WELL......DUH. Drop in Magnificent Seven could drag down U.S. stocks, top fund manager says https://finance.yahoo.com/news/drop-magnificent-seven-could-drag-140416221.html "The market valuations on a standalone basis look extended, and therefore an annual drawdown or correction of 10% to 13% is very possible,"...... "Still, large technology companies are generating cash and have stronger businesses than those which typically led other bouts of market weakness,....." MY COMMENT Those two sentences pretty much sum it all up......the IRRATIONAL markets.
Waiting out times like this are just part of being a long term investor. A 25% pullback for NVDA from ATH, a 40% pullback for AMD from ATH. I think the stocks have some sizeable gains this year and people are selling on the upcoming tech earnings and also the Fed meeting. Much of this is computers trading and then the average investor panicking and jumping on board. Huge pullback today on no news. This is just what the stock market is in this age and we just have to deal with it and ride it out.
Case in point.....NVDA today.....down by 6.3%. I am starting to doubt that there is anything that MSFT can announce today that will satisfy the market.....short term. There will be some reason somewhere as to why earnings are not good enough or the guidance is not good enough. So.....yes....I will continue to be fully invested for the long term as usual.
To continue reveling in the MUD (irrationality and herd behavior) of the current markets: NVDA.....June 18....$135.58. NVDA right now....July 30....$105. DOWN by 22.55%. BUMMER.
The mainstream markets are now distinctly RED. I have a single green stock right now.....CMG. WHATEVER.
For some of the guys that have invested long term historically in the chip stocks....isn't this kind of the cyclical nature of it. I don't follow those companies exclusively, but in general terms, it seems over time they go gang busters and then kind of fall off. Then back at it again. Maybe more so than some of the other stuff. It seems TireSmoke has mentioned this before in some of his posts....that it can be a wild ride with them at times.
Yes chip stocks have much larger swings than pretty much anything else I've seen. This particular instance is annoying because the demand is good and fundamentals look good so it's some sort of outside factor (computers trading on headlines) that seems to be the reason for the pullback. trying to justify the short term market is like arguing with a drunk person, you can't defeat the irrational. "In the short run, the market is a voting machine but in the long run, it is a weighing machine" – Benjamin Graham, Warren Buffett's mentor.
Some earnings.... P&G Announces Fourth Quarter and Fiscal Year 2024 Results (PG) Pfizer Reports Strong Second-Quarter 2024 Results And Raises 2024 Guidance (PFE) American Tower Corporation Reports Second Quarter 2024 Financial Results (AMT) PayPal Reports Second Quarter 2024 Results (PYPL) Strategy Execution and Strong Operations Drive Phillips 66 Second-Quarter Results (PSX) Of course MSFT and AMD up at close.
Another RED day for me. NVDA alone down by a bit more than 7%. I am sure we will see more selling in the stock......and in the other big cap growth stocks.... as the downward momentum generates more selling in response. Yes it is a rotation.....no not to small caps....but a rotating correction impacting the big cap growth stocks the most. I also lost out to the SP500 today by......2.43%.
HERE is the MSFT earnings. Microsoft beats quarterly revenue estimates https://finance.yahoo.com/news/microsoft-beats-quarterly-revenue-estimates-200311879.html (BOLD is my opinion OR what I consider important content) "(Reuters) - Microsoft beat Wall Street estimates for fourth-quarter revenue on Tuesday, driven by gains from AI adoption across its cloud services and business software products. Revenue rose 15% to $64.7 billion in the quarter ended June, compared with analysts' consensus estimate of $64.39 billion, according to LSEG data." MY COMMENT not much data here....I will look for more.
No surprise here......it did not matter what they reported.....the markets will never be satisfied. Microsoft shares drop as cloud miss overshadows better-than-expected revenue and earnings https://www.cnbc.com/2024/07/30/microsoft-msft-q4-earnings-report-2024.html (BOLD is my opinion OR what I consider important content) "Key Points Microsoft reported better-than-expected earnings and revenue for the fiscal fourth quarter. The stock dropped in extended trading as investors focused on disappointing Azure revenue. Total revenue increased 15% from a year earlier. Microsoft shares fell 7% in extended trading on Tuesday after the software company reported disappointing cloud revenue, overshadowing stronger earnings and revenue than analysts had predicted. Here’s how the company did, compared with the LSEG consensus: Earnings per share: $2.95 vs. $2.93 expected Revenue: $64.73 billion vs. $64.39 billion expected Microsoft’s revenue increased 15% year over year in the fiscal fourth quarter, which ended on June 30, according to a statement. Net income, at $22.04 billion, was up from $20.08 billion, or $2.69 per share, in the year-ago quarter. The company’s top segment, Intelligent Cloud, generated $28.52 billion in revenue. It includes the Azure public cloud, Windows Server, Nuance and GitHub. The total was up about 19% and below the $28.68 billion consensus among analysts surveyed by StreetAccount. Revenue from Azure and other cloud services grew 29% during the quarter. Analysts polled by CNBC and StreetAccount had expected 31% growth. Microsoft doesn’t disclose revenue from the category in dollars. Last week Google parent Alphabet said revenue from its cloud business, encompassing Workspace productivity software and Google Cloud Platform infrastructure, went up by about 29%. The Productivity and Business Processes unit that includes Office software and LinkedIn produced $20.32 billion in revenue. That’s up 11% and more than the $20.13 billion StreetAccount consensus. During the fiscal fourth quarter, Microsoft started selling Surface PCs with AI features that can run certain models locally without the need for an internet connection. Dell, HP and other device makers also touted their own so-called Copilot+ PCs. CEO Satya Nadella said at a press briefing in May that “we’re bringing real joy and a sense of wonder back to creation on the PC.” Executives will discuss the results and issue guidance on a conference call with analysts starting at 5:30 p.m. ET." MY COMMENT UGH.....Hello? I hate to tell Mr Market....but....the entire financials from the entire business are what counts. You can nit-pick earnings all you want.......but it is the entire business that counts. As has been the case for the last 2-4 quarters.....we are going to throw away all the earnings BEATS. They are always overshadowed by some other event or data.....or....are nit-picked to death by MORONS. Welcome to the modern world of investing. YES.....overall.....I am calling this a good BEAT.
MSFT down 6.5% after hours after a really good ER. The recent IT issues and cloud service outage came at the wrong time. My email at work still isn't functioning properly. Hopefully AMD will pull through with good guidance and reverse our current chip correction. After a small break, I'm ready to move onward and upward!
Seems that way. Lousy skittish market. Oh well. I'm going to sit and do nothing while the craziness plays out.
AMD showing strong guidance into the 2nd half of the year. The stock price is at 0% YTD so this will hopefully push it to some respectable percent gain by year end. I kept a little 75 share position because I really do like the stock and it has done me very well over the years but my goodness, when it drops, IT DROPS! Over the year I have transitioned from AMD into my already overweight NVDA position. I am looking forward to NVDA earning report at the end of the month. I do not recommend my portfolio to anyone, this is just what it evolved to. The plan I am formulating now is to eventually get half the account back into ETF's most likely VGT and then divide the 2nd half of the account among a few hand picked stocks, NVDA and some none tech related.
I can not see this entire article....but what I can see.....says it all. "AI trained on AI garbage spits out AI garbage" https://climateerinvest.blogspot.com/2024/07/ai-trained-on-ai-garbage-spits-out-ai.html (BOLD is my opinion OR what I consider important content) "This is a really big problem. From MIT's Technology Review, July 24: As junk web pages written by AI proliferate, the models that rely on that data will suffer. AI models work by training on huge swaths of data from the internet. But as AI is increasingly being used to pump out web pages filled with junk content, that process is in danger of being undermined. New research published in Nature shows that the quality of the model’s output gradually degrades when AI trains on AI-generated data. As subsequent models produce output that is then used as training data for future models, the effect gets worse. Ilia Shumailov, a computer scientist from the University of Oxford, who led the study, likens the process to taking photos of photos. “If you take a picture and you scan it, and then you print it, and you repeat this process over time, basically the noise overwhelms the whole process,” he says. “You’re left with a dark square.” The equivalent of the dark square for AI is called “model collapse,” he says, meaning the model just produces incoherent garbage. This research may have serious implications for the largest AI models of today, because they use the internet as their database. GPT-3, for example, was trained in part on data from Common Crawl, an online repository of over 3 billion web pages. And the problem is likely to get worse as an increasing number of AI-generated junk websites start cluttering up the internet. Current AI models aren’t just going to collapse, says Shumailov, but there may still be substantive effects: The improvements will slow down, and performance might suffer. To determine the potential effect on performance, Shumailov and his colleagues fine-tuned a large language model (LLM) on a set of data from Wikipedia, then fine-tuned the new model on its own output over nine generations. The team measured how nonsensical the output was using a “perplexity score,” which measures an AI model’s confidence in its ability to predict the next part of a sequence; a higher score translates to a less accurate model. The models trained on other models’ outputs had higher perplexity scores. For example, for each generation, the team asked the model for the next sentence after the following input: “some started before 1360—was typically accomplished by a master mason and a small team of itinerant masons, supplemented by local parish labourers, according to Poyntz Wright. But other authors reject this model, suggesting instead that leading architects designed the parish church towers based on early examples of Perpendicular.” On the ninth and final generation, the model returned the following: “architecture. In addition to being home to some of the world’s largest populations of black @-@ tailed jackrabbits, white @-@ tailed jackrabbits, blue @-@ tailed jackrabbits, red @-@ tailed jackrabbits, yellow @-.” MY COMMENT We need to be very careful how we use this "stuff". Even without AI....we are not exactly getting more intelligent in business, society, culture, government, academia, etc, etc, etc.
Speaking of AI. The reaction to the MSFT earnings is just IDIOTIC. The earnings report was a good BEAT. Picking out one little bit of the report or one business segment as the.....end all, be all....makes no sense. A company operates as a whole. ALL business segments contribute to and create the whole universe of earnings for the company. The old saying could not be more true......the WHOLE is greater than the sum of the parts. In addition in my view....the way we are looking at AI is......ALL WRONG. It is not going to just be visible in one little part of a company. It is going to quickly embed over the entire operation of a company. It is going to impact and underlie the entire operation of most companies especially in the tech world. It is not going to be isolated to one part of the business that can be seen in an earnings report. It is going to be incorporated into.....ALL....products and business segments. The current focus on....."is the AI investment paying off".....is simply dumb, limited thinking. We can already see that AI is sweeping through business and society. We are at the start of a HUGE snowball rolling down hill situation. In reality....we will not see AI or the impact of AI....because it will underlay EVERYTHING. In fact that is the way it is supposed to work. If we can......"see it"....we are doing something wrong.
The OBVIOUS story of the day.......and....not like this is shocking after the unjustified drop in NVDA yesterday. Stocks rally before Fed decision as Nvidia surges https://finance.yahoo.com/news/stoc...-fed-decision-as-nvidia-surges-134308475.html (BOLD is my opinion OR what I consider important content) "US stocks rallied on Wednesday amid a tech revival that sent the Nasdaq surging, as investors prepared for the Federal Reserve's decision on whether to cut interest rates. The S&P 500 (^GSPC) rose by 1.5% while the tech-heavy Nasdaq Composite (^IXIC) soared more than 2%. The Dow Jones Industrial Average (^DJI) rose a modest 0.1%. Tech stocks are in the ascent again after taking a battering in recent days. The first earnings from "Magnificent Seven" megacaps stirred fears the AI boost would prove a bust, after falling short of high hopes. A swath of positive news is spurring a pre-market comeback for chip stocks, with AMD (AMD) shares getting a boost from an AI-driven earnings beat. Nvidia (NVDA) climbed over 7%, regaining ground lost in a steep drop on Tuesday in the halo of the results. Also on Wednesday, Morgan Stanley noted that the recent 25% drawdown in Nvidia stock presented a "good entry point," marking a sentiment shift in what's been an otherwise tough July for the AI leader. Elsewhere, Dutch chip gear giant ASML's (ASML, ASML.AS) stock surged after Reuters reported the US will exempt some foreign allies from new China curbs. As that pressure eases, the spotlight is turning to the Fed, which is expected to hold interest rates steady but signal a cut is in the pipeline when it ends its July policy meeting later Wednesday. The market is overwhelmingly convinced a Fed pivot is coming in September — the debate now is whether rates will go down by 0.25% or 0.5%, according to the CME FedWatch tool. Chair Jerome Powell's post-meeting comments will be closely followed for hints that recent inflation and labor data could support a deeper cut. Meanwhile, more earnings are set to roll in, Meta's (META) results due later will be scrutinized for signs that the Facebook parent's AI spending is paying off — the big question for megacaps this season. In commodities, oil jumped after the killing of Hamas' political leader in an airstrike stoked geopolitical tensions. Brent crude (BZ=F) futures, the global benchmark, rose 3% to top $80 a barrel. US benchmark West Intermediate crude futures (CL=F) climbed to $77.31 a barrel, a 3.5% gain." MY COMMENT YES.....the IDIOCY will continue later today and later this week with tech earnings. The search for evidence of the impact of AI....is a joke. How embarrassing for those that are spouting this BALONEY in their writings. To me it just shows a total IGNORANCE of how business operates. As I said AI is in the early stages of embedding in EVERYTHING. IT will be ubiquitous and invisible. You will not be able to quantify it....other than impact on employee head count....which will plummet......as less human employees are needed to do basic work. BUT.....we are having a much nicer day today than over the past few weeks. Now the question is will it last to the close.
