The Long Term Investor

NEVER MIND.....my prior statement about not adding more NVDA. I just sold ALL shares of TSLA......and put the entire proceeds into NVDA. Since the TSLA was only a tiny bit more than 1% of my entire portfolio....it is not like this as a HUGE gamble.

I decided that I like the future for NVDA more than I like TSLA at the moment. Of course....this is not an all or nothing event since I can always buy TSLA in the future if I wish to get back in.

I am posting this.......since I make a COMMITMENT on here......to post ALL moves that I make on the day I make them.

 

I have a nice gain going on so far today. Since I sold TSLA.....I have a single stock that is down today.....NKE.

I have no further plans to do any moves in my portfolio......this year....or any time in the future. i want to sit and wait and watch.

 

ANOTHER....nice gain for me today. I also beat the SP500 by 0.55%.

I had a single stock down at the close......NKE. TSLA was down at the close but I sold all shares earlier in the day.

 

Here.....is the Microsoft earnings today.

Microsoft earnings top estimates as Azure revenue growth declines

https://finance.yahoo.com/news/micr...-azure-revenue-growth-declines-200907418.html

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

"Microsoft (MSFT) reported fiscal fourth-quarter earnings on Tuesday that topped Wall Street's estimates for earnings per share and revenue.

The tech giant reported Azure and other cloud services revenue growth of 26% year-over-year for the quarter, down 1 percentage point from the quarter prior. Azure growth has declined sequentially every quarter since at least Q3 2022 and remains in investor focus as companies trim capital expenses amid rising interest rates.

Here are the most important numbers from the report compared to what analysts were expecting, as compiled by Bloomberg.

• Revenue: $56.2billion vs.$55.5 billion expected ($51.87 billion in Q4 2022)
• Adj. EPS: $2.69 vs. $2.55 expected ($2.23 in Q4 2022)
• Productivity and business processes revenue: $18.29 billion vs. $18.1 billion expected ($16.6 billion in Q4 2022)
• Intelligent Cloud revenue: $23.99 billion vs. $23.8 billion expected ($20.8 billion in Q4 2022)
• More personal computing revenue: $13.9 billion vs. $13.58 billion expected ($14.46 billion in Q4 2022)

Microsoft stock had rallied into the report, rising more than 43% this year. Shares in after hours trading fell about 2% following the earnings release.

Microsoft has been at the forefront of the AI conversation since announcing a $10 billion investment in the ChatGPT creator, OpenAI, in January. The company has integrated AI into its Bing search product and most recently announced pricing for its new AI product that will integrate into Microsoft 365 products.

The product, dubbed Copilot, is said to be able to summarize users' unread emails, reformat PowerPoint bullets, and write drafts based on outlines on demand, among other functions. Wall Street was bullish on the product's $30 per month pricing, with several analysts boosting their price targets on the stock after the news.

Microsoft CEO Satya Nadella is slated to speak to investors at 5:30 p.m. ET.

“Organizations are asking not only how – but how fast – they can apply this next generation of AI to address the biggest opportunities and challenges they face – safely and responsibly,” said Satya Nadella, chairman and chief executive officer of Microsoft in the release. “We remain focused on leading the new AI platform shift, helping customers use the Microsoft Cloud to get the most value out of their digital spend, and driving operating leverage.”"

MY COMMENT

A clear across the board BEAT on earnings by Microsoft today. Revenue....EPS....Cloud Revenue, ......Personal Computer revenue.....Productivity and Business Processes.....ALL are BEATS.

As to Azure growth of +26%.......just BS to complain about this sort of growth. I DEFY ANYONE to show me any difference between 26% growth or 27% growth in Azure.....one percent is meaningless.

We will find out tomorrow what the so called experts and the professional traders think. Probably......a day or two hit on the stock.....for ZERO REASON.

 

HERE is GOOGLE.

Alphabet earnings: Google parent beats top and bottom line expectations, stock pops more than 3%

https://finance.yahoo.com/news/alphabet-earnings-163119905.html

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

"Alphabet (GOOG, GOOGL) reported its Q2 2023 earnings on Tuesday after market close, beating top and bottom line estimates. The stock popped more than 3% in after-hours trade.

Alphabet came in with $74.6 billion in revenue, beating expectations of $72.75 billion, as well a beat on earnings per share of $1.44 actual versus $1.32 expected.

Within that revenue beat are key wins, including a beat in Google ad revenue, signaling the company's strength and that the digital ad market may be picking up. The cloud numbers are also key, especially since in Q1 2023, Google Cloud turned profitable for the first time, with the division growing by 28%.

Additionally, the company announced a key leadership change – CFO Ruth Porat will ascend to the newly-created role of President and Chief Investment Officer.

Here are the key metrics that Alphabet reported compared to Wall Street's estimates, as compiled by Bloomberg:

Revenue: $74.6 billion actual versus $72.75 billion expected

EPS: $1.44 actual versus $1.32 expected

Google ad revenue: $58.14 billion actual versus $57.45 billion expected

Google Cloud revenue: $8.03 billion actual versus $7.83 billion expected

Operating income: $21.84 actual versus $19.94 billion expected"

MY COMMENT

Just like Microsoft a CLEAR BEAT in EVERY category. We are off to a big season for the BIG SEVEN.

BUT.....never underestimate the ability of the financial media and the negative ninny's to find something to gripe about when it comes to earnings.

So glad to own both of these companies.

 

The companies above are both KILLER companies. I consider BOTH as CORE HOLDINGS to the point that I double and triple up on them.......with my stock holdings and both my SP500 Index and Fidelity Contra fund.

These companies represent the.....BEST of the BEST.....in the world. That is the simple reason why I own both of them. I am glad to see GOOGLE doing well.....they have been taking some flack lately in the financial media. I personally consider Microsoft the best of the two......love their current management and the breadth of their product and business categories.

 

HERE is the TRUTH about the MSFT earnings:

"Microsoft reported its strongest financial quarter ever.

The company posted $56.2 billion in sales and $2.69 earnings per share in the three-month period ending June 30, smashing consensus estimates of $55.5 billion of revenue and $2.55 earnings per share, according to FactSet.

Microsoft shattered several of its financial records during the most recent quarter, as its gross sales and net income ($20.1 billion) were both all-time bests, while its EPS was the second-highest ever.

Overall, Microsoft’s top line swelled by 21% over the last 12 months while its bottom line spiked by 8%; profits and sales grew by 10% and 6% from last quarter, respectively.

Largely driving the gains was a 21% year-over-year in operating income in its intelligent cloud segment including much of Microsoft’s current AI offerings."

https://www.forbes.com/sites/dereks...highest-quarterly-sales-ever/?sh=3f8027314cb8

MY COMMENT

SORRY......not going to lose any sleep over the......"highest quarterly sales ever"........and the "strongest financial quarter ever". The media and the "professionals" are......SIMPLY INSANE.....to disrespect these earnings.

 

"AS USUAL.........HERE is my current PORTFOLIO MODEL.

I am once again posting my PORTFOLIO MODEL. My initial criteria to start the process to consider a business are.......BIG CAP, AMERICAN, DIVIDEND PAYING, GREAT MANAGEMENT, ICONIC PRODUCT, WORLD WIDE LEADER IN THEIR FIELD, LONG TERM HORIZON, etc, etc, etc.

PORTFOLIO MODEL

"Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 60% of the total portfolio and the fund side at about 40% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing.

As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 10 stock portfolio.At the same time the funds double and triple up on my individual stock holdings............that I consider the BEST individual businesses in the WORLD.

STOCKS:

Alphabet Inc
Amazon
Apple
Costco
Home Depot
Honeywell
Microsoft
Nike
Nvidia


MUTUAL FUNDS:

SP500 Index Fund
Fidelity Contra Fund

CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (73). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)"

MY COMMENT

This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my ten stock holdings there is MUCH doubling and tripling up on the stocks. THAT is INTENTIONAL. I strongly subscribe to the view of Buffett and some others that TOO MUCH diversification kills returns. I do NOT believe in the current diversification FAD that most people seem to now follow.......or think they are following. I DO NOT do bonds and think the current level of bonds held by younger investors.....those under age 50.....is extremely foolish.I DO NOT do market timing or Technical Analysis."

#16107

 

YES.....I am now a CHIPPIE. Kind of like a financial........Swiftie.

My thought process.....well....for what it is worth here it is.

I have owned this stock for a while now.....so I have been following it. I believe they are on the way to $600 per share......and beyond.....soon. I also believe they are on the way to a stock split within 6-12 months. I have not seen this sort of EXPLOSIVE growth by a tech company since I bought my shares of MSFT in about 1990.

I see this company as the equivalent to what I saw happen with MSFT over the ten years from 1990 to 2000. That purchase of MSFT in about 1990 was a life changing purchase for me.....I see this company and the opportunity to participate over the next 5-10 years as the same potential.

They have come to totally dominate the chip industry over the past 5 years in particular. I like their involvement in AI....gaming....self driving vehicles....etc, etc, etc.. I LOVE their FOUNDER management. Their recent guidance has been off the charts.....I have NEVER seen a company give such extreme positive guidance.......EVER. With the AI boom they are positioned to be a dominant player for at least a decade.

As to TSLA......I like the company.....but even with the recent gains I was just about flat....after the losses last year. It was my smallest holding....about 1% of portfolio value.......and something I could sell to raise some money with little capital gains tax. In all likelihood a lateral move.

TSLA being a relatively small position with little gains.....I simply made the mental calculation that the potential to gain in NVDA with those funds over the next 5-10 years......"PROBABLY"....significantly outweighed what I would gain in TSLA.

If I regret selling my small position in TSLA.....I will have money in my budget next year (five to eight months from now) and can always add it back in at about the same level.....1% of portfolio value.

I see NVDA as a long term.......high momentum......investment.

AND.....the number one answer......NO GUTS NO GLORY.

 

To add to the above.....I have many mature companies in my portfolio.....NKE....COST....HON....HD....AMZN....and the other tech companies that I own. I am willing to take this risk to inject a bit of youth into my holdings.

Time will tell....if my view of the POTENTIAL and PROBABILITY is accurate.......or if I am simply chasing returns in hind-sight.

It is ALSO a reflection of my belief in the current young BULL MARKET and the next few years for the markets.

My personal investing style is moderate aggressive....for the long term. I have NEVER been afraid of calculated risk. I have described many times on here scraping together all liquid cash....$80,000.....and going all in all at once on MSFT......1000 shares about 1990. I dont consider this move as even remotely as risky.

Plus.....number two answer......it will make for some FUN on the thread.

 

Well for me it is the MAGNIFICENT FIVE......since I sold TSLA and will never buy META.

ACTUALLY......this was a pretty sudden decision. It was driven by all the above......but.....it happened today when I was looking at my account results before the close. I was looking at the ten holdings in my account and the dollar figure for each. Nine of them were significant.....and then....there was poor little TSLA as only about 1% of the entire portfolio.....a significantly smaller number. It got me thinking whether it was gaining me anything to hold a stock that was only 1%.

I decided it really did not have much potential compared to putting that money to work in my largest holding.

I was not thinking this....but.....I always say there are a number of stocks that I will NOT buy.......airlines, auto companies, insurance companies, drug companies, banks, financial companies, oil companies. They have just NEVER preformed for me in the distant past.. So I guess when push came to shove....I was willing to give up the auto company in favor of boosting a tech holding.

I do see TSLA as more than an auto company.......and still see MUSK as a visionary leader. I would love to see him put all of his companies other than TSLA under the "X" brand as sort of an Elon Musk Berkshire Hathaway......SpaceX, Starlink, The Boring Co, Twitter, and his future payment company and his future AI company, etc, etc.

I dont think TSLA is going to run away from me...so....I will just see how this all plays out.....at WORST.....it will just be a lateral move that just keeps about the same value one way or another.

 

This investment was done according to what I consider the PROBABILITIES.

1. Sell one holding and immediately reinvest the money so that it is continuously exposed to the markets.

2. Stay FULLY INVESTED all the time with no gaps.

3. Go all in all at once rather than trying to time the market or wait for some mythical entry point.

4. Be decisive....selling and buying.

5. Let the winners run as they wish.

 

One last comment:

As I was thinking about doing this trade I did consider what I believe is the most significant risk. That being that NVDA has set the bar so high in their forward guidance that the market expectations for them in the coming earnings report are off the charts and unattainable.

Thus.......earnings can not possibly beat or meet those outrageous expectations guaranteeing that the stock will drop significantly when the upcoming earnings are reported. Thus......also....taking much of the momentum away from the stock.

I accept this risk and will simply hold through it if this happens. This is NOT a short term trade.

 

I have been clear on Amazon in the past and my view is still the same. I think the company is experiencing a management failure. I put most of the blame on their performance lately on the new management....which at this point is not so new. I think the current management is overwhelmed and incompetent.

I have no plans to sell my Amazon stock.....but.....I am calling it a "watch" for the next year or two to see if they can make progress and return to their old ways.

It is often a dangerous time for a booming company when the change over from founder management happens.

The company is doing pretty well YTD.......+50.47%. Other performance data....one year +12.47%....five year +42.12%. So stock is up about 8% per year long term. Of course this does NOT include dividends and compounding of those dividends.

EDIT: My choice is to own BOTH Nvidia and Amazon.