The Long Term Investor

Way to go TireSmoke. A really big year for you and your family. CONGRATULATIONS. AND.....the markets will come back....it is always just a function of time.

 

YES......a very BEAUTIFUL day in the markets. I have been siting all morning waiting for the other shoe to drop and for the markets to start to WAFFLE. BUT....so far they are good.

Stocks rise as huge earnings day kicks off

https://finance.yahoo.com/news/stock-market-news-live-updates-october-25-114326444.html

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

"U.S. stocks rose to start Tuesday's trading ahead of corporate earnings from some of the market’s biggest players.

The S&P 500 (^GSPC) inched higher by 0.9%, while the Dow Jones Industrial Average (^DJI) ticked up by 0.6%. The technology-heavy Nasdaq Composite (^IXIC) up by 1.4%.

The jumps continued stocks' gains from Monday, as the major indices rallied ahead of a slew of third-quarter earnings this week.

Coca-Cola (KO) posted earnings before the bell on Tuesday. The Atlanta-based company raised its full-year outlook as quarterly profit and revenue topped expectations.

General Motors (GM) stock moved higher after the carmaker topped profit expectations but fell short on revenue. General Electric (GE) profits, meanwhile, fell in its latest quarter as the company plans to cut costs in its renewable-energy business.

“The pace of earnings reports has really picked up steam and the results this morning have been somewhat lackluster,” Paul Hickey, head portfolio manager for Bespoke’s Wealth Management services, wrote in a note. “Of the nearly 40 reports so far this morning, 64% have exceeded EPS forecasts, and 62% of exceeded revenue estimates. Also slightly more companies have lowered guidance than raised it.”

Microsoft (MSFT), Alphabet (GOOGL), Visa (V), and Chipotle (CMG) are set to report earnings after the bell. Other key megacap tech firms like Meta Platforms (FB), Apple (AAPL), and Amazon (AMZN) will report later this week.

“Well, if we take a giant step back, what we're looking at this week is a cumulative $7 trillion amount in market value of companies reporting this week amongst the big tech players,” Erika Klauer, technology equity portfolio manager at Jennison Associates, told Yahoo Finance Live on Monday ahead of the big tech earnings.

About a fifth of companies in the S&P 500 have reported third-quarter results as last Friday, and 72% of those posted earnings that beat Wall Street expectations, according to FactSet.

In the commodity markets, Brent crude, the international oil benchmark, fell 1.55% to $83.27 a barrel Tuesday morning. The yield on the U.S. 10-year Treasury edged lower to 4.1% after rising to its highest levels since 2008 over the past several days.

Elsewhere, U.K. 10-year government bond yield edged down after Rishi Sunak was formally appointed as the next prime minister.

Overseas, stocks in Hong Kong and mainland China ended the day were unchanged after swinging between losses and gains. On Monday, U.S.-listed Chinese stocks tumbled to their lowest level in nearly a decade, a day after President Xi Jinping secured a third term controlling over the ruling Communist Party.

“The China we are looking at right now, led by Xi Jinping, is one focused more on security. It's focused more on restructuring the economy so there's fewer vulnerabilities for the party in terms of reckless credit expansion in the property sector, shadow finance out of control,” Leland Miller, China Beige Book Co-Founder & CEO, told Yahoo Finance Live on Monday."

MY COMMENT

The good earnings continue.....in spite of the media and experts. We are NOW 20% into the reporting and we are seeing a VERY NICE........72%.......of companies with earnings BEATS. That is HUGE compared to what was being put out there in the media.

SO FAR......SO GOOD.

 

Here is the only real news of the day.....not that it is shocking.....much of this data is simply supply/demand.

Home prices cooled at a record pace in August, S&P Case-Shiller says

https://www.cnbc.com/2022/10/25/hom...cord-pace-in-august-sp-case-shiller-says.html

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

"Key Points

• Home prices are still higher than they were a year ago, but gains are shrinking at the fastest pace on record, according to S&P Case-Shiller.
• Prices in August were 13% higher nationally compared with August 2021.
• That is down from a 15.6% annual gain in the previous month.

Home prices are still higher than they were a year ago, but gains are shrinking at the fastest pace on record, according to one key metric, as the housing market struggles under sharply higher interest rates.

Prices in August were 13% higher nationally compared with August 2021, according to the S&P CoreLogic Case-Shiller Home Price Index. That is down from a 15.6% annual gain in the previous month. The 2.6% difference in those monthly comparisons is the largest in the history of the index, which was launched in 1987, meaning price gains are decelerating at a record pace.

The 10-city composite, which tracks the biggest housing markets in the United States, rose 12.1% year over year in August, versus a 14.9% gain in July. The 20-city composite, which includes a broader array of metropolitan areas, was up 13.1%, compared with a 16% increase the prior month.

“The forceful deceleration in U.S. housing prices that we noted a month ago continued in our report for August 2022,” wrote Craig Lazzara, Managing Director at S&P DJI in a release. “Price gains decelerated in every one of our 20 cities. These data show clearly that the growth rate of housing prices peaked in the spring of 2022 and has been declining ever since.”

Leading the price gains in August were Miami, Tampa and Charlotte, with year-over-year increases of 28.6%, 28% and 21.3%, respectively. All 20 cities reported lower price increases in the year ending in August versus the year ending in July.

The West Coast, which includes some of the costliest housing markets, saw the largest monthly declines, with San Francisco (-4.3%), Seattle (-3.9%) and San Diego (-2.8%) falling the most.

A quick jump in mortgage rates from record lows this year has turned the once red-hot housing market on its heels. The average rate on the popular 30-year fixed home loan started this year right around 3%. By June it stretched over 6% and is now just over 7%, according to Mortgage News Daily.

“With monthly mortgage payments 75% higher than last year, many first-time buyers are locked-out of housing markets, unable to find homes with budgets that have lost $100,000 in purchasing power this year,” said George Ratiu, senior economist at Realtor.com. He also noted that higher home prices combined with higher interest rates are keeping would-be sellers from listing their homes. They appear to be locked in to their lower rates."

MY COMMENT

All this stuff is simply......local.....so broad data is not relevant. In my little local area according to the real estate show that I sometimes hear on Saturday done by a local mortgage company........our local market is still seeing price increases every month. We are at an average mortgage of about 6.8%.

He also noted that higher home prices combined with higher interest rates are keeping would-be sellers from listing their homes. They appear to be locked in to their lower rates.

We will know what is going on with the housing markets about a year from now.....after.....we go through the winter, the spring, the summer and into next fall.

 

The BEATS just keep on coming.....Smokie.

I have a nice big gain so far today.....if we can avoid the end of the day slump as we hear to after hours earnings. This has been a great little market run-up. It has lowered my YTD LOSS to......"only".......about (-25.8%)

 

I like this little article.

Stanley Druckenmiller's No. 1 piece of advice for novice investors

https://www.amazon.com/QBLEEV-Refle...hIjoiMi43NSIsInFzcCI6IjEuMDAifQ==&sr=8-9&th=1

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

"Stocks rallied last week. The S&P 500 surged 4.7% in what was the biggest weekly gain since June. The index is now up 4.9% from its October 12 closing low of 3,577.03. However, it’s still down 21.8% from its January 3 closing high of 4,796.56.

When markets are as volatile as they have been, it’s easy to get caught up in all the things that are going right or wrong at the moment.

And while there’s nothing wrong with keeping current on the present, this is not the right mindset for long-term investors in stocks.

"Do not invest in the present,” Stanley Druckenmiller, the legendary hedge fund manager currently running Duquesne Family Office, said. “The present is not what moves stock prices."

Druckenmiller noted that this is his No. 1 piece of advice for new investors.

In a Sept. 22 episode of the “How Leaders Lead” podcast, Druckenmiller expanded on this (via The Transcript):

“I learned this way back in the 70s from my mentor [Speros] Drelles. I was a chemical analyst. When should you buy chemical companies? Traditional Wall Street is when earnings are great. Well, you don't want to buy them when earnings are great, because what are they doing when their earnings are great? They go out and expand capacity. Three or four years later, there's overcapacity and they're losing money. What about when they're losing money? Well, then they’ve stopped building capacity. So three or four years later, capacity will have shrunk and their profit margins will be way up. So, you always have to sort of imagine the world the way it's going to be in 18 to 24 months as opposed to now. If you buy it now, you're buying into every single fad every single moment. Whereas if you envision the future, you're trying to imagine how that might be reflected differently in security prices.”

This is theoretically sound as theory says the value of a stock should reflect the present value of a company’s future cash flows.

Druckenmiller is talking about picking stocks. But I think his still serves as a good framework for broadly diversified investors processing macro information coming from economic data and earnings announcements.

The labor market is strong

One big theme of late has been the strength of the labor market. Specifically, the elevated level of job openings signals the need to hire, and the depressed level of layoff activity signals the desire to hang on to employees.

Consider these quotes from recent earnings calls (via The Transcript and RBC Capital Markets):

• "I would note at this point, based on our Q3 performance, we have seen net hiring among our customers. So, we have not yet seen an emergence of recessionary impact in our commercial book of business." - UnitedHealth Group
  
  
• "We're seeing positive staffing trends with 11 straight weeks of net pharmacist head count increases." - Walgreens Boots Alliance
  
  
• “We are not making major cutbacks across the plant...We don't see any reason for great draconian measures.“ - Morgan Stanley
  

Bloomberg reported that Goldman Sachs, Morgan Stanley, Citigroup, JPMorgan Chase, and Bank of America all increased their headcounts in Q3.

Similarly, the past week’s high-level economic reports broadly confirmed these anecdotes. Initial claims for unemployment insurance benefits fell last week and continue to trend at low levels. The Federal Reserve’s October Beige Book said that employment “continued to rise at a modest to moderate pace in most Districts.“ Manufacturing business surveys from the NY Fed and Philly Fed each indicated employment was up in their respective regions in October.

What all this staffing means for the future

The resilient labor market suggests that demand in the economy continues to be robust.

But that’s the present.

What about the future? What does this mean 18 to 24 months down the road?¹

I think there are at least two basic scenarios to consider.

• Bearish scenario: The economic lull we’re in eventually evolves into recession and we have an extended period of weak demand. Companies that are currently increasing hiring or refusing to layoff workers could see a sharp drop in earnings as weak revenue runs into high labor costs, and profit margins get crushed.
  
  
• Bullish scenario: The economic lull we’re in proves short-lived, and growth soon accelerates again. Companies that held on to employees or grew head counts today may not need to compete aggressively for workers in what should be an increasingly competitive labor market. Because they already have extra capacity, these companies will benefit from operating leverage as revenue growth comes with expanding profit margins, which amplifies earnings growth.
  

What actually happens depends on where the economy heads, which itself is not an easy thing to predict.

But I can’t help but think that given the current state of things, the outlook favors the more bullish scenario. Why? Because the message from the economic data and corporate America is that demand continues to outpace the capacity to supply. Consider this quote from the Fed’s October Beige Book: “Overall labor market conditions remained tight, though half of Districts noted some easing of hiring and/or retention difficulties. Competition for workers has led to some labor poaching by competitors or competing industries able to offer higher pay.“

And consider this from Domino’s: “Staffing remains a constraint, but my confidence in our ability to solve many of our delivery labor challenges ourselves has grown over the past few quarters.”

So demand would have to fall considerably before companies find themselves with too much costly idle labor.

Let’s check back in 18 to 24 months.

The bottom line: Stocks are a discounting mechanism, pricing in what’s expected to happen and not what’s currently happening. Whether it’s 18-24 months out or 20 years out, being in the stock market is about betting on a better future that has yet to be realized and priced in. Now, it’s not particularly clear what’s to come in 18-24 months. (The lesson of the past 18-24 months is that things can certainly go wrong.) But long-term history is very consistent in teaching us that the long-term future always turns out to be better than what we are experiencing today."

MY COMMENT

BULLISH or BEARISH.......who cares.....what will count is to be in the markets long term. That sidesteps both the short......a year or less........and.....the medium term.....1-3 years.

YES......as usual.....it really is this simple.

 

A KILLER day today. I have now got back all my cushion that I lost in the most recent market dip. I also moved my YTD loss to......only.......(-25.3%)

I was nicely green today.....all ten stocks. Plus I beat the SP500 by 0.36%.

Simply another BEAUTIFUL DAY in the markets today.

 

Here is MICROSOFT EARNINGS.

Microsoft cloud misses despite small beat on top and bottom

https://www.cnbc.com/2022/10/25/microsoft-msft-earnings-q1-2023.html

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

"Key Points

• Microsoft surpassed expectations on the top and bottom lines, but cloud revenue was lower than expected.
• The software maker is now including revenue from its HoloLens augmented-reality headsets in the segment that includes Windows, resulting in an adjustment of about $100 million.

Microsoft shares fell as much as 2% in extended trading on Tuesday after the software maker reported softer cloud revenue than expected in its fiscal first-quarter.

Here’s how the company did:

• Earnings: $2.35 per share, vs. $2.30 per share as expected by analysts, according to Refinitiv.
• Revenue: $50.12 billion, vs. $49.61 billion as expected by analysts, according to Refinitiv.

Total revenue grew 11% year over year in the quarter, according to a statement. Net income, at $17.56 billion, fell by 14%. In the year-ago quarter Microsoft saw a $3.3 billion tax benefit. The company’s gross margin, at 69.2%, trailed the StreetAccount consensus estimate of 69.8%.

Microsoft’s Intelligent Cloud business segment, which includes the Azure public cloud, as well as Windows Server, SQL Server, Nuance and Enterprise Services, generated $20.33 billion in quarterly revenue. That’s up 20% and slightly less than the $20.36 billion consensus among analysts polled by StreetAccount.

Azure revenue grew 35% in the quarter, Microsoft said, compared with 40% growth in the previous quarter. Analysts polled by CNBC had expected 36.4% growth, while analysts surveyed by StreetAccount had been looking for 36.9% Azure growth.

The Productivity and Business Processes segment that contains Microsoft 365 productivity software subscriptions (the company is in the midst of rebranding the bundle from Office 365), LinkedIn and Dynamics, posted $16.47 billion in revenue, up 9% and above the $16.13 billion StreetAccount consensus.

Revenue from the More Personal Computing segment totaled $13.33 billion, down slightly and higher than the $13.12 billion StreetAccount consensus. The segment includes Windows, as well as Xbox, Surface and advertising from the Bing search engine.

Revenue from sales of Windows licenses to device makers dropped 15% year over year, worse than outlook Amy Hood, Microsoft’s finance chief, gave in July for a decline in the high single digits. Technology industry researcher Gartner said earlier this month that PC shipments in the quarter fell 19.5% year over year, and chipmaker AMD earlier this month issued lower-than-expected preliminary quarterly results tied to a “weaker than expected PC market and significant inventory correction actions across the PC supply chain.”

During the quarter, Microsoft started rolling out the first annual update to its Windows 11 operating system since releasing the original version last year, and the company announced plans to slow down its pace of hiring said it was cutting less than 1% of employees. Microsoft also introduced Viva Engage, a portal in the Teams communication app where co-workers can share video stories.

The quarterly results include small adjustments in the way that Microsoft reports revenue. Revenue from HoloLens augmented-reality devices will appear in the More Personal Computing segment instead of the Intelligent Cloud segment. Microsoft adjusted its forecast for the segments by about $100 million in connection with the change.

Notwithstanding the after-hours move, Microsoft shares have fallen about 26% so far this year, while the S&P 500 stock index is down 19% over the same period.

Executives will discuss the results and issue guidance on a conference call starting at 5:30 p.m. ET."

MY COMMENT

ALL in all I will take it as a moderate earnings beat. Even the areas that were not up to expectations were very small misses. On the big bottom line categories of earnings and revenue......they beat expectations. Compared to all the EARNINGS NEGATIVITY we have been hearing for months now....this is a good beat.

 

Now for GOOGLE.

Alphabet misses on top and bottom lines as YouTube ad revenue drops in the quarter

https://www.cnbc.com/2022/10/25/alphabet-googl-q3-2022-earnings-.html

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

"Alphabet shares dropped in extended trading on Tuesday after the company reported weaker-than-expected earnings and revenue for the third quarter.

• Earnings per share (EPS): $1.06 vs. $1.25 expected, according to Refinitiv estimates.
• Revenue: $69.09 billion vs. $70.58 billion expected, according to Refinitiv estimates.
• YouTube advertising revenue: $7.07 billion vs $7.42 billion, according to StreetAccount estimates.
• Google Cloud revenue: $6.9 billion vs $6.69 billion, according to StreetAccount estimates
• Traffic acquisition costs (TAC): $11.83 vs $12.38, according to StreetAccount estimates

Revenue growth slowed to 6% from 41% a year earlier as the company contends with a continued downdraft in online ad spending. Other than one period early in the pandemic, it’s the weakest period for growth since 2013.

YouTube ad revenue slid about 2% from $7.21 billion a year ago to $7.07 billion. Analysts were expecting an increase of about 3%. Alphabet reported overall advertising revenue of $54.48 billion during the quarter, up slightly from the prior year."

MY COMMENT

This is a flat out earnings miss. So....they will be punished tomorrow. STILL......a supremely great company that I will continue to own for the long term.

 

Markets about what you would expect today after the GOOGLE miss and the MICROSOFT beat. Although the even with the general beat......MSFT is being nit-picked by the financial media and short term thinkers.

The good news today....the Ten Year Treasury is down again today.....approaching 4% at the moment.

We are in a MIXED MARKET today with the DOW up and the other averages down due to the above earnings. I would give the SP500 a good shot at going positive some time to day.....or....at least taking a run at it. The NASDAQ.....probably not.....but you never know.

 

I like this little article.

Stocks go up in Bull Markets

https://allstarcharts.com/stocks-go-up-in-bull-markets/

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

"Many stocks are no where near their all-time highs.

The S&P500 still needs to rally 25% just to get back to its former highs. And that’s after the 10% rally that we’ve already seen in October.

The Nasdaq100 would need to go up another 43% from here just to get back to its highs. And again, that’s after it already ripped 12% off its lows this month.

Remember, the average Nasdaq stock fell 44% from its highs during the bear market. The average small & micro cap stock dropped about 50%.

And since most stocks are so far from their highs, investors are having a hard time calling this a bull market.

“They need to make new all-time highs for it to be a bull market”, they say to me.

So ok, let’s play that game.

None of these prices here below were new all-time highs. So was this a bear market then?



What about this one?

No new all-time highs.

Was this a bear market too?



Investors have a funny way of ignoring what’s right in front of them.


They would rather have a computer complicate their process instead of just going one by one and counting how many stocks are going up vs those going down.


They have all kinds silly “rules” that tell them what a bull market or a bear market is.

The worst offenders go around trying to convince people than an arbitrary 20% move off its lows is what defines a bull market.

Not 19.6%, to be sure, or 20.3%. Specifically 20. For absolutely no reason other than that’s what someone said on the TV once.

For me, it’s all so much simpler than that:

Should we be spending our time looking for stocks to buy? Or should we be spending more time looking for stocks to sell?

My answer has quite obviously been the former.

The weight of the evidence pointed to capitulation back in June, and consistent breadth improvement ever since.

Spending more time looking for stocks to buy has been paying off.

We’re still looking for further confirmation of improving breadth, of course. Always.

But there certainly haven’t been any signs of downside breadth expansion, or any evidence of a bear market at all for quite some time.

Let’s see what the market gives us – further improvement, or brand new evidence of deterioration, completely out of no where.


So far, we’ve only seen improvement.

And keep in mind, this is also the best time to buy stocks of the entire 4 year cycle. This is all happening as we’re about to enter the best 3-month period of the year Nov-Jan starting next week….

Some people like fighting trends.


I am not one of those people.


How are you feeling?


Is the market making you feel stupid? Good. It’s supposed to. Get used to it.

That’s why we like to keep an open mind around here.

All we know is that we don’t know what the market is going to do next. But the good news is that no one else does either.


So keep your head down and keep working.

That’s what I’m going to do."

MY COMMENT

YEP.....keep your head down and keep working.

HERE is reality......the VAST MAJORITY of the losses that we have year to date occurred very early in the year. Over the more recent months.....the markets have not been that much of a disaster. For the past month......the SP500 is positive by +5.31%. For the past three months.....we are.....ONLY.....negative by -4.33%. We have been seeing a much more stable market for the past six months if not more.

I am not saying that we are going to see a boom....but......I continue to say....we have now seen the bottom of the market.....yes, still a soft bottom. And my usual disclaimer.....that does not mean we will simply soon move up. We might linger and back-fill for months of even a year or more. I do have HIGH HOPES for the election pushing a turn aorund for the markets in a few weeks.

 

Some good food for thought here.

Expectations and Reality

https://collabfund.com/blog/expectations-and-reality/

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

In 2004 the New York Times interviewed Stephen Hawking, the late scientist whose motor-neuron disease left him paralyzed and unable to talk since age 21.

Apparently in a good mood, the Times asked Hawking: “Are you always this cheerful? Seriously, how do you keep your spirits up?”


“My expectations were reduced to zero when I was 21,” Hawking said. “Everything since then has been a bonus.”

Quite a lesson, isn’t it?

And it’s one that applies to a lot of things.

Part of what makes any joke funny is the surprise. The setup leads you down one path (“Someone gets in a car accident every nine seconds”), then the punchline comes in a direction you didn’t expect (“Imagine how bad a driver that guy is.”)

The setup of that (very bad) joke is sad. The punchline is meaningless. It’s the gap between the two – the punchline deviating from your expectations – that might make you laugh. Few one-line jokes are funny; there’s not enough potential to set someone’s expectations, so it’s harder to surprise.

So many things work like that. People get excited when they’re surprised. Not when something big happens, or when they find the right answer. They get happy, mad, scared, amused, and astounded when they stumble across a gap between expectations and reality.

There are so many examples of this that defy intuition.

Will Smith writes in his biography that:

• Becoming famous is amazing.
  
  
• Being famous is a mixed bag.
  
  
• Losing fame is miserable.
  

The amount of fame almost doesn’t matter. Going from a nobody to a little famous creates a huge gap between what you expected your life to be and what it became – same on the way down, in the other direction. But being famous merely meets expectations.

Tennis player Naomi Osaka said last summer that she got to a point in her career where winning a major world tournament didn’t bring any joy – “I feel more like a relief,” she said.

I have a friend who grew up in abject poverty in Africa. He now works in tech in California. He says to this day he is still blown away when a hot meal is put in front of him. It’s astounding to him how abundant food is in America. Part of me is a little envious of that trait – he finds immense pleasure from something I don’t think twice about.

Harry Truman – a failed retailer, failed farmer, failed zinc miner, failed oil driller, and senator held on leash by local Missouri businessmen – was almost universally panned when he became President after Franklin Roosevelt died. The Washington Post wrote: “We should be less than candid at this grave moment if we did not recognize the great disparity between Mr. Truman’s experience and the responsibilities that have been thrust upon him.” Historian David McCoullough wrote: “To many it was not just that the greatest of men had fallen, but that the least of men— or at any rate the least likely of men— had assumed his place.” Today, Truman is consistently ranked among historians’ top-10 presidents of all time, often ahead of Roosevelt. Part of that, I’ve come to believe, is that expectations for Truman’s abilities were so low that any leadership qualities he put forth blew people’s minds. A little success was a win; a big success felt like a miracle.

Actual circumstances don’t make much difference in all of these cases. What generates all the emotion is just how big the gap is between expectations and reality.

When you think of it like that you realize how powerful expectations are. *They can make the best tennis player in the world feel miserable and a paralized man feel amazing. *It’s astounding.

Everyone, everywhere, doing almost any task, is just in pursuit of finding some space between expectations and reality.

But that’s so easy to overlook.

Peter Kaufman, CEO of Glenair and one of the smartest people you will ever come across, wrote once:

We tend to take every precaution to safeguard our material possessions because we know what they cost. But at the same time we neglect things which are much more precious because they don’t come with price tags attached: The real value of things like our eyesight or relationships or freedom can be hidden to us, because money is not changing hands.

Same with expectations – they’re easy to ignore because their value isn’t on a price tag.

But your happiness completely relies on expectations.

Your boss’s impression of your career relies on them.

Consumer confidence relies on them.

What moves the stock market relies on them.

So why do we pay so little attention to them?

We spent so much effort trying to improve our income, skills, and ability to forecast the future – all good stuff worthy of our attention. But on the other side there’s almost a complete ignorance of expectations, especially managing them with as much effort as we put into changing our circumstances.

Aldous Huxley said, “Most human beings have an almost infinite capacity for taking things for granted.”

How true, and how scary. Imagine a life where almost everything gets better but you never appreciate it because your expectations rise as fast as your circumstances. It’s terrifying, and almost as bad a world where nothing gets better.

Asked, “You seem extremely happy and content. What’s your secret to living a happy life?” 98-year-old Charlie Munger recently replied:

The first rule of a happy life is low expectations. If you have unrealistic expectations you’re going to be miserable your whole life. You want to have reasonable expectations and take life’s results good and bad as they happen with a certain amount of stoicism.

My friend Brent has a related theory about marriage: It only works when both people want to help their spouse while expecting nothing in return. If you both do that, you’re both pleasantly surprised.

Both of those are easier said than done. I think it’s often hard to distinguish high expectations from motivation. Low expectations feels like giving up and minimizing your potential.

The only way around that might be recognizing two things.

One, the realization that most good outcomes come from a minority of the actions you take, so it’s normal if most of what you do doesn’t work out. Failing nine times and having a big win on the tenth attempt is about as good as it gets in a lot of things – investments, relationships, careers, etc. When you accept that losing often is the only path to winning occasionally, it’s easier to keep your expectations low without losing ambition and motivation.

Two, understand how the expectation game is played. It’s a mental game, and it’s often a crazy and agonizing game, but it’s a game that everyone is forced to play, so you should be aware of the rules and strategies. It goes like this: You think you want progress, both for yourself and for the world. But most of the time that’s not actually what you want. You want to feel a gap between what you expected and what actually happened. And the expectation side of that equation is not only important, but often it’s more in your control than managing your circumstances."

MY COMMENT

Human behavior.....much of it genetic based.....in the root of everything. Recognizing and dealing with the consequences of human behavior is important to all sorts of success.......especially investing.

I highly recommend to anyone in any field.....sports, music, investing, business.....LIFE.....the power of positive thinking and the power of VISUALIZATION. Inherent in this is....GOAL SETTING.

 

I am ignoring the actual markets today.....waiting for them to strengthen. In FACT the SP500 is now stronger than it was earlier, trying to get to the positive......and.....the NASDAQ has come back a good amount although is still about (-1%).

There is HOPE for the markets today....they want to go up....but are being held back by the GOOGL/MSFT hangover.

 

I post this as an example......an example of a company with HORRIBLE MANAGEMENT. A company that has been shooting itself in the foot for many years....from moving their HQ, to turning over the business to the bean-counters, to outsourcing their manufacturing, etc, etc, etc. I owned this company at one time. It is a textbook business school example of MANAGEMENT FAILURE. AND.....the bad this is.....IT CONTINUES.

Boeing reports quarterly loss on problems in Air Force One, tanker programs

https://www.cnbc.com/2022/10/26/boeing-ba-earnings-q3-2022.html