The Long Term Investor

Not a bad open at the present today. I have not looked....but....I am not too sure the market averages are going to translate well to my holdings today....time will tell.

NOT TO BE NEGATIVE.....here is a PRIMARY issue for the economy going forward:

November 30, 2020

Small business confidence drops to all-time low after Biden election

https://www.cnbc.com/2020/11/30/sma...e-hits-all-time-low-after-biden-election.html

AND....now today....I see this data. It is interesting that this information seems to be EXTREMELY difficult to find anywhere online. NO....not a conspiracy theory.

January 12, 2021

US small business sentiment sinks in December - NFIB

https://www.sharecast.com/news/inte...timent-sinks-in-december---nfib--7775133.html

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

"Small business sentiment in the US unexpectedly deteriorated in December, according to the latest survey from the National Federation of Independent Business.

The small business optimism index fell to 95.9 from 101.4 in November, missing expectations for a reading of 100.3 and marking the lowest reading since May.

NFIB chief economist Bill Dunkelberg said: "Small businesses are concerned about potential new economic policy in the new administration and the increased spread of Covid-19 that is causing renewed government-mandated business closures across the nation."

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The plunge in the NFIB index in the spring was due to the initial Covid shock, but the December index also likely has been pushed down by the defeat of President Trump; indeed, that might be the key factor behind the fall.

"NFIB members were thrilled by the Mr. Trump’s victory in 2016, and the headline index jumped by 10.9 points in November and December. The drop in the past two months is 8.1 points, so it’s not hard to regard it as the removal of much, though not all, of the Trump premium. The details make for grim reading, with sharp falls in the volatile expectations components - economy, sales, and earnings - accompanied by declines in all the key labor market numbers and four-point drop in capex plans, to just 22.""

MY COMMENT

I dont expect this to have a HUGE impact on investors.....since most investors are NOT investing in small business. I do anticipate that this will impact employment numbers going forward. The types of stimulus.....BIG and BROAD and INFRASTRUCTURE......that we are likely to see will NOT benefit small business at all. The GOOD NEWS......this makes any chance of INFLATION less likely. It is likely....with these attitudes.......that jobs will NOT be added by these businesses in the near term. Small business is much more sensitive to tax and regulation increases....large businesses have political and economic power that small owners do not have.....so the little guys are often just left behind. As a RESULT.....I dont see much chance for an out of control economy of the sort that would fan the flames of INFLATION.

The OTHER good news is.........the usual......disconnect from the general economy and stock market results. People....investors.....that are focused on the CREAM OF THE CROP........should do well. Of course for me......"doing well".....can happen in two ways:

1. The markets go UP and money is made.
or
2. The markets DROP......and.......being invested in good quality companies allows the investor to weather the storm BETTER than the general averages creating a "MONEY IN THE BANK" situation when the inevitable UPTURN comes......whether it is months or even years.

Situation number two above.....is where the POWER of dividend reinvesting comes into play BIG TIME. This is why I ALLAYS reinvest dividends and capital gains.....that money invested during the down times is LEVERAGE when the markets turn back positive after a fall.

 

Appreciate the kind words.

NOW...to get back to what will ACTUALLY matter to the markets this week and over the coming months.......here is the earnings calendar for this week. It will be nice to have the........DISTRACTION.......of earnings to.........HOPEFULLY........get the financial media reporting and discussing what will........ACTUALLY.......matter to investors going forward.

EARNINGS CALENDAR 2021

https://markets.businessinsider.com/earnings-calendar

The BIG day will be Friday....with reports from:

JP Morgan Chase
Wells Fargo
Citigroup

I am ANTICIPATING a very healthy and positive quarterly earnings season. After the business environment of the past 10 months.....earnings.....should be TEED UP for the next TWO to SIX quarters.

 

AMAZING.....I have NEVER seen a real estate market like the current market in my area. EVERY listed home in our "little" 3000 home neighborhood is....PENDING. There are ZERO....homes for sale. This area has been extremely strong for the past couple of years.....and....2020 EXCEPTIONALLY strong. ACTUALLY....this is probably bad news for realtors and others that are in real estate related business......there is nothing to sell and no way to make money.

It will be interesting to see what happens as we get into February and March.....this winter there has been ABSOLUTELY no drop off in the MANIA.

 

The story continues.....

Tesla takes another step on road to launch in India

https://www.reuters.com/article/us-...step-on-road-to-launch-in-india-idUSKBN29H23U

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

NEW DELHI (Reuters) - Tesla Inc has moved a step closer to its launch in India later this year by registering a company in the country, a regulatory filing showed on Tuesday.

Tesla Motors India and Energy Private Limited was incorporated on Jan. 8 with its registered office in the southern city of Bengaluru, a hub for several global technology companies.

The filing shows the Indian unit has three directors including David Feinstein, who is currently a senior executive at Tesla, according to his LinkedIn profile.

India’s transport minister Nitin Gadkari told a local newspaper in December the U.S. electric carmaker would start with sales and then might look at assembly and manufacturing.

Tesla chief executive Elon Musk has tweeted several times in recent years, including as recently as October 2020, about an impending foray into India.

The move comes as Indian Prime Minister Narendra Modi is promoting the production and use of electric vehicles to reduce the country’s oil dependence and cut down on pollution.

But efforts have been stymied by a lack of investment in manufacturing and infrastructure such as charging stations.

To boost investment, India plans to offer $4.6 billion in incentives to companies setting up advanced battery manufacturing facilities, according to a government proposal seen by Reuters.

MY COMMENT

Good news for shareholders. This is the first concrete step to position TESLA in India. This will give them a strong presence in India as well as solidify their market in China. Between the two countries potentially a market of 2.8 BILLION people. TOTALLY dwarfs the markets in the USA, North and South America and the EU.

 

Well.....a green day today. AND....I managed to get a small beat on the SP500 by .12%.

Last week we started out with a RED day on Monday and than GREEN across the board for the rest of the week. Lets hope that we follow that pattern this week.

BUT.....if not......it is ONLY a week....in the scheme of things not particularly relevant to the long term. No doubt as we move forward more HEAVILY into earnings......they will come to dominate the market action. Next week the inauguration will be over and that is another good thing to get the markets FOCUSED back where they should be........on earnings and business.

I would guess that most people are tired of the 24/7 politics.....I certainly am. That is one PLEASURE with this board.....the lack of political BICKERING.

 

WOW......I just got a message right after the above post was made....my wife and I are scheduled for COVID vaccine on this Thursday. NICE.......perfect end to a good day.

Finding the vaccine at any provider has been impossible here in our city. I have been watching the Public Health web site for them to put up a vaccine registration link. It just appeared about 45 minutes ago and I jumped on it.....got us registered.....and we are all set for the first shot on this Thursday.

 

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 55% of the total portfolio and the fund side at about 45% 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 12 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
Honeywell
Nike
Microsoft
Proctor & Gamble
Tesla
Nvidia
Snow (100 shares, a rare, long term, speculative holding)

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. (71). 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 twelve 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."

 

Well that is a real BUMMER Jwalker. I hope all around you are fine and that you dont have any other issues than the mild cold symptoms. I dont know anyone IRL that has gotten covid.

Both of my kids and their spouses have now gotten the vaccine....even though they are younger they fall into certain categories that qualified. My one child following the vaccine had fever, chills, headache, a sore arm for 4 days and swollen lips. BUT...did not get a severe enough reaction to have to go to the hospital.

Autopilot is a good thing when it comes to investing.....especially for younger people that are busy with work, family, and kids. Get well and be safe.

 

Hello 4revR - Taken

I am sure there are others on here that will have some good info for you. I dont follow any of them. My GUT reaction would be to look at Boeing instead of the actual airlines.....although I imagine that ALL the airline stocks are very depressed from their normal pre-covid levels......but.....I have not looked at them.

For me....personally....they ALL fall into the category of stocks that I would NEVER buy. I have a list of industries that I just always avoid.....based on many many decades of investing....the are:

Insurance and financial companies
Banks
Auto companies and airlines
Drug companies
Oil companies

I dont like companies that are subject to "whims" outside their business and bounce up and down depending on interest rates, economic conditions, government regulation, etc, etc. like these sorts of companies seem to do. I have owned CHEVRON many times in the past....but their performance always dissapoints........since the stock is so sensitive to outside factors.......world conditions and regulation and new laws, etc, etc..... outside their actual business. I do think they are the best of the oil companies but will never buy them. I have also owned Exxon in the DISTANT past a number of times.

Same with banks....they bounce up and down like a yo-yo due to interest rates and government actions, etc, etc. Auto makers.....just a disaster....constantly up and down, in and out of favor, etc. I have owned Boeing in the past. These sorts of industries just seem to ALWAYS disappoint me and I end up selling them....often after years of holding on and waiting...always waiting.

Same......of course....with the drug companies. The ONLY semi-drug company that I have owned in the past 20 years is JNJ which I sold last year.....for poor performance. LONG AGO.....20-40 years ago....I used to own one or two of the big drug companies that EVERYONE seemed to recommend I gave up on them as long term investments long, long, ago.

So now......having never been satisfied with any of these sorts of companies......I NEVER consider or even look at them. They are my list of businesses that I will NEVER invest in.

 

Zukodany.....I would BLAME it on those NASTY comic books if I was you. They were the gateway to stock trading.....first you start trading and selling comic books.....than......before you know it you are moving on to the hard core stuff.....stock trading. My mom always warned me about those comic books. (Actually she encouraged me to read them......she tricked me....knowing that anything that caused a kid to practice reading was a good thing)

HAVE you ever seen the commercial.....THIS is your brain......THIS is your brain on drugs......AND, GASP.....the final step they never show you because it is TOO SHOCKING........THIS IS YOUR BRAIN ON COMIC BOOKS. SAME with those baseball trading cards......a gateway to GAMBLING.

 

BOOM......another solid day.....in the green of course.......like most everyone today. AND....another beat of the SP500 by .22%.

It was so nice having to do a little errand today that involved about 300 miles of driving........no news....no politics.....no incessant blather by media mavens. SO NICE and relaxing. Just come home about 4:00 and find that the markets did their job and I was making money while driving and IGNORING EVERYTHING. AHHHHH......the power of long term investing in action.

 

DEFINITELY.....sarcasm. BUT...for some reason typing that reminded me of some of the ways that my mom would outsmart us when we were kids.

My sister would throw a fit if I did not have to go to bed at the same time as her. She was younger. She found out when she was 51 years old......from my mom........that my mom would put us to bed at the same time.......but would let me have my light on and read comics in bed for 45 minutes. My sister mentioned this just a few weeks ago.....she is STILL pissed off about me getting to stay up later.

She would give us breakfast milkshakes about three times a week. We REFUSED to eat eggs for our entire childhood....although we eat them now. The milkshakes were milk, chocolate....thick and frothy. We found out as adults that she was putting an egg and various other things in there........and.......tricking us into eating healthy.

Same with my parents allowing me to have a subscription to MAD MAGAZINE in the late 1950's......starting in about 5th grade. Probably SHOCKING at the time. Once again they were tricking me to read, read, read. At the same time they were giving me lessons in politics, society, culture, news, etc, etc, since the Mad Magazines......back in that time.....were FULL of satire about current events, society, international events and politics.

She was a pretty smart cookie....valedictorian of her high school class and one of a few women in her college for the time.......1941. She was also a MATH WHIZ. She was not allowed by the college to major in math. She had to major in Home Economics like the other girls. So she majored in Nutrition and Science under the Home Economics department.

At least she was able to use her math ability to figure out investing at a time when......NO ONE.....was investing except for a very few people....certainly not many housewives. Thinking about it......I guess she manipulated me into learning about investing at a very young age by playing on the natural greed and inquisitiveness toward money and finances that ALL kids have........if it is encouraged in an appropriate way.

As a result......we strongly encouraged our kids to learn about money and investing....in an age appropriate way. I play with a great BASS PLAYER that has toured with many NATIONAL ARTISTS. We were driving back from a rehearsal the other day and talking about something or other.......when he.......WISTFULLY......mentioned that he never learned about money when he was young. SO IMPORTANT....to teach your kids. (By the way......I do NOT talk investing or money with any of the people I am around in the music world)