The Long Term Investor

Yeah I am because....I am thinking that over the past couple of weeks the markets threw everything but the kitchen sink at us investors. AND....in the end it did not bother me at all.....I withstood it all just fine.....and most of it was just a giant distraction from the EPIC year that we have had.

I am thinking that next year is really looking like a good one. I will stick with my prior SP500 prediction.

At the same time I think that next year will either be one or the other.....a nice UP year....or a down year.....nothing in-between.

So....basically the markets gave us everything they had the past ten market days.....and we simply laughed.......kind of like Santa....HO, HO, HO......

 

At this point.....and considering the last couple of weeks......NO. But it is probably simply random anyway.

 

Merry Christmas Lori. Have a great holiday.

Plus 70% in one year.....AMAZING......you have been holding out on us Lori. YES.....you will be a MILLIONAIRE. Perhaps five years is a little......soon. BUT...you are certainly on your way. You are a good poster and an asset to the board. Looking forward to seeing more of your posts and experiences next year. Keep up the good work.

Wishing you much success in life and much happiness.

 

I made my little buy of more PLTR shares at the open today. Unfortunately....it is still a very small position in my portfolio on a percentage basis. At least now if it continues this run it has been on this year....I have enough shares that it can make some....REAL MONEY....going forward.

 

When I checked my trade a few minutes ago....I could see that I am making some money to start the day today. Looks like a similar mixed market to what we have been seeing lately at the open. At least the big averages are starting out in the GREEN. Better than the opposite.

 

I like this little article.....for the economic summary in each little category and the question for next year. Although economic data in general is not a long term market driver.......unless it leads to extreme market action that lasts for years.

Ten Economic Questions for 2025

https://www.calculatedriskblog.com/2024/12/ten-economic-questions-for-2025.html

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

"Below are my ten questions for 2025 (I've been doing this online every year for 20 years!). These are just questions; I'll follow up with some thoughts on each of these questions.

The purpose of these questions is to provide a framework of how the U.S. economy will likely perform in 2025, and if there are surprises - like in 2020 with the pandemic - to adjust my thinking.

There is significant uncertainty as to fiscal and regulatory policy in 2025. There were many promises made during the campaign that obviously will not happen (deport 20 million people, no taxes on tips, overtime or Social Security benefits, 200% tariffs, and on and on).

We can assume the 2017 Tax Cuts and Jobs Act (TCJA) will be extended. That larger tariffs will be imposed on some imports, and there will be some deregulation. There is also the potential for significant policy mistakes, but for now I'm assuming any policy changes will not significantly impact the economy in 2025.

1) Economic growth: Economic growth was probably close to 2.8% in 2024 (around 2.6% Q4-over-Q4). The FOMC is expecting growth of 1.8% to 2.2% Q4-over-Q4 in 2025. How much will the economy grow in 2025? Will there be a recession in 2025?

2) Employment: Through November 2024, the economy added 2.0 million jobs in 2024. This is down from 3.0 million jobs added in 2023, 4.8 million in 2022, and 7.3 million in 2021 (2021 and 2022 were the two best years ever), but still a solid year for employment gains. How much will job growth slow in 2025? Or will the economy lose jobs?

3) Unemployment Rate: The unemployment rate was at 4.2% in November, up from 3.7% in November 2023. Currently the FOMC is projecting

the unemployment rate will increase to the 4.2% to 4.5% range in Q4 2025. What will the unemployment rate be in December 2025?

4) Participation Rate: In November 2024, the overall participation rate was at 62.5%, down year-over-year from 62.8% in November 2023, and below the pre-pandemic level of 63.3% in February 2020. Long term, the BLS is projecting the overall participation rate will decline to 61.2% by 2033 due to demographics. What will the participation rate be in December 2025?

5) Inflation: Core PCE was up 2.8% YoY through November. This was down from a peak of 5.6% in early 2022. The FOMC is forecasting the YoY change in core PCE will be in the 2.5% to 2.7% range in Q4 2025. Will the core inflation rate decrease further in 2025, and what will the YoY core inflation rate be in December 2025?

6) Monetary Policy: The FOMC cut the federal funds rate four times in 2024 from "5-1/4 to 5-1/2 percent" at the beginning of 2024, to "4-1/4 to 4-1/2" at the end of the year. Most FOMC participants expect around two 25 bp rate cuts in 2025. What will the Fed Funds rate be in December 2025?

7) Wage Growth: Wage growth was solid in 2024, up 4.0% year-over-year as of November. How much will wages increase in 2025?

8) Residential Investment: Residential investment (RI) was slightly positive through the first three quarters of 2024. Through November, starts were down 4.3% year-to-date compared to the same period in 2023 (due to a sharp decline in multi-family starts). New home sales were up 2.1% year-to-date through October. Note: RI is mostly investment in new single-family structures, multifamily structures, home improvement and commissions on existing home sales. How much will RI change in 2025? How about housing starts and new home sales in 2025?

9) House Prices: It appears house prices - as measured by the national repeat sales index (Case-Shiller, FHFA, and Freddie Mac) - will be up 3% to 4% in 2024. What will happen with house prices in 2025?

10) Housing Inventory: Housing inventory decreased sharply during the pandemic to record lows in early 2022. Since then, inventory has increased but is still below pre-pandemic levels. Will inventory increase further in 2025?"

MY COMMENT

To me the above data for 2024 shows a year with a basic....GOLDY-LOCKS economy happening. In spite of the fact that many people still struggled and had issues getting along. A very good entry point into 2025.

 

Of course we are already seeing the mixed market push toward the RED in the big averages today. We continue to be in a little weak spot....as we TRUDGE forward toward year end.

 

HERE....is the market today.

Dow falls more than 200 points at the start of a holiday-shortened week

https://www.cnbc.com/2024/12/22/stock-market-today-live-updates.html

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

"The Dow Jones Industrial Average and the S&P 500 declined on Monday as the market started a holiday-shortened trading week on a soft note.

The blue-chip Dow fell 270 points, while the S&P 500 dipped 0.2%. The tech-heavy Nasdaq Composite last traded near the flatline.

Trading is expected to be relatively muted during the week. The New York Stock Exchange closes early Tuesday for Christmas Eve at 1 p.m. ET, and the market is shut on Christmas Day.

Weak economic data seemed to sour the sentiment. The Conference Board’s consumer confidence index for December fell to 104.7, compared to a Dow Jones estimate of 113.0. Meanwhile, orders for durable goods — generally big-ticket items such as aircraft, appliances and computers — fell 1.1% in November, the largest month over month drop since June.

The market is coming off a rollercoaster ride that saw the blue-chip Dow suffer a 10-day losing streak, its longest since 1974. The Dow tumbled 1,100 points last Wednesday after the Federal Reserve signaled fewer rate cuts for 2025 than previously projected. A cooler-than-expected inflation reading at the end of the week helped stocks recoup some of the losses.

Month-to-date, the 30-stock Dow is down 4.6% in December, while the S&P 500 is off 1.7%. The tech-heavy Nasdaq Composite bucked the downtrend, rising 1.8% this month.

Investors have been reassured that federal agencies will stay open into the new year after President Joe Biden signed a funding bill on Saturday that averted a government shutdown. The bill funds federal agencies at current levels for the next three months.

Santa rally?

Investors were hopeful that a so-called Santa Claus rally may help the market end 2024 on a high note, especially following a tumultuous week. Dating back to 1969, the S&P 500, on average, added 1.3% in the last five trading days of the year and the first two in January, according to the Stock Trader’s Almanac.

The second half of December is also typically the second-strongest period of the year for U.S. equities, and the S&P 500 has been up 83% of the time in December of presidential election years, according to Bank of America.

“With the market’s primary uptrends still intact, we are not giving up on the potential for a Santa Claus to come to Broad & Wall this year,” Craig Johnson, chief market technician at Piper Sandler, said in a note."

MY COMMENT

Actually I consider the sour economic data mentioned above as POSITIVE for investors......long term. Nothing is indicating a run-away economy or an over-exuberant stock market.

It simply looks like we are in a NORMAL economy......with good solid GDP happening and inflation basically in the normal historic range.

 

I will mention now that we have family arriving for Christmas tonight.....so my posting might be limited over the next 3-4 days. I am sure that the markets can.....somehow....survive without me.

MERRY CHRISTMAS and HAPPY HOLIDAYS everyone on Christmas eve-eve.

 

WELL....we have now seen a NASTY market turn today. I now only have one stock in the green.....NVDA. All the rest are RED. BUMMER.

 

I see some comments that the slide in consumer confidence is causing the markets to SLUMP today. I doubt that is true.

It is more likely that all the AI TRADING PLATFORMS are trading that headline and pushing the markets down. it does not matter if the consumer confidence is justified in having any impact on the markets....... in reality. The negative headline gives the AI TRADERS an issue to trade in unison.....and....of course....drive the markets down.

I dont consider indicators like....consumer confidence....as having any real economic accuracy....or even being a real economic indicator. It is simply a poll.......a ridiculous poll.

To me the REAL......most accurate economic indicator.....is actual business results from real companies that are.....GASP..... in business. What a shocking concept.

In other words.....EARNINGS. AND....earnings have been hitting it out of the park for about 10--12 quarters now....even if the markets often disrespect them.

 

Two concepts that used to be big with investors.....back in the old days when....investors were actually investors....not traders or gamblers......CONSOLIDATION and CAPITULATION.

Capitulation Often Signals Big Gains Ahead

https://finance.yahoo.com/news/capi...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif

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

"And a gift was delivered on Dec. 18, when the Federal Reserve said it would slow its pace of interest rate cuts. Markets fell hard. Nothing was spared.

Using exchanged-traded funds as index proxies, the iShares Core S&P Small-Cap ETF (IJR) fell more than 4%. The iShares Core S&P Mid-Cap ETF (IJH) fell 3.84%. And the SPDR S&P 500 ETF Trust (SPY) dropped 2.95%.

Capitulation Often Signals Big Gains Ahead

Forced selling is part of being in the markets. On Dec. 18, 96.8% of all Big Money signals were sells. Only 11 stocks were bought, while 334 were sold. This is capitulation:


But I’ll soon show you how capitulation often signals big gains ahead.

First though, note how no sector was spared in the selloff:


When I look at that chart, I see all these sells creating opportunities across sectors.

Stocks Of All Sizes Rise

Since 2012, there have been 58 days when 330 or more stocks were sold. But here’s what I mean when I say there are big gains ahead – a year later, stocks of all sizes rise more than 20%, on average:


These huge capitulation deals are sales on stocks.

This makes an interesting setup for 2025. As the chart above shows, average returns at the index level are strong.

Still, some single stocks should outperform greatly. And the best bet is to identify and buy high-quality winners on sale.

Lately there have been some big winners in certain sectors, like financials, discretionary, industrials, and technology.

After Dec. 18’s rare capitulation signal, there will likely be more fast-rising winners in the future too.

Spot the Winners

It helps to have a MAP to spot the winners.

One of the winners in the discretionary sector over the past year is Deckers Outdoor Corporation (DECK). Some of the apparel maker’s popular brands include HOKA and UGG.

As I wrote earlier this month, Big Money has been jumping all over DECK. It’s pretty easy to see why, with such great sales and earnings growth:


Those with a MAP have been on board with DECK for a while. The Big Money buy signals have been popping on the stock, especially those two blue bars above (those mean DECK was a Top 20 buy).

The right research tools can be so valuable – especially after the recent capitulation!

MAPsignals spots what others miss. As 2025 approaches, consider a MAP to guide your investing."

MY COMMENT

I am not recommending any stock mentioned above.

BUT....I am a strong fan of...CAPITULATION. As I have said in the past....it is a good thing to shake people out of the markets.....that should not be there. It is part of the normal market process and healthy.

Capitulation and consolidation are both normal and necessary for the markets to advance. We are in a little 2-3 week time span where we are seeing both these concepts at work right now. Stocks and the markets are CONSOLIDATING the prior advances and gains right now. We are also seeing some capitulation as people start to experience some fear and sell out of the winners of this year.

Fine with me......I am content to sit through these time periods and achieve the future gains that will come as a result.

 

The bond traders are fighting to keep the Ten Year and other yields high right now. They are using backward looking data to justify the current rates........"a high neutral rate, elevated rate volatility, the inflation risk premium, and large net issuance amid price-sensitive demand”.

BUT....sooner or later the dam will break and rates will slide down. So.....I like this little article.

Wall Street Sides With Fed and Sees Lower US Bond Yields in 2025

https://finance.yahoo.com/news/wall...f-8jlcqOmp62GxLKMaFT2rEshtmpjFuQTBOCiLZsmL3Lp

 

The markets today are in a....back alley, hand-to-hand, knife fight....for direction. NOW....the positive bias is fighting back, trying to turn the SP500 positive. The NASDAQ is already positive.

 

I ordered my 1oz.....Uncirculated Sliver Eagle coins yesterday.

One for each kid and their spouse for their 2025 birthday and Christmas. Over the years it has taken on a life of its own......now they all expect to get their silver coin.

With the current price of silver.....about $30 per ounce....and with the kids and spouses having 30 or so coins each.....it is starting to add up to....real money.....about $2000 to $2500 per couple. A small little...emergency HOARD.

A family tradition that goes back many decades to my early adult years in the 1970's when my parents started gifting silver coins to family adults for birthdays and Christmas.

AND....a little stealth way.....to generate some awareness and discussion of money and investing with family members.

 

The....FINAL COUNTDOWN continues..... to the new year. After today we are down to FIVE market days left in 2024,,,,,until we lock in the results for 2024 and start over at.....YTD ZERO.

The WHEEL.....will TURN.