U.S. goods trade deficit rose to a record level in January after the value of imports jumped further as companies looked to meet elevated consumer demand.

The trade gap came in at $107.6 billion at the start of 2022, the Commerce Department said Monday. This was larger than the $99.5 billion consensus economists were expecting, according to Bloomberg data, and increased from the $100.5 billion goods trade deficit from December.

Imports rose by $4.4 billion in January compared to December to reach $262.5 billion — also a record high. Exports, meanwhile, shank by $2.8 billion, falling to $154.8 billion in January.

Nearly every goods categories posted an increase in imports for the month. On a percentage basis, foods, feeds and beverages saw the largest jump at 8.6%, with the value of these rising to $17 billion. Industrial supplies and capital goods imports each rose by around 2%, coming in at nearly $62 billion and $69 billion, respectively.

A 12.5% plunge in exports of consumer goods contributed heavily to the overall contraction in January exports. Exports or automotive vehicles and industrials supplies also fell."

MY COMMENT

Looks like the entire focus....as you would expect.....is all Russia, Russia, Russia. That is as you would expect and actually RATIONAL. It is also totally clear that this is UNLIKELY to be a long term or even medium term issue for investors. So....my view....the best course for long term investors is.....as usual.....to sit and do NOTHING.

 

Oh I forgot DAX.....congratulations on the new job. That is fantastic.

 

Thanks T0rm3nted. I am especially interested in funds or ETF's that might have some percentage of Russian investments. But I guess any that have a good chunk of money in Russia or Eastern Europe or even Europe in general would be interesting to see how this mess impacts them. Anyone follow any of these and have any opinions or views?

 

Somewhat on topic with the above post.

Moscow’s stock market is closed, but these Russian ETFs continue to trade in the U.S. Here’s why

https://www.cnbc.com/2022/02/28/mos...russian-etfs-continue-to-trade-stateside.html

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

"The NYSE and Nasdaq have announced today that they are halting trading in several Russia-based stocks that list on their respective exchanges.

Much more interesting is the fact that the Russian stock market in Moscow is closed, but U.S.-based Russian exchange-traded funds are trading in the U.S. this morning.

There are five Russian ETFs that trade in the U.S., however only two have any substantial assets: VanEck Russia ETF (RSX) and iShares MSCI Russia ETF (ERUS), both of which track a market-cap-weighted index of Russian-listed securities.

The RSX is down nearly 30%, and the ERUS slid more than 18% this morning.

How can Russian ETFs trade when the underlying securities are not trading? Market participants make estimates of the value of the underlying securities.

“You look at the futures, and if the futures are down X, the stocks might be expected to be down Y,” Harry Whitton, head of ETF sales trading at Old Mission Capital, told me.

This may seem like an odd way to trade, but Whitton points out that this happened several times before. Greece was closed for six weeks several years ago, but Greek ETFs in the U.S. continued to trade. When the Greek market finally reopened, the Greek stocks priced at almost exactly what the ETFs were trading them for.

What this means is that ETFs can be on the market, even with the underlying market closed.

“The ETFs became the proxy for the Greek market,” Todd Rosenbluth, head of ETF and mutual fund research for CFRA Research, told me.

Creation and redemptions may be an issue

One potential issue is the ability to create and redeem ETFs. This is a critical feature of ETFs. Market participants create and redeem new shares in ETFs depending on demand.

“Since some firms have stopped trading the underlying securities, it limits the ability to create and redeem shares of ETFs,” Rosenbluth told me. “If you can’t create new shares, you are essentially a closed-end fund. The fund will trade at a premium or discount [to the net asset value].”

“There are an array of sanctions affecting RSX but we have not halted creates or redeems,” Jan Van Eck, CEO of VanEck, said in an email. The firm offers the VanEck Russia ETF (RSX).

Because the net asset value, or NAV, is frozen, the Russian ETFs today are trading at a substantial discount to the NAV.

Bottom line: ETFs are trying hard to estimate what the value of Russian securities are with their underlying market closed.

But the longer the Russian market stays closed, the more stale that NAV becomes."

MY COMMENT

THIS is why I will NOT buy stocks or funds or ETF's that are companies in brutal communist dictatorships.

 

YES.....consumers are driving the USA economy and are spending in spite of all the various issues in the financial media.

Consumers positioned ‘strongly’ amid inflation, geopolitical risks: Strategist

https://finance.yahoo.com/news/cons...n-geopoltical-risks-strategist-190824522.html

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

"Despite the ongoing Russia-Ukraine War causing turbulence in global financial markets, Federal Reserve officials are signaling that March rate hikes are still on the table. The Fed seems set on pumping the brakes in order to combat inflation not seen in decades.

According to Lance Cannon, portfolio manager at Hood River Capital Management, however, American consumers remain well-positioned in light of inflation, geopolitical risks, and rising interest rates.

“And we do believe that the consumer is still positioned really strongly here,” Cannon told Yahoo Finance Live. “I mean, if you look at a lot of the data that's come out, while inflation has been high — we can't deny that, that's pretty evident — we feel that there's a great opportunity still available. And the consumer continues to be strong and shows that through their spending habits.”

Cannon joined Yahoo Finance Live to discuss the outlook for equities markets amid the current geopolitical landscape, record inflation levels, and Fed policy. Hood River Capital Management LLC is a Florida-based investment management firm providing investment advisory, financial planning, and consulting services to trusts, estates, charitable organizations, public funds, and corporations.

Cannon pointed to the Russell 2000 (^RUT) as presenting a buying opportunity due to small cap stocks trading at a relative discount compared to those in the S&P 500 (^GSPC). He believes that certain small cap stocks stand to benefit from the healthy state of U.S. consumers.

“But we view that the U.S. still has a lot of opportunity in itself and think that's a really great place to be on a go-forward basis as well,” he said. “I think there's a lot of things that line up for domestic small cap to really work. And we're really bullish on the opportunities that lie in front of us.”

Strong consumer metrics

Cannon’s thesis echoes that of DataTrek Research’s Nicholas Colas, who cited the healthy state of the U.S. consumer as being a bullish indicator for large cap stocks. Colas believes that the key metrics that currently make American consumers positioned well will remain strong throughout the rest of 2022.

For instance, January unemployment stood at 4.0%, only slightly up from December’s 3.9% but still better than the lowest levels of the 1970s (4.6%), 1980s (5.0%), and early 2000s (4.4%). In addition, wage growth continues to be strong — average hourly earnings for all employees on private nonfarm payrolls increased by $0.23 to $31.63 in January. The Bureau of Labor Statistics’ Employment Situation report for February is expected to be released on March 4.

The personal savings rate also stands below pre-pandemic levels at 6.4% for January — under the December 2019 level of 7.3% — suggesting that consumers are not being shy about spending, even in the face of surging prices."

MY COMMENT

The consumer economy is very hot at the moment. That is one reason....besides the supply chain....for shortages of many goods. People are buying and there is high demand. We are in a very strange time period when NO ONE seems to know why anything is happening. BUT....as to consumers.....first, there is much pent up demand from the shutdown. Second....wages are WAY UP from a year or two ago. People have money.

 

Today was a perfect example of the opaque nature of the short term. I actually ended the day in the GREEN......actually....nicely in the green considering. I also got in a pretty good beat of the SP500 by 1.20%. In fact ALL of the accounts that I manage were GREEN today. of course....they are all invested the same way.

A good start to the week.

 

I see that the NASDAQ was positive today by +0.41% and the RUSSELL was also positive today by +0.35%. We actually had a strong market by the end of the day with even the DOW ONLY being down by (-0.49%) and the SP500 being ONLY down by (-0.24%). These are all definately good numbers for the end of the day....compared to the open this morning.

This shows the underlying strength of the markets......the amount to which we are now oversold......and.....the FACT that geopolitical events have limited power to hold the markets down for very long.

 

HERE....is the future for Russia. Not that this means much......they have defaulted in the past as have many, many, other countries over the years.

UPDATE 2-Russia default 'extremely likely' if Ukraine crisis worsens, banking lobby says

https://finance.yahoo.com/news/1-russia-extremely-likely-default-180415133.html

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

"LONDON, Feb 28 (Reuters) - Russia is very likely to default on foreign debt and its economy will suffer a double digit contraction this year after the West launched sanctions unprecedented in scale and coordination, a global banking industry lobby group said on Monday.

The Institute of International Finance (IIF) estimated that half of the Russia's central bank's foreign reserves are held in countries which have imposed freezes on its assets, severely shrinking the bank's policymaking firepower.

The central bank, which on Monday hiked interest rates and introduced capital controls, would prioritise the protection of domestic savers with foreign investors "one of the last on the list," the IIF said.

"If we stay here and this (the crisis) escalates, then default and restructuring is likely," Elina Ribakova, the lobby group's deputy chief economist told reporters during a media call.

She said default would be "extremely likely", although the relatively small size of foreign holdings - at around $60 billion - of Russian debt would limit the fallout.

Default on domestically held bonds was far less likely, she added.

Russia's central bank and the Russian finance ministry did not immediately respond to requests for comment.

Russia last week invaded Ukraine, leading the West to impose a series of sanctions. These have included the freezing of the central bank's assets, removal of many Russian banks from the global payments system SWIFT and the blacklisting of individuals and entities. Russia calls its military action in Ukraine a “special operation.”

The sanctions sent the rouble plunging to record lows on Monday, and Western investors are scrambling to dump Russian assets as the country finds itself increasingly isolated.

The IIF's Ribakova said the measures, which could yet be toughened even further, were "the most severe economic sanctions imposed on a country" ever and would send the Russian economy into a tailspin, with a low double-digit contraction this year likely and inflation soaring by a double digit amount too.

She said conversion of Russian domestic foreign exchange holdings into roubles was also on the table, although the central bank would be reluctant to deploy that initially as it tried to spare hurting domestic savers.

The central bank retains tools to try to calm markets, including hiking rates further, providing liquidity to domestic banks and limiting capital flows. It may also be forced to impose bank holidays to stop a run on banks, the IIF said in a report issued on Monday and written before the latest sanctions.

Ribakova said an estimated $10 billion had been pulled from Russian banks on Friday alone.

The sanctions could get tougher, including preventing U.S. and European entities from trading in existing Russian government debt, expanding the list of institutions banned from SWIFT and removing energy-related trade exclusions.

Such measures would amplify financial, trade and pure contagion risks for the global economy too, and especially Europe, Ribakova added.

In its earlier report the IIF said that should Russia's biggest lenders, Sberbank and VTB, get kicked off SWIFT, expect "a fundamental destabilization of the entire financial system, with profound implications for the real economy." (Reporting by Tommy Reggiori Wilkes Editing by Hugh Lawson)"

MY COMMENT

Not that this will matter.....Russia has a long history of defaults. In fact way too many countries to count have defaulted in the past.

 

So now that we are FIVE DAYS into the invasion of Ukraine......are stock and funds reacting the way you thought they would? Are they reacting the way you saw the media saying they would? Are they even down?

Here is a chart of the SP500 after the last FIVE DAYS market days.

 

I have not been paying much attention to the markets today. That is a luxury that I have as a long term investor.....my account can take care of itself for extended time periods. Actually forever.

I have workers here again today finishing up our immediate projects. After today the only work that will be left is doing crown molding in rooms that dont already have it and trimming out 7 windows that are currently bull-nose. We will wait till about April or May to do that work. We need a break from the mania of workers being here.

At least the markets are open......but in the RED so far. Seems like a typical open and mid morning. I dont have as much of a....."feeling".....that we will get into the green by the end of the day today. I hope we do......but I am just not "feeling" it today like I did on other recent days.

 

Here is some economic data......that will be overwhelmed by the bigger events that are going on.

U.S. construction spending surges in January on homebuilding

https://finance.yahoo.com/news/u-construction-spending-surges-january-153047977.html

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

"WASHINGTON (Reuters) - U.S. construction spending surged in January, boosted by strong outlays on single-family homebuilding and private nonresidential structures.

The Commerce Department said on Tuesday that construction spending increased 1.3%. Data for December was revised higher to show construction outlays rising 0.8% instead of 0.2% as previously reported.

Economists polled by Reuters had forecast construction spending gaining 0.2%. Construction spending increased 8.2% on a year-on-year basis in January.

Spending on private construction projects shot up 1.5% in January. Outlays on residential construction increased 1.3%.

Single-family homebuilding spending advanced 1.2%, while outlays on multi-family housing projects dipped 0.1%.

Despite January's jump, homebuilding remains constrained by higher prices for building materials, especially framing lumber. The United States last November nearly doubled the duties on imported Canadian softwood lumber after a review of its anti-dumping and countervailing duty orders.

The National Association of Homebuilders said last month that building material production bottlenecks were raising construction costs and delaying projects.

Residential investment rebounded moderately in the fourth quarter after two straight quarterly declines.

Investment in private non-residential structures like gas and oil well drilling accelerated 1.8% in January, suggesting a rebound in spending early in the first quarter. Spending on structures fell for a third straight quarter in the October-December period.

Spending on public construction projects gained 0.6% in January. Outlays on state and local government construction projects fell 0.5%, while federal government spending soared 13.8%."

MY COMMENT

Construction is HOT right now but being constrained by supply chain issues. These are good numbers but not going to mean much with the BIG issues that are going on overhanging everything else.

I was listening to my normal Central Texas real estate radio show on Saturday while driving. Here in this area we are already seeing a massive SURGE in home buying interest and prices. The Spring selling season is starting early and very strong. Multiple offers are the norm as well as offers well over list price. We are on our way to seeing another year of BIG INCREASES in home values here.

Of the 4200 homes in my general area......there are ONLY 4 homes available for sale. Average time on market in my area is less than a week....usually 1-3 days.