The Long Term Investor

HERE.....are my NIKE earnings that came out today after the bell.

Nike earnings top Wall Street’s expectations, despite inflation in the U.S. and Covid lockdowns in China

https://www.cnbc.com/2022/06/27/nike-nke-earnings-q4-2022-earnings-.html

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

"Key Points

• Nike posted better-than-expected sales and profit for its fiscal fourth quarter.
• The company did not share a forecast for the year ahead, however. It referred to some ongoing challenges, such as disruptions that have slowed shipments of shoes and apparel.
• In the three-month period, inventory rose 23% versus the year-ago period, driven by longer lead times from ongoing issues in the supply chain.

Nike on Monday topped Wall Street’s earnings and sales expectations for the fiscal fourth-quarter, as the sneaker giant overcame a Covid lockdown in China and tougher climate for consumers in the U.S.

Shares rose about 1% in aftermarket trading.

The company did not share a forecast for the year ahead, however. It referred to some ongoing challenges, such as disruptions that have slowed shipments of shoes and apparel across the globe.

Here’s how Nike did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

• Earnings per share: 90 centsvs. 81 cents expected
• Revenue: $12.23 billion vs. $12.06 billion expected

The company reported net income for the three-month period ended May 31 of $1.44 billion, or 90 cents per share, compared with $1.51 billion, or 93 cents per share, a year earlier.

Sales dropped to $12.23 billion from $12.34 billion a year earlier.

Nike is in the middle of a strategy shift, as the company sells more merchandise directly to shoppers and trims back the amount sold by wholesale partners like Foot Locker. Its direct sales grew 7% to $4.8 billion in the quarter versus the year-ago period. Nike’s wholesale business trends were the opposite. Sales in that division dropped 7% to $6.8 billion.

The strategy, which began about two years ago, is paying off, Chief Financial Officer Matt Friend said.

“In this dynamic environment, Nike’s unrivaled strengths continue to fuel our momentum,” he said in a news release, adding that the company is “better positioned than ever to drive long-term growth while serving consumers directly at scale.”

In North America, Nike’s largest market, total sales fell by 5% to $5.11 billion.

In Greater China, its sales took a bigger hit due to lockdowns. Total sales in the country dropped by 19% to $1.56 billion versus $1.93 in the year-ago period.

The athleticwear and sneaker company faces several key challenges in the coming quarters. As the prices of gas, groceries and more rise, some consumers may skip over discretionary items or trade down to lower-priced brands. Supply chain challenges continue, causing merchandise to move slowly around the globe or get stuck in the wrong spot.

In the three-month period, inventory rose to $8.4 billion — up 23% versus the year-ago period — driven by longer lead times from ongoing disruptions in the supply chain.

Shares of Nike closed on Monday at $110.50, down 2.13%. As of Monday’s close, Nike shares are down about 34% so far this year. It’s underperformed the S&P 500, which is down about 18% during the same period. The company’s market value is $173.9 billion.

Nike said its board authorized a new four-year, $18 billion stock buyback program this month. It will replace the company’s $15 billion share buyback program, which will end in the coming fiscal year."

MY COMMENT

Very nice on the EPS and REVENUE. Net income was down a bit as were sales. BUT....all in all I consider this good earnings in the current environment.

A good kick off for earnings that will start in a few weeks.

I continue to think that many of these big companies are playing.....rope-a-dope......with their guidance, even though Nike did not give any specifics.

Of course.....as usual.....I am not a fan of the stock buy-back program. Simply a waste to corporate money.

 

What would you grade that book......about 1.0 to 1.5?

 

Hey broteau.

Good to have you here and posting. Welcome. As to SNOW.....I have not been following them much since the IPO. I do see lots of positive articles out there regarding the company. Obviously they are way down at the moment. Sorry...I dont really have enough current knowledge of the company to have an opinion.

You seem to follow them.....what is your analysis of the company?

 

Yes......as usual.....it is this simple.

Buy the Dip? Deciding When to Buy Stocks
It's tough to determine whether the market has hit its bottom, but you can still buy the bear.

https://money.usnews.com/investing/...cles/when-should-you-buy-the-stock-market-dip

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

"When the stock market performs well, investors tend to stick to their investment strategy. But when markets turn chaotic, some may panic and start to sell off their investments. Changes in financial markets are effective at playing with our emotions, but instead of exiting the market, there are ways to take advantage of a market downturn.

Buying the dip is a strategy used to buy stocks when their prices are down, betting that the long-term upward trend will eventually win out. But this strategy is not exclusive to stocks. Investors can buy the dip on any asset class, like commodities, exchange-traded funds and cryptocurrencies.

This strategy is being considered now more than ever, with the Nasdaq and the S&P 500 both in bear market territory.

These big moves can instill fear in investors when they see their portfolio returns going south, but this isn't the first, nor will it be the last, bear market. Experts say stock market downturns are actually opportunities to continue investing and increase wealth over time.

"It could be a once-in-a-generation opportunity to buy great technology companies on sale," says Nancy Tengler, CEO and CIO of Laffer Tengler Investments.

Investors wondering about whether it's a good idea to buy the dip in stocks should keep these concepts in mind:

• Stock market volatility is OK.
• Dollar-cost averaging smooths out fluctuations.
• Invest in quality companies.

Stock Market Volatility Is OK

There are many things that can affect the stock market in the near term. This year, inflation, rising interest rates, the war in Ukraine and COVID-19 lockdowns in China have all been weighing on U.S. stocks. If some or all of these factors persist, the U.S. economy can slow and potentially head into a recession, resulting in the market falling even further.

While the stock market and the economy are not one and the same, they are linked, so economic changes have an impact on stock market performance. One of the factors that has particularly stymied economic growth is inflation.

In response, the Federal Reserve is expected to continue to be more aggressive in its monetary policy by increasing interest rates, which should help ease inflation but also could result in a slowdown in the economy and a hit to earnings.

"The Fed should be able to give people comfort that we're not looking at inflation at 8% forever. We may not get back to 2%, but over time the rate comes down to something more reasonable," says Rhys Williams, chief strategist at Spouting Rock.

It's not all doom and gloom. In the first quarter of 2022, U.S. gross domestic product fell at an annual rate of 1.5%, but the Conference Board recently forecast that U.S. GDP will grow at a 1.9% annual rate in the second quarter. "If you look at the underlying fundamentals, the economy is in good shape, as is the consumer," Tengler says. "We are in a pretty strong earnings environment, and even with earnings slowing, companies are in solid shape with a lot of cash on their balance sheet," Tengler adds.

There have been a number of dividend increases in the first quarter as well. "Companies don't raise their dividends in anticipation of future earnings declines. They have to be able to pay them out of earnings, and are raising them based on their view of the future," she explains.

Things could get worse before they get better, but it's likely not much different this time around, which means investors who are patient and stay invested will be rewarded. "Historically, market returns have annualized about 9% since the early 1900s, and that includes the Great Depression and stock market crash and all the bear markets since, because the market tends to go up two-thirds of the time in annual periods," Tengler says.

Dollar-Cost Averaging Smooths Out Fluctuations

But how do you buy the dip without having to time the market? Rather than putting your cash all in at once, experts say to slowly add in your money over time.

Dollar-cost averaging is investing a set amount of money on a regular basis. Because the investments are spread out evenly over time, investors avoid the pitfalls of emotional investing, which tends to lead people to buy when stock prices are high and sell when they are low.

"If you miss the five best days, beginning with $10,000 in 1980 through the first quarter of this year, your portfolio would be 38% lower than if you had stayed full invested. When you retire, that's a 38% lower standard of living," Tengler says.

That's why she recommends remaining disciplined and continuing to get more shares of great companies at lower prices in periods like this.

"Sometimes you may be early, but in the long term it won't matter. It's in the short term where it feels really uncomfortable," Tengler says.

"Ideally, you get more shares at lower prices, so if you can increase your 401(k) allocation right now, or you can put savings to work, the market may go down another 10%, but three years from now, that's going to matter little to you," she adds.

While no one knows when the stock market will recover, history has proven that staying in the market leads to higher returns than trying to time the market.

Invest in Quality Companies

With inflation expected to remain above the Fed's 2% target, investors who want to reduce risk in their portfolios should consider seeking out stocks with reasonable valuations and whose companies can sustain growth in profitability amid an economic environment of rising costs.

"What you really want in an environment like this is companies that have strong earnings growth, even better if they pay dividends [that] are growing. You want an ability for the company to grow in a reliable manner," Tengler says.

Since stocks across the board have been down, now can be a good opportunity to buy them at a discount. The "Dogs of the Dow" are good opportunities in this market, says Clark Kendall, president and CEO of Kendall Capital.

Kendall points to Verizon Communications Inc. (VZ), Walgreens Boots Alliance Inc. (WBA), International Business Machines Corp. (IBM), Coca-Cola Co. (KO) and JPMorgan Chase & Co. (JPM) as blue-chip stocks with strong dividends.

Some positive news: While the economy will continue to have some inflation, Kendall says indications point to a healthier, balanced economy emerging. "Generally, the market thinks inflation will come down over the next 18 to 24 months," he says."

MY COMMENT

The current time period of market issues......is a great time to buy RATIONAL and QUALITY businesses. It is just a matter of time....till the markets WILL hit new highs again. It might be 6 months....it might be 12 months....it might even be 24 months. BUT....as always it will happen.

ACTUALLY....for most people at least ten years from retirement.....the longer the better to get back to good markets. That gives them more time to invest money at cheap prices that will compound massively in the future.

As to dollar cost averaging......why not? It is not what I usually do personally. I believe that dollar cost averaging in over the next six months to the end of the year is a no-brainer. Over that time I believe that anyone dollar cost averaging in will be "likely" to capture the bottom of the market some time over the next 6 months.

As usual....you can not just throw money at the markets. The BEST plan in my opinion is to buy QUALITY, QUALITY, QUALITY. In other words the best of the best big cap names in tech and in the SP500. The companies that are the GUTS of the USA and WORLD economy. They are ALL on sale right now.

 

YES......there is nothing new with human behavior or investing. There is NEVER a new normal in investing. The same things repeat over, and over. New generations of investors coma and go that have not seen some sort of event in their short investing lives.....but....the old dog investors, have seen it all.

6 Things To Know About Stock Market Crashes and Downturns
The regularity of market crashes and declines is a reminder that patience is key to investing in equity markets.

https://www.morningstar.com/article...know-about-stock-market-crashes-and-downturns

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

"Here we go again.


From December 2021 through mid-June, the U.S. equity market was down about 20% in real terms.

This is not the first time I’ve written about large stock market declines, which has included articles on the coronavirus crash and the history of market crashes among others.

Lessons Learned From Stock Market Declines

I’ve seen several themes emerge when it comes to these large stock market declines:

1. From time to time, stock markets go through long and deep periods of decline.
2. After a large decline, it is hard to predict how long it will take for stock markets to recover.
3. Over the very long run, stock markets have been very generous to investors who can get through long periods of decline.
4. During times of a rapid and deep decline, investors should avoid panic selling.
5. The standard bell curve is an inadequate model of stock market returns. A model that can capture the extreme risks of the equity market (its “fat tails”) is needed.
6. Sometimes, the market and economy move in opposite directions.

How Frequent Are Stock Market Crashes?

Let’s take a closer look at those occasional periods of stock market declines.

The chart below uses real monthly U.S. stock market returns going back to January 1886 and annual returns over the period 1871–85, which I originally compiled for Laurence B. Siegel’s 2009 book, Insights Into the Global Financial Crisis.

Following convention, I use the term bear market to refer to a downturn of 20% or more. Each downturn is indicated with a horizontal line, which starts at the episode’s peak cumulative value and ends when the cumulative value recovers to the previous peak.



As you can see in the chart above, the 152-year record of U.S. market returns is littered with bear markets; in each case, the market eventually recovered and went on to new heights.

Indeed, this proved to be the case most recently in 2020. After a decline of 20% (in real terms) from December 2019 to March 2020, the U.S. equity market fully recovered in just four months and was back to its precrash level by July, soon pushing higher.

This market recovery is evidence of the second lesson about stock market declines: One can never predict how fast a recovery will be.

New Heights After Market Downturns

An investor who stayed in the market through these extreme downturns has been well-rewarded, so far.

The chart above shows that despite the downturns, some of which were quite long and severe, $1 invested at the end of 1870 grew to $20,514 in real terms at the end of May 2022. This is a real annual rate of return of 6.8%.

Think back to when the market bottomed out in February 2009. From then through May 2022, it was up 424%. Even after the additional drop that took place during the first part of June 2022, and made the current drop an official bear market, the market is up by 409% from February 2009.

Recall when the market had plummeted in January 2020. From then through May 2022, it is up 18%. Even after the additional drop that took place during the first part of June, the market is up by about 14% from January 2020.

Not All Stock Market Declines and Recoveries Are the Same

Below is a list of the 22 worst market declines in the nearly 152-year history of the U.S. stock market.

The table shows the month at which the cumulative value peaked before the decline, the month at which the stock market decline was at its worst (the trough), and the month in which it reached the previous peak.

Not surprisingly, the largest decline occurred with the crash of 1929 when the cumulative value dropped by 79% and took four and a half years to recover. (This recovery was short-lived. It was followed by an almost 50% decline, the fifth-largest decline on our list.)



In more recent memory was the second-largest decline of 57.6%, which occurred during the 2000s. That decade started with a crash, followed by a near recovery, but then experienced another crash—the global financial crisis.

To put things in perspective, note that the decline of 18.3% (the 18th on our list) that started with the onset of the novel coronavirus pandemic took only four months to recover, though the pandemic lasted far longer. This shows how the market can at times be disconnected from the real world, and it's a stark reminder that the stock market is not the economy.

As of May 2022, the current stock market decline stands at 17.5% and is 21st on our list.

At this point, we don’t know how severe this current market decline will be, how long it will last, or how long it will take to recover. But if history is any guide, prudent long-term investors who can withstand the risks of equity investing should stay the course and not panic.

Lessons Learned From the History of Stock Market Crashes and Downturns

At the time of a market crash or downturn, of course, we couldn’t have known that would prove to be the case—which is why some investors panicked and sold off their stock holdings.

It just goes to show the unpredictability of markets. Not all crashes are alike in their severity and duration, and naming the market’s peak or bottom is difficult. Therefore, the best bet is to prepare now for the next crash by owning a well-diversified portfolio that fits one’s time horizon and risk tolerance.

What I wrote more than two years ago rings truer than ever: “Market risk is about more than volatility. Market risk also includes the possibility of depressed markets and extreme events. These events can be frightening in the short term, but this analysis shows that for investors who can stay in the market for the long run, equity markets still continue to provide rewards for taking these risks.”

Equity Investing Can Be Quite Rewarding, But One Must Understand the Risks

One reason the risks and potential awards of equity investing are often misunderstood is that standard models of equity returns are based on the bell curve.

In a bell-curve model, it is virtually impossible for there to be the sort of extreme returns that are largely responsible for the deep declines and large runups that we see in market history. In other words, bell-curve models lack the fat tails (the extreme returns on the ends of the curve) that we see in historical returns.

Understanding the historical record should help investors get through the current downturn. And if this downturn is like all the others in the past 150-plus years, investors will be richly compensated."

MY COMMENT

You rarely hear any of the long term investing...."stuff"....in the regular day to day media. Everyone is focused on the short term DRAMA and trading.

BUT.....the average person is NOT trading......NOT market timing......and NOT a short term speculator. So ignore all the drama and day to day BS.....invest for the long term and achieve financial security for your family.

Use this thread and other sources for STRENGTH and CONFIDENCE to get through this down time.....I do. I post this stuff to constantly reinforce my mind set as a long term investor.

 

This is GREAT NEWS for the markets and investors.

Consumer expectations fall to 9-year low as inflation weighs on Americans

https://finance.yahoo.com/news/consumer-confidence-conference-board-june-2022-143536146.html

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

"The Conference Board's latest reading on consumer confidence showed consumer expectations in June fell to their lowest level since 2013.

The Conference Board's consumer confidence index for June fell to 98.7 from 103.2 in May, below expectations for a reading of 100.

The report's expectations index, which is based on consumers' short-term outlook for income growth, the job market, and overall business conditions, fell to 66.4, its lowest reading since March 2013.


Consumer expectations dropped to a 9-year low in June as inflation weighs on the minds of American shoppers. (Source: The Conference Board)
"Consumers' grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices," said Lynn Franco, senior director of economic indicators at The Conference Board. "Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as growing risk of recession by year-end."

The Conference Board's report follows consumer sentiment data from the University of Michigan released last week that fell to a record low of 50.2.

The University of Michigan's report had gained outsized investor attention after Federal Reserve Chair Jerome Powell mentioned the inflation expectations component of that data as "eye-catching" during testimony before Congress last week. On Friday, the UMich report showed a slight decline — to 3.1% from 3.3% — in consumer inflation expectations, though this remains above the Fed's 2% inflation target.

On Tuesday, The Conference Board said purchasing plans for large items like homes, cars, and appliances had held "relatively steady," though this data has cooled since the start of the year.

"Looking ahead over the next six months, consumer spending and economic growth are likely to continue facing strong headwinds from further inflation and rate hikes," Franco said."

MY COMMENT

GOOD.....we need to wring all the excess out of the economy and get to the bottom. this is a step in that direction and a very nice contrary indicator for a bottom some time over the next 6-12 months.

 

The markets are all in the RED at this time of the day. We had a break for a week....but....the general direction is STILL down.

Stock market news lives updates: Stocks dip as choppy trading persists, consumer confidence falls to 16-month low

https://finance.yahoo.com/news/stock-market-news-lives-updates-june-28-2022-114448455.html

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

"US stocks turned lower on Tuesday as a choppy streak of trading extended further.

The S&P 500 erased earlier gains to trade in the red, adding to losses after ending Monday slightly in the red. The Nasdaq Composite dropped more than 1%, and the Dow dipped slightly. The equity averages took a leg lower after a new report showed US consumer confidence deteriorated to a 16-month low in June amid ongoing inflation concerns, stoking concerns that souring outlooks would contributed to a further slowdown in actual spending and activity.

Domestic stocks were briefly buoyed during the pre-market session after China cut in half its required quarantine times for travelers, in a sign the country may be loosening its most stringent COVID zero policies that had acted as a risk to growth. Stock indexes in Asia and Europe broadly gained. US crude oil prices briefly rose above $111 per barrel, and the 10-year Treasury yield jumped back above 3.25% to approach last week's highs.

US equity investors remain closely attuned to signs of an economic deceleration in the US, with inflation continuing to run at multi-decade highs and monetary policymakers maintaining a firm stance that their priority remains bringing down prices even at the expense of some growth. Closely watched data from the University of Michigan last Friday suggested consumers were at least beginning to temper their expectations for how hot inflation will run in the near-term, however, helping contribute to a stock rally that closed out the S&P 500's second-best week of 2022.

With quarterly corporate earnings season set the pick up in the next few weeks, the focus will soon shift to how companies have been navigating persistent inflation alongside early indications of softening demand. As of Friday, consensus Wall Street strategists were still predicting S&P 500 earnings would grow, in aggregate, by 10.4%, according to FactSet. Some have indicated this estimate will need to be revised down to fully reflect inflation's impact to margins, and the effects of an otherwise softening economy. Semiconductor bellwether Micron (MU) is set to report earnings later this week, with the pace of the earnings reports set to pick up in mid-July.

"I think we're gonna have a second half that's frustrating the bulls and frustrating the bears, bouncing around a bunch as we kind of digest the economy slowing," Bob Doll, Crossmark Global Investments chief investment officer, told Yahoo Finance Live. "How much of an effect does that have on earnings? Maybe we get a little better inflation news so the [price-earnings ratio of the S&P 500] doesn't get threatened as much. But we're moving from a period where it's all been about PEs multiples declining. And we're moving to a period where I think the earnings are gonna be watched more carefully than the PE."

On the move

• Nike (NKE) shares dipped after the athletic apparel-maker offered a disappointing full-year outlook, reflecting in large part ongoing concerns over sales trends in its business in China. Sales in Greater China fell by 20%, excluding currency impacts, in Nike's latest quarter. Nike said it expects revenue will grow by a low double-digit percentage this year, with gross margins flat to down by 50 basis points.
  
  
• Robinhood's (HOOD) stock fell to give back some gains after rallying by 14% in its best day in over a month on Monday, following a report that FTX might be considering a deal to buy the trading platform. Sam Bankman-Fried, the CEO and founder of FTX, told Yahoo Finance, however, that "there are no active M&A conversations with Robinhood."
  
  
• Kezar Life Sciences (KZR) shares soared after the company announced "positive results" from a phase 2 clinical trial for its drug aimed at treating treading lupus nephritis. The stock was on track for its best session since June 2020 based on early price action."

MY COMMENT

Nothing new going on. No new issues. the markets continue the same as the past 6 months. I anticipate another 6 months of the current market issues and conditions.....at MINIMUM.

I anticipate having perhaps $20,000 to $25,000 to invest some time between December and the first few months of 2023. When those funds are available I will simply put them in and get them working. I am not going to try to anticipate or time the market bottom. I have not decided yet if I will spread that money between my stocks and funds......or.....if I will just plunk it all into the SP500 Index Fund. Wither way it will go into my ten stocks since they are all highly weighted in the SP500.

 

Here is some nice news for home owners. At least the real property (house) part of most peoples net worth is holding up....so far. Of course......these sorts of articles and data are always taken ith a grain of sale since.....all real estate is LOCAL.

Home prices surged to another record high in April

https://finance.yahoo.com/news/home-prices-record-high-april-2022-131118002.html

MY COMMENT

Keep in mind that this is APRIL data......and....is therefore out of date with the current markets.

 

The word of the day is......DETERMINATION.

COURAGE and DETERMINATION.....everyone.