The Long Term Investor

Regarding my couple of posts on the prior page.....and....the post above by Smokie.

RISK TOLERANCE.....has a way of changing very quickly when you see your 30 year money becoming 8-10 year money....in just a few years......especially when you are retired and dont have time to wait it out...or....you dont have income to replenish.

 

HERE is a good article on the NVDA chip announcements today.

Nvidia announces Blackwell Ultra and Rubin AI chips

https://www.cnbc.com/2025/03/18/nvidia-announces-blackwell-ultra-and-vera-rubin-ai-chips-.html

"Key Points

• Nvidia announced new chips for building and deploying artificial intelligence models at its annual GTC conference on Tuesday.
• CEO Jensen Huang revealed Blackwell Ultra, a family of chips shipping later this year, and Vera Rubin, the company’s next-generation GPUs that are expected to ship in 2026.
• The announcements are a test of Nvidia’s new annual release cadence. Before the AI boom, Nvidia released new chip architectures every other year."

MY COMMENT

Good to see some new products for the media to fear-monger.

 

Yes they are......it is called a CORRECTION......for those that have never seen such a thing.

The 'Magnificent 7' stocks are having their worst quarter in more than 2 years

https://finance.yahoo.com/news/the-...t-quarter-in-more-than-2-years-190335944.html

 

RED across the board for me today in my nine stocks. Also got beat by 1.30% today by the SP500.

 

I have been having a good market day today. I took the morning off to deal with plumbers. I will also be dealing with plumbers all day tomorrow. The FUN of home ownership.

I am nicely in the GREEN with two hours to go today. My only red stocks are....COST and AMZN.

 

A nice little article here.

How Not to Invest

https://ofdollarsanddata.com/how-not-to-invest/

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

"When people look for investment advice, they typically want to know what actions they should follow. They want to know what to do. For example, they might ask “Should I buy Nvidia?” or “Should I sell my international stocks?” or something else. They want a prescriptive solution for how to invest their money.

But some of the best investment advice doesn’t tell you what to do. It tells you what not to do. Charles Ellis popularized this line of thinking in his 1998 book Winning the Loser’s Game. His idea was that to “win” in the game of investing, you didn’t have to find the next big thing, you just had to avoid making costly mistakes. In other words, instead of hitting more home runs, strike out less often.

When you think about the nature of markets and investing, this kind of anti-advice makes perfect sense. As the phrase goes, “stocks take the stairs up, but the elevator down.” Since you can lose a lot of money quickly in investing, you can see why focusing on what not to do can be far more powerful than it would be in other domains.

And today, Barry Ritholtz builds on this idea in his new book How Not to Invest, a comprehensive guide on what not to do in investing. From curbing bad behavior to spotting misleading data (and more), How Not to Invest is a tome of common investment mistakes and how to avoid them. Barry covers just about every investment bias and mistake you’ve ever heard of (and many that you probably haven’t).

My favorite part of the book was titled “Avoidable Mistakes,” which looks at how even wealthy people can run into pitfalls with their money. One story highlights how a billionaire family managed to invest in Enron, Bernie Madoff, and FTX. Can you name a worse hat trick of investment fraud? Or how about the pair of advisors that became billionaires by siphoning off excessive fees from their clients over years? All of this and more are covered in How Not to Invest.

But this post isn’t a book review. It’s a reminder that we all make investment mistakes. With that being said, below are a few financial missteps I’ve made in recent years.

Invest in Your Friends’ Companies

While you may recall my experience losing a few thousand dollars in altcoins or what happened when I owned individual stocks, these pale in comparison to how much I’ve likely lost in private investments. I say “likely” because all of the private companies I ever invested in are still around. However, as far as I know, all of them are worth less today than what they were valued at back in 2021 (when I first invested).

As you may recall, in 2021 everyone and their mother was investing in private companies, crypto, or anything else they could get their hands on. Well, so was I. I had a few friends of friends with startups that needed funding, and I just happened to have some extra cash.

As a result, I ended up investing in three private companies that I heard about through my network. Each of these was pitched to me as an exclusive deal that wasn’t being made to the general public. While technically true, it was also true that the valuations of each of these companies were inflated. I just didn’t know it at the time.

Since I made those investments, two of these three companies have taken a down round (i.e. raised cash at a lower valuation) and one of them has less than 9 months of runway (i.e. cash) before it goes under. Of course, it’s possible that one of these companies ends up being sold for billions and I make all my money back and then some. But, if I had to judge them based on their performance since 2021, it’s not looking good.

My only saving grace when making these private investments is that I only invested 5% of my total net worth at the time. Still, seeing 5% of your net worth go to zero isn’t easy for anyone. That’s why I don’t do private investments anymore. I no longer invest in something because it came through my network. I’m not saying I will never do a private investment again, but, for now, I’ve learned my lesson.

Predict Future Tax Policy (and Trade on it)

Not all of my investment mistakes have been about what I’ve invested in. Some of them have involved the timing of my investment decisions. My most recent timing mistake was selling a bunch of equities in my brokerage account in anticipation of higher capital gains rates under a Kamala Harris presidency.

Of course I wasn’t sure if she would win or lose the election, but, if she did win, I was quite sure that capital gains rates would rise. So, I took some gains in my brokerage account to hedge this possibility.

Looking back now, this was obviously a mistake. I likely paid a higher tax rate on some of my investments than I would’ve had I just held onto them.

In the grand scheme of things, this isn’t that bad of a mistake, but the behavior underlying it was. I engaged in some minor market timing based on my prediction about future tax policy.

This isn’t the first time I’ve done this either. But it highlights how difficult these decisions are to get right. If you had told me in 2015 that income tax rates would be lower in the future I would’ve said, “No way.” I was wrong then and I was wrong last year about future capital gains rates too.

Don’t make financial decisions based on the possibility of future tax policy changes. Once a policy change is confirmed, then make the best decision you can. You’ll thank me later.

Be Lazy About Your Money

Despite writing about personal finance and investing every week, I can be surprisingly lazy about certain aspects of my money. One example was not finishing the setup for my TreasuryDirect account to get access to I bonds years ago. I bonds are bonds where the interest paid out changes every six months based on the rate of inflation.

I knew about I bonds back in 2022, but didn’t finish setting up my TreasuryDirect account until rather recently. The problem was that, for some random reason, I got flagged to verify my identity through a separate process with TreasuryDirect. It seemed like a hassle so I decided to just not do it. I got lazy.

In retrospect, that decision wasn’t great and I should’ve been earning more on my money as inflation raged over the past few years. Of all the mistakes listed here though, this is definitely the most minor. Nevertheless, it goes to show how even people who care about this stuff (aka me) can procrastinate about certain aspects of their finances.

Unfortunately, you only have the luxury of being lazy with your money after you’ve put the right processes in place. That’s when you can spend less time thinking about it. But when big changes are happening in the economy (i.e. inflation, a market crash, etc.), that’s not the time to get complacent. I did and I lost out on who knows how much as a result.

Thankfully, you don’t have to go down the same road. You can learn from me (or anyone) when it comes to their mistakes.

The Bottom Line (You Can Learn from Anyone)

Making mistakes is a part of the investment process. Even successful investors have had their fair share of blunders. I don’t know anyone who hasn’t.

This is what makes investment mistakes valuable in a way that investment strengths aren’t. They are universal and you can learn them from anyone. I mean that. You don’t have to pick stocks like Warren Buffett to teach me about a misstep you had. You don’t have to read a balance sheet like Aswath Damodaran to warn me about the dangers of a particular investment.

We are all equal when it comes to sharing our mistakes. There is a sense of beauty in that. It’s a shared human experience. Whether you want to learn from those other experiences is up to you.

Happy investing and thank you for reading!"

MY COMMENT

Do not get confused.....the above are investment behavior that you....SHOULD NOT DO.

YES.....we all make mistakes. In fact I have some scattered in this thread if you have read it all. It is just part of the process of being an investor.

 

HERE....is what the FED did today....basically NOTHING.

Fed holds rates steady, stays on track for 2 more cuts in 2025

https://finance.yahoo.com/news/fed-...-track-for-2-more-cuts-in-2025-180239602.html

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

"The Federal Reserve held interest rates steady Wednesday for the second meeting in a row and maintained a prior prediction for two rate cuts at some point this year.

What the central bank did change, however, was its outlook on inflation and economic growth amid uncertainties stemming from some of President Trump's economic policies.

Fed officials now see inflation staying higher this year than previously estimated and economic growth going lower than prior predictions.

Policymakers estimate that the core Personal Consumption Expenditures (PCE) measure of inflation will be 2.8%, compared with 2.5% previously.

And the US economy is now projected to grow at an annualized pace of 1.7% instead of 2.1%. The unemployment rate is seen edging up to 4.4% from 4.3% previously.

"Uncertainty around the economic outlook has increased," Fed officials said in their policy statement.

The adjustments are the first from policymakers during the new Trump administration, just as the new president’s economic policies are being put into place.

The signature move from the White House since Jan. 20 has been the imposition of tariffs on China, Canada, and Mexico, as well as on steel and aluminum. Trump promises to announce a new slate of “reciprocal” duties on many more countries early next month.

Fed Chair Jay Powell has also consistently stressed a wait-and-see approach to assessing the economic impact of policy changes.

As a result, the Fed has now held borrowing costs steady for two consecutive meetings, maintaining its benchmark interest rate in the range of 4.25%-4.5%. The pause follows three consecutive rate cuts in late 2024.

The central bank also announced it will begin slowing the pace of Treasuries being drawn off its balance sheet starting in April, reducing the amount of Treasuries allowed to roll off from $25 billion to $5 billion. The Fed, however, will maintain the pace of mortgage-backed securities being drawn down by $35 billion per month.

Fed governor Chris Waller dissented in Wednesday decision because he would have preferred to continue the current pace of decline in letting bonds mature off the Fed's balance sheet. He agreed with the decision to hold rates steady.

Waller and his Fed colleagues on Wednesday kept their median estimate first made in December for two rate cuts in 2025, even as a much-studied "dot plot" showed a large number of policymakers favored fewer or no cuts.

Nine officials see 2 cuts, while 4 officials see 1 cut and 4 see no cuts.

The biggest challenge for the Fed going forward may be how to balance both sides of their mandate — maximum employment and price stabilities — as uncertainties mount about both of those goals.

One large concern for investors is the possibility of a scenario in which growth stalls, inflation persists, and unemployment rises — a dynamic known as stagflation.

Fed officials, though, offered some moderating words about the economy, too. They retained language in their Wednesday statement noting that "economic activity has continued to expand at a solid pace."

On the inflation front, the next reading of the Fed’s preferred inflation gauge of core PCE could reveal some new complications.

The metric is likely to show the gauge remained elevated in February, rising to 2.7% from 2.6% seen in January, when it is released next week.

That is still far from the Fed’s eventual goal of 2%."

MY COMMENT

The FED is now able to hide out behind the current government and put any blame for higher inflation or slower economic growth on the government......deserved or not. A great position for them....insulating themselves from blame or responsibility.

Of course for the past four years they sat MUTE while the government STIMULATED the hell out of the economy and created massive issues.

BUT....who cares the FED is basically a joke anyway. Anyone that believes in a 2% inflation target is simply......yes I will say it.....a MORON. History tells us that the NORMAL range for inflation in a good economy is 3-4%.

The best thing today is that we are now done with them for another month or so....when they will once again rear their ugly head again.....and dominate the short term media.

 

NOTE:

I will be gone all day tomorrow for.....plumbing issues. Our water softener malfunctioned and we now have "resin" all through our house plumbing. I will be tied up ALL DAY tomorrow with the plumbers....flushing out the entire water system of our house.....all cold and hot water lines, the thankless hot water, all fixtures and cartridges, valves, and all screens and filters.. Two plumbers for 10 hours.....a Journeyman and one apprentice

WOE IS ME..........nothing like a little $3300 bill out of the blue. The fun of home ownership. At least we are in a position to be able to take this sort of out of the blue hit.

To prep for this I got the water softener repaired and new resin installed yesterday for $500.

I also had the operation of our tank-less hot water checked out today to make sure it is still operating properly.

 

Not bad today.....ALL green in my stocks. Plus and added bonus beat of the SP500 today by....0.43%.

Moving on to the back half of the week. I like how we are now seeing a mixture of up and down market days. I will call it PROGRESS in terms of the current correction.

 

Waiting for the plumbers to arrive. Since I posted about this a day or two ago I will put up this article.

There’s a ‘danger zone’ for retirees when the stock market dips. How to shield your portfolio

https://www.cnbc.com/2025/03/20/retirees-sequence-of-returns-risk.html

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

"Key Points

• “Sequence of returns risk” refers to how the timing of withdrawals paired with stock market losses can impact how long your nest egg lasts.
• This issue is biggest during early retirement years because there’s then less money for future growth when the market rebounds.
• You can reduce this risk with portfolio diversification or the “bucket strategy,” experts say.

Stock market dips can create a big portfolio risk during your earlier retirement years — and many investors don’t prepare, financial experts say.

The issue, known as “sequence of returns risk,” refers to how the timing of withdrawals paired with stock market losses can impact how long your retirement saving lasts.

Your first five years of retirement are the “danger zone” for tapping accounts during a downturn, according to Amy Arnott, a portfolio strategist with Morningstar Research Services.

If you take assets from accounts when the value is falling, “there’s less money left in the portfolio to benefit from an eventual rebound in the market,” she said.

Moreover, sequence risk can increase your chances of outliving retirement savings, Arnott said.

For example, let’s say your portfolio dropped by at least 15% during your first year of retirement and you also withdrew 3.3% of the balance.

That combination would increase your odds of depleting the portfolio within 30 years by six times compared to someone with a first-year positive return, according to a 2022 report from Morningstar. (This research assumed future yearly withdrawals were fixed at the same share of the portfolio.)

Negative returns are more harmful early in retirement than later, according to a 2024 report from Fidelity Investments. That’s because retirees miss more years of potential compound growth.

“It’s very difficult to overcome those losses in early years,” said David Peterson, head of advanced wealth solutions at Fidelity.

By comparison, early years of positive returns in retirement have “the advantage of the markets working in your favor,” he said.

Keep a ‘balanced asset allocation’

As you approach retirement, a “balanced asset allocation” is one of the best things investors can do to reduce sequence risk during early retirement years, Arnott said.

For example, there’s a lower sequence risk if your portfolio is 60% stocks and 40% bonds compared to heavier stock allocations, she said.

With the “proper asset allocation,” negative returns might not be as extreme for your portfolio as the stock market losses, Peterson said. Of course, the right mix ultimately depends on your risk tolerance and goals.

Adopt the ‘bucket approach’

You can also shield your portfolio from stock market losses with a retirement strategy known as the “bucket approach,” Arnott said.

Typically, you’ll keep one to two years of living expenses in cash, which would be accessible during market dips, she said.

The next five years of spending could be in short- to intermediate-term bonds or bond funds. Beyond that, the third bucket focuses on growth with stocks, Arnott said.

“It does take some maintenance from year to year,” but it could provide “peace of mind” while reducing sequence of returns risk, she said."

MY COMMENT

Knowing how difficult it can be to manage a retirement on personal assets.....I think many Baby Boomers are going to learn some very hard lessons in retirement.

It all worked out for me....even though I experienced TWO nasty bear markets in my first ten years of retirement. BUT....it took a lot of planning and work to make it happen.

 

OK guys....have a good market day. I notice that we have now ERASED the red open and are green across all the big averages. A perfect time for me to sign off for the day. KEEP IT GOING.

 

Well the plumbers are just leaving in time to post this. We seem to now have normal water again.

I had a small gain today in my stocks thanks for PLTR, NVDA, and HD. I also beat the SP500 by 0.39% today.

Moving on to Friday.....with a chance...to stem the weekly losses that the SP500 has had for the past four weeks. We will see.

At least I am now seeing gains and losses day by day over the week. An improvement from the losses of the last 3-4 weeks. We seem to be settling in on the correction and making some progress back to positive markets. I saw today that the BIG TECH stocks are all down by at least 20% right now. They are probably near a bottom but who knows....it will all depend on FEAR.....not....FACT.

If I had money to invest in the sort of big cap stocks that I own....I would say it is a very nice buy-in time right now. But what do I know.....I am not a market timer.

 

OK....I am calling it....at the close tomorrow we will be at the bottom of this correction. It will be fun to look back in about 6-12 months and see if this is right. Not that I care as a long term investor.

Although......there will be MUCH fear-mongering as we approach tariff day....April 2. So.....I am probably premature.....but....I am STILL calling this the bottom at the close tomorrow anyway.