The Long Term Investor

HERE.......is my PORTFOLIO MODEL as it stands........right now........with the addition of Nvidia.

"HERE is a repeat of the portfolio model.......as usual:

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 55% of the total portfolio and the fund side at about 45% 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
Honeywell
Johnson & Johnson
Nike
Microsoft
Proctor & Gamble
Tesla
Nvidia

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. (70). 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 twelve 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."

 

HERE is the REAL news of the day. ACTUALLY......I am now thinking that we might end positive for the day.......not that it matters. If......as I suspect.......the DROP yesterday was due to all the "professional" investors knowing ahead of time about the New York Times article on Google..........and.......bailing in FEAR......as they always do.....we might be in for a positive day if the "little people" dont follow their herd behavior. I have a little bit of a feeling that the......"little people"........might not care at all about Google and some anonymous sourced article by the New York Times about antitrust.

Economy added 1.4M jobs in August as unemployment fell to 8.4% amid persistent COVID-19 outbreaks

https://www.usatoday.com/story/mone...e-jobs-report-august-m-jobs-added/5710737002/

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

"The U.S. economy added 1.4 million jobs in August as businesses shuttered by the COVID-19 pandemic continued to reopen and bring back workers, more than offsetting a fresh wave of layoffs by firms that have exhausted their federal loans.

The unemployment rate fell sharply to 8.4% from 10.2% in July, the Labor Department said Friday.

Economists surveyed by Bloomberg had estimated that 1.35 million jobs were added last month.

August’s payroll gains were healthy but mark the second straight monthly slowdown in hiring after employers added a record 4.8 million positions in June and 1.8 million in July. That’s a troubling sign considering the nation has recouped slightly less than half the unprecedented 22 million jobs wiped out in early spring as states closed down nonessential businesses such as restaurants, malls and movie theaters.

“The fact that employment is settling into a trend of slow, grinding improvement is a worrisome sign for the broader recovery,” economist Lydia Boussour of Oxford Economics wrote in a note to clients.

The latest figures were inflated by the hiring of 238,000 temporary workers for the 2020 Census who likely will be laid off in coming months.

Many states have allowed businesses to reopen in phases but others, especially in the South and West, paused or reversed their relaunch plans in July and August amid coronavirus surges. Recently, cases in those hot-spot states generally have trended down but the results have been mixed. Positive test rates have stayed high in Texas and Florida and edged down just slowly in California, Goldman Sachs says.

As a result, many businesses are running at just partial capacity amid lingering state restrictions and consumer fears of contagion. Many struggling firms recently have exhausted the cash they received through federal loans that were forgivable as long as they retained or rehired workers. After meeting those terms, many are letting workers go again.

Last month, the number of Americans on temporary layoff fell by 3 million to 6.1 million as more laid-off workers were called back. At the same time, the number of workers permanently laid off jumped from 2.9 million to 3.4 million, indicating that some temporary layoffs have become permanent.

About 45% of unemployed workers said they were on temporary layoff, down from 56% the previous month.

Meanwhile, Congress remains deadlocked over a new stimulus package that would provide more funds for teetering businesses and renew at least part of the $600 federal supplement to state unemployment benefits that expired in late July.

A separate survey released by Cornell University earlier this month showed that 31% of temporarily laid off or furloughed workers who have been rehired,said they were cut a second time and another 26% have been told by their employer that they may be laid off again.

Industries that are hiring
Retailers led the August payroll gains with 249,000. Professional and business services added 197,000 jobs but more than half came from temporary staffing agencies, indicating that many wary employers are filling openings with contingent workers amid lingering uncertainty.

Leisure and hospitality, the sector hardest hit by the pandemic, added 174,000 workers, mostly at bars and restaurants. Transportation added 78,000 jobs and health care, 75,000. Manufacturing, still recovering from a sharp drop in demand and supply disruptions from overseas, added 29,000 jobs.

Pandemic alters labor market
About 24 million Americans said they couldn’t work last month because their employer closed or lost business during the crisis, down from 31.3 million in July. And about 5.2 million people were prevented from working or looking for jobs because of the outbreak. Nearly a quarter of workers teleworked, down from 26.4% in July."

MY COMMENT

THE MEDIA.....just can not stand this good news.......so.....this article is packed with many many references to negative opinion type garbage and fear mongering about the virus. The poor economists......wrong again.....but at least not as badly as usual.

This it TOTALLY GOOD NEWS. When you close down the entire economy of the entire country and six months later the unemployment rate has recovered to 8.4% that is GREAT NEWS. We STILL have a ways to go......but.....we are well on the way to recovery. If ALL the states would reopen we would see even better numbers. The EXTRA unemployment benefits continue to be a drag on getting people back to work.....but I think they are still necessary.

 

OK.......just completed my BUY of the 12 stocks in my family members account. At the time of the trades the averages were ALL down for the day as follows:

DOW (-0.65%)
SP500 (-1.4%)
NASDAQ (-2.84%)

I will CAPTURE the end of the day results at the close when the half of the funds goes into the 2 mutual funds at the closing NAV for today.

 

WELL........"I"......have always had at least two accounts. You can use them for different things and it helps to mentally keep them separate.

QUITE a come back by the markets today. Hope it continues for the next 15 minutes.

 

ONE DAY.......is totally meaningless....but I consider today a SUCCESS on my trades for the $410,000 in family member funds.

Those that are positive for the day....AMZN. AAPL, MSFT, NVDA, TSLA. Negative for the day.....NKE, HD, HON, JNJ, PG.
Those BARELY negative for the day......COST, GOOGL.

I must be a REALLY GOOD market timer........this money hits the account on the same day as a HUGE drop in the markets and a bit of a drop today. NOW that this money is invested.......it is time for the markets to CONTINUE the RUN UP.

The money going into the funds.......about $200,000 will invest after the close today.

I like to post pretty good data......so anyone that wishes can follow how any of these trades are doing. Just like the MAJORITY of my trades on here this was....ALL IN ALL AT ONCE. I NEVER second guess the academic research..........which represents PROBABILITY. Being still 2 months from the election, I was NOT willing to wait till that event is over to invest these funds. I am HOPING that I build up enough of a cushion over the next 2 months to get by any post-election correction.

 

WELL......all in all not a bad week. I am GLAD to see it over with. There was potential for a BIG drop today and the markets fought back and showed real strength.....even though the close was negative.

For the week......again....not too bad considering

DOW for the week (-1.82%)........year to date.......(-1.42%)

SP500 for the week (-1.42%)........year to date.......+6.07%

BUMMER....that the DOW is now back to negative for "year to date". BUT.....plenty of time left in the year to turn that around nicely.

 

HERE......is the after-hours story of the day:

Tesla falls after S&P 500 adds Etsy and two others, bypassing carmaker

https://www.cnbc.com/2020/09/04/tes...s-etsy-and-two-others-bypassing-carmaker.html

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

• "Shares of Tesla sank more than 6% after hours on Friday after Etsy, Teradyne and Catalent were added to the S&P 500 Index, but not Elon Musk’s electric car maker.
• Tesla was seen as a candidate for inclusion after reporting its fourth straight profitable quarter.

Shares of Tesla dropped more than 7% after hours on Friday after the S&P 500 Index Committee decided to move Etsy, Teradyne and Catalent into the S&P 500, but abstained from including Elon Musk’s electric vehicle and solar energy company.

By contrast, shares of Etsy, an e-commerce marketplace for artisans, rose more than 5% on news of its inclusion.

Some Tesla investors expected the company to be included this quarter, as the company reported its fourth consecutive quarter of profitability in July.

According to S&P Dow Jones Indices, there’s over $11.2 trillion in assets benchmarked to the S&P 500, with roughly $4.6 trillion of the total in indexed funds. An inclusion for Tesla would mean tracking funds would need to buy more than 120 million shares of Tesla stock, soon.

The make-up of the S&P 500 is determined by what’s known as the “Index Committee” at S&P Dow Jones Indices. Inclusion is based on quantitative as well as qualitative factors.

Companies must be U.S. based, and listed on either the NYSE, the Nasdaq or the Cboe. They also must have a market cap of more than $8.2 billion, and report four straight quarters of profit as determined by U.S. generally accepted accounting principles (GAAP).

Even if a company meets these criteria as well as the other stipulations, that does not guarantee inclusion in the index. The committee meets on a quarterly basis to rebalance the index, but companies can be added or removed from the S&P at any time. Given the potentially market-moving nature of additions and deletions from the index, the process is tightly guarded. Even companies that are set to be added receive no advance warning.

Tesla shares are still up nearly 400% for the year, including a recent run after the company implemented a five for one stock split."

MY COMMENT

I think the SP500 is AFRAID of Tesla. They dont know what to do with this company which will DOMINATE their index. FORTUNATELY for shareholders of Tesla.........the SP500 has NOTHING to do with success or failure for Tesla.

AND

HERE is the other big business story today:

"The Pentagon said Friday it will stick with Microsoft for a major cloud contract that has been disputed in court for months.

The JEDI, or Joint Enterprise Defense Infrastructure, deal has become one of the most hotly contested contracts for the Department of Defense. The contract is intended to modernize the Pentagon’s colossal IT infrastructure and could be valued up to $10 billion for services rendered over as many as 10 years.

“The Department has completed its comprehensive re-evaluation of the JEDI Cloud proposals and determined that Microsoft’s proposal continues to represent the best value to the Government,” the Pentagon said in a statement. “The JEDI Cloud contract is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract that will make a full range of cloud computing services available to the DoD. While contract performance will not begin immediately due to the Preliminary Injunction Order issued by the Court of Federal Claims on February 13, 2020, DoD is eager to begin delivering this capability to our men and women in uniform.”

The outcome represents a loss for Amazon, which challenge the award of the contract after the Pentagon gave it to Microsoft in October.

Amazon said in a scathing blog post Friday that it will continue to seek a review of the situation and that the Pentagon’s re-evaluation of the companies’ proposals simply validated the original decision to go with Microsoft.

“On JEDI, President Trump reportedly ordered former Secretary Mattis to ‘screw’ Amazon, blatantly interfered in an active procurement, directed his subordinate to conduct an unorthodox ‘review’ prior to a contract award announcement and then stonewalled an investigation into his own political interference,” Amazon wrote.

“While corrective action can be used to efficiently resolve protests, in reality, this corrective action changed nothing, wasted five months that could have been spent getting to the bottom of these serious concerns, and was designed solely to distract from our broader concerns and reaffirm a decision that was corrupted by the President’s self-interest.”

Microsoft shares briefly moved higher during Friday’s trading session following the announcement before closing down 1.4% for the day in a mostly down day for tech stocks.

“We appreciate that after careful review, the DoD confirmed that we offered the right technology and the best value. We’re ready to get to work and make sure that those who serve our country have access to this much needed technology,” a Microsoft spokesperson told CNBC in an email.

In November, Amazon Web Services, Amazon’s cloud computing unit, filed a lawsuit in the Court of Federal Claims protesting the JEDI decision. The company argued that President Donald Trump’s bias against Amazon and its CEO, Jeff Bezos, influenced the Pentagon to give the contract to Microsoft. Amid the legal battle, the Pentagon invited Amazon and Microsoft to revise and resubmit their proposals for the contract. A Justice Department representative was not immediately available for comment following the Pentagon’s statement.

Today’s decision could lead to more legal wrangling.

The lucrative contract, originally scheduled to be awarded in September 2018, drew scrutiny after Trump said last year that he was seriously considering taking a look at the JEDI contract.

“I never had something where more people are complaining,” Trump told reporters at the White House in July 2019. “Some of the greatest companies in the world are complaining about it,” he added, naming IBM, Microsoft and Oracle. The White House declined to comment.

Trump’s potential influence over the deal came into focus when a book charting then-Defense Secretary James Mattis’ tenure at the Pentagon claimed the president told Mattis to “screw Amazon” out of the contract.

The billionaire executive, who owns the Washington Post, has become a source of frustration for Trump. The president regularly criticizes the publication for its coverage of his administration. Trump has also gone after Amazon repeatedly for, as he claims, not paying its fair share of taxes and ripping off the U.S. Post Office.

Earlier this year, the Pentagon’s inspector general released a report saying that the award did not appear to be influenced by the White House.

However, the inspector general noted in its 313-page April report that it had limited cooperation from White House officials throughout its review and, as a result, it could not complete its assessment of allegations of ethical misconduct.

At the time, Department of Defense spokesperson Lt. Col. Robert Carver told CNBC in a statement that the inspector general’s report confirmed the Pentagon’s JEDI cloud procurement process was conducted “fairly and in accordance with the law.”

An AWS spokesperson suggested at the time that the report did not reveal all that much.

“It’s clear that this report couldn’t assess political interference because several DoD witnesses were instructed by the White House not to answer the IG’s questions about communications between the White House and DoD officials,” the spokesperson wrote in an email to CNBC. “The White House’s refusal to cooperate with the IG’s investigation is yet another blatant attempt to avoid a meaningful and transparent review of the JEDI contract award.”

In December, Amazon’s AWS chief Andy Jassy told CNBC that the cloud contracting was not adjudicated fairly.

“You know, there was significant political interference here,” Jassy said of the JEDI award in a conversation with CNBC’s Jon Fortt. “When you have a sitting president who’s willing to be very vocal that they dislike a company and the CEO of that company, it makes it difficult for government agencies, including the DoD to make objective decisions without fear of reprisal. And I think that’s dangerous and risky for our country.”"

MY COMMENT

THAT is a big contract. GOOD for me either way since I own BOTH companies.

 

I am going to talk about Tesla a little bit. I have been seeing lots of headlines TODAY about the SP500........SNUB. ALL drama queen stuff. OH.........woe is us.......Tesla did not get into the SP500.........yet. Blah, blah, blah.

I have a question for investors......

Did you buy this company as a.......BUSINESS? Or did you buy it as a........MEDIA CREATION........for drama and clicks.

IF YOU.....bought this company as a business.....than who cares about the SP500. Inclusion has NOTHING to do with the success of this business. There is NO DOUBT that the company will end up in the SP500......I would guess some time within about a year or so. What COUNTS is the BUSINESS RESULTS put up by the company. NOT a bunch of silly........JUVENILE.....media drama.

I bought it as a BUSINESS.......a car company, a battery company, a self driving software company, etc, etc, etc. Inclusion in the SP500 is irrelevant to ANYTHING to do with any of these business areas or any other business aspect of this company.

NOW........if you are NOT an investor.......if you are a speculator that does not care about the actual business of the companies that you dabble in......the SP500 might be a big thing to you. It would drive some.......non business related......price action in the stock. WELL......too bad.......a MISS for you. Move on.....or stay invested.......your choice. Those of us that are actually....INVESTORS.......the choice is clear. I personally am in it for the long term......as long as I see business potential.

 

Markets are closed today. SO.....not a surprise that even the financial websites seem to be running OLD news stories rehashing the same old.....blah, blah, blah.

After the Shortest Bear Market Ever, How Long Can the Bulls Run?

https://www.fisherinvestments.com/e...t-bear-market-ever-how-long-can-the-bulls-run

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

"How long can this bull market last? That is a question we hear often, with the common presumption now being that the shortest bear market of all time, followed by the shortest-ever recovery to prior highs, must mean this will be a short bull market. Perhaps that is doubly true, considering this cycle has acted more like an oversized correction than a traditional bear market—and it all follows history’s longest bull market. But in our view, there is no realistic way to assess how long this bull market will last—you must assess conditions as they evolve. One thing, however, is clear: Age and the prior bear market’s length don’t really mean anything. All bull markets end one of two ways: when investors have run out of worries and developed irrationally high expectations, or when something wallops the expansion before its natural peak.

Exhibit 1 shows the length of every S&P 500 bear market—and ensuing bull market—since WWII ended. As you will see, short bear markets don’t mean much. Prior to 2020, the two shortest bear markets on record were 1987’s and 1990’s. The bull market that followed 1987’s crash was relatively short at 31 months. But 1990’s bear market was almost exactly as short. The bull market that followed the second was the 1990s’ boom—at 10 years, it is history’s second-longest. One short, one long, no pattern.

Exhibit 1: S&P 500 Bear and Bull Market Lengths (in Months)


Source: Global Financial Data, Inc., as of 3/24/2020. Length is rounded to the nearest whole month.

The bull markets above came in all shapes and sizes, but all ended in one of the two ways: either when euphoria made expectations unattainable or when hit by a huge, unseen negative. In March 2000, August 1987 and most others, euphoria ruled the day. Investors generally figured the party would last forever, and they overlooked or explained away any indicators hinting at negativity ahead. March 2000 was the height of the dot-com boom—the new economy, when boom and bust were declared dead and pundits sought new terms for economies that only grew. With Y2K having come and gone, many thought the coast was clear for more Tech-led economic growth and bull market. They overlooked the declining Leading Economic Index and inverted yield curve, not to mention the flood of IPOs by companies with no profits, no sound business plan and deep operating losses. Euphoria blinded investors to all of these, and a bear market began.

Bull markets that didn’t end in euphoria ended when a huge negative burst on the scene, surprised the world and walloped the global economy hard enough to knock a few trillion dollars off GDP, rendering recession. In October 2007, it was the imposition of mark-to-market accounting to illiquid assets banks never intended to sell, forcing them to take paper losses whenever a hedge fund or other entity sold similar holdings at fire-sale prices. That vicious cycle of writedowns and fire sales eventually transformed about $200 billion worth of actual loan losses into nearly $2 trillion of exaggerated and unnecessary writedowns. In this year’s bear market, the wallop was the global lockdown aimed at containing the spread of COVID-19, which caused the deepest and most rapid economic contraction in modern history.

For something to qualify as a wallop, it must be huge—trillions of dollars’ worth of huge—and surprising. The myriad alleged negatives percolating through financial headlines today don’t count, in our view, because they are either too small, too unlikely or too well-known. These aren’t wallops in waiting, but the first bricks in this bull market’s wall of worry. As for sentiment, we think most of the investment community is still waiting for the other shoe to drop, not envisioning perma-expansion.

If you are investing for long-term growth, the above is really all you need to know when it comes to deciding whether to own stocks. If you aren’t in a bear market, you are in a bull market, and capturing bull market returns is vital to achieving market-like returns over time. Whether this bull market expires in two years, three or more shouldn’t make any difference to your asset allocation today. Taking defensive positioning when you are actually early in a bear market can be beneficial, but we don’t think the day to make that decision is when stocks close at an all-time high. This year’s notwithstanding, the vast majority of bear markets roll over slowly, giving investors time to assess the situation carefully and avoid knee-jerk decisions.

So rather than sweat now about how long this bull market might last, just live in the moment while keeping your eye on your long-term goals. If you are in a diversified portfolio tailored to your needs and time horizon, take heart in knowing that stocks’ long-term returns include all bull and bear markets along the way. While we think it is prudent to watch for signs a bear market may be underway, trying to date a bull market’s end before you see them is a guessing game unlikely to yield success.

MY COMMENT

Interesting HISTORICAL DATA in that chart. BUT......nothing that gives any clear indication of anything relevant to investors......especially long term investors. I DO AGREE that most bull markets end in out of control..........and........unjustified EUPHORIA.........or.......some big negative result. With the country being very SHAKY right now on many levels I........DO NOT SEE......the sort of euphoria that signals the end of a bull market. I.......DO SEE.......the election as the sort of MASSIVE negative event that can kill the bull market. SURE......everyone expects some level of mess due to the election. BUT......I believe that the ........vast majority of media and investors are.......GROSSLY UNDERESTIMATING......what is going to happen in the election. I HOPE I am wrong.

There are three.........primary........ potential approaches.

1. SELL everything before the election and reinvest after the DISASTER and TURMOIL are over. Perhaps 2-6 months down the road.

2. HEDGE your portfolio with calls, puts, or perhaps inverse funds.

3. Do NOTHING and simply hold through the turmoil and drama and wait for the markets to recover.

As for myself.......I will be simply doing NOTHING. I will remain fully invested as usual for the long term and will sit out the 2-6 months of SOCIETAL DISRUPTION that........is likely.......my personal view.......to be the result. BEST case situation.......there is such an overwhelming winner that NOTHING can alter or impact the result. WORST case situation........a complete societal, cultural and historical catastrophe. YOU......can take your pick based on your own political bias. Those are the extremes of the BELL CURVE......with everything else in between. I GUESS.....this is one of those events that will be a BIG INDICATOR of investor awareness of their REAL risk tolerance. REGARDLESS of politics........the pressure on investors and the NERVOUSNESS is going to RAMP UP SIGNIFICANTLY as the election approaches.

 

FINALLY.........a new week. Man, that was a boring 3 day weekend. Even........a down day.......will be better than the VOID of a holiday weekend.

TODAY.......surely a down open. The recent GAINS have to be digested and consolidated a little bit for the markets to move on. NOT a bad thing. The markets can NOT just go up CONTINUOUSLY like a rocket. PLUS......the BIG traders and investment bank people are back now from their August holiday that traditionally ends after Labor Day. The resulting SHALLOW........thin......markets in August are typically erratic. Add in the EXTRA impact of the Robinhood guys and......it is what it is.

FUNNY.......I have not seen a lot of articles.......so far this year........about how September is the worst month for stocks.....blah, blah, blah. I dont buy any of that BALONEY about ANY month. BUT the media is usually full of it. they must be distracted by other events and happenings this year to no need to drag out that.......OLD SAW......as a topic for articles by LAZY journalists. WELL.......I should say........so called journalists. I dont care what side of the political spectrum you are on.......the practice of journalism today is in the TOILET.

 

I HOPE those that have held AAPL and TSLA post-split ARE longer term investors in those companies and NOT stock split speculators.

The DATA is.....very clear.......that holding post split on nearly any company is often a NEGATIVE experience for at least a few months if not a quarter. NO BIG DEAL if you are a long term investor in a company and you either already owned it at the split announcement OR you bought very early after the split announcement and BEFORE the actual split. Of course......YOU CAN NOT ASSUME.......that every company will go up JUST because they announce a split. A poor investment is a poor investment REGARDLESS of a split.

ADD in the current political environment, the economic shut-down, and other factors.........and........this is NOT a good time to SPECULATE with stocks like these post-split.......UNLESS you are holding for the long term. Here are the losses post split.......at the moment:

AAPL pre-split August 28, 2020 - $124.81
AAPL post-split September 8,2020 - $118.19
A 5.3% LOSS

TSLA pre-split August 28, 2020 - $442.68
TSLA post-split September 8, 2020 - $362.24
A 18.17% LOSS

 

Sounds like you did well.....roadtonowhere08. When did you sell? How did you do in the trade?

I worry about those Robinhood guys that are inexperienced and get caught up in MANIA and GREED. It is very easy to put more at risk than you realize if you have NO experience and have NEVER been an investor before.

 

I find the financial moves that TSLA has made recently, very smart. They took advantage of the current high price to raise an additional $5BILLION in capital. That is a BIG chunk of cash. They were COY about the timing of when the shares would be sold.......and......than went out and raised ALL the money IMMEDIATELY. VERY SMART.........someone at that company has some REAL feel for business. Their timing was exquisite in locking in this $5BILLION strengthening of their balance sheet.

This little article was published on September 1, 2020.........a good HIND-SIGHT view of a good financial move by TSLA.

Tesla to sell up to $5 billion in stock amid its incredible rally

https://www.cnbc.com/2020/09/01/tesla-to-sell-up-to-5-billion-in-stock-amid-rally.html

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

"Amid Tesla’s incredible rise that has seen shares soar to new highs, the electric auto maker said Tuesday it will sell up to $5 billion in new stock.

The additional shares will be sold “from time to time” and “at-the-market” prices, Tesla said in a filing with the Securities and Exchange Commission. It said banks will sell shares based on directives from Tesla.

“We intend to use the net proceeds, if any, from this offering to further strengthen our balance sheet, as well as for general corporate purposes,” Tesla said.

The stock briefly traded in the green on Tuesday, but moved lower throughout afternoon trading and ended the session 4.67% lower.

The decline hardly dents shares’ rapid appreciation this year. Through Monday’s close, the electric car maker has gained nearly 500% in 2020. In the last year, shares have gained 1,004% compared with the S&P 500′s 20% rise.

Tesla’s run-up has only gained steam since the company announced its 5-for-1 stock split on Aug. 11. In that time, Tesla shares have rallied 81.3%. That gain includes a 12.6% pop on Monday, when the split took effect. That rise came even though stock splits are purely cosmetic, meaning nothing about the company’s underlying business changes.

Tesla’s market cap now stands around $464 billion meaning the new offering represents about 1% of the company’s value, according to FactSet.

Wedbush analyst Dan Ives called the capital raise a “smart move,” citing strong appetite among investors to “play the transformational EV trend through pure play Tesla over the coming years.”

CEO Elon Musk is “raising enough capital to get the balance sheet and capital structure to further firm up its growing cash position and slowly get out of its debt situation, which throws the lingering bear thesis for Tesla out the window for now,” Ives added. Wedbush has a neutral rating on the stock and a base target of $380.

Part of Tesla’s share appreciation is due to the company reporting its fourth straight quarter of profits in its July 22 report, which qualifies the electric auto maker for inclusion in the S&P 500. Tesla also posted better-than-expected second-quarter vehicle deliveries.

Still, the rate at which investors have piled into the company has left many on the Street puzzled.

Miller Tabak chief market strategist Matt Maley warned that shares are due for a pullback. Those “who buy stock in TSLA on the new $5bn equity distribution they announced this morning are going to get burned,” he said.

“Even if this stock rallies a bit more over the next week or two, it’s going to be trading at least 30% below today’s level before the end of the year in our opinion,” he added.

On Monday night, RBC reiterated its underperform rating on the stock, calling the automaker “fundamentally overvalued.” However, the firm did raise its price target from $170 to $290.

Tesla last tapped capital markets in February, when it announced a $2 billion common stock offering. The announcement came just two weeks after Musk said during the company’s fourth quarter earnings call that he had no intention of raising capital.

“We’re spending money as quickly as we can spend it sensibly,” Musk said on Jan. 29. “We are not artificially limiting our progress. Despite all that, we are still generating positive cash. In light of that, it doesn’t make sense to raise money because we expect to generate cash despite this growth level.”

MY COMMENT

A PERFECT financial move. That is one more reason that I like this......very young......company. They seem to make the right moves at the right time....over and over. I.......DO......consider this stock a somewhat speculative investment. SO.......it is NOT a company that I would BET THE FARM. BUT......the moves they make......continue to be very nicely done. I have NO plans to add to my position which is 60 shares.......post-split.