The Long Term Investor

The......BAD......management news for AMAZON continues.....as executives continue to BAIL.

Amazon executives overseeing Alexa, hardware group depart the company

https://www.cnbc.com/2022/10/13/ama...-alexa-hardware-group-depart-the-company.html

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

"Key Points

• Amazon has lost two high-profile executives, Tom Taylor and Gregg Zehr, the company confirmed.
• Both executives spent well over a decade at Amazon.
• Their departures add to a recent exodus of top talent at the company.

Gregg Zehr, president of Amazon’s hardware research and development group, known as Lab126, has retired, the company confirmed to CNBC. Zehr is credited with inventing the hugely successful Kindle e-reader.

Tom Taylor, senior vice president of Amazon Alexa and a member of CEO Andy Jassy’s elite S-Team, is also retiring, Amazon said. Both Taylor and Zehr spent well over a decade at the company.

“We have strong succession plans for all businesses, and both these positions were backfilled with strong internal leaders some time ago,” an Amazon spokesperson said in a statement.

Business Insider earlier reported on Zehr and Taylor’s departures.

For Jassy, it marks the latest high-profile exits at a time when Amazon is staring down a multitude of challenges, from soaring inflation to slowing sales. Heather MacDougall, Amazon’s workplace health and safety chief, departed the company in September. In July, public policy chief Jay Carney left to join Airbnb, and 23-year Amazon veteran Dave Clark resigned as retail chief a month later.

Two prominent Black leaders — operations executive Dave Bozeman and Alicia Boler-Davis, senior vice president of global customer fulfillment — also announced their departures in June.

Amazon said it still maintains high retention rates. The average tenure for vice presidents is about 10 years, and for senior vice presidents it is “much longer,” the spokesperson said.

The executive exodus also comes as Jassy has been reining in spending across the company. Amazon has implemented a hiring freeze for corporate retail roles and has discontinued a number of projects in recent months, ranging from its Care telehealth service to its Glow video-calling projector."

MY COMMENT

AMAZON is bleeding talent from the executive ranks. This has been going on throughout the term of Jassy. NOT a good sign that people that probably have massive stock holdings are choosing to BAIL. These types of people......dont have to work, and they are choosing NOT to work with or under Jassy

AMAZON continues as a.....two year watch......for me. there comes a time with every company once the founder leaves when it is time to let the stock go. I am not there yet......but I will be watching them.

 

Luckily the painting was under glass.

I am not going to get into the politics of climate.......but.....there is ABSOLUTELY ZERO relationship between this historic and iconic painting and their issue. They targeted it simply to get publicity. It is simply SICK....no matter your issue.....to potentially damage or destroy a world treasure and human cultural icon.....to get publicity.

BUT....you know......as usual.......the ends justify the means. This kind of thinking is very dangerous to "YOUR" property and individual rights.

 

I like this little article.....in general.

Our Perspective on Markets’ Rollercoaster Reaction to September Inflation Data
There is a rather interesting entanglement between stocks and bonds these days.

https://www.fisherinvestments.com/e...rcoaster-reaction-to-september-inflation-data

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

"September’s Consumer Price Index report hit the wires today, and once again, inflation data sent Fed watchers into a tizzy. While the headline rate slowed from 8.3% y/y to 8.2%, the “core” rate, which excludes food and energy, accelerated to 6.6%—a fresh multi-decade high. Unsurprisingly, rate hike expectations jumped, with most market participants now seeing the fed-funds target range topping 4.5% by 2023’s end—and a growing minority now envisioning rates topping 5% by then.[ii] That is a big change from yesterday’s expectations, and it was initially enough of a jolt to send market sharply lower. The S&P 500 opened down around -1.6% from Wednesday’s close, and 10-year US Treasury yields jumped from 3.91% to a high of 4.22%.[iii] But as the day progressed, the moves reversed. The S&P 500 closed up 2.6% on the day and the 10-year yield flipped to finish at 3.94%.[iv] While we hesitate to read much into a wobbly day, we see a couple of interesting lessons to draw here, and we think they provide reason for optimism.

Why is always harder to know than what, but we doubt 10-year yields’ reversal stems much from Fed predictions, which remain high. Best as we can tell, the bigger development is the rampant chatter about the UK government plotting another U-turn on its recent “mini-budget” and will soon announce it doesn’t plan to cancel next year’s corporate tax hike after all. This seems to have radically shifted sentiment toward UK Gilts: British 10-year yields are down almost -33 basis points on the day as we write. Their decline has helped pull rates down globally, and if you look at an intraday chart of the US 10-year yield, you will see an initial decline that paralleled Europe, then a sharp spike as the inflation data came out, followed by a renewed decline—which in turn parallels stocks’ rise.

So, we would venture that the inflation report—and its impact on rate hike expectations—caused a fleeting sentiment jolt global factors soon overrode. This is unprovable, as most explanations for daily market movement are, but we think it is useful as a working hypothesis. Now, ordinarily we wouldn’t dwell on such things, but stock returns and bond yields have been very negatively correlated lately, which is rather unusual. Since 2000, the rolling 3-month correlation between weekly S&P 500 price returns and the weekly change in 10-year Treasury yields has been more negative than it is today on only four occasions.[v] To us, this is a strong indication that bond market freakouts are spilling over into stocks right now. So when rate hike expectations and UK Gilt volatility took Treasurys on a wild ride Thursday, stocks rode shotgun.

The bad news here is that sentiment-fueled swings in stock and bond markets alike are unpredictable. Even if we can identify reasonably probable causes for what just happened, we can’t use that to make judgments about what will happen immediately ahead. No one can. Sentiment is too finicky. However, we can set some baseline expectations for a more meaningful stretch of time. In the UK, which seems to be dominating global bond markets right now, we see a high likelihood that as internal divisions force the Conservative Party to keep watering down its fiscal plans, investors’ overreaction to what was only ever a series of tiny tax cuts probably fades. That points to tamer long rates.

In the US, we see a high likelihood that investors eventually realize their expectations for future long rates are overstated. To see this, consider another, liquid market-based indicator: breakeven inflation rates. These, based on nominal Treasury yields and Treasury Inflation-Protected Security yields, show markets’ expectations for average annual inflation. The 10-year breakeven inflation rate is presently 2.29%, implying investors expect inflation to average about 2.3% annually over the next decade.[vi] That is down from just over 3.0% in April.[vii] The 5-year rate, which is more sensitive to near-term expectations, has come down even more. It topped out at 3.59% in late March and is now down to 2.32%.[viii] That is a significant deceleration, and it is inconsistent with persistently rising 10-year Treasury yields. Maybe at some point even the Fed will notice and cool rate hikes, alleviating a weight on sentiment.

Why might markets be pricing in lower inflation despite September’s acceleration in core inflation? Especially considering core prices are widely considered to be stickier than headline given they aren’t skewed by volatile food and energy prices? Well, for starters, because commodity prices actually have a larger effect on core prices than you might think. Take a look at your surroundings, and you will see products containing industrial metals like iron ore. You will see electronics that include palladium and rare earth metals—and contain semiconductors made using neon gas. You will see gizmos with lithium-ion batteries. You will see all manner of plastics and synthetic rubbers, which use oil as a feedstock. You will see cleaning products and other chemicals made in facilities powered by natural gas. Heck, every manufactured product has a power bill.

All of these are avenues for commodity prices to feed into core CPI, and we think this year’s earlier commodity price spikes have done just that. It isn’t an instantaneous price input since companies will often hedge their raw materials and energy costs, hence the seemingly slow and delayed filtering-through. But sooner rather than later, commodity prices’ more recent declines should start filtering through, helping stabilize consumer goods prices. Easing supply chain bottlenecks and lower shipping costs should help, too. Meanwhile, home prices have started rolling over, which should stabilize both actual rent and owners’ equivalent rent. And on the monetary side, broad money supply measures throughout the developed world have slowed to pre-pandemic trends, which weren’t too inflationary.

The more inflation slows, the more investors’ expectations for long rates should ease and the more likely it is the Fed follows the market. Meanwhile, other, more stock market-specific forces should take hold, like the overwhelming likelihood that midterms increase gridlock, reducing the legislative risk aversion that has also loomed over stocks lately. Economic data should give more clarity on how the US is weathering Fed activity and Europe is faring amid its energy woes, helping ease uncertainty and enabling investors to move on and look further forward. Even if the numbers aren’t great, stocks’ year-to-date declines are consistent with markets pricing in a shallow recession, and getting confirmation of this would probably end the questioning and help investors look more to the future and an eventual recovery. This isn’t fanciful—stocks regularly start recovering before the economy does.

When markets are swinging wildly, we find that focusing on core, timeless tenets is quite helpful. Even if the day-to-day circumstances change, markets generally don’t. As Ben Graham so aptly described, they will still be voting machines in the short term, registering the world’s feelings. And in the long run they will still be weighing machines, registering likely corporate earnings over the next 3 – 30 months. Today’s robust profit margins, which aren’t getting nearly enough love right now, suggest earnings should be far more resilient than the world seems to expect. If margins today are flush despite all the challenges publicly traded companies have had to navigate over the past two and a half years, that speaks to businesses’ ability to absorb the punches and keep on truckin’. That resilience is what you own if you own stocks."

MY COMMENT

The last paragraph of this little article is ......right on. Over the longer term.....it will....as usual.....be all about earnings and company business. After all.....that is what you are investing in when you own a stock or a fund......a particular business or a group of businesses.

 

Yes, Emmett.....it is very good. Nice recommendation.

 

After yesterday....it is not surprising that we are down today. Here is probably one of the primary reasons.

Consumer spending was flat in September and below expectations as inflation takes toll

https://www.cnbc.com/2022/10/14/retail-sales-september-2022.html

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

"Key Points

• Retail and food services sales in total were little changed in September against the estimate for a 0.3% gain.
• Excluding autos, sales rose 0.1%, vs. the estimate for spending to be unchanged.
• The numbers are not adjusted for inflation, indicating that consumer spending slowed.

Consumer spending was flat in September as prices moved sharply higher and the Federal Reserve implemented higher interest rates to slow the economy, according to government figures released Thursday.

Retail and food services sales were little changed for the month after rising 0.4% in August, according to the advance estimate from the Commerce Department. That was below the Dow Jones estimate for a 0.3% gain. Excluding autos, sales rose 0.1%, against an estimate for no change.

Considering that the retail sales numbers are not adjusted for inflation, the report shows that real spending across the range of sectors the report covers retreated for the month.

A Bureau of Labor Statistics report Thursday indicated that consumer prices rose 0.4% including all goods and services, and 0.6% when excluding food and energy.

Miscellaneous store retailers saw a decline of 2.5% for the month, while gasoline stations were off 1.4% as energy prices declined.

A slew of other sectors also posted drops, including sporting goods, hobby, books and music stores as well as furniture and home furnishing stores, both of which posted a -0.7% drop, while electronics and appliances were off 0.8% and motor vehicle and parts dealers fell 0.4%.

General merchandise store sales rose 0.7%. Gainers also included online stores, bars and restaurants, clothing retailers and health and personal care stores, all of which saw 0.5% increases.

While the gains for the month were muted, retail sales rose 8.2% from a year ago, matching the rise in the consumer price index. Shoppers remain generally flush with cash though there are indications of late that they are dipping into savings to make ends meet.

The Fed has enacted multiple interest rate hikes aimed at reducing inflation and bringing the economy back into balance. Markets expect the central bank to raise rates up to 1.5 percentage points more through the end of the year.

A separate report Thursday showed that import prices fell 1.2% in September, slightly more than the 1.1% estimate. Exports declined 0.8%."

MY COMMENT

This is a DISMAL report. It shows that nearly every category was WORSE than expected. This is what you get with a RECESSION.

Makes me wonder.......how many down quarters of GDP are NOW required for it to be called a RECESSION?

I actually....HOPE....things continue to deteriorate......we need to get to the bottom once and for all in order to turn the corner and move back to a positive direction for the markets. I would rather get there quicker....compared to drawing it all out for the next couple of years.

 

Yesterday gave me about THREE DAYS of cushion in my account....before I hit my YTD low once again. Here are the markets today.

Stock market news live updates: Stock erase gains amid bank earnings, more inflation data

https://finance.yahoo.com/news/stock-market-news-live-updates-october-14-115112610.html

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

"U.S. stocks erased gains Friday in early-session trading as Wall Street's biggest banks reported earnings and investors digested more inflation data.

The S&P 500 (^GSPC) fell nearly 1%, while the Dow Jones Industrial Average (^DJI) was down 0.3%. The technology-heavy Nasdaq Composite (^IXIC) fell by 1.3%.

Stocks fell as a consumer survey from the University of Michigan showed inflation expectations increasing, another indicator closely watched by the Federal Reserve.

Wall Street was tuned in Friday to third-quarter earnings by financial heavyweights, such as JPMorgan Chase (JPM), Morgan Stanley (MS), and Citigroup (C).

JPMorgan Chase kicked off earnings before the opening bell Friday. Its stock rose 2% after the bank's quarterly results topped Wall Street consensus for earnings and revenue.

Wells Fargo posted stronger-than-expected revenue for the third quarter, offsetting a profit miss. The stock was up 3%. Morgan Stanley reported a profit drop in the third quarter, prompting shares fell nearly 2% in premarket trading. Citigroup reported a 25% drop in third-quarter profit on Friday following weak investment banking activity.

Elsewhere on Friday morning: Kroger announced a $24.6 billion deal to buy rival Albertsons, and Beyond Meat announced a 19% reduction in the plant-based meat company's global workforce after another brutal quarter.

On the retail front, shoppers' retail spending was flat in September amid high inflation and climbing interest rates. Retail sales, excluding gasoline, were up 0.1%. The measure doesn't adjust for inflation. Economists surveyed by Bloomberg called for a 0.2% gain in retail sales.

"The high inflation environment is weighing on consumer morale and purchasing power, and it is forcing many households to dip into savings and use credit to finance outlays," EY Parthenon Chief Economist Gregory Daco, said in statement.

"While consumers remain willing to spend, many families, especially those at the lower-to-median end of the income spectrum, are feeling increasingly constrained by elevated prices and rising interest rates," Daco added.

Stocks could try for another rally while on Thursday, stocks started the day sharply lower after a hotter-than-expected inflation report. But that didn’t last long, as stocks trimmed their losses and turned green before midday trading, ending a six-day losing streak with a big rebound rally.

"We got a "bear hug"... S&P 500 5% in 5 hours after hot CPI because it was simply so oversold," Michael Harnett, investment strategist at Bank of America, wrote in a note on Friday.

Thursday's stock market gains followed the main event of the week on Wall Street — consumer price data, which came in hotter than expected. The Consumer Price Index (CPI) for September showed prices rose 8.2% over the prior year and 0.4% over the prior month. The core consumer price index, which excludes food and energy, rose 6.6% from a year ago, marking the highest level since 1982. Core CPI rose by 0.6% month over month.

To other investors, the sharp moves were excessive short market positioning, during which traders rushed to cover following the hot inflation data.

“What followed was extraordinary and may have been exacerbated by short-covering, perhaps even some panic," Oanda Senior Market Analyst Craig Erlam wrote in a note. "While it may indicate the market has established a bottom for now, given the scale of the declines since the August peak, that doesn't necessarily mean the worst is suddenly behind us. Not when inflation is so stubborn, the labor market so tight and the Fed so intent on more aggressive hikes."

In the currency market, the dollar extended gains compared to the yen, climbing to the highest level since 1990. Still the dollar is up 15% for the year against other currencies while the 10-year Treasury yield wavered close to 4%. Elsewhere, Bitcoin also rebounded, rallying back toward $20,000. However, the digital asset is down 58.6% this year."

MY COMMENT

The last....first. the Ten Year Treasury today is pushing back toward 4%. That is probably why ALL the BIG CAP TECH monster stocks are down. A TOTALLY IRRATIONAL knee jerk reaction.....since these companies are so cash rich and making massive amounts of money....and...therefore have absolutely NO need to use credit. These companies should be SAFE HAVENS in the current market and economy. They are the most secure and successful companies in the world. I am of course....EXCLUDING....Facebook from this group.

Personally....I dont see much market belief in what is happening today. the markets are just DRIFTING after yesterday and the week. Stocks are just worn out from all the events and FEAR MONGERING DRAMA this week and limping to the end of the week.

ACTUALLY.....the bank earnings so far.....are better than I expected. Earnings are doing better so far than most of the.......small "e", "experts".....were predicting. Typical.

 

This stock is a perfect example of what....I DO NOT....invest in. It is a little "boutique stock". I dont think it has ever been profitable. I am seeing the future for this company to be......total failure or a buy out candidate. Either way I believe it will not exist in the not too distant future. The business model was totally flawed to start......the market for this product was extremely limited....to mostly vegans and vegetarians....only about 1% to 4% of the entire country. I would call it a...."wishful thinking company". It was pushed hard by the media......and is still failing.

NOW.....the executives are abandoning the company. The handwriting is on the wall.

This is a perfect example why I focus ONLY on companies that are BIG CAP, AMERICAN, DOMINANT WORLD WIDE, ICONIC PRODUCT, etc, etc. It was also a start-up darling stock. I strongly try to ONLY invest in companies that are far enough along in their business life to have proven that they are going to stick around for a while and be wildly profitable.

To me.....this sort of stock is simply.....FAD INVESTING. Or.....HYPE INVESTING.

Beyond Meat to cut 19% of its workforce as sales, stock struggle

https://www.cnbc.com/2022/10/14/bey...of-its-workforce-as-sales-stock-struggle.html

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

"Key Points

• Beyond Meat plans to cut 19% of its workforce, or about 200 employees, the company said Friday in a regulatory filing.
• The company also said several top executives were leaving.

Beyond Meat plans to cut 19% of its workforce, or about 200 employees, the company said Friday in a regulatory filing.

The cuts are expected to be completed by the end of the year and are an effort to achieve cash flow positive operations within the second half of 2023.

Shares of the company, which are already down about 78% so far this year as the company struggles with declining sales, fell in mid-morning trading. The stock earlier this week notched a 52-week low of $12.76 per share and was last seen trading for about $13.90 per share, dragging the company’s market value below $900 million.

The announcement came as the company also revealed its chief operating officer, Doug Ramsey, left the company weeks after he was arrested for allegedly biting a man’s nose and punching a Subaru in an Arkansas parking garage.

As part of the job cuts, the role of chief growth officer has been eliminated and Deanna Jurgens, who held that role, will leave the company.

The company also said Chief Financial Officer Philip Hardin stepped down from his post earlier this week. Hardin will leave the company after a roughly two-week transition period to pursue another opportunity, according to the filing.

Lubi Kutua, previously Beyond Meat’s vice president for financial planning and analysis as well as investor relations, assumed the top financial role on Thursday.

Beyond Meat did not immediately return a request for comment on the changes.

In August, the company announced it was trimming its workforce by 4%."

MY COMMENT

A company that is bleeding money. When you have ZERO growth....not much need for a Chief Growth Officer.

This is also a good example of a company.....that if I did own it.....I would have done a "bite the bullet strategy".....and sold at a loss and taken my lumps.....rather than holding on to ride it down more and more. There is a time as an investor.....that the best course is to simply take your loss and move on.

 

Here is the SIMPLE TRUTH. BUT......a very difficult thing for most people to grasp or do in real life. OBVIOUSLY....most of the people on this thread are not in that category.

‘The best buying opportunity’: Why now is a good time to invest, according to a stock market historian

https://www.cnbc.com/2022/10/14/now-is-a-sweet-spot-for-stocks-says-market-historian.html

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

"If you’ve looked at your portfolio lately, 2022 may not seem like a “sweet spot” for much of anything. The S&P 500 is down more than 22% since the beginning of the year, putting it firmly in bear market territory — defined as a decline of 20% of more from recent highs.

But a “sweet spot” is exactly what Jeffrey Hirsch, a market historian and publisher of the Stock Trader’s Alamanac, says investors can take advantage of now.

Hirsch sees the market’s decline in the first three quarters of 2022 not as a negative but as a potential entry point for investors. That’s because since 1946, the S&P 500 has gained an average of 28.2% over the next five quarters after sinking for the first three of a calendar year, with no losses, according to the Stock Trader’s Almanac.

“We think the market is setting up for the best buying opportunity of the 4-Year Cycle,” Hirsch recently wrote on his website.

History indicates now is a good time to buy stocks

Hirsch, whose reference guide homes in on historical cycles to give investors an idea of the ways stocks will move, thinks now is an opportunity for investors to buy for two main reasons.

• October has been a “bear killer.” Historically, investors have often come out of hiding in October. The S&P 500 has started to head up again during that month in 12 post-war bear markets.
  
  No historical stock market trend is perfect: the index suffered major losses in 1978, 1979, 1989 and 1997, and you may have heard of October crashes in 1929 and 1987.
  
  Nevertheless, October has been the highest-returning month in the S&P 500 on average since 1950, according to Stock Trader’s Almanac data.
• It’s midterm season. Midterm years tend to be rocky ones for stocks, according to Hirsch’s data, especially under Democratic presidents. While all midterm years show an average gain of 6% in the S&P 500, midterms under Democratic presidencies have an average gain of 4%. Narrow the list of midterms down to first-term midterms, and there’s an average loss of 0.6%. First-term Democratic president midterms: -2.3%.
  
  But out of that shakiness comes high historic average returns. Going back to 1949, the S&P 500 has sported an average return of 20% in the three quarters beginning in October of a midterm election year.
  
  “We’re looking at a strong fourth-quarter rally here, right in the sweet spot of the cycle,” Hirsch said in a recent webinar.

Why now is a good time for long-term investors, not just traders

Investing pros will tell you to avoid making any wholesale changes to your portfolio strategy based on the expectation of short-term gains, whether those expectations are rooted in market history or not. Despite what it’s done in the past, the stock market could go down in the short term.

In fact, many of the correlations that Hirsch draws in his analysis rely on the fact that the U.S. stock market has tended to go up throughout its history. And it’s natural that the market tends to perform well after a prolonged period of losses, critics might say. After each bear market in history, stock prices have risen to new highs.

If you’re a long-term investor, that’s sort of the point. Even if you’re queasy about the idea of finding the exact sweet spot, if you believe the market will continue to rise over the decades that you plan to invest, a period when stock prices are low is undeniably a great time to buy.

“No one knows where the bottom is, but we do know that stocks are on sale right now,” Charles Rotblut, vice president of the American Association of Individual Investors recently told CNBC Make It.

If you have money sitting on the sidelines, financial pros recommend that you invest now, and more importantly, that you keep investing regularly. By putting the same amount of money into a diversified portfolio at a consistent clip — a strategy known as dollar-cost averaging — you guarantee that you’ll buy more shares when stock prices are low and fewer when they’re high."

MY COMMENT

If you have a TRUE long term horizan.......a minimum of 5 years and better 7 years......now is a GOLDEN TIME to plow money into the markets.

I dont see us turning around in just a few months. I would say there is a 50/50 chance that the current mess will continue for another 2+ years. BUT....even 2+ years is......short term. Over the long term.......5-7 years or more......"the future's so bright....I gotta wear shades".

 

That did not take long. Today I was RED, RED, RED. I lost all the gains from yesterday......and.....have not hit my YTD low again. Not a single stock up for the day. AND....a beat by the SP500 of 0.93%. This takes me down YTD to (-31%).

BUMMER

 

So....this was "our" week....glad it is over.....as usual.

DOW year to date (-18.45%)
DOW for the week +1.15%

SP500 year to date (-24.82%)
SP500 for the week (-1.55%)

NASDAQ 100 year to date (-34.49%)
NASDAQ 100 for the week (-3.15%)

NASDAQ year to date (-34.03%)
NASDAQ for the week (-3.11%)

RUSSELL year to date (-25.07%)
RUSSELL for the week (-1.16%)

I have now wiped out the entire year......2021 gains and a bit of 2020. The market time machine has taken me back by somewhere in the neighborhood of about a year and a half....perhaps a bit more.

Another week in the can. I think it is a pretty solid.....about 100%....odds that 2022 will end as a negative year. The ONLY question is......how much.

 

Move over Spud......I will once again join you on that couch.