The Long Term Investor

NICE......a strong open today. NOT a BOOMING open....but a really nice feel to the open today. I was AMAZED when I checked my accounts and saw SNOW.......UP....by $34 per share. YESTERDAY after the earnings at the close it was down by 9% and I expected it to be down today. When I checked today it was at $326.50.....the shares I bought on November 27 were bought at $310.......so still have a 5.05% GAIN. I expected those shares to be negative today. the INITIAL shares of SNOW that I bought a few months back were bought at $230 per share.

I will say......I really dont see any reason for those initial shares to be UP this much over such a short time with no real news or company events. BUT......who am I to argue with the market gods.

EDIT: After posting a few articles SNOW is NOW up by $41 per share.

 

HERE....is the ACTUAL news of the day:

Another 712,000 Americans filed for unemployment benefits last week
Economists expected 775,000 new claims

https://www.foxbusiness.com/economy/jobless-claims-coronavirus-pandemic-november-28

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

"The number of Americans applying for state unemployment benefits dropped last week, even as a surge in coronavirus cases and colder weather continue to threaten the labor market's recovery from the pandemic.

The latest jobless claims figures from the Labor Department, which cover the week ending Nov. 28, show that 712,000 workers sought aid last week, about three times the pre-crisis level. Still, it's well below the peak of nearly 7 million in late March, when states first implemented lockdown measures to curb the spread of COVID-19.

Economists surveyed by Refinitiv expected 775,000 new claims. It marked a decrease from the upwardly revised figure of 787,000 one week ago.

12 MILLION AMERICANS FACE LOSS OF UNEMPLOYMENT BENEFITS DAY AFTER CHRISTMAS

Close to 68 million Americans ‒ roughly 40% of the nation's labor force ‒ have applied for aid since the coronavirus lockdowns began in mid-March.

The number of people who are continuing to receive unemployment benefits fell for the 10th consecutive week to 5.52 million, a decline of about 569,000 from the previous week. The decline suggests that employers are calling their workers back.

Still, some of the drop in so-called continuing claims may represent workers who have used up the maximum number of payments available through state unemployment programs (typically about six months) and are now receiving benefits through a separate federal program that extends the aid by 13 weeks. Congress created the extra federal benefits earlier this year with the passage of the CARES Act.

But those key federal jobless aid programs created in March are slated to expire at the end of the year, leaving about 12 million workers with no income on Dec. 26, according to a new study published by the Century Foundation, a nonprofit think tank.

Job losses remain elevated and, as COVID-19 cases surge across the country, prompting state and local governments to implement new lockdown measures, economists are increasingly warning of a bleak winter.

“It would be very helpful and very important that there be additional fiscal support for the economy, really to get us through the winter,” Federal Reserve Chairman Jerome Powell told lawmakers this week. “I think we made a lot of progress faster than we expected, and now we have a big spike in COVID cases, and it may weigh on economic activity."

The latest claims figure came one day before the Labor Department's closely watched November jobs report, which is expected to show the economy added 469,000 jobs and the unemployment rate fell to 6.8%, according to Refinitiv economists."

MY COMMENT

YES.....I cant help it.....I HAVE to mention one of my favorite TARGETS......those mythical "economists surveyed". WRONG once again......to the negative side as usual. They have been wrong to the negative side of the numbers CONSTANTLY for the past four years. The eight years prior to that they were CONSTANTLY wrong to the positive side of the numbers, and always being revised LATER to be worse than expected. Of course, these sorts of numbers are INFECTED with politics. The more we allow politics to infect EVERYTHING the more the general public will DISTRUST everything. That is NOT a good thing in a free....capitalistic....country.

 

As an owner and BIG beneficiary of the TESLA stock BOOM over the past six months......I hate to post this little article. I ALSO hate to admit that MUSK is RIGHT:

Elon Musk warns employees Tesla's stock could 'get crushed like a soufflé under a sledgehammer'

https://www.cnn.com/2020/12/02/business/elon-musk-tesla-stock-price/index.html

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

"Tesla CEO Elon Musk is telling his employees they need to cut costs or they can kiss its lofty stock price goodbye.
Tesla (TSLA) shares have been among the best performers in 2020, rising nearly 600% through Tuesday trading, making it among the most valuable stocks in the country, worth more than any major automaker. After years of losses Tesla has now reported five straight quarters of positive net income.

But in an email to employees Musk acknowledged that Tesla's actual profit margin is fairly low, only about 1%, and that the stock price is due to investor expectations of future profits rather than recent results.
"If, at any point, they conclude that's not going to happen, our stock will immediately get crushed like a soufflé under a sledgehammer!" he wrote in the email, which was first reported by Electrek. Tesla did not respond to a request for comment about the email.

The email was primarily focused on the importance of finding even small cost savings in the car building process.
"This a tough Game of Pennies — requiring thousands of good ideas to improve part cost, a factory process or simply the design, while increasing quality and capabilities," Musk wrote. "A great idea would be one that saves $5, but the vast majority are 50 cents here or 20 cents there."

While Tesla has become the leader in electric cars, all the top automakers are making major pushes to build more electric vehicles. General Motors (GM) has announced plans to switch to nothing but electric vehicles, and expects 40% of the cars it sells to be electric within five years. Part of the incentive is that electric vehicles can be cheaper to build because they have fewer moving parts than gasoline powered vehicles.
In separate comments Tuesday, Musk repeated a statement he has made previously that the Tesla stock price is "too high."

"I even said the stock was too high. I mean what am I supposed to do," he said while rolling his eyes during an interview with Mathias Doepfner, CEO of technology and media company Axel Springer. Musk was responding to the fact that Tesla is worth more than five times as much as Volkswagen (VLKAF), the world's largest automaker in terms of sales.
Doepfner asked if Musk would consider using Tesla's lofty stock price to buy an established automaker and although Musk said he's not looking to do that, he wouldn't rule it out.

"We're definitely not going to launch a hostile takeover," he said. "If somebody said, 'Hey, we think it'd be a good idea to merge with Tesla,' we'd certainly have that conversation."
Musk's full interview with Doepfner was posted on YouTube."

MY COMMENT

As an owner of TESLA......for less than a year......who bought at about $1000 per share and NOW has a GAIN of about $1935 per share.......I MUST agree. I am NOT at the point.....yet......but at some time in the "future"........1-2 years....... I am going to have to evaluate SELLING some shares and taking my initial money off the table and leaving the GAIN money on the table. At that point I would.....obviously.....be playing totally with FREE MONEY.

As I said......I will "consider" this option. Not sure if I will do it or not. I ALSO believe there is NO RUSH to do so at this time. My medium term......2-4 years.....concern is whether or not TESLA can CONTINUE to differentiate themselves from all the other EV vehicles that are going to FLOOD the markets over the next 2-4 years.

At this time.....I will just kick the can down the road and watch.

 

I am NOT a CRAMER follower...BUT......DUH:

Pent-up demand will define the next leg of the bull run, Jim Cramer says

https://www.cnbc.com/2020/12/02/jim...d-to-define-the-next-leg-of-the-bull-run.html

MY COMMENT

OBVIOUS and in my opinion TOTALLY CORRECT. One of those times when everything will benefit. The DOWN SIDE....many investors will think they are AMAZING stock pickers and have investing genius. When.....the reality will be.....a hot market driving EVERYTHING up. The PRIMARY reason that I see stocks BOOMING over the next six months. COMPLIMENTS of the vaccines and the END of the pandemic.

 

EMMETT.......yes, you are a favorite of mine. Your comments are ALWAYS very good. PLUS...I watched all your films, LIKED them, and REALLY appreciate knowing something about you outside of this investing site. It makes you a REAL person.

"Wash each others hair"......are you assuming that either of us has any hair? Actually I do (have hair, not wash his)...but I can not speak for TomB16.

I like your somewhat sardonic and little bit twisted sense of humor. I see that in your films.....they all seem to lead up to a TWIST at the end.

 

And....since Emmett brought up the subject....HERE is a statement by TomB16 from another thread....talking about his purchase of TESLA stock:

"I ended up putting a substantial blob into a fairly new startup building electric cars in Fremont, California. When I mentioned that purchase on an Internet forum, there were quite a few people mocked it as a death wish, a few people were angry, and one person sent one of the most hostile PMs I've ever received."

I have seen this many times on investing sites. We are ALL guilty of this to some degree. At least....on this site.......I dont see much of this sort of behavior. As investors it is AMAZING how often we are CHALLENGED or THREATENED by how others invest and what they post. Or, plain old jealousy. We ALL tend to personalize our style of investing and our holdings. A DANGEROUS thing since it is ONE symptom of a closed mind.

The fact that I make money and am successful investing how I do.....DOES NOT.....mean that someone trading or doing some other form of investing will not....in theory....be successful too. IT is NOT a zero sum game. It is possible for different styles to be successful at the same time.

HOWEVER......there is STILL reality and probability. AND...there is still the academic research that proves certain investing ideas either DO or DO NOT work. ONE thing we do know works according to the research is.......LONG TERM, buy and hold, type investing. OBVIOUSLY "buy and hold" includes continued fundamental analysis based evaluation of your holdings and when a stock is no longer justified.....it is no longer justified.

The GREATEST weakness of most long term investors.....in my opinion....is the danger of getting emotionally involved with your holdings and never being able to sell. BUT......as an investing weakness......I would put being unable to sell as a LESSER EVIL on the scale of investing evils. To me the BIG EVILS are......active trading and market timing. BUT....that is just me and my BIAS.

ANOTHER big issue I see with some long term investors is the MANIA to find some obscure company to buy while IGNORING the successful big names that are right in front of your face. I dont have to reinvent the wheel. If I SEE success right in front of me.....I am very CONTENT to simply hitch myself to it and go along for the ride. THIS is why my holdings tend to be the BIG CAP, DOMINANT, ICONIC, proven leaders.

 

MODERATE.....but nice little gain today....I will take it. ALSO BEAT the SP500 by .82%. So a....good/good.....day.

My gain today came compliments of four stocks.....NKE, HON, SNOW, and TSLA. the other eight holdings were red today.

SNOW ended up kicking ass....up by $47.20. COOL.

 

We NEED a nice day today to end the week....someone buy something.

Kaloyan.....perhaps I am misjudging you....but....I have an issue when someone comes on this site and talks about wanting to educate everyone in a better way and posts a link that takes you to a site where all the "education" is NOT free but is being SOLD as a product.

If you REALLY want to help.....why not post all that......"for sale"...... content on THIS site....."FREE". Not some TEASER blurbs.....but the full content of the site.......FREE....NO CHARGE.

 

TODAY......is kind of like.....yesterday.....when I look at my portfolio. A few holdings contributing to a modest gain....so far.

I want to mention SNOW. It is up again today...as I type this about $22 per share. It was up about $47 per share yesterday. YES....I own this stock so I LIKE the gains....BUT........I want to emphasize:

This is a speculative stock at this time in their very young life as a public company. The large moves in share price recently dont seem to have a lot of connection to anything that I can see. I ASSUME the stock is simply trading on MOMENTUM and HYPE......or......is perhaps a darling on Robinhood or other trading sites. I am NOT trying to discourage anyone from buying the stock.....BUT.....BE CAREFUL. BE REASONABLE........and.......realize that any money you put into this stock should be RISK ORIENTED and SPECULATIVE money.

 

"Just have to keep in mind the end goal and stay patient and focused while only investing funds I can afford to lose."

WORDS TO LIVE BY....for every investor....Ragin Cajun. Making money is GREAT...but....I believe it is BEST to do so in a way that involves the least possible risk. That is one reason that I focus on the BIG CAP world of companies that are PROVEN. I ALSO believe that the type of companies that I invest in will be more STABLE in a BEAR MARKET. YES, they will go down in a bear market along with most everything else......but my experience has been that they will not go down as much and will recover sooner.

 

I think this "little" article is interesting. I have no insight into this event....but it is a HUGE trade:

Mystery Surrounds $7 Billion Outflow From Vanguard S&P 500 Fund

https://finance.yahoo.com/news/mystery-surrounds-7-billion-outflow-140153460.html

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

"A record outflow from one of Vanguard Group’s biggest exchange-traded funds is stirring speculation over who was behind it and why.

More than $7 billion was pulled from the $172 billion Vanguard S&P 500 ETF (VOO) on a single day this week, according to data compiled by Bloomberg, about 4% of the fund’s assets. But trading volumes were below the one-year average and there were no obvious outsized transactions, while the U.S. equity benchmark rose on the day -- making a mass exodus less appealing.

It’s all leading to a theory that a major holder of the fund executed a large over-the-counter trade.

“We think the redemption didn’t show up because it was an outsized primary market sale,” said Eric Balchunas, a Bloomberg Intelligence ETF analyst. Rather than shopping for a tie at a store, “this is like someone going straight to the tiemaker, and that’s rare since most ETF usage is smaller investors,” he said.

When cash flows into an ETF, a market maker known as an authorized participant gives the issuer more of the fund’s underlying assets in exchange for new shares to meet demand. When money is being taken out, the process works in reverse.

Ordinarily an investor buys or sells their shares on an exchange. But instead of selling on the open market, they could hand them directly to an AP, who can redeem them with the issuer in return for the underlying assets. Those assets can then be sold down by the AP or passed on to the investor to hold or sell.

“Trading activity and flows are not actually systemically tied together,” said Dave Nadig, chief investment officer and director of research at ETF Flows, a research and data provider. Since the huge withdrawal didn’t show up on the tape, it suggests an institution collected a position worth $7 billion but preferred to have the underlying assets, he said.

It’s not possible to know for certain who pulled out the cash. According to the latest available data, Bank of America Corp. is the largest holder in the fund, with shares worth about $14 billion. Raymond James Financial Inc. is next with about $5.2 billion, followed by Parametric Portfolio Associates with $4.9 billion.

Spokespeople for Vanguard and Parametric declined to comment on the flows, while Bank of America and Raymond James didn’t immediately respond to requests for comment.

The scale of the withdrawal indicates that VOO is now being used by large institutions in addition to being a favorite with retail investors, Balchunas said. The fund is cheaper than its main competitor, the SPDR S&P 500 ETF Trust (SPY). It has an 0.03% expense ratio, compared with 0.095% for SPY.

VOO has attracted $19.5 billion of inflows this year, second only to the Vanguard Total Stock Market ETF (VTI), which has lured $27.8 billion. SPY is leading outflows after seeing $26 billion pulled from the fund.

“This really does speak to the usage of ETFs as portfolio tools,” Balchunas said. “VOO is now being used by the big boys.”"

MY COMMENT:

Is this tied to election betting sites? Some entity that is trying to avoid the TESLA entry into the SP500? Who knows.....a mystery that will probably NOT be solved. It is interesting that the BIG BOYS are now using this ETF as a vehicle for their stock market machinations.

TODAY.....looking good, a strong day......as usual we will need to avoid the mid day and end of day FADES. We need the action to broaden out a little bit and involve more of the big holdings.....a few have turned positive for the day.

I CONTINUE to see the next six months as one of the BEST forward looking market time periods in a long, long, time. I see ZERO issues on the horizon over that time period other than normal BLACK SWAN risk which is ALWAYS present in the background. I guess earnings could be an issue for the first and second quarters with the lock-down MANIA we are currently seeing in some states.....however.....this is more of an issue for small business since just about EVERY medium and large company seems to be operating with IMPUNITY.