The Long Term Investor

LOL.....I love it.....listening to Varney in the background as the guest explains that PLTR is the stock that....."Wall Street analysts hate".....they have called the buyers of this stock for a couple of years...."Dumb Money".

Thanks Wall Street MORONS....as a "dumb money"...."little person".....I have made 300% to 400% on that stock in most accounts....during that couple of years.

 

I just looked and I actually have a GAIN today. Compliments of MSFT, NVDA, COST, and HD.

Once again.......an indication of the POWER of a portfolio as a whole....versus.....just focusing on individual stocks.

 

I also see that much of the market wide loss today has now strongly moderated. The DOW and SP500 are now GREEN.....and...the NASDAQ is only down by (-0.21%).

I like it....moving in the right direction.

 

The.....DUMB MONEY IDIOTS.....in PLTR....up by +503% in the past one year.

Of course, this sort of growth in the stock price is unsustainable long term.

The primary thing it has done is give massive name recognition to this business. it is like a massive amount of FREE advertising of this companies services. Now it is up to company management to take advantage of and leverage this......free gift.

From what I have seen with the management of this company....they are doing a very good job. With a young company like this one MANAGEMENT is critical.

HEY ZUKODANY.......how are you doing in general and with your PLTR? You were the earliest buyer of the stock on this board. what is your current view and plan for PLTR stock?

 

Ok....time to leave the markets alone and let them....do their thing.

 

Still moving forward....as ALL the averages are NOW GREEN.

Perhaps the......"DUMB MONEY"......"LITTLE PEOPLE"....do actually have some power and ability to move the markets.

 

As if COMMON SENSE did not already tell us this was true. BEWARE.....of this company and AI product at all costs.

DeepSeek coding has the capability to transfer users' data directly to the Chinese government

https://abcnews.go.com/US/deepseek-...sers-data-directly-chinese/story?id=118465451

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

"DeepSeek, the explosive new artificial intelligence tool that took the world by storm, has code hidden in its programming which has the built-in capability to send user data directly to the Chinese government, experts told ABC News.

DeepSeek caught Wall Street off guard last week when it announced it had developed its AI model for far less money than its American competitors, like OpenAI, which have invested billions. But the potential risk DeepSeek poses to national security may be more acute than previously feared because of a potential open door between DeepSeek and the Chinese government, according to cybersecurity experts.

Of late, Americans have been concerned about Byte Dance, the China-based company behind TikTok, which is required under Chinese law to share the data it collects with the Chinese government.

With DeepSeek, there's actually the possibility of a direct path to the PRC hidden in its code, Ivan Tsarynny, CEO of Feroot Security, an Ontario-based cybersecurity firm focused on customer data protection, told ABC News.

"We see direct links to servers and to companies in China that are under control of the Chinese government. And this is something that we have never seen in the past," Tsarynny said.

Users who register or log in to DeepSeek may unknowingly be creating accounts in China, making their identities, search queries, and online behavior visible to Chinese state systems.

Tsarynny says he used AI software to decrypt portions of DeepSeek's code and found what appeared to be intentionally hidden programming that has the capability to send user data to one website: CMPassport.com, the online registry for China Mobile, a telecommunications company owned and operated by the Chinese government.

China Mobile was banned from operating in the U.S. by the FCC in 2019 due to concerns that "unauthorized access to customer…data could create irreparable damage to U.S. national security." It was delisted from the New York Stock Exchange in 2021 and added to the FCC's list of national security threats in 2022.

John Cohen, an ABC News contributor and former acting Undersecretary for Intelligence and Analysis for the Department of Homeland Security, said DeepSeek is a most blatant example of suspected surveillance by the Chinese government.

"China Mobile is part of a growing list of Chinese-based technology companies that have been determined to pose a risk to U.S. national security," Cohen said .

"National security officials always suspect that technology sold by a Chinese-based company has a backdoor making that data accessible to the Chinese government. In this case, the back door's been discovered, it's been opened, and that's alarming."

"It's alarming to say the least," Rep. Josh Gottheimer (D-NJ), who serves on the House Intelligence Committee, told ABC News.

"I think we should ban DeepSeek from all government devices immediately. No one should be allowed to download it onto their device. And I think we have to inform the public," Gottheimer said.

DeepSeek's terms of service specify that they "shall be governed by the laws of the People's Republic of China."

DeepSeek's privacy policy discloses that they collect all kinds of data including chat and search query history, keystroke patterns, IP addresses, and activity from other apps.

However, experts say it's impossible to know what of this data DeepSeek is potentially sending to China Mobile.

Tsarynny's analysis found that DeepSeek's web tool creates a digital "fingerprint" for each unique user, which has the capability to track users' activity not only while they use DeepSeek's website, but all web activity going forward.

Rep. Raja Krishnamoorthi (D-IL), the top Democrat on the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, said the possibility of covert collection of DeepSeek user data by the Chinese government is "very disturbing."

"I think there's absolutely the intention by the CCP to collect data of Americans and user data worldwide," Krishnamoorthi told ABC News. "This pattern of data collection is really familiar to people who study the use of CCP controlled-company apps and you use those apps at your own risk."

DeepSeek, its hedge fund founder High-Flyer, and China Mobile did not respond to multiple requests for comment."

MY COMMENT

The threat to TRASH TikTok here in the USA....another Chinese spy tool....is directly linked to the sudden appearance of DeepSeek...in my opinion. it is a replacement vehicle to SPY on our people and country in case TikTok is banned.

In fact ....the threat from DeepSeek is much worse......once embedded around the world it will be impossible to get rid of.

YES....we are MORONS.

 

A nice medium gain for me today....as we slowly move away from the INSANITY of Monday. I was helped by NVDA, MSFT, HD and COST today. I also beat out the SP500 today by....0.56%.

Another day, another dollar.

 

With the complete dominance of the financial media today with negative GOOGL content....here is something that actually might matter.

Google opens its most powerful AI models to everyone, the next stage in its virtual agent push

https://www.cnbc.com/2025/02/05/goo...0-its-most-powerful-ai-model-to-everyone.html

"Key Points

• Google on Wednesday released the Gemini 2.0 artificial intelligence model suite to everyone.
• The continued releases are part of a broader strategy for Google of investing heavily into “AI agents” as the AI arms race heats up among tech giants and startups alike.
• Meta, Amazon, Microsoft, OpenAI and Anthropic have also expressed their goal of building agentic AI, or models that can complete complex multistep tasks on a user’s behalf."

 

Tomorrow is AMZN earnings day. Lets hope we dont encounter some mini-black-swan that makes them irrelevant.

 

I have seen the media and financial advisors recommending that EVERYONE own a percentage of international stocks and funds for many decades. At one time I did own some Dodge & Cox International fund......way back in the 1990's. After a few years I dumped it to totally focus my money on AMERICAN companies. I never saw any reason to own the International fund when I looked at my American versus International results......especially in terms of my BIG CAP focused.....GROWTH COMPANY....lifetime investment strategy.

I continue to totally IGNORE any international stocks or funds in favor of AMERICAN companies that DOMINATE around the world....and....are therefore basically International companies.

Is It Time to Ditch International Stocks?

https://alphaarchitect.com/2025/02/is-it-time-to-ditch-international-stocks/

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

"Raise your hand if you’re tired of hearing that “this year will be the year for international investing!” ‍♂️

Since 2010, the S&P 500 has beaten the International Developed market in all but three years (2012, 2017 & 2022). This led the U.S. market to outperform International Developed by an astounding 8.14% compounded per year. Wowza! Talk about pain if you’re a global investor.


Source: YCharts. 01/01/2010 – 12/31/2024. The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged and do not reflect management or trading fees, and one cannot invest directly in an index.
So what gives? What could possibly make international investing appealing in this day and age?

Sure, we could talk about U.S. market concentration and valuation concerns (which are real). Or we could highlight the potential diversification benefits of investing internationally. But a more compelling question to tackle is: “How did the U.S. market actually realize its astonishing relative outperformance?” The answer might offer clues about whether U.S. dominance is just inevitable or if diversifying overseas is the more attractive proposition.

Let’s dive in.

Theoretically, a market could go up for two reasons:

1. Valuation repricing: Investors bid up prices. Even if earnings remain steady, valuations rise as demand increases.
2. Better-than-expected fundamentals: Earnings increase.

For international investing, there’s one additional factor:

1. Currency Effects: A rising dollar is bearish for foreign investments, while a falling dollar provides a tailwind for international assets.

Let’s examine each of these and determine how each of these affected the return gap between U.S. and international stocks.

Valuation repricing

When comparing U.S. outperformance to international markets, it’s tempting to assume fundamentals played the only role. But is that what actually happened?

Let’s ask the quants.

According to AQR’s Cliff Asness, Antti Ilmanen and Dan Villalon, U.S. outperformance over international developed from 1990 through 2022 can mostly be attributed to valuation expansion. In fact, richer valuations account for about three-quarters of the U.S.’s relative outperformance over international, while the rest can be attributed to fundamentals – or maybe just pure luck! Over this time period, U.S. stocks appreciated mainly because people were willing to pay more for the same earnings, not necessarily because of superior fundamental growth.1 Therefore, betting 100% of a portfolio on U.S. stocks is essentially a bet on unending optimism. A bold bet if you ask me!


Source: Asness, Cliff, Ilmanen, Antti and Villalon, Dan. “International Diversification – Still Not Crazy After All These Years.” The Journal of Portfolio Management 49, no. 6 (June 2023).
Still, we have to give it to the U.S. I’d rather have my assets appreciate through multiple expansion than not at all.

US 1 – International 0

But I hear you. Obviously, not all the return differential came from multiple expansion. In fact, about 1.2% of the return differential cannot be accounted for by multiple expansion. Yeah, maybe it’s not statistically insignificant… But it’s definitely economically significant!

Let’s explore one plausible explanation behind this 1.2% (as noisy as it may be).

Earnings growth story

Multiple expansion seldom happens randomly. More often than not, fundamentals catalyze valuation revisions. So let’s look at the story behind earnings growth.



Source: Thomas, Callum. Earnings: USA vs Rest of World. January 8, 2025. Topdown Charts.
As you can see, starting around 2012, U.S. earnings began diverging from their international counterparts, and while regulatory and fiscal policy in the U.S. might have contributed to this differential, the concentration of stellar performers further skewed the numbers. Maybe these two things are related, maybe not, but at the end of the day, one thing is clear: U.S. growth left international investors in the dust.

US 2 – International 0

Should we then bet on the horse of U.S. growth dominance? No clear answer here, but at least historically, periods of abnormal growth have been followed by more moderate (or negative) periods of growth. After all, it’s pretty hard for things to keep going up indefinitely!

Let’s examine one last factor to this return differential.

Currency effects

Investing internationally is an implied bet against the U.S. dollar. When an investor buys an international asset, they must sell their U.S. dollars (forming an implied short position) and buy the local currency to purchase said security (establishing an implied long position).

So how has this bet paid off post-GFC?

Horribly! Once again, things did not pay off for international investors.


Source: YCharts. 01/01/2010 – 12/31/2024. The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged and do not reflect management or trading fees, and one cannot invest directly in an index.
Looking at the dollar index, from January 2010 to December 2024, the USD realized a 39.33% return against a basket of other major currencies.

US 3 – International 0

Before deciding whether USD dominance is a trend or a fad, let’s analyze the two events that stand out from this chart:

• 2014: The dollar strengthened as the Fed announced interest rate hikes following a strong economy while most other central banks lagged.
• 2022: A strong inflationary shock forced the Fed into a hiking cycle. This, along with perceived weakness in Europe threatened by the Russia-Ukraine war, fueled USD demand.

These two events alone account for most USD gains since 2010! And they both have one big common denominator: Interest rate policy.

While uncovered interest rate parity would dictate that lower yielding currencies should appreciate over time, and higher yielding currencies should depreciate over time, this has not been historically true. In fact, higher yielding currencies have tended to appreciate over time as investors reach for yield, while lower yielding currencies have tended to depreciate as investors flock to higher interest rate currencies. Hence, carry trades are possible! Therefore, changes in interest rate policy may be predictive of future currency moves. All else equal, higher yielding currencies tend to appreciate, and lower yielding currencies tend to depreciate.

Importantly, while the U.S. central bank adopted a significantly more hawkish stance in the mid 2010’s, most other major central banks only began hiking until recently. This likely served as a strong tailwind to the dollar post-GFC. But should we expect this to repeat? Maybe, perhaps not. But let’s at least examine what interest rates are doing today.

Most notably, the Bank of Japan finally reversed its negative interest rate policy just last year (!) and signaled a willingness to continue its rate-hiking cycle. And though the European Central Bank has continued pursuing an accommodative monetary stance, the incoming Trump administration has also been vocal in its desire to lower interest rates. The main difference being that the U.S. is starting from a higher level and has much more “room” to drop.

All this could serve as a potential mean-reversion trigger for the U.S. dollar that may take years to unwind.

As always, currencies can be tricky, and macro predictions are a fool’s errand! Not to mention, trade balances, potential tariff wars, inflation and purchasing power differentials will most likely also influence future dollar moves (either up or down). Having said that, there are some legit reasons to believe that the dollar has headwinds ahead.

Conclusion

Where do we go from here?

To make a soccer analogy, clearly, this return differential has not resembled the Argentina (3) – France (3) 2022 World Cup final. It’s probably closer to the Brazil (1) – Germany (7) 2014 World Cup fiasco. The U.S. clearly trounced most other countries for over a decade!

But the question is not “what do I wish my portfolio would have looked like during that period?” It’s “what is the best evidenced-based decision I can make for my portfolio going forward?”

Investing 100% in the U.S. might make sense if:

1. You expect the U.S. to keep getting pricier than other markets, indefinitely.
2. You expect the U.S. to continue growing earnings at abnormally higher rates, indefinitely.
3. You expect the U.S. dollar to trounce other currencies, indefinitely.

If not, then international investing surely does look appealing, at least from a diversification perspective.

So what can investors do based on this information?

Here are three options:

1. Stay 100% U.S.

If you believe U.S. stocks will keep crushing it, this is your move. But keep in mind: U.S. stocks are pricey and concentrated—both of which are serious headwinds to overcome. Did I mention this is a pretty bold strategy?

2. Go 100% International

Expecting U.S. valuations to mean-revert? This is your play. But remember, 10 years ago the U.S. was already the pricier option. Valuation-based timers missed out on a stellar decade. Ouch!

3. Diversify Globally

Not sure which region will win over the next decade? Target both! Diversification is the only free lunch in investing, after all. Whether the U.S. keeps dominating or international markets stage a comeback, you’ll be prepared for either scenario.

Spoiler alert, we believe #3 looks like the most sensible option. After all, prudent investing relies on following the evidence – and as presented, it surely looks like international diversification has its place in most portfolios."

MY COMMENT

I like the analysis above......but I will boil it down to something very simple. NAME all the NON-USA companies that are totally dominant in their business around the world, especially here in the USA. Can you name more than one? Or two? Or three?

Personally I have ZERO interest investing in foreign or International companies outside of the BIG CAP AMERICAN companies that are in my portfolio and dominate the world of business.

 

to continue the above.....here is some nice info:

Biggest Companies in the World by Market Cap
Apple, Nvidia, and Microsoft top the list of biggest companies in the world

https://www.investopedia.com/biggest-companies-in-the-world-by-market-cap-5212784

BY MARKET CAP

APPLE
NVIDIA
MISCOSOFT
ALPHABET
AMAZON
SAUDI ARABIAN OIL
META
BERKSHIRE HATHAWAY
ELI LILLY
TAIWAN SEMICONDUCTOR

BY REVENUE

WALMART
AMAZON
SAUDI ARABIAN OIL
CHINA PETROLIUM
APPLE

BY EMPLOYEE COUNT

WALMART
AMAZON
ACCENTURE
BYD CO
VOLKSWAGEN

MY COMMENT

I would NOT recommend buying a company based on "employee count".

 

The....ridiculous....death of yet another American icon. Another conglomerate bites the dust. No doubt the....."creating shareholder value"....short term thinkers.....(the modern version of corporate raiders)..... along with the company executives will see a HUGE payday.

But in the end they will simply be gutting a big company to create three medium to small size companies that will be subject to far more risk by being more niche companies.

Why legendary industrial giant Honeywell is breaking up

https://finance.yahoo.com/news/why-...giant-honeywell-is-breaking-up-121645204.html

As usual this is for the benefit of a short term shareholder:

"The operational upheaval at Honeywell comes amid pressure from activist investor Elliott Management, which has a stake of about $5 billion. The firm disclosed its investment in November."

 

Oh yes......the markets. They are open today and the big average that count.....the SP500 and NASDAQ....are in the green right now.

Stock market today: S&P 500, Nasdaq edge higher with Amazon set to highlight earnings rush

https://finance.yahoo.com/news/live...set-to-highlight-earnings-rush-143040259.html

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

"US stocks inched up on Thursday in anticipation of Amazon's (AMZN) quarterly results, as investors assessed the earnings season so far and eyed President Donald Trump's fast-moving policy overhaul.

The Dow Jones Industrial Average (^DJI) hovered near the flat line, while the S&P 500 (^GSPC) nudged up around 0.3%. The tech-heavy Nasdaq Composite (^IXIC) rose 0.3% on the heels of two winning days in a row for the major gauges.

The tariff jitters that shook stocks earlier in the week may have eased, but markets are tracking incoming earnings for any company warnings. At the same time, tech and chip-related results are being scrutinized for signals about the strength of AI demand.

Investors are keenly awaiting Amazon's quarterly report due after the bell, following Alphabet's (GOOG, GOOGL) cloud sales flop. The report will further test the view that Big Tech plans to keep spending big in AI after disappointing results late Wednesday from chip makers Arm (ARM) and Qualcomm (QCOM).

Adding to the gloom, Ford (F) shares slid despite a quarterly earnings beat after it put out muted full-year guidance, pointing to tariffs as a headwind.

Peloton's (PTON) stock soared after the fitness equipment maker posted better-than-expected sales, thanks in part to its seasonal partnership with Costco (COST). Meanwhile, ConocoPhillips (COP) beat quarterly profit estimates amid higher oil and gas production.

Treasury Secretary Scott Bessent relieved some pressure on the Federal Reserve, saying Trump wants to bring down 10-year Treasury yields to ease borrowing costs, rather than push for lower interest rates. The benchmark yield (^TNX) traded around its lowest levels since December, at about 4.43%.

In economic news, jobless claims jumped to 219,000 last week, slightly above estimates of 213,000. Investors look to the reading for clues to Fed decision making amid the risk of an uptick in inflation."

MY COMMENT

In other words in media talk today........"I GOT NOTHIN". A good thing. I am seeing little to no fear-mongering sensationalism today. A typical thing when stocks are in the green.

 

I see from the ticker that I am doing well today.....six of nine stocks UP for me so far. CMG, AApL, and GOOGL are down at this moment.

For us...."DUMB MONEY" investors.....PLTR is hitting new all time highs again today. It is currently up by +6.15%....at $107.59. This stock has been showing great MOMENTUM for a while now......and....I am riding the wave. So far they have been able to keep the momentum going by.........(amazing concept)....actually performing.

It will be up to management to keep it going.......with future earnings and fundamentals. They need to strongly leverage and grow this BOOM in market cap. "IF".... they handle this right....they can leverage the company into the.....MAGNIFICENT.....category. That is still a very big....."IF".....and will be a big test for their management.

 

To comply with my promise to put up my trades on here I am disclosing the following: Today.....about 20 minutes ago, I sold half of the CMG position in all accounts and put those proceeds into WMT. So now I have TEN STOCKS. Both CMG and WMT are.....micro-positions.....on training wheels.

I have had WMT on my buy list for a long time now....but have not had funds that I wanted to commit to the stock. So I decided to split my CMG money into two.....micro-positions......and watch them both.

I think I have held CMG going on a year now. In some accounts it is slightly red and in some slightly green....depending on the day it was bought. I still like the stock and how they are adding stores every year. BUT it is still up in the air how it is going to do for me long term. So....I have basically hedged my bet....by adding WMT.

I will continue to watch CMG for at least another year or two. I will also watch WMT as well. Hopefully BOTH of them will stick as long term holdings for me. I could use more NON-TECH holdings in my portfolio. I see this move as a ZERO risk move....since I believe WMT will perform at least as well if not better than CMG......over the short to medium term.

 

SO....here is my current portfolio of....TEN....stocks.

The UPDATED Portfolio Model.......NOT as investment advice.....just as a disclosure of my personal BIAS and my thinking on how to structure a long term portfolio.

"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 70% of the total portfolio and the fund side at about 30% 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 9 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
Microsoft
Nvidia
Palantir
Chipotle Mexican Grill (Junior position)
WMT (junior position)

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. (74). 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 nine 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."

 

You will see from the above that I have now....REMOVED....the "junior position" designation from PLTR. It has now......"Graduated"..... into a REAL position in the accounts that I manage. It is now far above being a "junior position". It is making me some real money and contributing to my portfolio.

By splitting my CMG money into two stocks I have maintained having two "junior positions" to watch and evaluate.

I also have gone up to 10 stocks. My IDEAL has always been to have 10-15 stocks.....over my investing life.

 

Looks like mortgage rates have now settled into the normal historic range. BUMMER....for those that were not able to lock in the CRAZY LOW...... 2-4% rates back when.

Average US rate on a 30-year mortgage falls to 6.89%, third straight weekly decline

https://finance.yahoo.com/news/average-us-rate-30-mortgage-170147785.html