The Long Term Investor

LOL.......Emmett and Zukodany.

I hate to say it TireSmoke but I think we are still a good ways from CAPITULATION.

 

I am back now.........six days and EIGHTEEN HUNDRED......miles later. I will post a bit now. I have to go another 250 miles on Thursday. I will also do another 200 miles on Saturday. I am tired of sitting.

I have not looked at my account today.......no use anyway.....a DISMAL day in the markets. I am no doubt in the RED. Of course.......I sit and wait so I dont really care.

 

OK.....the REAL news of the day earnings......Microsoft.

Microsoft earnings beat across the board, stock up on outlook

https://www.cnbc.com/2022/04/26/microsoft-msft-earnings-q3-2022.html

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

"Key Points

• Microsoft beat expectations on the top and bottom lines.
• The company announced plans in the quarter to buy Activision Blizzard for almost $69 billion.

Microsoft beats EPS and revenue expectations, $49.36B vs. $49.05B estimated

Microsoft shares surged 6% in extended trading on Tuesday after the software maker issued fiscal third-quarter earnings that exceeded analysts’ expectations and an optimistic outlook for the current quarter.

Here’s how the company did:

• Earnings: $2.22 per share, adjusted, vs. $2.19 as expected by analysts, according to Refinitiv.
• Revenue: $49.36 billion, vs. $49.05 billion as expected by analysts, according to Refinitiv.

Microsoft’s revenue increased by 18% year over year in the quarter, which ended on March 31, compared with 20% in the previous quarter, according to a statement. Microsoft turned in the smallest revenue beat since 2018, exceeding consensus by less than 1%. Sales and marketing expenditures totaled $5.6 billion, 10% higher than the year-ago quarter and the fastest growth in more than three years.

Amy Hood, Microsoft’s finance chief, said to expect fiscal fourth-quarter revenue of $52.4 billion to $53.2 billion. The middle of the range, at $52.8 billion, is just below the $52.95 billion consensus among analysts polled by Refinitiv.

The company’s Intelligent Cloud segment, which contains Microsoft’s Azure public cloud for application hosting, along with SQL Server, Windows Server and enterprise services, generated $19.05 billion in revenue. That’s up 26% and above the $18.90 billion consensus among analysts polled by StreetAccount.

Revenue from Azure and other cloud services jumped 46% in the quarter, compared with 46% growth in the prior quarter. The expectation was 45.3%, according to a CNBC survey of 13 analysts, while analysts polled by StreetAccount had been looking for 43.6% growth.

The number of Azure deals worth at least $100 million in the quarter more than doubled, CEO Satya Nadella told analysts on a conference call.

Microsoft’s Productivity and Business Processes segment, containing Office productivity software, LinkedIn and Dynamics, posted $15.79 billion in revenue in the quarter, up about 17% and slightly more than the StreetAccount consensus estimate of $15.75 billion. Microsoft raised the prices of certain Office 365 productivity software subscriptions during the quarter.

The More Personal Computing Segment, which includes Windows, Xbox, search advertising and Surface, kicked in $14.52 billion in revenue, up 11% and higher than the $14.27 billion StreetAccount consensus.

Microsoft said revenue from Windows license sales to PC manufacturers increased 11% in the quarter. Microsoft had projected high-single-digit growth in January. Research firm Gartner estimated that PC shipments fell 6.8% in the quarter, marking the sharpest decline since the first quarter of 2020, after a pandemic-fueled market expansion. Excluding PCs running Google’s Chrome OS operating system, which became more popular during Covid, shipments rose by 3.9%.

Revenue from security products and services falls under each of Microsoft’s three segments. In January Microsoft said its security revenue grew nearly 45% in 2021, faster than any other major product category. The company disclosed financial figures from its security business for the first time last year, surprising some observers.

In the quarter Microsoft announced a plan to acquire video-game publisher Activision Blizzard for $68.7 billion, the largest transaction in Microsoft’s 47-year history. Microsoft also closed its Nuance Communications acquisition and laid out a strategy for expanding in health care, an industry Nuance focuses on. Nuance took away a penny from Microsoft’s quarterly earnings but added $111 million in revenue.

Excluding the after-hours move, Microsoft stock has declined 19% since the start of 2022, underperforming the S&P 500 index, which is down about 12% over the same period.

Executives will discuss the results with analysts and issue guidance on a conference call starting at 5:30 p.m. ET.

MY COMMENT

WTF......when I was looking for this article I saw some sources trying to bad-mouth the earnings. INSANITY.....these were nice earnings especially considering the quarters that were the comparison. I like it....this company continues to hit on all cylinders and management is doing great.

Who cares about the short term markets.....EARNINGS are KING over the long term.

 

Now Google.....a little bit of a different story.

Alphabet reports weak earnings and revenue on big YouTube miss

https://www.cnbc.com/2022/04/26/alphabet-to-report-q1-earnings-after-the-bell-tuesday.html

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

"Key Points

• Alphabet missed on top and bottom lines for the first quarter.
• YouTube showed particularly weak results.
• Other Bets, which includes self-driving car unit Waymo, nearly doubled its revenue compared to the year prior.

Alphabet reported weaker-than-expected earnings and revenue for the first quarter on Tuesday. The stock slid about 5% in extended trading.

Here are the results:

• Earnings per share (EPS): $24.62 per share, vs. $25.91 expected, according to Refinitiv

• Revenue: $68.01 billion, vs. $68.11 billion expected, according to Refinitiv

• YouTube advertising revenue: $6.87 billion vs. $7.51 billion expected, according to StreetAccount
• Google Cloud revenue: $5.82 billion vs. $5.76 billion expected, according to StreetAccount
• Traffic acquisition costs (TAC): $11.99 billion vs. $11.69 billion expected, according to StreetAccount

Google’s revenue came in at $68.01 billion, growth of 23% from the same period last year. That’s a slowdown from 34% growth in the first quarter of 2021, when the economy was reopening from the pandemic.

The company reported $54.66 billion in advertising revenue for the quarter — up from $44.68 billion the year prior.

Breaking down the Big Tech earnings

YouTube ad revenue for the quarter fell short of analyst expectations. The video site was a particular beneficiary of the pandemic, when users were primarily at home on their devices. The miss also comes as TikTok captures a growing share of the social media video market.

Porat says YouTube “modest growth” mostly in direct response ads. The deceleration primary reflects lapping in the exception performance in the first quarter of 2021, she says on call.

CEO Sundar Pichai said on a call with investors that YouTube’s TikTok competitor “Shorts” now has 30 billion daily views, which is double the amount of views the prior quarter and four times as many as the year before.

Google’s cloud business was a standout in the quarter, growing 44% and beating estimates as more big enterprises shift their workloads away from their own data centers. However, the cloud division is still losing money, reporting an operating loss of $931 million, compared to $974 million a year earlier.

During the quarter, Google halted much of its Russian operations due to the invasion of Ukraine. Revenue growth in the European region, which also includes the Middle East and Africa, slowed to 19% in the first quarter from 33% a year earlier.

Alphabet’s Other Bets, which includes its life sciences companies and self-driving car unit Waymo, nearly doubled revenue from the year prior, bringing in $440 million versus $198 million the year prior. The unit lost slightly more than the previous year with $1.15 billion.

Traffic Acquisition Costs (TAC), the metric used to show how much the company pays other websites to acquire traffic, came in higher than Wall Street expected at $11.99 billion.

Google’s other revenue segment, which includes hardware, Play Store, and non-advertising YouTube revenue, notched $6.81 billion, slightly higher than the prior year.

Alphabet’s stock is down 18% for the year as of Tuesday’s closed. Based on after-hours trading, it’s at its lowest since may 2021.

MY COMMENT

Not great but not horrible. Good growth in many segments....especially revenue. I will take it.

If the give me a super low pre-split price and I will enjoy the HUGE gains from there as they compound. SCREW the short term trading and speculation. this is a nice long term holding and I plan to continue to hold this stock for the long term.

 

The POWER of the SP500 as a one stop investing vehicle is shown by how it is holding up in this down market. Year to date it is (-12.40%) after the big drop today. I consider that STRONG evidence of the diversification that the 500+ holding deliver. In addition it reflects the power of owning the 500+ greatest companies in the USA.

 

Today was one of the WORST losing days I have had in all my accounts that I run in a long time. I was decidedly in the RED. PLUS....got beat by the SP500 by 0.81%.

I am now down by (-17.40%) year to date. Just a horrible series of negative events happening this year. The good news.....most of them really have nothing to do with stock FUNDAMENTALS.

I have NO concerns for the markets or negative feelings. I am just siting and watching with....clinical bemusement. I have sat through much worse in the past.

BUT....at the moment it is a short term TRADERS market.

WHATEVER.

 

At least I am not Cathie Wood.......with ARKK down (-45%)......for the year, after just......(less than).... four months. The WORST performing USA Equity Fund for the first quarter.

Cathie Wood's ARKK is worst-performing US equity fund in Q1 2022: Morningstar

https://finance.yahoo.com/news/cath...y-fund-in-q-1-2022-morningstar-185220557.html

 

We continue with earnings for the rest of the week. Many BIG companies......including META tomorrow. For me the ones that I care about are AMAZON and APPLE on Thursday and HONEYWELL on Friday.

 

This was a HUGE loss yesterday.

Tesla loses $126 billion in value amid Musk Twitter deal funding concern

https://finance.yahoo.com/news/tesla-loses-126-billion-value-225849997.html

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

"(Reuters) - Tesla Inc lost $126 billion in value on Tuesday amid investor concerns that Chief Executive Elon Musk may have to sell shares to fund his $21 billion equity contribution to his $44 billion buyout of Twitter Inc.

Tesla is not involved in the Twitter deal, yet its shares have been targeted by speculators after Musk declined to disclose publicly where his cash for the acquisition is coming from. The 12.2% drop in Tesla's shares on Tuesday equated to a $21 billion drop in the value of his Tesla stake, the same as the $21 billion in cash he committed to the Twitter deal.

Wedbush Securities analyst Daniel Ives said that worries about upcoming stock sales by Musk and the possibility that he is becoming distracted by Twitter weighed on Tesla shares. "This (is) causing a bear festival on the name," he said.

Tesla did not immediately respond to a request for comment.

To be sure, Tesla's share plunge came against a challenging backdrop for many technology-related stocks. The Nasdaq closed at its lowest level since December 2020 on Tuesday, as investors worried about slowing global growth and more aggressive rate hikes from the U.S. Federal Reserve.

Twitter's shares also slid on Tuesday, falling 3.9% to close at $49.68 even though Musk agreed to buy it on Monday for $54.20 per share in cash. The widening spread reflects investor concern that the precipitous decline in Tesla's shares, from which Musk derives the majority of his $239 billion fortune, could lead the world's richest person to have second thoughts about the Twitter deal.

"If Tesla's share price continues to remain in freefall that will jeopardize his financing," said OANDA senior market analyst Ed Moya.

As part of the Tesla deal, Musk also took out a $12.5 billion margin loan tied to his Tesla stock. He had already borrowed against about half of his Tesla shares.

University of Maryland professor David Kirsch, whose research focuses on innovation and entrepreneurship, said investors started to worry about a "cascade of margin calls" on Musk's loans."

MY COMMENT

When the need for money to purchase Twitter is weighed against the capacity that the Berlin and Austin factories will provide to Tesla......I think Musk is in no danger. In the end the fundamentals and numbers that Tesla is going to put up over the next year will more than cover the purchase of Twitter.

Most of this "stuff" is simply media fear mongering based on political leanings. I also believe that in the end Musk will make an insane amount of money on the Twitter purchase.

 

Well so much for the markets.....at the moment. We have now gone red with the Dow, SP500 and NASDAQ. We had an opening bump from the bargain hunters and now we are seeing the selling pressure again.

I would say we are now seeing a SIGNIFICANT possibility for this year to be NEGATIVE for investors. Not that this is some sort of disaster.......we are way past due for a down year.......and.....investors that have been long in the markets for years are way ahead of the game......in spite of the losses this year.

You have to play the game.......and take the pain (once in a while)......to get the gain. AND.......also to get the compounding that comes from being invested for the long term.

 

HERE......is the simple TRUTH of long term investing.

Warren Buffett's simple investing advice that's beaten most pros for 12 straight years: Morning Brief

https://finance.yahoo.com/news/warr...ost-pros-for-12-straight-years-100054380.html

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

""I recommend the S&P 500 index fund and have for a long, long time to people," billionaire investor Warren Buffett said at Berkshire Hathaway’s annual shareholders meeting last May.

That’s been pretty good advice, and I wouldn’t be surprised if he repeated it again at the upcoming shareholder meeting on Saturday.

In a report published last month, S&P Dow Jones Indices (SPDJI) analysts found that 85.1% of U.S. large-cap equity fund managers underperformed the S&P 500 in 2021. It was the 12th straight year that more than half of the managers in this category lagged the index.

In other words, investors following Buffett’s advice have outperformed most professional money managers every year for more than a decade.

Sure, the S&P 500 (^GSPC) has been having a rough go lately, falling about 13% from its Jan. 4 high of 4,818.

But as SPDJI’s data suggests, it’s incredibly difficult to overweight and underweight stocks in a way where you beat the market.

Indeed, many of the most popular stocks in the market have been doing terribly. On Tuesday, Mike Zaccardi tweeted stats showing how Microsoft (MSFT), Alphabet (GOOG, GOOGL), Tesla (TSLA), Nvidia (NVDA), and Facebook parent Meta (FB) are all down between 20% and 53% from their highs.

Following last Tuesday’s disastrous earnings announcement, Netflix (NFLX) shares are now down by 70% from their recent high.

According to a different report, SPDJI analysts found that only 22% of the stocks in the S&P 500 outperformed the index from 2000 to 2020.

No one’s saying that investors should outright avoid trying to pick winners for their stock portfolio. However, investors should understand that stock-picking is incredibly hard, and there’s a pretty good chance that you will ultimately underperform the market."

MY COMMENT

That is how simple it really is. Most people.....if they were honest with themselves.......would be better off to simply buy the SP500 and hold it for the long term. Nothing more......nothing less.

BUT......that is not fun. It is not exciting.......unless you get excited by seeing your money grow.

I hammer on my family members all the time........if something happens to me......simply put everything into the SP500 and let it ride for the long term. Avoid all the money managers and others wanting to manage your money.....just let the SP500 do the hard work.

 

Here is what is going on in the markets today.......same old, same old.

Stock market news live updates: Stocks erase earlier gains to dip after tech-led rout

https://finance.yahoo.com/news/stock-market-news-live-updates-april-27-2022-222157192.html

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

"U.S. stocks turned lower Wednesday after the major equity indexes slid a day earlier, as concerns over inflation and global economic growth stirred up further volatility across risk assets.

The S&P 500, Dow and Nasdaq erased earlier gains to trade in the red. A day earlier, the S&P 500 dropped 2.8% on Tuesday for its largest decline in seven weeks, with technology shares especially slammed. The Nasdaq Composite sank 4% to fall to 12,490.74 — its lowest level since December 2020. With just three trading days left in April, the S&P 500 is tracking toward a monthly decline of 7.8%.

A tepid quarterly earnings season pressed on, and the Big Tech companies that reported earnings after market close on Tuesday produced mixed results. Microsoft shares rose after the company posted sales and earnings that exceeded estimates, fueled in part by further growth at its Azure cloud computing business. Alphabet, however, saw shares fall after posting a sharp deceleration in YouTube ad sales growth and missing on earnings, even as company-wide revenue came in-line with estimates. Peer ad-driven tech giant Meta Platforms is poised to report results Wednesday after market close.

The sell-off across U.S. stocks this week extended volatility seen so far in April and for the year-to-date, with investors continuing to monitor signs of elevated inflation and the further specter of supply chain strain as China grapples with an ongoing COVID-19 resurgence in key regions. And though the Federal Reserve is in a blackout period ahead of the central bank's May meeting next week, investors have still kept prospects of tightening monetary policy at the top of their minds, with higher rates and borrowing costs poised to pressure high-growth company valuations.

"The wall of worry has been building, as it relates to Fed worries," Matt Stucky, Northwestern Mutual Wealth Management senior portfolio manager, told Yahoo Finance Live on Tuesday. "Just a little over three months ago, the futures market was pricing in just three or four interest rate hikes for all of 2022. We're quite a bit above that now. And markets are pricing in a federal funds policy rate at about 2.7% by year end. So that's a significant amount of ratcheting up of Fed tightening that's been building up throughout the year. And it's one of the major reasons why we've seen volatility kick up as well."

Given these myriad concerns, other analysts suggested investors brace for more choppiness in the near-term.

"There are some names deeply discounted but I do think there's a little bit more to go on the discounts. So I would be cautious about entering the markets at this point," Kathy Entwistle, Morgan Stanley Private Wealth Management managing director, told Yahoo Finance Live. "It's impossible to call the bottom, so we do like to do a little bit of dollar cost averaging on the way in as well."

"Supply chain has been an issue, we've had issues over in China, we've got inflation — these are all things we've known about and have been recurring," she added. "But I think it's all coming to a head right now and everybody's at this point where it's like there's nowhere else to go. We know that [Fed] action is finally going to happen and that's going to affect the markets."

9:43 a.m. ET: U.S. trade deficit surges to a record high

The U.S. trade deficit jumped to a record high in March, yawning much more than expected compared to February as imports leaped.

The trade gap for goods reached $125.3 billion last month, Commerce Department data Wednesday showed. This came in much wider than the deficit of $105 billion expected, based on Bloomberg consensus data. In February, the trade deficit stood at $106.3 billion.

Imports jumped 11.5% to reach $294.6 billion, which was also a record and was led by a jump in industrial and energy product imports. Exports rose by 7.2% and also reached an all-time high of $169.3 billion.

MY COMMENT

If you are not a real long term investor.......or.......are subject to fear and panic.....WATCH OUT. We have a ways to go with the current market drop. Over the long term it will be irrelevant. BUT......to capture those long term gains.....you have to be invested and in it for the long term.

I suspect that we are going to eventually see people BAILING out of the markets this year as the losses continue for a while. I dont feel like we are near a bottom at the moment.......and.....I dont feel like people are CAPITULATING and moving out of the markets.....yet.

Thank God that we are currently in a FED black-out period. We need to make the black-out PERMANENT.

 

Sorry.......have to take a painting in to the photo imaging company to have some high resolution photos done in TIFF Format for an upcoming exhibition.

SOMEONE BUY SOMETHING.