The Long Term Investor

ENJOY THE DAY.....as I JINX the markets by saying....SHOW ME THE MONEY.

 

I looked at my account EARLY today....a minute ago. I have a good little gain going so far......six stocks UP and four DOWN. the down holdings at the moment are....AAPL, AMZN, COST and HD. A mix of tech and non-tech on the down companies.

My best stock so far today is......NVDA.....up by 1.65% or $6.52. This gives me a gain of 1.82% on my small addition of 15 shares that I purchased on 6-2-23. I need to build up a cushion on those shares.

I am sure there were many that thought I was CRAZY for buying NVDA shares now. BUT....it was a small number of shares.....and...I am looking ahead to the next ten years.

 

Zukodany mentioned:

"Was watching an interview with Ray Dalio (Bridgewater) on Squawk yesterday. Man, that guy really REALLY thinks that we’re fcuked. Never heard such harsh bearish predictions since Ackman’s big meltdown in 2020 before covid. I mean this guy is subscribing to geopolitical escalation, civil tear, debt crisis … the WORKS!
It doesn’t help that he was right about 2008."

I know he knows this as a commercial property owner and business person.....but for other readers......this is how media works. It is not like it took much genius to see that we were heading for a BIG MELTDOWN back in 2008. As an average person watching all the crazy liar loans and derivatives happening back in 2008 it was OBVIOUS to me as a......"LITTLE PERSON" .....that we were headed for disaster. (that is why I sold out of the markets totally for the first time ever in May of 2008)

The financial media LOVES to pin labels on experts like......"he was right about 2008". If the expert is smart they run with that label and it becomes a big introduction line for them from than on. Of course.....they were often WRONG about every other DISMAL event they predicted for years before and years after. In other words it is often....just random luck....or....pointing out the obvious that everyone else is ignoring.

I dont give much credibility to this sort of STUFF. BIG WOW.....someone was right about some financial event that.....was obvious in hindsight......FIFTEEN years ago.

What I find fascinating is the ability of the financial business and experts to NOT see the obvious. It is classic....EMPEROR'S NEW CLOTHES. (I doubt that anyone under 40 understands this reference.)

AND.....this is what I LOVE about investing. It is the constant illustration of human behavior. It is entertainment. It is the......ULTIMATE PERFORMANCE ART. WELL.......make that the second most ULTIMATE PERFORMANCE ART......number one in PERFORMANCE ART is politics.

 

Next month Social Security cost of living months....July-Sept begin.

Social Security cost-of-living adjustment may be 2.7% in 2024, new estimate finds

https://www.cnbc.com/2023/06/13/soc...ent-estimated-at-2point7percent-in-2024-.html

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

"Key Points

• New government data for May shows inflation is cooling.
• For Social Security beneficiaries, that may be bittersweet news, because though some prices may come down, their cost-of-living adjustment next year may be lower.

New government data shows the annual rate of inflation dipped to the lowest level in about two years as of May.

But that may be bittersweet news for Social Security beneficiaries, as they may receive a much lower cost-of-living adjustment in 2024 than they did this year.

The Social Security COLA could be 2.7% in 2024 based on the latest consumer price index data, according to The Senior Citizens League, a nonpartisan senior group.

That would be substantially lower than the record 8.7% COLA Social Security beneficiaries saw this year, the highest increase in four decades due to record high inflation.

The CPI rose 4% from a year ago as of May, the U.S. Department of Labor said Tuesday, and 0.1% for the month.

The subset of the index used to determine next year’s cost-of-living adjustment, the consumer price index for urban wage earners and clerical workers, or CPI-W, was up 3.6% year over year — the lowest level since March 2021, The Senior Citizens League noted.

To be sure, the latest estimate for the 2024 COLA is subject to change, and could even point to a lower benefit increase for next year as inflation continues to subside, noted Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League.

The Social Security Administration calculates the annual COLA by determining the percentage change in the CPI-W from the third quarter of last year to the third quarter of the current year. If there is no increase, there is no COLA.

Over the past 10 years, the average Social Security COLA was 2.6%, according to Johnson.

Some prices still high, despite inflation cooling

Even though inflation is cooling, prices are still high despite the rate of price increases slowing, Johnson said.

Some categories, like insurance and health-care costs, rarely decline, she noted.

“The fact that we’re even forecasting a COLA at all means prices are higher than they would be a year ago,” Johnson said.

“That part of it is still very problematic for retirees and disabled Social Security beneficiaries who are living on fixed incomes,” she said.

The record 8.7% COLA for 2023 was expected to give beneficiaries more than $140 more per month starting in January, according to the Social Security Administration.

Richard Fiesta, executive director of the Alliance for Retired Americans, said this year’s benefit boost has had a “mitigating effect” for retirees.

New $35 per month caps on insulin for Medicare beneficiaries starting in January, put into effect by the Inflation Reduction Act, have also helped, he said.

“We are definitely seeing from our members that that is having an immediate and positive effect on their pocketbooks,” Fiesta said.

Longer term, both The Senior Citizens League and the Alliance for Retired Americans, as well as other groups, hope the measure for the annual COLA can be changed to the consumer price index for the elderly, or CPI-E.

The measure would more accurately reflect the categories retirees spend their money on, Fiesta said, such as health care, food and fuel.

Democratic Social Security reform proposals have included that change. However, not all experts are convinced the CPI-E would be a better COLA measure."

MY COMMENT

More than $100 per month for me. I would like to get $100 per month more.......minimum.

 

Another good....ALL AROUND....day for me and the markets today. I had a nice medium level gain. Seven stocks UP today and three....AAPL, NKE, and HD.......DOWN. A beat on the SP500 by 0.21% today.

I am pushing toward a 31% YTD gain across my entire portfolio and am now about another 10.5% from hitting an all time high.

As to my little addition of 15 shares of NVDA to my total holding of the stock.....those shares are NOW up by 4.07% since they were added on 6-2-23. I need to rack up more of a cushion on those over the rest of this week.

 

HERE is the close today.

Stocks rise after inflation report, S&P 500 and Nasdaq hit fresh 13-month highs: Live updates

https://www.cnbc.com/2023/06/12/stock-market-today-live-updates.html

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

"Stocks rose Tuesday after new inflation data showed price pressures slowed again in May, adding to investor optimism that the Federal Reserve could skip a rate hike when it next decides on policy this week.

The Dow Jones Industrial Average traded 145 points higher, or 0.4%. The S&P 500 climbed 0.6%, and the Nasdaq Composite advanced 0.8%. The S&P 500 and Nasdaq Composite each notched their highest closes since April 2022 on Monday. The Dow, meanwhile, climbed 243.95 points, or 0.7%, at its session on Tuesday.

A report Tuesday showed that the consumer price index in May increased 4% year over year, marking the slowest annual rate since March of 2021. Following the report, traders increased their bets that the Fed will keep rates unchanged on Wednesday after hiking at 10 consecutive meetings. The latest odds gave a 99% chance the central bank would keep rates at the current target rate of 5% to 5.25%, according to CME Group’s FedWatch tool.

″[The Fed] will buy themselves the maximum amount of optionality by signaling at least one further hike by the end of 2023, aligned with market expectations, and will guide towards a ‘skip’ instead of an extended pause to sit and observe the effects of raising rates 5% since the beginning of the hiking cycle,” said Gargi Chaudhuri, Head of iShares investment strategy Americas.

Tech shares led the way as easing inflation and rates boosted optimism for the sector. Oracle shares jumped 0.4% after topping Wall Street’s estimates for the fiscal fourth quarter. Shares of streaming giant Netflix
climbed 2.9%.

The S&P 500 and Nasdaq Composite jumped 0.9% and 1.5%, respectively, to finish at their highest level in 13 months on Monday. The Dow added 189.55 points, or 0.56%. The S&P 500 is now up more than 24% from its October low, surpassing the simplistic definition of a bull market.

Nvidia may have ‘too little upside left,’ ‘Dean of Valuation’ says

It may be hard to find more room to rally for Nvidia
said Aswath Damodaran, a New York University business professor also known as the “dean of valuation.”

The stock has surged more than 180% this year amid excitement around artificial intelligence. But he said it’s hard to see room for shares to get more expensive after trading around $400.

“I’ve held Nvidia now for five years and I’m happy that I did,” Damodaran said on CNBC’s “Closing Bell.” But at the current price, “Nvidia would basically have to decimate or dominate the entire AI market for it to be justifying this price. And I’m not willing to take that bet. I mean, there’s too little upside left when you price that in.”"

MY COMMENT

A BANNER day for many investors. We are starting to look like we are in for an extended nice summer rally.

As to NVDA.......I think it has more room to run. With all the attention it has had since the......BLOW OUT EARNINGS......there will be many people considering this stock. It may end up as having more room to run simply based on self perpetuating momentum.

 

HAPPY FED DAY tomorrow.

I was looking for a card at the super-market. What a shock....they have no.......HAPPY FED DAY.......cards. I guess I will just have to get out the old construction paper, white lace, scissors, white paste glue (that tastes pretty good) and make one like we used to for Valentines Day and Christmas in Elementary School back in the old days.

I was trying to think what color of icing you would use on cupcakes for FED DAY. BLACK? I think GOLD......now that they are nearly finished.

We might just see stocks go GREEN every day this week.......and....totally ignore the FED.

 

YIKES.....that is a nightmare. I have never been able to understand any business, professional, or other self employed person that simply lets someone else do all their business finances.

I was self employed for 22 years in business. When I first started I wrote all my own checks, paid all my own bills, even did my own accounting. As I grew I would have trusted employees prepare all the bills, checks, accounting, etc, etc,.....BUT......I still signed every check and reviewed everything.....every month. How else could I know what was actually happening in my business and prepare for the future?

I had a friend and his wife that were in the clothing manufacturing business. He spent most of his time on the road dealing with buyers and customers for their line of clothing. They built a brand new custom 4500 sq ft view home overlooking Puget Sound. About six months after the house was done they left for Hawaii. They had a business manager handling the day to day operations of the manufacturing an all the accounting. They got a call in Hawaii from him telling them that they were broke. It was a total shock to them....they had no clue. They had to sell the dream house and cut way back in the business. it was very sad.

 

So true.

Big Political News Doesn’t Mean Major Market Relevance

https://www.fisherinvestments.com/e...tical-news-doesnt-mean-major-market-relevance

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

"Markets’ focus is narrow.

Editors’ Note: MarketMinder is politically agnostic. We prefer no politician nor any political party in any country, and we assess developments for their potential economic and market impact only.

Here is the thing about politics and stocks: If you don’t check yourself, it becomes very, very easy to obsess over news that seems seismic from a societal standpoint but doesn’t mean much (if anything) for stock returns.

We say this because political news is dominating today’s headlines globally, and pundits are trying (and in our view, failing) to extract economic implications from all of it. In Scotland, for example, former First Minister (and former Scottish National Party head) Nicola Sturgeon was arrested over the weekend in conjunction with a simmering scandal about the party’s alleged misuse of funds. She was released without charge pending further investigation, but that hasn’t stopped some corners of the UK press imagining a new day where the SNP is out of Scottish government and a fresh administration can improve the country’s economic competitiveness—lifting the entire UK economy in the process. Never mind that there is another upstart nationalist party and it is far from certain that a party running on a pro-business platform would win the next Scottish election, which isn’t due for nearly three years—or that they would even be able to enact any meaningful, well-crafted reforms.

This isn’t an isolated case. News of former Italian Prime Minister Silvio Berlusconi’s passing didn’t just bring some of the more salacious political obituaries we have had the misfortune of reading—it also brought speculation that Berlusconi alone was shoring up the center-right Forza Italia Party. Some now argue his passing will allow Prime Minister Giorgia Meloni to bolster her Brothers of Italy party’s ranks in Parliament, as she could absorb Forza Italia defectors. Perhaps, but people switching from one party within a coalition to another doesn’t change the balance of power, nor the gridlock inherent in multiparty administrations like Italy’s. To us, the speculation seems like an attempt to argue that Meloni’s moderation was temporary, and now all the radical legislation people feared when she first took office will finally kick in—the latest iteration of Italy fears that stretch back to at least 2010. That seems very much like a stretch in a three-party coalition like hers. The competing interests haven’t gone away—they just have a less visible figurehead with Berlusconi gone.

And then we have the second indictment of former President Trump and the ongoing House investigation into an alleged influence peddling scheme involving President Biden, which have cranked the US’s political outrage industry up to 11 on both sides of the aisle. You don’t need us to tell you that every talking head on cable television is banging on about what this means for 2024. Never mind that we are over six months away from the primaries, with challengers in both parties still declaring and no debates yet on the books, much less in the books. The time will come for investors to focus on 2024 and its stock market implications, which will chiefly boil down to whether that contests raises or reduces gridlock—and how that reality squares with expectations. But with primary races still just loosely taking shape and the very long history of early polls reflecting name recognition more than probabilities, that time isn’t now.

If you care about this news from a personal or societal standpoint, fine. If you actually enjoy sociological commentary on what George Soros’s passing the torch to his son might mean for this or that political cause, hats off to you. We aren’t saying any of this is trivial. But basing investment decisions on what you think today’s political stories might mean for elections that are well over a year (or two or three) away is sheer speculation. The problem is, markets don’t move on possibilities. They move on probabilities and how those probabilities relate to expectations. If you can’t assign probabilities and expectations aren’t clear, we think you have no rational basis to buy or sell a stock.

Another risk: Basing your decisions on things the market just doesn’t care about and doesn’t price in. Politics involves a huge array of things, some having zero to do with markets. On one side are the developments that actually affect the economy and the incentives to take risk and invest. That will generally include taxes, regulations and property rights. These things markets care about (although to varying degrees and often in counterintuitive ways). On the other side are all of the other things that might make some folks cheer and others’ blood boil but don’t actually change how the country does business. We classify all of this as sociology. And stocks have a long, long, long history of yawning at sociology. It just isn’t a market driver.

This is where the pitfalls for investors materialize. Politics is an emotional topic for many, and all too often that emotion can bleed into people’s investment decision making. We see it time and again. Opinions about the sociological side of things make people draw conclusions about the economic side of things, usually based on feelings—feelings that don’t match the economic reality. Seeing a party do something you love on Issue X doesn’t mean their economic policies will be some massive positive surprise that will send stocks soaring. Similarly, seeing a party doing something you detest on Issue Y doesn’t mean their economic policies will wreck markets.

Often it is a lot messier than that. Political parties and leaders globally have reputations for being pro- or anti-business. In most cases, neither is deserved, raising the risks of basing your expectations on traditional political biases. French President Emmanuel Macron ran twice as a pro-business independent, yet his government just implemented food price controls and now stands accused by investors of “stealth nationalization” of a healthcare company. The UK’s Conservative government—supposedly intellectual descendants of free-market heroine Margaret Thatcher—adopted energy price controls, raised taxes and is now reportedly pursuing its own food price controls. Meanwhile, the opposition Labour Party is hanging out a shingle as the pro-business alternative—surprising everyone who wrote them off as lurching far-left. And stocks? Rising, globally, on improving economic fundamentals and the simple reality that, for the most part, gridlock is either blocking big change or sanding down big initiatives.

If anything, all of this week’s noise is a strange blessing—it hides the reality of gridlock. International bluster makes it seem like big things are happening, which sets expectations low. Meanwhile, governments are doing very little to create winners and losers, which reduces uncertainty and lets everyone get on with the business of investing, buying and selling. Those boring, every-day transactions are where economic growth and investment returns come from. When no one notices gridlock, it becomes a wonderfully stealthy positive surprise. We think that is where we are today in pretty much all major developed economies worldwide. Take a breath and enjoy it.


MY COMMENT

AMEN......leave all the news drama out of your investing. You will be better off.

 

Making money today......always a good thing. Having just looked.......five stocks up and five down......but the up stocks are far outweighing the five down. The down at this moment....AMZN, HD, HON, GOOGL, and TSLA.

NVDA is now far and away the largest single holding in every one of my accounts. I am just going to keep riding that wave and see where it goes.

 

I LOVE contrary indicators......bull market extenders.

Consumer Sentiment Is Low—That’s a Good Sign for Stocks
When the public is gloomy, equities usually thrive.

https://www.morningstar.com/stocks/consumer-sentiment-is-lowthats-good-sign-stocks

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

"A Contrarian Indicator

Many adages are patently false. For example, tennis fans sometimes cluck about the peril of winning a set by the highest possible score of 6-0. Fly too high, suffer Icarus’ fate. To assess that conceit’s accuracy, researchers at Tennis Channel searched for all the matches that the world’s number-one women’s player, Iga Światek, has ever lost during her professional career after posting such a score. None.

2-0 lead the worst lead. It is demonstrably better than 1-0, although obviously worse than 3-0.

That said, the common claim that consumer confidence is inversely related to stock performance is correct. The chart below shows the monthly output for the University of Michigan’s Index of Consumer Sentiment, which addresses the public’s confidence in their financial futures, from the date of President George Herbert Walker Bush’s inauguration through the next three decades, until December 2018.

Consumer Sentiment: 1989-2018
(University of Michigan Consumer Sentiment Index, January 1989-December 2018)

The Track Record
Consumer sentiment plummeted during President Bush’s first two years, reaching its low point in October 1990. At that point, U.S. equities were down 15% on the year. Not entirely coincidentally, the very month that sentiment bottomed was also stocks’ nadir. In November, equities promptly resumed what would become the longest bull market in American history.

Consumer sentiment followed suit, peaking as the new millennium commenced. Then the technology-stock crash began. Consumer sentiment jaggedly declined until October 2008. Technically, that date did not signal the stock market’s floor—equity prices were slightly lower in March 2009—but it was mighty close. Suffice it to say that buying U.S. equities would have been an excellent idea.

Broadly speaking, the 30-year pattern matched what researchers had expected when entering the period. (By the late 1980s, the belief that consumer sentiment was a contrarian indicator had become widespread.) When people are deeply unhappy, stocks are likely to thrive, because the economic damage that bothers them has already occurred. A contented populace, on the other hand, is the investment equivalent of red sky at morning. Equity shareholders, take warning.

Why So Low?
With that precept in mind, let’s see how consumer sentiment has since behaved. The next chart repeats its predecessor while adding the post-2018 period.

Including the Recent Past
(University of Michigan Consumer Sentiment Index, January 1989-April 2023)

The relationship between consumer sentiment and equity prices has continued. After maintaining its level for another year, sentiment crashed upon the advent of the novel coronavirus, staged a fleeting recovery, and then plunged again in summer 2021 when inflation arrived in earnest. Consumer sentiment now hovers near its 35-year low.

Indeed, sentiment appears to have overshot the economic news. Inflation has been painfully high, of course. But job growth has been strong, and corporate bankruptcies few. Anecdotally, the public seems to be grumpier than the situation would warrant. I tested that notion by calculating the “Misery Index,” which measures the extent of economic suffering by summing 1) the unemployment rate and 2) the trailing 12-month change in the Consumer Price Index.

Misery Index
(Unemployment Rate + Trailing 12-Month Change in CPI, January 1989-April 2023)

The brief but severe pandemic-driven recession sent the index to its highest level since the early 1980s. Then, as employment picked up, inflation surfaced. But over the past several months, the index has subsided, as price increases have moderated while employment remains robust. At 7.4%, its April 2023 total was below the post-1989 median of 8.1%. As judged by the Misery Index, consumer sentiment today is below what one would reasonably expect.

Down in the Dumps
That leads to another question: Have Americans become more pessimistic? The previous two exhibits suggest that consumer sentiment has declined over time, even as the economic news has been similar. The first third of the evaluated period brought the technology-stock crash, the second third the global financial crisis, and the final third pandemic/inflation shocks. Those once-per-decade woes seem akin. Yet the level of consumer sentiment has gradually declined.

I also put numbers to that proposition, by:

1) Calculating the median figures for the Consumer Sentiment Index and Misery Index from January 1989 through April 2023.

2) Rescaling the monthly index values, so that each index’s median = 100.

3) Summing the two rescaled monthly amounts, then subtracting 200.

The result is the Adjusted Sentiment Index, a statistic of my invention.

An example will illustrate the point. In January 1989, the rescaled Misery Index was 120. The Misery Index was 20% above its median level. The public should therefore have been commensurately discouraged. However, that month’s Consumer Sentiment score was 10% above its median, at 110. The Adjusted Sentiment Index was thus 230 minus 200 = 30. The positive result indicates that people were relatively optimistic, given the prevailing economic conditions.

The Adjusted Sentiment Index for April 2023, in contrast, was a puny negative 37. Only during the global financial crisis has that figure ever been lower.

Public Discontent is Growing
(Consumer Sentiment Adjusted for the MIsery Index, January 1989 - April 2023)

The Silver Lining
The public’s unhappiness is difficult to comprehend. Two months ago, I discussed a similar finding from a University of Chicago National Opinion Research Center survey, in which 78% of respondents stated that they were not confident that their children’s financial lives would exceed their own. If that prediction proves correct, that would be a remarkable setback, as across the entire wealth spectrum every American generation has been wealthier than the one that preceded it.

This time, of course, could be different, but an argument of such improbability is worth considering only when advanced by a highly credible source. Yet as we have seen, the public’s financial judgment has been the direct opposite of “highly credible.” With their economic sentiment, the people have reliably and consistently been on the wrong side of future events.

Glum times are not much fun. If given the option, I would not choose that Americans be deeply pessimistic. There is, however, a silver lining for equity investors, in that such moods have typically presaged strong stock market gains."

MY COMMENT

For investors I love it when it is.......the best of times, and the worst of times. Sentiment is a perfect contrary indicator.......when not combined with some huge world wide disaster.

 

Which takes us to the FED later today.......I expect NOTHING to happen. BUT....I dont discount the ability of the tea leaf readers to find something horrible in the commentary. They make their living from the negative....even if it is fantasy.