The Long Term Investor

This is pretty much the markets and media today......that I referenced above.

Mag Seven’ Crushed as Stocks Fall on Tariff Angst: Markets Wrap

https://finance.yahoo.com/news/asian-stocks-gain-us-rises-222832522.html

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

"(Bloomberg) -- A selloff in tech megacaps drove stocks lower, with concerns about the economic impacts of a trade war sapping market liquidity and leaving traders unwilling to take on too much risk.

Following their biggest winning run since November, the group of megacaps known as “Magnificent Seven” slumped, with Nvidia Corp. and Tesla Inc. dropping at least 4.5%. The tech-heavy Nasdaq 100 slipped 1.1%. A measure of big banks rose for a ninth straight day - the longest rally since 2006.

A warning from the Congressional Budget Office that the Treasury risks a payment default as soon as August weighed on sentiment. And so did a report showing a slide in business equipment that suggested some companies are limiting investment as they await specifics on tariffs. While the unpredictability of a trade war and risk of weaker economic growth have roiled financial markets, President Donald Trump has signaled plans to press ahead with those levies.

“Tariffs will continue to garner attention, with traders looking for any updates on upcoming US reciprocal tariffs that will go into effect on April 2,” said Arthur Hogan at B. Riley Wealth.

The S&P 500 fell 0.4%, extending a quarterly selloff that’s set to be the worst since 2023. The Dow Jones Industrial Average rose 0.4%.

The yield on 10-year Treasuries advanced four basis points to 4.35%. The dollar rose 0.2%."

MY COMMENT

At the moment....today....the markets are captive to extreme short term stories. NONE of this "stuff" will matter for long.....probably only a week or two.

The Congressional Budget Office BS is a classic example of a non-story. How many hundreds of times have we seen and heard this sort of BALONEY over the past 20-30 years. A CLASSIC example of fear-mongering over nothing. There is ZERO......in fact less than ZERO.....chance that the USA going to default on payments.

 

I sit today and watch the 24/7 media and their incessant drive for clicks based on negativity and sensationalism.....impact the markets and businesses. NOTHING fundamental to business matters any more......and....as we move into the short, medium, and distant future this will get worse and worse.

In the end if we continue on the current path.....the markets will become totally disconnected from reality.

As I have said many times when this happens the markets as rational investment vehicles for he creation of wealth will cease to function. We are seeing the early warning signs of self-created.......investing, and market.....genocide.

I have mentioned this many times. Unfortunately the process slowly continues. There is no way to stop it. I have no doubt that it WILL happen over the course of the next 20-40 years....perhaps even quicker.......when you consider the potential impact of AI on trading and the markets over the next ten years.

In the end.......I believe it is likely......that the typical SCIENCE FICTION MOVIE plot line will happen. A world controlled by ELITES with the rest of the population eking out a subsistence living.....with no way to better themselves.

Do I care? NO....I will not be around to have to experience any of it. I have had the benefit to live and invest in the GOLDEN ERA of stock market investing.

 

But.....hey......the price of eggs is way down and going to go down further. I was in the store yesterday and a dozen extra large white eggs were priced at.......$4.76. Good old HEB.

 

I swear that AI is making spell check DUMBER. Lately I have been seeing all sorts of CRAZY spelling corrections when I type a misspelled word. For example I might mistakenly type.......redeculrs.....and the only option given to me by spell check is....."reducers". If I make the typo......"redeculous".....spell check gives me one option....."credulous".

I would think that a smart AI spell check system would at least include an option for....."ridiculous".

I have just noticed this over the past month or two....before that.....I found the spell checker word options just about perfect in figuring out what the word was supposed to be. Welcome to the world of.....DUMB.....AI.

 

Ok.....no reason for me to waste any more time on the markets at this moment.

 

At least I have two stocks up right now....HD and WMT. YEA.

Welcome to the wacky world of.....BIG BANK AI TRADING...... of the news headlines and content.

it will be nice to see earnings start in 2-3 weeks....not that the markets will pay any attention or reward earnings beats in the short term.

 

By the way......I will NOT be posting much tomorrow and Friday. Tomorrow I have a little art event with some fellow collectors and some museum people.

Friday I have to be in the studio all afternoon so I will not be posting much in the morning since I have to get ready and than make the hour drive to the studio.

BUT.....I fear not......this thread and the markets are in good hands.....long term.

 

Well I had a big loss today. AND to top it off I lost out to the SP500 by a whopping.......1.97%.

The only VICTORY for me today was HD and WMT both being in the green.

Hump day was certainly a HUMP....but we are over it now. I expect we will see a massive ramping up of the fear-mongering over tariffs the rest of this week and early next week. The DOOM&GLOOM could hit epic levels.

I will IGNORE IT ALL.

 

I am not surprised by today in the markets at all.....considering the news headlines and what the financial media is OBSESSIVE about right now.....the day was just what you would expect.

I do STILL consider that we reached a bottom in the correction. i was thinking lt was last week.......but looking at charts of the SP500 and the DOW and the NASDAQ....the bottom of this little correction was on March 10th. Some of my big stocks like PLTR and NVDA and MSFT tell me that the bottom was March 13. So probably about March 10-15 was the bottom.

NOW....we have to slog our way up the other wall of the correction....out of the mud pit. Of course we all know that regaining a loss takes a higher percentage of gain than the loss itself.

AND......at some point along the way in making our money back from this little correction....I would not be surprised if the markets try to re-test the bottom. I would....however....be very surprised if the re-testing broke through the prior market bottom. My guess is that we HAVE seen the bottom of this little correction no matter how much longer it lasts.

I would think that this little correction will ONLY last another month or two. BUT.....I have seen corrections in the past that hit a bottom and than linger above that bottom for an extended time before returning the markets to gains.

I am still expecting 2025 to be a GOOD year for the markets. The wild card is how much of the day to day drama gets stirred up into a huge irrational tidal wall of worry........which sweeps earnings out of the way....regardless of how good they are.... for a quarter or two or longer.

My personal goal for 2025 is the same as it always is....it never changes:

1. Average a total return of 10%, long term

2. Beat the SP500 each year.

I am still personally expecting a gain of +15% to +18% for 2025.

"EXPECTING" being the operative word and considering.....WHO AM I?....to expect anything from the markets. The markets owe ME/YOU......NOTHING. The markets have no heart, no soul, they are inert....a made up mathematical concept that is tied to the actual fundamental value of a particular business at a particular time. It is the same as a lake, or a river, or a cave, or a mountain....it does not care in any way if you live or die. It has no ability to CARE or NOT CARE.

I WILL IGNORE IT ALL......my new MANTRA.

 

I like this little article....it is a very cool story....and sounds like massive business potential. Basically wrapping up all the AI system components and software of all the future robots.

Nvidia sees robots as its next big market opportunity

https://finance.yahoo.com/news/nvidia-sees-robots-as-its-next-big-market-opportunity-192843855.html

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

"Nvidia (NVDA) continues to ride the AI wave as cloud giants Amazon (AMZN), Google (GOOG, GOOGL), Meta (META), and Microsoft (MSFT) snatch up as many of its data center chips as they can.

And while shares of the chip company are off 10% year to date, they're still up 27% over the past 12 months and more than 700% since 2023. Revenue is also soaring, jumping from $27 billion during the company's fiscal 2023 to $130 billion in fiscal 2025.

But during Nvidia's GTC event last week, CEO Jensen Huang repeatedly made the case for the company's next major AI innovation: robotics. Huang is looking to use Nvidia's digital AI prowess to grow what he calls physical AI, including self-driving cars and humanoid robots.

"We are ... world class with robotic safety. I believe this expertise is going to pay off big someday," the CEO said during a press briefing during the conference.

"We've been investing in this area for 10 years now. It's a multibillion-dollar business for us already ... and I think this is going to be one of the largest businesses for the company long term," Huang added.

Nvidia’s physical AI push

A quick tour of Nvidia's GTC showcase at the San Jose McEnery Convention Center offered a glimpse at Nvidia's robotics ambitions, with exhibits ranging from robotic arms to human-size bipedal robots.

On one side of the large hall, the company displayed its own prototype of a robotic ultrasound machine as an example of how businesses can take advantage of its technologies.

The voice-activated bot included a single mechanical arm with a camera and scanner. When I told it to perform a liver scan, it quickly located the organ on a dummy torso and performed the procedure. A display mounted behind the setup showed the live results, which I can only assume is what a liver looks like on an ultrasound.

I'm a reporter, not a doctor.

In the next stall, Agility Robotics showed off its Digit robot as it grabbed items off a faux store shelf and put them into a shopping basket, completing the task over and over again like some kind of Sisyphean nightmare. A litany of other robotic arms and a Boston Dynamics Spot were also on display at the event.

A 3-in-1 deal

Huang is banking on robot makers relying on a three-computer system that Nvidia has developed to train and run the machines.

The first system includes Nvidia's DGX AI systems, which customers use to develop AI robot models. Then there's the Nvidia Omniverse system, which customers use to train their robotic models to navigate the real world in a virtual setting.

The idea is to ensure customers can subject their robots' AI models to a litany of potential scenarios ranging from falling down stairs to crashing into walls to trying to avoid falling air conditioners without having to put them — or the people around them — in any real-world danger.

"You want to simulate ... millions of miles of [a car] driving, test it out beforehand, and then deploy it," Nvidia vice presidence of Omniverse and simulation technology Rev Lebaredian told Yahoo Finance.

"And [it's] the same for all robots. I'm using cars as an example, but the robots we have in our factories. These are multimillion-dollar factories. Any amount of downtime costs millions of dollars and opportunity cost, or they can be dangerous too. You don't want them hurting the robots themselves or hurting people that are also in those factories."

The final component is Nvidia's Jetson Thor onboard computer, which runs those trained AI models. Think of it as something of a robotic brain. Vehicles would use Nvidia's AGX Thor.

Nvidia faces stiff competition and headwinds

Nvidia isn't the only company looking to capitalize on the promise of a robot-filled future. Amazon, Apple, Google, Meta, Microsoft, and Tesla are each working on some element of the robot ecosystem.

Then there are the practical hurdles companies must overcome before robots become a part of our everyday lives. Humanoid robots are still incredibly expensive — upwards of tens of thousands of dollars — and their batteries still don't last very long before needing a top-off.

And while self-driving cars continue to expand to more cities, we're still some time from the day when you can hop into your car's driver's seat and take a nap on the way to the office.

Nvidia, however, has a history of continuing to develop technologies it believes in until they break into the market. Look no further than its graphics card software and AI capabilities. And if Nvidia can do the same with robotics, it could be a whole new opportunity for the chip giant."

MY COMMENT

I would not bet against NVDA. What a brilliant company. I am sure they will capture a HUGE market with their robotic "packages".

What a simple and brilliant strategy.....capture the market by providing the tools that an engineer or inventor uses to develop robotic models. At that point.....they are probably LOCKED IN to use the NVDA training materials, and the NVDA robotic brain.

 

I agree....it is very difficult to find any single company that has potential like NVDA. And....that is outrageous of me to be talking about potential......considering their dominance now in chips. An amazing company.....that has been punished for NOTHING over the last 6-9 months. Many great earnings reports ignored due to constant media mongering.

But...at the same time Ii would consider them HIGH RISK. Probably not for everyone.

As to PLTR....a great holding for me....probably up by about 300% in only 1.3 years. But like every stock.....there are many reasons that it is not suitable for a particular investor. Any investor should invest in what is suitable for them....including personal views or political views. it is a free market and free country....or at least is supposed to be.

 

I just got back from my "museum thing"......and am now heading out to lunch. I will let the markets continue to push slowly into the green.....or at least try to.

 

Yep should be easy.....just like the markets.

 

I had a small/medium loss today in my stocks. My RED stocks were GOOGL, NVDA, and PLTR. I also lost out to the SP500 today by 0.43%.

Last day of the week coming up....I missed the whole day today and will probably miss it all tomorrow. Fine with me....the markets are boring and disconnected from business right now.

 

In spite of the SCARY headline......absolutely normal.

Fed's preferred inflation gauge shows prices increased more than expected in February

https://finance.yahoo.com/news/feds...more-than-expected-in-february-123310140.html

 

I like this little article

Exploring Stagflation Fears, Then and Now
Is today’s stagflation chatter reason for investors to worry?

https://www.fisherinvestments.com/e...tary/exploring-stagflation-fears-then-and-now

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

"Is dreaded stagflation lurking? Some think so after the Fed’s latest “dot plot” economic projections showed downward revisions to GDP growth and upward revisions to inflation—due in part to potential tariff fallout. Fed chair Jerome Powell noted at his post-meeting press conference that any tariff-related inflation would be “transitory,” seemingly forgetting he was in favor of retiring that particular word, but some skeptical pundits worry prices will dig in as the economy fizzles. We disagree. A comparison between the posterchild for stagflation in the 1970s—which many misremember—and the present suggests today’s fears are misplaced, in our view.

Stagflation refers to the nasty combination of a flat or shrinking economy accompanied by rising prices and unemployment. The 1970s are a frequently cited example and, arguably, the only spell in modern history that comes close. However, while that period conjures up memories of economic stagnation, rising prices—especially for gasoline—and political tumult (e.g., Watergate), the data indicate a more complex reality.

The inflation aspect was indeed bad. Despite some easing early in the 1970s’ second half, the inflation rate’s low that half-decade was still over 5% y/y, which isn’t exactly slow. (Exhibit 1)

Exhibit 1: US CPI, 1965 – 1985


Source: FactSet, as of 3/25/2025. US CPI, year-over-year change, January 1965 – December 1985.

But the “stag” part has always been a bit overstated, in our view. Yes, the US was in recession for most of 1970 and from late 1973 – early 1975. During those stretches, real (i.e., inflation-adjusted) GDP contracted -0.7% and -3.1%, respectively.[ii] Yet US GDP expanded during the rest of the decade—and some years featured strong annual GDP growth. (Exhibit 2) Over the entire 1970s, inflation-adjusted GDP grew 37%.[iii]

Exhibit 2: The Not-So-Stagnant 1970s


Source: Bureau of Economic Analysis, as of 3/25/2025. Real GDP, annual change (percent), 1970 – 1979.

The unemployment rate didn’t rise perpetually throughout the 1970s, either. (Exhibit 3) While it was elevated in general, it ebbed and flowed before climbing sharply in the middle of the decade—then trended downward in the late 1970s. Moreover, unemployment peaked not in the 1970s but in the early 1980s.

Exhibit 3: Unemployment Rate, 1965 - 1985


Source: St. Louis Federal Reserve, as of 3/25/2025. Unemployment rate, monthly January 1965 – December 1985.

Many who came of age in the 1970s may recall anecdotal episodes of hardship, e.g., waiting in five-mile lines for gasoline.[iv] These memories understandably stand out. But they don’t necessarily reflect how people felt about the economy—even at the time. Fisher Investments founder and Executive Chairman Ken Fisher recalled the period in his book The Only Three Questions That Count:

Pretty much no one knew in 1974 we were already long in recession. I don’t think much of anyone saw it as a recession until 1975 and by then it was mostly over—and that was a huge one. It was heavily masked by the high level of inflation then—for many firms, revenues remained strong as unit volume shrank. Still, if few saw it, note how few would see a mild economic decline.”[v]

The 1970s weren’t an economic golden age—elevated inflation weighed on households, just as it has in recent years. But the stagnation from 50 years ago also wasn’t as entrenched as commonly believed.

Today’s stagflation concerns presume President Donald Trump’s tariffs will lead to higher prices and weaker growth. But we see some holes in this argument. First, tariffs aren’t inherently inflationary. They apply only to wholesale costs at the border, and US goods imports make up around 12% of GDP.[vi] Effective tariffs affect a small piece of total commerce—not influential enough to drive prices across all goods and services higher. This is true especially when you factor in the many workarounds and businesses’ tendency to negotiate with suppliers to split costs.

Also, inflation is a monetary phenomenon—a case of too much money chasing too few goods and services. If money supply spiked, businesses could then pass their added costs to customers broadly—which could lead to higher prices. But US money supply today is growing at its prepandemic pace, which paired with benign inflation, arguing against rapid price growth.

What about stagnation or recession? Many think Q1 GDP will dip based on recent estimates from widely watched “nowcasts.” We highlighted some issues with these projections, namely, skew tied to gold imports. The Atlanta Fed’s “Gold-Adjusted” GDPNow now shows annualized Q1 growth of 0.2%—far from gangbusters, to be sure, but not contraction.[vii] Tariffs also lack the scale to roil economic growth. It is possible America and its trading partners hit each other with higher and higher tariffs. But that doesn’t look probable to us right now, especially since the Trump administration has used tariffs more as a negotiating tactic than permanent policy. We saw this yet again Thursday, with the news that tariffs on China may drop in exchange for a TikTok deal.

Even if the dot plot projections come true, which they often don’t, true stagflation isn’t necessarily in the cards. The FOMC projects real GDP to rise 1.7% in 2025 and 1.8% annually in 2026, 2027 and over “the longer run.”[viii] Even the weakest individual forecast (0.6% GDP growth in 2026 and 2027, respectively) is still expansionary. As for inflation, the FOMC projects annual PCE inflation to decelerate over the next couple years, from 2.7% this year to 2.0% by 2027.[ix] That is a far cry from the inflation of the 1970s. It all seems pretty benign to us, illustrating the gap between sentiment and reality.

Stagflation worries are consistent with other signs of cooling sentiment toward the US. After an initial burst of excitement following last November’s election, optimism has cooled. “Business friendly” legislative changes don’t look as likely, and deregulation hopes have fallen. Those who were optimistic Trump would unleash economic growth now worry the administration’s policies may spark a 1970s rerun. While that overstates the federal government’s influence over the economy and markets, investor worries about a 1970s redux also presumes stocks were uniformly weak then.

This reputation stems from the S&P 500’s negligible price return during the decade as a whole, entrenching it in investors’ collective consciousness as a lost decade.[x] But this is a function of bear market placement. Consider: There were three S&P 500 bear markets from 1966 – 1974, contributing to some poor stretches of rolling equity returns.[xi] What gets lost: the nicely positive years, including 1971 (10.8%), 1972 (15.8%) 1975 (31.6%) and 1976 (19.2%).[xii] That so-called stagflationary period of weak economic growth, rising prices and higher unemployment didn’t mean stocks sank like a stone the whole way. There were ups and downs, just like the 2000s, and plenty of opportunities.

So no, in our view, stagflation talk isn’t reason to be bearish. It strikes us as a classic brick in a bull market’s wall of worry."

MY COMMENT

Agree completely. Most people talking about this...."stuff".....have no memory and no clue what happened in the 1970's and 1980's. They were not even born.

 

That is it for me today.....need to get ready for the studio.

 

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."