The Long Term Investor

Speaking of COSTCO earnings.

Costco Stock Hit By Sellers Ahead Of Quarterly Earnings Report; FedEx Warns, Shares Dive

https://www.investors.com/research/...ly-result-fedex-warns-shares-dive/?src=A00220

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

"Investors sent shares of FedEx (FDX) sharply lower Friday when the company pre-announced weak earnings and sales. CEO CEO Raj Subramaniam said he expects the economy to enter a "worldwide recession." Wall Street will be hoping for a different tune from retail stocks like Costco (COST) and Darden Restaurants (DRI) ahead of upcoming earnings reports.

Despite strong fundamentals, Costco stock has been under selling pressure as it tries to hold the 500 level.

Costco stock has a Composite Rating of 85, helped in part by high return on equity and several quarters in a row of double-digit revenue growth. Costco stock also has a Relative Strength Rating of 83 from IBD Stock Checkup, ranking it No. 2 in its group.

Results from Darden Restaurants — the parent company of Olive Garden, LongHorn Steakhouse and Yard House — are due Thursday before the open. The Zacks consensus estimate is for adjusted profit of $1.56 a share, down 11% from the year-ago quarter. Look for revenue to be up 7% to $2.37 billion.




DRI stock looks a little better than Costco stock as it consolidates near its 40-week moving average. Darden's relative strength line has started to trend higher after a nice rally off lows, but the 40-week line is still a potential resistance level after Darden got turned away at the line last month and wrestles with it now.

Costco Stock Fades Ahead Of Results

Results from Costco are due Thursday after the close. Adjusted profit is expected to rise 5% to $4.11 a share, with revenue up 15% to $71.84 billion.

Late last month, Costco reported August sales of $17.55 billion, up 11% from a year ago. Same-store sales increased 8.7% for the month.

Costco stock responded positively when the company reported earnings in late May. Shares jumped nearly 6% in big volume even though margins took a hit due to rising freight and labor costs. Earnings and revenue came in better than expected, with adjusted profit up 2% to $2.91 a share. Revenue increased 16% to $52.6 billion. Total company same-store sales jumped an impressive 14.9%. On an adjusted basis, same-store sales increased 10.8%.

Despite strong fundamentals, Costco stock has been struggling to attract buyers after a short-lived breakout over a 552.81 buy point. Costco quickly paid a visit to its 200-day moving average, rallied back above the line for four sessions, then gave up the support level Tuesday in heavy volume.

FedEx (FDX) also reports Thursday after the close. FDX stock poked above its 40-week moving average in June when investors cheered its last earnings report. But sellers hit the stock hard Friday after the company guided earnings and revenue below expectations and pulled its outlook."

MY COMMENT

I expect that the COSTCO MACHINE......will simply post the typical strong earnings this week. BUT.....of course.....it will not matter to the short term soothsayers.

 

I am NOT a fan of Cathie Wood....but that does not mean she wrong in this move.

Nvidia Is on Sale and Cathie Wood Is a Big Buyer

https://finance.yahoo.com/news/nvidia-sale-cathie-wood-big-101751279.html

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

"(Bloomberg) -- A rebound for Cathie Wood’s exchange-traded funds may depend in part on an equally battered large-cap technology stock that’s been a long-time favorite of hers -- Nvidia Corp.

ETFs controlled by the growth stock proponent’s ARK Investment Management LLC have been loading up on Nvidia shares, purchasing more than 400,000 in September, according to the firm’s daily trading disclosures. ARK funds held more than 675,000 shares as of June 30, according to data compiled by Bloomberg.

Nvidia shares have plunged 55% this year, the biggest drop among tech stocks with market values of $100 billion or more. Sales growth has slowed at a time when valuations for rapidly expanding companies have come under intense pressure amid soaring interest rates. The stock rose 0.5% on Monday.

That’s left the stock cheaper than it was last year when its market value was climbing toward $1 trillion. Yet at 32 times projected earnings, its still priced above its average over the past decade.

Wood has long been a fan of Nvidia, whose graphics processors are used in personal computers and for complex computing tasks required for artificial intelligence. Shares of the Santa Clara, California-based company have been part of her portfolios since ARK began in 2014, along with electric-car maker Tesla Inc.

Still, ARK’s conviction has wavered at times. The firm sold nearly 300,000 Nvidia shares on Aug. 23, the day before the chipmaker reported earnings in which its quarterly revenue forecast fell about $1 billion short of the average Wall Street estimate. ARK representatives didn’t respond to inquiries seeking comment.

“Nvidia is a high-quality company and while it was expensive earlier this year, the correction has made it look pretty attractive at these levels,” said Greg Taylor, chief investment officer at Purpose Investments Inc.

Wood’s affinity for Nvidia was a massive boon as the shares soared from about $4 at the start of 2014 to more than $330 late in 2021, when Nvidia’s market value peaked at more than $800 billion. This year, however, the stock has been a big drag. Nvidia has fallen 60% from a Nov. 29 record, shedding about $500 billion in market value along the way.

Of course, Wood has been criticized as her portfolios have taken a beating with economic conditions weighing disproportionately on the high-growth, high-valuation stocks she tends to favor. Her $8 billion flagship ARK Innovation ETF has fallen 55% this year.

As for Nvidia, Wall Street has been slashing earnings estimates. Projections for 2023 profits under generally accepted accounting principles have fallen more than 50% over the past three months, according to data compiled by Bloomberg."

MY COMMENT

I am generally NOT a fan of chip stocks. I have owned a few of them over the past decades. These companies tend to be boom or bust....over and over and over. I do however own NVIDIA. I see than as the top of the line big cap chip company. I like to own stocks that are the MONSTER in their category. In addition this company has AMAZING management.

I would probably NOT own this company if not for their management. There is a lot about them and their market that I like....but the management was the primary factor.......when I decided to add this company to my portfolio."

 

If you are interested in real estate, the housing markets, etc, etc.....here you go.

Homebuilder sentiment tumbles in September for ninth straight month
Rising interest rates and high inflation forcing slowdown in the housing market

https://www.foxbusiness.com/economy/homebuilder-sentiment-tumbles-september-ninth-consecutive-month

 

I see that the yield has backed off to about 3.475% now...

10-year Treasury yield jumps to 3.51%, the highest level since 2011

https://www.cnbc.com/2022/09/19/tre...as-traders-anticipate-the-feds-next-move.html

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

Treasury yields climbed on Monday as traders anticipated the Federal Reserve’s next moves in the face of persistently high inflation.

The benchmark 10-year Treasury yield gained 6 basis points to 3.518%, hitting its highest level since April 2011, and was last up 2 basis points to 3.467%. The yield on the 2-year Treasurybond rose 8 basis points to trade at 3.936%, trading around levels not seen since 2007.

Yields move opposite to prices. One basis point is equivalent to 0.01%.

The Fed’s two-day meeting will begin Tuesday, with most market participants expecting another 75-basis-point hike by the central bank. Some analysts have, however, argued the Fed could increase interest rates by a full point, or 100 basis points.

It comes after inflation rose more than expected in August. The consumer price index increased 0.1% for the month and 8.3% over the past year — higher than economists expected. The data has led investors to expect the Fed to double down on higher interest rates for longer, until prices fall.

“The 10s-2s spread plunged last week and was trading at -46 bps on Friday and is just a few basis points from setting fresh multi-decade lows,” wrote Tom Essaye of the Sevens Report. “The signal from 10s-2s is clear: The economy is going to slow materially and likely contract materially in the coming quarters, and it’s a message I believe we continue to need to heed.”

MY COMMENT

DUH......the FED is determined to drive rates higher over the next 6-12 months. I do believe that normalizing rates is a good thing. We were previously siting at 100 year historic low rates.

There is no need for this to impact the markets. If the FED would do their increases in a transparent and orderly way......this would not be an issue. Instead they chose to LURCH forward.....being whipsawed by short term economic data.....doing constant and ridiculous media interviews and speeches......as ego-maniacs.

 

After two hours.....STILL....no real market strength or direction. We have now turned slightly RED. I have not calculated it but the SP500 and NASDAQ might be at their lows of the day right now. So.....perhaps we are seeing an attempt to set a direction today. Who knows....who cares.

 

I like this little article.

Should I buy stocks now or wait? Two experts weigh in on the current market
The stock market has definitely taken a beating in 2022. Here’s what investors should keep in mind.

https://www.cnbc.com/select/should-i-buy-stocks-now-or-wait/

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

"While stock market investors have been seeing red for a large part of 2022, Tuesday was an exceptionally bad day. The Consumer Price Index report published early Tuesday morning showed inflation is still on the rise despite the Federal Reserve continuing to raise interest rates.

According to Investor’s Business Daily, this led the stock market to plunge to its worst one-day loss since June 2020, with total losses of over $1 trillion dollars. But does that mean you should run to your brokerage account and buy more shares of your favorite companies? Or would the better strategy be to pull everything out and avoid more losses?

Below, Select details how everyday investors should be thinking about their investing strategies.

Should investors rush to buy stocks?

2022 has been an especially frustrating year for investors, which followed 2021′s roaring bull market.

Nearly all major indices and many individual stocks are suffering double-digit year-to-date losses, leaving many hesitant to put more money into the already bleeding stock market.

A Bankrate survey from May 2022 indicated 56% of U.S. investors said they had purposely not made any investments due to stock market volatility. But now that inflation isn’t slowing down and markets are continuing to sell off, investors may be even more reluctant to put their money to work.

If you’re already investing or want to begin your journey, consider the following two points:

This may not be the bottom

JD Gardner, founder of Aptus Capital Advisors, says this is likely not the bottom of the market, which leaves a great opportunity for investors to put their money in when stocks are on sale and ride the wave of growth back up to the top.

With that in mind, several studies have shown that “time in the market” was much more favorable than the idea of simply “timing the market.” In other words, waiting for the market to fall and predicting its rise isn’t really the best strategy. Putting your money to work in proven investments and giving it time to work for you is the best way to go about it.

Before you try to predict what the stock market will do, try and dollar-cost average your way into the market so you can keep your average spending down — and your hopes high — for solid returns.

Consider investing in index funds that track the overall stock market or S&P 500, this way you’re not relying on the performance of an individual company. Funds that track the broader market have proven to be good choices if you have a long term investing horizon.

Focus on what you can control

The stock market will have its good days and bad days, and the only things in your control are your financial goals and the strategy you’re employing to reach them.

Tara Falcone, chartered financial analyst, certified financial planner and founder of the goals-based investing app Reason says there’s little reason to worry just yet. “If you’re investing for a long-term goal like retirement that’s decades away, you probably don’t need to sweat this downturn.”

That said, if you have a short-term goal, such as buying a home, Falcone urges investors to “assess whether the investments you’ve earmarked for that goal are [on target].” If they aren’t, it may be time to adjust your investing strategy.

How you can start buying stocks today
401(k) or IRA

A common method for everyday investors to put aside their money is by using either a 401(k) or an individual retirement account (IRA). While these particular accounts work best for those who want to put some money away and not touch it until their post-working years, they may not be a great option for those who are active traders.

A 401(k) is an employer-sponsored retirement account that lets you put money away tax-deferred — in other words, you won’t have to worry about paying taxes until it’s time to take the money out. In some cases, you might also be able to score free money through an employer match if your company offers it.

You can also opt to open an IRA, or an individual retirement account, on your own, whether or not your employer offers a 401(k) plan. A traditional IRA gives you the opportunity to contribute pre-tax dollars, while a Roth IRA allows you to invest post-tax dollars.

I elected to contribute to both a 401(k) and a Roth IRA to take advantage of tax deferment with the former and tax-free growth with the latter. The best combination will be unique to your financial needs, so consider your tax bracket and retirement goals before you begin investing. For more information about opening a traditional or Roth IRA, check out some of our favorite IRA brokerages:

Taxable brokerage accounts

A taxable brokerage account is different from a 401(k) or IRA because you can deposit and withdraw money to and from it as often as you like without incurring a penalty. This makes them a great place to put money away for retirement or toward another goal, such as buying a home.

Keep in mind, however, that investing in tax-advantaged accounts — such as a Health Savings Account, 401(k) or IRA — first may be a better strategy to help reduce your overall taxable income.

If you prefer to have some flexibility in how your money will be invested, consider working with one of these brokerages or robo-advisors as you continue on your investing journey:

Bottom line

What’s happening with the stock market continues to be a concern for many, but by investing for the long-term, you can improve your odds of having a successful portfolio. While the market’s volatility may make you weary, investing diligently as planned in a diversified portfolio is a historically safe long-term strategy — just remember, there are no guarantees you will earn a certain rate of return."

MY COMMENT

AS usual....AMEN....it is that simple.

 

Of course......"I"......lived through the Jimmy Carter days as a young, working adult.

 

Yep Spud.....it is all about leadership.....some people have it. It is an intangible. Many people....especially in government.....dont have it. They have the acting skills and charisma.....to get elected....but once the election is over.....they are in way over their head and can NOT govern as a LEADER.

I have seen the same thing during my High School years in athletics. I had plenty of chances to view the difference that leadership makes......state doubles champion in tennis, on a final four team in my state in basketball, on a district champion term in football as a tackle, defensive end and kicker, third in district in discus, golf team. I even did football at a PAC12 school for a brief 3 weeks as a freshman (kicking). LOL.....that college team thing was during the time of the change over from American style kicking to soccer style kicking and I could see that my style of kicking (American) was quickly on the way out. That was the end of my athletics.....I never did any sports as an adult.....I had enough when I was young. AND....I had things that I wanted to achieve in business, investing, and life and dont live in the past.

I have seen many, many times the difference that a inspired leader (coach) can make with the same group of guys......as has anyone that did a good amount of athletics.

 

I see that the markets are still quietly LINGERING today. At least they are in the GREEN. I still have not looked at my account today. Not that I am avoiding it.....I have just not thought about looking.

 

You know I have to give my parents, sports, my childhood environment, the values that I was taught, family, etc, etc, credit for what I have done in life. I was NEVER the most gifted or immediate talent in anything.....till I went into the business world. Everything I did.....was due to outworking anyone else.....as a fanatic......and sticking with it for the long term. Outside of business....in my early life I was never an overnight success. Later in life I did find out that I had a strong talent for business and investing. BUT....I still worked harder than anyone else.

 

LOL.....that sounds like an academy award speech above. Actually I was nominated for an Emmy back in........NO.....I am lying, sorry.

 

I had to look since I mentioned my account. Doing very well today. I need to get back some of the recent losses for my....retesting the lows....cushion.

Here is what is going on today.

Dow rises 100 points in volatile trading ahead of the Fed’s next rate hike

https://www.cnbc.com/2022/09/18/stock-market-futures-open-to-close-news.html

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

"Stocks ticked higher Monday in a volatile trading session ahead of the Federal Reserve’s two-day policy meeting that kicks off Tuesday.

The Dow Jones Industrial Average last traded 145 points, or 0.49% higher. The 30-stock index wavered on Monday between a 263-point loss at its lows and a high of nearly 150 points. The S&P 500 and Nasdaq Composite gained 0.5% and 0.6%, respectively.

Yields pushed higher ahead of the Fed’s likely decision to raise its benchmark rate by another 75 basis points to snuff out inflation later this week, with the 10-year Treasury yield topping 3.51% and hitting its highest level in 11 years.

After some brief hope over the summer that the Fed may be done with its aggressive tightening campaign, investors have been dumping stocks again on fears the central bank will go too far and tip the economy into a recession.

Investors are focused on the Fed’s policy meeting slated to begin Tuesday, where the central bank is expected to raise interest rates by another 75 basis points. Investors are also watching for guidance about corporate earnings before the next reporting season begins in October.

“We’re in a wait-and-see approach and markets are waiting for some kind of bullish or bearish catalyst to send us out of this trading range,” said Adam Sarhan, CEO of 50 Park Investments. “The markets are struggling for direction and that’s the fundamental news.”

Seven of the 11 major S&P 500 sectors rose or traded flat, led to the upside by consumer discretionary, industrials and materials. Financials also moved higher as some investors bet that higher rates could benefit their bottom lines. Health care was the laggard, falling 1.3%.

Stocks slid last week as investors reacted to a hotter-than-expected inflation report and a dismal warning from FedEx about a “significantly worsened” global economy. The major averages posted their fourth weekly loss in five weeks and hovered near two-month lows.

Beyond the Fed meeting, there are just a few economic data releases on deck this week, including August housing starts on Tuesday and initial jobless claims on Thursday."

MY COMMENT

BARING some rate surprise from the FED......I think we may be in for a good week. BUT.....my total focus will be on the upcoming EARNINGS. That is what builds the real long term gains.

 

Well, well......a very good day for me today. I was nearly all GREEN today. My single down stock was MSFT. I also got in a good beat on the SP500 by 0.55%.

Tomorrow we move on to the first day of the FED. Should be another lingering day like today....since NOTHING is going to happen tomorrow.

 

I see that with the recent sell-off.....I am now lagging the SP500 (-18.18%).....by 6% year to date. BUMMER.

But not unexpected....with the recent sell off and the over-size impact it had on the BIG tech stocks.

 

Beyond Meat.......well....I guess not the COO. (the ALLEGATIONS are below)

Beyond Meat COO Doug Ramsey arrested for allegedly biting man’s nose after Arkansas college football game

https://www.cnbc.com/2022/09/19/bey...-arrested-for-allegedly-biting-mans-nose.html

 

Not my account.......one that I manage for family. I just put in an order to buy 150 shares of NVDA.....about $20,000. ALL the funds are going into this one stock since I consider it the BEST BUY available of the ten stocks that I have in each portfolio. The order will execute at the open tomorrow.

The money is available NOW....so it happens tomorrow. My usual....all in all at once when the funds are available.....no market timing.