The Long Term Investor

Sounds like a good life review and plan TireSmoke. That is the bottom line of being an investor....to give yourself and your family options.

My plumbers got done and I avoided having a hole cut in my wall. The valve is fixed......$500 later.....but that is also why you invest......so you are able to handle the little bumps that life throws at you.

Today I was TOTALLY GREEN.....every stock. Up big time plus got in a big beat on the SP500 by 1.62%.

I believe I am also at an all time high. My two primary accounts that I look at every day had a SIX FIGURE gain today.

HAPPY DAYS ARE HERE AGAIN........YEA HAW.

 

And....I think we are all set up for a MASSIVE gain week.

But every time I think that I get disappointed by the stupidity of the markets and financial media.

BUT being a positive thinker I will say.....SHOW ME THE MONEY.

 

WAY TO GO LORI.

You are heading toward another milestone and will soon have to set a new investment goal. CELEBRATE and psychologically reward yourself. Investing is a very erratic adventure.....up and down....but, closing in on a new all time high is great motivation and confirmation that what you are doing WILL work. WELL DONE....as usual. You are a valued member of this group.

 

In the largest account that I manage I just brought.....at the open today..... the PLTR position up to about 2.5% of the account value. It is no longer a mini-position in that portfolio in terms of dollar value. BUT....is still well below all the other positions in that account.

As additional funds pop up over time I will also add more shares of PLTR in my other accounts.

A long time ago I said that I would put any and all portfolio moves on this thread when they happen. Thus, the above post.

 

Our economic data is so corrupted by.......how it is collected,.......how it is released,.......the massive revisions,.......the constant changes in how it is calculated which make comparisons worthless......politics, etc, etc, etc. I never invest based on any of it.

Slow Your Roll on September’s “Blowout” Jobs Report
September’s jobs numbers were fine, but don’t overstate the takeaways.

https://www.fisherinvestments.com/e...w-your-roll-on-septembers-blowout-jobs-report

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

"“Wowza.” That is how one economist described the September jobs report, as nonfarm payrolls soared past expectations. The enthusiasm wasn’t isolated to a select few, either—most coverage cheered the “strong labor market.” While we don’t pooh-pooh September’s numbers, some perspective is in order. Positive or negative, in our view, labor data only confirm what stocks have long since moved on from.

September’s results featured plenty to like. Nonfarm payrolls surged 254,000, trouncing consensus estimates of 142,500. Meanwhile, the unemployment rate ticked down for a second-straight month to 4.1%.[ii] The “underemployment” rate—which includes those working part-time for economic reasons as well as discouraged workers (those who haven’t sought work in over four weeks)—fell to 7.7% from August’s 7.9%, the first decline in nearly a year.[iii] The solid report prompted the usual Fed speculation (e.g., Jerome Powell and friends face less pressure to cut rates now). But more interesting to us: the generally chipper reaction. One take even suggested now is the time to “concede that the economy is looking fabulous.”[iv]

That optimism isn’t baseless, but put this “blowout” jobs report in perspective. One, September’s read isn’t even this year’s biggest monthly gain this year (that honor goes to March’s 310,000).[v] Yes, September’s 254,000 gain exceeds 2024’s year-to-date monthly median of 216,000, but not hugely.[vi] Looking over the past two years, the median monthly gain is 240,000—not far off last month’s result.[vii] And are September’s results worthy of a “wowza” when compared to 2021’s 546,500 monthly gain amid the post-lockdown economy’s hiring spree?

Then there is the seasonal adjustment factor. Hiring fluctuates based on the time of the year (e.g., retail hiring picks during the winter holiday shopping season), so the Bureau of Labor Statistics applies seasonal factors to make the numbers more easily comparable month to month. However, things can get a little wonky in September since it is the transition point between summer and fall (teachers return to school, construction hiring tends to cool). But even by historical standards, this year’s seasonal factor was the largest for any September going back to 2002.[viii] One reason may have been favorable weather, benefiting restaurants, construction and retail—the industries that drove September’s gains. But the establishment survey response rate was also the lowest for any September since 2002, further complicating the picture.[ix] As more data come in, revisions may blow away the blowout initial estimate.

One other notable component to September’s report: Manufacturing employment fell by -7,000, one of two detracting sectors (the other being Transportation and warehousing).[x] The dip extends manufacturing’s long-running soft patch. Over the past 12 months, the sector has shed a net -28,000—most among all major sectors.[xi] Unsurprisingly, durable goods industries (e.g., transportation equipment manufacturing) is responsible for most of the decline. Yet this isn’t new news—labor data are simply confirming a trend other, less-lagging manufacturing data have shown over the past two years.

For all the chatter about what this means for the Fed, all this activity occurred before September’s rate cut—evidence against those arguing a rate cut is necessary to support further jobs growth. We also think this proves all that talk about July’s supposedly bad report indicating the Fed was behind the 8-Ball was just plain wrong. Remember the negative volatility at August’s onset? Headlines attributed some of that to the deceleration in July jobs growth—which supposedly meant a rising risk of recession (since the Fed would delay a rate cut). We wrote back then that it seemed like a chicken/egg thing—i.e., volatility was clouding everyone’s view. Stocks have since rebounded, quieting those recession predictions. Yet September’s solid report has many ratcheting down expectations of future rate cuts—which also strikes us as silly since central bankers’ actions aren’t predictable (despite how much attention their words receive).

Moreover, jobs are lagging economic indicators, simply confirming developments from months ago. So in the event that a September Fed rate cut influences a company’s decision—which we are skeptical of—that effect won’t show up in the data for some time. Looking ahead to the next jobs report, October’s results may reflect some noise tied to the three-day East and Gulf Coast port strike and disruptions tied to Hurricane Helene. Those singular events don’t say much about what businesses will do in November, let alone next year. For all the eyeballs jobs data grab, they reflect old news to stocks."

MY COMMENT

EYE ON THE BALL......what really counts in investing is FUNDAMENTALS and EARNINGS. Not the general economic data.......whether it is accurate or not.

 

I like this little article.

The Noise Factory

https://behaviouralinvestment.com/2024/10/08/the-noise-factory/

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

"What will the Fed do next? How will conflict in the Middle East impact the oil price? What does a new bout of stimulus mean for the Chinese Equity market? Is the US economy heading into a recession or reflation? Investors are trapped in a vortex of noise. We are compelled to engage with and react to a rotating cast of inescapably prominent and impossibly complex issues. This constant state of flux is the lifeblood of the investment industry but poison for clients. For most investors 99%, of what we see, hear and feel in financial markets is not just irrelevant to what we are trying to achieve, it actively makes it harder to make good decisions and attain our goals. Why is noise so ubiquitous and what can we do about it?

Critical to the success of any investor is the ability to cancel out the noise that surrounds us and focus on the elements that will have a material influence on our outcomes. Given the sheer complexity and chaos inherent in financial markets this can seem like an impossible task – how can we figure out what is significant?

There are two key criteria we can apply to help us identify harmful noise in financial markets (which is the vast majority of what we encounter). For any issue or event, we should ask two questions:

– Does it matter?

– Is it knowable?

Unless we can answer both in the affirmative, we can classify it as unhelpful noise.

Let’s take each in turn:

– Does it matter? Here we are seeking to understand whether the subject we are focusing on will actually matter to what we are trying to achieve. Let’s assume I have a 20-year investment horizon, will the next decision by the Fed have any obvious impact on my investment goals? Absolutely not. The same can be said for whatever geopolitical issue is the focus of our attention at any given point in time. If something is likely to have either no effect or a random influence on us meeting our investment objectives, then it is just noise. Spending time thinking about it is likely to leave us worse off.

Even if something does matter – we are confident that some variable or topic will have a material impact on our investments over the time horizons that matter to us – it can still be noise, because it also must be knowable.

– Is it knowable? Being confident that something actually matters is a pretty high hurdle for investment information, but even that is not sufficient. For it not to be noise, it must be knowable or predictable. Why? Well, let’s say I was certain that the near-term decisions of the Fed or the latest geopolitical issue would have an impact on meeting my investment objectives – this is only meaningful if I know or can predict the outcome of these things. I need to know both that the Fed decision matters and believe that I can predict it, otherwise, what am I going to do about it?

If that isn’t tough enough, there is another problem. We often need to know two things – both what is going to happen and how it will impact financial markets. Many wonderful (lucky) predictions about a particular event have been rendered worthless because someone got the second part wrong. Forecasting any future occurrence is usually a herculean task, adding on a prediction of how it will then influence something else (alongside all the other unforeseeable things that might also impact it) is getting us pretty close to impossible.

So, how can we tell what matters and what is knowable? Well, we can apply some simple tests.

Does it matter?

Test: If I had a crystal ball and knew something would occur in advance, would it change my investment decision making?

This is a useful test for long-term investors because most things really should not influence our choices. There is a danger, however, of being overconfident and believing that certain pieces of information will move markets in an obvious way. Imagine having some foresight of 2020 ‘Covid’ economic data and making investment decisions based on that – it probably would have ended badly.

Is it knowable?

Test: Is the information already known or is there evidence that people can accurately predict it?

The most obvious piece of information that is in some way knowable is the valuation of an asset. For example, when bond yields were close to zero we didn’t need to make predictions about future returns being low – we knew this. Unfortunately, most financial market relevant activity isn’t knowable, it is instead reliant on making bold predictions about the future, which in complex adaptive systems is quite the ask.

Bringing these aspects together creates a simple framework for addressing the issue of noise in financial markets and the many problems it causes investors:

When people talk about current hot topics in financial markets – usually in wildly overconfident ways – we should be trying to apply this framework before anything else. Ask does the thing being discussed have any relevance based on my objectives and horizon, and if it does, is it reasonable to believe that it is in anyway knowable or predictable? The vast majority of things we can ignore, some things matter but are unpredictable so we diversify our portfolios, and a select few things really matter and should inform the investment decisions we make.

It is fair to say that what matters depends on the individual investor and what they are trying to achieve. So, for short-term traders many more events and occurrences will seem to matter because they are trying to judge near-term changes in sentiment. It is expected that they will interact with the market more than those with a longer horizon. The problem for investors taking such short-run perspectives is that most of the variables that might matter for them are not predictable in any reasonable or consistent way.

Using this framework leaves something of a puzzle, however. Most investors have long-term objectives, yet almost everyone seems to be obsessed with perpetuating short-term noise – constantly talking about things that don’t matter and / or are unknown and unpredictable. What causes such a dynamic? There are many, many factors at play, but here are a few ideas:

We want to reduce uncertainty: As humans we abhor uncertainty, and there are few things more uncertain than short-term financial market fluctuations. Engaging with what is happening and listening to people who confidently explain it (and predict how it will develop) is incredibly comforting. The sense of security it gives us is entirely false, but it feels real.

We react to what is in front of us: Even if we try to avoid it, we are surrounded by news of what is unfolding right now and cannot help but think that what is happening in the moment is more important than anything else.

We want to sound smart: Talking about financial markets makes us sound smart. We can quite easily be wrong about how every major financial market event unfolds yet still sound credible and intelligent whilst doing it. The alternative is to say “I don’t know” or “it probably doesn’t matter” and that doesn’t do wonders for our conversations or career.

We don’t want to look negligent: One of the real challenges faced when trying not to engage with market noise, is that there will always be some events that will have an impact and matter (particularly in the short-run). We won’t know what these are beforehand, but after they occur everyone will act as if they were obvious and inevitable. We cannot risk looking negligent, so it is safer to treat everything as if it might be vital.

We avoid feedback: Does anybody genuinely keep track of the views they have on market events and short-term market moves? Almost certainly not. Everyone knows why this is, but it doesn’t matter because everyone carries on in the same fashion. ‘I was wrong yesterday and the day before that, but I will be right tomorrow.’

We focus on what matters to others: Unfortunately, it is not the things that matter to our long-term outcomes that are most important, but what other people think matters. If everyone else in the industry treats certain events or issues with the utmost significance, it is almost impossible to be an outlier. The industry acts as if these things are important, so clients think they are important, and it is rational to conform.

We want to sell something: Everything always in the end comes down to incentives. Noise, news flow and the conveyor belt of market events grease the wheels of almost everything that happens in the industry. It is in the interests of everyone to join in (apart from the clients).

We are bored: The willingness of investors to engage with market noise always reminds me of a social psychology experiment where participants were left alone in a room for fifteen minutes. They could either sit and think, or press a button that would give them an electric shock. 67% of men chose to electrocute themselves. Long-term investing is usually dull, embracing the noise of financial markets might be painful, but at least it stops us being bored.

I often wonder whether the majority of people involved in the investment industry know that much of what is discussed and debated on a day-to-day basis is often irrelevant and almost always unpredictable, and just play along with the game, or if they actually believe that they stand apart from everyone else in their ability to make sense of the cacophony. Whatever the case, noise is a real problem for most investors and one that can lead to poor long-term outcomes unless we find ways to drown it out.

The next time you get drawn into a conversation about the latest market event try stopping yourself and first asking – does this matter and is it knowable? The answer will usually be no"

MY COMMENT

Some very good comments above. Most of it is basic human behavior and psychology. We all have a need to be accepted, to be part of the group, to comply with expectations. PEER PRESSURE in investing is extreme. It is amplified by the fact that we are dealing with REAL MONEY.

The BEST investors have an ability to IGNORE all the noise and when necessary stand apart from the crowd and ignore the social pressure to simply go along to get along. Many investing mistakes occur because we dont want to look bad or stupid. Have the GUTS to trust yourself and the long term markets.

 

ACTUALLY the big averages have now evolved to GREEN. BUT....here are the short term story lines today.....for us long term investors to......IGNORE.

Dow rises, Nasdaq slips with Fed and Google breakup in focus

https://finance.yahoo.com/news/live...sANImuuk0Aj66YME-qRy0485ApUvZI6kSskJZ2QeVAUif

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

"US stocks were mixed on Wednesday as the risk of a Google breakup prompted a pause for thought in the wait for more Federal Reserve clues to the chances of a "soft landing."

The Nasdaq Composite (^IXIC) fell about 0.2% while the S&P 500 (^GSPC) hovered near the flat line. The Dow Jones Industrial Average (^DJI) was the leader in early trading action, rising nearly 0.3%.

Stocks have whipsawed this week amid intense debate over the state of the economy now the Fed has finally eased up on policy. Its decision to cut by a jumbo 50 basis points raised concerns it might see risks the market could not. That has investors wondering about a "no landing," where the economy keeps growing and inflation risks once again emerge.

Minutes from the Fed's September meeting, due later on Wednesday, will be scoured for clues — especially as to why one policymaker dissented on the size of the cut.

Meanwhile, investors are absorbing news that the DOJ is considering asking a judge to force Google to sell off key businesses to remedy its monopoly position. Shares of owner Alphabet (GOOG) slipped in early trading, after rising in a broader tech rebound that fueled Tuesday's solid gains.

MY COMMENT

AND....of course....we will get the CPI and PPI data this week on Thursday and Friday. It is always something...it never ends.

I am "feeling" like we are seeing a good open today. After the big rally yesterday it is nice to see all the early green in the big averages.

 

Lots of people are suffering from the hurricanes. Lots of people are being hammered by and suffering from inflation in their daily lives and are sturgeling.

BUT....at the same time we are in the middle of a massive BULL MARKET. Those of us that are long term investors properly invested are doing well.

Dont forget the power of EMPATHY and CHARITY. My go-to charity.....Tunnel-To-Towers. Just about 100% of the money they collect goes to help others. As we all achieve our goals and success investing....dont forget to give a little bit back to help those that are in a hard situation.

 

A mixed day for me at the moment. I have five stocks UP and four DOWN. NVDA is basically dead flat. At least the big averages continue all green.

It is all about PATIENCE. Patience in investing equals the ability to sit and do nothing. Unfortunately us humans.....usually equate activity and doing something......with productivity. As a species we have issues with siting and doing nothing.

 

TOTALLY MEANINGLESS....but still psychologically nice to see that the PLTR stock that I bought at the very open today is now UP by 2.81%. It will give me a little cushion for the inevitable up and down action that will come as these shares slowly settle into the long term.

I am now seeing PLTR as having a significant probability to remain in my various accounts as a long term holding. Same with CMG.....I am accepting that it will be a long term holding for me....even though it will continue as a MINI position.

 

After this morning I never looked at the markets all day....till a minute ago. I just got back from an auction preview.

It was nice to come home to a medium gain today. Even though I lost out to the SP500 by 0.24% today....I still made respectable money in the markets.

I had only three stocks in the RED........and NVDA, 24cents.....and....CMG, 5cents....were down by peanuts....that helped me today. My single stock with much of a loss.....GOOGL.....compliments of our government trying to destroy one of the crown jewels of the USA business world with their anti-trust BS.

All in all a very good day for me as we head into the final two days of the week.

 

Just thought I would put this up for......Citi.....who apparently think that NVDA is and will continue to be stock in a holding pattern.

Nvidia shares are up 25% in the last month, rallying near a record ahead of tech earnings

https://www.cnbc.com/2024/10/09/nvi...a-month-as-stock-closes-in-on-new-record.html

LOL....see post a page back about how CITI is predicting that NVDA will......"REMAIN" "stuck for the rest of the year" That is my kind of being stuck.....I hope all my stocks get stuck like that.

 

I just looked at the....over 1000....shares of PLTR that I added to one account this morning right at the open. For the day a gain of 3.96%.

Now I can forget about those shares for the long term since they are now successfully launched.