The Long Term Investor

Well the markets are now open. Of course they are up at the moment.

Earnings are BOOMING especially in the BIG TECH world....but I do not assume that the markets will reward this......at least today. The short term markets are opaque and ignorant.....other than for the traders.

I am not sure what is going on with the NASDAQ....numerous sources that I see and showing it as "unchanged". I suspect it is having some issue with getting opened today.

META will report today.......not that I care since I dont own the stock.

 

Here is the markets so far today.

Nasdaq jumps, buoyed by Microsoft results

https://finance.yahoo.com/news/stock-market-news-today-live-updates-april-26-2023-120512387.html

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

"U.S. stocks pointed up Wednesday, led by the Nasdaq, as investors digest the big tech earnings bonanza that has kicked off this week.

The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) were up about 0.2%. The technology-heavy Nasdaq Composite (^IXIC) climbed 0.91%.

Government bondswere mixed. The yield on the 10-year note slid to 3.39%, while rate-sensitive two-year note yields also declined to 3.88% Wednesday morning.

Tech giants Microsoft (MSFT) and Alphabet (GOOGL) both reported better-than-expected earnings and revenue for the most recent quarter after the close on Tuesday.

Microsoft (MSFT) shares soared during Tuesday’s extended session, after the software giant reported fiscal third-quarter earnings per share of $2.45, which beat Wall Street estimates of $2.23. Revenue of $52.9 billion came in above expectations of $51.02 billion. The stock rallied over 9% Wednesday morning.

Microsoft's potential acquisition of Activision Blizzard (ATVI), however, suffered a setback Wednesday morning, as UK regulators blocked the deal over competition fears. Activision stock sank about 9% Wednesday morning.

Alphabet’s (GOOGL, GOOG) first-quarter earnings showed a 2% rise in search revenues, far below the corresponding quarters from the last two years. Meanwhile, installations of the Bing app have quadrupled after it was augmented by AI. Shares ticked down slightly before the bell.

Meta (META) earnings are up next after the bell on Wednesday, while Amazon (AMZN) reports Thursday.

Tech stocks have fueled the equities rally so far this year, but some analysts expect the sector could come under selling pressure as it loses steam. Investors remain concerned that expectations for earnings growth will be weaker, prompting some market strategists to anticipate a pullback that has so far not yet materialized.

Separately, on the banking front, PacWest Bancorp (PACW) reported earnings after the close that topped EPS estimates, sending the stock up on Tuesday.

That action in the banking sector followed First Republic Bank’s (FRC) stock plunge of nearly 50% after the regional lender reported on Monday a larger-than-expected drop in deposits. The bank is considering asset sales, Bloomberg reported, following Silicon Valley Bank’s collapse and the turmoil in the sector. First Republic looked to extend its rout on Wednesday, as it fell around 11% Wednesday morning.

First Republic’s drastic move to the downside on Tuesday dragged down the KBW Regional Banking Index, which fell to its lowest level since November 2020.

Meanwhile, the consumer remains in good shape despite a slowdown in inflation. Visa (V) reported earnings that beat top- and bottom-line expectations for its latest quarter on Tuesday that showed continued post-pandemic rebound in international travel.

Elsewhere, mortgage applications to purchase a home climbed for the second time over the past three weeks, signaling stabilization in the housing market, according to the Mortgage Bankers Association weekly survey. Other data out on Wednesday showed that US manufactured good orders got a bounce in March from new contracts for passenger planes."

MY COMMENT

A typical day for the markets and those that are "the experts". Good earnings and beats.....are IGNORED. GOOGLE earnings.....IGNORED. The big drop in the Ten Year Yield......IGNORED.....in spite of the constant BS about how the big cap tech companies are so interest rate sensitive any time the Ten Year Yield goes up. When it goes down......the sensitivity is NEVER there.

This is exactly what I predicted yesterday when the BIG BEATS were released by GOOGLE and MICROSOFT:

"Tech stocks have fueled the equities rally so far this year, but some analysts expect the sector could come under selling pressure as it loses steam. Investors remain concerned that expectations for earnings growth will be weaker, prompting some market strategists to anticipate a pullback that has so far not yet materialized."

NEVER......underestimate the ability of the markets to IGNORE the GOOD and the GREAT and focus on some fantasy negative event that is just around the corner. This is called.......driving your short term trading results. It is POISON for.....long term investors.

 

The DOW and the SP500 are about to go negative for the day. Yep....I see that the DOW just did.

No surprise....the short term markets are DUMB. They defy reason. In addition they are not relevant at all to the long term.

This is why I never anticipate or try to time the markets. It is impossible to predict the short term day to day markets. This is also why when I have money that is stock market money.....it just goes all in when it is available. It is worthless to try to anticipate or plan out the markets.

 

I have been trying to find some.......any....data on earnings today. NOTHING.....CRICKETS.

The topic is TABOO. it is an embarrassment to the financial establishment.

I am guessing that this might be one of the GREATEST earnings reporting quarters since the start of the pandemic. Individual company reports that I see day after day are OVERWHELMINGLY strong and positive.

Great news for investors that are long term thinkers. Money in the bank. This stuff can be ignored short term....but it will have a positive impact over the medium to long term.

 

I did just hear on a TV Business show that earnings are running at about 75%.....BEATS. The "expert guest"......than goes on to explain why they are really not so good.

The DOW continues to go down and I predict that the SP500 will soon join it in the red.

You have to just laugh.......ENJOY the day.

 

What a poor showing for the markets today.

BUT....that is the short term.....opaque and obscure.

That's ok....I got the BEATS that I wanted yesterday. Now I am hoping that I do as well on Thursday with AMZN and HON.

 

I see lots of focus on the banking "stuff" today. It has made a revival as a financial media topic. I suspect that it is as a result of those that want to see some sort of bail-out of First Republic. They are working all the PR channels with lots of fear mongering and doom & gloom.

You cant blame them.

BUT....First Republic is NOT the banking system. it is another bank that tied their fortunes to the Wealthy in a very niche way. If it was up to me I would just let them fail. At that point the FDIC would step in, take over, and sort out the remaining mess. Businesses like this one just need to......go away.

 

What a weird little market day today.

I had the majority of my stocks in the RED today.......seven of them. Yet the three stocks that were in the GREEN......AMZN, MSFT, and NVDA......gave me a nice medium level GAIN today.

As a bonus.....I got in a beat on the SP500 by 1.10% today.

i hated the markets today.....but.....I like the result in the end. You never know what is going to happen....or why.....short term.

I will take it.

 

Glad to see this strange little day end. Here is how it went.

Dow, S&P 500 close lower Wednesday as First Republic woes eclipse Big Tech earnings

https://www.cnbc.com/2023/04/25/stock-market-today-live-updates.html

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

"The Dow Jones Industrial Average lost more than 200 points as investors’ worries around First Republic overpowered their excitement around Big Tech earnings.

The blue-chip index declined 228.96 points, or 0.8%, to end at 33,301.87 after trading up more than 100 points earlier in the session. The technology-heavy Nasdaq Composite added 0.4% to finish at 11,851.35, trimming gains after jumping as much as 1.4%. The S&P 500 slid 0.5%, closing at 4,055.99.

First Republic Bank slid more than 33%, extending losses after falling almost 50% on Tuesday. The regional bank said late Monday that its deposits dropped 40% to $104.5 billion in the first quarter.

That reignited concerns about the health of the banking system initially prompted by the closure of Silicon Valley Bank last month. Bloomberg News reported Wednesday that U.S. bank regulators were considering downgrading their assessments of First Republic, which could hinder the bank’s ability to borrow from the Federal Reserve.

Microsoft climbed more than 7% to trade at its highest point in more than a year after beating Wall Street’s expectations on the top and bottom lines in its latest quarter. The company also said it saw a big jump in revenue from its Intelligent Cloud business segment. Amazon rose more than 2% as some market participants grew hopeful that the e-commerce giant’s cloud business could also show strong revenue growth.

Alphabet shares were down 0.4% after trading up earlier in the day. The Google parent posted better-than-anticipated earnings but said revenue grew just 3% from the same period a year ago.

Still, the Technology Select Sector SPDR Fund (XLK) added 1.3% as investors increased exposure in the thick of Big Tech’s marquee earnings week. Meta Platforms advanced 0.8% ahead of the Facebook parent’s earnings report coming after the market closes. Amazon’s quarterly report is due after the bell on Thursday.

Elsewhere, Chipotle shares jumped more than 13% to an all-time high on the back of strong earnings.

“Earnings have not been enough to catalyze the market higher,” said Ross Mayfield, investment strategy analyst at Baird.

There were “a couple good reports out of the Big Tech names, but there was such a rally into their earnings season that I think you needed earnings to really clear a high bar to actually catalyze another leg higher,” Mayfield added. “That just hasn’t been the case, especially when you have other headwinds pressing down on the market.”

Demand for long-lasting goods like appliances and computers was higher than economists expected in March, according to data released Wednesday morning, in a sign that the economy is showing resilience. This data point comes ahead of the latest GDP update slated for Thursday and the big Personal Consumption Expenditures Price Index — the Fed’s favored inflation gauge — on Friday."

MY COMMENT

OK.....cancel the pending recession.....demand for long-lasting goods (big ticket stuff) is UP......the economy is showing resilience. Earnings are BOOMING compared to expectations.

I see a lot of people NOW comparing the earnings to a year ago. They should be comparing the earnings to the expectations.

just as I predicted the markets found a way to DISRESPECT the GOOGL earnings from yesterday.....even though they BEAT ........every expectation.

 

If someone had $900,000 to use to purchase a lifetime INCOME ANNUITY......for the life of themselves and their spouse.......it would generate a MONTHLY INCOME of $6599. If you put in double that.....$1.8MIL.....it would produce $13,198 per month for the life of you and your spouse.

Here are the critical assumptions:

1. The annuity is being purchased at age 65, for both the husband and wife.
2. The lifetime income will be for the entire lifetime of the husband and wife for as long as either one of them is alive.
3. Payments are to start at age 70.
4. Payments are guaranteed for at least ten years, minimum.....even if both the individuals do not live ten years.

I ran the numbers above just out of curiosity what Income Annuities were paying right now in terms of pay-out. Definitely much better pay-outs now that the FED have raised rates.

 

Here is the META earnings BEAT.

Meta shares pop after better-than-expected revenue for the first quarter

https://www.cnbc.com/2023/04/26/facebook-meta-q1-earnings-report.html

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

"Meta shares jumped in extended trading on Wednesday after the company issued revenue for the first quarter that topped estimates and provided optimistic guidance for current period.

• Earnings: $2.20 per share.
• Revenue: $28.65 billion vs $27.65 billion, according to Refinitiv.
• Daily Active Users (DAUs): 2.04 billion vs 2.01 billion expected, according to StreetAccount
• Monthly Active Users (MAUs): 2.99 billion vs 2.99 billion expected, according to StreetAccount

For the second quarter, Meta expects revenue of between $29.5 billion and $32 billion, while analysts were expecting sales of $29.5 billion, according to Refinitiv.

Meta’s first quarter sales jumped 3% year-over-year to $28.65 billion. It’s difficult to compare the company’s EPS of $2.20 with analyst projections of $2.03 because it’s unclear if the analysts were expecting an expensive charge.

Since Meta CEO Mark Zuckerberg announced in February that 2023 would be the company’s “year of efficiency,” the stock has been on the rise, cutting into its historic losses last year.

Investors have rallied around Zuckerberg’s plans to slim down his company through a series of layoffs, resulting in some 21,000 expected job cuts. The company most recently said goodbye to some technical workers last week, and is planning another round of cuts in May that will target employees in business groups.

Meta’s downsizing efforts come as the company’s revenue base is shrinking from a battered online advertising market and the lingering effects of Apple’s 2021 iOS privacy update that dramatically limited ad targeting capabilities. The company is also facing increased competition from rival TikTok.

The Facebook parent could record its fourth consecutive quarterly sales drop if it posts first-quarter results that come in at the low end of its previous guidance, which called for revenue of between $26 billion and $28.5 billion.

Google parent Alphabet, which dominates the online ad market along with Meta, reported first-quarter results on Tuesday that beat analysts’ expectations, though ad revenue fell from the prior year.

Outside of its core business, Wall Street will also want to hear Meta’s latest plans for investing in the metaverse, a futuristic world of virtual and augmented reality. Since changing its name from Facebook to Meta in late 2021, the company has been spending billions of dollars a quarter on technologies for the metaverse, even as revenue isn’t expected to be significant anytime soon."

Analysts expect Reality Labs, the metaverse division, to record an operating loss for the first quarter of $3.95 billion, according to StreetAccount.

Meta shares have jumped 72% so far this year after losing almost two-thirds of their value in 2023. The stock closed on Tuesday at $207.55."

MY COMMENT

I dont really see this as a BEAT....probably a "beat/push". Monthly daily active users was not a beat.

I dont see as very compelling. The Metaverse is a total disaster. The company has NOTHING going on with AI......and severely trails everyone else in this area. They are getting their ass kicked by TikTok.

When I look at this stock I really dont care what the numbers are.....their busines model and their future with a single controlling owner (ZUCK) ....who to me exhibits very poor vision and judgement......are huge impairments.

 

In spite of the fact that I will not own this company....at least this article gives more detail about the earnings.....which are more of a BEAT in the totality. Based on tho info here it was a very good report.

Meta Platforms stock soars after earnings crush expectations, expenses drop

https://finance.yahoo.com/news/meta...ush-expectations-expenses-drop-201702704.html

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

"Meta Platforms (META) reported first quarter results after the close on Wednesday that blew away expectations while the company also raised its forecast for the current quarter and lowered its expense forecast.

The Facebook and Instagram parent company saw shares surge as much as 11% to its highest level since January 2022 in after hours trading. Meta, which has touted 2023 as its "Year of Efficiency" said in the release that it has "substantially completed" its 2022 layoffs, though it continues to conduct layoffs this year.

Last month, Meta announced it would lay off 10,000 workers, building on the company's previous layoff announcement back in November.

Here are the most important numbers from Meta's earnings, compared to analysts' estimates compiled by Bloomberg:

• Revenue: $28.65 billion actual versus $27.67 billion estimated
  
• EPS: $2.20 actual versus $2.01 estimated
  
• Advertising Revenue: $28.1 billion actual versus $26.76 billion estimated
  
• Family of Apps Revenue: $28.3 billion actual versus $26.88 billion estimated
  
• Reality Labs Operating Losses: $3.99 billion actual versus $3.8 billion estimated
  
• Q2 Revenue: $29.5 billion-$32 billion actual versus $29.48 billion estimated
  

"We had a good quarter and our community continues to grow," said Meta CEO Mark Zuckerberg in a statement.

"Our AI work is driving good results across our apps and business. We're also becoming more ecient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision."

If this earnings cycle is about cost-cutting in Big Tech, perhaps no company has been more ruthless than Meta.

In October, the company was guiding for 2023 expenses to come in between $96 billion-$101 billion. In Wednesday's release, the company said it now sees expenses for this year come in between $86 billion-$90 billion, including restructuring costs.

This also accounts for losses in the company's metaverse division, Reality Labs, which are expected to continue and increase year-over-year. Reality Labs lost $13.7 billion in 2022.

There also seems to be a light at the end of the tunnel when it comes to the digital advertising slowdown, which rattled Meta in previous earnings cycles.

The company's ad revenue beat was bolstered by the growth of ad impressions, which rose 26% year-over-year in Meta's Family of Apps, which includes Facebook, Instagram, and WhatsApp.

The company reported headcount at the end of Q1 stood at 77,114 a decrease of 1% from last year.

In its release, Meta said, "Substantially all employees impacted by the layoffs announced in November 2022 are no longer reflected in our reported headcount as of March 31, 2023. Further, the employees that would be impacted by the 2023 layoffs are included in our reported headcount as of March 31, 2023.""

MY COMMENT

Based on the above I would now call it a BEAT. So....another one of the BIG CAP TECH companies surprises to the UP side of earnings. The GREAT earnings continue to pile up.

 

OK......here we go. Last BIG earnings report of the week today.....AMAZON. I also have HON today.

Tomorrow we get the GDP figure to cap off the week. So far it has been a sterling week....great earnings in general.....great earnings by BIG TECH.....no real negative news......the lingering bank crisis being dragged out again. That is about it. All in all.....regardless of AMAZON earnings....it has been an outstanding week.

 

YES......we are doing well.

Tugging on Valuations’ CAPE

https://www.fisherinvestments.com/en-us/insights/market-commentary/tugging-on-valuations-cape

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

"The cyclically adjusted price-to-earnings ratio is no superhero indicator.

Despite Tuesday’s rockiness and fearful headlines, stocks’ nearly six-and-a-half month rally from October’s low looks increasingly like a new bull market. A big reason? Alongside stocks’ strong returns, sentiment remains down in the dumps. Few believe in the rally’s staying power, with many hunting for reasons to justify their bearish stance. One such reason making the rounds Tuesday was the cyclically adjusted P/E ratio—aka CAPE—which is allegedly too high, signaling stocks are overvalued. We don’t buy it. Not only are valuations backward-looking, but CAPE is a fundamentally flawed indicator that doesn’t even try to predict near-term returns.

One big criticism of traditional P/Es, which compare stock prices to either the trailing 12 months’ earnings or analysts’ expectations for the next year’s, is that they are subject to too much skew from recessions and bear markets—a fair point. During bear markets, stocks typically fall before earnings do—and begin recovering while earnings are still falling. This tends to inflate P/Es early in a bull market, as you get a higher price divided by a much lower denominator—a curious math quirk that delivers a result many find counterintuitive (high P/Es around historically great times to own stocks). But it just means stocks pre-priced future corporate profits. As earnings bounce, P/Es usually even out.

CAPE tries to solve for this by comparing stock prices to the last 10 years’ worth of inflation-adjusted earnings, creating an alleged super valuation. The logic: By averaging out 10 years’ worth of profits, you compare prices to a more stable, allegedly accurate measure of core profitability. But in our view, that makes the measure super-duper backward-looking. It meant that until 2019, CAPE included depressed earnings from the financial crisis, which weren’t exactly relevant to stock prices on the eve of COVID. It also meant that in the 2000s, CAPE included the sky-high earnings at the end of the 1990s boom, which were similarly irrelevant at the time.

Adjusting for inflation adds more trouble. When it comes to economic data, we think inflation-adjusting is a crucial step to putting data in context and comparing across history as well as countries. But another cardinal rule to data analysis is keeping like with like. CAPE doesn’t. Its earnings are inflation-adjusted, but it uses nominal stock prices. That means its denominator is always adjusted lower, skewing CAPE higher. Inquiring minds might ask whether inflation-adjusting stock prices is a viable solution for this, but we don’t think so. Inflation-adjusted or “real” returns are an imaginary, largely academic construct. In the real (ha) world, investors earn nominal returns in hopes of outstripping inflation, and they pay taxes on those nominal returns. It isn’t even clear what the most logical deflator would be. CAPE uses the consumer price index to deflate earnings, but that seems suspect considering the sheer amount of companies that sell to other businesses, rather than consumers. The producer price index might be more relevant to their revenues, as it is to the vast majority of companies’ costs. Or you could get more granular and use the subsets that are most relevant to the individual companies. Or you could use the GDP deflator. Or or or.

Lastly, looking at CAPE’s history, there is clearly no magic level that signals a bull or bear market. (Exhibit 1) Nor is there designed to be one. CAPE doesn’t claim to predict returns over the next year. Nor does it claim to identify whether a bull or bear market is immediately ahead. Its goal—which we think is impossible—is to predict average returns over the next decade. Even if it were right, which it often isn’t, knowing average returns over a decade won’t tell you when and how those returns occur. A weak decade could include a very nice bull market or two, sandwiched between bear markets. CAPE won’t tell you when those cycles will turn, so it won’t help you navigate them. Note, too, that today’s allegedly high level matches levels seen smack in the middle of the 1990s’ and 2010s’ long bull markets.

Exhibit 1: A Long Look at CAPE


Source: Yale University, as of 4/25/2023.

Just looking at pure market predicting power, we don’t think CAPE is useful for investors trying to navigate stocks’ ups and downs. It has been high in bull and bear markets alike … and low in bull and bear markets alike. Its extra backward-looking nature doesn’t even make it a great sentiment indicator, unlike traditional P/Es. It is just a bizarrely constructed, awkwardly inflation-adjusted, occasionally entertaining, backward-looking thing."

MY COMMENT

One thing I have seen over the last years......I have come to really respect the viewpoint that Fisher consistently puts out.

I have never used their services and dont plan to. I dont know how their real world returns are. BUT....their commentary is usually RIGHT ON. They are classic long term in their published beliefs and online content. Very RATIONAL.

Yes.....the BULL MARKET continues.....earnings is proving that it is for REAL. Of course it seems pretty REAL to me....since it has been happening now for the past TEN MONTHS.

 

Some common sense.

Some Things I Think

https://collabfund.com/blog/thoughts/

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

"The fastest way to get rich is to go slow.

Many beliefs are held because there is a social and tribal benefit to holding them, not necessarily because they’re true.

Nothing is more blinding than success caused by luck, because when you succeed without effort it’s easy to think, “I must be naturally talented.”

Social media makes more sense when you view it as a place people go to perform rather than a place to communicate.

Comedy is the best way to teach about human behavior. George Carlin, Chris Rock, and Jerry Seinfeld have done more to enlighten others than 99.9% of psychology PhDs.

The best measure of wealth is what you have minus what you want. (By this measure, some billionaires are broke.)

The most valuable personal finance asset is not needing to impress anyone.

Most financial debates are people with different time horizons talking over each other.

From school, I remember: Every good story I was told, but none of the formulas I memorized before a test.

It’s easiest to convince people that you’re special if they don’t know you well enough to see all the ways you’re not.

“People like you more when you are working towards something, not when you have it.” - Drake

A lot of people seem to have a necessary level of stress, and when their life is going well they make up imaginary problems to fill the void.

Few things are as persuasive as your own BS, while nothing is easier to identify than other people’s BS.

Everything is sales.

Every employee is replaceable.

Those we admire most in sports, business, politics, and entertainment tend to share one quality: They knew when it was time to quit, time to pass the baton, time to disappear, in a way that preserved, even enhanced, their reputation. Nothing diminishes past success like overstaying your welcome.

The hardest thing when studying history is that you know how the story ends, which makes it impossible to put yourself in people’s shoes and imagine what they were thinking or feeling in the past.

You can only ignore the critics if you also discount the praise.

Related: Few traits are as destructive as an appetite for praise.

There are two types of people: Those who want to know more and those who want to defend what they already know.

My jealousy of dogs: They can sit for hours doing absolutely nothing, appearing perfectly content.

A lot of people like making money more than they enjoy having money. The change, not the accumulated amount, is the thrill.

Matt Damon says, “You retard socially and emotionally the moment you become famous. Your experience of the world is never the same.” The same may be true – and far more common – for those who become wealthy.

Most beliefs are self-validating. Angry people look for problems and find them everywhere, happy people seek out smiles and find them everywhere, pessimists look for trouble and find it everywhere. Brains are good at filtering inputs to focus on what you want to believe.

Few traits are as attractive as humility, but few are as common as vanity.

Everyone wants to be lucky and to be admired, but no one admires a person for their luck.

The market is rational but investors play different games and those games look irrational to people playing a different game.

A big problem with bubbles is the reflexive association between wealth and wisdom, so a bunch of crazy ideas are taken seriously because a temporarily rich person said it.

Logic doesn’t persuade people. Clarity, storytelling, and appealing to self-interest do.

You only know someone well if you can correctly predict how they will react in stressful situations.

There is a big difference between an expert, whose talent should be celebrated, and a guru, whose bad ideas should never be questioned.

Past performance increases confidence more than ability.

Happiness is the gap between expectations and reality, so the irony is that nothing is more pessimistic than someone full of optimism. They are bound to be disappointed.

In social fields, very few things are true all the time. “Too many theories try too hard to be laws,” says Carl von Clausewitz.

The most important decision most people will ever make is whether, when, and whom to marry. But that topic is never taught in school. It can’t be – everyone’s different, and you can’t reduce it to a formula or a statistic.

I’ve often wondered how many personal bankruptcies and financial troubles were caused by spending that brought no joy to begin with. It’s a double loss: not only are you in trouble, but you didn’t even have fun getting there.

Nothing leads to success like unshakable faith in one big idea, and nothing sets the seeds of your downfall like an unshakable faith to one big idea.

There are two types of successful people: those with imposter syndrome, and sociopaths.

The bust is only dangerous if you depend on the boom.

“Reality will pay you back in equal proportion to your delusion.” - Will Smith

Every five to seven years people forget that recessions occur every five to seven years.

Many people check their portfolios every day but their blood pressure every few years, if even that.

The pessimists can be wrong if just a few big things go right.

The most important communication skill is knowing when to shut up.

“It’s good to have people in your life who you don’t want to disappoint.” - Buffett

Not caring about temporary things, and obsessing over permanent things, is underrated.

Lots of things are factually true but contextually nonsense.

Economies run in cycles but people forecast in straight lines.

You are twice as gullible as you think you are – four times if you disagree with that statement.

Price is what you pay, value is whatever you want Excel to say.

Bad luck is easy to identify when you fail, but good luck is easy to ignore when you succeed

“Men resist randomness, markets resist prophecy.” - Maggie Mahar

People tend to be obsessed with harm posed by others (terrorism, crime) while oblivious to much greater self-inflicted harms (poor diet, no exercise).

We underestimate the importance of control. Camping is fun, even when you’re cold. Being homeless is miserable, even when you’re warm.

So much of what people call “conviction” is actually a willful disregard for facts that might change their minds.

In school they tell you your paper must be a minimum of five pages long. In the real world you have five seconds to catch someone’s attention before they’re bored and move on.

“Learn enough from history to respect one another’s delusions.” - Will + Ariel Durant

There is an “ideal” net worth for everyone, when money not only stops bringing pleasure but becomes a social liability.

“If you only wished to be happy, this could be easily accomplished; but we wish to be happier than other people, and this is always difficult, for we believe others to be happier than they are.” - Montesquieu

With the right incentives, people can be led to believe and defend almost anything.

Good marketing wins in the short run and good products win in the long run.

“Judge talent at its best and character at its worst.” - Lord Acton

Net worth goes from $0 to $1 million: Ecstasy. Net worth goes from $10 million to $1 million: Despondency. Can we agree that all wealth is relative?

Three legal investment strategies: Be smarter than others, be luckier than others, be more patient than others. That’s the whole list.

The most productive hour of your day often looks the laziest. Good ideas rarely come during meetings – they come while going for a walk, or sitting on the couch, or taking a shower.

Nothing destroys relationships – in love and careers – like being needy.

Schools are good at measuring intelligence but not great at measuring passion, endurance, and character, which tend to be more important than intelligence in the long run.

The majority of what you know comes from the experiences you’ve had and the people you’ve met, both of which are largely out of your control.

Average performance sustained for an above-average period of time leads to extraordinary performance. This is true not just in investing but careers, relationships, and parenting.

I recently came across something called the rule of thirds: One-third of days you should feel amazing. One-third of days should feel OK. One-third of days should be crappy. That’s a good, balanced, realistic life.

The same traits needed for huge success are the same traits that increase the odds of failure. We should be careful praising winners or criticizing failures, because they often made similar decisions with different degrees of luck.

Every generation is disappointed in their kids, partly because things typically get better over time, and you become resentful as you see younger generations bypassing problems you had to overcome.

Vaccines can be amazing at one point in time but lose effectiveness as the virus they were targeting adapts and evolves into something new. The same is true for business and investing strategies: What works wonders in one era might flop the next as the world evolves.

A good test when reading the news is to constantly ask, “Will I still care about this story in a year? Two years? Five years?”

A good bet in economics: the past wasn’t as good as you remember, the present isn’t as bad as you think, and the future will be better than you anticipate."

MY COMMENT

NEVER underestimate the power of being average......and...having above average common sense.

 

HERE is some GDP data.

GDP rose at a 1.1% pace in the first quarter, less than expected

https://www.cnbc.com/2023/04/27/gdp-q1-2023-.html

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

"Growth in the U.S. slowed considerably during the first three months of the year as interest rate increases and inflation took hold of an economy largely expected to decelerate even further ahead.

Gross domestic product, a measure of all goods and services produced for the period, rose at a 1.1% annualized pace in the first quarter, the Commerce Department reported Thursday. Economists surveyed by Dow Jones had been expecting growth of 2%.

The growth rate followed a fourth quarter in which GDP rose 2.6%.

The report also showed that the personal consumption expenditures price index, an inflation measure that the Federal Reserve follows closely, increased 4.2%, ahead of the 3.7% estimate.

Stocks initially reacted little to the report, with major indexes pointing to a higher open. Treasury yields increased."

MY COMMENT

A double edged sword. First GDP......good news for the FED doing only one more rate hike in a week or so and than pausing for the rest of the year. Very good news for investors.

Second....if this is accurate.....we are seeing a slowing economy...although the results that I see from business are not showing this.

Third....personal consumption....is showing the opposite......a pretty significant increase over the expectation....which is BAD NEWS for inflation and the FED. An indicator of an economy that is NOT slaowing.

So a mixed bag with NO clear message. Welcome to the real world.