A CLASSIC little article here that fully documents the GLORY of long term investing. the article covers a good amount of ground beyond what is in the headline. How Many Stocks Outperform the Stock Market? https://awealthofcommonsense.com/2025/10/how-many-stocks-outperform-the-stock-market/ Bottom line...outperforming the SP500 is hard. AND...doing so consistently is just about unheard of. Again....we are a rare bunch on this thread. And........picking winning stocks is hard and it is harder yet to stay in them for the long term. As the article says: "Buy-and-hold is probably your best bet when owning individual stocks but it’s not easy to sit on your hands and wait."
Here is the markets today to close out the week. Dow, S&P 500, Nasdaq surge to records as tame inflation cements Fed rate cut bets https://finance.yahoo.com/news/live...tion-cements-fed-rate-cut-bets-200014567.html
A short but nice little article. There is a lot of talk lately about....bubbles. We have basically seen three bubbles since 1989.....the Japan asset bubble (1989)....the Dot Com bubble(2000)...and....the housing, credit, derivative bubble in 2008-2009. I remember all three. The second two....Dot Com and housing, derivative bubble......were clear and obvious to me when they happened. In both......people were OUT OF CONTROL and what was happening was pretty obvious....yet many, if not most people, did not see it. In the Dot Com bubble I simply held through it all.....my expectation was that my BIG CAP portfolio would protect me. It did somewhat....but I still had a big drop. It was similar to a nasty BEAR MARKET. In the derivative bubble....I sold all stocks..... for the first time in my life. The reason I sold was my concern that for the first time in history....there was potential for a world wide economic and banking collapse. I was able to re-invest in early 2009 and captured some BIG GAINS. A Short History of Bubbles https://ritholtz.com/2025/10/short-history-of-bubbles/ Now the question....do I think we are in a bubble right now with AI. Short answer.....NO. A resounding....NO. Does that mean everyone should trust my view..........NO. On this topic, like most investing topics....EVERY INVESTOR....has to do what they believe is right for them.
LOL.....I have some news for you.....the FED is ALWAYS.....FLYING BLIND. They have no better ability to predict the financial and economic future than anyone else....perhaps worse. They have a horrible record of causing recessions and screwing up the economy. The entire basis for their inflation fighting....the 2% target.....is simply DUMB and IRRATIONAL BS. Etc, etc, etc. Good inflation news gives some relief — but the Fed’s flying blind from here https://finance.yahoo.com/news/good...he-feds-flying-blind-from-here-100045928.html
YES.....we are at just the early beginning of the AI impact on employment. It will create much turmoil as companies SEVERELY flatten their organizational models. Meta AI layoffs latest signal tech’s hottest career path may end with more risk than riches https://www.cnbc.com/2025/10/22/big-tech-ai-acquisition-layoffs-workers.html
Oh man, that brings back some memories. The dot com I was just going along working and kept at it. Based on my time, I noticed the loss, but was somewhat early in career and investing. The GFC was terrible. I held the line and stayed in, but it was very difficult. I finally just told myself that it would get better and end. It eventually did. That did not make it any easier though. It tested many for certain. I think people overlook the amount of time to recovery. In these events, it is hard to know how deep or how long it may last. Especially as it just grinds on and on. In general terms, I think many can overestimate their ability to endure. This is why it is so important to manage your plan for risk. Some think they can make on the fly adjustments, anticipate time and length, and many other factors. It is a lot different in the event itself.
This will be interesting to see over a period of time. Just how much of a wider impact it may or may not have from an employment perspective. Obviously, we have seen some near term stuff, but I wonder about further down the road. I guess some of it depends on how actually useful it turns out to be and to what extent it is applicable to certain fields.
Both the bubbles above were basically....nasty BEAR MARKETS. In fact in this thread........ there is a time span where we were caught up and stuck in a BEAR MARKET for at least 1 to 1.5 years. This is just...."my"...... reality as a long term investor and why anyone that does not have at least 5 years should not be thinking they are long term. Money that is shorter term than 3 years should not be in the markets at risk. Too much danger that when that money is needed we will be in the middle of a bear market and you will be down by 20-30%....on that "needed" money.
To continue speaking about many of us on this thread.....and how well we do as AMATEURS. Berkshire Hathaway YTD......+8.6%. SP500 YTD.......+15.5%. Warren Buffett’s Berkshire is lagging the S&P 500 by the largest gap so far this year https://www.cnbc.com/2025/10/25/buf...-500-by-the-largest-gap-so-far-this-year.html
Maybe he will give us a performance bonus. The investing world will have a void when he is gone. His comments and letters are always an interesting read.
The week to come. BIG on earnings and BIG on the FED cut. Both could make this a very good week for investors. Big Tech earnings, a crucial Fed meeting, and a Trump-Xi sit-down: What to watch this week https://finance.yahoo.com/news/big-...t-down-what-to-watch-this-week-114354660.html "The corporate earnings calendar will be the busiest of this earnings season, with Big Tech leaders Microsoft (MSFT), Amazon (AMZN), Apple (AAPL), Alphabet (GOOG), and Meta (META) all set to report quarterly results." In addition we WILL get another rate cut from the FED. Probably a quarter point.....but.....there is a slight chance for a half point surprise. I will gladly take the quarter point.
Seems we (US) have been tinkering with the economy for a long time now. The FED and policymakers have been at it for the past several years. They always seem to want to do something, often times as a result of their own meddling in the first place.
Speaking a bit above about Warren Buffett. I came across this article and it also made me think of WXYZ's unrelenting campaign to split the COST stock. I thought it was interesting. Of course, due to his long tenured popularity, people tend to take some of his comments and shade them to apply to many specific things. He obviously feels this way about the BRK (A) and BRK (B) to a certain point. Why Buffett Believes Stock Splits May Reverse Investor Gains Warren Buffett has long argued against stock splits, as he believes they increase trading churn, invite short-term speculators, and detach the share price from underlying business value.1 Buffett has focused on investor behavior and frictional costs in his case against splits.1 They: increase share turnover, and therefore the so-called “pickpocket” of transaction costs;4 Cardozo Law Review. The Essays of Warren Buffett: Lessons for Corporate America. Page 129. attract speculative buyers who focus on the price quote, not value; and therefore,1 lead to prices that deviate from intrinsic value.1 He thus concluded there were “no offsetting advantages” to splitting Berkshire’s traditional, Class A shares.5 Buffet's broader goal is a market price that is rationally related to intrinsic value. That requires self-selecting, long-term owners who think like business partners rather than traders. A lower share count to make the sticker price lower, he argues, entices the wrong crowd: “People who buy for non-value reasons are likely to sell for non-value reasons."3 Buffett did, however, make two exceptions in Berkshire's history that may muddy the waters when it comes to splits. The first was Berkshire's creation of Class B shares (BRK.B) in 1996 to combat the proliferation of high-fee Berkshire "clone" trusts and to offer a lower-denomination vehicle for real long-term investors to invest in Berkshire.6 He emphasized this was to preserve the shareholder culture that helped his investment decisions. B-class were set at roughly 1/30th of an A share (with a reduction in voting rights) to be useful, but still have a big enough entry ticket to keep out the purely speculatively minded.7 Today, the B shares trade for 1/1,500 the market price of A shares.8 Second, in 2010 Berkshire executed a 50-for-1 split of Class B shares to consummate the Burlington Northern Santa Fe (BNSF) acquisition. Berkshire’s regulatory filings explicitly framed the split as a way to facilitate the deal, rather than as a new stance on stock splits.9 For investors, there are two takeaways. Don’t mistake a lower sticker price for value. A split doesn’t change the fundamentals of the business, but it can change behavior around the stock. Buffett wants that behavior aligned with long-term fundamentals, not short-term trading impulses. Permit entry without watering down philosophy. The dual-class structure permitted smaller investors to purchase B shares without diluting A shares. This has enabled Berkshire to make strategic investments while maintaining the culture of its base of core investors. Buffett was blunt about this issue. A split, he wrote, would raise trading costs, downgrade the shareholder population, and encourage prices less consistently-related to intrinsic business value.1 His approach over the years has not changed, even as Berkshire added B shares and split those for specific acquisition purposes, all the while maintaining that A shares would never be split.
As mentioned above, a big week for earnings as some of the top notable companies report. Earnings are always a good time to check up on your companies and evaluate for yourself what is going on. Where we are at the moment: October 24, 2025 Key Metrics • Earnings Scorecard: For Q3 2025 (with 29% of S&P 500 companies reporting actual results), 87% of S&P 500 companies have reported a positive EPS surprise and 83% of S&P 500 companies have reported a positive revenue surprise. • Earnings Growth: For Q3 2025, the blended (year-over-year) earnings growth rate for the S&P 500 is 9.2%. If 9.2% is the actual growth rate for the quarter, it will mark the ninth consecutive quarter of earnings growth for the index. • Earnings Revisions: On September 30, the estimated (year-over-year) earnings growth rate for the S&P 500 for Q3 2025 was 7.9%. Seven sectors are reporting higher earnings today (compared to September 30) due to positive EPS surprises. • Earnings Guidance: For Q4 2025, 11 S&P 500 companies have issued negative EPS guidance and 12 S&P 500 companies have issued positive EPS guidance. • Valuation: The forward 12-month P/E ratio for the S&P 500 is 22.7. This P/E ratio is above the 5-year average (19.9) and above the 10-year average (18.6).
The 87% and 83% numbers above are WAY above normal. As is the 9.2% growth rate for earnings. NOW....the big question is.....will this result in increases in value for the companies reporting this data and for shareholders? OR....will it all be lost in the DRAMA and FOG of the speculative....BS...of the short term markets?
I was looking at one of the accounts that I manage today. NVDA dominates the eight individual stocks and no doubt dominates the SP500 Fund that is in the account also. It is pretty obvious why. One of the largest share gains is a....VERY LARGE....block of stock that I bought in September of 2022. ( I added shares in a number of accounts at that time) Those shares in.....THREE YEARS and a month or so......have a gain of +1400%. I had to look twice to see if that was right. It is simply.....mind-boggling. AND....there are many, many other blocks of shares that are between....+1000% and +1400%. JUST INSANE. (I had to go back and double check in the account, I just have trouble believing this, but it is true) Going from memory...I think my earliest purchases of the stock were either 2020 or 2021......I am too lazy to go back into the accounts for a third time to check.
Nice. Very, very nice. Is this the same stock that is “disrespected and ignored?” . You guys are spoiled, spoiled, spoiled I say…LOL.
W, what did you see leading up to the GFC to make you get out? I was only about 20 and just getting into the working world at the time, but I don’t feel at face value I seen anything at the time but it was before I cared to look also. That sure was one golden bet for you I bet, to get out and then be able to get back in capturing a ton of gains. Did you get out just early on when it started or did you get out really before any of the drops started? As in, did you only really see it coming after it kind of started already?[/QUOTE]
I talked about the 2008 banking collapse years ago in this thread.....my old posts would be more accurate than my memory now. Those events were long ago....but I believe, but can not be sure this long after the events,.....that I sold out of the markets and went to all cash some time around March of 2008....but it may have been May. At that time I was very nervous and concerned that there was a..."possibility"....perhaps as large as 25% to 50%....of a total world wide banking and economic system collapse. The markets were positive in 2007....but starting in 2007 I was seeing massive numbers of people buying houses with LIAR LOANS in Houston area. I was spending a lot of time in the ghetto.....and people were buying houses and moving out with little to no income....it was CRAZY. But I...did not know much about derivatives. In December 2007 and into early 2008....many companies started to fail and go bankrupt. Countrywide financial, was a big one. Over the time span of January 2008 to March 2008 when Bear Sterns collapsed....there was much coverage in the media. I was living from my personal assets in early retirement and had just about everything in the markets. I believe it was about March of 2008...but at this point can not be sure.... that I got very concerned and sold out of the markets. Things continued in a death spiral until sometime around September when Freddie Mac and Fannie Mae basically collapsed as well as Lehman, Merrill Lynch, and AIG. As a result the government finally stepped in.....with the country on the verge of complete banking collapse. I sat in cash till about march of 2009....at that point the markets were down by about 50%. I figured that we had to be within about 10% of a bottom. The government had stepped in to try to shore things up. SO.....I bought back in....ALL at once. I was willing to take the risk of losing another 10% to get in at the bottom. In hindsight my timing was perfect.....but I had no way to know that at the time. I simply made a decision that getting in within 10% of the bottom was a risk I was willing to take.....and with the huge losses in the markets...... we had to be near the end of the drop. Of course....there was way more to the whole situation than the above....it was a VERY SCARY time. Look at the timelines for 2008 and 2009 here: https://en.wikipedia.org/wiki/2008_financial_crisis I remember a lot of the stuff in those timelines......especially things like this: "September 18, 2008: In a dramatic meeting, United States Secretary of the Treasury Henry Paulson and Chair of the Federal Reserve Ben Bernanke met with Speaker of the United States House of Representatives Nancy Pelosi and warned that the credit markets were close to a complete meltdown. Bernanke requested a $700 billion fund to acquire toxic mortgages and reportedly told them: "If we don't do this, we may not have an economy on Monday" My moves were total seat of the pants investing......and a HUGE amount of simply, LUCK....driven by FEAR when I sold out.......but in hindsight it all worked out. Even selling out to cash.....did not take away much of the FEAR....since a total banking system collapse would probably make my cash worthless....if I could even get to it. It is very hard to describe those times and all the emotions as things were spiraling out of control....if you did not live it or were not aware of what was happening. It was a TOTAL once in a lifetime experience.....that was on a scale that dwarfed the Great Depression.
Amazing open today. I am sitting at the Dr office. My wife is being evaluated for a possible hip replacement.
