The Long Term Investor

I like this little article for the weekend. I find it very IRONIC.

The Tactics People Are Using to Get Their Money Out of China
Finding ways around the rules is something of a national pastime.

https://www.bloomberg.com/news/arti...ate-earnings-set-for-biggest-jump-in-a-decade

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

"There’s barely a global asset that isn’t influenced by Chinese money, from the latest hot Hong Kong public offering to luxury apartments in Vancouver.

Technically though, most of these purchases are the result of loopholes exploited by Chinese citizens — or in some cases outright law-breaking. China’s capital control rules explicitly forbid citizens from using any of their $50,000 annual foreign exchange quota to directly purchase offshore property or securities, although indirect investment via some channels is permitted. There’s an official program for trading Hong Kong stocks, for instance, which crucially doesn’t include IPOs.

Depending on the severity of the breach and the amount of money involved, potential sanctions range from being denied future quotas to criminal conviction.

Despite the risks, finding a way around the regulations is something of a national pastime. For ordinary middle-class families exploiting loopholes is all about making money, while for the rich — spooked by China’s crackdown on Alibaba Group Holding Ltd. — it’s about protecting fortunes.

As the Chinese authorities periodically crack down on common techniques, exactly how funds are moved changes over time. Right now, it’s all about peer-to-peer and cryptocurrencies rather than cash in a suitcase.

“It’s got a lot harder than before, but people are still finding a way,” said Peter Cai, project director of Australia-China relations at the Lowy Institute. “The risks are manageable for most people because the rules haven’t been fully enforced by the Chinese authorities.”

Details are based on interviews with people who moved money offshore and those familiar with the practice, who declined to be quoted publicly or by full name due to the sensitivity of the topic.

1. Offshore Basics
A prerequisite to spending money abroad is an offshore bank account. This part is legal, if sometimes tricky.

Chinese banks set a high bar for opening a Hong Kong bank account onshore: China Minsheng Banking Corp., for example, asks its clients to deposit 300,000 yuan ($46,476) for three months. And Chinese banks tend to be stricter about checking what quota money is used for.

Those who spend significant time overseas — for example attending university — can qualify for accounts while out of the country. For those without that connection, players like Standard International Bank offer U.S. accounts opened online with no asset requirements. The drawback? The transaction costs for shifting money out are higher than using a Hong Kong bank account, said Zhu Yunpeng, head of securities and futures brokerage department at TF International Securities Group Ltd.

Once you have an offshore account, you can then wire in money up to your quota limit.

To buy into the latest hot Hong Kong public offering, it’s then just a matter of moving money into a brokerage account. Each individual step is legal, but taken together as a chain individuals are breaching their pledge on what they intend to use their forex for. Though that’s not putting people off — at one brokerage, mainland customers have driven a 10-fold surge in new account openings this year.

“Most of the people moving money outside the borders are to pursue higher investment returns,” said Hao Hong, chief strategist of Bocom International, highlighting in particular the rush to get in on overseas IPOs of superstar technology firms.

The risks: Chinese regulators have so far turned a blind eye to such practices and the forex regulator is mulling whether residents should be allowed to buy overseas stocks directly. The State Administration of Foreign Exchange didn’t immediately respond to a faxed request for comment. Still, if officials decide to crack down, violators could be added to the currency regulator’s watch list, denied foreign exchange quota for three years and subject to anti-money-laundering investigations.

2. Peer to Peer
If you want to avoid drawing attention to yourself with cross-border transfers — or move more than the $50,000 cap — another popular option is a “two-way exchange.”


First, find someone who wants to get investment gains back into China. Agree terms like who makes the first move and the exchange rate. Then transfer yuan to your counterpart’s Chinese bank account, while they put foreign currency in your offshore account.
Illustration: Cynthia Hoffman/Bloomberg
Where there’s demand, there’s a business. Some Hong Kong-based insurance agents have turned themselves into underground money exchangers for those who need the local dollar, typically charging a fee, according to two insurance agents who declined to be named.

The risks: Apart from the risk of someone running off with your money, the biggest threat is a potential criminal penalty. Fraudulent buying and selling of foreign exchange or forex trading in a disguised form could lead to a criminal conviction, according to a document published by the Supreme People’s Court. It doesn’t give a detailed description of exactly what types of transaction fall into this category.

3. Virtual Currencies
The nature of cryptocurrencies, which are based on decentralized blockchain technology, makes them hard to trace and thus a perfect conduit for grey-market money. The trouble is the authorities know that too.

“There are no legal channels to trade Bitcoin in China,” said Da Hongfei, founder of blockchain solutions provider Onchain. “Some rely on peer-to-peer transaction, but there’s hardly an easy way.”

The first step is to use a virtual private network to get outside the Chinese-controlled web and set up a crypto trading account.

To get money into the account, most people use yuan to buy USDT, a digital coin from Tether. USDT tokens are often bought from existing users, and are accepted by many crypto platforms as payment because they are backed by the same amount of U.S. dollars.

Then you can use your Tether USDT tokens to buy a liquid and well-accepted digital currency like Bitcoin and pay directly for offshore purchases. Or sell the tokens and ask the buyer to wire the proceeds to your offshore bank account.

The risks: There are no officially sanctioned crypto exchanges in China. Additionally, as cryptocurrencies are still a favored vehicle for illicit purposes like money laundering any funds suspected of being involved in such activities could trigger a bank account freeze overseas as well.

4. M&A Games
Wealthy individuals or companies also have the option of inflating purchase prices.

Those who want to move money offshore via this approach can arrange to overpay for an overseas asset. The seller then pays the difference between the transaction price and the market price to a party connected to the buyer as a consultancy fee. That “fee” can then be deposited in the buyer’s offshore account.

Companies with intangible assets like intellectual property, which offer a huge room for valuation markup, make perfect acquisition targets for that purpose, said Shen Meng, a director at boutique investment bank Chanson & Co in Beijing.

After waiting a while, the assets can be resold to another local partner below the market price, with the seller claiming the business has failed due to bad decisions or a changing business environment."


While the remaining value will be pulled back to China, the difference between the market price and the resale price is thus retained offshore and can be retrieved from the local partner under the pre-arranged deal, said Shen.
Illustration: Cynthia Hoffman/Bloomberg
Risks: China has stepped up scrutiny of overseas acquisitions due to concerns about systemic risks. While the move is primarily aimed at the biggest players like once-sprawling conglomerate HNA Group Co. — which spent more than $40 billion on acquisitions across six continents between 2016 and 2020, although there’s no evidence it inflated purchase prices — everyone can expect more questions."

MY COMMENT

YES....I find it very IRONIC that Americans and others around the world are sending MILLIONS.....probably BILLIONS to China by investing in Chinese companies and stocks. At the same time the people that actually live under the brutal Chinese dictatorship....are moving their money out of the country to safe haven investment outside the country. AND....at the same time our businesses....large and small.....are the BACKBONE of the Chinese economy building all the business capacity and infrastructure for China.......and....turning them into one of the top powers in the world today.

As I have said before.....I will not invest in Chinese companies. It is bad enough that many of the companies that I own support the Chinese government and their policies with technology, money, investments in their economy, etc, etc.

 

On a related weekend topic......BITCOIN.

Bitcoin Hits Another Record as Largest Token Extends Rally

https://finance.yahoo.com/news/bitcoin-approaches-record-high-risk-184919437.html

"Bitcoin is picking up momentum once again, topping $60,000 for the first time amid optimism that the largest digital token will achieve wider adoption.

The cryptocurrency was at 60,012 as of 12:22 p.m. London time, bouncing back from a rout at the end of February following a previous peak set that month. It’s benefiting from optimism in financial markets after President Joe Biden signed the $1.9 trillion pandemic-relief bill into law.

“Bitcoin’s resilience is proving to be the stuff of legend,” said Antoni Trenchev, managing partner and co-founder of Nexo in London, a crypto lender. “Every correction is an opportunity to reset and restart the move upwards.”

Bitcoin is up about 1,000% in the past year amid signs of increasing institutional interest as well as speculative demand. Advocates champion the cryptocurrency as a store of value akin to gold that can act as a hedge against inflation and a weaker dollar. Others argue that the rally is a giant stimulus-fueled bubble on track to burst like it did in the 2017-2018 boom-and-bust cycle.

Industry participants and some strategists point to wider take up as one reason why the current bull run is different.

Examples include Tesla Inc.’s $1.5 billion investment in Bitcoin and Chief Executive Officer Elon Musk’s endorsements of the digital asset on social media. Billionaire investor Mike Novogratz, who runs Galaxy Digital Holdings Ltd., has said that Bitcoin could reach $100,000 by the end of the year.

“The announcement from the White House is very significant for risk assets in general, and crypto-assets specifically,” said Simon Peters, an analyst at multi-asset investment platform eToro, adding that the “floodgates” are now open in terms of new liquidity."

MY COMMENT

I would not be surprised st all to see bitcoin hit $100,000. It has now achieved....for the first time.....mainstream corporate and big bank acceptance. As to being a store for value......I dont see any value there at all.....since there is NOTHING physical about Bitcoin in the slightest.

I bought my ONE BITCOIN back when the price was $2,900. I ended up selling fractional parts of my one coin between $12,000 and $19,000.......to fund art of course. I guess I should have held onto that one coin.....LOL.

I have been putting $100 per month into Bitcoin as MAD MONEY lately for the past 7-8 months......I dont really remember since I never look at it. The percentage of ONE BITCOIN that I own is getting smaller and smaller as the price rises. BUT.....there will come a time that my little mad money experiment MIGHT be worth some real money at some time in the distant future.........IF.......REALLY BIG "IF".....Bitcoin gets up to about $10,000,000 or above. I am not sure I have enough life expectancy left to see that happen.

 

AND.....continuing on the weekend theme of ILLUSORY STORES OF WEALTH......Chinese investments, Bitcoin, and now........NFT art....which I touched on a few pages back.

How in the World Did a “Digital Artwork” Sell for $69 Million at Christie’s?
All your questions about Beeple, NFTs, and a decapitated Buzz Lightyear, answered.

https://slate.com/technology/2021/0...ies-nft-69-million-explained-why-why-why.html

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

"Exactly what just sold for $69,346,250 at Christie’s?

A collage from the artist Mike Winkelmann, better known as Beeple, who composed a new piece of digital art every day for 5,000 days starting in May 2007 and has collected them in a work titled EVERYDAYS: THE FIRST 5000 DAYS. It’s arranged as a patchwork of his pieces in somewhat chronological order. The Christie’s description reads, “Society’s obsession with and fear of technology; the desire for and resentment of wealth; and America’s recent political turbulence appear frequently throughout the work.” It is the third most-expensive artwork ever sold from a living artist. What’s notable about this piece of digital art, though, is that there’s no special in-person way of appreciating it. There are innumerable copies across the web—including at the top of this article—that you can see for free.

Digital … art? How does it work? Does the winner actually own this piece now?

The winner doesn’t “own” the work in the traditional sense of the word. There isn’t a painted canvas to stow away in a bank vault, though the winner will get a digital file and some rights to display the image. The real prize that people were bidding for is a sort of cryptographic certificate of ownership attached to the work known as non-fungible token, or NFT. The owner can sell that certificate on a blockchain, the digital ledger technology that underlies cryptocurrencies. However, with NFTs, the owner typically does not get the copyright and can’t collect royalties from the art. That usually remains with the artist. (It’s unclear whether this case was an exception.)

Who is Beeple? People keep saying he drives a Toyota.

Beeple, or Mike Winkelmann, is a 39-year-old artist—with no gallery representation—and father of two from Charleston, South Carolina. And yes, he says he drives a “fucking Toyota Corolla piece of shit.” Before the pandemic, he was a graphic designer and animator, creating concert graphics for Justin Bieber and Shakira’s wall of fire at the Super Bowl halftime show.

On May 1, 2007, inspired by the British artist Tom Judd, Winkelmann began drawing an image from start to finish every day. The digital, pixel images frequently lift figures and images from pop culture, and are all posted on his website. Donald Trump wearing pasties. Jeff Bezos as an octopus. A decapitated Buzz Lightyear. (Buzz Lightyear is a major Beeple motif.) Everydays is composed of 5,000 of these images.

Once the pandemic hit, Winkelmann’s concert artwork had ground to a halt, so he dove into the world of NFTs. “People kept hitting me up, saying, ‘Oh, you should check out this NFT thing,’ ” he told the Art Newspaper. “And so finally, when I looked at it, in about mid-October, I was like, ‘What the hell, this is just crazy.’ From there, I just went apeshit trying to understand everything. I talked to collectors, I talked to the CEOs of these platforms, I talked to artists in the space—anybody that could help me wrap my head around what was going on.” Beeple’s first art “drop”—21 JPGs—happened in December. Within a weekend, his art grossed more than $3.5 million. This week’s Christie’s auction was Winkelmann’s first foray into the institutional art world.

OK, remind me what NFTs are.

A detail of one of the images that makes up “EVERYDAYS: THE FIRST 5000 DAYS.” Christie’s Images Ltd. 2021/Beeple
NFTs are a type of cryptocurrency in which each token is one of a kind and accrues value independently. This is different from a cryptocurrency like Bitcoin, since you could swap any one Bitcoin for another and end up with the same value on either side of the bargain. You also can’t divide an NFT into smaller pieces, as you can with Bitcoin. The nonfungible nature of NFTs makes them useful for selling art like Beeple’s collage. People have also used them to sell music, virtual objects in video games, and even tweets.
And now Christie’s—like, the serious art world—is involved?

Yeah. Weird!

Who’s the buyer? I’m dying to know.

Christie’s has declined to name the winner, though Bloomberg is speculating that it’s Justin Sun, founder of the cryptocurrency platform Tron, because he bid the hammer price of $60.25 million. Sun is known for his extravagant spending, recently bidding $2 million for an NFT attached to Twitter CEO Jack Dorsey’s first tweet.

Weren’t you saying a week ago that NFTs might be a bubble? This seems pretty serious!

There has certainly been a lot of hype around NFTs over the past few weeks. This is partly thanks to the prevailing surge in cryptocurrency prices in 2021 and to the sudden flurry of activity in NBA Top Shot, a virtual marketplace for trading basketball highlights that uses NFTs. (Yes, people pay hundreds of thousands of dollars to “own” highlights they can watch on YouTube.) Some investors have been concerned about the space given just how much money people are willing to pay for NFTs. “I do think there is somewhat of a bubble, to be quite honest,” Beeple recently told the Observer. “It’s something that I was actually fairly worried about for a while, and now I’m not worried about it at all.” In the interview, Beeple argued that a technology that confers ownership to people online will likely stick around in the long term, because there are so many potential uses for it, many of them undiscovered at this point. For what it’s worth, that case basically jibes with what Mark Cuban, one of the most visible promoters of NFTs, has been saying. The entrepreneur and Shark Tank judge told CNBC that the initial excitement has been inflating prices, which will settle down as more people become involved in the market. Still, he sees the technology itself as having staying power in the long term. And clearly, those prices haven’t settled down yet.

Are a lot of artists doing this? How much money are they making?

Yes, there are many artists trying to get a piece of the NFT craze. NFT marketplaces like Rarible, OpenSea, and Nifty Gateway are seeing a huge boom in digital art. Nifty Gateway has sustained 50 percent month-over-month growth since March 2020, and Rarible has hosted about $5,668,986 worth of transactions over the past month. Overall, consumers have reportedly spent $174 million on NFTs since November 2017. Prominent artists and other celebrities have also been holding high-profile NFT auctions. The experimental pop artist Grimes made about $6 million during an auction last week featuring 10 pieces of art that featured flying babies and medieval landscapes. Lindsay Lohan also recently sold an NFT portrait for $58,947 and the creator of the legendary Nyan Cat GIF made $590,000 by auctioning off the feline meme.

Is this … a good thing?

Digital artists have long struggled to make money from their work, since the art is often infinitely reproducible and it can be difficult to establish exactly who the creator is. In this sense, NFTs are a long-overdue way for these artists to more reliably earn money. In fact, many NFTs ensure that artists get a cut every time their work is bought and sold on the secondary market. At the same time, though, a person who attaches an NFT to a certain work doesn’t have to prove that they’re the original artist. There have reportedly been cases in which scammers steal another person’s art to sell as an NFT.

The environmental impact of NFTs has also been a sticking point. As with most cryptocurrencies, creating and trading NFTs requires a huge amount of energy from computers, which in turn results in carbon pollution. This is partly because the Ethereum blockchain, which hosts most NFTs, uses a proof-of-work model that requires users to expend a lot of energy in order to mine and trade tokens in order to prevent frivolous actions. An audit of the NFT marketplace Nifty Gateway revealed 30 of the releases from its most popular artists in February resulted in more than 2,100 tons of carbon dioxide emissions. Beeple has pledged to address the issue, telling Gizmodo on Wednesday, “I can assure you that moving forward that all of my drops will not just be carbon neutral but carbon NEGATIVE. I will also be buying carbon credits for my past drops to not only completely offset those but also make them carbon negative as well.”

OK, say I’m the winning bidder. How do I show off my Beeple piece? If I can’t hang it in my brandy cellar to wow my guests, I’m not sure what I just paid $69.3 million for.

Wow, congrats on your brandy cellar. It’s true, an already-Instagrammed collage would not seem to merit such a price tag. Here’s the case Beeple makes: “The NFTs were designed in a way that makes them immediately distinguishable from Instagram and immediately distinguishable as a collectible,” he told Decrypt. With one of his earlier NFT auctions, hosted by Nifty Gateway, he mailed plastic, tangible frames to buyers that displayed the NFT on loop and featured a holographic QR code that revealed the NFT owner when scanned. Owners also get a unique link where they can register their token, post information about their storing of the piece, and begin to build an online community around their Beeple art collection. They also got a Beeple hair sample.

Beeple has expressed his desire to work with the buyer of Everydays to brainstorm creative ways to exhibit the piece, whether that means displaying the work on a personal TV screen or on a building at the Art Basel art fair. At any rate, Christie’s says that Beeple will deliver each piece directly to the buyer and that his “unforgeable signature” will be encrypted onto the NFT.

This might be a cosmic-brain question but: What if it’s a good investment?

Although only time will tell the investment’s worth, internet speculation is already buzzing. A finance reporter for Defiant News thinks that the $69 million price was a steal. “Christie’s auction was the first true intersection between digital ‘Internet’ art and the mainstream, high-end art world. This is now a historic piece of art, and it will only go up in value,” he tweeted. Others think that the art’s worth is more the precedent it set. One NFT investor wrote on Twitter, “It’s not gonna make the buyer rich and it’s not gonna make the buyer poor. But what this trade will do is serve as a benchmark for future CryptoPunks and the Hashmasks.” (CryptoPunks and Haskmasks are both successful crypto-art projects.) The co-founder of open-source blockchain network Tezos, Kathleen Breitman, told the Wall Street Journal that cryptocurrency-focused private equity firms are behind on the NFT rush but may buy in if recognizable names enter the field. So far, though, investments in Beeple’s art have a pretty good track record—an NFT a Miami collector bought for $66,000 in October sold for $6.6 million just a few months later.

This makes so little sense to me I’m concerned I might be in a dream right now?

Whew, same. But depending on how you feel about decapitated Buzz Lightyear, maybe more of a nightmare?"

MY COMMENT

If this was not so much money being wasted you would think it was a joke. BUT.....if someone wants to spend $69MIL on an illusion......have at it. YES.....another store for invisible value.

If our past history was not.....disappeared in a puff of MILLENNIAL smoke.....I might mention the story of The Emperors New Cloths.....but that story......no doubt.....is no longer part of the new normal. (I kind of like the phrase......"past""history")

NO DOUBT....this will become a new area for ZUKODANY to buy and sell on the internet in place of his usual.....PHYSICAL..... comic books. I might even have to sell out my Impressionistic American Art and invest it all in a collection of NFT art that I can carry around in my pocket on a key chain.

I LOVE the little bit of the article about the impact of CARBON on the environment with this sort of art.....CLASSIC.

All in all.....yet another indicator of where we are heading........at the moment.......in the world of money, investing, and human behavior.

 

Back to the REAL WORLD for a moment........well somewhat real.

Markets set up for disappointment from Fed meeting as bond yields renew rise

https://www.marketwatch.com/story/m...d-yields-renew-rise-11615584126?siteid=yhoof2

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

"All eyes will be on the Federal Reserve’s meeting next week as traders put pressure on the central bank to prevent a de-stabilizing rise in bond yields.

Yet the U.S. central bank is likely to stick to its messaging that higher yields reflect the rosier economic outlook, suggesting the clash between recalcitrant bond traders and a patient central bank will continue.

“The Fed is aiming for higher inflation which means higher interest rates. I think the market has misread the Fed in thinking about yield curve control,” said Steven Ricchiuto, chief U.S. economist for Mizuho, in e-mailed comments.

The central bank’s unwillingness to push back against the bond market’s speculation has ended up sapping investor sentiment, with the sharp rise in long-term bond yields this year causing momentary panic across technology stocks, corporate bonds and emerging markets.

Some of these market nerves reflect worries that a further disorderly increase in long-term yields could hamstring a recovering and highly leveraged economy, ill-prepared to deal with a rise in borrowing costs.

The 10-year U.S. Treasury note yield TMUBMUSD10Y, 1.629% rose to around a one-year high of 1.63% at the end of the week, The benchmark maturity is up around 70 basis points where it traded at the start of 2021.

Meanwhile, the S&P 500 SPX, +0.10% and Dow DJIA, +0.90% finished at another record on Friday, after rebounding from last week’s slump when investors were rattled by the prospect of further selling in the bond market.

Analysts anticipate Fed Chairman Jerome Powell will repeat the mantra that the central bank remains far away from reaching its employment and inflation goals at his press conference after the policy meeting on March 17.

Perhaps more pertinently, the Fed is unlikely to meet the calls of bond traders to announce tweaks to the Supplementary Leverage Ratio, which was adjusted last year to help banks deal with the coronavirus crisis, or to change the composition of its monthly purchases of U.S. Treasurys and mortgage bonds.

“They’re going to be resistant to being pushed around. The last thing they want to do is fight the market. As long as [the rise in yields] is orderly and as long as credit markets are operating well, the Fed is getting what it wanted,” Gregory Staples, head of fixed income North America at DWS, told MarketWatch.

Still, one place where investors may see the central bank moving closer towards the bond market’s vision of the economy is in the summary of economic projections and the so-called dot plot, where members of the Fed’s policymaking committee forecast where policy interest rates are headed.

The December dot plot shows most members of the FOMC are penciling in their first rate hike in 2024.

With a $1.9 trillion stimulus bill now signed into law by President Joe Biden, some senior Fed officials may choose to move their expected timeline for the first interest rate hike since the pandemic began into 2023. But such a move still remains far away from the market’s more hawkish expectations, with short-term money markets penciling in a rate increase as early as the end of 2022.

“It creates a discrepancy what the Fed is projecting and the markets are projecting,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments, told MarketWatch.

Yet it’s unclear if this tension has the potential to drive further market turbulence in the way it has in the past few weeks, according to Jefferies’ Aneta Markowska.

She argued the bond market’s dizzying selloff so far had reached levels that indicated investors had already digested the economic boost from the stimulus bill. Until the Fed started the conversation on tapering its asset purchases, she didn’t see yields moving higher.

In the end, the heated debate on where interest rates are headed may turn out to be a sideshow for stock-market investors momentarily dazed by the rise in long-term bond yields.

If the jump in bond yields reflects a surge in economic growth, corporate earnings are likely to see a marked improvement, making higher borrowing costs less relevant for the equities market.


“You don’t need rates to stay at historic lows for earnings to improve,” said Goodwin.

Next week, investors will digest some major U.S. economic data releases, including February retail sales and industrial production on Tuesday and February housing starts on Wednesday.

The corporate earnings reporting calendar will be thin, though a handful of large companies may draw attention. Nike Inc. NKE, -0.52%, Accenture PLC ACN, -0.53% and Fedex Corp. FDX, +0.64% will report results next week.

MY COMMENT

This bond yield BALONEY is just as ILLUSORY as the "things" talked about in the posts above. It is a total sideshow...with the media being manipulated......either knowingly or unknowingly.......... by speculative bond traders trying to force the FEDS hand to juice their trading profits.

ACTUALLY....I think rising rates at this point in time are a good thing for the economy AND for investors. BUT....I dont expect to really see much.......it would be nice to see the Ten year Treasury get back into a more normal range.

 

I posted the below on Emmetts thread: "Poll: Are you an investor or a trader"......but....I will repeat it here.

"I think it is very interesting that 77.2% of the responders to this poll are FOCUSED on INVESTING and not TRADING.

There is a HUNGER for content on actual investing on the internet....which for many means.....longer term investing.

CASE IN POINT......the BOGLEHEADS FORUM. Most on that site are definately longer term investors and most of the content is focused on long term investing. That forum is......I suspect....the largest most active investing forum on the internet. They have 105,935 MEMBERS. Not to mention the.......probable..... hundreds of thousands of non-member lurkers and readers.

We have a good mix of content on this board....and in my opinion......better......more diverse........content covering a broader range of types of investing. I STILL think this forum is the best I have seen."

YES....the 77.2% above is the people that described themselves in the poll as "investors" versus traders OR "both, but weighted more in investing".

For any that have not seen the Emmett thread or participated in the poll check it out and add your input to the poll. It is under this board....the "Investing" board on this forum.

 

But Zukodany......regarding post #4446......that is the "NEW NORMAL". You are just too old to understand. As we move into the DIGITAL WORLD and beyond into the AI WORLD.....nothing that happened before about year 2000 or perhaps year 2010.......actually existed. NONE of it has any relevance to the future or what happens in the future.

ACTUALLY....those that have some concept of the past and those that actually experienced some of it....have a HUGE advantage. In any aspect of life I ALWAYS PREFER to be underestimated....by others. The more IGNORANCE......the better for those that are not.

 

I REALLY dont care about.....ten year treasury yields. But.....I know others worry about the issue. AND....the media LOVES the topic.....since yields hop around daily and it gives them a topic that they can HARP on day after day.....for views..... as the rates move up and down.

Masters of Equities Universe Are Unfazed by Spike in Bond Yields

https://finance.yahoo.com/news/masters-equities-universe-unfazed-spike-000100892.html

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

"The recent rise in interest rates triggered a bout of volatility, but it’s not making the pros in the stock market run for the hills just yet.

Some of the world’s biggest fund managers say equities can persevere and continue rallying through the rise in government bond yields. They are focusing instead on prospects for a powerful economic and profit recovery.

In an informal Bloomberg News survey of more than 50 market players, most respondents including State Street Global Advisors and JPMorgan Asset Management said they’re monitoring the pace of the ascent in yields -- and the reasons for it -- rather than awaiting a particular level that will mark a breaking point for stocks. As long as central banks stick to accommodative policies, the equity bull run can power ahead, these investors say.

“Absent a shift in central banks’ thinking, we don’t think yields will rise to a level where it broadly hurts equities,” said Hugh Gimber, a London-based global market strategist at JPMorgan Asset Management. “Provided the Fed sticks to guidance, and remains comfortable, willing to look through any temporary spike in inflation, I don’t see an environment where yields are rising in a way that’s problematic for equities broadly.”

The surge in government bond yields over the past month helped fuel an exit from the frothier parts of the market such as technology and defensive shares, leading to a dip of as much 11% in the Nasdaq 100. But the vaccination push in major economies and bets on a recovery in economic growth as well as consumer spending are filling equity bulls with confidence that they can keep reaping returns despite higher interest rates.

At the same time, the pick-up in yields and the more than 70% rally in stocks from pandemic lows are pushing fund managers to become more selective. The likes of Manulife Investment Management and HSBC Asset Management say that, while this isn’t the time to exit equities, the selloff in bonds will accelerate the rotation out of the more expensive growth parts of the market and into cheaper and laggard equities that can benefit from the economic recovery.

“If rates were rising from a normal range, tech stocks would’ve been fine, but not true when the valuations are what they have been,” said Dave King, a Boston-based portfolio manager at Columbia Threadneedle Investments. “Potential reopening, coinciding with the rise in yields as well as other factors, were positive for the stocks that people didn’t like too much last year, whether it’s banks or energy.”

The energy sector is the best performer in the MSCI World this year, rising about 30%, while financials are next with a 14% gain. More defensive and rates-dependent sectors, such as consumer staples and utilities, are both in the red.

Cult stocks that have been investors’ favorites throughout the pandemic have also had a harsh few weeks. Tesla Inc. was down as much as 36% from its January peak before recouping some of its losses last week. Even market stalwart Apple Inc., the biggest U.S. stock, crashed as much as 19% from its record high.

This environment could also mark a shift from U.S. stocks to other international equities, such as Europe and emerging markets, that have higher exposure to value sectors. Having lagged the S&P 500 during last year’s rally from the March lows, the Stoxx Europe 600 is outpacing the American benchmark so far in 2021.

“The risk of an equity market correction driven by higher yields is highest in the U.S.,” said Joost van Leenders, an Amsterdam-based senior investment strategist at Kempen Capital Management. “The U.S. economy has recovered faster than the European economy, and another major fiscal stimulus bill has just been approved. Inflationary pressure in Europe looks minimal. From a style perspective, growth is more at risk than value. This also means Europe may benefit relative to the U.S.”

Investors who are watching out for a particular Treasury yield level that can significantly hurt global equities pointed to a range between 2% and 3% for 10-year bonds.

“It’s important to remember that historically, rising yields have been consistent with rising markets, because both are driven by growth, and we think that will remain the case this time,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. At the same time, he added that “yields above 2.25-2.5%, if not accompanied by an improvement in the long-term earnings growth outlook and lower risk premia, would start to make current equity valuations look more challenged.”

The pause in the bond market selloff in the middle of the week last week showed how quickly stocks and growth sectors can come rushing back. The Nasdaq 100 on Tuesday surged 4% for its biggest jump since November, signaling that appetite for tech names remains strong.

“If the rise in bond yields is too quick or too high, it’s a negative for equity valuations. However, if controlled and modest over time, equities can absorb the adjustment reasonably well,” said Nathan Thooft, Boston-based global head of asset allocation at Manulife Investment Management. “Especially if the reason for higher rates is better growth rather than just higher inflation.”"

MY COMMENT

I OFTEN....."bold"...parts of articles that I do NOT agree with as "important content". I DO agree with the central tenant of this article. We are going to see PLENTY of long term growth in company fundamentals and a rise in bond yields to a NORMAL........3-5%....is NOT going to be a negative for any significant length of time.

I DO NOT agree with the characterization above that there has been a.....SURGE.....in the ten year yield........a huge exaggeration as these historic 100 year lows. NONE of these managers.....if the are actually managing stocks.....are going to NOT buy or invest in stocks even if yields go up to normal.......3-5%.

As to yields encouraging investment outside the.....USA......NO, not interested in the slightest. A sure way to severely LAG the markets. The BEST and most DOMINANT companies in every level of investing....small cap, mid cap, big cap.....are here in the USA.

 

HERE are a few events coming up next week. MOST will be ingnored and have little to no impact....even if they should have an impact. UNFORTUNATELY......the FED will be doing their thing.......it would be nice if they could just SHUT UP and GO AWAY for a few weeks or a month or two........like the old days.

FOMC meeting, retail sales: What to know in the week ahead

https://finance.yahoo.com/news/fomc...what-to-know-in-the-week-ahead-151348494.html

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

"Investors this week will be closely watching the Federal Open Market Committee's (FOMC) Wednesday monetary policy decision, as well as a key report on the state of the consumer.

The FOMC's March meeting will take place Tuesday and Wednesday, with a decision set for Wednesday at 2 p.m. ET.

While this week's monetary policy decision will more than likely yield no immediate policy changes, it will take on additional weight in providing more commentary on the central bank's thinking about the pace of the economic recovery, and whether a faster-than-expected rebound might warrant a nearer-term adjustment to the Fed's policy.

In other words, Federal Reserve Chair Jerome Powell will be tasked with toeing the line between offering a more optimistic assessment of the trajectory of the economy, while also assuaging market participants' fears that the recovery may lead to overheating and a rapid rise in inflation.

"We think it is likely that the FOMC economic forecasts will acknowledge the improved growth picture this year, and some transitory inflationary pressures as well, but will continue to show a long road toward conditions consistent with maximum employment that would put sustained pressure on inflation," Morgan Stanley economist Ellen Zentner wrote in a note Friday.

So far, Powell and other FOMC officials have said that the Fed would leave policy as is even if the economy experiences a stint of above-target inflation, to compensate for the years of below-target inflationary pressures.

However, investors have been nervously contemplating the likelihood of an unchecked jump in inflation later this year as more businesses reopen and massive amounts of consumer demand unlock. In such a scenario, many investors have feared the Fed might react by moving faster than it has currently telegraphed by quickly raising interest rates, slowing asset purchases and otherwise tightening monetary policy to stave off inflationary pressures.

These predictions have manifested in the fixed-income markets, with the 10-year Treasury yield climbing some 50 basis points over the past month alone to more than 1.6%, both in anticipation of a strong economic recovery and of a possibly earlier than expected Fed move.

But Powell has said in recent public remarks that he believes any signs of inflation in the economy data this year would be transient. He has also maintained that the move higher in Treasury yields reflects an improving outlook on economic growth — a stance he is likely to reiterate during this week's press conference.

"We do not expect a policy reaction from the FOMC with respect to ongoing volatility in the Treasury market. Chair Powell will likely highlight the Fed’s current forward guidance and flexible average inflation targeting (FAIT) for short-term rates in order to push back on current market liftoff pricing," Nomura economist Lewis Alexander wrote in a note."We expect Powell to reiterate that recent increases in long-term rates likely reflect increased optimism over the recovery, but that persistent signs of market illiquidity bear monitoring."

As of December, the Fed signaled it would keep the benchmark Fed funds rate at near-zero levels through at least 2023. While the Fed will likely say rates will remain on hold at least through the next two years, the central bank's updated Summary of Economic Projections this week may show one rate hike as soon as in 2023 as economic conditions improve, some economists have speculated.

"We do not expect any substantive changes to the Fed’s core policies — including forward guidance and asset purchases — at the March FOMC meeting," Alexander added. "Additional fiscal stimulus and moderating new COVID-19 cases should strengthen the Fed’s near-term outlook. However, we believe a stronger economic outlook — including a slightly higher inflation trajectory — will result in the median 'dot' in 2023 showing one rate hike."

Retail sales
One of the most closely watched economic reports this week will be the February retail sales print from the Commerce Department on Tuesday.

Consensus economists are looking for retail sales to have pulled back in February after surging by the most in seven months in January. Specifically, retail sales are expected to have fallen 0.7% month-over-month, following January's 5.3% rise.

"The February retail sales report likely revealed a deep freeze in consumer spending," Bank of America economist Michelle Meyer wrote in a recent note. "This decline reflects three main factors: 1) payback from the stimulus-induced gain in January; 2) delayed tax refunds; and 3) winter blizzard. The first two factors had a particularly negative impact on the lower income group."

January's retail sales report showed a strong rebound in some of the categories hardest hit during the pandemic. Department store sales spiked by nearly 24% month-over-month, bringing these stores' year-over-year sales declines to just 3%. Electronics and appliance stores also saw a nearly 15% rise in sales at the start of the year. Retail sales overall were up 7.4% year-over-year in January, extending a stretch of year-over-year gains that began last summer, as consumers increasingly spent on goods to compensate for a lack of opportunities to spend on services like leisure travel during the pandemic.

Despite the probable February drop in retail sales, the outlook for spending later this year remains strong, as a $1.9 trillion infusion of stimulus percolates through the economy and as mass vaccinations allow more spending to come back online. And consumers have been sitting on historic levels of savings as the pandemic drags out into its second year, with the personal savings rate hovering at an elevated 20.5% in January.

As in-person activities begin to reopen, the degree to which consumers reopen their wallets will depend on how they view their newly amassed capital, according to Bank of America.

“The spending multiplier will mainly depend on whether people view the money saved as ‘wealth’ or ‘deferred income.’ If it is treated like wealth, we would expect a very low payout in the order of four cents on the dollar. If it is seen as deferred income, the payout will be much higher, even if the money is mainly held by high-income households,” Ethan Harris, Bank of America head of global economics research, wrote in a note Friday. “We lean toward the latter. Therefore, we expect the glut of excess savings to help support exceptional growth this year in addition to the tailwinds from fiscal stimulus and an improving virus picture.”

Economic calendar

• Monday: Empire Manufacturing, March (14.5 expected, 12.1 in February); Total Net TIC Flows, January (-$0.6 billion in December); Net Long-Term TIC Flows, January ($121.0 billion in December)
  
  
• Tuesday: Import price index, month-over-month, February (1.0% expected, 1.4% in January); Import price index excluding petroleum, February (0.4% expected, 0.9% in January); Import price index year-over-year, February (2.6% expected, 0.9% in January); Export price index, month-over-month, February (0.9% expected, 2.5% in January); Export price index, year-over-year, February (2.3% in January); Retail sales advance month-over-month, February (-0.7% expected, 5.3% in January); Retail sales excluding autos and gas, month-over-month, February (-1.3% expected, 6.1% in January); Retail sales control group, February (-1.1% expected, 6.0% in January); Industrial production month-over-month, February (0.4% expected, 0.9% in January); Capacity utilization, February (75.6% in February, 75.6% in January); Manufacturing production, February (0.2% expected, 1.0% in January); Business inventories, January (0.3% expected, 0.6% in December); NAHB Housing Market index, March (84 expected, 84 in February)
  
  
• Wednesday: MBA Mortgage Applications, week ended March 12 (-1.3% during prior week); Building permits, month-over-month, February (-7.2% expected, 10.4% in January); Housing starts, February (-1.0% expected, -6.0% in January); FOMC Rate Decision
  
  
• Thursday: Initial jobless claims, week ended March 13 (703,000 expected, 712,000 during prior week); Continuing claims, week ended March 6 (4.144 million during prior week); Philadelphia Fed Business Outlook Index, March (24.0 expected, 23.1 in February); Leading Index, February (0.3% expected, 0.5% in January)
  
  
• Friday: N/A
  

Earnings calendar

• Monday: N/A
  
  
• Tuesday: Coupa Software (COUP), CrowdStrike (CRWD), Lennar (LEN) after market close
  
  
• Wednesday: Green Thumb Industries (GTII.CN) after market close
  
  
• Thursday: Dollar General (DG) before market open; Nike (NKE), FedEx (FDX), Hims & Hers Health (HIMS) after market close
  
  
• Friday: N/A"

MY COMMENT

Sounds good.....unless....you are a micro day trader. For long term investors.....nothing to see here.....as usual. In FACT......everything......is lined up for a great 6-24 months for business and companies. Any.....academic....interest rate BLATHER......will NOT translate into anything at all that impacts company fundamentals moving forward. ESPECIALLY.....for the big cap world. It will be FULL SPEED AHEAD for business.....and.....as usual.....the BIG MARKET LEADERS.......will once again lead the charge.

EVERYONE....knows full well that the FED is not going to do anything. BUT....all the executives and big time banks and big managers HAVE to give themselves WIGGLE ROOM in their comments so they dont look like IDIOTS.......in not considering and spouting the current media line. They would look out of touch if they did not do so. They want their clients to FEEL LIKE they are really monitoring the situation and on top of things. EMPHASIS on the word......"FEEL".

 

I keep these in my bookmarks. If you scroll up and down through this content you will find MANY various calculators for investors.

For example the SP500 with dividends reinvested calculator. Lets say I wanted to see what the SP500 had done since this thread was started in October of 2018. I put in the data and........out pops the following info:

Total SP500 return (without dividends) +39.418%
Annualized SP500 return (no dividends) +15.306%
Total SP500 returns with dividends reinvested +45.285%
Annualized SP500 return with dividends reinvested +17.361%

You can also adjust for inflation in the calculation.

HERE is the calculator that I used for the above:

https://dqydj.com/sp-500-return-calculator/

HERE is a basic calculator that allows you to put in a stock symbol and calculate the gain for any time period you wish with dividends reinvested:

https://dqydj.com/stock-return-calculator/


The pages that the link BELOW will take you to contain the following calculators. Perhaps some will find these tools useful.

https://dqydj.com/calculators/

The above link contains the following:

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Our major issue with financial media is the failure to consider dividend reinvestment when quoting index price returns. Another issue? Inflation adjustment – you’ll find both features on most of our investment calculators. Along with automatic updates, and (sometimes) periodic investment and even tax and fee estimates.

As for what we’ve built, we’ve got you covered – included are DRIP calculators for individual stocks, S&P 500 returns, Dow Jones returns, Bitcoin returns, corporate bond returns (of various grades), and all manner of other commodity and index return calculators.

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