The Long Term Investor

We will have to wait a couple of months to start another round of earnings fun. So here is sort of a final round up with 98% of companies reporting. It has been.....YES ANOTHER....great round of earnings with the predictions of the experts being shown once again to be GARBAGE.

EARNINGS INSIGHT

https://advantage.factset.com/hubfs...k/Earnings Insight/EarningsInsight_053124.pdf

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

"Key Metrics

We are at 98% reporting and, 78% of S&P 500
companies reported a positive EPS surprise 61% reported a positive revenue
surprise.

Earnings Growth: earnings growth rate for the S&P 500 is 5.9%. The highest year-over-year earnings growth rate reported
since Q1 2022 (9.4%).

Earnings Guidance: 64 S&P 500 companies issued negative EPS guidance and 42 issued positive EPS guidance.

Valuation: Forward 12-month P/E ratio, S&P 500, is 20.3. Above the 5-year average
(19.2) and the 10-year average (17.8)"

MY COMMENT

BUMMER.....experts. Once again you are shown to be incompetent. It is just about a probability impossibility for a group to be this consistently wrong for so long. Therefore I believe it means that the "expert" system of earnings predictions is broken and intentional.

We will be back at it with the next round of earnings in about two months....it never ends. It is relentless. I am not sure the constant and never ending earnings season is a good thing. It really is focus on the short term....three months. I kind of wish we were back in the old days when the....annual report....was the standard in the industry.

 

This is old news....but....I find this little article interesting. Read it and it is OBVIOUS.....that there is really NO REASON for the Costco stock reaction to earnings....by going down. In this case the markets and investors responsible for the drop are...DELUSIONAL. I saw an article the day after earnings that said there was a revenue miss and that was the reason for the drop...FAKE NEWS.

Costco Stock Falls Despite Earnings Beat. Here's Why
Costco's earnings report showed strong demand for gold bars and silver coins. Here's what you need to know.

https://www.kiplinger.com/investing/stocks/costco-stock-falls-despite-earnings-beat-heres-why

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

"Costco Wholesale (COST) stock is struggling Friday after the membership warehouse's appearance on the earnings calendar. While COST beat revenue and earnings expectations for its fiscal 2024 third quarter, the company kept membership fees unchanged at current rates.

In the 12 weeks ended May 12, Costco's revenue increased 9.1% year-over-year to $58.5 billion. Comparable store sales were up 6.5% when excluding the impacts from changes in gasoline prices and foreign exchange, while e-commerce sales surged 21% on strong demand for gold bars and silver coins.

COST also said its earnings per share (EPS) jumped 29% from the year-ago period to $3.78.

The top- and bottom-line results cruised past analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $58.1 billion and earnings of $3.70 per share.

When asked on the conference call about a possible membership fee increase, Costco Chief Financial Officer Gary Millerchip said that even though the company is well beyond the typical five years for an increase, it is still evaluating "high inflation and the risk and concern around recession" to determine when the right time will be to raise fees.

Costco also eased concerns about raising the price of its $1.50 hot dogs. Although the company cut off access to non-members earlier this year, Millerchip confirmed in the earnings call that the "price is safe." "

MY COMMENT

The article I saw on Friday saying there was a revenue miss was FAKE NEWS. Luckily I did not post it on here since I did not believe it.

Costco revenue beats estimates as cash-strapped consumers look for deals on groceries, discretionary items
Costco's quarterly earnings beat Wall Street's revenue expectations on strength in groceries and discretionary items

https://www.foxbusiness.com/markets...mers-look-deals-groceries-discretionary-items

EARNINGS.....GREAT. GUIDANCE....GREAT. Nothing to justify a drop in the stock at all.......so we move forward from here.

I have to compliment management for holding the line on membership fees. Their customers will appreciate that with many people being impacted by inflation in their day to day lives. They still have the ability to raise member fees when they choose to do so and this is simply....MONEY IN THE BANK....going forward.

Not announcing a stock split....in my view....a mistake......a very rare mistake for company management.

 

My little real property report....anecdotal of course.

Out of 4200 homes in my area we have 69 active listings. Thirty five of them are one million or above. The highest price $9MILLION. thirty four are below one million with the lowest being $620,000.

In my own very small....very specific neighborhood of 85 homes....we have had three homes sell in the past 3 months. All sold within about 30-45 days after going on market. We currently have one home for sale at a price of $2.5MILLION....for about 5100 sqft.

In Austin in general we are still in a buyers market due to lack of inventory...although days on market is a bit longer. At least in my general region prices are UP year over year by at least 6%.

One of my kids that lives in the Austin region will close on a new house in a couple of weeks. After they close and partially move into the new home, we will put their old house on the market with some of their furnishings staying there for staging. Perhaps they will get lucky and get a sale without having to list...or....even hire a realtor. They have a showing on Monday with a potential buyer that heard through social media that their house is going to be for sale. That buyer wants to get into their neighborhood.....and is an all cash buyer.

 

LOL....I dont know if others are seeing this on the thread. I see advertisements in between some of the posts. AND....three posts above this one there is an advertisement for.......WEIRD....SUPERMICRO.

I can not copy and past the ad....but it ways:

"Build Your Cloud Your Way"
"Supermicro & AMD"
"Supermicro gives CSP's maximum solution choice"

Talk about targeted advertising.

 

That is a good exercise with the SP500 Smokie.

I see my SMCI in there as the top gainer. Since I bought it it has done nothing but go down....LOL.

But I dont really care much since it it such a tiny....irrelevant position..... after I cannibalized it on April 19 to jump on NVDA at $764........when there was a fire sale. Those NVDA shares are UP by 44% in a little over a month and a half.

 

YES....Smokie both PLTR and SMCI are training-wheel positions for me. Very small. They are very small since they are outside of my normal criteria....BIG CAP, ICONIC PRODUCT, GREAT MANAGEMENT, AMERICAN, DOMINANT companies. Neither is anywhere near what I would call BIG CAP.....or....DOMINANT......or....ICONIC PRODUCT (by my criteria).

I did PLTR as a micro momentum trade and most of my 117 shares (104) were profit and free shares.....so virtually no skin in the game with that one. My SMCI is now ONLY 10 shares.....after cannibalizing the rest of the shares to get cash to buy some NVDA when it was on sale for a few days at $764 per share.

So even though they are technically part of my portfolio the positions are TINY. I do report on them like the rest of my stocks.....and with these two included.....I now have TEN POSITIONS. BUT...in reality I have only eight that matter.

I am interested in both companies and whether they can develop into companies that meet my criteria above. BUT....they are not particularly relevant to me in terms of percentage of portfolio.

ALSO.....as I talk about them I am.......DEFINITELY NOT......suggesting for others to buy either of these companies.

 

To continue. I do find that owning these very small positions....helps me to mentally follow both companies in much more detail.

 

Good data Smokie.

People that actually invest as you show above are doing very well. In addition there is a lot of money available to people.....and on the sidelines.... as your first chart shows above.

 

This should be HIGH MOTIVATION for anyone that is just thinking of starting as a new investor. ALL it takes is rational, clinical focus and educating yourself on basic long term investing. YOU can do the same thing as this man.


31-year-old who joined the Air Force at 18 now has $500,000 invested: My No. 1 tip for saving more

https://www.cnbc.com/2024/06/02/air...00-dollars-invested-shares-top-money-tip.html

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

"Did you have your finances totally figured out when you were 18?

Almost no one does. But at 18, Darren Thedieck had some ideas about where he wanted to be, and he ended up getting a few crucial things right.

Thedieck started nerding out over investing in high school, reading the likes of Benjamin Graham and Warren Buffett alongside “Stock Investing for Dummies.” By the time he joined the Air Force in 2012 at age 18, he was determined to start investing right away.

As a result of steadily contributing to retirement and brokerage accounts over the years, the now 31-year-old has more than half a million dollars invested. He’s happy to share some of the savvy that got him there, offering a free personal finance course for fellow service members online.

“My No. 1 piece of advice would be to pay yourself first. Close your eyes and envision who you want to be in 20 or 30 years from now,” he says. “Imagine the kind of person you want to be. Imagine the things you wish you had in life. And then think about what you have to do to get there.”

How a vision for the future helps you now

Thedieck’s advice echoes a sentiment frequently expressed by Buffett himself: Think about how you’d like your obituary to read, and begin building a life that lives up to it.

“I would try to think about how you’d want to look back on your life and think about yourself, and start today to go on a path that leads to that goal,” Buffett said at this year’s Berkshire Hathaway shareholder meeting.

For Thedieck, who is currently stationed in Italy with his wife and daughter, the goal is a European retirement, and soon. At age 38, he’ll be eligible to retire from the military with a pension worth half his base pay.

Between his pension income and withdrawals from his investments, which he hopes to push over $1 million in the next five years, he could theoretically have enough income to fund his family’s lifestyle without pulling in a salary.

Thedieck’s advice applies even if you’re not in the military or focused on early retirement. If you have a dream of owning a home or traveling the country in an RV, saving for those things should be a major line item in your budget.

“Prioritize your savings and investments for your future self just as much as you would your regular bills,” he says.

That may mean forgoing some things you want — such as fancy trips or expensive cars — in the short term, in order to put more money toward intermediate- and long-term goals. That’s a far easier task if you know what the trade-off is, Thedieck says.

“Start being intentional in your life with what you spend, what you save and what you do in your life, to make sure that you become the person that you want to be 20 to 30 years from now.”"

MY COMMENT

JOIN US....become a long term investor. Take the first step today. You are welcome to come on here and ask questions. You are welcome to come on here and ask for help. There are many that post on here that would be glad to help.

 

They never slow down.

Nvidia announces new AI chips months after latest launch as market competition heats up

https://www.cnbc.com/2024/06/02/nvidia-next-generation-ai-chips-rubin-blackwell.html

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

"Key Points

• Nvidia unveiled its next generation of AI chips, just months after announcing its previous model.
• The quick turnaround highlights the competitive frenzy of the AI chip market and Nvidia’s sprint to keep its top spot.
• CEO Jensen Huang has pledged to release new AI chip technology on a one-year basis, faster than the company’s previous two-year timeline.

Nvidia on Sunday unveiled its next generation of artificial intelligence chips to succeed the previous model, which was announced just months earlier in March.

Nvidia CEO Jensen Huang announced the new AI chip architecture, dubbed “Rubin,” ahead of the COMPUTEX tech conference in Taipei.

Rubin comes months after the March announcement of the upcoming “Blackwell” model, which is still in production and expected to ship to customers later in 2024.

Huang’s announcement of Rubin appears to quicken the company’s already-accelerated pace of AI chip advancement.

Nvidia has pledged to release new AI chip models on a “one-year rhythm,” as Huang put it on Sunday. The company had previously been operating on a slower two-year update timeline for chips.

The turnaround from Blackwell to Rubin was a matter of less than three months, underscoring the competitive frenzy in the AI chip market and Nvidia’s sprint to preserve its dominant spot.

AMD and Intel are two major competitors working to catch up, though their gross margins trailed Nvidia’s in the most recent fiscal quarter. Companies like Microsoft, Google and Amazon are also vying for Nvidia’s top spot, even as they are simultaneously some of Nvidia’s biggest patrons. A flurry of startups are also working to enter the space.

“Today, we’re at the cusp of a major shift in computing,” Huang said Sunday. “With our innovations in AI and accelerated computing, we’re pushing the boundaries of what’s possible and driving the next wave of technological advancement.”

The Rubin chip platform will have new GPUs, the crucial graphic processing technology that helps train and launch AI systems. It will come with other new features like a central processor called “Vera,” though the Sunday announcement did not provide many details.

Shares of Nvidia were relatively flat at Friday’s market close with shares trading at $1,096."

MY COMMENT

This company NEVER takes a day off...even Sunday.....as seen by this announcement. They are on fire as a business....yet....are running faster and faster like they are being chased by demons. I love the management and culture of this business. TOTAL FOCUS.

I will repeat......this company is the ONLY company I have seen.....that reminds me of MSFT from 1990 to 2000. That time period was MASSIVE for MSFT shareholders and employees. I was able to participate in the glory days as a shareholder from 1990 to 2002.

I also got to see some of what was going on in Redmond (their HQ and primary campus) as a resident of Redmond, living within about 5 miles of the campus. HUGE money was being made by MSFT employees due to their stock options and the many stock splits. The employee benefits were insane.

 

A nice strong open today....especially for what I own.

Of course.....we are ONLY three minutes into the day. Now that is really the short term.

 

It is just a matter of time.

Nvidia leads global market cap gainers in May with AI-driven rally

https://finance.yahoo.com/news/nvidia-leads-global-market-cap-113039818.html

 

I dont think the markets are rigged.....much. There is of course much legal manipulation that happens in short term trading. Like the AI Platforms acting in concert to make things happen. BUT....

The market is rigged

https://allstarcharts.com/the-market-is-rigged/

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

"How many times do these people tell you that the market is rigged?

Well, if you actually believe that then why wouldn’t you just bet on the companies that profit most from the rigging?

I don’t see the problem.

If you can’t beat them, join them!

Here is the NYSE Broker Dealers Index making new all-time highs.



This Index is on the list of my “Fab 5” that suggests we’re still in the midst of a bull market, despite any corrections we may have along the way.

As we’ve discussed all year, if these 5 groups of stocks, Broker Dealers, Semiconductors, Homebuilders, Industrials and Technology are above their prior cycles highs, then it’s hard to be too bearish on this overall market.

We already saw a correction this year that reset the overly bullish sentiment coming into February. It didn’t take much either. But it was enough to reset investor sentiment from a headwind back in February to a potential tailwind this summer.

And despite any corrective action that sent the Nasdaq down 8%, Technology down 10% and Small-caps down double digits, the S&P500 and Nasdaq100 just closed the month yesterday at the highest levels in history.



There are more opportunities from the long side today than we’ve seen since October, in my opinion.

I look at a lot of charts. I analyze a lot of ideas.

It’s been a while since there have been this many opportunities.

You might think the market is rigged. And maybe it is.

But price is the only thing that pays.

And if prices are being manipulated to the upside, and you’re not profiting from it, then that’s on you.

If you don’t like it, then take your ball and go home. Go play somewhere else.

But for the rest of us adults in the room, we understand that the system isn’t perfect. It never has been. It likely never will be.

But that doesn’t mean that we have to give our profits back.

Quite the opposite. We actually get to keep it and spend it however we want."

What a great country we live in!"

MY COMMENT

I dont consider this rigged....but it is close to being so. That is the FACT that the SP500 will have a POSITIVE RETURN about 70 percent of ALL years. If the past results continue to hold....if you invest in a simple SP500 Index Fund you will have a positive return 70% of all years. If this is "rigged" (well not really, it is just probability fact) I dont know what is.

Imagine if any CASINO promised a 70% of the time positive return on every 50 plays of a slot machine. People would flock in to play since it would no longer be a gamble....it would be PROBABILITY.