YES.....when you get down to it....it is all about earnings. Earnings are the bedrock on which the market stands https://www.briefing.com/the-big-picture (BOLD is my opinion OR what I consider important content) "The fourth quarter earnings reporting period isn't over yet, but the end is in sight with only 110 or so S&P 500 companies yet to report. That's a nearly 80% completion rate and it can be said that the fourth quarter reporting period has unfolded much better than expected. When we published our preview on January 10, the fourth quarter blended earnings growth rate stood at 11.7%. Today, according to FactSet, it stands at 16.9%, which is the highest year-over-year earnings growth rate since Q4 2021. Analysts typically cut their estimates as a quarter carries on, thereby making it "easier" for companies to hurdle the lower bar. They did that this time too, but to be fair, the blended growth rate on September 30 stood at 14.3%, so this reporting period has truly been better than expected as opposed simply to better than the lowered estimate. That's the good news. The bad news is the strong earnings growth hasn't translated into a less expensive market. Earnings Do the Driving A market trading with a full, if not rich, valuation has a fuller and richer valuation as the fourth quarter reporting period moves into its final stages. That doesn't mean the market can't get fuller and richer on further multiple expansion. One can never know fully the extent to which momentum and animal spirits can take things. It does suggest, ironically, that there will be a high price to pay if the fundamental ground on which the confident stock market stands is shaken. There was a little taste of that this past week with the release of the January Consumer Price Index. That report caused a momentary rumble, yet the January Producer Price Index prevented a tectonic shift thanks to a component breakdown that suggested there might not be cause for undue inflation alarm when the January PCE Price Index is released on February 28. That point aside, earnings are what drive the stock market, so if one wants to make a case for why the stock market has stood strong through the DeepSeek upset, the tariff uncertainty, and the CPI inflation scare, earnings would be the bedrock evidence. The market cap-weighted S&P 500 is up 4.0% to begin the year and the equal-weighted S&P 500 is up 3.3%. Those moves are the nexus of multiple expansion considering that the forward 12-month EPS estimate has gone up only 0.6% since the start of the year. The calendar year 2025 estimate, meanwhile, has gone down 1.1% since the year began. The earnings estimate trends bear close watching. If they don't start picking up with some better momentum of their own, particularly the forward 12-month estimate, then we may be staring at a market that has the unsatisfying disposition of "churning." That is market parlance for "spinning its wheels" or not really getting anywhere. Just a lot of chop with some good days and some bad days, creating a feeling of going everywhere and nowhere all at once. Looking for the Next Level That is the pratfall of a market that trades with a full valuation in the case of the equal-weighted S&P 500 and a rich valuation in the case of the market cap-weighted S&P 500. It demands good news to hold its form, but it needs "next level" news to get into a sustainable breakout mode given the high valuation at which it now trades. Some "next level" items would include: Inflation getting back to the 2.0% target without the economy tanking. A big step up in productivity aided by technological advances like AI. Passing tax cuts without increasing the deficit. A trade detente between the U.S. and China. None of that will come easily, if at all, but even baby steps in any of these directions can go a long way toward lifting investors' spirits and earnings estimates. What It All Means We said the fourth quarter earnings reporting period would be an important tell for the market. It has told us that U.S. companies continue to exhibit earnings strength in the face of headwinds like the stronger dollar, geopolitical uncertainty, higher interest rates, and sticky inflation. What it has also told us is that the bar of earnings expectations is rising. That is because companies have easily surpassed lowered estimates, but it also because the market's high valuation carries the command that earnings growth cannot disappoint, or the price-driven multiple expansion will turn into price-driven multiple compression." MY COMMENT If my memory is right we have been seeing BIG earnings beats over expectations for many years now. Of course they beats are usually disrespected and ignored based on "experts" in the media nit-picking them.
Too bad this jump in price is not based on anything fundamental that INTEL is actually doing. What a massive failure of MANAGEMENT over many, many, years. Intel stock rises on report of Broadcom, TSMC exploring deals that would split up chipmaker https://finance.yahoo.com/news/inte...-that-would-split-up-chipmaker-140021690.html
Here we are. Stocks Set for All-Time Highs as Chipmakers Rally https://finance.yahoo.com/news/asian-stocks-edge-higher-gains-223534825.html (BOLD is my opinion OR what I consider important content) "(Bloomberg) -- A rally in chipmakers drove stocks toward all-time highs, while talks between US and Russia raised hopes of an end to the war in Ukraine. The S&P 500 topped its previous closing record set last month. Intel Corp. jumped 5% on a news report that Taiwan Semiconductor Manufacturing Co. and Broadcom Inc. are mulling potential deals that would break the firm in two. The US and Russia agreed to more talks on resolving the war in Ukraine and finding ways to work together on other international issues, but set no date for a summit meeting between Donald Trump and Vladimir Putin. “The S&P 500 is poised to break above its all-time highs from January as the thought of an end to the war in Ukraine might be in the offing,” said Matt Maley at Miller Tabak + Co. “As always, it will have to become a meaningful break above those old highs to confirm that a new rally leg to this bull market has begun.” The S&P 500 rose 0.1%. The Nasdaq 100 climbed 0.2%. The Dow Jones Industrial Average fell 0.2%. The yield on 10-year Treasuries advanced five basis points to 4.52%. The Bloomberg Dollar Spot Index rose 0.2%. West Texas Intermediate crude rose 1% to $71.42. Global stocks have become the most-popular asset class with investors, who are showing the biggest willingness to take risk in 15 years, according to a survey by Bank of America Corp. Fund managers’ cash levels fell to the lowest since 2010, while 34% of participants said they expect world equities to be the best-performing asset in 2025, the survey showed. A net 11% indicated they were underweight bonds. Investors are “long stocks, short everything else,” strategist Michael Hartnett wrote in a note. The bullishness was underpinned by expectations of robust economic growth and lower US interest rates this year, he said. About 89% of respondents said US equities were overvalued, the most since at least April 2001." MY COMMENT Of course......ALL the big averages have now turned to the dark side of the force.....RED.
Not much of any real interest to me in the financial media today. The content is dominated by.....politics. So....I will sit and wait for direction to become clear and perhaps some content about actual investing to appear.
I had a pretty good day going earlier......now....I only have two stocks UP, out of ten. They are.....NVDA and PLTR.
I see that PLTR hit a new 52 week high today of.....$125.00....per share. Of course it has backed off from that number for the moment. Definitely a.....WILD AND CRAZY....stock at the moment. I dont think I would buy at these levels even if I wanted to own the stock. Although if the market breaks to new highs or bumps up on NVDA earnings.....I am sure we will see additional new 52 week highs for PLTR....soon. This stock is on an EPIC......MOMENTUM run. Basically HUGE momentum is creating more MOMENTUM as the company becomes a household name. BUt......as an owner I am NOT going to be selling or taking any profits. I am in it for the.....LONG TERM.
After the three day weekend we are drifting and directionless early in the day. The markets are trying to get oriented and figure out short term direction. We have had some big gains lately and are near all time highs in the averages. So it would not be unusual to sit and consolidate some of these gains. On the other hand the markets are strongly BIASED to the up side and are definately in a BULL MARKET. So longer term the BIAS is still strongly positive. I like that in spite of being near or at record highs in the big averages......the BIG CAP TECH stocks have MUCH room to run up from the discounted prices that many of them sit at right now. Perhaps as much as 10% to 15%. Personally I like this BIG TECH....situation. At some time in the near future these stocks are going to quickly catch up to the general markets and drive my portfolio UP. Their earnings have come in nicely and have not been respected. Sooner or later the movement WILL come.
Ok for transparency....I will say that today.....a short time ago....I SOLD all shares of CMG in ALL accounts and have moved that money into WMT. I am NOT putting this out there as a recommendation to anyone else. I DO NOT do investment advice to others on here. I prefer the broad based CONSUMER business of WMT to the more NICHE business of CMG. I have not seen any progress in CMG in any of my numerous accounts. Basically it has been either standing still for the time I have owned it or slowly churning sightly lower. I think as of today I did not have a single account with a gain in CMG. A FAILED experiment with this stock. BUT....that is why I do....."training-wheel".....small positions of new stocks. I try to NEVER jump to a full position on a new stock.....in most cases.
BUMMER....I hate to give up on CMG.....and....I am now back to NINE stocks. SO....here is my current portfolio of....NINE....stocks. The UPDATED Portfolio Model.......NOT as investment advice.....just as a disclosure of my personal BIAS and my thinking on how to structure a long term portfolio. "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 70% of the total portfolio and the fund side at about 30% 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 9 stock portfolio.At the same time the funds double and triple up on my individual stock holdings............that I consider the BEST individual businesses in the WORLD. STOCKS: Alphabet Inc Amazon Apple Costco Home Depot Microsoft Nvidia Palantir WMT (junior position) MUTUAL FUNDS: SP500 Index Fund Fidelity Contra Fund CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (74). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)" MY COMMENT This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my nine 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."
I guess I will now be more interested in the WMT earnings this Thursday. Although WMT is only a JUNIOR POSITION in all my accounts.
I was wondering how long you were going to endure CMG. That stock had alot going for it but just couldn't get any traction. Another one that just got beat by the media at every opportunity. Oh well. I think WMT is a much better choice and should be something you can hang onto and rake in the gains for years. Any they have a little dividend you can reinvest as a little bonus to the growth. PLTR is going wild, NVDA is a potato. Pretty dismal stock performance this year but the year is still young. Let's hope we don't have to drag out this flateline too much longer!
I actually still like CMG....but as you said they just could not get going. The portion size campaign on Social Media greatly impacted them......and...no matter their earnings they were constantly being second-guessed in the media. A shame...but that is how it is. WMT for me is a.....Junior Position. It still has to prove itself to tempt me to make it a whole position. They can start with some good news at earnings this Thursday. Over the past few years the......junior stocks......that have made the cut to whole positions are NVDA and PLTR. I would still like to find one or two more non-tech names to hold long term. I do like broad, big cap, consumer stocks....so WMT is right up my alley.
I ended with a small GAIN today on the backs of only three stocks....PLTR, NVDA, and MSFT. I also got beat by the SP500 today by....0.01%. I will take my small gain and move on to tomorrow........better than a loss.
NVDA has been climbing slowly since the last low in the beginning of the month. Higher lows is a good sign. I am just sitting and waiting for a catalyst! So far we have seen a lot of strength in the AI and Chip sectors so I think they are going to beat next week it comes down to if they exceeded expectations enough and give good enough guidance to appease the market gods.
We have very cold weather here in Central Texas right now. A bit of powder snow and temps about 20 degrees. I missed any posting today for a dental appointment. AND...I will miss most of the rest of the day since I have a rehearsal at 11:00 that will basically run all afternoon. I have a slight gain so far today and actually had five stocks up as of a minute ago. A definite improvement from the open today. Seems like the sort of day today to have a good chance for a positive close.
As a free market....Libertarian....capitalist. I of course agree. Greed is good — how capitalism makes the world better for us all https://nypost.com/2025/02/16/opini...capitalism-makes-the-world-better-for-us-all/ (BOLD is my opinion OR what I consider important content) "Politicians bash businesses. “Stop the greed!” shouts Sen. Bernie Sanders. Many Republicans are equally ignorant. When some Florida businesses raised prices in response to sudden demand during a crisis (a useful signaling device in a free market), state Attorney General Pam Bondi called that “sickening . . . disgusting . . . unacceptable!” Sen. Josh Hawley attacks airline CEOs for charging different people different prices. “You make it clear,” he sneered. “Money is your bottom line.” Well, yes, Senator. That’s the CEO’s job. Sadly, big shots trained as lawyers rarely understand the principles that make capitalism work so well. “The only way you can make money in business is by providing customers with value!” says Yaron Brook, head of the Ayn Rand Institute. “The biggest problem we have in our culture is this perception that when you pursue your own self-interest, you are somehow a villain . . . it’s why socialism is still viewed as morally noble, capitalism as evil and bad.” Ayn Rand was a philosopher who understood that others get richer because entrepreneurs pursue profit. Intellectuals hate her for saying that. Rand’s books sold millions of copies, but the media trash her. HBO’s John Oliver joked, “Ayn Rand became famous for her philosophy of objectivism, which is a nice way of saying, being a selfish a–hole.” “Being selfish is not the same as being an a–hole,” responds Brook. It’s just following “your rational, long term, self-interest . . . Her philosophy is smeared because it goes against 2,000 years of philosophy that tells us that the purpose of life and morality is to suffer and sacrifice.” I wish politicians understood that entrepreneurial greed is why we have iPhones, refrigerators, cars that usually work, supermarkets that stay open all night, and many of the things that make our lives better. Governments sometimes try to build things, but they routinely fail. California promised high-speed commuter rail service. Seventeen years, and billions of tax dollars later, no trains. But in just three years, a “selfish” private company, Brightline, built a train line that carries commuters and tourists from Miami to Orlando. At no cost to taxpayers. The private sector routinely builds things that, over time, get better and cheaper. The price of TVs has fallen 97% since 1998. Why would capitalists, greedy people looking to make more money, lower prices? Because they have to. Unlike government, capitalists have competitors. Those selfish people want our business, too. Pursuit of profit even fought racial discrimination. When some Southern states’ Jim Crow laws imposed segregation, some greedy companies resisted the rules. One bus company even sued to end Jim Crow. Economist Thomas Sowell noted, “Only whites could vote, but whites and blacks could both supply money.” “There’s enormous profit-motive,” Brook points out, “in you being the one that allows everybody into your restaurant . . . In a true marketplace, discrimination can exist, but it doesn’t exist for long.” Ayn Rand said that selfishness even makes us love our families. “Imagine,” says Brook, “going to the woman you’re going to marry and saying, ‘I’m not doing this for me. This is a massive sacrifice.’ She would slap you in the face, as she should. I love my wife for self-interested reasons.” Corporate greed, regulated by competition, is the main reason world poverty has dropped. For thousands of years, most people tried to survive on the equivalent of less than $2 a day. Fifty years ago, thanks to capitalism, just 35% did. Now it’s just 9%. Some rich people got absurdly rich. So what? The poor got richer, too. Quietly, capitalism, harnessing individuals’ greed, makes the world a better place." MY COMMENT Sow me someone that is focused on greed and is anti-business......and usually....you will see someone that is wealthy. AMAZING....they got theirs....but want to virtue signal you from ever getting yours.
Nice for shareholders and consumers. Apple debuts iPhone 16e for $599, includes Apple Intelligence, Apple's first in-house modem https://finance.yahoo.com/news/appl...ce-apples-first-in-house-modem-160159160.html
Today....a shockingly news and drama free day for investors. I like it even if the big averages are lingering near unchanged....slightly in the red. ENJOY a rare drama free day everyone. I will post some when I get back after the close. HEY......MAKE ME SOME MONEY TODAY.......I CAN FEEL THE GREED.
