The UPDATED Portfolio Model. I am once again posting my PORTFOLIO MODEL. My initial criteria to start the process to consider a business are.......BIG CAP, AMERICAN, DIVIDEND PAYING, GREAT MANAGEMENT, ICONIC PRODUCT, WORLD WIDE LEADER IN THEIR FIELD, LONG TERM HORIZON, etc, etc, etc. PORTFOLIO MODEL "Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 60% of the total portfolio and the fund side at about 40% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing. As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 10 stock portfolio.At the same time the funds double and triple up on my individual stock holdings............that I consider the BEST individual businesses in the WORLD. STOCKS: Alphabet Inc Amazon Apple Costco Home Depot Microsoft Nvidia Palantir (Junior position) Chipotle Mexican Grill (Junior position) MUTUAL FUNDS: SP500 Index Fund Fidelity Contra Fund CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (74). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)" MY COMMENT This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my ten stock holdings there is MUCH doubling and tripling up on the stocks. THAT is INTENTIONAL. I strongly subscribe to the view of Buffett and some others that TOO MUCH diversification kills returns. I do NOT believe in the current diversification FAD that most people seem to now follow.......or think they are following. I DO NOT do bonds and think the current level of bonds held by younger investors.....those under age 50.....is extremely foolish.I DO NOT do market timing or Technical Analysis."
WOW.....while I was out to lunch and running around the markets TURNED in my favor. I now have only one stock in the red....GOOGL. As I mentioned in the last post before this page I sold my remaining SMCI today....taking a loss. Looking at my account all my other nine stocks are now GREEN and I have a nice gain....life is good. Now off to get an oil change...I will check in on how I closed when I get back.
If you are into STOCK MARKET GAMBLING....here is some motivation for you. How Roaring Kitty’s wealth went from $53,000 to nearly $300 million — and could one day top $1 billion https://www.cnbc.com/2024/06/04/how...-million-and-could-one-day-top-1-billion.html MY COMMENT A once in a billion happening....but....good for him. I hope he has a good chunk set aside in safe investments as a safeguard. I also hope the powers-that-be do not come after him for market manipulation or pump and dump. He is (was) a little retail investor/trader and they will CRUSH him if they can to make an example of him. The big boys dont like amateurs.....non-club members.... messing up their games.
Welp, I bailed on the rest of my shares of SMCI as well. With the split coming up I put the money into NVDA. Cut losses and move on. Nothing emotional about investing. As the year progresses I will see if AMD is trying to play keep up or actually gaining market share and pull accordingly. Right now they are around 5% of my account so i'm not real concerned. Year to date: 83%, Not bad.
100% agreed. He harnessed the power of social media and all together they became a force to be reckoned with. I say more power to all of them. A big middle finger to the established market manipulators. It also served as a very public PSA to invest wisely, because those who lost money on this lost their shirts big time. Unfortunate, but it is bound to happen. Trading is a lot like musical chairs. Caveat emptor.
Siting at the oil change. I see on my phone that I had eight of nine stocks up today. My lone red…..CMG. I will see the numbers when I get home. Yes Roaring Kitty shows the power of social media. As does what is happening to CMG right now. Regardless I still like the stock.
I now see that my phone was not up to date with CMG when I posted above....they were in the GREEN today. So ALL nine stocks in the green for me today. A nice gain in my account to...yet another....all time high. I also beat the SP500 today by 0.75%. LETS KEEP IT GOING ALL WEEK.
YES......THEY DID. Stock market today: Stocks eke out gains as labor market cools, rate-cut bets rise https://finance.yahoo.com/news/stoc...arket-cools-rate-cut-bets-rise-200250323.html The headline says it all.
We are currently in a NICE NORMAL market. The FED hikes are over for now and we are probably still looking at cuts some time late this year or early next year. NOTHING much negative is going on except for the usual media doom and gloom negativity.....which most investors simply ignore. Stocks are still....climbing, climbing, climbing, climbing....the good old wall of worry. The winners continue to win and the losers do what they do. It is one of those years so far that GAINS ARE HUGE....in spite of the fear laden atmosphere. I LOVE IT.
I like this little article for.....a single sentence. Musk Gives Explanation for Why He Diverted Chips From Tesla to X https://finance.yahoo.com/news/musk-gives-explanation-why-chips-203151903.html HERE it is: “My current best guess for Nvidia purchases by Tesla are $3B to $4B this year,” Musk wrote. MY COMMENT Just for TSLA.....I love it as a NVDA shareholder.
I sold my last little bit of SMCI yesterday for a loss. Of course.....LOL....at the open today it is up by over 4%. Oh well.....at least I am enjoying the nice open today.....ALL the big averages in the green to start the day.
GOOD....another little indication of future rate cuts. US private payrolls rise less than expected in May: ADP https://finance.yahoo.com/news/us-private-payrolls-rise-less-124120619.html (BOLD is my opinion OR what I consider important content) "(Reuters) - U.S. private payrolls increased less than expected in May while data for the prior month was revised lower, a report showed on Wednesday. Private payrolls increased by 152,000 jobs last month after rising by a downwardly revised 188,000 in April, the ADP Employment report showed. Economists polled by Reuters had forecast private employment increasing by 175,000 last month. The report was the latest indication that employment is not buckling under the weight of 525 basis points of interest rate increases from the Federal Reserve since March 2022, although other data has shown the job market is coming into better balance. On Tuesday, the Labor Department reported job openings fell in April to the fewest in more than three years and the ratio of vacancies to the number of unemployed persons had returned to levels seen prior to the COVID-19 pandemic outbreak in early 2020. The ADP report, jointly developed with the Stanford Digital Economy Lab, also precedes Friday's more comprehensive and closely watched nonfarm payrolls report for May from the Bureau of Labor Statistics. Economists polled by Reuters expect the BLS data to show 170,000 private-sector jobs were created last month, little changed from April's 167,000, while total payroll growth is estimated at 185,000 versus 175,000 in April. The unemployment rate is forecast unchanged at 3.9% and annual wage increases holding steady at 3.9%." MY COMMENT As usual another revision DOWN. this data is never accurate.
The market open today. Stock market today: US stocks rise amid more signs of jobs market cooling https://finance.yahoo.com/news/stoc...e-signs-of-jobs-market-cooling-110811459.html (BOLD is my opinion OR what I consider important content) "US stocks popped on Wednesday, buoyed by tentative optimism for interest-rate cuts amid signs of slowing labor demand and a cooling economy. The S&P 500 (^GSPC) rose 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) led the gains, popping 0.7%. Meanwhile the Dow Jones Industrial Average (^DJI) gained about 0.2%. Stocks have had a bumpy ride as the market wavers over whether to interpret a softening in economic readings as a positive sign for the chances of rate cuts from the Federal Reserve or a negative sign signaling the start of a broader slowdown. Data out Tuesday showed job openings fell to a three-year low in April. Cracks in the labor market could spur the Fed to begin lowering borrowing costs, but they are also a sign the economy could be headed for recession rather than a soft landing. That said, hopes for a Fed shift appear to be growing. About 65% of traders now expect policymakers to reduce the benchmark rate at their September meeting, compared with less than 50% a week ago, according to the CME FedWatch tool. The ADP private payrolls report released Wednesday provided the latest evidence of labor market cooling, as private-sector growth came in below estimates. The bigger focus, though, is firmly on the labor data highlight of the week, the key May jobs report coming Friday. In individual movers, Hewlett Packard Enterprise (HPE) shares rose as much as 15%, setting the stock up for its biggest gain since 2016. The surge came after HPE posted a revenue beat fueled by a jump in sales of AI-focused servers." MY COMMENT A good normal day today....should be good for stocks.
Since there is nothing else going on today....here is another take on payrolls. Private payrolls growth slows to 152,000 in May, much less than expected, ADP says https://www.cnbc.com/2024/06/05/pri...-in-may-much-less-than-expected-adp-says.html (BOLD is my opinion OR what I consider important content) "Key Points ADP reported that companies added 152,000 jobs in May, fewer than the downwardly revised 188,000 in April and below the Dow Jones consensus estimate for 175,000. Nearly all the hiring came from the services sector, with goods producers contributing just a net 3,000 to the total. Trade, transportation and utilities led with 55,000 new jobs, while education and health services added 46,000, and construction contributed 32,000." MY COMMENT The economy is still doing well but at the same time much of the economic data is coming in soft. The best of all worlds for investors as earnings continue to beat and grow and at the same time the FED is.....sooner or later....going to start cutting rates.
AND....nicely today the Ten Year Yield is down to 4.3%. The treasury "manipulators" can not hold the rates high for long. At the same time the DOW is now in the red. Thankfully for me it is the least relevant Index. I see general market BIAS as STRONGLY UP...whether people are seeing it or not. We are currently in a BIG economic disconnect. A good percentage of people think we are in a recession. There is definately a SOUR MOOD out there in the real world. At the same time investors are achieving all time highs in their portfolios. The best of times, the worst of times......but....in general a great environment for investors.....as we enjoy the ride.
NVDA is ON FIRE again today. I hope it can last till the close. The stock is really powering into the split which will basically happen this Friday. It is a real BLESSING to me and the accounts that I manage to hold this stock. The potential is there for this stock to be life changing money....over the next 3-5 years for those that have the GUTS to....ride the wave. There will no doubt be various dips over that time span. AND....there will be many that give in to the stress of seeing the big gains siting in their account and take profits. Of course the other side of the coin....is the longer term....3-5 years....is not assured to be a continuation of what is happening right now or in the past. BUT....I can dream. Speaking of dreaming....NVDA.....one year gain......206%....... three year gain....over 600%.......five year gain....over 3000%. Imagine achieving those sorts of gains over the next 3-5 years. That is what I mean by life changing money. The......"BIG IF".....can it happen? I think those of us that hold this stock are pretty golden for the next 1-2 years.....after that we are into the great unknown.
I like this little article. The Minsky Market https://awealthofcommonsense.com/2024/06/the-minsky-incineration/ (BOLD is my opinion OR what I consider important content) "Through the end of May, the S&P 500 has experienced 24 new all-time highs this year alone. Volatility has been relatively low for some time now. We haven’t had a 2% down day on the S&P 500 in well over 300 trading days: That’s fast approaching the longest streak without a nasty down day over the past 10 years. The S&P 500 is up around 11% for the year on a total return basis. That’s pretty good considering it was up more than 26% in 2023. If you stayed the course by continuing to plow money in your 401k, IRA or brokerage accounts during the 2022 bear market, the market value of your portfolio has never been higher. Sure, you have to deal with some FOMO and the possibility of greed forcing you to make bad decisions but these are the good times for investors. Markets are up. Volatility is low. You can earn 5% on your safe assets in T-bills or money markets. There’s not much to complain about when it comes to the financial markets. I’m not a doomer or someone who tries to predict what the markets will do (especially in the short run) but you should enjoy the good times while they’re here. They won’t last forever. They never do. In the early-1990s, economist Hyman Minsky published a research paper called The Financial Instability Hypothesis. Minsky wrote, “Over periods of prolonged prosperity, the economy transits from financial relations that make for a stable system to financial relations that make for an unstable system.” Essentially, stability ultimately leads to instability as investors and businesses throw caution to the wind and take on more risk in the good times, which inevitably leads to the bad times. Drilling down even further, markets are cyclical. During the downturns, expectations keep getting revised lower and lower in the midst of bad news. Markets fall and investors gets overly pessimistic. The thing is, you don’t even need good news for the tide to turn, just less bad news. It’s not good or bad that matters in the short run but better or worse. The opposite occurs during uptrends. Expectations keep ratcheting higher and higher as markets rise and investors get overly optimistic. You don’t necessarily need bad news for the good times to end, just less good news. The key as an investor is to avoid allowing your emotions to match that of the herd. I like to think about it in terms of lower expectations. If you lower your return expectations, you’re more likely to stick with your plan when things head south or when greed runs rampant. Having lower expectations also frees you from the need to constantly predict what’s going to happen next. If you can’t predict what’s going to happen next, what can you do to prepare? These two questions can help balance out the dueling emotions of fear and greed Would I feel comfortable with my current allocation in the event of a steep market sell-off? Would I feel comfortable with my current allocation in the event of a continuation of the bull market? I don’t have the ability to predict the length of bull markets or the timing of bear markets. But I do know you can’t bank on your high watermark in stocks lasting forever. Occasionally, there will be a violent correction that incinerates some of your capital base in the short-term, even if things work out in the long-term. The time to prepare for that inevitable incineration is when things are going well, not during the actual correction." MY COMMENT Just a little reminder of REALITY after my "dreaming" post above regarding NVDA returns. Be careful out there boys and girls......dont let the great current markets cause you to get crazy in your allocation, your holdings, and your dreams. Enjoy the ride but live in the world of REALITY and PROBABILITY.
OK...that is about it for me right now. I am not seeing much else to put up on here today. It is a GOOD STRONG day for the SP500 and the NASDAQ. The gains have really escalated in the last 20-30 minutes. PATIENCE....COURAGE....ENDURE. And today I will add....ENJOY.
