The Long Term Investor

Regarding the above....one way to not miss rallies and bull markets is to NOT be a trader. To NOT be a market timer. To simply be a long term fully invested all the time investor. That is what I do. I also push the odds in my favor by owning the best companies in the world.

It also helps to have some talent and vision for seeing the REALITY of the markets and the investing world.

 

Hey Everyone. Please note that it will be a short week next week. The markets will be closed on Wednesday for Juneteenth.

 

Good job gtrudeau88. You are finding what works for you and doing it. That is what counts.

 

I am having a good day early today. Six of nine stocks up including NVDA. My CMG over the past 3-4 sessions has finally broken free of the social media attacks and portion size campaign and has been putting up good gains. I think that little bit of drama is now over since the social media people have probably pumped as many clicks out of this as possible.

I see that right now the big averages are all slightly in the red today. I expect that the markets will move to the green in the same fashion that we saw nearly every market day over the past couple of weeks.

 

I dont think I would bet big on this "asset". In fact I dont think I would invest in it at all. For those that like the THRILL of abnormal assets....perhaps 2-5% max....especially for retirement money. I am NOT a fan of abnormal assets in a retirement plan. It is simply too much of a gamble....even for 5% of my future.

The Indiana Jones Retirement Strategy for the History-Loving Investor

https://www.realclearmarkets.com/ar..._for_the_history-loving_investor_1038235.html

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

"Investment for retirement, for the future, combines the practical and the romantic, though it’s not often sold like that. Planning for a world in which the Bucket List becomes the To Do List inspires many people. But in a stressed economy a new market emerges as financial need meets love of the rare and beautiful, creating a new kind of safety net.

In search of the reliable asset, one that holds its value and provides for the investor, a burgeoning market brings nostalgic owners together with investors looking for a connection to history and to value. The market essentially is a stock, a share, in great works of art that can be bought and sold as owners feeling the pinch of this economy look for liquidity while investors look to preserve wealth in timeless treasures. Basically, an owner possesses the asset while an investor owns fractional interest in the item. When it comes time to sell, the investor will share in the future liquidity event.

It's not difficult to understand. When “Seize the Gray” won the Preakness, more than 2,500 people shared in the winners purse. And a similar market exists for those who own not racehorses, but items of lasting value. Recently, in fact, a rare, gold, 3,000-year-old Mycenaean funeral mask from Crete came on the market, a treasure of ancient Greece and now an investment opportunity available for modern day treasure enthusiasts. That’s not something you can buy at the mall or online.

For those contemplating such arrangements, it’s like a reverse mortgage of sorts.

Imagine the widow, whose husband bought what seemed like a charming little Renoir painting in his pre-war youth, but in today’s economic conditions needs to pay her bills. But the thought of parting with her glimpse into her husband’s heart is hard to bear. Such a treasure can be sold as a fractional interest security to investors who know that the market value of such a resource may increase substantially over time. It’s almost as if that masterpiece is a virtual puzzle, available for ownership in pieces.

This fractional puzzle piece can come in many forms including non-fungible tokens (NFT), security token offerings (STO), common stock and even membership in a non-government organization (NGO).

Nothing is quite as irreplaceable as items of historical value.

In Raiders of the Lost Ark, Harrison Ford plays the history lover in Dr. Indiana Jones. A part-time history professor and almost full-time treasure hunter, he looks for things of ultimate worth … in film after film, drawn not just to the gold or jewels that may be part of the make-up, but the artistry and meaning of an object. The whole is truly greater than the sum of its parts.

Near the end of the first movie, Ford’s character confronts his archeological nemesis, threatening to blow up the Ark of the Covenant, a treasure of unimaginable historical value to the world and to the Jewish people.

But his adversary, Dr. Rene Belloq in the film, calls his bluff, telling the Nazis with him (the ultimate treasure thieves) not to be concerned. He and Jones share a passion for the true worth and meaning of items made special by time and by significance, as well as from that which people used to create them.

“We are simply passing through history. This…This is history. Do as you will.”

And Dr. Jones does not follow through on his threat. As the movie is decades old, most of us know how it ends. And many of us feel that same pull to connect to our past in our present.

There is something beautiful about an investment opportunity that provides liquidity for an owner, bespoke asset classes for an investor, and a moment of connection to greatness for all of the above.

A Hippocrates said, “Life is short, the art long.”

MY COMMENT

I am sure some will think this is great for the owner of the item and for the investors. I am also sure....like the race horse above...there will be glowing news stories about the investors that hit it big. BUT you will NEVER hear about those that did not. You will also never hear about those that invested in some piece of art or NFT as a fractional owner and lost all their money.

To me this is another BUYER BEWARE situation. BUT....if you like the thrill of investing in some sort of collectable asset.....if it was me....I would keep my exposure very, very, small.

 

I like this little article.

Latest inflation data provides potential for 'even greater upside' in the stock market rally

https://finance.yahoo.com/news/late...side-in-the-stock-market-rally-100054916.html

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

"After a rough start to 2024, the latest inflation data may very well mean more fuel for the current stock market rally.

"Inflation falling continues to be one of the primary factors behind the bull market in stocks," Julian Emanuel, who leads Evercore ISI's equity, derivatives, and quantitative strategy, wrote in a note to clients.

On Sunday, Emanuel boosted his year-end price target for the S&P 500 (^GSPC) to 6,000 from 4,750. Emanuel cited the promising inflation path and the “early innings” of the AI trade when moving his year-end target to the highest on Wall Street.

The S&P 500 and Nasdaq (^IXIC) hit four straight record closes last week as investors digested softer-than-expected inflation readings for both consumer and wholesale prices.

UBS Investment Bank's chief US equity strategist Jonathan Golub, who holds one of the highest S&P 500 year-end targets on the Street at 5,600, believes this week's inflation data and what it could mean for eventual interest rate cuts "provide the potential for even greater upside" to his year-end outlook.

Golub's confidence is increasing because inflation is showing its most significant progress toward the Fed's 2% goal since the start of the year. That is fueling hopes for rate cuts — and sending Treasury yields, a noted headwind for stocks over the past year, lower.

The May Consumer Price Index (CPI) showed "core" CPI, which excludes volatile food and energy categories, increased by 0.2% month over month, the lowest reading since June 2023. Meanwhile, the "core" Producer Price Index (PPI), which excludes the volatile food and energy categories, was unchanged in May from the prior month, below economists' expectations for a 0.3% increase.

Combining the various metrics, economists believe this points to a positive reading of the Fed's preferred inflation gauge within the Personal Consumption Expenditures (PCE) index later this month.

Rate cuts?

Bank of America US economist Stephen Juneau wrote that Thursday's PPI supports their view that "disinflation is the most likely path forward" and points to an "A+ report" for May core PCE. BofA estimates core PCE increased 0.16% month over month in May.

"The May CPI and PPI data are favorable for our view that the Fed will be reducing its policy rate later this year," Juneau wrote. "We see recent inflation data as greatly reducing the likelihood that the Fed has to raise rates and view labor market data as indicating that the probability of fast rate cuts is also low.

"An easing cycle that begins in September remains a possibility, particularly if shelter inflation were to moderate further in the next couple of months."

The inflation data seems to have cheered investors in the face of the Fed's latest Summary of Economic Projections (SEP), which showed the median forecast for rate cuts fell to just one cut in 2024. Markets are now more firmly pricing in two interest rate cuts this year than they had entering the week.

Some attribute this to when the data was released. The CPI report came just hours before the Fed released its — and while Fed Chair Jerome Powell noted that officials are allowed to change their forecast after an economic data release, "most people don’t."

Additionally, the Fed's call was close, with just one more official favoring one cut rather than two. Between the narrow majority and the second positive inflation reading of the week coming after the Fed had already wrapped its meeting, Wall Street strategists believe the Fed's forecast may already be stale.

"Honestly, if [the inflation data] happened a week earlier, I think that might just have been enough to keep another two people on the two-rate-cut bandwagon," JPMorgan Asset Management chief global strategist David Kelly said at a media roundtable on Thursday.

Kelly said the recent data added to the case that inflation is falling slowly toward the Fed's 2% target. And unless the US economy is hit by an unexpected shock to reverse course, "the soft landing continues," Kelly said."

MY COMMENT

I agree with the above. I believe we are all set up for a very nice last half of 2024. if we can avoid some unknown black swan.....there is really NOTHING in the way of a good continuation of the bull market.

BUT.....that does not mean the markets will just go straight up....there will as is NORMAL be soft spots and perhaps even a correction in there somewhere along the way. That is simply NORMAL.

 

Here is the markets today....there is really NOTHING of note that is going to happen this week. It will simply be a normal market week.

Stocks enter shortened trading week near record highs: What to know this week

https://finance.yahoo.com/news/stoc...d-highs-what-to-know-this-week-110034200.html

Stock market today: S&P 500, Nasdaq hold near record highs as Wall Street gets bullish

https://finance.yahoo.com/news/stoc...hs-as-wall-street-gets-bullish-133029572.html

 

That is about it for today. So I will simply sit, wait, and watch. I love a sit and wait and do nothing day. The story of my life as a long term investor.

 

I ended with a nice NET GAIN today in spite of NVDA being slightly down by -$0.90. I had eight of nine stocks UP at the close. Sterling movers were PLTR at +6.15% and CMG at +2.87%. I did however lose out to the SP500 today by 0.41%.

A very pleasing day today at the close and a good omen for the markets tomorrow and the rest of the week. We shook off the RED open very nicely as the day progressed.

 

I like this event as a NVDA shareholder......I may not like it as an APPLE shareholder.

Big Reshuffle of $71 Billion ETF Looms as Nvidia Surpasses Apple

https://finance.yahoo.com/news/big-reshuffle-71-billion-etf-174907744.html

"(Bloomberg) — One of the world’s most prominent technology ETFs looks poised for a big rebalancing that would ramp up exposure to Nvidia Corp. (NVDA) at the expense of Apple Inc. (AAPL) – spurring billions of dollars in trading volume in one fell swoop.

Barring an 11th-hour deviation from the methodology set out by index provider S&P Dow Jones Indices, State Street Global Advisors is on track to revamp the composition of its $71 billion Technology Select Sector SPDR Fund (XLK) after Nvidia’s market value closed above Apple on Friday.

For months, XLK has held way fewer Nvidia shares even as the AI giant soared 166% year-to-date. When the chipmaker ranked in third place, it made up roughly 6% of the ETF’s assets, compared with 22% in the S&P 500 Information Technology Index. The ownership cap, imposed under diversification rules, has caused XLK to underperform massively this year.

While S&P in theory reserves the right to make an exception, industry participants say the ETF is on track to be re-tooled when it enacts the quarterly rebalance near the end of June.

On that basis, Apple and Nvidia are set to reverse their positions in the ETF with the former’s weight dropping to 4.5% and the latter rising above 20%, according to calculations sent by the index provider to three market participants familiar with the matter.

State Street stands to purchase $11 billion of Nvidia shares and dump $12 billion of Apple, one estimate shows. That’s not insignificant — the forecast sale in Apple shares is equal to the average daily trading value in the past three months.

“By our calculation, the flip-flop between Nvidia and Apple will occur,” said Chris Harvey, head of equity strategy at Wells Fargo Securities. “This aligns the XLK ETF more closely with the momentum trade and semis. At the margin, it’s more dollars chasing a stock that does not need any additional help.”

A spokesperson for S&P declined to comment on potential index changes and referred Bloomberg News to the methodology.


Matt Bartolini, head of SPDR Americas Research at State Street, said XLK will rebalance according to its rules and the methodology. The ETF is obliged to track the S&P benchmark that is designed to stay in compliance with the diversification regulations.

The rules “have served investors well,” he said.

S&P has left the door open to making an exception when it unveils sector weightings at the end of the month, judging by a document sent late last week and seen by Bloomberg News.

The index committee “reserves the right to make exceptions when applying the methodology if the need arises,” S&P wrote in a note regarding the June rebalance. “In any scenario where the treatment differs from the general rules stated in this document or supplemental documents, clients will receive notice, whenever possible.”

S&P said it will send clients so-called proforma documents related to the rebalance for sector indexes each day through Friday.

Any last-minute deviation from the public methodology would not be taken well by traders, who tend to take positions in anticipation of possible revisions in index rebalances like this. While it’s getting crowded, buying stocks that are entering major indexes and selling those that are exiting them has become one of the most reliable strategies for the hedge fund world.


Underpinning the massive adjustments in the duo’s weightings in the ETF are diversification rules dating back more than 80 years that were established to safeguard investors from concentrated bets. Under those rules, the combined representation of the largest companies — those making up roughly 5% or more of a diversified fund — can’t add up to more than 50%.

Similar restrictions last year spurred the overseer of the Nasdaq 100 to conduct a special rebalance to keep index-tracking funds in compliance with the rules. When this rule is breached, indexes such as the Nasdaq 100 tend to trim the top holdings proportionally. XLK’s methodology works differently. When a number of stocks are not in compliance, the smallest of those gets clipped.

This unique rule is why Nvidia has been massively under-owned by XLK, leading the fund to trail the traditional S&P 500 tech sub-index by more than 5 percentage points this quarter — the widest dispersion since 2001.

With the semiconductor pioneer catching up to Apple and Microsoft Corp. in size during recent weeks, XLK’s upcoming rebalances have garnered Wall Street interest given the prospect of volatility-inducing weight additions and reductions to some of the world’s most closely watched tech companies.

“I am interested to see if they keep the rules the same through the next rebalance in September,” said James Seyffart, ETF analyst at Bloomberg Intelligence. “If Apple manages to surpass Nvidia or Microsoft by the next rebalance reference date — which is September 13th — we could have a mirror image massive rebalance where Apple is bought to the tune of billions and Nvidia or Apple are sold to the tune of billions.”"

MY COMMENT

This rule really has the power to whip the top three tech stocks around quarter to quarter. BUT....a rule is a rule. AND....if NVDA is not purchased and brought up to speed in the holdings....they are going to have some very angry shareholders that will be locked in to further under-performance.

It will be fun to watch....but....for me it is a double edge sword since I own both APPLE and NVIDIA.

 

Regarding the above....the NVDA snowball continues to pick up speed as it rolls downhill and gets bigger and bigger.

Even when the MASSIVE gains end and the company settles into a more......."normal" growth......... it will still be a HUGE holding for shareholders and a growth engine for years to come. It has now been established as one of the MAGNIFICENT THREE of the tech world.

 

The close today....and....more strength in the markets and a good nod to the future of this year.

Stock market today: Stocks zoom higher as S&P 500 notches 30th record close of 2024

https://finance.yahoo.com/news/stoc...ches-30th-record-close-of-2024-200034109.html

MY COMMENT

I like that word.....ZOOM.

 

AND....now my little year end prediction for SP500 5800....is starting to look PUNY.

Latest inflation data provides potential for 'even greater upside' in the stock market rally

https://finance.yahoo.com/news/late...side-in-the-stock-market-rally-100054916.html

 

Here is another take on what I posted above.

Nvidia to get 20% weighting and billions in investor demand, while Apple demoted in major tech fund

https://www.cnbc.com/2024/06/17/nvi...d-while-apple-demoted-in-major-tech-fund.html

Key Information

• Microsoft and Nvidia will likely compose about 21% in this tech ETF. Apple will be about 4.5%.
• The rebalance will only last one quarter.
  
• The ETF has $71 billion in assets, a 15-percentage-point change in the fund is more than $10 billion.

MY COMMENT

I have a sneaking feeling that at some point they will have to revisit this rule.

 

Hey Zukodany.....your PLTR is now +50.9% year to date. Pretty good.

 

The story of the day. Good news for the FED and rate cuts in the future.

Retail sales increase less than expected in May

https://finance.yahoo.com/news/retail-sales-increase-less-than-expected-in-may-123311452.html

"Retail sales increased at a slower-than-expected pace in May as high interest rates and inflation continued to weigh on consumers.

Retail sales increased 0.1%, less than the 0.3% economists had expected. In April, retail sales ticked down 0.2%, according to revised data from the Commerce Department.

Excluding autos and gas, retail sales increased 0.1%, below estimates for a 0.4% increase but above the 0.3% decline in April.

Capital Economics chief North America economist Paul Ashworth noted Tuesday's retail sales reading adds to "signs that consumers are struggling a little."

"The soft May retail sales data support our view that, after a disappointing first quarter, GDP growth remains a little lackluster in the second quarter too," Ashworth said.

Within the report, gasoline stations led the declines, falling 2.2% from the month prior. Sales at furniture and home stores were also a laggard with sales falling 1.1%. Meanwhile, sporting goods and hobby stores were the biggest gainers, with sales rising 2.8% from the month prior.

"Consumer spending is slowing because real incomes growth is moderating and because some consumers are becoming credit constrained amid elevated interest rates and rising credit card utilization," Oxford Economics deputy Chief US economist Michael Pearce wrote in a note to clients.

The report comes less than a week after the Federal Reserve's revised Summary of Economic Projections (SEP) showed the central bank estimating one interest rate cut this year. The commitment to high interest rates for longer than many had hoped has economists increasingly concerned that the restrictive policy could prompt a meaningful slowdown in the US economy.

Allianz chief economic adviser Mohamed El-Erian told Yahoo Finance on June 13 the balance of risks for the Fed if it waits to cut in December "is in favor of them being too late and the economy slowing more than it should."

MY COMMENT

The MAJORITY of the economic news over the past 2-3 months continue to pile up in favor of rate cuts by the FED.

This is GOOD NEWS for stock and fund investors going forward.