The Long Term Investor

The GAINS that we saw at the open today seem to be ESCALATING. The general path for today is PROBABLY going to be the same as yesterday.

 

I am currently LINGERING in the usual mid-morning market DOLDRUMS. Basically flat for the day. The stocks that are saving me today are my non-tech holdings........Costco, Home Depot, Honeywell, Amazon, and Nike. My more pure TECH holdings are all down.

With where we are now it will be up to the closing hours of the markets to determine where we end the day. The morning is directionless. At least on the positive side.....my account.....is just FLAT and I am holding on to the gains from yesterday at the moment.

 

TODAY is a very SLOW news day. There is nothing at all in the financial or investing news so far today. Everything is a RE-HASH of the same old topics. Add in the very low holiday volume and you have what is going on in the markets today.....NOTHING.

It is actually kind of nice to have a BORING slow day.

 

As you would expect with what I own I was in the RED today. BUT....I held onto most of the gains from yesterday. I also....got beat by the SP500 by 0.23% today.

I was in the car most of the afternoon and listening to various radio stations......news, business, and some talk. I was AMAZED by the constant and unrelenting talk, news. etc, etc about Omicron. After what I heard all day I have no doubt that today in the markets was all about OMICRON. Which means today was just an irrelevant day when it comes to the long term and fundamentals. It was a daily result that over the longer term will be meaningless.

So......we move on to the........FINAL THREE.....market days of 2021.

 

I see a number of people posting results today. I am going to avoid calculating mine till after the close on Friday. I am pretty sure I am well ahead of the SP500.....but I will find out for sure on Friday.

As is my custom and pledge on this thread......I will post ALL results after the market close on Friday.....if I have time. I am playing on Friday night.....so....some of the results might end up being posted on Saturday. In any event I will transparently put it on here for all to see. What good is a thread about long term investing if you don't post REAL results.......so people can see what worked and what did not work.

 

HERE is the media take on today.

Stock market news live updates: Stocks end mixed after S&P 500 U-turns, slipping from all-time high

https://finance.yahoo.com/news/stock-market-news-live-updates-december-28-2021-233337505.html

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

"The S&P 500 took a breather on Tuesday, closing out a choppy trading session in the red after the index ceased a four-day climb toward another all-time high.

U.S. stocks were mixed following seesaw action from all three major indexes in intraday trading as investors weighed rising coronavirus cases. The S&P reversed course in midday trading after hitting an intraday high earlier in the session. The Dow was up while the Nasdaq faltered, dragged down by continued selling in tech stocks.

Global COVID-19 cases hit a daily record on Monday, with more than 1.44 million worldwide infections reported, topping the prior record, according to Bloomberg. Infections from the highly-transmissible Omicron variant — found to spread 70 times faster than previous strains — comprised much of the newly tracked cases, though studies indicate illness caused by the strain is less likely to be severe or lead to hospitalizations.

The CDC also eased its guidance for quarantining after exposure to the virus, halving its recommendation to isolate upon a positive test from 10 to five days.

December was a volatile month for investors who weighed the strain’s impact on the economy, but recent developments that indicate Omicron may cause milder disease helped markets shake off earlier concerns.

“Perversely, bad news around Omicron might be good news for the markets because it gives the Fed the impetus to continue with these very loose monetary policies,” Opimas LLC chief executive officer Octavio Marenzi told Yahoo Finance Live.. “Too much good news for the real economy might actually be quite bad for the markets.”

The S&P hovered over another record close after the index marked its 69th all-time high of the year at the end of yesterday’s trading, along with broader market advances in the final stretch of 2021.

Meanwhile, brent crude oil closed at about $76 a barrel after rising to a one-month high of $79 a barrel on Monday.

Veteran oil industry analyst Phillip Streible of Blue Line Futures told Yahoo Finance the renewed vigor in oil prices of late is only just the beginning. Streible thinks oil is headed beyond $80 in 2022.

He said prices are at risk of falling to $60 in the near-term due to an Omicron-related demand slowdown, but that will likely prove to be a buying opportunity in front of a "long-term" rally in 2022.

The rest of the week is expected to be mostly quiet for investors, with trading volumes low and a light calendar of economic data and earnings releases.

“We’re going to have a very strong January,” Navellier & Associates founder and CIO Louis Navellier told Yahoo Finance Live. “If we can rally on light volume, we’re going to get an explosion to the upside when the volume increases in January.”

The market will head into 2022 with several key considerations to weigh but with its biggest focus on the course of the pandemic and rising inflationary pressures, as well as on measures the Federal Reserve could take in response.

“Inflation and Omicron are the two most important catalysts for the stock market right now,” APAC CEO at Qraft Technologies Francis Oh told Yahoo Finance. “I think that those catalysts are priced in through the market volatility… still I think the market will cautiously move off.”

MY COMMENT

From what I am hearing the next weeks are going to be CONSTANT and unrelenting....OMICRON. I am looking forward to getting these next three days out of the way and moving on to a new year.

 

The open today....for me....is the same as yesterday morning.....totally FLAT. If this keeps up we will MUDDLE our way to the end of the 2021 market year. That would not be a bad thing since we are up by about 28% in the SP500 and I am over that in my account.

A listless end to the great year would be par for the course for 2021.

 

I like the investor psychological evaluation reflected in this little article.

Six (Three) Investment Resolutions for 2022, Part One

https://americanconsequences.com/six-investment-resolutions-for-2022-part-one/

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

"It’s the time for steeling your resolve about ways to improve your life… and how to make yourself wealthier – or, depending on how things go, preventing yourself from becoming poorer – is a good place to start.

In that spirit… here are six resolutions that any investor would do well to consider in the new year…

1. Would You ‘Buy’ That Again Now?

There are an infinite number of things that we could buy… stocks, Caribbean islands, Patek Philippe watches, 75-inch 4K Smart TVs, Hermès ties… Money is useful in that way.

But – unless you’re the Federal Reserve – we don’t have an infinite amount of money. So whenever we buy one thing, we’re making an explicit decision to not buy lots of other stuff. And there is a cost associated with that decision – it’s called opportunity cost.

When you’re investing in stocks, the opportunity cost is easy to figure out. You can see how other stock prices changed after you made an investment decision, and (if you want to torture yourself) look at how much money you could have made… Hindsight is 20/20.

But the “cost” of what you didn’t buy is less clear with respect to other types of goods. The money you spend on that Cancún getaway is cash that you’re not putting away for your children’s education. It’s cash that you’re not using to buy shares in a stock that could double or triple in price in coming years (or… in a stock that could fall to zero).

When you understand what you’re not buying, you might change your mind about what you purchase. Or you might decide that what you’re buying is the best possible use of your funds.

But remember: Right now, you’re buying everything you own – again. Every day, your cash is tied up in something that you own today.

So ask yourself: “If I had the cash in my hand to buy this thing right now, instead of the thing itself” – whether it’s a French door refrigerator, a Belize beach bungalow, or a dozen shares of Amazon – “would I still buy it right now?” If the answer is no… well, you know what to do.

Every moment that you’re holding onto an asset, you’re using valuable capital that you could put to a different use… That means every day you’re “buying” something that you already own.


2. Get in Touch With Your Feelings… About Money

It may sound obvious, but in order to get more money, you need to like money. You can’t attract something that repels you. It’s the financial equivalent of “If you want friends, you have to be a nice person,” and “If you want to lose weight, eat healthier and exercise.” Obvious stuff, right?

But if deep inside you feel having a lot of money means you’re selfish or greedy, or if you think money is a little dirty or somehow naughty… I have bad news: You’re probably never going to be rich, or stay rich. If on some level you don’t like money, it’s unlikely that you’ll ever have a lot of it.

Ask yourself if any of the below resonates…

• Money is the “root of all evil.”
• Making money takes too much time and effort.
• If I want money too badly, other people will think I’m shallow.
• Money doesn’t buy you happiness, so why bother?

Your emotions – consciously or unconsciously, intentionally, or accidentally – are the invisible tripwires of life. And if you let them, they’ll also get in the way of your path to riches. If there’s a voice in your head telling you something like the above, even (or especially) if it’s just a quiet muttering in the background, it’s going to trip you up.

Rich people don’t have mixed feelings about money. They wouldn’t be rich if they did. If you do… either fix it – or remain non-rich.

3. Expect Mean Reversion

A mean is a way of averaging. It’s what you get when you total a bunch of numbers and divide that by the number of items counted.

Means can change over time. The average temperature of the Earth has been rising. The average American kid has more allergies today than he did two generations ago. The computing power you can hold in your hand has risen exponentially over the past few decades. Some things do change over time – in a deep, structural way that alters how we live.

But for almost everything else, random events and developments can take things one way – and eventually they usually return to normal, or the average, and the cycle kicks in. Your team wins five games in a row, but then loses a few after that. You have a string of crummy luck, and then the next few weeks are better. It rains and rains… and then it doesn’t.

In investing, extreme prices move up or down and return to their average like a rubber band. Stretch it, and when you let go, it returns to its original shape. That’s mean reversion.

The good news about things going against you for what feels like forever is that, eventually, your luck turns… And the reverse is true too… What feels like a run of happy luck will also eventually run out.

Whether it’s a share price on a streak that doesn’t make sense… markets that levitate for what feels like forever… sooner or later, they revert to the mean. Expect it and plan for it – rather than be surprised by it.

And what’s long overdue to revert to the mean? U.S. market share prices. Over the past decade, the S&P 500 Index has returned 16.4% per year (and 28% over the past year). But over the past 50 years, it’s returned 11.1% per year… and 10.8% per year over the past century.

If history is any guide, at some point – when mean reversion kicks in – the S&P 500 is going to suffer through an extended period of performance that’s lousy by recent standards… but a stretch that will be perfectly normal by mean-reversion standards. Get ready for it."

MY COMMENT

Some little reality based psychological jewels above. I especially like the one about your attitudes toward money. It seems like a lot of people these days have some sort of guilt or even anger towards money and those that make more money. Talk about a.....TOTALLY.....self defeating attitude.

There is nothing wrong with having ENJOYMENT and CELEBRATING the fact that you are making money or doing well. Just because you have success does not mean that others can not have success. EVERYONE can do well....there is plenty of room for everyone.

 

HERE is the economic data of the day.....not because it is important....just because it is about the only one today.
Pending home sales slip in November amid hot housing market

https://finance.yahoo.com/news/pending-home-sales-november-2021-150010616.html

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

"The hot housing market may finally be cooling off a bit.

Pending home sales, a leading indicator of the housing market's health, missed expectations and fell in November. The National Association of Realtors’ (NAR) Pending Home Sales Index, which tracks the number of homes that are under contract to be sold, dropped 2.2% in November from October. Analysts expected a 0.8% increase in sales, according to Bloomberg consensus estimates. Pending sales slid 2.7% from the same month a year ago.

“There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices,” NAR Chief Economist Lawrence Yun said in a statement.

Pending home sales fell the most in the Midwest, down 6.3%, followed by the West which saw sales slip 2.2% from a month earlier. Pending home sales in the Northeast and South were flat last month from October. Contract signing declined across all four regions of the U.S.

“Buyer competition alone is unrelenting, but home seekers have also had to contend with the negative impacts of supply chain disruptions and labor shortages this year,” Yun said. “These aspects, along with the exorbitant prices and a lack of available homes, have created a much tougher buying season.”

Exorbitant home prices and historically how inventory is putting a damper on activity. Last month, the NAR reported that median existing-home prices for all housing types rose 13.9% to $353,900 in November from the same time last year. Meanwhile, total housing inventory at the end of November was 1.11 million units, down 9.8% from October and down 13.3% from one year ago (1.28 million).

Yun noted that housing demand continues to be high, adding that homes placed on the market for sale go from “listed status” to “under contract” in approximately 18 days.

“While more holiday gatherings and waning confidence could have caused activity to falter in November, home shoppers remained motivated. As we approach the new year, many are looking ahead, especially first-time homebuyers hoping to make a big change in 2022,” Realtor.com Chief Economist Danielle Hale said in a statement prior to the results. “Real estate demand continues to outmatch supply, and our survey data suggests that first-time shoppers both expect competition and are adjusting their plans to prepare for it further in advance.”"

MY COMMENT

A relatively worthless commentary on the housing market. NO......the market is NOT slowing. Prices are SKY HIGH and there is little inventory....that is the reason for the drop in pending sales. People still want.....very much....to buy a home but they are priced out of the markets and there is NO inventory.

If I was a potential buyer I would not start thinking that the market was going to change. I would not start thinking that I should just wait for better prices and a market collapse.....especially....in the HOT markets.

 

It is a SLOW....low volume....day in the markets. There does not seem to be much EXCITEMENT. As usual people in general and investors are tired and just want to get the year over with.

Stock market news live updates: Stocks tick up modestly after S&P 500 loses steam, Dow posts winning streak

https://finance.yahoo.com/news/stock-market-news-live-updates-december-29-2021-233614054.html

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

"U.S. stocks edged higher Wednesday morning though hovering just above their flatline after the S&P 500 took a breather in the previous trading day, closing out a choppy session in the red as the index ceased a four-day climb toward its 70th all-time high.

The Dow, S&P and Nasdaq ticked up slightly after futures pointed to a mixed open.

Markets closed on a mixed note Tuesday following seesaw action from all three major indexes as investors weighed rising coronavirus cases across the globe. After reaching an intraday high, the S&P 500 reversed course midday to tick down, while the Dow extended a five-day winning streak. The Nasdaq faltered, dragged down by continued selling in tech stocks.

Main Street Asset Management CIO Erin Gibbs told Yahoo Finance Live that pullbacks caused by the Omicron variant resemble those that occurred when the Delta strain first took course and are likely to see the same gradual but upward recovery.

"We encourage our clients to stay in the markets, not to get out, because when those recoveries hit and when the sentiment changes, it happens so quickly that often by the time you get back into the market, you’ve already missed out," she said.

Global COVID-19 cases hit a daily record this week, with more than 1.44 million worldwide infections reported as of Monday, according to Bloomberg. Infections from the highly-transmissible Omicron variant — found to spread 70 times faster than previous strains — comprised much of the newly tracked cases, though studies indicate illness caused by the strain is less likely to be severe or lead to hospitalizations.

The CDC also eased its guidance for quarantining after exposure to the virus, halving its recommendation to isolate upon a positive test from 10 to five days.

December was a volatile month for investors who weighed the strain’s impact on the economy, but recent developments that indicate Omicron may cause milder disease helped markets shake off earlier concerns.

“Perversely, bad news around Omicron might be good news for the markets because it gives the Fed the impetus to continue with these very loose monetary policies,” Opimas LLC Chief Executive Officer Octavio Marenzi told Yahoo Finance Live. “Too much good news for the real economy might actually be quite bad for the markets.”

On Tuesday, U.S. home price growth slowed for the third straight month but continued to climb overall. The Standard & Poor’s S&P CoreLogic Case-Shiller national home price index. posted a 19.1% annual gain in October, down from 19.7% from September. The 20-City Composite posted a 18.4% annual gain, down from 19.1% a month earlier.

Home prices continue to appreciate at double-digit rates — two-to three-times faster than a year ago — across all metropolitan areas, CoreLogic Deputy Chief Economist Selma Hepp said in a statement prior to the results.

“Unfortunately, the rate of home price growth will be limiting for many young buyers who have yet to accumulate sufficient equity gains, and an expected increase in mortgage rates next year will present further challenges," she said. "Together, these two factors will keep a lid on continued home price acceleration.”

The rest of the week is expected to remain quiet amid the typically-low year-end trading volumes and a light calendar of economic data and earnings releases, though investors will tune in on Thursday for a fresh read on initial jobless claims as they continue to assess the progress of economic recovery.

10:19 a.m. ET: Bitcoin poised to see worst month since May

Bitcoin's (BTC-USD) declines have set December up to be its worst month since May. The token was up slightly, 0.74% higher to $47,893.30 as of 10:48 a.m. ET but continues to decline from its record overall.

The digital currency fell below its closely-watched level of $50,000, extending the slide from its all-time high into a fifth week, according to Bloomberg data. The Bloomberg Galaxy Crypto Index fell as much as 4.9% on Tuesday to its lowest since early October, while other digital currencies also slumped."

MY COMMENT

Part of the problem in the markets right now is a total lack of leadership by government. There is just ZERO confidence in government on a national and also in many local areas. This is just an UNDERLYING condition that investors are going to have to deal with.

We should be seeing some good numbers on OMICRON in a month or two.....but....till than we are just going to have to live with the spread of this MILD disease. In the end....it will turn out to be a good thing. It SHOULD take some of the FEAR out of this virus as people get used to the idea that it is simply going to end up like a mild cold or at worst a mild flu.