The Long Term Investor

Was yesterday a single day event? At least according to the open today it was. Now...lets see how we close today.

At least.....as of this morning.....I got a good discount on my....TWO....shares of NVDA that I bought yesterday.

 

I did.....a "couple" exactly. Doing just two shares did not justify much thought about falling knives or additional short term dip in the stock. Those two shares are not going to break me....if they go down a bit more.

I am hearing a lot of rational and realistic voices today regarding the HYSTERICAL PANIC yesterday. It was simply....SILLY. I guess that is just how things are going to be in the...."modern age"....of investing. Panic and mass psychosis/hysteria......are now the norm in the short term.

 

Extremely moderate market action today....especially considering yesterday. Most of my non-tech stocks are down today. My tech stocks are UP in general although NVDA and PLTR are down a little bit.

Nasdaq, S&P 500 look to chip away at losses after DeepSeek-inspired tech rout

https://finance.yahoo.com/news/live...er-deepseek-inspired-tech-rout-143051690.html

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

"The Nasdaq and S&P 500 wavered on Tuesday, following a steep stock sell-off spurred by concerns of over-confidence in Big Tech's potential payoff from investments in AI. Investors also assessed a return to a tougher tone on tariffs from President Donald Trump, ahead of the start of a Federal Reserve meeting where the impact of his policies is likely to be discussed.

The tech-heavy Nasdaq Composite (^IXIC) gave up early session gains to fall 0.2%, coming off a closing loss of over 3%. The S&P 500 (^GSPC) fell slightly, while the Dow Jones Industrial Average (^DJI) hovered near the flat line.

Stocks began to chip away at losses booked in Monday's tech-led rout, which came as buzz built for Chinese startup DeepSeek's potentially cheaper AI model. That risk to US leadership in AI raised questions about whether chipmakers and other tech names call follow through on high earnings expectations.

Bellwether chip giant Nvidia (NVDA) briefly rose sligthly, having plunged 17% in the previous session to erase a record $589 billion in market value.

Meanwhile, the dollar (DX=F) strengthened after renewed tariff threats from Trump that revived worries about a trade war, already in focus after a brief standoff with Colombia. Trump said he wants universal tariffs "much bigger" than the 2.5% his incoming Treasury Secretary, Scott Bessent, reportedly plans to introduce gradually.

With that risk to inflation in mind, investors are keeping a watchful eye on the Fed's two-day policy meeting that begins later Tuesday. The central bank is expected to leave interest rates unchanged, given recent solid economic readings.

General Motors (GM) kicked off a fresh batch of key earnings updates, posting a quarter sales and profit beat as it turned the corner in its EV and China business. Boeing (BA) reported an annual loss of almost $12 billion in the wake of a strike and problems in key units.

With the DeepSeek risk in mind, focus is tighter on Big Tech earnings coming this week, with results from Apple (AAPL), Tesla (TSLA), Meta (META), and Microsoft (MSFT) on the docket."

MY COMMENT

I dont see anything FUNDAMENTAL about the big panic and drop yesterday. I doubt any of the big tech GIANTS will be impacted at all in terms of fundamental business results. It was simply a news driven PANIC.

I would expect that 6-12 months from now it is going to be a tiny little blip on a long term chart.

 

I like this little article and still agree....although I still believe we are looking at either a very good year.....or....or a negative year. One or the other....nothing in-between. I put the PROBABILITY on......a "good year".

Here’s my surprise prediction for the stock market in 2025 — and pessimists worldwide should pay attention

https://nypost.com/2025/01/27/business/ken-fishers-surprise-prediction-for-the-stock-market-in-2025/

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

"Last month, during the thick of the holidays, I found myself in a rare though not totally unprecedented predicament: I wasn’t sure which way to bet on the stock market in the year ahead.

In my December column, I told you there were three possible 2025 outcomes – all of them seemingly likely, and to a vexingly similar degree. I also told you that I’d come back to you when I could conclude which is, in fact, the most likely.

Well, I’m back – and with an answer that has surprised me in more ways than one.

Recall the three possible outcomes I had outlined: A minor decline, a small single-digit positive year, or another big year like 2023’s and 2024’s gains. I also said the latter was the least expected and would shock the most people because three big years in a row is legendarily rare.

Now, I dare say – brace for the legendarily rare. That’s because I believe that what is most likely is a stock market gain of 15% to 25% – maybe slightly bigger.

There is, however, also one major twist here that came even less expected for me – and which hence may be even more universally shocking. The twist is that European stocks should lead, quietly but strongly, as my forecast above is for the MSCI World index. The S&P 500 should lag Europe.

What has changed since year-end? As I said then, I would keep researching for signs of sentiment that would swing direction and that the swing would happen soon.

5
I also told you that US investors were optimistic while foreign ones were pessimistic. As it turns out, the overseas pessimism is extreme – vastly more depressed overall than Americans are optimistic. Hence, even a moderate year for foreign GDP, particularly European, would lead to huge positive surprise for them. They’re just more sensitive right now.

Decades ago, behaviorists proved American investors hate losses more than they love comparable sized gains – about 2 ½ times as much. My former research partner Meir Statman and I then deployed the same methodology showing UK and German investors are even more skittish about losses, by factors of 4 to 1 and 6 to 1, respectively.

Europeans are just more risk averse than Americans. I’ve long known that. Seemingly few remember it.

Now, I’ve discovered how much more that is the case right now than usual, as absolute Trump terror overwhelms Europeans — hugely more than was measurable in December. It is shockingly so, almost beyond words. Since the US election, they have become extraordinarily pessimistic. It is as if they were MSNBC commentators, only without the occasional smiles and jokes.


There are 3 possible 2025 outlooks for stocks — here’s how to find the right one

And, so, European stocks are too depressed and, also but less so, most non-US markets. So, most, but of course not all, are quietly beating the S&P 500 year to date. Britain, Germany and Israel have actually hit new all-time highs in 2025.

Coupled to that, inherent in the make-up of American versus foreign stocks, value stocks, meaning statistically cheaper on earnings and other measures than pricier growth stocks, should outshine growth stocks — for the first sustained time in years.

But why do I say it is “inherent”? In industry sectors America and growth stocks are intertwined. By market cap weighting almost all growth stocks are American. Tech and Communication Services total over 40% of the S&P 500, almost none of Europe.

Hence, when growth stocks like the Magnificent 7 lag the market, as evidenced by the Nasdaq lagging the S&P 500 even when both rise, value must be leading. Europe too! But this is more than just sectors. It is also country sentiment.

You doubt me? OK, but it is happening right in front of your eyes. Grab your iPhone. Use its normal Apple News stock market app to look up the S&P 500, the Nasdaq composite, and MSCI Europe. There it is. Europe leads.


And if you look at specific European countries you will see it broadly spread except Denmark (which is mostly Novo Nordisk weakness). Said otherwise, Europe is leading the S&P 500 which is leading Nasdaq.

While at it, I’ll add that I expect Emerging Markets stocks to lag, as they fall mostly across categories I expect to lag like utilities and struggling commodities.

5

So please – cheer up and mind your geography as you think about stocks this year. And Happy 2025."

MY COMMENT

I would definately like to see good growth and a good economy across the EU. It is good for them and also good for American business.

 

LOL.....today I am seeing more skepticism about DeepSeek. There is commentary that what they reported in NOT true...that they are using way more chips than they are saying and thus what they are doing is simply the "norm". Of course if this is true....it is partly because they cant admit that they are sourcing USA chips in violation of the law.

This stuff will all sort out over the next week or two and in the end I suspect it will turn out to be a big...nothing. Simply a HYSTERICAL OVERREACTION. BUT......no need to guess...time will disclose all that we need to know.

I think a big part of yesterday was....most likely...... a calculated CHINESE move to take a shot at our new government and our economy....and of course.....we reacted exactly as they expected.

 

In terms of the FED.....great news.

US consumer confidence deteriorates further in January

https://finance.yahoo.com/news/us-consumer-confidence-deteriorates-further-151517232.html

 

I do the same thing LORI.

I consider my big brokerage account as my..."emergency fund". I have no reason to want 3-6 months of cash siting and doing nothing. I like to keep all my money at work in the markets. I have been operating that way for a long time now.

Although If I was retired or close to retirement....and was relying on personal assets to fund my retirement.........I would keep at least 3 years of living expense money siting in CD's or other cash equivalent. I would not want.....to have my immediate retirement money in the markets and subject to short term market insanity or corrections or bear markets.

 

And....BOOM.....the markets are now all green as are NVDA and PLTR. We should be past much of the opening turmoil for today...although the West coast is now at 7:30AM and coming on board the markets.

 

Basically I think over the medium term we will see yesterday as the stock market equivalent of the.....DRONE HYSTERIA......that swept the East Coast a few weeks ago.....a lesson in....human mass-psychosis.

Not that it matters if I am right or wrong.....I did NOTHING yesterday, other than buy 2 shares of NVDA....as a token.....a symbolic....move to support the company and the markets.....as well as my pocket-book, long term.

Whether the DeepSeek news was....accurate, right or wrong, fraud, Chinese propaganda, or not.....beyond a few days it is not going to matter.

 

Here is where we are now.

Nvidia rises 2% in tenuous bounce Tuesday following largest market value loss in history

https://www.cnbc.com/2025/01/28/nvi...loss-in-history-but-its-a-fragile-bounce.html

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

"Nvidia rose on Tuesday, one day after the emergence of a cheaper, open-source artificial intelligence model from China caused the shares to post the biggest market value loss in stock market history.

Nvidia was last higher by about 2.5% in Tuesday trading. The stock has swung between gains and losses in morning trading after opening higher.

The stock plunged 17% on Monday and slashed more than $595 billion from the company’s valuation, the biggest single-day market cap decline on record.

Monday’s steep sell-off — which sent shockwaves across the broader tech industry, with the Nasdaq Composite dropping 3% — came as traders grew fearful that an AI stock bubble could burst due to the Chinese startup DeepSeek.

The S&P 500 and Nasdaq traded into the red following Nvidia on Tuesday as investors looked for a bounce in the AI bull market leader to restore confidence.

DeepSeek last week released an open-source model that reportedly outperformed OpenAI’s in different tests. The company also said the initial version of this model cost less than $6 million to build — a fraction of the billions of dollars major U.S. tech companies are spending on AI.

To be sure, Nvidia — which has been the posterchild of the U.S. AI trade due to its high-powered chips — called DeepSeek’s R1 model “an excellent AI advancement.”

“DeepSeek’s work illustrates how new models can be created using that technique, leveraging widely-available models and compute that is fully export control compliant,” an Nvidia spokesperson told CNBC on Monday.

Additionally, most Wall Street analysts stood by Nvidia after the sell-off, with none of them downgrading the stock thus far. Some also see the DeepSeek developments as a long-term positive for AI.

“We think investors need to differentiate between the impacts around potential benefits and drawbacks of DeepSeek for the software industry. More powerful LLM models that can run at a fraction of the original cost estimates (if confirmed) will mean that genAI adoption should come easier … and hence, faster and broader across the software universe,” wrote Barclays analyst Raimo Lenschow.

To be sure, while Morgan Stanley’s Joseph Moore kept his overweight rating on the stock, he did trim his price target to $152 from $166 on Tuesday.

“The DeepSeek release highlights evolutionary innovations in AI, some of which may be deflationary. That said, the stock market reaction is probably more important than the cause, and could bring further export controls or reduce spending enthusiasm; trimming PTs but remain positive,” he said.

The Wall Street endorsements, however, failed to lift the stock. Nvidia shares are now down 23% from an all-time high reached earlier this month."

MY COMMENT

To continue my......"SPECULATION"....I also think the announcement on Sunday evening was timed perfectly to impact Monday markets here in the USA.....and....was timed to impact the big earnings week for big tech that is happening this week and next week.

My default mode is to.....NEVER....trust the Chinese and to.....NEVER.....underestimate the fact that the Chinese communist government is totally in control of....and embedded.....in any and every company in China.

 

Not that this needs repeating:

Experts urge caution over use of Chinese AI DeepSeek
Oxford professor advises against putting private data on platform in case it could be shared with Chinese state

https://www.theguardian.com/technol...-urge-caution-over-use-of-chinese-ai-deepseek

This is a good article and worth reading....I am just too lazy to post the whole thing.

 

I have not looked at my actual account yet.....but ALL my stocks are up right now except for those that are non-tech....COST, HD, and CMG. Looks like we have shrugged off the maniacal panic of yesterday.

Amazingly.......I am not even seeing a lot of content about DeepSeek today in the media. Of course there is some....but not the massive focus that you would expect after yesterday.

 

I tend to be a skeptic about the DeepSeek news....that is my nature. As i said.....right or wrong.....it really does not matter much.

BUT....here is a view that I am seeing mentioned today.

DeepSeek’s meteoric rise could be short-lived because of China’s data policies, history of lies

https://www.firstpost.com/tech/deep...s-data-policies-history-of-lies-13857069.html

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

"Chinese AI app DeepSeek has stunned the tech world, quickly climbing to the top of the App Store and challenging established players like Apple Intelligence, Google Gemini, and OpenAI’s ChatGPT.

Within just a week of launching its new large language model (LLM), DeepSeek has garnered massive attention, marking a significant shift in the generative AI landscape. However, as quickly as it has captured the spotlight, DeepSeek could face hurdles that might stifle its growth, particularly due to China’s strict data policies and the country’s history of misleading consumers and at times entire countries about the true nature of its tech products.

Cheaper price point attracts a lot of attention

DeepSeek, much like ChatGPT, functions as a chat application, where users can ask questions and perform tasks, receiving responses based on a vast language model. What sets DeepSeek apart is how it managed to release its model at a fraction of the cost of its competitors.

The app, built on the DeepSeek-V3 LLM, was made available as an open-source model, which allows anyone to download and use it. With limited resources, including restricted access to high-end AI chips, DeepSeek’s development team had to get creative.

By making their model more resource-efficient, they were able to offer an effective AI at a significantly lower price—reportedly only $5.58 million, compared to billions spent by Western firms like OpenAI and Microsoft.

This innovative, low-cost approach has sent shockwaves through the AI market, with investors particularly rattled. Major companies, including Nvidia, saw massive losses, as DeepSeek demonstrated that AI could be developed efficiently without the need for expensive hardware. However, while DeepSeek’s cost-effective model has made waves, it’s unlikely to sustain its dominance in the long run.

The data privacy dilemma

The main concern surrounding DeepSeek revolves around the company’s data collection and its ties to China. DeepSeek’s privacy policy clearly states that all user data, including conversations, search histories, and uploaded files, are stored in China. Users can delete their chat history, but there are worries about the volume of data collected automatically, including device information, IP addresses, and even keystroke patterns.

While many AI platforms collect similar data, the issue with DeepSeek is that it sends this information back to China, where it could be subject to the country’s strict cybersecurity laws and make its way to ther Chinese Communist Pary. These laws require companies to cooperate with national intelligence efforts, raising serious concerns about government surveillance and the potential for data misuse.

Moreover, DeepSeek has faced accusations of censorship, particularly on sensitive topics like the 1989 Tiananmen Square massacre. This raises red flags about the platform’s potential to manipulate information and subtly push Chinese government narratives, further intensifying geopolitical concerns.

Global pushback

While DeepSeek’s rise has certainly caught the attention of the AI industry, it faces significant resistance from the West, especially the United States. The US government has long been wary of Chinese tech companies, citing national security risks. Past examples, such as the ban on Huawei and ongoing issues with TikTok, underscore the challenges that Chinese companies face in gaining a foothold in Western markets.

If DeepSeek continues to grow in prominence, it’s likely that it will attract regulatory scrutiny in the US and other parts of the world. This could lead to investigations and potential bans, much like the treatment of other Chinese tech giants like TikTok and Huawei.

The US and other Western nations are already suspicious of Chinese tech, and DeepSeek’s close ties to the Chinese government could make it an easy target for regulators. Even if the company doesn’t face an outright ban, its ongoing success may trigger calls for investigations into data privacy violations and security risks. This could ultimately dampen its chances of long-term success in Western markets.

Chinese startups and a history of misleading claims

DeepSeek isn’t the first Chinese tech company to face criticism over its transparency and data practices. In recent years, Chinese startups and the government have often been accused of misleading users about the nature of their products, particularly concerning data privacy and security.

From Huawei’s controversial relationship with the Chinese government to the ongoing concerns about TikTok’s data harvesting, there’s a growing distrust of Chinese tech products in the Europe and the US.

Experts are also wary of one more factor — the veracity of DeepSeek’s claims about the costs of training its AI models, and just how many of the H800 processors they used to train their models.

This history of misleading claims has cast a shadow over DeepSeek, with many experts recommending taking a cautious approach about the potential risks involved in using the app. The lack of transparency regarding DeepSeek’s data policies, coupled with concerns about censorship and government control, makes it difficult for many to fully trust the platform. As with other Chinese tech products, the question remains whether DeepSeek can continue to thrive in the face of mounting scrutiny or if its rise will be short-lived, eclipsed by the same geopolitical and regulatory challenges that have hindered other Chinese tech giants.

What’s next for DeepSeek

DeepSeek’s rise has undoubtedly shaken the AI industry, proving that AI can be developed more cheaply and efficiently than previously thought. However, its ties to China, concerns about data privacy, and the potential for censorship make its long-term success uncertain.

While it has caught the attention of global investors and users, the road ahead is likely to be bumpy, with regulatory scrutiny and geopolitical tensions threatening its growth. The history of Chinese tech companies being scrutinised for misleading practices only adds to the uncertainty surrounding DeepSeek’s future in the global market."

MY COMMENT

Ok this topic is...beat to death. I am now moving on. I think we all know about as much as anyone. We will see over time if this is.....DeepSeek....or.....DeepFake....and/or....DeepSpy. And.....either way...... it will probably end up as a meaningless little stock market event.