The Long Term Investor

Thanks for the IDEA B Russ. I see guys that are walking around "open carry" once in a while. I think I am going to go out and buy a BIG TRIDENT and carry it around with me. I might get a cape also.

 

WELL......I dont want to identify the type of music because I dont want to inadvertently identify myself. Not that I am some sort of celebrity. I am a sideman type player and have played and toured regionally as well as nationally and internationally. There is various "stuff" out there on the internet that has my name and other info as a result of touring. So, I just dont want to get that specific.

Sorry....dont mean to be mysterious. AND....no the band was NOT "Question Mark & The Mysterians".

Dont know why that old band name popped into my head when I typed the word "mysterious"....but it did.

I am WILLING to be very open about personal "stuff" on here, but try to keep away from anything that might be too specific.

 

What an ERRATIC day today. At least it ended well. I was GREEN except for one stock......PG. AND....beat the SP500 by .22% today. I will take it. Glad I was not glued to the markets today. It would have been an exhausting day. As a long term investor I can SKIP OUT whenever I wish for as long as I wish.

 

I am sure you will. It is worth the wait for the right property.

 

WELCOME........iamatrader.

That post above was a little over two years ago. We have ALL been through a lot since than. Feel free to contribute and post as you wish. This is an WIDE OPEN THREAD. No need to agree with me or even post on the same topics. ALL are welcome.

 

DULL, LINGERING, open today.....although I see that the NASDAQ is now positive as I post this....so there might be HOPE that we end the day as we did yesterday. Who knows. It will be good to JUST get this week behind us and move forward. Too much focus on economic shut downs this week and NOT enough focus on the near term.........6 months out......future and earnings, economics, actual business, other data, etc, etc.. I am sure there will STILL be plenty of economic and other issues at that time........but.......the virus will be out of the picture. AND.....we will hopefully have moved beyond politicians trying to micro-manage the economy and markets.

 

My BIG WINNERS today.....early in the market day.....are NIKE and SNOW. Everything else is pretty DULL. I am very surprised by the strength that SNOW has shown since the IPO. HOWEVER.......I have absolutely NO plans to add to my 100 share position. The stock is just too long term and speculative.

There will be plenty of opportunity to pick up additional shares later if the company becomes a DOMINANT business. There will also be HUMONGOUS (investing term of art) gains to be had from my IPO purchase of 100 shares........if.......big if.......the company lives up to all the hype. BUT.....so far I am seeing a lot of strength in the stock compared to most IPO's.

 

rg7803

Being in Portugal....what is your take on Europe, the EU, and the economy in Portugal? What do you see as the "mood" of the average person.

 

For me.......TGIF.....this has been a really UGLY day and a really UGLY week. Really NOTHING to do with actual companies. A week when the markets were just FATALLY DISTRACTED by outside news. ALL you can do as an investor is just ride it out.

I......of course.....today ended in the RED. The day ended the same was it was early in the day.....NIKE and SNOW the ONLY bright spots for me. I did manage to beat the SP500 by .03%.

SP500 five day change -.77%
SP500 year to date +10.11%

The loss for the week is actually not all that bad considering how impotent of a week this was for the markets. Just not a lot of conviction or energy. The BEST NEWS of the day.....we can now take a few days off than move on to a new week.

 

YOU are on a ROLL.....ZUKODANY.

 

The FOUNDATION of where we go from here is already set. Here is one of the PRIMARY contributors going forward over the next months:

Investors Look Past the Chaos and Throw $53 Billion at Stocks

https://www.newsmax.com/finance/streettalk/investors-chaos-billion-stocks/2020/11/20/id/998096/

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

"Traders might have surmised that rising coronavirus cases and turmoil atop the government would breed at least the beginnings of caution among investors. Not so much.

In what is shaping up as a historic month for equities, exchange-traded funds focused on U.S. stocks were just hit with one of the biggest deluges of cash ever recorded, attracting nearly $53 billion in November. A similar enthusiasm can be seen in flows to long-term mutual funds, following a stretch in which the buy-and-hold set pulled money for 26 of 29 weeks.

The cascade of money explains any number of market trends, not just the strength of gains -- November could easily be the fourth-best month for the S&P 500 in two decades -- but the much-discussed rotation into beaten-down areas. The small-cap Russell 2000 beat the tech-heavy Nasdaq 100 for a second week, even as hospitalizations climb and the future of Federal Reserve lending programs remains unclear.

As hazy as the economic outlook is, investors are viewing this as an opportunity to buy the dip in sectors that have been battered by the pandemic, according to JPMorgan Asset Management.

“That means that any sort of pullback in the market when you see bad news, it gets absorbed by this cash,” said Gabriela Santos, a global market strategist at the firm, in a Bloomberg Television interview. “It’s especially your hardest-hit sectors, your more cyclically, economically oriented sectors and regions that are going to see the biggest bump.”

That’s likely to continue given that mountains of cash are still parked in money market funds, Santos said. Nearly $1 trillion flooded into the funds from February to late May as the pandemic gripped markets, ballooning U.S. money-fund assets to a record $4.8 trillion. That pile has since shrunk to roughly $4.3 trillion -- still well above pre-virus levels.

Now, with a potential end to the pandemic in sight, analysts expect that the cash stashed in money-market funds will continue to fuel stocks. The S&P 500 has rallied 8.8% in November, on track for its strongest month since April. Meanwhile, the Russell 2000 has surged 16%, also its best showing since April.

“Investors were eager to get some money put back into the markets,” said Chris Gaffney, president of world markets at TIAA Bank. “Some of those sectors and areas that depend on growth, I think investors are starting to look at again and maybe moving back into.”

Of course, the tug-of-war between reopening optimism and a darkening coronavirus picture could quickly tilt in the bears’ favor. The share of U.S. hospitals anticipating a critical staff shortage within seven days rose to a record, and the number of Americans hospitalized has more than doubled since Labor Day. That was enough to send the S&P 500 lower on Friday, leaving it down 0.8% on the week.

“Another week of negative headlines, and people will get more defensive going into year-end, especially now that states are continuing to shut down,” said Michael O’Rourke, chief market strategist at JonesTrading. “If we don’t see hospitalizations start to decline, come the first week of December, investors who rushed in on the vaccine news may revisit their thinking.”

But those concerns have done little to dissuade speculators. Hedge funds that place both bullish and bearish wagers on equities are gearing up for more upside. Their net leverage, a measure of industry risk appetite that takes into account long versus short positions, reached a record high this month, according to data compiled by Credit Suisse Group AG. Among hedge fund clients at JPMorgan Chase & Co., net leverage has increased to levels not seen since at least the start of 2018.

Additionally, after months of sitting in money-market funds that yield next-to-nothing, investors may be looking to eliminate so-called cash drag from their portfolios heading into year-end.

“This is the time where people are introspective and are saying, ‘I might have had cash, but cash isn’t the solution long term,’” Richard Steinberg, chief market strategist for The Colony Group, said. “A lot of the moves we’ve had recently is to position going into next year, almost as a tabula rasa.”"

MY COMMENT

It is easy to FORGET how good this month has been to date and we are ONLY two thirds of the way through. AND.....than we move on to December and good potential for more gains to end the year. There is......OBVIOUSLY......a ton of money and investors siting on the sidelines and waiting for a SIGN to get back into the markets. In my opinion the APPROVAL and start of DISTRIBUTION of the vaccine in December......along with the KILLER third quarter earnings.......and NO SIGN of any sort of testing of any prior lows.....will jump start the markets into the new year.

I anticipate that those investors........and........ALL that money sitting on the sidelines......will come into the markets over the next YEAR. As the months go by and the TRAUMA and fear experienced by people starts to dissipate and be replaced by NORMALCY there will be HUGE inflows of money into the markets. On top of these funds we are now entering the time of year when many will be investing 401K match money and IRA money.....the vast majority of which will go into stocks one way or another.

The LIGHT AT THE END OF THE TUNNEL......is starting to look like a HUGE freight train bearing down on us. For those of us that are already invested for the long term.....we will continue on. For those NOT invested......time to start to think and plan for the future.

 

I post this article for discussion purposes. There have been many in the economic world that have been waiting for INFLATION for the past 30 years. So.....

Inflation May Be About to Pick Up Sharply

https://finance.yahoo.com/news/inflation-may-pick-sharply-060002819.html

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

"It may seem strange to be worried about inflation in the midst of a global recession, a pandemic and huge political ructions in the U.S., but I strongly suspect that it’s about to pick up both soon and sharply. How fast this happens depends on how quickly the developed world recovers over the next few months, but pressures are building. As has been the case for many years, global inflation has “Made in Asia” stamped all over it. This time, though, that’s likely to be compounded by much greater supply constraints in the economy.

First, a little humility. Forecasting inflation is fiendishly hard. Generally, the best forecast is what inflation is at the moment. Central banks have been neither good at forecasting inflation nor creating it. This is because, in essence, classical economics largely assumes that, all things being equal, increasing the supply of money pushes inflation higher. And yet, after years of rate cutting, quantitative easing and so forth, the only thing that has gone up is asset prices. It has been Apple Inc., as it were, not apples.

Clearly, then, not all things are equal. Economic models assumed that how quickly money changes hands (its velocity, in the jargon) is both stable and predictable. Instead, it has collapsed. That’s why all those people who predicted a massive rise in inflation as a result of central bank QE have been wrong. Velocity may pick up — your guess is as good as mine — but that wouldn’t tell us much about what happens in the next couple of years as it’s more of a long-term indicator. And there are signs aplenty that inflation is headed higher.

Ask yourself the following counterfactual. Had you known that the developed-world economy would be largely shut down, what would you have expected to happen to the prices of traded goods? Probably, you’d have expected them to collapse. But as the chart below shows, they didn’t even fall as much as in the manufacturing recession of 2015, let alone during the global financial crisis.

Prices are now rising strongly, in part because Asian growth is humming. Chinese export prices have risen year over year. Excluding oil, industrial commodity prices are also now higher than they were at the end of last year. Even if nothing moves between now and late spring of 2021, year-over-year comparisons will start to look very dramatic — as prices this spring were at their low point. These trends are already making themselves felt in the developed world. U.S. import prices, for example, are rising strongly. Durable goods prices are on a tear. There are signs that services inflation is also rising.

Yet much of the developed world is still in the midst of a pandemic, subduing demand. When the vaccine comes or the virus blows itself out, demand will pick up smartly. What will happen to prices when it does? I strongly suspect that a lot of manufacturing capacity has been lost. Both domestically and internationally, transportation is at once more difficult and more expensive. The vogue for ESG investments has probably also meant a lack of investment in stuff you dig out of the ground or drop on your foot.

Assuming that all this takes a fairly long time to get up and running, you would expect these constraints to last. The same is probably true of services. A lot of companies have already been put out of business and many more are likely to go to the wall. There has been, then, severe losses to economies’ supply potential. All of which means that the path of least resistance when demand picks up is higher prices.

How central banks react is key. They have told us that they will let economies run hot. What they’re really saying is that nothing they’ve done has made the slightest difference to overall inflation and they don’t know why. Still, let’s take them at their word. What would it mean in practice? Would they avoid putting up short rates or try to hold down long rates at a time when government borrowing is likely to remain huge? Either would, in effect, loosen monetary policy by driving real rates down when economies — and inflation — are growing strongly. This is not credible and countries that do nothing would probably see their currencies fall instead, thereby pushing imported inflation higher.

I suspect that private holders of longer-dated bonds won’t wait for central banks to change their minds, knowing that they’ll have to hike at some point. The risk is asymmetric. Bond yields are breathtakingly low and sooner or later they will rise, possibly rapidly: There is a lot of leverage in fixed income, and bonds with de minimis coupons potentially move a lot more in price than those that actually pay a decent rate of interest.

Those with a few grey hairs will remember the bond carnage of 1994. At some point, I’d expect yield curves to steepen dramatically from today’s levels. Avoiding longer-dated government and corporate debt and keeping to the very short end seems sensible. As would buying out-of-the-money, long-dated put options on long-dated debt.

Central banks have suppressed volatility and rates in debt markets for years. This is about to become much harder."

MY COMMENT

NO......I dont agree with the premise of this article in the slightest. AND.....NO......I do NOT anticipate inflation. I post this for discussion because I KNOW there are many that DO believe inflation is just round the corner......they have been predicting it for years. The FED has been screwing up the economy for decades chasing PHANTOM inflation.....that NEVER happens.

Why no inflation? First there will be NO pressure to drive wages UP. NONE. If anything the pressure will be for wages to be stagnant or actually dip. There will be massive numbers of people looking for work or to change jobs once the pandemic is over. In addition we are about to start back down the OLD ROAD of massive illegal immigration, massive legal importation of lower cost foreign white collar workers and massive importation of blue collar workers. We are about to start back down that OLD ROAD of GLOBALISM and semi-socialism.....the failed EU model. We just cant help ourselves.

We will import HIGH levels of jobs as manufacturing quickly ESCAPES from the country to locate in low wage and low cost third world countries. Asia and Mexico. This will be anti-inflationary.

We are also STILL in the early stages of jobs being eliminated in the hundreds of thousands due to technological change over in the economy and business. Without wage pressures there WILL BE NO INFLATION.

DOES that mean the general economy will be all ice cream and ponies? NO. The policies we are about to EMBRACE.....big time.....will lead to general economic stagnation. ESPECIALLY if those policies last for 8, or 12, or more years. The MODEL for where we are headed is the EU. A perfect example of failed economic policies combined with a GLOBALISTIC bureaucratic environment.

Does this mean bad news for stocks. Probably not. The general economy is disconnected from stock market results. The economic conditions that will make inflation IMPOSSIBLE will be big drivers of productivity in the business world.

MY TAKE....pretty good time for investors......economic stagnation......a continuation if not increase in the deflationary environment that has been the norm for the past 11 years. In other words......a REVIVAL of the economy that we lived in from 2008 to 2016......best case. We are about to put most of those policies back in place and the result will be the same. the REAL QUESTION is how bad will it get......and how much worse than during that time period will it get. WORST CASE......stagnation with the FED once again chasing non-existant inflation.

 

I do agree wit the view expressed in this "little" article. Of course......like everything on here.......anyone else is entitled to their own view....no need to agree with me to post here:

Earnings Reality Is Beating Expectations—by a Lot

https://www.fisherinvestments.com/e...ings-reality-is-beating-expectations-by-a-lot

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

"Q3 earnings are trouncing analysts’ estimates—a sign sentiment remains too pessimistic.

With 92% of S&P 500 companies reporting Q3 earnings, the results are not only much better than what analysts anticipated at midyear—during the lockdowns’ depths—but even better than expectations set as the world reopened somewhat in the fall. While mostly backward looking, the yawning gap between reality and expectations suggests stocks still have plenty of room to keep climbing the wall of worry.

Entering earnings season, analysts expected a bloodbath. But the results weren’t nearly as awful as expected. At their worst—halfway through 2020—analysts expected Q3 earnings to plunge -25.4% y/y and sales to drop -5.6%.[ii] As Q3 closed, they had revised those estimates up a smidge to -21.1% y/y and -3.6%, respectively.[iii] But now, with most results in, companies are smashing those initial projections. Q3 earnings are on track to fall just -7.1% y/y, with revenues only -1.6% below Q3 2019.[iv]

Better-than-expected results are widespread and historically above average. Of the companies that have reported so far, 84% surprised positively—a record high and well above the 73% five-year average.[v] Further, Q3 earnings have topped estimates by a whopping 19.4%—second only to Q2’s 23.1% and way above the 5.6% five-year average.[vi] In short, last quarter’s earnings reveal a big reality-expectations gap.

The latest earnings reports also debunk pundits’ claims that only narrow market segments are driving growth and returns. All 11 sectors are exceeding estimates—it isn’t just a handful of Internet behemoths beating expectations. Moreover, four sectors—Health Care, Staples, Tech and Communication Services—have grown earnings and revenue year-over-year in Q3. They comprise 60% of the S&P 500’s market value.[vii] Yes, these are COVID winners, but that doesn’t mean their strength is temporary. These sectors typify growth-oriented stocks, whose underlying drivers usually don’t depend as much on the economic cycle.

Of course, not all sectors are this strong. Energy and Industrials, namely, have dragged down Q3’s results, mitigating the biggest sectors’ gains. This isn’t exactly surprising, with lockdowns disproportionately affecting transportation and associated fuel demand. Energy earnings cratered -109.1% y/y in Q3 (slightly better than the -111.4% expected at quarter-end), while Industrials’ earnings almost halved -49.3% (versus the -61.5% expected in September).[viii] This was with double-digit revenue declines of -34.8% y/y and -15.2%, respectively.[ix] But this doesn’t tell the full story. Airlines fall under Industrials, and their earnings nosedived -313.0% y/y, contributing to about half of the S&P 500’s earnings decline.[x] Other groups within Industrials fared better, underscoring the importance of digging below the surface. For example, air freight and logistics companies’ earnings soared 27.2% y/y—an underappreciated sign of how burgeoning e-commerce doesn’t benefit certain famous online shopping giants alone.[xi]

With vaccines in the wing, some say growth leadership will fade in favor of value-oriented stocks, like within Energy, Industrials and Financials, but we think this is premature. Such economically sensitive sectors have lagged greatly this year—and over the last decade. However, after recent promising vaccine results, many suspect economically sensitive value stocks are set to lead with their month-to-date edge only the beginning. While possible, we don’t presently see this as probable. The interest rate environment doesn’t support Financials’ profits or a big credit boost to aid typically leveraged value firms. Energy is still dealing with a supply glut that doesn’t seem set to abate soon. Their recent outperformance looks like another sentiment-based countertrend to us. In our view, a prolonged leadership shift requires an underappreciated shift to fundamentals. Vaccine developments are noteworthy, but not underappreciated, and they don’t affect all fundamentals driving value.

Looking ahead, analysts are penciling in further earnings and sales improvements. Currently, they expect Q4 earnings to fall -10.8% y/y, but they anticipate revenues slipping only -0.2%.[xii] That seems pretty good to us, considering Q4 2019 was economic activity’s pre-COVID peak.[xiii] If revenues turn out to be just a rounding error below that, despite this quarter’s stalled reopenings and renewed shutdowns, we would take that as a good sign of the economy’s underlying strength. Sales’ rebound to near last year’s peak levels—albeit only for publicly traded companies—would be a great testament to Corporate America’s resilience after the record deep quarterly GDP contraction seen in Q2.

Stocks, though, are likely looking further into the future. For full-year 2021, analysts’ estimates call for a 22.1% y/y rise in earnings on 7.8% revenue growth.[xiv] Now, we aren’t saying this is some huge increase. It would be off a low 2020 base. If S&P 500 earnings rise 22.1% next year, they would be up just about 3% from 2019’s high.[xv] But we think it does help provide a general, bigger-picture guide for how stocks are fathoming a time in the next few years when COVID fades and lockdowns are a memory.

Past earnings don’t tell you where profits—or stocks—will head. But we think the story of how reality has related to expectations on the profit front explains a whole lot about how this young bull market has evolved."

MY COMMENT

AND......as usual......we know that the PROBABILITY is that the analysts will be WRONG.......to the negative side. In my opinion we probably have about a year before the DRAG of new regulations, new executive orders, and the reestablishment of government by bureaucracy takes hold. We will be under the lingering remnants of the old administration during that time......you cant turn a massive ocean liner (government)......on a dime. THAT is ALSO a positive for the economy and especially investors for the next 6-12 months.

 

YES.....Zukodany

People have done very well. YOU, me, TomB16 and many others on here at various times have hit all time highs in our portfolios during this pandemic. Collectables, art, etc, are selling at high prices and like hotcakes. Houses are skyrocketing in price. Just shows that the "general economy" is not connected to the performance many of these assets.......and......a long term fully invested all the time investor can make good money during very strange times.