The Long Term Investor

I have time for a post or two while I wait to go to the airport.

Notes on a Round Trip
The S&P 500 is back at breakeven after the sharp springtime correction.

https://www.fisherinvestments.com/en-us/insights/market-commentary/notes-on-a-round-trip

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

"It is official: After Friday’s modest rise, the S&P 500 is up 0.5% in price terms since February 19. Not that the journey was flat. The -18.7% price index decline from the high through April 8 was wretched, especially with over half of it coming in two days, April 3 and 4—the aftermath of Liberation Day.[ii] The 9.5% rally on April 9, after Trump paused reciprocal tariffs for 90 days, was whiplash-inducing in its own way, prompting worries that it was temporary and the other shoe would soon drop.[iii] But stocks clawed their way back in fits and starts and have now erased the decline. We see a few key lessons.

First and foremost: There is nothing magical or significant about getting back to breakeven. This is true whether the downturn is a correction like this one (a sharp, sentiment-induced drop of around -10% to -20%) or a bear market (a longer, deeper, decline of -20% or worse with a fundamental cause). Index levels are arbitrary, and past performance isn’t predictive. We have been in this business a long time, and we have seen far too many investors treat the breakeven point as a good exit point, presuming it must be a false dawn because headlines don’t look great and there is no clarity. So they get out, miss a bull market rally, and miss returns they can’t get back without taking undue risk. It can be a severe long-term setback when you consider all the compound growth those missed returns could have generated over your entire investment time horizon.

We know headlines still seem iffy. We still don’t have clarity on whether reciprocal tariffs return on July 9, what future trade deals will look like, which tariffs will stick in the long run, whether the deal-to-make-a-deal with China will come to fruition or how long the latest impasse with Canada will last. Fiscal policy is also still in flux. And while the ceasefire in the Middle East appears to be holding for now, geopolitics are unpredictable.

But, friends, these are typical of bull markets’ proverbial wall of worry. No bull market is free of real or perceived negatives. There are always risks and fears. Stocks rise on the positive surprise—the relief—that occurs when things simply don’t go as bad as feared. If the landscape were worry-free, in our view, that would be cause for suspicion that unseen risks lurked. A worry-filled landscape as stocks regain past highs is generally pretty bullish.

Beyond that, this saga shows lesson two: how quickly stocks move. On the downside, the S&P 500 hit correction territory in less than a month. The total drawdown spanned seven weeks.[iv] It was a gut-churning rollercoaster drop. But the ride back was also pretty darned swift. The Wall Street Journal reports it was the fastest recovery ever from a drop of -15% or worse.[v]

This is why we always discourage readers from reacting to sharp volatility. When you sell after a sharp downturn, you crystalize those losses and run the risk of missing the recovery that would have recouped them. Selling after Liberation Day may have felt good, even smart, given the market’s wild swings and the worst-case-scenario forecasts of tariffs’ economic effects. But those wild declines were markets’ pricing in those worst-case scenario forecasts. Once those were baked into prices, any outcome even marginally better was bound to bring stocks bullish relief. And that is what happened, even as uncertainty persisted. While avoiding part of a bear market can be more fruitful, those tend to unfold much more gradually than a correction, giving you time to assess the landscape and make a carefully considered forward-looking decision, not a hasty reactionary one.

Which brings us to lesson three: Markets don’t wait for clarity. There is no all-clear signal. Ever. Stocks managed to mount a recovery despite the many lingering questions over tariffs. Those who wait for clarity when deciding when to invest generally end up waiting for Godot while the market passes them by.

And finally, lesson four: Global diversification is your friend. While the S&P 500 is only now at new highs, the MSCI World Index got there early this month. Non-US stocks weren’t immune from the correction, but they had an easier ride, likely for the simple reason that tariffs hit the imposer harder than the target. US tariffs don’t make other nations’ trade with one another costlier. Heck, many reacted by pursuing freer trade. Non-US stocks won’t always beat US, but that isn’t the point. Rather, global investing maximizes your opportunity set and enables you to mitigate country-specific risk. After a few years of US outperformance, we suspect this is an easy thing to lose sight of, but this year to date is a good reminder."

MY COMMENT

I choose to "globalize" by owning the best USA companies in the world.

AND....I NEVER sell out in any panic....no matter what. I am a long term investor for better or worse.

 

PLTR.....LOL.

Last Friday.....PLTR....went into a one day......CORRECTION. A drop of over 10%. Today it is up by about 6-7%......and....out of correction. Talk about compressing the process.

I have tried mightily to find some reason for the drop last week.....there is NOTHING. No doubt it was some concerted action by the "professionals"......the traders that act in concert to manipulate the markets....and/or.......simply ALL copy each other in the most outrageous HERD BEHAVIOR.....and constantly create there own self-fulfilling market prophesy. Why anyone thinks these people are experts or even know how to invest is beyond me.

Some people might think they actually know what they are doing when in reality.....they are simply usually CREATING the very event they are trading. They really have no idea what they are doing.....they just have massive market moving money behind them.

 

All the big averages are GREEN to start the day.....in this short week. BUT.....I can see that six of my nine BIG CAP GROWTH MONSTER stocks are RED. At least PLTR is up right now.

Looks like a potentially "strange" market day ahead. WHATEVER.

Ok that is it for me. LETS MAKE SOME MONEY TODAY......PLEASE.

 

I ended the day with a medium gain today. BUT.....who cares....I got beat by the SP500 by....0.20%.

On to the remainder of the short week.....2.5 days to go.

 

A RARE day so far.....not a single thing that I am inclined to post. It is a MILD mixed day in the markets. DOW is green.....SP500 and NASDAQ are very mild red.

I have no doubt that I am in the RED today to start out since NVDA, PLTR, and GOOGL are all red at this moment. At least I have six of nine stocks green.

 

I suspect that we are seeing a very shallow market today. I suspect that the primary reason for this is the short 4th of July holiday week. I am sure a good number of investors are taking the week off. If this is true.....it will be one of those weeks where the gains or losses do not reflect much at all.

In addition with the media focus on the TAX BILL......and when or if there will be a vote.....combined with a ZERO news week otherwise.....there is little to no attention on the markets.

 

At least today is the start of the.....THIRD QUARTER.

 

TireSmoke mentioned this the other day.

Palantir Rebounds Amid Russell Rebalancing, S&P 500 Changes, Accenture Partnership

https://finance.yahoo.com/m/a4354666-3f09-3334-ba17-abb2e4939495/palantir-rebounds-amid.html

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

"Shares in Palantir Technologies (PLTR) fell sharply late Friday on no apparent news. But the retreat in Palantir stock did coincide with a rebalancing of Russell U.S. indexes.

Also, on Monday S&P Global's rebalancing of its benchmark indexes, including the S&P 500, takes effect. Palantir stock joined the index on Sept. 23. Shares have jumped roughly 250% since the company joined.

Palantir stock fell on Friday even though the S&P 500 and Nasdaq hit record highs, capping a powerful week for equities.

According to a recent Reuters article, the Russell rebalancing was expected to pressure Palantir stock because of trading by passive managers that track benchmark indexes.

While Palantir joined a Russell index that tracks 1,000 large-cap names, a reshuffling forced small-cap funds tracking the Russell 2000 to unload Palantir stock as it moved into a different index.

Meanwhile, Barron's in a recent article said the S&P 500 rebalancing on Monday could also impact Palantir stock.

Palantir stock fell 9.4% on Friday. With the retreat, shares in the maker of data analytics software have still gained 73% in 2025.

Palantir, Accenture Partnership

On Monday, shares rebounded amid an announcement with information technology services firm Accenture (ACN). Palantir and Accenture Federal Services said they will partner to seek contracts from U.S. government agencies. Palantir stock rose nearly 5% to 137.21 in early trading.

Further, Palantir stock has advanced in 2025 amid views that the company seems poised to win more U.S. government business under the Trump administration.

Also, retail investor enthusiasm for generative artificial intelligence plays has lifted PLTR stock, although commercial-related revenue has yet to ramp up.

Still, Wall Street analysts now do not expect most software makers to monetize generative AI, or "conversational AI," in a material way until 2026.

PLTR Stock Technical Analysis

Shares hit a new all-time high of 144.86 on June 16. Palantir is among AI stocks to watch.

Meanwhile, Palantir's Relative Strength Rating stands at 99 out of a best-possible 99.

PLTR stock holds an Accumulation/Distribution Rating of B-plus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.

Also, Palantir stock holds a Composite Rating of 99 out of a best-possible 99, according to IBD Stock Check-up. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.

PLTR stock has a 21-day ATR of 5%. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.

IBD suggests stocks with ATRs of up to 8%."

MY COMMENT

OK....as good of a reason for the drop last week as any. I could not find anything else to explain the drastic late day drop.

A 10% hit is a BIG one day hit. BUT.....with many of my shares showing 500% to 1000% gains......I am not inclined to do anything but continue the ride. I have ZERO interest in trading daily, weekly, or monthly results......as a long term investor.

 

Starting a new quarter today means that we will soon be back into EARNINGS......in a few weeks. It is never ending.

 

HERE is the markets today.

S&P 500 slips to kick off second half of 2025, Tesla shares drop

https://www.cnbc.com/2025/06/30/stock-market-today-live-updates.html

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

"The S&P 500 slipped Tuesday to kick off the second half of 2025 after the broad market index notched another record to close out a stunning quarter.

The S&P 500 shed 0.2%, while the Nasdaq Composite lost 0.3%. The Dow Jones Industrial Average, however, gained 106 points, or 0.2%.

Electric vehicle maker Tesla fell 4% after President Donald Trump suggested in a post on Truth Social that the Department of Government Efficiency (DOGE) should look into the government subsidies that CEO Elon Musk’s companies have received.

Musk has criticized Trump’s sweeping “big, beautiful bill,” calling it “utterly insane and destructive” over the weekend. In response to the president’s recent post, Musk wrote in a post on X: “I am literally saying CUT IT ALL. Now.” This isn’t the first time Trump and Musk have sparred over the administration’s spending plans. A feud broke out between the two earlier this year.

Stocks showed little reaction to comments from Federal Reserve Chair Jerome Powell, who confirmed at a panel at the European Central Bank’s Forum on Central Banking in Portugal that the central bank likely would have cut rates again by now were it not for tariffs.

“In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs,” he said.

Wall Street is coming off another record setting session after came after Canada walked back its digital services tax in an attempt to facilitate trade negotiations with the U.S. Ottawa’s move to rescind the new levy comes after Trump said on Friday he would be “terminating ALL discussions on Trade with Canada.”

Traders are hoping for deals between the U.S. and its trading partners, as Trump’s 90-day reprieve on his steepest tariffs is set to expire next week.

Stocks made an impressive comeback after suffering steep declines in April, after Trump’s sweeping tariff policy pushed the S&P 500 near bear market territory. The major averages have since made a sharp turnaround, with the broad market index closing the second quarter with a 10.6% gain and the Nasdaq up nearly 18% in the period.

Though traders now head into the second half of the year with stocks at record highs, some remain optimistic the market could surge even higher in the months ahead.

“We think this is going to be a broader recovery,” Mike Wilson, chief U.S. equity strategist and chief investment officer at Morgan Stanley, said Monday on CNBC’s “Closing Bell.”

“I think with the Fed cutting in the second half of this year or next year, we can see a rolling recovery – because now there’s quite a bit of pent-up demand, particularly in those interest rate sensitive parts of the market,” he added. Those corners of the market include manufacturing and housing, the strategist said."

MY COMMENT

YES.....the second half looks all set up for a banner market for rational and realistic investors. it appears that we will in fact see 1-3 rate cuts in that time span.

There is a lot in the news lately about TSLA. That stock is all over the place lately. Definitely NOT something that I have any interest in.

 

Here is the economic data of the day....not that anyone cares.

US job openings in May hit 7.8 million in a continuing display of labor market resilience

https://finance.yahoo.com/news/us-job-openings-may-hit-141239012.html

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

"WASHINGTON (AP) — U.S. job openings rose unexpectedly in May, a sign that the American labor market remains resilien t in the face of high borrowing costs and uncertainty over U.S. economic policy.

U.S. employers posted 7.8 million vacancies in May, The Labor Department reported Tuesday, up from 7.4 million in April. Economists had expected a slight decrease to 7.3 million.

The number of Americans quitting their job — a sign of confidence in their prospects — rose modestly, and layoffs fell.

Openings are high by historical standards but have come down sharply since peaking at a record 12.1 million in March 2022.

The U.S. job market has steadily decelerated from hiring boom of 2021-2023 when the economy bounced back from COVID-19 lockdowns. The unexpectedly strong post-pandemic recovery ignited inflation, prompting the Federal Reserve to raise its benchmark interest rate 11 times in 2022 and 2023.

The higher borrowing costs have gradually cooled the labor market, and President Donald Trump’s policy of taxing imports at high rates has added uncertainty to the hiring outlook.

The Labor Department is expected to report Thursday that the U.S. economy generated 117,000 jobs last month, according to a survey of forecasters by the data firm FactSet. That would be down from 139,000 in May, from an average 168,000 a month in 2024 and a from a monthly average of 400,000 from 2021 through 2023. The unemployment rate is forecast to tick up to a still-low 4.3% from 4.2% in May.

MY COMMENT

YES.....as usual the economists are wrong again. AND.....yes.....there is NO recession.