Well, my little getaway is over. So nice to just disconnect from everything and catch your breath from our fast paced little world. I really had no idea what was going on market wise or anything too much else during that time. Nice to just let things roll....portfolio included. Of course, that is most of the time now anyway for me, unless I make a few extra contributions outside of the regular scheduled ones. So, I had to catch up on our thread. It appears everything survived. Earnings continued to come in with some good reports and the market continues to climb upward. I see the daily financial news and media in general is the same as when I left....full of unactionable nonsense as usual. I skipped over most of that...lol. Nice to see everyone doing well and sailing along still.
OK I lied. I have some down time from taking care of business, so I will make one post. I mentioned in a post a page or so ago that I try to NOT be too diversified as it is practiced and recommended today. I prefer to be like BUFFETT.....diversification as used today is a return killer. The Death of Diversification: Why Buffett Was Right All Along https://www.realclearmarkets.com/ar..._why_buffett_was_right_all_along_1127849.html (BOLD is my opinion OR what I consider important content) "In modern investing, diversification has become dogma. It is rarely questioned, universally recommended, and deeply embedded in the infrastructure of financial education. But like many ideas that begin as wisdom and end as cliché, diversification, as it is now practiced, reflects a loss of clarity about what investing is meant to be. Warren Buffett famously said that “diversification is protection against ignorance. It makes little sense if you know what you are doing.” For decades, this statement has been brushed aside as the musings of a genius with an unusually high risk tolerance. In truth, it was a quiet indictment of the entire financial industry. Diversification was once a prudent guardrail. It is now a crutch. In a world increasingly allergic to judgment, we have replaced depth with breadth and conviction with convenience. Why learn to understand a business deeply when you can simply own all of them at once? I have spent the past decade managing a concentrated investment partnership built on the structure Buffett pioneered in the 1950s. It is a model that prizes ownership over speculation and insight over noise. Our portfolio is small by design. We invest only in businesses we understand well, businesses that generate real cash flows, led by competent stewards, and purchased with discipline. This is not an act of bravado. It is an act of respect for capital, for clients, and for the craft of investing itself. And it stands in contrast to the industrialized portfolios of our time: over-diversified, over-optimized, and often underwhelming. Sizing matters as much as selection. The Kelly criterion formalizes this: when you have a positive edge, and because these opportunities are rare, you must bet big. Because inputs are uncertain and drawdowns matter, disciplined investors use fractional Kelly (e.g., half‑Kelly) to reduce estimation risk and volatility. The spirit aligns with concentration: back your best‑understood businesses responsibly. The rise of index funds and quantitative allocation models has led many to believe that owning a slice of everything is the best we can do. This may offer statistical comfort, but it quietly removes the moral and intellectual dimensions of investing. At its best, investing is not an algorithm. It is a judgment. It is the act of placing capital, a scarce and powerful resource, in the care of those who can grow it wisely. Diversification, in its modern form, abdicates this responsibility. It protects the investor not from risk, but from responsibility. It says, “You don’t need to understand. You just need to own the market.” Spreading capital across your 25th or 40th idea frequently dilutes the portfolio’s weighted expected return. Unless those added names bring genuine, independent alpha, the extra breadth mainly reduces tracking error, not the risk of permanent loss. That tradeoff can leave investors with benchmark comfort but mediocre compounding. But real risk is not volatility. Real risk is the permanent loss of capital. And the best way to avoid that is not to own everything. It is to understand what you own. History shows that in market stress, cross‑sectional correlations rise, compressing the diversification benefit just when investors most hope for it. Diversification still dampens idiosyncratic shocks, but it is far less effective against systemic shocks. That is precisely when business quality, balance‑sheet strength, and cash‑flow durability matter more than the number of line items you hold. The culture of investing reflects the culture of the broader world. And in both, we see a flight from accountability and a preference for systems over judgment. The concentrated investor must think. He must decide. He must know. And for this reason, he is out of step with the spirit of our time. But perhaps that is why this model endures. The concentrated, value-oriented approach continues to outperform over long periods, precisely because it demands qualities that cannot be mass produced: discipline, patience, and thought. The irony is that the more we have diversified our portfolios, the less we have diversified our thinking. Everyone owns the same indices. Everyone hugs the same benchmarks. And everyone wonders why their results look the same. We do not need more diversification. We need more discernment. Buffett was right. Not just in his returns, but in his reasoning. And for those willing to step outside the noise, to study great businesses, and to act with conviction, the path is still there." MY COMMENT Many would say that my style of "diversification" is CRAZY. Only nine stocks....make up about 77% if my portfolio....due to riding the wave and letting winners run. My two funds SP500 Index and fidelity contra have shrunk......"Honey, I shrunk the funds".....to about 25% of my entire portfolio from about......35 to 40%.....ten years ago. BUT....my focus on the big cap tech monsters that dominate the world and are the largest companies in the world is intentional. As are my two funds that I own for balance and to counter-balance my personal BIAS. Yes I own four or five highly aggressive...... but at the same time......mostly very conservative BIG CAP TECH names.....but at the same time I own a few of the top 25.....non-tech.... business names in the SP500 like COST, AMZN, HD, WMT. YES....with my funds and stocks I TRIPLE up on the same names. Outside this site I DO spend a huge amount of time reading and especially......THINKING....about what I own and why I own it. Emphasis on......THINKING. I often day dream and visualize what I am doing while driving, doing daily activity, watching TV, etc, etc, etc. I tend to "follow"......NO ONE. I do what I do with ZERO emphasis on conformity or being a follower. At this point it is easy and second nature since that is how I have invested....over the past 55+ years....and.....posted.....over the past 30 years......about investing. In the end you have to simply do what works for you and IGNORE everyone else.
Ok everyone....please continue.....I am likely to be missing from here on till next week. In fact I will not have internet access for much of that time.
The article above about "Death of Diversification" and Warren. I have seen more than a few of these since good old Warren retired. It's almost like these hedge fund managers are trying to fill a void. Not gonna happen fellas. They just can't stand the fact that a ton of investors have learned and found cheaper ways to achieve their goals towards a comfortable retirement and keeping more of their money. On to our market day. Kind of sluggish. CPI report out tomorrow for those interested.
Welcome back to the party COST. Glad I moved some money into it on the drop. Its like clockwork. It will peak at some point in the 1050 range...no split then yo yo again. I am interested to see who wins the NVDA PLTR stock price race. Seems to be investors are tying one to the other right now with PLTR having caught up.
The inflation number for July for those that might be interested. I'm not posting the intricate details about all of it. The media is covering it if anyone wants the specifics. United States Inflation Rate 2.70% As of the end of July 2025
Of course the above inflation rate will be the point of much chatter leading up to the FOMC meeting in mid September. All of the drama, predictions, and circus surrounding it will continue. Not much we can control about it, other than ignoring most of it. We have become accustomed to it at this point since it has been a topic for the past few years one way or another.
looks like we are now within a little over 5 percent away from w’s yearend price target for the spx which i believe he had at around 6800. with 4 months left to the year it looks pretty doable. i will admit though, i thought we might see some corrective action this month and especially the next as these have been the weaker market months out of the year historically speaking. nothing that will derail this bull run but a healthy dip. but a correction through time (sideways action) is as good as a pullback as well haha. hope everyone is doing well out there this week. can’t believe we are coming down to the final weeks of the summer. year is rocketing on by.
Yes bigbear, the year seems to have flown by. It has been a noisy little first half it seems. We have endured it all and are sitting nicely at the moment. I wouldn’t be surprised by anything this year. I like our chances…..but that doesn’t mean I know a darn thing about what the future holds.
Some info on earnings from FACTSET.... Key Metrics • Earnings Scorecard: For Q2 2025 (with 90% of S&P 500 companies reporting actual results), 81% of S&P 500 companies have reported a positive EPS surprise and 81% of S&P 500 companies have reported a positive revenue surprise. • Earnings Growth: For Q2 2025, the blended (year-over-year) earnings growth rate for the S&P 500 is 11.8%. If 11.8% is the actual growth rate for the quarter, it will mark the third consecutive quarter of double-digit earnings growth for the index. • Earnings Guidance: For Q3 2025, 38 S&P 500 companies have issued negative EPS guidance and 40 S&P 500 companies have issued positive EPS guidance. • Valuation: The forward 12-month P/E ratio for the S&P 500 is 22.1. This P/E ratio is above the 5-year average (19.9) and above the 10-year average (18.5).
The market scored another positive finish today overall. Nice. Some of the TECH big names struggled and stayed on the red side it appears. The small cap side of things has put together two really nice days, along with some of the DOW. Maybe a little reallocation/profit movement taking place to that area. Not unheard of to see that from time to time. Not much news wise, other than the usual FED fight and rate cut bets/predictions.
Of course, another economic report is out today (PPI). Apparently, it came in a bit over what was expected by economists. Go figure. The financial media is parsing through the details and offering widespread opinions. I'm not much into reposting all the different articles and all that goes with that. Here is the actual report from US BLS. Although, they too are under some scrutiny at the moment. Anyway, for those interested in it. https://www.bls.gov/news.release/ppi.nr0.htm
Yesterday added a few more Kroger shares to my USA portfolio to keep it balanced from the tech sector. I also have PG, COST and HD to avoid overtech the mix. I have considered to cut half of COST position but I will wait for next report. Performance YTD has not been stellar as you know. On my other protfolio (International portfolio) I recently had cut RIO (mining), EXO (Amsterdam) and Diageo (London, the Guiness manufacturer) due to poor performance. Some names on the table for that account/portfolio: add some MercadoLibre (MELI), add a few more of Palantir (PLTR), new position in GRAB (small cap), or HOOD (in this case also holding IBKR so not so good idea). All this names in a pullback. Two other names I have been checking their performance and finantial info: Nu Holdings (NU) and Sofi Technologies (SOFI) both names relevant on digital banking services. As I have written here before I am not fancy with chinese companies and banking sector; however NU in particular may worth a look due to their dominant role in South America where they are the relevant player with a great market share. They will present earnings today, after close.
Kind of a squeak by kind of day in the SP500 and the other index. A mixed bag sort of with other stuff as well. Not bad considering some of the noise I suppose.
Another day in the markets, another economic report. This is the retail sales which is conducted by US Census Bureau (economic indicator division). In a nutshell, retail sales were reported upward. Here is a link to the actual report below. Kind of interesting how this is conducted. Anyway, for those who are interested in the report. https://www.census.gov/retail/marts/www/marts_current.pdf
A bit of a struggle today in the markets it appears (so far). We have had a decent week overall. Today....we shall see. Of course, a week is a tiny timeframe for those investing for the long haul. Some of the semiconductor stuff is also on the struggle bus today. Could be some money coming off the table, could be some of the latest "chip news", or a combination of the two. It's the short term, so anything is possible I suppose. In the financial news it is much the same topics as it has been for sometime now. No point in me rehashing all of those opinions and predictions.
