The Long Term Investor

No....Emmett....not really. BUT.....I might consider a speculative short term attempt to earn some CASH when the Robinhood IPO comes out.

I am actually not feeling like making any changes at all right now. In fact...the opposite....I am waiting for a time to take my initial investment off the table in TSLA and let the profit ride for the long term.

 

I like this "little" article. It meanders all over the place....but....eventually gets to earnings....which is what REALLY matters right now. I have.....edited out.....the political "stuff"........that I do not think is relevant. Anyone that wants to see it can look at the original article:

Earnings Extravaganza As Investors Digest United's Losses, Await Intel And IBM

https://finance.yahoo.com/news/earnings-extravaganza-investors-digest-uniteds-143515559.html

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

"With inauguration in the rear-view mirror, Wall Street returns today to the business at hand: A long list of earnings reports and the latest word on unemployment claims.

We’ll get to earnings below. First off, weekly initial jobless claims offered a little good news and some bad. On the negative side, they’re still too high at 900,000, and above many Wall Street estimates. The good news is that last week’s big number got revised downward slightly. This metric just stubbornly refuses to fall, but maybe if more states come out of lockdown we’ll see improvement in coming weeks.

The market scored fresh record highs yesterday for every index, with the Nasdaq (COMP) up an amazing 2% after impressive earnings from Netflix Inc (NASDAQ: NFLX) that helped propel the rest of the FAANG stocks. Those companies remain the gorillas on Wall Street. The excitement about yesterday’s inauguration and hopes that President Biden can push through another stimulus package seem to have spilled over today. It also seems positive that media reports said Amazon.com, Inc. (NASDAQ: AMZN) has offered to help the Biden administration with Covid vaccine distribution. AMZN knows a thing or two about logistics.

A little data came in too, with December housing starts and building permits both beating analysts’ expectations. So that also might be helping the market early on.

Volatility continues to cool. The Cboe Volatility Index (VIX) has fallen back below 22, but remains above the historic average of around 20. VIX futures remain in contango, meaning forward prices are higher than the spot price. If you look toward spring, VIX futures are above 26. This is a possible warning sign that some investors see a bumpier road ahead.

Earnings Parade Marches (edit out)

The earnings engine keeps chugging up the hill today with two major railroads—CSX Corporation (NASDAQ: CSX) and Union Pacific Corporation (NYSE: UNP)—reporting. Then there’s Intel Corporation (NASDAQ: INTC) and IBM Common Stock (NYSE: IBM) in a double play for the Tech sector this afternoon. INTC could be an interesting one, as the company recently announced a new CEO who analysts think can guide the company through some of its production challenges (see more below).

(edit out)

(edit 0ut)

(edit out)

What Else Is Lifting Stocks? Rising Target Prices

Getting back to the markets, we’ve mentioned valuation a lot lately—mostly to point out that the S&P 500 Index (SPX) is at historically high levels on a price-to-earnings basis and some analysts are fretting about possible overbought conditions.

It wouldn’t be fair to bring up valuation and not add that plenty of analysts apparently see more potential upside for many of the biggest stocks. That’s been evident this week in price target raises for companies like Tesla Inc (NASDAQ: TSLA), NFLX, and Alphabet Inc (NASDAQ: GOOGL).

All of those stocks got some traction Wednesday in part due to those target increases from Wall Street, which helps explain why high-profile large-cap growth companies led the way in yesterday’s rally. NFLX might have earned those higher targets with its incredibly strong earnings, but keep in mind that TSLA, GOOGL, and the other FAANGs that rose yesterday all still have to report. Higher expectations from Wall Street could mean a bigger hit if their earnings fail to impress.

That’s just one reason investors need to be careful, especially with indices at all-time highs. The market environment has been a bit of a two-edged sword with those highs accompanied by bounces every time things pull back. If you’ve been playing the ‘buy every dip’ game for the last few years, your success has probably been in many ways unparalleled.

Still, whatever’s going on with “animal spirits” and the overall market, every company has its own fundamentals to consider. That means if you own individual stocks, you always have to keep that in mind. Take INTC, which is expected to report this afternoon. This stock rocketed from below $30 to nearly $70 between 2016 and 2019, only to now be struggling in the $50s due to manufacturing issues that have made it fall behind competitor Taiwan Semiconductor (TSM).

Last year, INTC was forced to delay rolling out mass production of its next-generation fabrication process until at least late 2022, further widening the advantage TSM has gained, Barron’s recently noted. Intel already pays TSM to produce chips, but the company may seek to expand that partnership or try and find capacity elsewhere. Investors are waiting for answers to those questions on the earnings call later today, but it just points up that whatever phase the market is in, no company is immune from problems.

On the subject of problems, there’s also United Airlines Holdings Inc (NASDAQ: UAL), which reported last night. The problems it’s experiencing extend to the entire industry due to the pandemic’s impact, which cut worldwide passenger traffic to levels last seen in 2003. UAL posted its fourth-consecutive quarterly loss, and said it expects Q1 revenue to be down 65% to 70% compared with the same period of 2019. Shares fell nearly 2% in pre-market trading. Boeing Co (NYSE: BA) is coming up next week and analysts are looking for more insight into cost cuts and customer demand metrics.


philadelphia semiconductor index
CHART OF THE DAY: FAANG REVIVAL. After a short slumber, the NYSE FANG+ Index ($NYFANG—candlestick) showed life yesterday as it gapped up reaching a new high at around 6693. For a while it was trending up along its 25-day moving average (blue line) but yesterday’s action put it well above that support level. Data source: Ice Data Services. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.

Tough Audience: We’re entering the heart of earnings season, so it’s time to remember a pattern seen so often recently. Investors can be hard to please, to say the least, and might punish companies even when they meet or exceed Wall Street’s expectations—just ask anyone who holds shares of JPMorgan Chase & Co. (NYSE: JPM) after it absolutely demolished analysts’ projections but lost ground in the market last Friday.

In some cases, there may be “whisper numbers” going around that some had hoped a company would meet. In others, the actual earnings might look fine but guidance might not please everyone. Even an offhand remark from an executive on an earnings conference call can sometimes spoil what otherwise would have been a strong day, if you remember what happened to Caterpillar Inc. (NYSE: CAT) a few years ago. With so many stocks at or near their highs, any company that fails to meet expectations is vulnerable to getting a knuckle sandwich from Wall Street.

Biden’s First Steps on China Awaited: Since we mentioned CAT, it’s probably time to consider the Biden administration’s policy on trade and its potential impact on companies like CAT with a big presence there. For now, Biden says he’s keeping former-President Trump’s tariffs, and faces calls from both sides of the aisle to stay tough on Beijing. On the other hand, there are companies in the U.S. being hurt by tariffs and by having less access to China’s huge market, so there’s that to think about. Though the first phase of the trade deal signed last year by the countries seems to have gotten agricultural trade back into gear, many industries remain caught between the trenches in this long trade war.

It might be interesting to get CAT’s perspective on trade relations when it reports next week. The company said in its Q3 earnings call that it had strong demand in China for its construction segment that quarter and that it expected China construction demand to grow in coming quarters.

Not All Boats Lifted: One sector that sat out yesterday’s rally was Financials. This segment of the market has cooled off lately and it looks like that could be due partly to the recent flattening in the 10-year yield, which had been on a tear for about a month. The yield ticked up slightly early Thursday, pivoting around 1.1% after flirting with 1.2% earlier in January. Overall, bank earnings looked good but not great. The best takeaways are that some of the reserves set aside for credit losses got removed, and that loan activity and trading looked strong in Q4."

MY COMMENT

WOW.....I can FEEL the POWER.....as I edit out the political content of this article. I had no idea......OMG. I feel like a tech oligarch.

Sorry, just kidding.....I am just tired of politics infecting EVERYTHING. I am NOT going to start editing......routinely. The KEY......yes.....earnings and fundamentals WILL rule the markets over the coming weeks and year.

I thought it was interesting that NETFLIX had.......BLOW OUT....numbers the other day.......and.....today, I get an email that they are RISING my subscription price by $2.00 per month. Talk about some real BS stuff. They hit record numbers in ALL categories and than turn around and hit their subscribers with a 12% increase.....for me. In reality.....the increase has been known about for a week or so.

Heading to the close.......so far a nice positive day across the various averages.

 

I....could not wait.....to log in and check the results today.....so....they would be locked in for eternity. A VERY nice day....in spite of four holdings.....NKE, HON, PG (very slightly) and TSLA.....being red today. I was definately GREEN today.........hit an account high......and.....BEAT the old SP500 by .85%.

For a while there over the past week or two....I was having trouble beating the SP500. I think I made it all back over the past few days.....although.....I do not keep any sort of data on this day to day....just the year end result.

POOR TESLA......they have been locked in a trading range for the past TWO weeks. It ALL started on January 8....when the stock hit a nice high of $880. Since than.....including today.....they have been trading in a very narrow and flat range between $811 and about $855.....closing today at $844.

If my memory is right.....was it January 8 when TomB16 sold ALL of his TESLA stock? Seems to me......we can BLAME TomB16 for this weakness in TESLA.......he must have owned way more shares than anyone thought to be able to flatten the stock for two weeks. Thanks a lot....TomB16.

A great day today.......lets close out the week with another one tomorrow......we are.....now....starting to build up a little bit of a cushion. January has the.....potential.....to end up as a really nice strong start to the year.

January 2021 weekly gain SP500

Week of January 4 +1.85%
Week of January 11 (-1.48)
Week of January 18 (so far) +2.25%

 

HERE is the EARNINGS data for a stock that I owned for a good length of time.......long ago......IBM. It has been a while since I sold them. They have been in DECLINE for a long, long, time now.........compliments of a corporate culture of ARROGANCE and INCOMPETENT MANAGEMENT. They SQUANDERED the opportunity of the century.....when they allowed a small start up.....MSFT.....to have control of the future of computing.......the PC operating system. The MOST DOMINANT tech company of the time....that got SNOOKERED by company composed of a bunch nerds....led by a college drop out....that had just a handful of employees.....and.....did not even have a product yet. A SAD but TELLING tale of woe:

IBM revenue slide continues in Q4 2020

https://www.cnbc.com/2021/01/20/ibm-earnings-q4-2020.html

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

"Key Points

• IBM’s revenue fell more than analysts were expecting.
• The company’s revenue has now declined for four consecutive quarters.
• The company again declined to provide earnings guidance for the full year, following the emergence of the coronavirus.

IBM shares moved 7% lower in extended trading on Wednesday after the company reported fourth-quarter revenue that fell short of analysts’ expectations.

Here’s how IBM performed:

• Earnings: $2.07 per share, adjusted, vs. $1.79 per share as expected by analysts, according to Refinitiv.
• Revenue: $20.37 billion, vs. $20.67 billion as expected by analysts, according to Refinitiv.

Revenue fell 6% on an annualized basis, the fourth consecutive quarter of declines, according to a statement. Revenue had not fallen so sharply in five years. The company has sought to go bigger in cloud computing and artificial intelligence under new CEO Arvind Krishna, but revenue declines also rankled his predecessor, Ginni Rometty.

“The challenging environment we have seen since March continued with the shift in clients buying behaviors and priorities,” said Jim Kavanaugh, IBM’s chief financial officer, on a conference call with analysts. “Giving the level of macroeconomic uncertainty, more clients tended to move toward shorter duration engagements impacting our software revenue.”

IBM’s Cloud and Cognitive Software segment that includes Red Hat produced $6.84 billion in revenue, down about 5% year over year. That’s lower than the FactSet consensus estimate of $7.18 billion.

The Global Technology Services unit came up with $6.57 billion in revenue, which was down 6% and below the $6.92 billion FactSet consensus.

Global Business Services, which includes consulting, contributed $4.17 billion, down about 3% and more than the $4.08 billion consensus.

Systems revenue of $2.50 billion, from sales of mainframe computers and other hardware, was down by 18% and under the $2.26 billion consensus estimate. The company is comparing against a period when Systems revenue rose from a new mainframe.

The company did not issue formal earnings guidance but did say it expects revenue growth in 2021, along with $11 billion to $12 billion in free cash flow.

The company’s earnings per share fell 66%, the sharpest decline in three years, partly because of a $2.04 billion pre-tax charge for structural actions in the quarter. The hit was less than expected; in October the company had said it would be around $2.3 billion.

The charge relates to the plan IBM announced in October to spin off its Managed Infrastructure Services division, which offers hosting for web sites and web-based software, into a separate public company by the end of 2021. The spin-off amounted to the first major shift for IBM since Krishna replaced Rometty as CEO in April. That division currently sits within Global Technology Services.

Also in the quarter IBM said it had agreed to buy cloud consulting services provider Nordcloud for an undisclosed sum.

Excluding the after-hours move, IBM stock is up about 5% since the start of 2021, while the S&P 500 is up around 3% over the same period.

MY COMMENT

ABSOLUTELY PATHETIC earnings. TOTALLY negative in nearly EVERY way.

"The challenging environment we have seen since March continued with the shift in clients buying behaviors and priorities,” “Given the level of macroeconomic uncertainty, more clients tended to move toward shorter duration engagements impacting our software revenue."

The quote......above......from IBM is......corporate speak.......for....."WE JUST ABSOLUTELY SUCKED"....this quarter.

 

HERE......is a brief version of the......BEGINNING OF THE END.....for IBM. From this time on the company was a dead man walking....they just did not know it yet. They are kind of in the MIDDLE of the end right now. I STILL think that with the proper management they could turn things around and become the kind of company that they should be. Of course......this is simply....my personal opinion as someone that has followed them as an investor for many decades.

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

The Agreement That Catapulted Microsoft Over IBM

https://www.ozy.com/true-and-stories/the-agreement-that-catapulted-microsoft-over-ibm/94437/

"When Thomas Watson Jr. took over his father’s company in 1956, he began the process of modernizing and revitalizing International Business Machines, or IBM. Invoking Søren Kierkegaard’s parable about tame ducks who — rather than fly south — remain up north growing fat on the food that’s given them, Watson wanted to build a company filled with “wild ducks,” those willing to break formation or “think different,” as another computer manufacturer once put it. Despite its wild ducks ethos, IBM was still a slow-moving corporate behemoth, one that waited too long to enter the personal computer business in the late 1970s. It was a delay that provided a fateful opening for two true wild ducks, Microsoft’s Bill Gates and Paul Allen, to fly down south in 1980 and pull off a contractual coup that would change the course of tech history … and help oust IBM as the world’s dominant computer company.
As Kevin Maney chronicles in The Maverick and His Machine, Thomas Watson Sr. was essentially the first celebrity CEO — not only the highest-paid man in America but also a visionary who believed that his mission-driven IBM could be a great place to work and make an impact on the world. As it grew its share of the computer market, IBM cultivated an equally strong corporate culture, including countless employee perks, a monthly magazine, even a company songbook. IBM’s sales reps were not permitted to drink, and they were required to wear suits and ties.

IBM’s legal caution would prove to be Microsoft’s business windfall.

And then two men who hardly ever wore suits turned up in them for a meeting with IBM in August 1980. Gates and Allen had started Microsoft just three years earlier, but the Bellevue, Washington, software company had already sold more than a half-million copies of its Basic software program, which had drawn the attention of the largest computer-maker in the world. IBM had traditionally developed new products in-house, but by 1980 it was late to the PC market and wanted to move as fast as possible, which meant outsourcing some key work. Among other things, IBM needed software to enable the operation of various programs for its first PC. And so IBM approached Microsoft and other software-makers about their top-secret “Project Chess” (also with the initials PC), requiring each to sign a nondisclosure agreement before IBM would even sit down with them.

As Paul Allen shares in Idea Man: A Memoir by the Cofounder of Microsoft, a key competitor of Microsoft’s had refused to sign the NDA that IBM gave them — and while their lawyers were bogged down negotiating, Allen and Gates made their move, signing IBM’s NDA and promising them (even though they were not sure quite how to deliver) that Microsoft could create a disk operating system (DOS) that would meet their needs. “[T]hanks to a fluke,” Allen writes, “we’d been handed the opportunity to create the pivotal product of the era.”

On Nov. 6, 1980, the contract that would change the future of computing was signed: IBM would pay Microsoft $430,000 for what would be called MS-DOS. But the key provision in that agreement was the one that allowed Microsoft to license the operating system to other computer manufacturers besides IBM — a nonexclusive arrangement that IBM agreed to in part because it was caught up in decades of antitrust investigations and litigation. IBM’s legal caution, however, would prove to be Microsoft’s business windfall, opening the door for the company to become the dominant tech company of the era.

Hundreds of thousands of IBM computers were sold with MS-DOS, but more than that, Microsoft became the maker of the crucial connection that was needed between the software and hardware used to operate computers. Company revenue skyrocketed from $16 million in 1981 to $140 million in 1985 as other computer-makers like Tandy and Commodore also chose to partner with them.

And as Microsoft’s fortunes rose, IBM’s declined. The company known as Big Blue, which had once been the largest in America, and 3,000 times the size of Microsoft, lost control of the PC platform it had helped build as software became more important than hardware. By the early 1990s, the company was losing billions of dollars a year and struggling to stay afloat, with Microsoft surpassing IBM in market value in January 1993. While parts of IBM, including its research labs, had done a great job at championing wild ducks and crazy ideas, over time, says Maney, “the company no doubt became loaded with tame ducks.”

IBM had also let its wild ducks be corralled by overly cautious lawyers — a lesson Microsoft would learn from, throwing legal caution to the wind at times. That would occasionally land the company in hot water, including with the famous antitrust suit brought by the U.S. Justice Department in the late 1990s. Microsoft tried to rebel against IBM’s bulky, top-down corporate style in other ways as well. “We hated IBM,” Peter Neupert, a former Microsoft executive, told Wired in 2000. “The people who were rewarded most at Microsoft were cowboys and misfits — the guys IBM would never hire.”

And so goes the history of modern computing — from hardware to software, from wild ducks to cowboys and misfits, transitions powered in large part by a single highly consequential contract provision."

MY COMMENT

In my opinion......the GREATEST BUSINESS BLUNDER.....in the history of computing. The rest is history.....this is the genesis of the earnings report that is outlined above as well as my comments/opinion above.

 

CONGRATULATIONS......to the NASDAQ and the SP500.....both closed at new all time highs today.

Many people dont have the time or inclination to pick stocks. These modern indexes......SP500, NASDAQ.......or variations of them.......I would guess are used in some form or other by more investors than any other investment for their long term savings or retirement. They have been......and will be...... a convenient way to WEALTH......for a VAST percentage of the population.

BELOW are some......SNIPPETS........from this little article....relevant to the record close

Nasdaq closes at another record as Big Tech jumps ahead of earnings, S&P 500 ekes out new high

https://www.cnbc.com/2021/01/20/sto...s-in-previous-session-biden-takes-office.html


"The tech-heavy benchmark climbed 0.6% to close at a new high of 13,530.91 as Apple shares popped 3.7%. The Dow Jones Industrial Average dipped 12.37 points to 31,176.01, after touching an intraday record earlier in the day. The S&P 500 gained less than 0.1% to 3,853.07, eking out another fresh high."

"Apple’s jump came after top analyst Katy Huberty from Morgan Stanley said she expects a record December quarter print for the tech giant. Optimism is rising that major technology companies will impress Wall Street when they hand in earnings reports next week. Apple and Facebook have risen 7.7% and 8.6%, respectively, this week ahead of their quarterly results, while Microsoft has gained 5.8%."

"The S&P 500 has gained 2.6% so far in the new year, and the tech-heavy Nasdaq has climbed nearly 5% during the same period."

"The S&P 500 is currently trading at 22.8 times forward earnings, near levels during the 2000 dotcom bubble, according to FactSet. The broad equity benchmark is also 16% above the 200-day moving average, twice the normal levels even in bull markets."

“The breadth in the market place was quite poor during the rally.”

"Thursday’s action came after a better-than-expected reading on jobless claims. First-time claims for unemployment insurance totaled 900,000 for the week ended Jan. 16, lower than an estimate of 925,000 according to economists surveyed by Dow Jones."

MY COMMENT

YES......it seems to me that the markets have been very shallow often lately.....in December and into this year. One nice thing as a.....LONG TERM INVESTOR......I dont have to understand or know.........what or why.......anything is going on in the markets. It is simply NOT relevant. My job is to........STAY.....fully invested and capture the gains......regardless......of why or how they are happening.

Obviously.......being long term.....I dont think it is even possible to capture or predict the short to medium term market action. The academic research bears this out......as does the poor performance of short to medium term traders.......over the long term.

 

SPEAKING.......of IBM. I remember in the very early 1980's purchasing a........multi unit....multi printer..... IBM DISPLAYWRITER system for my business. The system used large floppy discs and was a dedicated word processor using detached computer type keyboards, detached type monitors and separate disc drives. Basically a computer that could only be used for word processing with storage on floppy discs.

At the time this was state of the art. I put about $50,000 onto the system for my business. Much of the cost was for multiple IBM printers. The primary reason I bought the system was for the advanced printers that could hold multiple types of paper PLUS envelopes without having to change paper trays or feed the envelopes in.

Before that time at least in my city.....most businesses were still using IBM Selectric II typewriters and/or Mag Card machines.

That was a lot of money for the very early 1980's. I remember very well that the local IBM rep was extremely arrogant and dismissive.......we were considered a very SMALL customer....hardly worth their time and effort.

The ADVANCES in technology over my time in the business world from the mid 1970's till the time I closed my business in 1999 were.....MIND BOGGLING........to say the least.

 

I may not short term trade or invest.....but......I LIKE it when the markets show RATIONAL behavior day to day. The open today is TOTALLY understandable with the earnings released by IBM and INTEL. Both of these stocks STILL have the ability to drive the markets.

It will be interesting to see if the markets FLIP to the positive by the close today. I personally think there is a pretty good chance.

This year.....my take.....we will experience a........NORMAL......fundamental, results driven, market environment. A VERY good thing.

 

WELCOME.....Dax Martinez. Feel free to post and contribute any time on this thread.

For someone that is just starting out.....you seem to have things figured out nicely. Investing 20% of your weekly income.....is HUGE......especially at your young age. If you continue to do this over your life you will achieve financial security. Probably the most important thing you can do is cultivate a life long habit of saving and investing.

You seem to have a nice group of stocks and funds.

As to retirement.......do you have access to a 401K plan with a company match? If so that is probably your BEST retirement vehicle.....at least up to the limit to capture the company match. If there is no 401K.......it is likely that your BEST retirement vehicle will be a ROTH IRA. You will find MUCH info on the internet about how a ROTH IRA works.

If you are into LONG TERM INVESTING.......start at the beginning of this thread and read the old posts. MOST of what is here applies just as much today as when it was first posted.

With your attitudes and background and DRIVE to improve yourself......you and your kids have a BRIGHT FUTURE. Keep up the good work......you have made a good start to get your CDL and get into a high demand occupation......as well as starting to invest. CONGRATULATIONS for taking the first steps.....your family and parents must be very proud of what you are doing.

 

Hi Dax

I assume you have a brokerage account for the investments that you have made so far. You might want to have your brokerage account....your ROTH IRA.....and any new savings accounts....at the same place. That way you will see them all together when you go online. They would ALL be separate....different....accounts....but it will still be easier to have them all at one place.

REMEMBER.....we ALL started where you are starting right now. The KEY is.......consistent life long investing. You dont have to hit it out of the park......slow and steady wins the race. What REALLY builds up the money is investing over a lifetime.

 

WELL.....my accounts were in an EPIC BATTLE today between the red and the green. By days end......I ended up in the red by.......a very minimal amount. I was really hoping to end in the green. BUT....flat.....on a day like this.......is actually fine with me. As a consolation prize.....I was able to beat the SP500 by .27% today.

SO.....we are once again....done with another week......week 3 of the year is now locked in. HERE is where we are to date:

SP500 for the week +1.94%
SP500 year to date +2.27%

DOW for the week +0.59%
DOW year to date +1.28%

NASDAQ100 for the week +4.39%
NASDAQ100 year to date +3.71%

NASDAQ for the week +4.19%
NASDAQ year to date +5.08%

SO......a nice start to the year and a very nice January with a week to go till the end of the month. AND.......some nice earnings coming up over the next week or two. So far......EVERY one of the market indexes are positive year to date and ALL were up nicely for the week. Over time....it ALL adds up.....bit by bit.

 

What? Is there socializing on this site? Where?

DAX....you and anyone else that is starting out.....come here and post as much as you want. EVERYONE on here is very happy to try to help anyone get started and be successful. PLUS......we will learn from you......also.