The Long Term Investor

Rustic1.....welcome.....if you are new.....if not....welcome anyway. SO....are you now a buy and hold investor? Or are you still trading? If you are now trying buy and hold.....or as I prefer....long term investing......how long have you been a convert and how have you been doing? It is never too late to come into the light.

You will find many fellow long term investors on this thread. And if you enjoy trading you can always do what EMMETT does and have 90% of your money in your long term portfolio and trade with a small percentage for enjoyment and the mental challenge....5% or 10%.

 

Hi Dax.

To me that question is personal preference. You might have a stock that you think is important and want to try to get a position up to speed before the others. Or...you might want to try to fill all positions equally. Of you might do it by putting the money into the position that you think is the best value each week. Or...the position you think has the best current growth prospect, etc, etc, etc.

Me personally.......if I was averaging in like you are......weekly......I would probably just put each weeks money into all the positions across the board.......and try to grow my portfolio as a whole.

Are you able to buy fractional shares in your account? I assume so. That would make it easy to just put an equal amount of money into each holding every week.

 

Good for you Rustic1. Nothing you can do about the past. Main thing is to focus.....as you are.....on where you go from here forward.

 

Yes....Trahn. In the end I am afraid they will be eaten alive by the shorts.....the "professionals". I fear that the majority of people in the chat rooms and other social sites are being.........PERHAPS FRONT RUN....by instigators on the sites.......but.....that is simply my personal opinion and speculation.......NOT any sort of allegation.

BUT....perhaps we are seeing the beginning of the end of......professional trader dominance. The beginning of TRUE......crowd investing......in numbers so large and so disconnected from the usual sources of Wall Street power....that they are a force that can overwhelm the professional hedge funds and big banks and other institutional trading platforms. There certainly seems to be plenty of FEAR. In one of the articles I posted the......."professional"........was whining for the SEC to shut them down. It certainly seems like they FEAR the young bucks.

ALL I know is.....I am glad I am a long term investor.......and....not subject to this sort of drama and short term exposure. It is interesting to.......speculate......as I am doing in this post.........but.....that is the extent of it for me....simply speculative opinion based discussion. I dont care to be a gambler on either the long side or short side of this.....STUFF.

Both the long side and the short side in this game are taking a HUGE RISK. What gives the professionals the edge is their unlimited resources and ability to influence and use the media to push their narratives.

Interestingly....I see that after hours GameStop is UP by another $12 per share....or......15.73%.

 

Speaking of gambling.......in my opinion the RISE of the SPAC lately is simply more insanity. Why in the world would I pay some hedge fund or other entity up to 20% off the top in fees for the......privileged....to hand them my money WITH NO IDEA what they were going to use my money for.

HERE is some info on this sort of financial vehicle for those that have not heard of a SPAC:

Special Purpose Acquisition Company (SPAC)

https://www.investopedia.com/terms/s/spac.asp

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

"What Is a Special Purpose Acquisition Company (SPAC)?
A special purpose acquisition company (SPAC) is a company with no commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. Also known as "blank check companies," SPACs have been around for decades. In recent years, they've become more popular, attracting big-name underwriters and investors and raising a record amount of IPO money in 2019. In 2020, as of the beginning of August, more than 50 SPACs have been formed in the U.S. which have raised some $21.5 billion.

Key Takeaways

• A special purpose acquisition company is formed to raise money through an initial public offering to buy another company.
• At the time of their IPOs, SPACs have no existing business operations or even stated targets for acquisition.
• Investors in SPACs can range from well-known private equity funds to the general public.
• SPACs have two years to complete an acquisition or they must return their funds to investors.

How a SPAC Works
SPACs are generally formed by investors, or sponsors, with expertise in a particular industry or business sector, with the intention of pursuing deals in that area. In creating a SPAC, the founders sometimes have at least one acquisition target in mind, but they don't identify that target to avoid extensive disclosures during the IPO process. (This is why they are called "blank check companies." IPO investors have no idea what company they ultimately will be investing in.) SPACs seek underwriters and institutional investors before offering shares to the public.

The money SPACs raise in an IPO is placed in an interest-bearing trust account. These funds cannot be disbursed except to complete an acquisition or to return the money to investors if the SPAC is liquidated. A SPAC generally has two years to complete a deal or face liquidation. In some cases, some of the interest earned from the trust can be used as the SPAC's working capital. After an acquisition, a SPAC is usually listed on one of the major stock exchanges.

Advantages of a SPAC
Selling to a SPAC can be an attractive option for the owners of a smaller company, which are often private equity funds. First, selling to a SPAC can add up to 20% to the sale price compared to a typical private equity deal. Being acquired by a SPAC can also offer business owners what is essentially a faster IPO process under the guidance of an experienced partner, with less worry about the swings in broader market sentiment.

SPACs Make a Comeback
SPACs have become more common in recent years, with their IPO fundraising hitting a record $13.6 billion in 2019—more than four times the $3.2 billion they raised in 2016. They have also attracted big-name underwriters such as Goldman Sachs, Credit Suisse, and Deutsche Bank, as well as retired or semi-retired senior executives looking for a shorter-term opportunity.

Examples of High-Profile SPAC Deals
One of the most high-profile recent deals involving special purpose acquisition companies involved Richard Branson's Virgin Galactic. Venture capitalist Chamath Palihapitiya's SPAC Social Capital Hedosophia Holdings bought a 49% stake in Virgin Galactic for $800 million before listing the company in 2019."

MY COMMENT

There was mention of these....."blank check"......investment pools on Varney this morning. That tells me they are becoming more mainstream. I have been hearing more and more about them over the past year or so.

In my opinion......a very poor investment. Why in the world would I give someone my money with NO IDEA what they are going to use that money to buy. I can buy the GREATEST PUBLIC companies in the world....with actual financials......why would I want to GAMBLE my money on some future UNKNOWN acquisition. AND.....on top of that pay 15% or 20% or more of my money right off the top in fees. My opinion.......INVESTOR INSANITY.

For those that want to get into a little more detail....here is the SEC......yes the US Securities And Exchange Comission.....Investor Bulletin on SPAC's:

https://www.sec.gov/oiea/investor-a...t-you-need-know-about-spacs-investor-bulletin

In my opinion....this portion of the Bulletin is ESPECIALLY RELEVANT:

"The interests of the sponsor. SPAC sponsors generally purchase equity in the SPAC at more favorable terms than investors in the IPO or subsequent investors on the open market. As a result, investors should be aware that although most of the SPAC’s capital has been provided by IPO investors, the sponsors and potentially other initial investors will benefit more than investors from the SPAC’s completion of an initial business combination and may have an incentive to complete a transaction on terms that may be less favorable to you.

In addition, the SPAC may require additional financings to fund the initial business combination, and those financings often involve the sponsors. As a result, the interests of the sponsors may further diverge from your interests. For example, additional funding from the sponsors may dilute your interest in the combined company or may be provided in the form of a loan or security that has different rights from your investments.

To learn more about a sponsor’s interests in a SPAC, you should review the “Principal Stockholders” and “Certain Relationships and Related Party Transactions” sections of a SPAC’s IPO prospectus. You can learn more about an initial business combination and the sponsor’s interest in it from the proxy statement, information statement or tender offer statement."

 

OK.....good open today........as we are into two critical earnings days. Microsoft, Tesla, Apple.....and many more companies over the next few days.

Be careful out there......a LOT of CRAZY STUFF is going on in the markets lately. At least being a very long term investor is protection against the MANIA that we are seeing in the markets lately. The STUFF we have been seeing lately in the markets should make REALISTIC INVESTORS very cautious. That does NOT mean moving to the sidelines.....but CAREFULLY evaluating your portfolio risk and risk tolerance......and......NOT getting caught up in the MANIA. STICK to your long term investing plan.

 

ACTUALLY.....the above post reminds me of the IMPORTANCE of having an INVESTMENT PLAN. My investment plan is actually laid out in my portfolio model and my investment goals that I often post on here. It also incorporates my investing focus on long term investing, being fully invested for the long term....all the time.....and not trying to market time, or trade.

The best investors REFUSE to get caught up in the FAD of the moment.

 

Short term......the professionals with their shorts.....are taking it in the shorts. They got BRUTALIZED today. I am SURE the shorts have now lost over $4BILLION so far. Actually:

"Short-seller net-of-financing mark-to-market losses in Gamestop have reached an incredible $5 billion."

GameStop shares close 92% higher, market cap now above $10B

https://finance.yahoo.com/news/game...gher-market-cap-now-above-10-b-215836692.html

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

"GameStop (GME) shares gained another 92% today to close at a record $147.98 a piece in another clash filled session between reddit WallStreetBets and short sellers. The company’s market cap is now over $10 billion.

Shares were up more than 50% in after-hours following a tweet from Tesla (TSLA) CEO Elon Musk, who took notice of the stock’s rise.

The stock was temporarily halted for trading during Tuesday’s trading session, as was the case on Monday and last Friday.

Earlier on Tuesday, billionaire Chamath Palihapitiya tweeted he bought $115 call options in GameStop which expire in February, betting that the stock will go higher.

The crush on short sellers has been escalated since last week when shares spiked more than 100%. Wall Street veterans say they’ve never seen anything quite like this. The clash between short-sellers and Reddit WallStreetBets (WSB) caused a massive short squeeze on the stock. A short squeeze forces those who bet against the shares to buy in order to forestall bigger losses, sending the stock price much higher.

The story behind last week’s massive spike involves a response to short seller Citron Research’s recent prediction that shares of the video game retailer will drop to $20 a piece. Last Tuesday Citron’s managing partner Andrew Left announced he would list five reasons why the shares will plunge.

Reddit users dubbed WallStreetBets (WSB), a forum on the message board platform, pushed back on Left’s call and apparently helped create a massive short squeeze on the stock.

“I’ve never seen such an exchange of ideas of people so angry about someone joining the other side of a trade,” said Left in a YouTube clip last Thursday. He went on to list the reasons why he thinks the stock will go down to $20/share.

The reaction from Reddit users and other retail investors sent the stock up more than 50% last Friday as they celebrated the stock’s squeeze to record highs.

Also on Friday, Left said he would stop commenting on the stock.

“We are investors who put safety and family first, and when we believe this has been compromised, it is our duty to walk away from a stock,” Left wrote in a letter posted on Twitter.

The stock had been trending higher prior to last week. On January 12, shares were trading around $20/each after GameStop announced Ryan Cohen was joining the board of directors. Cohen is an activist investor and co-founder of pet retailer Chewy Inc (CHWY).

In July of 2020, the stock was trading at around $4 a share."

MY COMMENT

As T0rm3nted implies above......I do believe that time is on the side of the shorts......the "professionals". BUT....this is so crazy....who knows. The YOUNG BUCKS....may just continue to kick their butts......and.....squeeze them till they cry uncle. One of the craziest things I have seen in the markets in a very long time.

 

HERE....are the Microsoft earnings:

Microsoft reports 17% revenue growth as cloud business accelerates

https://www.cnbc.com/2021/01/26/microsoft-msft-earnings-q2-2021.html

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

"Key Points

• Azure revenue growth accelerated and came in above analysts’ expectations for the quarter.
• Sales of new Xbox consoles didn’t hurt the margin of the Windows business as much as analysts had expected.
• Revenue guidance for the company quarter beat expectations.

Microsoft stock rose as much as 6% in extended trading on Tuesday after the company reported fiscal second-quarter earnings Azure cloud revenue growth and quarterly revenue guidance that exceeded analysts’ expectations.

Here’s how the company did:

• Earnings: $2.03 per share, adjusted, vs. $1.64 per share as expected by analysts, according to Refinitiv.
• Revenue: $43.08 billion, vs. $40.18 billion as expected by analysts, according to Refinitiv.

Microsoft revenue grew 17% on an annualized basis, up from 12% growth in the prior quarter, according to a statement.

With respect to guidance, Microsoft sees $40.35 billion to $41.25 billion in fiscal third-quarter revenue. The middle of the range, at $40.8 billion, implies 16.5% growth and is higher than the $38.70 billion consensus among analysts polled by Refinitiv.

In the fiscal second quarter, revenue from Microsoft’s Intelligent Cloud business segment totaled $14.60 billion. The segment includes the Azure public cloud, server products such as Windows Server, GitHub and enterprise services. Revenue was up 23% year over year and above the $13.77 billion consensus among analysts polled by FactSet.

Microsoft said Azure revenue grew 50%. Analysts had expected around 42% growth. Microsoft doesn’t disclose Azure revenue in dollars.

The More Personal Computing segment, containing Windows, gaming, devices and search advertising, generated $15.12 billion in revenue, which was up 14% and came in higher than the $13.47 billion FactSet consensus estimate. Technology industry research company Gartner estimated that PC shipments, excluding Chromebooks, grew 10.7% in the quarter.

The segment’s operating margin narrowed to 34.6% from 40% following the introduction of two Xbox video-game consoles in November. Analysts polled by FactSet had expected a 26% margin from the segment. The company now has 18 million people subscribing to the Xbox Game Pass service for accessing dozens of games, up from 15 million in September.

The Productivity and Business Processes segment, including Office, Dynamics and LinkedIn, produced $13.35 billion in revenue, which was up 13% and more than the $12.89 billion consensus.



In the quarter Microsoft released $500 Xbox Series X and $300 Series S consoles, along with a small version of its Surface Laptop PC called the Surface Laptop Go. The company also said some of its source code had been accessed after the company had detected malicious SolarWinds software in its environment.

Amy Hood, Microsoft’s finance chief, said during a conference call with analysts that she expects double-digit revenue growth and “healthy operating-margin expansion” for the full fiscal year, which ends on June 30, even after a change in the useful life of servers and savings related to the coronavirus.

On Tuesday Microsoft stock closed at $232.33 per share, posting a new all-time high for the first time since September. Excluding the after-hours move, Microsoft shares are up around 5% since the start of 2021, while the S&P 500 index is up about 3%."

MY COMMENT

BLOW OUT numbers. As a shareholder I am very satisfied. Management at this company is FULLY back on track and pushing hard. GREAT company.......again.

 

I was.....very slightly....in the RED today. At least I got a beat of the SP500 by .14%. I am looking forward to see how MSFT does tomorrow. They are up nicely after hours.....but...the typical situation lately.....even with a great earnings beat would call for them to be down tomorrow.

We will see TESLA and APPLE report tomorrow. ANOTHER exciting day for long term investors. I imagine another exciting day for the WALL STREET short sellers with GameStop.....and the rest of the PETER PAN stocks that refuse to play the WALL STREET game. Those young bucks....driving these stocks up......wild and crazy guys.