The Long Term Investor

I have to disagree here a little bit. Respectfully, of course.

A couple of counter-points. The above article isn't a bad read, but it needs a bit of perspective. Not surprising in the least, it is actually promoting a system that "they" have identified to combat the very thing the article is talking about. Apparently, they have the magic sauce to solve this issue and nobody else has discovered it. Imagine that. All I can say is be careful about those type of assurances.

I don't necessarily disagree with the algorithmic market programs getting faster, better, and more advanced. They are surely not the same thing as they were 30 years ago. Yes, algo has been around even longer. The same can be said of the first Apple computer, the first cell phone, and so on. This does not mean that the market will become un-investable. If you are a short term investor or trade a lot, then you have to contend with this in a different way. That is not a problem for me, but I understand why it matters to others.

I would agree that the advancements have changed some things and will likely continue to do so going forward. This has been the case throughout history with most things. The above article is also speaking about the short term environment. The lightning fast trades, analysis, response of markets, and trying to extrapolate that into somehow destroying long term investing. My opinion, they are wrong on the long term investing front. Maybe their long term and my long term definition are different. In my world, it doesn't matter....shorter versions of time, maybe so.

The problem is this does not address the long term fundamental value of companies, the growth and profitability of those companies, and the longstanding drive to innovate and remain competitive. That is going to matter more than split-second trades in a short term environment. It always has.

There really are two worlds in investing. The short term and the long term. If one participates and lives in the active, short term environment, then one will certainly have to deal with it. The long term environment is what it says it is....long term.

I do not dismiss the volatility of the daily markets or other short term timespans. They exist. We see the ups/downs, the stock tickers jumping around, the news interjecting into the fray, pundits, and experts of all kinds. It is easy to think the markets are subject to these daily whims if we consume the information on a constant basis. When we subject ourselves to it with great frequency, what do we see? All of those things mentioned with the volatile day to day movements and all of the noise. We come back tomorrow and see the same thing. The next day, more of the same. It begins to convince us that it is a casino.

I can invest in a good, stable company with sound fundamentals and likely generate some wealth over a long period of time as long as the business remains sound. I can do this with a number of companies if I choose. I can periodically keep up with it's earnings information, monitor it's leadership, evaluate company projects and future plans. I can incorporate a number of these businesses individually or within an index if I want. This and other financial planning will matter in the long run. Long term investors will be just fine because of the investing environment we operate within.

Sorry, that is a bit long winded post.

 

I think it contained a good bit of hyperbole, which is likely directed for a particular type investor.

When I look at the cumulative returns of the market and stocks over time it suggests otherwise.

Time will tell.

Sometimes, it makes me think back to all of the wild predictions about what was to come from Y2K fear. The speculations and "fear" about what could happen was rampant. Somehow we survived.

 

100% agree with the sentiment. I guess it depends what kind of market the big players want. AI is not going away, and it will be implemented into everything. The better it gets, the more ubiquitous it will be. It could lead to gambling hellhole based on rumor and news cycles, or it could be brilliant in identifying stocks to invest in with laser accuracy. Time will tell.

 

90% of oil leaving Iran was going to China (1.25m BPD). 80% of Venezuelan oil exports were headed to China (less than 500K BPD).

The gulf war is a China problem, as is Venezuela. Although, Cuba was living in Venezuela's basement so they are going to need to get a hair cut and start applying for fast food jobs.

I don't consider myself to be particularly partisan. At least, not beyond the average person. But, these situations have been extremely well played. Things could fail and the world could go to crap but I think the odds are in favor of a short term improvement.

As for Iran, I don't see a world in which Iran is not evil. They are among the worst examples of the human condition, including Somalia.

Meanwhile, Elon is talking about 1m wafer starts per month. That is literally 70% of TSMC's current capacity. Elon's mouth has no sense of time but he is talking about a near total shift in semi production. Zero chance he can do it in five years but good for him in trying. It's a good use for some of his, soon to be trillion, dollar wealth.

It's a shame Micron gave China and Russia advanced packaging technology by sending their best technology to India. China announced they figured out advanced packaging capability in the same time frame. History will not be flattering to some of these moves.

AI is kind of dead, as described, but thriving as part of the surveillance state currently being built to track everything everyone is doing online. Humans can't remotely deal with that much data. We mine tiny amounts of it but AI will process all of it. Buy energy. Buy uranium suppliers. That's where the money will be.

The enemy of the market is the news cycle. I've heard more made up bad crap about everything that is happening than we have morons to spew it. All negative, all the time. If Trump cured cancer, it would be declared discriminatory toward Tumors. The situation on the ground isn't that bad from an economic perspective.

 

Could be.

If one wants to get in the game with the "big players" go ahead. I've just sat around and accumulated a nice retirement portfolio without any AI assists or trying to match wits with the big guys.

I get what you are saying though.

 

Yeah, China is not liking this little arrangement for sure.

Agreed. We aren't going to change anything there.

You mean the daily news and financial media is not doing this for the good of the service and trying to help us build wealth or be neighborly?? Are we supposed to think for ourselves??

 

Funny you mention this. I work around quite a few young(er) people. Sometimes I will talk about a particular event or mention something about the old days. Eventually, I notice the puzzled look on their faces and realize I have a lost audience. The good thing is they are nice about it and we have a good laugh about it at times.

I might be making comparisons to now vs then....then realize their normal was/is not the same as I have experienced.

 

Regarding Iran: We all know what happened in 1953, right? Ever since oil was discovered there, the U.S. and Brits have meddled in the Middle East, wrecking governments left and right. Instability is very good for keeping countries in check and feeding the military budgets. The Iranian government is awful and oppressive, but remember how it got there. The civilians, however, just want to live their lives in peace. History is littered with lessons and patterns.

 

I am thinking long term, like WXYZ. I have no intention of doing anything different. My yearly gains are plenty good enough for me.

But there are those who want more. It's never enough. Those are the people who will shape the markets for better or worse.