The Long Term Investor

BRAVO....LORI.

Spoken like a true long term........hunter/gatherer.....investor. I hope I would have the intelligence and vision to invest in the greatest companies in the world if I did not live in the USA.

ALL the 3-4 or so......outside the USA posters on here......are extremely valuable to this thread. It is very nice to get input and opinion from people that live in different countries and might have a different basis and perspective for viewing the world. Your insights are invaluable.

 

Lets have a good open and a good day today. I will miss the open since I have to do a routine quarterly blood draw this morning. But I will be listening to Varney on SAT radio. So I will be here in spirit.

Fortunately it does not matter if I am here or paying any attention at all. What I own as a long term investor is on lifelong automatic pilot.

 

So far a good but....tentative...start for me today. At the moment I am in the green with NVDA and GOOGL.....bouncing back and forth from red to green and green to red. We need to settle into the day and just move on in the markets. My only other down stock right now is AAPL.

When I look at much of the financial media today and lately.....I see a big amount of political talking points dominating the articles. What a waste of time and content.

I will only be here briefly today.....we will be going out to lunch early since I have to leave for the studio for my usual recent Wednesday rehearsal around noon. I am sure the markets dont need my help anyway.

 

HERE....is some good content that will probably be about as good as it gets on here for me today.

The Crystal Ball Test

https://behaviouralinvestment.com/2025/03/04/the-crystal-ball-test/

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

"At the 1998 shareholder meeting for Berkshire Hathaway, Warren Buffett said: “We try to think about two things: things that are important and things that are knowable.” Although at first glance this comment can seem quite innocuous, it is an essential idea to understand if we are to successfully navigate the uncertainty and noise of financial markets. Investors are generally quite poor at defining what matters to them and why; and this is a problem which causes all sorts of decision-making challenges. There is, however, a quick way to get better at this – a crystal ball test.

Before describing the test, let’s reflect on what Buffett is getting at here. He is saying that for his investment approach there are only a select number of elements that will influence results over time and an even smaller number of this group that are knowable (or predictable) to any reasonable extent. That is where his focus is.

Of course, nothing is perfectly knowable, but there are some things that we can have a sufficient level of confidence in, and many others that are, if not random, pretty close to it. The are far more things in the latter group than the former and distinguishing between them is vital.

Before worrying about whether something is knowable, we need to define which factors we believe are important to the success of our investment. How do we do that? Let’s turn to the crystal ball.

We can ask ourselves, and other investors, this question:

“If you had a crystal ball and could see one piece of information in the future that would materially influence this investment view, what would it be?”

We can apply this question to any type of investment – whether it be about an individual stock, or a major asset allocation shift. It should quickly elicit what we think the most important factors are, and then we can judge if there is any chance of us predicting it without the aid of a crystal ball.

Let’s take an example. If I had to take a view on the performance of ten year treasuries over the next five years, what would I want to foresee using the crystal ball? It would be US inflation in five years’ time.

This tells you that – for me – inflation is the most important variable in determining the returns of ten year treasuries over the next five years. Unfortunately, I have no idea what the rate of inflation will be, which obviously will impact how much conviction I would ever take in a view on US treasuries.

We can also invert the crystal ball question to get to a similar answer by asking:

“If you knew the outcome of X in advance, how would it impact your decision?”

If I knew the rate of inflation in the US would be 6% in five years’ time, it would almost certainly influence my view on US treasuries.

This type of question can help us cut short situations where people are debating some financial market issue that is not only unknowable but, even if we could predict it, we wouldn’t know what to do about it. (Elections are the gift that keeps on giving in this regard).

Using Buffett’s important and knowable framing, we can think about the usefulness of a crystal ball in three different ways:

– Something is both important and knowable: A crystal ball might help a little, but not much because we are reasonably confident in the variable anyway. (Think here of things like long-run earnings growth or starting valuations).

– Something is important and not knowable: A crystal ball is absolutely vital because something matters but we cannot anticipate it.

– Something is not important and not knowable: We can use the crystal ball as a paperweight because even seeing the future is of no use to us.

Unfortunately, investors are prone to spending far too much time in the latter two groups. Either making decisions that are heavily influenced by variables that are inherently unknowable, or wasting time on things that wouldn’t be useful even if they were knowable (which they aren’t).

The crystal ball test can be an exceptionally useful means of better understanding what type of investor we and others are. It is particularly effective in gauging what an investors’ true time horizon is (the factors that matter change with our horizon) and what variables are foremost in our thinking.

It is also a great sense check to stop ourselves spending an inordinate amount of time on financial market issues just because they are at the front of everyone’s mind, not because they are consequential.

How best can we incorporate Buffett’s thinking on focusing on what’s important and what is knowable into practice? I think there are seven key aspects. We should:

1) Be clear about the variables that are important to the success of our investment decision.

2) Understand whether these are sufficiently knowable / predictable.

3) Focus on elements that are both important and knowable.

4) Be aware of things that are important to our view but inherently unknowable.

5) Avoid high conviction investment views that are heavily reliant on unknowable variables.

6) Use diversification to protect against important but unknowable factors.

7) Stop worrying about things that are neither important nor knowable.

Investors are best served by adopting an approach where the most important determinants of success are also at least somewhat knowable. If we need a crystal ball for good outcomes, I don’t like our chances."

MY COMMENT

As usual it is the SIMPLE concepts and common sense that make for good investing outcomes. Trying to over-analyze everything is an impossible task.

I will tell you what really matters and is actually knowable.....simple business fundamentals.

 

HERE is yet another economic data point that the FED should like. I use the term "like" to mean....lead to more rate cuts. In reality I dont think the FED is very engaged right now....they are too busy having a little political snit.

Hiring slowed in February as economic uncertainty created 'hesitancy' to add jobs last month, ADP data shows

https://finance.yahoo.com/news/hiri...jobs-last-month-adp-data-shows-135002874.html


Of course none of this government data is......"trust-able"......in the slightest. It is ALL corrupt.

 

Ok....O got a nice gain today and did not even have to do anything. I missed the markets all day. I had a single stock in the RED.....AAPL. I also beat the SP500 today by......0.48%.

We are on a little ROLL....lets keep it going.

 

YES......SMOKIE....I heard a guest on VARNEY a little bit ago with a perfect description of the current short term market....

SELL FIRST.......AND ASK QUESTIONS LATER.

In other words irrational and random. It is driven by nothing and everything. AND....basically a market that is driven by everything at once......IS....driven by nothing.

His advice......RELAX.

 

At some point in the not too distant future people will be looking back at the prices and bargains that are out there right now and kicking themselves for not buying.

My view is that ANY.....long term investor.....will do very well if they can pick up some of the great ICONIC company bargains that are out there in the current very volatile, bumpy, and news (politics) driven market.

It is not a question of timing.....you dont have to hit the market bottom.......whenever that will be.....you simply have to take advantage of this opportunity when you are COMFORTABLE with the prices that are being handed to you on a silver platter. That COMFORT LEVEL will be different for every investor.

AND.....once you make those bottom fishing buys.....you have to have the CONFIDENCE in yourself and USA business....to hold for the long term.

 

SUDDENLY....we are worried about this? Well why not.....EVERYTHING is being thrown out there at the moment as market and economic negatives......recession, stagflation, the deficit, Tariffs, economic worries, jobs, CEO's selling stock (pre-arranged), etc, etc, etc. I see ALL these and more in the financial news today. it is FULL ON.....24/7.....FEAR-MONGERING and DOOM&GLOOM. It is the end of the world.

US Trade Deficit Surged to a Record Ahead of Trump Tariffs

https://finance.yahoo.com/news/us-trade-deficit-surges-record-133838723.html

Pretty good headline.....the writer got a "TWOFER".....two fear-mongering topics in a single headline.....the deficit and Tariffs.

 

These.....TWO for the price of one..... headlines today are instant CLASSICS.

"Palantir CEO sells $45M of stock in latest barrage"

"Here's the whopping amount of stock Palantir CEO Alex Karp has dumped"

https://finance.yahoo.com/news/here...antir-ceo-alex-karp-has-dumped-142212250.html

MY COMMENT

This entire article is a TOTAL hit job on PLTR......and....the markets as a whole.

Besides starting off with total distortion of the stock sales by the CEO it is a laundry list of every negative story line of the past couple of months regarding the company.....most of which are old news....and in reality will have ZERO negative impact. Talk about LAZY and SENSATIONAL journalism.

Here is the opening of this little.....GEM....of a story.

"If outspoken Palantir (PLTR) co-founder and CEO Alex Karp is uber-bullish about his secretive software company, he isn't showing it in his trades.

Karp has dumped $45 million worth of stock in the past two weeks after unloading about $2 billion in 2024......"

Of course later there is mention that these sales are part of a pre-approved plan to sell shares.......something that EVERY major company CEO or executive routinely does. BUT....even this innocuous fact is posed as a negative.

The article goes on to do a HIT-JOB laundry list of "SUPPOSED" negative topics:

"Palantir insiders agressively selling sharea".
"The defense department cuts."
"Loss of retail momentum."
"Drops in government spending/budgest."
"Company headcount growing by "only" 5% in 2024."
"The CFO stepping down in February."
"Over reliance on their top 3 customers for business (17%)."
"Concerns about the runway for growth and product differentiation."

 

YES.....it is a short term....GOLD RUSH.....for the AI TRADERS. The BIG BOYS. They are cleaning up right now as they manipulate, drive and control market direction for their short term profits.

What is sad is that this TRADING IN CONCERT.....since all the AI TRADING algorithms are basically the same.....and.....trading daily negative news and headlines.....is LEGAL.

Dont hold your breath.....that anyone will ever investigate this sort of trading for......ALLEGED....... market manipulation, anti-trust, RICO, Securitties Law, or other violations. These traders are simply too powerful and big.

 

On the topic of collectables.

Rare Michael Jordan, Kobe Bryant rookie jerseys expected to sell for $20 million at auction

https://www.cnbc.com/2025/03/06/michael-jordan-kobe-bryant-rookie-jerseys-auction.html

I guess this should help the economy....some.

 

I am NOT going to talk about any specifics of why the markets are down BIG today. Mostly because no one really knows.....it is all opaque noise. Anything regarding the current day to day markets is nothing but speculation at best and distortion at worst.

So I will not waste the skin cells of my fingers typing any of it.

COURAGE......ENDURE......IGNORE......PATIENCE.

 

WOULD YOU BELIEVE IT? I actually have two stocks in the GREEN.......WOW.

AAPL and GOOGL

WTF is going on......someone really screwed up.

 

We still have big losses today in the markets......BUT.....the averages are making an early comeback from the big opening dip.

I will go out on a limb and say we WILL close either in the green or at worst mixed in the big averages today. I am feeling that the dip buyers will show up and the opening BS will dissipate as the day progresses.

One thing I have NOT seen yet is any data saying that every-day.....the little people investors.......are bailing out on the markets. In spite of this FEAR driven market....they seem to be sitting firm and ignoring it all.

 

Ok.....I am making some progress. I now have FOUR stocks in the green......MSFT, GOOGL, HD, and AAPL.