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The Long Term Investor

Discussion in 'Investing' started by WXYZ, Oct 2, 2018.

  1. WXYZ

    WXYZ Active Member

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    SO FAR today and the first month of the year have been very kind to my PORTFOLIO MODEL. As to the general averages as we end the first month of the new year this is where we stand:

    DOW year to date +7.07%
    SP500 year to date +7.80%

    LOOKS GOOD to me, I will take it. (understatement of the year)
     
    T0rm3nted likes this.
  2. WXYZ

    WXYZ Active Member

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    We CONTINUE in the Rodney Dangerfield era of investing. The markets totally disrespect AMAZING earnings and look for any excuse to ignore REALITY.

    Amazon reports record-breaking holiday sales and earnings, but investors aren’t impressed

    https://www.marketwatch.com/story/a...ings-but-investors-arent-impressed-2019-01-31

    Amazon stock drops sharply during earnings call after company warns of increased investments

    https://www.cnbc.com/2019/01/31/amazon-earnings-q4-2018.html

    • "Amazon reported an earnings beat across the board, but first-quarter revenue guidance fell short of expectations.
    • It reported earnings of $6.04 per share, beating street estimates of $5.68 per share, according to Refinitiv.
    • Amazon stock dropped more than 5 percent in after hours after the company warned of increased investments in 2019."
    MY COMMENT:

    And, on, and on, and on, go the articles.....ALL talking about record earnings and beating the estimates in ALL categories. ACTUALLY, I am glad they are going to ramp up investment in the business in 2019 and hopefully beyond. This will DRIVE growth and more record profits going forward. Much better to invest in the growth of the business than send dividends back to investors or do IDIOTIC worthless share buy-backs. Just more evidence that the investment analyst and media community are FOOLS. The short term traders are more than willing to FLOG this negativity delusion for short term, one or two days of profit. SMART investors will enjoy the ride for the LONG TERM.
     
    TomB16 likes this.
  3. WXYZ

    WXYZ Active Member

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    The GREAT economic news continues. This is ALL very positive in an indirect way for stocks and investors. I would bet that the average person, and unfortunately even the average investor has NO CLUE. I also suspect that you would be hard pressed to see anything about this in the usual daily news, commentary, and opinion, other than a few sources.

    "Labor Force Participation at Trump-Era High of 63.2% in January"

    https://www.cnsnews.com/news/articl...orce-participation-trump-era-high-632-percent

    "In January, the nation’s civilian noninstitutionalized population, consisting of all people age 16 or older who were not in the military or an institution, reached 258,239,000 (lower than it was last month). Of those, 163,229,000 participated in the labor force by either holding a job or actively seeking one........."

    "Wages continued rising last month: In January, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $27.56, following a 10-cent gain in December. Over the year, average hourly earnings have increased by 85 cents, or 3.2 percent......."

    "The Congressional Budget Office, in a report released this week, said it expects last year's strong employment growth to carry into 2019. However, "Strong demand for goods, services, and labor is expected to put upward pressure on price and wage inflation, as well as interest rates, in 2019," CBO said......"

    (As to the comment on inflation above by the CBO, IN MY OPINION, totally wrong. There is NO inflation, in addition I would TOTALLY discount anything from the CBO)

    "Payrolls surge by 304,000, smashing estimates despite government shutdown"

    https://www.cnbc.com/2019/02/01/nonfarm-payrolls-january-2019.html

    • "Job growth in January shattered expectations, with nonfarm payrolls surging by 304,000, the Labor Department says.
    • Economists surveyed by Dow Jones had expected payrolls to rise by 170,000.
    • There were revisions. December’s big initially reported gain of 312,000 was knocked all the way down to 222,000, while November’s rose from 176,000 to 196,000.
    • The unemployment rate ticked higher to 4 percent, a level where it had last been in June, a likely effect of the shutdown, according to the department."
    MY COMMENT

    GEE....job growth in spite of the government shutdown. HOW can that even be true? I mean after all we were told that the shutdown would bring GDP down toward "0". As to unemployment ticking higher, YES, due to seasonal Christmas workers being let go as usual and the shutdown.....in other words.....normal and what would be expected. Seems like all the "economists" were off by a little bit. I wonder why, after all economics is such a "SCIENCE".........NOT. The best thing ANY investor can do is totally ignore any model or opinion masquerading as fact that is produced or predictions by any ECONOMIST.
     
    emmett kelly likes this.
  4. WXYZ

    WXYZ Active Member

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    I USED to call the rally after March of 2009 THE STEALTH RALLY since so many were still hunkered down in fear and despair and doom and gloom even years later. NOW, fast forward.....the DOW is now UP.......3351 points.....from the Christmas Eve low. I presume as usual many are still waiting for some phantom signal to get back in. Perhaps reading the entrails of a duck or raven or something, looking for that elusive sign that it is safe to get back into the water. Those of us that NEVER left the water and have a LONG TERM view are doing just fine....AS USUAL.

    By the way, what is this....SIX weeks in a row of up averages?
     
    emmett kelly likes this.
  5. WXYZ

    WXYZ Active Member

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    Now that the FED appears to be acting REASONABLY and actually taking into account the actual economic conditions as well as business and consumer conditions, stocks are on a tear. As I said in an earlier post, I would not be surprised in the least to see us hitting market highs by April. the months since October have been a GOOD LEARNING experience for investors that have little experience with a normal market environment. Having gone through a nasty correction and now being in a recovery period is good for those that aspire to be LONG TERM INVESTORS. As nearly EVERYONE knows corrections are an absolutely normal and healthy event in the economic cycle. Of course, what everyone knows is irrelevant when we are in the middle of DOOM&GLOOM and panic and fear being pushed by the media to generate eyeballs and clicks as well as push their agenda of the moment.

    Greed is making a serious comeback on Wall Street

    https://www.cnn.com/2019/02/03/investing/stocks-week-ahead-wall-street-greed/index.html

    "1. Risk on: Everything from junk bonds and crude oil to General Electric and emerging markets has raced back to life.
    The Nasdaq is up nearly 10% on the year. The S&P 500 just celebrated its best January in 32 years.
    Bullish investors have emerged from their late 2018 hibernation. Cash is piling back into the riskiest corners of the market.
    Fears of a recession induced by Federal Reserve rate hikes and US-China trade war have faded. They're morphed into hopes of a "soft landing" for the economy engineered by the suddenly-patient Fed and progress on trade talks. The CNN Business Fear & Greed Index went from "extreme fear" a month ago to "greed" today.
    It's a fresh reminder of how quickly sentiment can shift on Wall Street, which suffered its worst December since the Great Depression.

    "The market oversold tremendously in December," said David Kelly, chief global strategist at JPMorgan Funds. "The things that fell the most were the ones likely to the rise the most."
    Hence the snap-back rally for crude oil, which crashed into a bear market last year. US oil prices are up 22% so far in 2019.
    Ditto for GE (GE), which plunged 56% last year. GE is up 34% so far in 2019. It'd be the best stock in the Dow — if it hadn't been kicked out last summer. Other big 2018 losers like Zions Bank (ZBK), Coty (COTY) and General Mills (GIS) are all up double-digits this year.
    The junk bond market ground to a halt in December. Exactly zero US high yield bonds getting issued for the first time since the financial crisis. Junk bond sales remain slow, but the market has stabilized. Junk bond ETFs, including the iShares iBoxx High Yield Corporate Bond ETF (HYG), have soared back to all-time highs.

    Green light from the Fed
    "Fear of a credit event" in December "caused Fed capitulation," Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, wrote to clients on Friday. "It worked."
    The Fed's rapid reversal from hawkish to extremely dovish has served as a green light for investors. The risk trade is back on, at least for now.
    "We've seen quite a dramatic shift in the Fed's outlook for monetary policy in just the past two months," said Kelly.
    Suddenly, the Dow and S&P 500 are trading at eight-week highs. Both have reclaimed more than half their losses.
    But some think Wall Street's euphoria over Fed policy is misplaced.

    "People have to ask themselves: Why is the Fed pausing?" said Peter Boockvar, chief investment officer at Bleakley Advisory Group. "It's not because they met their objectives. It's because the data and markets have scared them."
    If the Fed's fears come to fruition, then a severe slowdown could be in the offing. That would be bad for stocks. If the Fed is being too cautious, then it may have to aggressively raise interest rates to catch up to inflation.
    "Either scenario, I wonder how much more upside there is to equities," said Boockvar.
    JPMorgan's Kelly isn't buying the recession talk. He pointed to the dovish Fed and little sign of bubbles in the economy.
    "People aren't paying enough attention to the possibility that this expansion could continue for quite a few more years," he said.

    2. The fate of Sears: This week could determine whether Sears survives. A US Bankruptcy Court judge will hold a hearing starting Monday about Sears' plan to sell its assets to its chairman, Eddie Lampert, who wants to keethe 133-year-old company in business.
    The hearing will probably unfold over the week. Sears hopes to have a decision that approves the sale by Friday.

    3. Media earnings: Both Disney (DIS) and 21st Century Fox (FOXA) report earnings this week. Disney is on track to complete its purchase of most of Fox before June, the company said in recent a government filing. Disney is also getting ready this year for the launch of its new streaming service, which it is expected to talk more about at an investor day in April.
    Fox, meanwhile, is preparing for its own reinvention as a smaller, leaner media company. The New York Times (NYT) and News Corp (NWS), which owns the Wall Street Journal and other publications, also report results this week.

    4. Google isn't slowing down: In the final three months of 2018, Google's CEO was grilled by Congress about data privacy, its employees around the world walked out over sexual harassment scandals, and it disclosed a security bug impacting the largely forgotten social network, Google Plus.
    But that doesn't seem to be slowing down Google's business. Alphabet (GOOGL), Google's parent company, is expected to announce 20% year-over-year sales growth when it reports holiday quarter earnings results after the bell Monday, fueled by the continued strength of its advertising sales business.

    5. General Motors reports earnings: General Motors will report financial results Wednesday. It's the company's first quarterly report since it announced plans to cut 8,000 salaried staff and close five plants in North America.
    Analysts are forecasting lower earnings for the quarter and the year. But the cutbacks aren't a response to financial distress. Instead, GM says it wants to trim costs and free up funds so it can invest in electric and self-driving vehicles. Analysts will be looking for more details about its investment plans when results are released......"

    MY COMMENT:

    Of course, they have to use the hot button word "GREED" in the headline conjuring up negative connotations. What do you expect from the media. I believe there is much upward room to run in stocks like Boeing, Amazon, Apple, and many others that continue to be chopped off at the knees when the traders and media disrespect their GREAT earnings and financial reports. We NOW see what happens when the FED sits back and lets business, the markets, and capitalism actually BE the economy. It is absolutely INSANITY the amount of power the FED now has and the role it has taken as the entity that is in charge of controlling and guiding the economy. It is NOT THE FEDS JOB to control or guide the economy. BUT...I have little expectation that this will ever change. If anything, government will continue to try to control the economy in ever increasing ways with the usual DISMAL results. We have just seen the best January in the last 30 years for stock investors. A good OMEN for the rest of the year, at least that is what the TAROT CARDS tell me.
     
  6. WXYZ

    WXYZ Active Member

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    The FORCE is very strong right now, I can feel it radiating.......whoops wrong board. I should say the MOMENTUM CONTINUES. The markets are on an extended TEAR right now. For LONG TERM INVESTORS this is one of those times that you just sit back and enjoy the ride. It is times like this that set in place the BIG GAINS for LONG TERM INVESTORS. There is a reason that the SP500 averages about 10% long term, and this is why. These sorts of events outweigh the down times about 65% to 35% over the long term. I DEFINITELY continue to be fully invested for the long term as usual. Quickly approaching portfolio record highs, perhaps some time in a month or so if this sort of environment keeps up. A GREAT start to the new week. BUT.....one day at a time....day by day...week by week.....month by month....year by year.
     
  7. WXYZ

    WXYZ Active Member

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    STRONG open today to continue the recent market direction.....UP. With the FED out of the way...for the moment...the economy is operating on most cylinders. There is STILL MUCH room for improvement as we continue to fight underlying fear, and doom, and gloom thinking that now seems to be the new normal in investors. In my opinion probably reflects the current media environment.

    Here is where we are at this moment in time:

    DOW year to date +8.91%
    SP500 year to date +9.19%

    A little relevant reading as to the current situation for investors:

    U.S. Stocks Churn Higher; Bonds Rise as Oil Slumps: Markets Wrap

    https://www.bloomberg.com/news/arti...drift-amid-holidays-dollar-gains-markets-wrap

    "U.S. stocks pushed higher for a fifth day, with sentiment getting a boost from corporate results and decent economic data. The euro edged lower.

    The S&P 500 matched its longest rally of the year, as stocks continued to rebound from the pre-Christmas rout. American earnings were mixed, with Alphabet slipping after announcing a big rise in spending, while Estee Lauder surged on its results. A reading on the services sector missed estimates but remained relatively high. Pemex bonds jumped after Mexico’s president said he’ll announce extraordinary measures to support the oil firm. Crude slumped.

    [​IMG]
    The relative calm in markets belies an undercurrent of uncertainty as trade talks between the U.S. and China remain unresolved and America lurches toward another government shutdown. Investors will be watching President Donald Trump’s second State of the Union address later for any more signs of political rancor or clues on the outlook for foreign trade.

    The Stoxx Europe 600 Index headed for the sixth advance in a row despite growth warnings from two chipmakers. Euro area PMIs were revised upward, helping boost sentiment further, but the common currency struggled as disappointing data from Italy hung over the region, while sterling fell following a weak services report......."

    "Among key events in the coming days:

    • Asian markets closed Tuesday: China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan, Pakistan
    • Earnings season continues, with reports this week from Twitter, Hasbro, Ryanair, Disney, Philip Morris, BNP Paribas, ING, MetLife, Societe Generale
    • Trump delivers a delayed State of the Union address Tuesday
    • On Wednesday, Federal Reserve Chairman Jerome Powell gives his first public comments following the January FOMC meeting and rate decision.
    • Central banks in India and the U.K. set rates this week......."
    (See article for unedited content)

    AND

    Don’t Hold Your Breath for Big Stock Returns, Says Goldman Sachs

    https://www.bloomberg.com/news/arti...our-breath-for-big-stock-returns?srnd=premium

    "Investors that didn’t profit from the equity rally in January, missed out on most of the returns for the year, according to Goldman Sachs Group Inc. strategists.

    “The dislocation at the outset of the year -- when markets had overpriced the slowdown -- has almost disappeared,” said the strategists led by Sharon Bell. “The rally we expected has happened swiftly, and given this we see relatively modest returns on equities from here."

    Global equities staged a powerful rebound in January from a brutal sell-off in the fourth-quarter as investors embraced a dovish U.S. Federal Reserve and optimism that the U.S.-China trade talks would end well. U.S. stocks are now up 16 percent from December lows while European equities have climbed about 9 percent.

    But while the recovery has been impressive, many investors still prefer to stay on the sidelines as too many questions about trade and growth remain unanswered and there’s limited consensus about the market’s direction. This has led to thinner trading volume and more muted reactions........"

    (Bold is mine, see article for additional content)

    MY COMMENT:

    As usual there are no doubt many that have missed this entire rally. The ILLUSORY strategy of MARKET TIMING creates the usual result. It is so easy to think timing works but so very difficult to actually achieve results superior to the unmanaged averages for any length of time, especially over the long term. As usual, I will state, the academic research DOES NOT support market timing as a workable, functioning strategy. BUT, people just can not sit and do nothing.

    BUT, we have a long way to go to the end of this year. There will no doubt be one or more corrections this year as we move forward. It is also likely that there will be one or more national or international news events that impact markets. IN OTHER WORDS......a normal market environment for stocks and funds. However, EARNINGS and financials are actually what counts, as usual. Those that do not see stocks or funds as representing ACTUAL businesses will continue to operate in the dark with one hand tied behind their back.
     
    T0rm3nted likes this.
  8. WXYZ

    WXYZ Active Member

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    HERE is a continuation of the above discussion:

    Confidence Busted. Consensus Broken. And a Rally Like Few Others

    https://www.bloomberg.com/news/arti...-consensus-broken-and-a-rally-like-few-others

    (edited content from the article)

    "........Every price gain seems matched by an outflow, every inflow matched by a hedge. Analysts are fickle, at odds, or AWOL. And volume is down -- those sidelines must be crowded.

    “We haven’t been in such an environment since before the 2008 financial crisis,” said Julian Rimmer, an emerging-market equities trader at Investec Bank Plc in London. “Fog is thickening, there’s limited visibility. There’s a real struggle in the market to come up with strong trading ideas.”

    The lack of consensus in markets was laid bare this week by Bank of America Merrill Lynch in their latest global investor survey. According to responses from 177 participants across the world managing $494 billion, the most-crowded trade is being long the U.S. dollar. But at just 21 percent, it’s the weakest consensus trade in almost three years......"

    ".......The shock of the fourth-quarter sell-off across risk assets appears to have helped fuel the dissonance. Chris Bailey, a European strategist at Raymond James, said amid the search for winning strategies he had more client meeting requests in December than ever before.

    “2018 was a difficult year with over 90 percent of asset classes showing a negative return,” he said. “This is a large shift compared to the last few years, so naturally strategists and underlying investors are cautious.”........."

    "......the S&P 500 just rose for a fourth straight week, yet U.S. equity funds saw outflows of $7.7 billion in the five trading days through Wednesday, according to a BAML note citing EPFR Global data. Stocks started the year in a once-in-a-decade rally, yet so-called fast-money investors including hedge funds and quants were slow to join in......"

    "........Markets are right now caught between two outlooks, according to Edmund Shing and Eric Oynoyan: on the one hand the threat of a recession, and on the other the potential for financial conditions to ease......"

    (Bold above is mine)

    MY COMMENT:

    See the rest of the article for the usual financial, investment banker, hedge fund manager, BLATHER. Or I should say EXCUSES for why they are missing out on the RALLY. If it was not so SAD it would be HILARIOUS. What is really sad is the fact that very intelligent people trust others to invest and manage their money.
     
    T0rm3nted and emmett kelly like this.
  9. emmett kelly

    emmett kelly Well-Known Member

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    Looked up a few of the contributors in post #228. One has an MBA, another a PhD in Artificial Intelligence. I kid you not. Must be trying to get ahead of the curve.
     
  10. WXYZ

    WXYZ Active Member

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    NICE....emmett kelly. Very interesting....

    I swear I could set up a HEDGE FUND and give the investors all sorts of mumbo jumbo and financial double speak and just put the funds in the SP500 and half of them would never know that their money was just in a passive index. If I told them that for the first month of the year we had returned about 8-9% they would be cheering.
     
  11. WXYZ

    WXYZ Active Member

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    I find the premise of this article very interesting. Basically that we are all driven in many ways by our environment and the events occurring in our younger more formative years. It also touches on the bias that those years IMPOSE on us and the need to be flexible or identify changing periods as we mature and grow as investors over the years. We are ALL very critically impacted in our investing behavior by the BIAS imposed on us by our life experiences. Investment selection, risk tolerance, risk taking, world view, etc, etc, are all impacted by our life history.

    MYSELF......I grew up in a RARE home that invested in stocks and funds in the 1950's. Very very few "regular" people invested in mutual funds back in the 1950's and even less had a brokerage account. My mother did both. Being exposed to her investing at a time when it was extremely rare had a BIG impact on me. Because of that exposure I was investing very early in life myself, in the early 1970's. Because of my childhood experience I was interested in stock investing by age 10. As teens in the 1960's my sister and I were gifted a few shares of stock on birthdays and Christmas as an "extra" gift. We grew up in a family where investing, and financial details were openly talked about and not hidden, at least from family. We grew up in an environment where investing was "normal". My grandfather was a business person and had a brokerage account and stock portfolio and I am sure that influenced and resulted in investing education for my mom. Little did I realize at the time how rare stock or fund investing was at the time.

    How Much Does Our "Investment Upbringing" Shape Us?

    https://www.realclearmarkets.com/ar...ur_investment_upbringing_shape_us_103611.html

    (here are some relevant quotes from the article, but the entire article is interesting)

    "“Three Identical Strangers” delves into the age-old nature vs. nurture question. The documentary film chronicles the amazing story of identical triplets separated at birth and reunited 19 years later.

    How did it happen?

    A prominent psychologist worked secretly with an adoption agency to place the boys in very different households. He wanted to study how people with identical DNA would evolve if they grew up in different environments.

    After a crazy chance encounter led to the three brothers being reunited (I won’t spoil the story), the boys discovered they shared many natural similarities. For instance, they smoked the same brand of cigarettes. Liked the same food. Two of them even attended the same college.

    And yet the brothers also had key personality differences. The filmmakers hypothesize this resulted from growing up in different households. One brother was raised in an upper-class family, one middle-class, and one lower-class. The three also experienced different styles of parenting.

    As I’m sure was the case for many, the film made me feel sorry for the brothers. Their lives should never have become a science experiment.

    It also left me contemplating how investing bias might be skewed by the market environments we “grow up in.”........."

    “........You need to be decisive, open-minded, flexible, and competitive.” - Stanley Druckenmiller......."

    "What’s next?

    Are you staying nimble in your market outlook?

    As a test, consider how your perception of markets may be impacted by the investing environment you grew up in.

    For instance, there are many young people working on Wall Street who have never experienced a bear market in their careers. How will that impact them going forward?

    Conversely, if you’re part of the Baby Boomer generation, you likely recall the Tech Bubble and 2008 Financial Crisis. Those experiences may have conditioned you to believe all bear markets involve torturous drawdowns. You may be overly cautious with how you’re investing, considering the average bear market has been tamer than those two affairs were.

    It’s important to take inventory of your investment experiences. It’s ok to have biases—we all do. The only danger is if you’re unaware you have them."

    MY COMMENT

    My investing style is the same as my grandfather and mother. BIG CAP, BIG NAME, ICONIC, MARKET DOMINATING, WORLD WIDE MARKETING, often DIVIDEND PAYING stocks and funds. This has always been MY investing style. BUT, the stocks and funds that I am invested in are not STATIC. They have changed over the past 40-50 years as needed. In the era of my grandfather and mother, they were able to hold many of the same stocks for decades. My mom was a shareholder in Phillip Morris for over 50 years. Same with many other BIG CAP stocks. In her lifetime things did not change as quickly as they do now.
    I owned many of the same BIG NAME stocks she did for many decades....Phillip Morris, Colgate, General Mills, Proctor & Gamble, 3M, Johnson & Johnson, etc, etc, etc. As time has gone by my portfolio has continued to evolve with the times. My basic investment philosophy......investing for the long term in BIG name companies and reinvesting dividends, has not changed...but my holdings have changed with the times. The advent of the computer era caused great changes in the investing world in the 1990's and 2000's, the change over the the MILLENIAL generation is causing even more changes. My investing style, which works well for me and has stood the test of time over 50 years, works for me very well........BUT......I do try to keep current with the companies that are in my concentrated portfolio.
     
    #231 WXYZ, Feb 6, 2019
    Last edited: Feb 6, 2019
  12. WXYZ

    WXYZ Active Member

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    You know what they say about a FOOL AND THEIR MONEY......

    U.S. fund investors pull most cash in 3 months from domestic stocks -ICI

    https://finance.yahoo.com/news/u-fund-investors-pull-most-160826936.html

    "NEW YORK, Feb 6 (Reuters) - U.S. fund investors snatched the most cash in three months from domestic stocks, Investment Company Institute (ICI) data showed on Wednesday, pointing to ongoing reticence and profit-taking in the face of a strong start to the new year.

    The trade group said a net $13.6 billion poured out of stock funds during the week ended Jan. 30, mostly driven by exchange-traded funds (ETFs), which are heavily used by institutional investors.

    During the week, the U.S. Federal Reserve signaled its three-year-drive to tighten monetary policy may be at an end, boosting riskier assets. The central bank discarded its promises of "further gradual increases" in interest rates, and said it would be "patient" before making any further moves.

    The S&P 500 added to its gains for the year, and the stock index has returned more than 9 percent in 2019.

    Domestic equity funds posted $14 billion in withdrawals, the most pulled since October and offset only marginally by around $400 million of demand for stock funds focused abroad.

    Overall, stock mutual funds typically used by retail investors took in $183 million, while U.S.-based equity ETFs posted $13.8 billion of withdrawals, ICI said.

    Investors showed further signs of hesitation by snapping up bonds and commodity funds, such as those that invest in gold. Debt funds attracted $7.8 billion during the week and commodity funds pulled in $767 million, according to the ICI.".........

    (bold is mine)

    MY COMMENT:

    YES.....more good news. The confusion, short term thinking, continued fear, etc, etc, show that this BULL MARKET has a good run ahead of it. We continue to climb the OLD wall of worry. Definitely a positive sign for things to come. ALSO a good indicator of the LOONY TUNES short term thinking and behavior on the part of the so called "professionals" and institutional investors. As to the International Investing briefly mentioned above, NOT FOR ME. I have NO interest investing in countries or businesses outside of the USA. The VAST majority of companies that are world wide dominant are located in this country. I have no interest in taking a flyer on companies and businesses that are second rate on the HOPE that they will some day "develop". If I cant find a good business to invest in in the USA, I am NOT going to find it in the third world. I can NOT imagine any economy in the world that I want to be tied to other than the USA.
     
  13. TomB16

    TomB16 Active Member

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    I share your view on this, WXYZ. I tend to think that when I read your posts but I don't often post support because it would come across sycophantic. Suffice to say, our point of view is remarkably similar.

    Over the years, I've come to believe that short term thinking doesn't impact long term investing in a significant way.

    More recently, I have embraced the thought that the more short term trades are done, the less likely they are to be profitable. We know the vast majority of short term traders lose money on average and yet everyone, including on this web site, posts endless quick profit stories which make it look easy to pull fast money out of the markets. While some of these stories are undoubtedly real, most of them simply cannot be.
     
  14. WXYZ

    WXYZ Active Member

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    Tom......I agree, your experience mirrors mine over the past 50 years. Either the totality of the academic research is WRONG. Or....the world is FULL of amazing short term traders that are ignored by the researchers. As to those on this site, I dont know. I dont really follow short term traders on here. I assume it is possible that there are a few very talented short term traders in the world. BUT, I have never known of or met one in my life that can be documented as successful over any period of time.
     
  15. WXYZ

    WXYZ Active Member

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    Tom......to continue our discussion.

    Obviously there is a big issue with knowing if ANYTHING posted on an investing internet site is for real or not. That is why I post my portfolio model for all to see and the allocations that I started with. I DO NOT post actual dollar amounts or what the current allocations have precisely evolved to in each account since their creation. REALITY in investing is a very big issue. People often whether traders, or long term investors fool themselves about results. I suspect that most long term investors, if they were absolutely honest with themselves would just be invested in something like a SP500 Index Fund since it is EXTREMELY rare for any investor to beat such a passive investment over the long term. I suspect that whether talking about traders or long term stock investors there is a good amount of lack of honesty with ourselves about our own investing. What makes this sort of issue even more complex is the fact that probably many people trade or long term invest as an active hobby as much as to make money. It is a challenge to try to beat the markets and be successful. It is an enjoyable activity and a challenge. Like any game or sport.

    Yes, I agree that the majority of traders probably dont make money or at least significantly lag the averages over the medium to long term especially when they ACTUALLY take into account all expenses, profit being taxed as ordinary income as short term gains, etc, etc. On the other hand with LONG TERM investors, the research tells us that the vast majority are ALSO unsuccessful in coming anywhere close to the unmanaged indexes over the long term.

    So, I guess what I am saying is I dont think this is a symptom of just traders, I think there are honesty issues with one's self with all kinds of investors. I think in any sort of investing people, being human, remember and emphasize their good trades and their good long term successes and tend to put the bad out of mind.

    So, I guess what I am saying is I agree with your opinion, but I extend it to ALL sorts of investors, not just traders.

    I do appreciate the discussion with you and your posts. There is nothing wrong with you posting on this thread, even if it is to agree. At least it generates discussion and thought, like your comment above got me thinking more in depth about how investors of all types fool themselves and the human nature involved.

    You know the bottom line in investing is that we ALL have to just do what we do for better or worse, and, if we are just fooling ourselves about the REAL results, that is just the way it is. Human nature is a bitch when it comes to any sort of investing behavior.

    YOUR thoughts...........?
     
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  16. WXYZ

    WXYZ Active Member

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    I will mention for Tom or ANYONE. Feel welcome to post ANYTHING you wish on this thread. It does not need to be on topic with what I am posting or anything else. Investing, economics, stocks, bonds, trading, long term investing, opinion, fact, personal data, etc, etc, etc. This is a PUBLIC thread in a PUBLIC forum so ANYTHING is welcome. This is NOT....."MY".....thread. It is not up to "ME" to direct or dominate what is or can be posted here.
     
  17. TomB16

    TomB16 Active Member

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    Heart felt apologies for the extended rant...


    In 1980, my parents went with another couple to Las Vegas. This couple went frequently and always won money. My parents had never been. They went, had a great time, and returned to report the couple in question disclosed only winnings and disregarded the losses. They gambled $10K, won $3K, and returned home telling everyone about the $3K they won in Vegas.

    Have you ever asked someone about their fuel economy? How come our CR-V gets 6mpg less than other CR-V of the same year? Several people have told us we obviously have a “Monday” car. How come my diesel truck gets 16.5mpg while diesel forums are full of people pulling down mid 20s with the same truck?

    In the 1990s, I worked at a financial institution and we had a bunch of people who had been to Vegas that winter (I live in a cold climate so we all try to escape the winter with Vegas being the most popular destination). Nearly all of them did very well financially on the Vegas trip.

    Have you ever had someone tell you how much they make? Everyone is making $100~150K annually.

    The forum I used to hang out on has had some epic threads with several people claiming to have made $4000 per day when they used to day trade. When asked why they quit, the universal answer was, “It was too much work.” Are they kidding? I would blow a donkey for $4000 per day.

    Over the years, I’ve gone from believing there was a small percentage of bullshitters in the world to basically thinking all speach is comprised of lies and deceipt.

    This is something I’ve done a great deal of thinking about. I’ve used every bit of personal ability to best quantify what’s going on. The result is a subjective opinion.

    My current view is that there is a small ratio of liars in the world. There are people who will lie even when it is not in their best interest to do so. They are simply wired in a way that prevents them from telling the truth. The rest of the population is unobjective.

    “The rest” includes me. That is, if this entire post isn’t a lie.

    Discovering the lack of objectivity in the human condition has been a revelation. No one is fully objective.

    Trying to quantify my own objectivity has been a wonderful and absolutely humbling experience. This can only be done by those who are truly courageous.


    Here is the truth:

    - I cannot predict macro factors with reliability higher than a random number generator.

    - I do not have any “touch” that gives me some sort of ability to succeed where others do not.

    - I have succeeded at a broad number of things not because of greatness but because of tenacity. Success has been hard work. That includes investing.


    Ridiculous idea that legions of people cling to:

    “I can make $300~500 per trade so if I can trade 20 times per day, I can make $6000-10000 per day.”


    It is possible to make money with high frequency trading but the more you trade, the lower the odds you will make money. To claim to be able to routinely make big money by rapidly trading is akin to someone claiming they can win the lottary repeatedly. It is literally a claim of reliably beating a game of chance.

    Almost all rapid traders lose money. If you press a braggadocios day trader with an audit, they will respond, “You can’t go by my brokerage records. I’m discounting several bad transactions because....”


    Here are some questions to ask yourself and/or project on other people:

    - You have a system. It makes money. OK, but if it only makes money when the market is growing and loses money like everyone else when the market is contracting, how is your system better than a simple index like S&P500? Are your returns better?

    - If you are an amazing trader, making tons of money, do you have a job? If so, why?


    Conclusions:

    Certainly, not everyone is a liar.

    People have varying levels of objectivity with no one achieving 100%.

    For most people, the best gain they will ever make can be done by studying their own objectivity level with courage and honesty. Once you realize you don’t have an “x-factor” advantage over other traders, perhaps it’s time to consider being happy with lifetime returns on the order of 10% from the S&P500.

    People who explain to you they are extremely knowledgeable and that you should listen to them, are unlikely to have any advantage over you. If they were truly objective, they would sit humbly by and try to not make self aggrandizing statements (this is my goal).

    Every one of us is on our own: In investing and in life.

    Short term trading is a poker game. It is a redistribution of wealth. There are winners and losers. The house is always a winner. The idea that more than half of traders can make money even after trading overhead is an obvious mathematical impossibility.

    If you have money, you are unlikely to want to engage in wealth redistribution.

    Lusting after wealth redistribution will reduce your chances of becoming wealthy.



    Again... apologies.

    For those who have read this entire post, your time would have been better served with introspection and study of your own level of objectivity.
     
    #237 TomB16, Feb 7, 2019
    Last edited: Feb 7, 2019
  18. WXYZ

    WXYZ Active Member

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    Story of the day for the short term thinkers:

    Stocks plunge on worries about US-China trade talks

    https://www.cnn.com/2019/02/07/investing/stock-market-today-china-larry-kudlow/index.html

    "Stocks took a turn for the worse Thursday after a key member of President Donald Trump's economic team said the United Statesand China may not be able to come to a new deal on trade before next month after all.
    Markets fell immediately after Larry Kudlow, the director of the White House's National Economic Council, suggested that the US and China weren't close to a new trade pact. The Dow finished the day off its lows but still dropped more than 220 points, or 0.9%. The S&P 500 also fell 0.9% while the Nasdaq was down more than 1%.
    "The president has indicated that he's optimistic with respect to a potential trade deal," Kudlow said on Fox Business. "But we've got a pretty sizable distance to go here.""........

    (see article for further content)

    MY COMMENT:

    I guess the DEFINITION of a "PLUNGE" in the markets is now a loss of less than 1%. Today a PLUNGE is a loss of about 8/10 of a percent. LOVE the headline writers and their DRAMATIC characterization of a normal day in the markets. It amazes me when these stories break out about the negotiations with China. I guess, since I owned a business where EVERYTHING was negotiation, I tend to see negotiation a little differently than those that NEVER do it. In my opinion, we continue to hold all the cards in the trade talks and the longer they last the better the end result will be for the USA. We need to ramp up the pain to maximum level for as long as possible. That is how we will have maximum leverage and get the best possible deal. Our media, investors, traders, and others are just a bunch of WIMPS on this stuff. We continue to hold ALL the cards with the trade STUFF so far having little to no impact on our economy or businesses. Now China, they are already in a world of hurt. Their economy is tanking, much worse than is being reported in their FAKE numbers that they put out. The ONLY DANGER in these talks is if we drag it on too long. There will come a time when China will have the incentive to simply wait out the election and hope that a new DEM PRESIDENT is elected who will just CAVE to them as USUAL.

    ON ANOTHER TOPIC.......NVIDIA had a bad hair day today. So glad that I sold this stock as noted in post 217 above. Down 3.6% today and things are not looking good heading to earnings next week. I would not be surprised to see the stock down in the 120's after earnings. Being a MEDIA DARLING and having all eyes glued on you constantly is not a good thing for a business. I STILL like the company but it is going to be a long long SLOG back to their record high price from this point and where we end up after earnings. I do not have the stomach to make that SLOG with them. I would rather wait till they are a more mature company and AI and driver-less cars are more mature as a business model and if they are still a leader dominating those areas consider them at that time. probably at least 5-10 years down the road. A lot can happen or change over that time.
    Bear of the Day: NVIDIA (NVDA)

    https://www.nasdaq.com/article/bear-of-the-day-nvidia-nvda-cm1095186

    Analysts Estimate Nvidia (NVDA) to Report a Decline in Earnings: What to Look Out for
    https://www.nasdaq.com/article/anal...ne-in-earnings-what-to-look-out-for-cm1095613

    SoftBank dumps Nvidia stake

    https://seekingalpha.com/news/3430159-softbank-dumps-nvidia-stake

    Is It Finally Time to Sell Nvidia Stock?
    https://investorplace.com/2019/01/is-it-finally-time-to-sell-nvidia-nvda-stock-nimg/

    Nvidia: Red Flags Are Flying High

    https://seekingalpha.com/article/4234018-nvidia-red-flags-flying-high

    GOSH after posting all that it makes me think at some point over the next month this stock might be beaten down enough to be a good buy......BUT NOT FOR ME. Having sold them on January 28, 2019. I have held various chip companies in the past INTEL, AMD, etc, and never seem to be able to justify holding them for the very long term. They allways seem to disappoint and never be able to sustain solid business. They tend to be a very UP and DOWN type of business. Kind of like the AUTO COMPANIES lurching up and down, year after year. BUMMER.
     
    #238 WXYZ, Feb 7, 2019
    Last edited: Feb 8, 2019
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  19. TomB16

    TomB16 Active Member

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    Nice post. Speaking of chip companies...

    I am not optimistic about chip companies. We will always need them but the first company to achieve deep AI will dominate all others. It will not be possible for anyone else to catch up.

    If I were to invest in silicone fabrication companies, it would be a basket because I believe AI will dramatically increase the demand for compute and control systems.
     
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  20. TomB16

    TomB16 Active Member

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    It's a bit of an echo chamber in here due to our convergence of thought. I just went on a long rant that simply mirrors what you said more eloquently in this post. Our exchanges are enjoyable but I can't imagine either of us are gaining a lot.

    We need those HFT dudes to come back to explain the tragedy of our approach and how we could improve our gains with Ouija, tea leaves, and the wearing of sandals with socks.
     

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