The Long Term Investor

LOL. Good comeback, I like it. BUT......I will only give you half credit since what I am doing is not really an ellipsis since I am not using the dots as a device in place of left out words. I am simply using it as a pause or for phrasing or emphasis, like a speaker might do.

"An ellipsis is a series of dots that usually indicates an intentional omission of a word, sentence, or whole section from a text without altering its original meaning.Wikipedia"

Once in a while I will use it in a quote, for example, where I am leaving out part of an article or sentence or two, etc. In that situation I will have to be more precise with the number of dots. LOL again.

AMAZING what you can learn on a good investing site.

 

"US will hold off on raising China tariffs to 25% as Trump and Xi agree to a 90-day trade truce

• Xi Jinping and Donald Trump discussed a range of issues — among them the trade dispute that has left over $200 billion worth of goods hanging in the balance.
• "President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10 percent rate, and not raise it to 25 percent at this time," the White House said."

https://www.cnbc.com/2018/12/01/us-china-wont-impose-additional-tariffs-after-january-1-report.html

U.S., Mexico and Canada ink new trade agreement, but fin
al ratification remains big hurdle

https://www.usatoday.com/story/news...nada-sign-revised-trade-agreement/2151060002/

MY COMMENT:

With this news, along with the FED clarification of their interest rate stance last week, we have now taken a substantial step toward a year end rally in stocks. There is now a substantial possibility (possibility, not probability) that we will end up at +8-11% by year end. I would NOT want to be shorting the general markets right now or mainstream stocks. Of course, many individual companies are down more than this short term........AND.......there are still the usual many short opportunities in individual companies based on their specific situation as is always the norm. At the moment, going into the new week here is where we stand:

Dow year to date: +3.31%
SP500 year to date +3.24%

I DEFINITELY like how the markets performed last week and am looking forward to the next week and the month of December. In my opinion, baring some BLACK SWAN event or news, the nasty correction is over. HOWEVER, that does not mean that the markets will resume the path of the last nine years. The gains we have seen over that time and the market action in general is an extreme aberration. New investors over the past nine years and inexperienced investors will STILL have to get used to investing in a much more normal market environment with the typical corrections and fear inducing time periods. It is important for investors to fine tune their risk tolerance and not put themselves in a situation of being scared out of the markets in fear and panic every time the media or general consensus is CRAZY. The more education you have on LONG TERM investing, the power of compounding, and long term market performance, the more likely you will be able to sit out the CRAZY short term times and events. Newer or inexperienced investors, especially those in INDEX FUNDS need to be aware of and rely on the HUGE impact on gains due to reinvesting dividends and capital gains as they are paid out, especially when those gains and dividends are reinvested in down market periods. In other words, CELEBRATE the down times as accumulation of low cost shares.

http://dividendlife.com/2017/02/05/...rkets-return-came-from-dividends-or-did-they/

"Calculating total return vs price return
The following chart shows the effect of re-investing dividends vs spending dividends in VFINX, which I’m using as a real-world equivalent of the virtual S&P 500 index. I could only get dividend data from Yahoo starting in 1980 so the calculations below are based from the 1 Jan 1980 to 31 Dec 2016.



If you had invested $10,000 back at the start of 1980, you’d have over $403,000 at the end of December 2016 if you’d re-invested all the dividends. Had you not re-invested them, your portfolio would be worth only $146,000."

 

FIRST market day after posting the above yesterday at 9:26AM went exactly as expected. LOOKING for another UP week this week. Markets will be closed on Wednesday.

ThreeEyes....got more good news today on his BOEING buy at $315. The stock jumped today by $13.20 to $360. BA has a lot more UPSIDE as these trade negotiations with China come to a close over the next 3-6 months.

At the close today:

DOW year to date +4.48%
SP500 year to date +4.37%

 

I think this "little" article is a pretty good summary of the markets today.

"DOW PLUNGES MORE THAN 700 POINTS"

https://www.cnbc.com/2018/12/04/sto...fall-amid-us-china-trade-deal-skepticism.html

"Stocks fell sharply on Tuesday in the biggest decline since the October rout as investors worried about a bond-market phenomenon signaling a possible economic slowdown. Lingering worries around U.S.-China trade also sent jitters down Wall Street.

The Dow Jones Industrial Average fell 719 points, or 2.8 percent, on track for its biggest decline since Oct. 10. At its low of the day, the Dow had fallen more than 800 points. The S&P 500 declined 2.8 percent to trade below its 200-day moving average as the financials sector lagged. Utilities was the only positive sector in the S&P 500, rising 0.8 percent. The Nasdaq Composite also dropped 3.3 percent.

"You can see the utilities positive on the day, but financials are getting hammered on the flatter curve while industrials are likely down on the tariffs headlines," said Jack Ablin, founding partner of Cresset Wealth.

The yield on the three-year Treasury note surpassed its five-year counterpart on Monday. When a so-called yield curve inversion happens — short-term yields trading above longer-term rates — a recession could follow, though it is often years away after the signal triggers.

Long-term rates fell to session lows around midday in New York while short-term yields were little changed.

"We started the day at 2.95 percent. Just a couple minutes before noon, the 10-year yield went from a 2.94 to a 2.92 percent yield. That doesn't sound like much but that's closer to a yield inversion and that's adding to the overall pressure in the stock market," said Robert Pavlik, chief investment strategist at SlateStone Wealth.

Jeffrey Gundlach, CEO of Doubleline Capital, told Reuters this inversion signals that the economy "is poised to weaken."

Lower long-term rates put pressure on bank stocks. The SPDR S&P Bank ETF (KBE) dropped 6 percent. Shares of J.P. Morgan Chase, Citigroup and Bank of America all declined more than 4.5 percent. The SPDR Regional Banking ETF dropped 6.2 percent and traded around 20 percent below its 52-week high and was on pace for its worst day since March 2017.

"No good deed goes unpunished," said Art Hogan, chief market strategist at B. Riley FBR. "As we get headwinds from trade worries fading, you get an inverted yield curve and another brick added to the market's wall of worry."

Trading volume rose on Tuesday. As of 2:01 p.m. in New York, more than 90 million shares of the SPDR S&P 500 ETF trust (SPY) had exchanged hands. The SPY's 30-day volume average is 110.5 million.

Doubt about a permanent deal between the U.S. and China crept into investors' minds following a stellar rally in the previous session.

The U.S. and China agreed over the weekend to hold off on any additional tariffs on each other's goods on January 1, in order to allow trade talks to continue. Leaders from the two countries met over dinner at the G-20 summit in Argentina. The news sent stocks surging on Monday, with the Dow rallying more than 300 points. Stock futures surged Sunday night as investors initially cheered the news. Dow futures jumped nearly 500 points before Monday's open.

But discrepancies over when that truce would begin has led to confusion. While President Donald Trump's economic advisor, Larry Kudlow, told reporters Monday that the cease-fire would start from January 1, the White House later issued a corrected statement saying that the 90-day truce period would start on December 1.

"Bottom line, yesterday's price action further confirmed that while clearly there has been some important macro clarity provided, we need to see more before we can expect the S&P 500 to make a serious challenge to the old highs," said Tom Essaye, founder of The Sevens Report.

China and the U.S. have been engaged in a tense sparring match over trade, with both countries hitting each other's economies with levies on imported goods. Trump's administration has so far slapped tariffs on $250 billion worth of Chinese imports, while Chinese President Xi Jinping's government has imposed tariffs on $110 billion in U.S. goods.

Trump said in a series of tweets Tuesday that a deal between the two countries would get done if possible. "But if [it's] not possible remember ... I am a Tariff man.""

My Comment:

Interesting to watch short term behavior as usual. I really dont care much for the "inverted yield curve" stuff, especially when it often takes one to two years for the prediction to come true, not much of an indicator to me personally. As a LONG TERM INVESTOR I really am not concerned with the China STUFF. LOGIC and REALITY tell me that we will have a China trade deal and that this market drag will dissappear some time over the next three to eight months. So.......whatever. Not that all will be straight up from there since we will be in the middle of the presidential election campaign and in my opinion (REGARDLESS of politics) the media will be hammering the economy with an extremely negative SLANT.

BUT, for you that have NOT been investing for more then the past nine years. YES......sooner or later there will be a rescession. This is a normal part of the economic cycle. AND.....yes, I believe that often they are triggered by the FED and/or policy idiocy of whoever happens to be in political power. I never discount the ability of goverment economists and bureaucrats or even worse government empolyee ideologs to screw up a good economy. On a side note, it is always interesting to watch people debate whether or not we are in a rescession. It is often not a bright line event, often there is confusion or disagreement whether we are even in a rescession. Often it is only clear in hindsight. As with all other events, I reamin fully invested through any recessions and consider myself lucky to be reinvesting all dividends and capital gains at bargain prices.

 

"This sell-off was caused by a computer-driven 'footrace,' Jim Cramer says

• CNBC's Jim Cramer blames trading algorithms for the stock market's nosedive on Tuesday.
• Algorithms programmed to sell securities on the same triggers were behind the massive decline, he says."

https://www.cnbc.com/2018/12/04/cramer-this-sell-off-was-caused-by-a-computer-driven-footrace.html?__source=yahoo|finance|headline|story|&par=yahoo&yptr=yahoo

MY COMMENT:

I do not watch or pay much attention to Cramer. BUT, I do have the same opinion about program trading and the drop today. The very mild and irrelevant interest rate inversion and other so called "indicators" set off a frenzy of program trading. It is OBVIOUS when this happens. There was really not much justification for the drop today and I see NOTHING that would lead me to believe that any number of regular investors were selling today. Over the long run, the financial and banking industry had better be careful. In my opinion this AI and Program trading has the potential to significantly disrupt the markets and severely impair "regular" people from choosing to participate in stock ownership or investing.

 

CURIOUS if anyone on here is selling off or considering selling off? I certainly am NOT. But, I am wondering how others are holding up in the very erratic market environment. I find the event in the article below very interesting. Interesting, but opaque. The sort of event that makes for CONSPIRACY THEORY. SOMEONE bailed big time or made a HUGE bet of some sort. The timing of this event DOES NOT line up with the arrest of the China executive in Canada but that is one possible cause. The speculation about a HEDGE FUND in the article is one possible theory. With the recent market acting, the year end time period, the way hedge fund redemptions work, the poor performance of hedge funds recently, etc, etc, this could very well be hedge fund driven. I doubt we will ever know one way or the other.

(EDIT: I see after posting the above that the arrest of the Chinese executive occurred during the dinner meeting between Trump and Xi. So the timing DOES NOT match up with the drop many days later in the futures.)

"The sell-off started with a mysterious plunge overnight that caused the exchange to halt futures

Key Points

• CME Group says it had to intervene with multiple 10-second pauses to prevent a steeper decline in equity futures.
• Speculation for the swell in volume and plunge in futures included the news of the arrest of the CFO of the Chinese telecom company Huawei.
• Traders also speculated that the selling could be attributed to a large fund or funds liquidating a position."

https://www.cnbc.com/2018/12/06/the-stock-selloff-started-with-a-mysterious-fall-in-the-futures.html

The stock market sell-off on Thursday began with a mysterious overnight plunge in equity futures that caused the CME Group to halt trading in several intervals.

When futures opened for trading at 6 p.m. ET on Wednesday, the eMini S&P 500 futures fell as low as 1.8 percent in a sudden move on above average volume.

The CME Group said it had to intervene with multiple 10-second pauses to prevent a steeper decline in the equity futures.

A CME Group spokesperson offered the following statement to CNBC:

“Our equity index futures and options markets paused intermittently following this evening’s open due to volatility, which triggered more than 40 Velocity Logic events in the first six minutes of trading. All markets operated as designed throughout.”

Speculation for the swell in volume and plunge in futures included the news of the arrest of the CFO of the Chinese telecom company Huawei. The arrest was made by the Canadian authorities on the extradition request by the U.S., a move that some worried could put trade negotiations between Beijing and Washington at risk.

“After we saw this Huawei news hit, it seemingly (and inordinately) contributed to an almost impossible 65 handle drop in Spooz (S&P futures) on the overnight reopen, with 36,700 contracts trading in the first 10 minutes,” said a note from the Nomura Securities trading desk.

But traders also speculated that the selling could be attributed to a large fund or funds liquidating a position.

Futures briefly recovered but then eventually fell back to near those lows as traders said the damage was already done.

“After the gap lower inevitably hit more US Equities ‘stop loss’ limit orders and further bludgeoned trader sentiment, the modest recovery thereafter lost further steam over the very early US hours,” the Nomura note said.

The CME’s Velocity Logic is designed to detect market movements of a set numbers of ticks up or down in a predetermined amount of time and halt trading if necessary.

The S&P 500 fell 1.7 percent at the opening bell Thursday while the Dow dropped more than 450 points, bringing that index’s two-day losses to more than 1,000 points. The moves may also be linked to pent-up market jitters that accumulated when the major exchanges were closed on Wednesday for the funeral of President George H. W. Bush.

 

THIS might be a good time to talk a little bit about RISK and RISK TOLERANCE. Here is a "little" article on the topic:

"Opinion: However you’re defining risk in this scary stock market — you’re probably wrong"

https://www.marketwatch.com/story/h...stock-market-youre-probably-wrong-2018-12-04?

I like the conclusion:

"As this discussion suggests, there is no one answer. I suspect that this is why Benjamin Graham, the father of fundamental analysis, made what otherwise is a very surprising claim in his investment classic The Intelligent Investor. He wrote that “the best way to measure your investing success is not by whether you’re beating the market, but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.”

Notice that Graham doesn’t mention risk, and I think that’s significant. He refers to “behavioral discipline” instead.

My interpretation of what he is telling us: Rather than engage in the endless debate over which definition of risk is the best, it would be more helpful to spend your energy determining if a strategy you’re considering is one that you can live with through thick and thin. If you can’t, then it isn’t appropriate for you, no matter how risky or conservative it might be according to some academic definition."

ANOTHER ARTICLE that I find relevant today:

"Searching for Meaning Behind the Stock-Market Decline"
https://www.realclearmarkets.com/ar...g_behind_the_stock-market_decline_103524.html

MY COMMENT:

SHORT TERM predictions, events, market situations are fun and interesting.....BUT.....it is the LONG TERM that will determine your real world results and whether or not you accumulate wealth. It ALL comes down to the power of compounding. Or the ability to LEVERAGE your money. Take your pick. I remain fully invested for the LONG TERM as usual.

 

EXTREMELY dramatic and CRAZY turn around today from market open to close. I would hate to be an inexperienced, nervous, investor in this environment. The good news is most of this ERRATIC stuff is extreme day to day reaction to CHAFF that has nothing to do with actual BUSINESS FUNDAMENTALS of various stocks and companies. That, however, does not lessen the psychological pain and trumoil that these dramatic, and in my opinion, unjustified, market moves are having on investors and their mental health.

 

NEWS ITEM of the day, at least at the moment. As the day goes on the spin on this story will evolve as usual. This is another positive for stocks and investors as we head toward the next round of FED action.

"Job growth falls short of expectations

Key Points

• Nonfarm payrolls increased by 155,000 in November, the Labor Department says. Economists surveyed by Dow Jones had been expecting payroll growth of 198,000.
• The average hourly earnings gain of 0.2 percent fell short of estimates for a 0.3 percent increase.
• October’s jobs count was revised lower from an initially reported 250,000 to 237,000."

https://www.cnbc.com/2018/12/07/us-created-155000-jobs-in-november-vs-198000-expected.html

HERE is another slant on this news:

"Record 156,795,000 Employed in USA, 13th Record-Breaker Under Trump"

https://www.cnsnews.com/news/articl...yed-americans-13th-record-breaker-under-trump

The November employment report, released today by the Bureau of Labor Statistics, shows the economy added 150,000 jobs, well below the (revised) 237,000 added last month.

But the unemployment rate held steady at 3.7 percent for the third month in a row; and the number of employed Americans once again reached an all-time high of 156,795,000, the 13th record since Donald Trump became president.

Wages continued rising as well: In November, average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents to $27.35. Over the year, average hourly earnings have increased by 81 cents, or 3.1 percent.

Among the major worker groups, the unemployment rates for adult men (3.3 percent), adult women (3.4 percent), teenagers (12.0 percent), Whites (3.4 percent), Blacks (5.9 percent), Asians (2.7 percent), and Hispanics (4.5 percent) showed little or no change in November.

The 5.9 percent unemployment rate for blacks matches the record low set in May. The November unemployment rate for Hispanics is just a tenth of a point higher than the record low of 4.4 percent.

On the negative side, the labor force participation rate remained stubbornly high.

In November, the nation’s civilian noninstitutionalized population, consisting of all people age 16 or older who were not in the military or an institution, reached 258,708,00. Of those, 162,770,000 participated in the labor force by either holding a job or actively seeking one.

The 162,770,000 who participated in the labor force equaled 62.9 percent of the 258,514,000 civilian noninstitutionalized population. The participation rate has showed little change since Trump took office. The highest it's ever been is 67.3 percent in the year 2000.

The number of Americans not in the labor force -- meaning they do not have a job and are not currently looking for one -- was 95,937,000 last month, near its all-time high. This number includes the growing number of Baby Boom retirees.

The Labor Department says job gains have averaged 170,000 a month over the last 3 months.

MY COMMENT:

I have highlighted in BOLD the info above that I consider significant disregarding any political content in the article. Personally, I consider this a positive jobs report for investors. MOST of the indicators and other data is near record high levels. It will be interesting to watch the spin of this data as the day goes on.

 

This "little" article by a WALL STREET QUANT and insider reflects and echos many of the thoughts and opinions that have been posted over the past couple of months in this thread. Including......negative feedback loop, AI trading, media manipulation, reality versus delusion and illusion, and the potential to KILL our market system. We are in, HOPEFULLY, a short term time period where the MEDIA along with ALGORITHM trading is irrationally driving the markets down. Without going into politics, there are many in the media with a very BIG AXE to grind that have lost ALL semblance of journalism and impartiality. The ALGORITHM trading of MASSIVE amounts of capital doing millions of micro-second trades, much of it based on the MEDIA headlines is severely impacting the markets. People need to wake up. Our markets are not IRONCLAD. Once people lose respect and confidence in the markets being connected to reality it is going to be very difficult to contain the damage and preserve our stock market system. If REGULAR people start to lose confidence in the honesty and reality of the markets the ultimate end will be anything from a very large crash to just dying with a whimper. Financial confidence is a very fragile thing and once lost it will be very doubtful if we will ever get it back. How IRONIC that is is the MEDIA and the BIG financial houses that are putting the entire system at risk of collapse from this SELF FULFILLING NEGATIVE PROPHESY that they are creating. I write this from a very CLINICAL level, not one of fear or panic or defeat. We are NOT on the verge of anything at the moment, but those in control of governance of the markets need to WAKE UP before the damage is done and at that point it will not be undone very quickly, if ever. (bold is mine below)

"Why are markets so volatile? JP Morgan's quant guru thinks 'fake news' is to blame

• Despite a positive fundamental backdrop, markets have been pummeled in wild trading this quarter.
• "To some extent, we trace the disconnect between negative sentiment and macroeconomic reality to the reinforcing feedback loop of real and fake negative news," wrote J.P. Morgan Chase top quant Marko Kolanovic.
• One recent example, according to Kolanovic, was the media treatment of the arrest of an executive from Chinese hardware manufacturer Huawei."

https://www.cnbc.com/2018/12/07/why...-jpmorgan-guru-thinks-fake-news-to-blame.html

"There's a yawning chasm between the real U.S. economy and how markets are behaving, and the media is to blame, according to J.P. Morgan Chase's top quant Marko Kolanovic.

Strong corporate profit growth and consumer spending signal that the economic expansion isn't about to end, in contrast to future price-earnings estimates and institutional equity holding levels near five-year lows, Kolanovic wrote Friday in a 2019 outlook note. He has a 3,100 target on the S&P 500, which would be a 17 percent increase from current levels.

"Positive GDP and earnings are 'reality,' which is currently starkly disconnected from equity sentiment, valuation, and positioning," Kolanovic said in the note.

Despite the positive backdrop, markets have been pummeled amid concerns about U.S.-China trade tensions and slowing economies worldwide. This week alone the major indexes were all down more than 3 percent, and the moves have been violent. One reason attributed to the declines has been the reversal of central banks' programs that bought trillions of dollars of assets after the financial crisis.

'Fake negative news'
"While higher volatility that comes with less monetary support warrants somewhat lower equity valuations, lower risk positioning, higher equity volatility and higher credit spreads, we think that the current divergence is simply too large," Kolanovic said in the note. "To some extent, we trace the disconnect between negative sentiment and macroeconomic reality to the reinforcing feedback loop of real and fake negative news."

Kolanovic cited a combination of domestic political groups, analysts and foreign actors who are amplifying negative headlines to sow discord and erode faith in markets. There are "specialized websites" that present a blend of real and fake news and distorted write-ups of financial research, he said, without citing the specific sites.

"If we add to this an increased number of algorithms that trade based on posts and headlines, the impact on price action and investor psychology can be significant," Kolanovic said.

One recent example, according to Kolanovic: The news of the arrest of an executive from Chinese hardware manufacturer Huawei came days after the actual event, disrupting futures trading and stoking fears that talks with China were unraveling, he said. Equity futures plunged on the report, prompting exchanges to halt trading several dozen times.

"The current US administration has also given more than enough material (e.g., tweets, etc.) to be exploited by these actors in order to create an environment of investment uncertainty (e.g., on issues of global trade, oil, business decisions of individual companies, etc.)," Kolanovic said."

 

POSTING THIS at the market low so far today. You have got to be kidding, now BREXIT is driving the US markets. Insanity. I could not care less about the failing EU, Brexit, or how many camels are being sold in the main camel market in Qatar. ALL I care about is business fundamentals and specific company fundamentals. HOPE there are some nice capital gain distributions this year to be reinvested at the current market levels. HERE is a "little" article for those that are ACTUALLY LONG TERM fundamental investors.

Opinion: The stock market is overreacting because fears about the economy are overblown

https://www.marketwatch.com/story/t...rs-about-the-economy-are-overblown-2018-12-08

AND

Market experts: Don’t bail on stocks in 2019

https://nypost.com/2018/12/08/market-experts-dont-bail-on-stocks-in-2019/

MY COMMENT:

We appear to now be in a sustained period of market irrationality. Driven by random world events and opinion makers and reporters that have various reasons to talk down the economy. FORTUNATELY, long term results and accumulation of wealth are not determined by this sort of short term "stuff" (about the most polite term I can come up for what is going on right now). I continue to be fully invested for the long term as usual.

 

I will note for the HISTORICAL RECORD and for context that we are now at DOW 23,974. We have breached the recent low of November 23, 2018. NOT that it means anything other than the current short term correction is alive and well. We were near this level back in March when we were at about 23,500 or so. After this MASSIVE, COLLAPSING, OMG we are so SCREWED, (sarcasm) event we are now at:

DOW year to date (-3.06%)
SP500 year to date (-2.84%)

Looks like the CHRISTMAS RALLY has been canceled. CONSIDERING that we have NOT had a single down year in the SP500 since 2008, NOT a shocking turn of events.

S&P 500 Annual Total Return Historical Data

Dec. 31, 2017 21.83%
Dec. 31, 2016 11.96%
Dec. 31, 2015 1.38%
Dec. 31, 2014 13.69%
Dec. 31, 2013 32.39%
Dec. 31, 2012 16.00%
Dec. 31, 2011 2.11%
Dec. 31, 2010 15.06%
Dec. 31, 2009 26.46%
Dec. 31, 2008 -37.00%
Dec. 31, 2007 5.49%
Dec. 31, 2006 15.79%
Dec. 31, 2005 4.91%
Dec. 31, 2004 10.88%
Dec. 31, 2003 28.68%

As we are now within two weeks of the HOLIDAY WEEKEND I will say to all reading this post and to ALL on these boards.........MERRY CHRISTMAS and HAPPY NEW YEAR. I appreciate this site and the diversity of investing and trading discussion on here. I appreciate being able to post here.

 

I GOT NOTHIN...........Not much going on right now one way or another in the markets or investing world. We continue with the same market environment that we have been in for the past month or two. A NEWS driven market. Although, most of the so called news is nothing more than gossip, rumor, and opinion. MIGHT end the year positive, might end the year negative. NOT even much in the way to articles, commentary, or material to post. Up nicely at the moment today, but who knows where we will close with the HUGE swings we are seeing recently from open to close. Should be a great time for TRADERS with this volatility. NO plans to make any changes to my portfolio between now and the end of the year. NO plans to make any changes to my portfolio in 2019. I continue to be FULLY invested for the LONG TERM as usual.

DOW year to date (-0.08%)
SP500 year to date +0.03%

 

WHAT A WASTE OF MONEY. For companies that are under-performing the competition, to waste money on GIMMICKS, is in my opinion a simple sign that they just dont get it and the handwriting on the wall gets darker and more clear. Of course, I am a HD shareholder, so I dont have a lot of sympathy for LOWE'S. I would be royally pissed if I was a Lowe's shareholder. Imagine, wasting 10 BILLION on buying back and propping up your own shares. GEE, what a NOVEL concept. You would think that management would have a lot more uses for that money that might ACTUALLY contribute to the success of the actual stores. Here they are getting BEAT by Home Depot and they can not seem to come up with uses for this money that actually might drive their actual business, increase their sales, productivity, margins, customer base, store experience, product mix, advertising plan, etc, etc. PATHETIC. BUT.......they are increasing shareholder value. Yeah right, that phrase and this share buy back idiocy is, in general, a joke.

Lowe's shares rise as retailer announces $10 billion stock buyback, 2019 forecast

• Lowe's during its annual investor day announces a $10 billion stock buyback program.
• The home improvement retailer issues its financial targets for fiscal 2019.
• Lowe's reiterates its profit outlook for fiscal 2018.

https://www.cnbc.com/2018/12/12/lowes-annual-investor-day-2018.html

MY COMMENT:

I have a Lowe's and a Home Depot within easy driving distance to the area where I live. Over the years we have decreased the number of times we shop at Lowe's significantly and now rarely go in the Lowe's. We are in Home Depot at least once every week or two. Have any of their management even spent any time in one of their stores, or for that matter in a Home Depot? They are not going to get anywhere trying to be some sort of semi-upscale-hardware store. It is obvious that they are NOT getting the contractor business. Their positioning as some sort of SQUISHY retail concept somewhere between a Target store and a hardware store is a failure. VERY BLAH retailing concept with no focus or core business.

 

For context (bold is mine):

shares fall as retailer cuts forecast and plans to exit some businesses

• Lowe's reports third-quarter earnings that beat estimates.
• Net income of $629 million, or 78 cents per share, was down from $872 million, or $1.05 per share, a year earlier.
• Same-store sales were softer than what Wall Street had anticipated and the company lowered its full-year estimates.

https://www.cnbc.com/2018/11/20/lowes-earnings-q3-2018.html

Lowe's has a lot of blocking and tackling to do, says Oppenheimer's Nagel 7:05 AM ET Tue, 20 Nov 2018 | 04:46

Lowe's on Tuesday reported quarterly earnings and revenue that beat analysts' expectations, though same-store sales were softer than what Wall Street had anticipated and the company lowered its full-year estimates.

Shares of the home improvement retailer dropped nearly 3 percent.

Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $1.04 adjusted, vs. 98 cents expected
• Revenue: $17.42 billion vs. $17.36 billion expected

Lowe's reported third-quarter net income of $629 million, or 78 cents per share, down from $872 million, or $1.05 per share, a year earlier.

Excluding certain items, including pretax charges of $280 million, Lowe's earned $1.04 per share, above the 98 cents per share expected by analysts surveyed by Refinitiv. Net salesrose 3.8 percent to $17.42 billion, above expectations of $17.36 billion.

Same-store sales rose 1.5 percent, below analysts' expectations of 2.9 percent. CEO Marvin Ellison said "continued challenges" with inventory out of stocks, "poor reset execution" and assortment concerns in certain categories pressured the company's ability to turn visits into transactions.

The company lowered its full-year sales forecast to about 4 percent, down from its prior estimate of about 4.5 percent. It now expects same-store sales to rise 2.5 percent, compared with a previous estimate of a 3 percent gain.

Lowe's anticipates full-year adjusted earnings of $5.08 to $5.13 per share.

Ellison started at Lowe's in July. Last quarter, the former J.C. Penney CEO outlined his plan to turn around the home improvement retailer, including to "aggressively rationalize store inventory."

Lowe's plans to end its Mexico retail operations and is exploring strategic alternatives for the business, the company announced Tuesday. It also plans to exit Alacrity Renovation Services and Iris Smart Home.

Lowe's has already announced it will shutter its 99 Orchard Supply Hardware stores by year-end and close 20 Lowe's stores in the U.S. and 31 in Canada. As of Nov. 2, Lowe's operated 2,133 home improvement and hardware stores in the U.S., Canada and Mexico.

"Our transformation will take time, but we have assembled an experienced team and developed a comprehensive plan to make steady progress," Ellison said in a statement.

Lowe's struggles come while its rival, Home Depot, is thriving. The company beat analysts' third-quarter earnings expectations and raised its full-year sales forecast, citing strong demand in the home improvement market.

"In isolation, Lowe's third-quarter results look reasonable: both total and comparable sales are growing, and the US business is seeing a fair uplift in same-store sales," Neil Saunders, managing director of GlobalData Retail, said in an email. "However, when set against the wider context of the market and against rival Home Depot, Lowe's growth is pretty weak."

 

INTERESTING "little" article. Not particularly investing, but cultural. And.....this sort of stuff is an indication of where we are now as a society compared to the recent past, a span of about a 60 year time period. Obviously the vast majority of this stuff is young workers for the most part. Says a lot about the current state of society, work ethic, manors, and where we are headed. Also says a lot about lacking reason and logic, since I assume that the majority of these types of people dont care about a future reference or work history as they go forward. To be somewhat fair, we have seen a total breakdown in the social contract and issue of loyalty between employer and employee on all sides over the past 10-20 years. Employers are just as likely to throw their workers under the bus. Unfortunately the GIG ECONOMY and me, me, me, attitude are NOT going to work out well for younger people as they go forward in life. We should probably call them the AI generation since huge numbers of them are going to be replaced by machines over the next 10-30 years. At that point they will not have to worry about whether or not work is "interesting" or what mommy and daddy promised them. We will obviously see a large clash between the participation trophy people and their corporate masters going forward. Unfortunately for the worker the power is mostly NOT going to be on their side of the relationship.

"Workers are ghosting their employers like bad dates"

https://www.msn.com/en-us/money/car...ing-their-employers-like-bad-dates/ar-BBQQsgT

(BOLD IN ALL CAPS IS MY COMMENTARY)

Economists report that workers are starting to act like millennials on Tinder: They’re ditching jobs with nary a text. (THEY ARE NOT STARTING TO ACT LIKE MILLENNIALS, THEY ARE MILLENNIALS)


“A number of contacts said that they had been ‘ghosted,’ a situation in which a worker stops coming to work without notice and then is impossible to contact,” the Federal Reserve Bank of Chicago noted in December’s Beige Book, which tracks employment trends.

National data on economic “ghosting” is lacking. The term, which usually applies to dating, first surfaced in 2016 on Dictionary.com. But companies across the country say silent exits are on the rise.

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Analysts blame America’s increasingly tight labor market. (YOU MIGHT WANT TO TAKE A LOOK AT CULTURE, SOCIETY, AND VALUES AS WELL AS OUR CURRENT PARENTAL NORMS AND EDUCATION SYSTEM) Job openings have surpassed the number of seekers for eight straight months, and the unemployment rate has clung to a 49-year low of 3.7 percent since September.

Janitors, baristas, welders, accountants, engineers — they’re all in demand, said Michael Hicks, a labor economist at Ball State University in Indiana. More people may opt to skip tough conversations and slide right into the next thing. (IT IS NOT A TOUGH CONVERSATION IT IS COURTESY AND MORE IMPORTANTLY THE BRAINS TO LOOK DOWN THE ROAD TO WHEN YOU MIGHT NEED A REFERENCE)

“Why hassle with a boss and a bunch of out-processing,” he said, “when literally everyone has been hiring?” (SOUNDS LIKE A SURFER DUDE....WHY HASSLE WITH IT)

Recruiters at global staffing firm Robert Half have noticed a “ten to twenty percent increase” in ghosting over the past year, D.C. district president Josh Howarth said. (THAT IS A BIG INCREASE......SHOWS SOMETHING ABOUT THE YOUNGER WORKER)

Applicants blow off interviews. New hires turn into no-shows. Workers leave one evening and never return.
“You feel like someone has a high level of interest only for them to just disappear,” Howarth said. (GET USED TO IT, THIS IS THE MONSTER SOCIETY HAS CREATED)

Over the summer, woes he heard from clients emerged in his own life. A job candidate for a recruiter role asked for a day to mull over an offer, saying she wanted to discuss the terms with her spouse.

Then she halted communication.

“In fairness,” Howarth said, “there are some folks who might have so many opportunities they’re considering they honestly forget.” (YEAH RIGHT.....I JUST "FORGOT" ABOUT THAT JOB I JUST INTERVIEWED FOR)

Keith Station, director of business relations at Heartland Workforce Solutions, which connects job hunters with companies in Omaha, said service workers in his area are most likely to skip out on low-paying service positions.

“People just fall off the face of the Earth,” he said of the area, which has an especially low unemployment rate of 2.8 percent.

Some Nebraska employers are trying to avoid unfilled shifts with apprentice programs that guarantee raises and additional training over time.

“Then you want to stay and watch your wage grow,” Station said.

Other recruitment businesses point to solutions from China, where ghosting took off during the past decade’s explosive growth.

“We generally make two offers for every job because somebody doesn’t show up,” said Rebecca Henderson, chief executive of Randstad Sourceright, a talent acquisition firm.

And if both hires stick around, she said, her multinational clients are happy to deepen the bench.

While ghosting in the United States does not yet require that level of backup planning, consultants urge employers to build meaningful relationships at every stage of the hiring process.

Someone who feels invested in an enterprise is less likely to bounce, write Melissa and Johnathan Nightingale, co-authors of “How F*cked Up Is Your Management?: An uncomfortable conversation about modern leadership.” (YES...IT IS ALL ABOUT "FEELINGS".......CLASSIC PARTICIPATION TROPHY TALK)

“Employees leave jobs that suck,” they said in an email. “Jobs where they’re abused. Jobs where they don’t care about the work. And the less engaged they are, the less need they feel to give their bosses any warning.”

Some employees are simply young and restless, said James Cooper, former manager of the Old Faithful Inn at Yellowstone Park, where he said people ghosted regularly.

A few of his staffers were college students who lived in park dormitories for the summer.

“My favorite,” he said, “was a kid who left a note on the floor in his dorm room that said ‘sorry bros, had to ghost.’ ”

Other ghosters describe an inner voice that just says: Nah. (THE FUTURE IS NOW)

Zach Keel, a 26-year-old server in Austin, made the call last year to flee a Texas bar-slash-cinema after realizing he would have to clean the place until sunrise. More work, he calculated, was always around the corner.

“I didn’t call,” Keel said. “I didn’t show up. I figured: No point in feeling guilty about something that wasn’t that big of an issue. Turnover is so high, anyway." (IT IS ALL ABOUT ME, DONT WORRY ABOUT ANYONE LEFT BEHIND HAVING TO COVER FOR YOU)

MY COMMENT:

When the social compact between employer and employee breaks down dont be surprised when you can not find a REAL JOB. At some time over the next 10-50 years there will be NO NEED for the large numbers of employees we have now in all areas of work. All that will be needed is good AI, a core staff, and a huge number of independent contractor, gig job, types. It is so obvious that we are heading toward the classic science fiction type society..........The Elites, the Bureaucrats and service workers that serve them, and everyone else scrambling for day to day subsistence survival. The vast majority of countries in Africa, South, and Central America already follow this model, for those that think this can not happen. Unfortunately for future generations, our culture, history, values, morals, system of government, markets, etc, etc, are NOT set in stone. They can ALL be overturned in the span of about two generations (20-50 years). And, once they are gone they will NOT be coming back. What used to be will just be a dying memory of the older generation until they are gone. I like to say.....every couple of generations creates their own reality and fortunately or unfortunately, they than have to live in that reality.