The Long Term Investor

Good job with the earnings.....Smokie.

 

With the market gains today I am now.....+13.62%......year to date.

From my account low that was hit in December 2022 I am now up by +17.71%. That gives me a real nice cushion.......in terms of dollars..... going forward for any sort of resurgence of the negative market.

When I say "account low" above.......I mean the low that I hit three or four times during 2022. The initial time was in June of 2022. After that initial low in June of 2022 the market went back up. As I i hit that same low another 2-3 times over the rest of 2022....each time the market rallied from that point up.

That is why I say the bear market ended in Jun of 2022. In addition the SP500 has been generally UP since June of 2022. The SP500 is NOW positive for.....1 day, 5 days, 1 month, 3 months, year to date, 3 years, and 5 years. It is still negative by (-7.91%) for 1 year.

For anyone that was curious about my usual strategy of.....all in all at once......the $9000 that I put into the SP500 Index in my kids account on January 31, 2023 is now up by just under 1%. So I was able to navigate the FED and the BIG TECH earnings with that money and still show a gain as of today. From here on.....that money will just return whatever the result is over the long term. Glad to have it successfully in the markets and working for my kid.

 

YEP.....it is fun again.

BUT....it always is....even in the down years. Those down years are the exception. AND....later that money comes back to your account as the losses evaporate over the long term.

 

I have "my" answers to these questions......many of them obvious to people on this thread.

Questions

https://alhambrapartners.com/2023/02/07/questions-6/

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

1. "Has the Fed’s rate hiking campaign actually lowered inflation? Or would it have happened anyway? Jerome Powell has said that the rate hikes would involve “pain” but if that is the criteria I don’t see it. Higher rates have hit the real estate market but almost nothing else. And even there, mortgage rates are now trending back down and activity seems to be picking up again. So, was the “transitory” camp actually right?
2. Could the drop in inflation be as transitory as the rise? There’s a lot of money still out there at the household, corporate and state government level. California just sent out more checks and my state (SC) just did a tax rebate at the end of the year. Income tax rates have been reduced in 10 states for 2023 and others, like SC, are doing one time rebates. With China re-opening and the potential for continued high demand in the US, will prices stay down?
3. Could rising rates actually be stimulative? Interest income was up $140.6 billion in 2022 while payments were up $94.4 billion.
4. Are we in a bull market? Last year when the S&P 500 fell below its 200 day moving average, there was a flood of articles about how this meant we were in a bear market. There was another flood when the 50 day moving average fell below the 200 day (the so called “death cross”). Now that the index and its 50 day MA are back above the 200 day I don’t see one article about it.
5. Is the S&P 500 Value index really value? The largest holding is Microsoft and the average forward P/E of the top 10 holdings is 21.1. The entire index trades for 17.1 times forward estimates and 2.41 times sales. Does this sound like a value index?
6. Now that real consumption of goods is back to trend (see This IS the Soft Landing) will they now fall below trend? Or reaccelerate? Auto sales in January up 17.7% from December and running at an annualized rate of 15.7 million would seem to argue for the latter.
7. Is the inventory correction over? Retail inventory/sales ratio for retail ex-autos and parts peaked in August at 1.17.
8. Domestic auto inventories, on the other hand, stand at 118.5 thousand units when the long term average is over 1 million. Is this a new post-COVID normal? Or will dealers build inventory back to the old levels? What’s the impact on GDP if dealers just bring inventory back to half the old normal?

MY COMMENT

What is your answer? Not that......"you" or "me".....get any say on any of this stuff.

 

The markets are open RED today......mild red at the moment. It seems like the after-hours are for the negative nancies and the traders (DUH). After many UP days they push the futures into the RED. It than takes the first hour or two the next day after the open for the markets to settle in and give us a REAL direction for the day.

At least the Ten Year yield is slightly down at the moment.

More white collar lay-offs being announced as the firing of workers continues in the corporate world. I welcome this......with apologies to anyone that has lost their job. Companies need to cut the fat and get lean, lean, lean.

If you thought there was ZERO news or anything going on early in the week.....we are out in the EXTREME end of the "ZERO GOING ON" scale today and the rest of the week.

 

The nutshell....that is today.

Stock market news live updates: Stocks dip after Powell-fueled rally

https://finance.yahoo.com/news/stock-market-news-live-updates-february-8-2023-122505474.html

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

"U.S. stocks slipped Wednesday morning as another bout of earnings results hit traders' desks, while enthusiasm from the previous session over Federal Reserve Chair Jerome Powell's embrace of "disinflation" faded.

The S&P 500 (^GSPC) dipped 0.4%, while the Dow Jones Industrial Average (^DJI) edged down roughly 120 points, or also roughly 0.4%. The technology-heavy Nasdaq Composite (^IXIC) declined 0.6%.

In specific stock moves, Microsoft (MSFT) shares rose 2.7% at the open, building on Tuesday's 4% advance over enthusiasm for a new version of its Bing search engine running on a more powerful version of OpenAI's popular ChatGPT natural language AI technology.

Under Armour (UA) was little changed at the open, paring a pre-market gain of as much as 3% after the athletic apparel retailer lifted its profit forecast Wednesday morning, benefitting from discounts during the holiday season.

Uber's (UBER) stock climbed 6.3% after earnings for the last three months of 2022 beat expectations and CEO Dara Khosrowshahi said the company was focused on achieving profitability in 2023 as post-pandemic demand for ride-hailing recovers.

Shares of Chipotle (CMG) sank 4% during the open after the burrito-maker's earnings disappointed as higher costs for tortillas, dairy, beans and rice, as well as labor costs, ate into profitability.

CVS Health (CVS) shares rose nearly 4% in extended trading after the pharmacy chain announced it has agreed to buy Oak Street Health in a $10.6 billion deal, marking its second big acquisition in the health-care space in the past two years.

The moves Wednesday morning come after investors cheered remarks from Powell at a speaking engagement in Washington, D.C., in which he embraced the presence of "disinflation" in the U.S. economy. On Tuesday, the S&P 500 gained 1.3%, the Dow 0.7%, and the Nasdaq 1.9%.

DataTrek's Nicholas Colas notes that Powell's comments did not sway the market’s expectations of the likely path of monetary policy this year. The rate-sensitive two-year Treasury yields were unchanged following the speech, Colas pointed out — at 4.46% while federal funds futures were at at 4.50-4.75% — indicating policy rates over the coming 24 months could remain where they are now.

"[Yesterday] afternoon’s equity market rally shows markets like Powell’s slow and steady, incoming data-centric approach to monetary policy," Colas said. "He could have used Friday’s jobs report as an excuse to signal more aggressive policy action in March, but he did not.""

MY COMMENT

More good earnings.....more big companies showing positive moves in their stock today......more good news for the markets regarding the course of the FED........AND......the Dow just turned positive for the day. Of course....in the time it too me to type that it is now back to slightly red.

We have seen a very nice come-back from the futures and the open today. Round and round we go and where we close nobody knows. With all that is known right now.....the day, the future.....looks very bright. That bright light is the light at the end of the bear market tunnel......we are getting closer.

My view....we have been out of the tunnel for SEVEN months now....but most people did not know it and many did not accept it. For long term investors.....it does not matter.....they simply sit and capture the long term market gains......while the market timers, traders, Technical investors, and others.....have to be right or they miss out. Of course.....it is very difficult to be "right".

 

I started my taxes last night on Turbo-tax.

I got everything in except for my Schwab materials which will not be available till February 17. Since I did not have much in the way of stock or fund sales I should not have much in the way of capital gains or losses. I will have the usual dividends from stocks and also capital gains in my two funds.

I was anticipating owing about $8000 for 2022.....and the partially completed return shows that I am right on track. I am very happy with this result......it is FAR LESS than I have paid most of my lifetime.

I will be taking the standard deduction....once again....for a married couple in our age group it is.....$27,300. I used to itemize deductions....but the standard deduction is so high now and the government has taken away or limited so many deductions....that I dont anticipate ever itemizing again.

 

This is a big topic in the media lately. So here is some informative info.

All you need to know about ChatGPT, the A.I. chatbot that’s got the world talking and tech giants clashing

https://www.cnbc.com/2023/02/08/wha...atbot-at-heart-of-microsoft-google-fight.html

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

"Key Points

• Schools, corporate boardrooms and social media are abuzz with talk about ChatGPT, the artificial intelligence chatbot developed by AI startup OpenAI.
• The tool is capable of taking written inputs from users and producing human-like responses — from poetry in the style of William Shakespeare to advice on what to do for a child’s birthday party.
• It has also sparked a tense clash between Google and Microsoft, two of the world’s largest tech companies.

What is ChatGPT? I asked the buzzy artificial intelligence chatbot, which has ignited conversation in schools, corporate boardrooms and social media, to explain itself.

In its own description, ChatGPT is “an AI-powered chatbot developed by OpenAI, based on the GPT (Generative Pretrained Transformer) language model. It uses deep learning techniques to generate human-like responses to text inputs in a conversational manner.”

The tool is the talk of the business world. It has been mentioned on earnings calls by management from a range of companies including oil giants, banks — and even the industrial behemoth Caterpillar.

It has also sparked concerns over potential abuses. In classrooms, students have used ChatGPT to generate entire essays, while hackers have begun testing it to write malicious code.

So what is ChatGPT, exactly? Here’s a simple guide on all you need to know about the popular AI chatbot.

What is ChatGPT?

ChatGPT is an AI chatbot developed by San Francisco-based startup OpenAI. OpenAI was co-founded in 2015 by Elon Musk and Sam Altman and is backed by well-known investors — most notably Microsoft.

It is one of several examples of generative AI. These are tools that allow users to enter written prompts and receive new human-like text or images and videos generated by the AI.

Prior examples include Dall-E, a text-to-image program from OpenAI that garnered attention from people captivated by its ability to come up with realistic, often absurd, pictures that match people’s text descriptions.

Lensa, an app based on open-source AI project Stable Diffusion, has been used to turn selfies into illustrious self-portraits inspired by everything from sci-fi to anime.

In ChatGPT’s case, the service is a text-based tool that can produce human-like responses to user requests — from poetry in the style of William Shakespeare to advice on what to do for a child’s birthday party.

What’s so special about it?

ChatGPT is powered by a large language model, or LLM, meaning it’s programmed to understand human language and generate responses based on large corpora of data.

ChatGPT’s LLM is called GPT-3.5. It is an upgrade of OpenAI’s GPT-3 language model.

With a whopping 175 billion parameters, GPT-3 is one of the largest and most powerful language processing AI models to date.

What makes ChatGPT so impressive is its ability to produce human-like responses, thanks in no small part to the vast amounts of data it is trained on.

“What’s exciting is that the responses are more and more human-like, so what you’re seeing is things that we did not think computers could do before,” Jeffrey Wong, global chief innovation officer at professional services firm EY, told CNBC.

Another thing that differentiates ChatGPT is its ability to log context from users’ earlier messages in a thread and use it to form responses later in the conversation.

The tool is the talk of the business world. It has been mentioned on earnings calls by management from a range of companies including oil giants, banks — and even the industrial behemoth Caterpillar.

It has also sparked concerns over potential abuses. In classrooms, students have used ChatGPT to generate entire essays, while hackers have begun testing it to write malicious code.

So what is ChatGPT, exactly? Here’s a simple guide on all you need to know about the popular AI chatbot.

Why is it so popular?

No generative AI application has quite managed to achieve the kind of influence and virality that ChatGPT has.

It has been the subject of countless memes and the talk of the business community at the World Economic Forum in Davos, Switzerland, last month. Chinese tech giant Baidu made its own version called Ernie Bot.

The chatbot signed up 1 million in the five days after its release, according to a Dec. 5 tweet from Altman. By January, ChatGPT had amassed 100 million monthly active users only two months into its launch, making it the fastest-growing consumer application in history, according to a UBS note published last week.

It took TikTok nine months to reach 100 million users and Instagram two and a half years.

Jan. 31 was the biggest-ever day for ChatGPT, with its website garnering a record 28 million daily visits, according to data from Similarweb. That was up 165% from a month ago.

One reason for ChatGPT’s popularity is its accessibility. The service is public to anyone via the OpenAI website, and its potential applications range from school homework to legal briefs.

The timing has also played a part, according to Wong.

“When we come out of pandemics, you typically see this burst of creativity,” he said. “The biggest example is, after the Black Plague, there was this Renaissance, this burst of creativity across the board.”

Why it’s got tech giants clashing

Microsoft is betting billions on ChatGPT’s owner, OpenAI. In late January, the tech titan announced a multiyear, multibillion-dollar investment deal with OpenAI.

Microsoft declined to disclose a specific dollar amount. A report from Semafor said the Redmond, Washington tech giant was in talks to invest as much as $10 billion in the company. Microsoft previously invested $1 billion into OpenAI.

On Tuesday, Microsoft held a press event where it announced new AI-powered updates to its Bing search engine and Edge browser. Altman confirmed Microsoft had incorporated some of OpenAI’s GPT-3.5 language technologies into Bing.

That was a day after Google unveiled its own response to ChatGPT, called Bard AI. The company plans to start rolling Bard out in Google Search in the coming weeks.

ChatGPT is seen as a threat to Google. Rather than turn to the web search pioneer for your most burning questions, people could rely on ChatGPT.

Google was actually early to the advanced conversational AI game, through the launch of its own large language model called Lamda in 2021. It missed the boat on launching its own consumer product based on Lamda — and hopes to change that with Bard, which is powered by the language model.

How good is ChatGPT, really?

ChatGPT has its limitations. Responses from the chatbot can contain factual inaccuracies. For example, it can invent fictitious historical names and books that don’t exist, or fail to solve certain math problems.

“The open-ended aspects of these models are a double-edged sword,” Will Williams, vice president of machine learning at British AI startup Speechmatics, told CNBC.

“On the one hand, there’s a high level of flexibility and fluidity in interactions, and an engaging conversation is possible on almost any topic. On the other hand, you never quite know when the model is making contact with reality and not over-confidently hallucinating.”

ChatGPT’s knowledge is still limited to 2021 data, but may improve with time. Going forward, the expectation is that ChatGPT will be the precursor to much more advanced AI systems.

For now, experts say generative AI isn’t yet capable of achieving human-like, “general” intelligence.

Artificial general intelligence, or AGI, is often considered the holy grail of the AI community. It most commonly refers to the ability of an intelligent agent to understand or learn any intellectual task that a human being can.

Plenty of companies hope to achieve that, from OpenAI to Google’s DeepMind.

The possibilities of GPT-3 have already led to excitement about OpenAI’s next-generation LLM model, GPT-4.

Tempering expectations, OpenAI’s Altman pushed back on the hype surrounding GPT-4, stating in a recent interview with StrictlyVC that people were “begging to be disappointed.”"

MY COMMENT

For those that like conspiracy theories.....or just a good business story.....here we have yet again....ELON MUSK. Of course.....as usual....... it is ELON MUSK that is right in the thick of the best of the best when it comes to corporate innovation, and success.

The danger of all this stuff will come when humans lose any desire or ability to do their own research on a topic and just "accept" what the machines churn out. At that point....the world will lose all ability to think for itself or to challenge the corporate, government or accepted line of thinking.

 

Still RED today.....as even the financial media is OBSESSED today with politics after the little circus of last night. I ignored it all....why waste a perfectly good evening.

 

I thought about you and your "clown" when I made that "circus" post above. I apologize to all...."real"....... clowns out there.

 

I just looked at my accounts and I am very definately in the red. We have moved strongly negative in the markets right now. probably a lost day....but you never know.

I do have three stocks positive at the moment.....MSFT, NVDA, and TSLA. I guess I should be thankful for that little bit of gain that is helping to lessen my losses a bit today.

I see that poor GOOGL is down about 8.44% at the moment. I assume this is a response to the MSFT news lately and their business model being at risk. I dont know this....just my assumption.