The Long Term Investor

I was green on Monday.....and was lucky to be green yesterday. BUT....today my luck ran out.......red for the day. AND....got beat by the SP500 by .69%.

As has been the case for the past 4-5 weeks......it is my BIG CAP TECH emphasis that is pulling my.....short term.....results down lately. If I have to have some holding down.....I am GLAD.....actually....that it is these companies. WHY? Because....I know that they ALL have STERLING FUNDAMENTALS.....and....that this weakness has no rational relationship to anything that is REAL.

ALL of the BIG CAP TECH stocks......will.....have their time to shine again........probably soon. ALL have amazing fundamentals. If nothing else.......to use the language of the old days......they are in a period of consolidation.......before the NEXT move up from here. They are ALL forming a new base in order to move on up.

The next two or three quarters of earnings will have the potential to........ROCKET......these companies forward. If the next 1-3 quarters are STRONG........it will show that this DISRESPECT of these companies lately is simply.......unfounded. The story line that these companies.....somehow....experienced an oversized benefit from the pandemic is......or.......have some oversized exposure to higher ten year yields......in my view.......way EXAGGERATED and in all probability simply UNTRUE. These companies are the......cream of the crop.....of the US economy and business world. They are money machines. PAY ME NOW OR PAY ME LATER.........I will be rewarded for holding these companies over the long term.......as has been the case for many years now.

I remain fully invested for the long term as usual.

 

Speaking of.......money in the bank......and....pay me now or pay me later. This little article illustrates the medium to long term future for REALITY based.......non-trader....non-speculator....INVESTORS.

Strategists raise their stock market outlooks for 2021

https://finance.yahoo.com/news/stra...ns-through-the-end-of-the-year-164055396.html

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

"The first quarter of the year has not even ended yet, and Wall Street firms are already building a case for stocks to rise even further in 2021.

With the composition of the government now confirmed and Democratic lawmakers in control of both the U.S. House of Representatives and Senate, strategists are seeing more fiscal stimulus boosting consumer spending, the economy and corporate profits. This is set to lay the groundwork for a strong recovery once the vaccine rollout reaches much of the population, many have said.

Still, these risk-on catalysts will likely come alongside some opposing forces, including rising interest rates and the specter of a less accommodative Federal Reserve and higher corporate taxes under the Biden administration as the economy emerges from the COVID-19 pandemic.

But on net, with all these factors in mind, a number of strategists suggested stocks will rise even more strongly this year than they believed at the end of 2020.

Here’s what some Wall Street strategists are now expecting for the U.S. stock market this year.

—

RBC Capital Markets (Target: 4,100; EPS: $177): Value stocks' outperformance 'is dependent on the ability of the U.S. economy to sustain above trend growth'
RBC Capital Markets upgraded its outlook on S&P 500 earnings, citing a stronger outlook on U.S. economic growth this year.

The firm now sees aggregate S&P 500 EPS rising to $177 this year, up from the $168 seen previously, before accelerating to $193 in 2022.

"This is primarily a housekeeping move that reflects changes to RBC house views on key macro variables from our colleagues in economics, commodities, and FX that are inputs into our model," the strategists led by Lori Calvasina wrote in a note. "The biggest change from our last update in late January is on GDP [gross domestic product], where our economics team anticipates real GDP growth of 6.6% in 2021 and 4% in 2022."

"There has been no change to our other core assumptions on interest expense (which we expect to remain low and flat), tax (we are keeping the rate flat vs. 2020), buybacks (we are baking in a partial recovery, a little more than half way back to 2019 levels), and margins (where we are modeling in a path similar to the recovery coming out of the 2015-2016 industrial recession, which doesn’t quite get us back to 2019 levels)," Calvasina added.

RBC also upgraded U.S. equities to Neutral relative to non-U.S. equities, noting that the pandemic situation in the U.S. has improved given the faster-than-anticipated vaccine rollout. The firm added that it still prefers small-caps over large caps, and value stocks over growth shares this year, given expectations for a strong domestic economic rebound.

The duration of value's relative outperformance, however, will depend whether the economy can sustain elevated growth rates even as it laps the worst points of the pandemic last year.

"We believe key to the value trade’s ability to seize this opportunity and retain leadership beyond 2021 is dependent on the ability of the U.S. economy to sustain above trend growth in 2022 and beyond," the analysts said. "The good news for the value trade is that current consensus forecasts expect GDP to remain above trend through the end of 2022. The thing to monitor is whether that changes."

RBC's price target on the S&P 500 remains at 4,100, implying upside of another 4.8% from closing prices on March 23, and a full-year 2021 rise of just over 9%.

S&P 500 EPS updated March 24, 2021; S&P 500 price target initiated Jan. 20, 2021

—

Deutsche Bank (Target: 4,100; EPS: $202): Equities likely to rise, pull back briefly, then rally to new highs by year-end
Deutsche Bank equity strategist Binky Chadha now sees even more upside for equities, with additional fiscal stimulus set to boost an economy already in the early innings of a post-pandemic rebound.

"Near term, we expect equities to continue to move up, supported by an acceleration in macro growth and earnings upgrades, which are already prompting rising positioning and large inflows as is typical, and likely to be further boosted by direct and indirect flows from stimulus payments," he wrote in a note on March 12.

"We then expect a pullback as growth peaks in Q2 at a high level," he added. "The more front-loaded the impact of the stimulus, the sharper the peak in growth, and the closer this peak in macro growth is to warmer weather (giving retail investors something else to do); and to an increased return to work at the office, the larger we expect the pullback to be."

However, he added that he then sees equities rallying back following the potential pullback and reaching 4,100 by year-end. That marks an increase from the firm's previous price target of 3,950 on the S&P 500, and implies additional upside of 3.3% from the S&P 500's record closing high on March 15. The firm also now sees aggregate S&P 500 earnings rising 43% to $202 this year, up from its previous $194 forecast.

By sector, Deutsche Bank said its top picks remain energy — as it forecasts West Texas intermediate crude oil will approach $80 per barrel by year-end — and financials, with the 10-year Treasury yield forecast to end the year between 2% and 2.25%.

"We move other cyclical sectors (industrials, consumer) from overweight to neutral; stay neutral the secular growth group and underweight the defensives," Chadha said. "Across regions we are overweight the more cyclical EM [emerging markets], Europe and Japan versus the U.S, on a baseline of a global cyclical rebound."

S&P 500 price target updated on March 12, 2021 following a price target initiation Dec. 3, 2020

—

Credit Suisse (Target: 4,300; EPS: $185): 'Accelerating GDP should result in higher revenues ... and an even greater gain in EPS'
Credit Suisse strategist Jonathan Golub upwardly revised his S&P 500 price target for the second time in two months on February 23. This time, he noted that stronger-than-expected corporate profits and upbeat reopening prospects warranted a more optimistic outlook on equities.

Credit Suisse's new year-end S&P 500 price target of 4,300 suggests upside of 10.9% from current levels. In January, Credit Suisse saw the S&P 500 ending 2021 at 4,200, and last year expected the index to rise to 4,050.

Golub now expects aggregate S&P 500 earnings per share to grow to $185 and 2021 and $210 in 2022, up from the $175 and $200, respectively, he estimated previously. Companies already entered 2021 with more profit-making momentum than expected, with fourth-quarter EPS topping estimates by 17% and unexpectedly growing on a year-over-year basis, Golub said.

And as vaccines enable the economy to open further, companies should be able to grow results even more, offering further catalysts for their stock prices. Major Wall Street banks expect, on median, that GDP will grow by 6.1% in 2021, Golub added. This would mark a sharp rebound from 2020's COVID-induced 3.5% contraction — the worst since 1946.

"Accelerating GDP should result in higher revenues (every 1% in GDP is a 2.5-3% change in sales), and an even greater gain in EPS given operating leverage," Golub added. "Additionally, rising rates — a benefit to Financials — and copper and oil prices — a boon for Industrials, Energy, and Materials — further augment this favorable backdrop."

S&P 500 price target updated on Feb. 23, 2021, following a prior update on Jan. 7, 2021

—

Goldman Sachs (Target: 4,300; EPS: $181): ‘Fiscal stimulus should support consumer-facing cyclicals'
Goldman Sachs raised its S&P 500 earnings outlook this month, citing an unexpected bump higher in corporate earnings results as companies rebounded faster than expected from pandemic-related disruptions.

"Analysts expected 4Q S&P 500 EPS would fall by 11%, but results showed +2% year/year growth," the strategists led by David Kostin said in a note published Feb. 12. "We raise our S&P 500 2021 EPS estimate 2% to $181 (from $178), reflecting higher sales and profit margins that should overcome input cost pressure due to high operating leverage."

Despite the improved earnings outlook for this year, Goldman Sachs left its S&P 500 price target at 4,300, implying 9.3% upside from the index's record close on Feb. 12.

Fiscal stimulus will likely comprise the next catalyst for U.S. equities, Kostin added, as lawmakers in Washington work toward another robust round of virus relief measures that would stoke consumer spending and further boost corporate profits.

"Many investors believe the spending boost will lead to higher inflation and interest rates, which would reduce the value of equity duration and increase the importance of near-term growth," Kostin said. "Fiscal stimulus should support consumer-facing cyclicals and our High Operating Leverage and Low Labor Cost baskets."

The firm highlighted a number of cyclical stocks that appeared appealing due to correlations with consumer spending and strong earnings growth over the past year, including Whirlpool, Charles Schwab, 3M and Facebook.

MY COMMENT

Simply another way of saying what I said above. Money in the bank....moving forward. Reinvesting all dividends.....accumulating shares.....forward looking earnings.......what a long term investor does. NOTHING....has changed in the slightest. ALL of the.....non-opinion factors.......are and remain STRONGLY POSITIVE going forward from here.

ACTUALLY......we are just in the very early stages of the economy reopening. The majority of states and MOST of the BIG ones have yet to reopen. As it..........INEVITABLY........happens, the result will be EXACTLY as you would expect.....a BOOMING business environment and general economy. BUT.....the big black swan........yes, again as expected.......GOVERNMENT POLICY.

 

NEED a confidence builder? Need confirmation as to the POWER of long term investing? Probably not. Most of us know that steady long term investing.......versus.........trading, market timing, and short term churning of your account.......will WIN OVER TIME. BUT.....regardless here is more confirmation of what we already know.

This chart shows why investors should never try to time the stock market

https://www.cnbc.com/2021/03/24/thi...hould-never-try-to-time-the-stock-market.html

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

"Key Points

• Investors should avoid the impulse to time the market, new data from Bank of America shows.
• Looking at data going back to 1930, the firm found that if an investor sat out the S&P 500′s 10 best days per decade, total returns would be significantly lower than the return for investors who waited it out.
• And the market’s best days typically follow the largest drops, meaning panic selling can lead to missed opportunities on the upside.

Timing the market is difficult at the best of times for even the most experienced traders.

Now, Bank of America has quantified just how large the missed opportunity can be for investors who try to get in and out at just the right moment.

Looking at data going back to 1930, the firm found that if an investor missed the S&P 500′s 10 best days each decade, the total return would stand at 28%. If, on the other hand, the investor held steady through the ups and downs, the return would have been 17,715%.

When stocks plunge a natural impulse can be to hit the sell button, but the firm found the market’s best days often follow the biggest drops, so panic selling can significantly lower returns for longer-term investors by causing them to miss the best days.

“Remaining invested during turbulent times can help recover losses following bear markets - it takes about 1,100 trading days on average to recover losses after a bear market,” noted Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America.

Sometimes, as happened in 2020, the recovery is much faster.

The data comes amid a boom in retail traders trying to find the next Tesla or Gamestop pop, and as fast, data-driven strategies become more prevalent across Wall Street. But Bank of America noted simple investing for the long term can be a “recipe for loss avoidance” given that 10-year returns for the S&P 500 have been negative just 6% of the time since 1929.

Of course, the data also shows the astronomical returns for any investor who correctly called the ten worst days of each decade — to the tune of 3,793,787%. Additionally, excluding the 10 worst and best days would have registered a gain of 27,213%.

But given the difficulty of precisely calling the peaks and troughs, the better bet is to simply stay in invested.

Bank of America noted that factors including positioning and momentum typically outperform over the short-term, but fundamental analysis wins over multiple years.

“Whereas valuations explain very little of returns over the next one to two years, they have explained 60-90% of subsequent returns over a 10-year time horizon,” the firm noted. “We have yet to find any factor with such strong predictive power for the market over the short term.”

Looking ahead Subramanian envisions more muted returns, or about 2% per year for the S&P 500 over the next decade. Including dividends, returns stand at 4%. The forecast is based on a historical regression looking at today’s price relative to normalized earnings ratio.

The firm added that over prior periods of similar returns, including between 1964 and 1974 as well as from 1998 to 2008, there was a higher probability of loss, pointing to the merits of staying invested for the long haul."

MY COMMENT

I usually try to find and post some article about investing for the long term or information for new investors.....every day.....versus the short term "stuff" that I often post. The short term stuff is usually just for fun.....or.....to poke fun at ALL the short term opinion MEDIA FLUFF.....or to explain what is happening day to day.

If market timing.....or.....calling the short term bottoms and tops.....was easy or even possible.....we would see all sorts of short term trading mutual funds and ETF's having the greatest investing records. BUT.......NO.....we never see that. The VAST MAJORITY of greatest and most successful managers and investors follow a long term path. LIKE many things in life....it is the boring thing....the simple thing......the dull thing......that is the success. Often.........FLASH = TRASH.........in life and in investing.

 

Siting today and watching housing prices......spin like an electric meter on an all electric house......in the recent winter FREEZE.

When it stops nobody knows.....but for now........3 homes for sale in this general area out of 4,200 houses......at the PEAK of the Spring listing time. A WHOPPING 0.00071% inventory at the moment.......and.....this has been the norm for many months now.....with no end in sight.

NO plans to ever sell.....but a nice bump up to NET WORTH....on paper.

 

Yeah.....day to day....it is what it is. It is very difficult for investors to just sit and do nothing. Especially if you are very much aware of the markets day to day. The TEMPTATION is always there to over think things......and....to make some move based on the short term conditions.

I know Emmett. We were in a two story before we recently downsized. To make it worse the house was built on a slope in the back....so to get to the yard from the first floor was about 20 steps down. SO.....we moved and downsized to a one story. No regrets at all.

Our taxes are FROZEN. I dont know what......younger....... people are going to do. The tax increases are going to drive many people out of their homes.....or at least severely impact their budget. I guess people that can not afford a house will have to move further and further out of town......the age old trade off of location.........versus.......price........versus.......the amount of house you get for the money.

I think I mentioned it on here.......the little HUD foreclosure on the wrong side of the tracks......2 bed, 1 bath....that was my first house for $16,000 back in about 1974. Is now worth about $400,000......if not more.......perhaps even $500,000. AND....it is still not in the better area of town.

 

I guess we wont hear anymore from Mr Zukodany tonight.

BUT for tomorrow...that is great news. This is a very difficult market for buyers. Acreage in a premium neighborhood near a classic town like yours is AMAZING. You are all set. The commercial option in the future is icing on the cake.....a lot of icing.

PLUS......a 2.99% rate for 30 years.....OUTSTANDING. You are kicking ass in Ohio. Congratulations to you and your wife.

 

Ended in the red today. four holdings down and eight up....but slightly red. And...got beat by the SP500 by .74%.

I any event....I was glad to see the averages green across the board. A good thing for EVERYONE....even if I was slightly down for the day.

 

I happen to agree with this little article. Lately we have been seeing many saying that the recovery over the past year from the lows.....is a new bull market. NO....it is simply the continuation of the......ancient bull market.....that has been going on for at least a decade now.

The Post-Lockdown Rally Turns One
Stocks aren’t acting like the last year was a new bull market.

https://www.fisherinvestments.com/en-us/marketminder/the-post-lockdown-rally-turns-one

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

"One year ago today, global stocks hit bottom. They had fallen -34.0% since their high on the previous February 12, pricing in the strict lockdowns and resulting deep economic contractions across the US, Europe, Australia and the rest of the developed world. The very next day, economic data would start registering that contraction courtesy of IHS Markit’s flash purchasing managers’ indexes (PMIs) for services and manufacturing. But stocks were already looking further ahead—they had priced the flood of bad news to come and were already looking forward to reopening and recovery. On paper, the steep rally over the past year is a new bull market. But as we will show, we think stocks are acting as if last year’s record-fast decline was the eighth correction in the bull market that began way back on March 9, 2009. That has two key forward-looking implications, as we will discuss.

A helpful way to see the past year’s uniqueness relative to other new bull markets, in our view, is to look at stylistic leadership. Usually, value stocks beat growth in a new bull market’s first stage. Value companies usually have shakier credit and rely on bank lending, making them extra-vulnerable in a bear market’s panicky final stage. Investors fear these companies won’t survive the recession and associated tighter credit conditions and punish them disproportionately. But they usually bounce just as fast in the new bull market, thanks to gutsy bargain-hunters seeking big returns in unfairly punished, economically sensitive firms and turnaround opportunities. This history, coupled with vaccine enthusiasm, is why the vast majority of pundits—and a record-high share of fund managers—expect value to beat growth for the foreseeable future.

But as Exhibits 1 – 3 show, the last year has looked much more like the typical aftermath of a correction that occurs late in a bull market than it does a new bull market. Exhibit 1 shows the past 12 months, with growth leading out of the gate and still ahead cumulatively, despite some countertrends. That looks nothing like Exhibit 2, which shows growth trailing over the first year following the prior two bear markets (again, with some countertrends). But it looks an awful lot like Exhibit 3, which shows the corrections occurring late in the 2002 – 2007 and 2009 – 2020 bull markets. In all three, growth led out of the gate and cumulatively over the full 12 months, with—yes—countertrends.

Exhibit 1: Growth Vs. Value Since Last Year’s Low


Source: FactSet, as of 3/23/2021. MSCI World Growth and Value Index returns with net dividends, 3/23/2020 – 3/23/2021. Indexed to 1 at 3/23/2020.

Exhibit 2: Growth Vs. Value in the First Year After Bear Market Lows


Source: FactSet, as of 3/23/2021. MSCI World Growth and Value Index returns with net dividends, 10/9/2002 – 10/9/2003 and 3/9/2009 – 3/9/2010. Indexed to 1 at the start of each period.

Exhibit 3: Growth Vs. Value in the First Year After Late-Bull Market Correction Lows


Source: FactSet, as of 3/23/2021. MSCI World Growth and Value Index returns with net dividends, 8/16/2007 – 8/16/2008, 3/23/2018 – 3/23/2019 and 12/25/2018 – 12/25/2019. Indexed to 1 at the start of each period.

Now, note that the 2007 – 2008 dataset in Exhibit 3 includes the first 10 months of the bear market that accompanied the global financial crisis, which we highlight a) in the interests of transparency and b) as a reminder that bear markets can arrive soon after corrections. But it still shows growth beating value right out of the gate, which underscores our point: That is what generally happens when stocks correct late in a bull market. (Growth’s continued leadership in the beginning of the ensuing bear market is a topic for another day.)

This full history is a big reason why we think the many, many people who expect value to take the baton and run with it now are likely in for some disappointment—that is our first takeaway. As the charts show, countertrends are normal—even big ones. They are fleeting functions of sentiment, and they are very good at fooling people. In our view, the key task for investors isn’t to time them perfectly, but to stay disciplined and focused on longer-term trends through them. Today, we think that means remembering markets are efficient and usually defy the most popular expectations. Forecasts for value leadership are too widespread—basic principles of markets’ efficiency dictate these forecasts are surely priced in. For more on that, see Monday’s look at industry trends.

The second main takeaway is a note of caution. Most pundits have seemingly penciled in years and years of bull market returns from here. That would be logical enough if stocks were acting like this was indeed a young bull market. But their behavior’s resembling a late-stage bull market implies the end of the run is probably much sooner than people think. We aren’t saying it is imminent. We are bullish! While sentiment has warmed considerably, it isn’t yet at the euphoric heights typical of peaks. Lingering worries over Europe’s vaccine distribution woes and potential US tax hikes are helping extend the wall of worry, keeping near-term expectations in check. But optimism eventually bubbles into euphoria, and it isn’t hard to imagine a few positive surprises along the road ahead inspiring that widespread cheer. Watching sentiment’s evolution—and how expectations square with the likely reality—will be critical as the months roll on.

Again, we think stocks still have room to rise. We think returns this year are likely to be very nice, with growth leading. But we think keeping a cool head, not letting greed get the best of you, and keeping your expectations in check will be key to navigating the rest of this bull market successfully.

MY COMMENT

AGREE COMPLETELY.....and have said so more than a few times on here. The ARTIFICIAL collapse of the economy and stocks last year was NOT.....a typical bear market. It was simply an INTERRUPTION of the very old bull market that started way back in 2009. As such.......I think it is very foolish to epxect that value will RULE over the next year......and.....that the bull market has years to run because it is.....young.

 

I like this little article. It is certainly TRUE so far this year.

Tech stocks, with the exception of one, are 'frustrating a lot of investors': analyst

https://finance.yahoo.com/news/tech...ing-a-lot-of-investors-analyst-102558525.html

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

The once can't-miss big-cap tech trade has been anything but hot in 2021 amid a shift to value stocks ahead of a strong economic recovery from the worst of the COVID-19 pandemic.

Such ongoing weakness in tech has put most names in the space in the penalty box for veteran Wall Street tech analyst Brent Thill of Jefferies.

"I think that tech is off limits right now. You are seeing money go to travel stocks. You are seeing money go to airlines. You are seeing the broadening out of money," Thill said on Yahoo Finance Live. "I think money will come back, it's just right now valuation combined with the names aren't working I think it's frustrating a lot of investors. A lot of the hedge funds have gotten turned upside down and they have to rethink their positioning. So right now, I call it more of a time out [on tech]."

While cautious on most of the underperforming tech sector, Thill does have his eye on one social media giant: Facebook.

"Facebook is a cheap name," Thill says. "$15 of earnings power and a mid 20 [P/E] multiple on it, and you are at $350 to $375 on the stock. So you got a lot of upside still on Facebook. We like that."

Facebook shares finished Wednesday's session at $282, up 3% on the year — and a laggard relative to the S&P 500 and Dow.
Meanwhile, a recent example of a likely frustrating tech trade is cloud play Adobe.
Adobe smashed quarterly earnings estimates on Tuesday evening by 36 cents. Demand was strong across the board, led by a 32% increase in sales at the company's Digital Media business. The company issued full-year earnings guidance about 60 cents above Wall Street projections.

Yet, Adobe shares fell nearly 2% in heavy trading on Wednesday.

Serious traders probably aren't too shocked by the ho-hum response to Adobe's blowout earnings.

The Nasdaq Composite is up marginally on the year versus a 4% gain for the S&P 500 and a 6% bump on the Dow Jones Industrial Average. As for the closely watched NYSE FAANG+ Index (which tracks top tech names such as Facebook, Apple, Amazon, Netflix and Google) it's up slightly year-to-date.

Cloud stocks have been hammered this year — Salesforce is down 6% year-to-date and DocuSign has shed 11% (despite a strong recent earnings report of its own."

MY COMMENT

The BIG CAP tech titans are on pause right now. The markets have to catch back up with them. In addition the markets need to see some earnings from them that will propel higher prices going forward. For investors like myself that are into the big tech......it will probably be until first and second quarter earnings to see much movement. It could even UNTIL late summer or fall.

We continue to see the.....short term....markets bouncing back and forth trying to decide whether to move up or correct. Typical short term action that is IMPOSSIBLE to predict or anticipate.

 

Some little points. I see where the yields on the Ten Year Treasury have been SLIDING for four day now. BUT....the tech stocks have not been in a RALLY during that time. How can that be? We have been told for the past 4-5 weeks now.....that rising yields....... is why the BIG CAP TECH is having issues. So they should rally on falling yields...right?

I also see....that the current media darling of the investment world......Cathie Wood......is saying that any inflationary pressure will prove to be TEMPORARY. We have been told for 4-5 weeks now that inflation is going to be a BIG issue.

We have also been told that the threat of higher taxes will not impact the markets. NOW suddenly the Chamber of Commerce and others are talking about the COMING tax hikes hurting business and the markets.

WTF....how can that be?

WELL....it can be.....because all the BLATHER that the so called EXPERTS put out there day to day is just that.....BLATHER. There is NO accurate correlation to any of it.

Treasury yields log 4th straight slide, 10-year briefly dips below 1.6%

https://finance.yahoo.com/m/c850c3f6-d790-382f-ab17-cb92d84e2edc/treasury-yields-log-4th.html

Cathie Wood predicts inflationary pressure will prove temporary

https://finance.yahoo.com/m/78cd0489-187e-32ae-b3d2-c22886d83613/cathie-wood-predicts.html

Threats of higher taxes could trigger major selling of stocks by the wealthy: strategist

https://finance.yahoo.com/news/thre...ocks-by-the-wealthy-strategist-173457220.html

NONE of these people have the SLIGHTEST idea what is going on or why.......no one does short term. It is ALL simply hindsight predictions and opinion GUESSWORK. ALL of the short term....and....trading....pronouncements are simply guess work. They have about a 50/50 chance to be right each day.

It is like the old Warren Buffett thought on Technical analysis:

"But Buffett discovered one small problem. Technical analysis didn't work. He explained, "I realized that technical analysis didn't work when I turned the chart upside down and didn't get a different answer."
After eight years of trying, he concluded that it was the wrong way to invest. Then he focused on the teachings of Ben Graham, which stressed business fundamentals, finding a strategy that both made sense and, more importantly, worked."

FORTUNATELY....there is ONE investing theory that DOES work. AND...it involves little to no daily work or effort. Long Term Investing.....based on sound fundamentals. It is AMAZING how.....the vast majority of investors that are famous and followed.......use this sort of investing.

 

Want the TRUTH about investing? HERE it is.......and it is so simple....that MOST people can not bring themselves to follow it. COME ON.......if there is no complex rules and formulas.....no math......no charts with all sorts of rules and exceptions and "stuff" that must be learned........if MUST NOT work....right?

Don't pay an investment adviser to 'beat the market' — do this instead

https://finance.yahoo.com/news/dont-pay-investment-adviser-beat-144400899.html

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

"If you work with an investment adviser, you’ve probably had a moment or two when you’ve lamented how much you’re paying in fees.

And it’s normal and healthy to regularly ask yourself — and your adviser — what you’re supposed to be getting in return for those fees.

If your adviser answers that they’re paid to “beat the market,” it might be time to seriously re-evaluate the relationship.

The fact is, most people who are paid to deliver higher returns than the stock market as a whole can’t do it. Data from the S&P Dow Jones Indices show 60% of large-cap equity fund managers underperformed the S&P 500 in 2020.

It was the 11th straight year that the majority of fund managers lost to the market.

There are plenty of good reasons to pay an adviser or certified financial planner to help handle your investments, but beating the S&P 500 isn’t one of them. The data says it probably won’t happen.

What financial pros are up against

The S&P 500 has delivered inflation-adjusted returns of about 7% per year, on average, for the past 40 years.

So to beat the market, a financial adviser would need to design a portfolio that gets better returns than that.

Is it possible in a given year? Sure it is — plenty of investors and mutual fund managers do it.

But is it possible to predict who will do it? And does the possibility justify the fees charged by the most prestigious fund managers, many of which operate on a “two and 20” model (2% of the portfolio’s value plus 20% of profits)?

Buffett’s famous bet

Warren Buffett, who’s justifiably famous for his sage money advice, has frequently argued that, for most people, a simple market-pegged portfolio is a smarter investment strategy than trying to pick winning stocks.

In January 2008, Buffett put this belief to the test: He bet a prominent hedge fund manager a million dollars that an S&P index fund would deliver better returns over 10 years than a fancy and expensive hedge fund portfolio consisting of actively selected stocks.

Buffett made this bet before the stock market collapsed in the financial crisis of that same year. But it didn’t matter — by 2015, the hedge fund manager had waved the white flag and admitted he’d lost.

Buffett’s index fund had made 7.1% per year; the hedge fund had made 2.2%. It wasn’t even close.

Anyone who wants to prove Buffett right yet again can easily do so thanks to a new generation of do-it-yourself investment apps, all of which allow you to quickly and painlessly assemble a stable portfolio with low fees

And some apps even allow accredited investors to invest in U.S. farmland, which over the last 30 years has performed even better than the stock market, according to industry research.

What a good adviser does

Investment advisers needn’t worry about beating the market because that’s not really the job of a good adviser.

A good adviser will work with you on your medium- and long-term financial goals, in ways an app or algorithm can’t replicate.

Are you saving up for a new home or a comfortable retirement? Maybe you’re saving up to pursue a post-retirement dream.

These are real-life questions that a real-life adviser can help you answer.

You should also have reasonable access to your adviser to discuss your investments and get personalized advice. If you call, your adviser — not an assistant — should pick up the phone.

As with Buffett’s slow-and-steady wisdom, these aren’t sexy ways to make fast money playing the market.

But if your adviser is promising you fast money, you should probably find a new adviser.

What should you do?

The best way to avoid being disappointed by your adviser is to not set yourself up for disappointment.

No matter how well a financial professional is dressed or how confident they sound, the data shows their investment picks likely won’t outperform the S&P 500.

You might decide that a DIY approach takes the stress out of investing. A simple smartphone app can automatically invest your spare change into a balanced portfolio. You won’t notice the contributions but you will notice the returns.

No matter what you do with your investments, you should never pay someone for a promise they can’t keep. A good adviser would tell you that.

MY COMMENT

YES....many people NEED an investment advisor. They dont have the time or the inclination to do their own investing. They are busy with life......or.....they can NOT avoid ALL the human behaviors that KILL returns. They are smart enough to evaluate THEMSELVES and hire someone to have the discipline that they do not.

OTHER people....thrive on doing it themselves.......and.....they do well.

The ONE common factor you see with a good advisor and a good investor doing their own thing.....LONG TERM FOCUS.....and......a long term investing approach. GIVE it some thought.....do you know ANYONE that hires an advisor....to day trade their account? Have you ever heard of ALL the successful advisors that are short term traders?

I wont say there are NONE....but I have never heard of any.

IN 25 years.....of posting on financial web forums.....and....interacting with hundreds of investors......I have NEVER heard of ANYONE hiring a professional to SHORT TERM TRADE their account. Why not? YES.....why not?

 

AMEN to the above post.

Now....moving on....a nice open today. We could use a strong day to kick us into the weekend.

Here is something that has been commented on here.......the RED HOT real estate market. It appears that this is NOW a nationwide event. LOL......I used to just laugh at all the BLATHER about...how different.....the Millennial generation was. They dont want to buy things....they just want experiences......they dont want to buy a house.....they are so different.

WELL.....surprise.....they are buying houses like MANIACS. They are moving in DROVES to the.......yes.....the burbs. They are doing EVERYTHING every generation does.....in the same order as always. The BIG PROBLEM.....many of them are now being SHUT OUT of.......home ownership....by market conditions. Those that bought earlier in life are CASHING IN right now. Those that did not....are in a panic to now buy a house.

Personally......I consider home ownership a MUST for any investor. It is a HUGE....necessary....asset in a well rounded financial portfolio.

'It's crazy. There is no inventory.' Housing industry veteran marvels at real estate boom

https://www.cnn.com/2021/03/26/business/housing-market-shortage/index.html

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

"Jeffrey Mezger is a 40-year veteran of the real estate industry. He's never seen a stronger housing market than this one.

"It's crazy. There is no inventory," the CEO of KB Home told CNN Business.
For wannabe buyers, the shortage of homes on the market, combined with a surge of competition from other purchasers is setting off bidding wars, all-cash offers and no end of sticker shock.

But this one-two punch of very low supply and roaring demand is suiting homebuilders just fine.
"This is the best housing market I've seen in my career," Mezger said. "It's a good time to be a homebuilder."
KB Home's first-quarter profit swelled by 62%. It handled more home transactions than in any first quarter since 2008. The company's backlog surged by 74% in value, and nearly doubled in the West Coast.

"There isn't a city we're in where I would say it's a tough market," Mezger said.

Not only is KB Home (KBH) making far more money now than a year ago, it's making more money per home built. Profitability per unit is up 73% year-over-year to $41,000.

Record-low inventory

It's the polar opposite of what the company faced during the subprime bust that began around 2007, when the housing market was gripped with a massive oversupply problem that took almost a decade to correct. Construction of new homes collapsed in the aftermath of that crisis and never recovered. The supply of new homes remains very low today.
"We've been under-building for the last 15 years," said Mezger.

As of the end of February, housing inventory tumbled by nearly 30% year-over-year to a record low of 1.03 million, according to National Association of Realtors data that goes back to 1982. Last month, homes typically sold in just 20 days — a record low.

Supply is so short that it's limiting the number of homes getting sold. Existing home sales fell by almost 7% between February and March, according to the NAR, which blamed the decline on "historically low inventory."

Mortgage rates are creeping higher

New home sales have also cooled off recently.

In February, new home sales tumbled by 18% to a nine-month low. Economists blamed last month's freezing temperatures in parts of the United States but also said the sales drop points to concerns about high prices and affordability.

"Mortgage rates are rising, consumers are shifting spending to reopening activities vs. at-home and we aren't looking at the same degree of pent-up demand as in early 2020," economists at Bank of America wrote in a note to clients this week. "We think housing activity is set to moderate."

Mortgage rates remain very low historically, although they have crept higher in recent months. The average interest rate on a 30-year fixed-rate mortgage hit 3.09% last week, the highest since June.

Higher borrowing costs will help cause housing affordability to decline by 5% to 6% this year, despite strong income growth, according to Bank of America.

Surging lumber costs are making homes more expensive

Still, housing CEOs remain upbeat, in part because demand is being driven by a new flock of buyers. Millennials make up the largest cohort of buyers for KB Home, a trend the company said began before the pandemic.

"Post financial crisis, millennials either saw their parents lose their home, couldn't get a job or had a lot of student debt. Millennials deferred their first home purchase much longer than previous generations," said Mezger.
He added that KB Home is also seeing strong demand from Gen Z homebuyers.

Beyond affordability, one challenge facing homebuilders is skyrocketing construction costs.

Ninety-six percent of builders surveyed in the 2020 National Association of Home Builders survey reported building materials as the top challenge, up from just 66% in 2019.

The No. 1 culprit is the shortage of lumber. Prices for lumber have skyrocketed in recent months because surging demand and shrinking supply, making it much more expensive to build new homes.

The elevated price of lumber alone is adding about $24,000 to the price of new homes, according to the NAHB.
As for KB Home, "We've been able to raise price enough to cover the cost and raise our margin," Mezger said. "Demand is that strong.""

MY COMMENT

GET used to it. I dont see any lessening of this housing BOOM for a long time. The population of the country is SURGING. The demand and desire for the best schools for kids and good suburban housing is BOOMING. The younger generations are NOW realizing that the historic LOW mortgage rates.........and....the desirability to own a home as a personal lifestyle decision and as a FINANCIAL ASSET is.......very important.

 

Here is a little different article. BUT.....so true. In today's world....scams abound.....be careful out there....ESPECIALLY new investors and those that are just starting out.

Simple Steps to Defend Yourself Against Financial Predators
Some tips on protecting yourself from bad actors preying on stressed investors.

https://www.fisherinvestments.com/e...o-defend-yourself-against-financial-predators

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

"Investors have a lot on their plate these days, from tax season to stories of investing opportunities promising big returns—including the newest fad, digital art. All the noise can be overwhelming, and, unfortunately, ne’er-do-wells will seek to exploit honest folks’ emotions. To help you shore up your defenses, your friendly MarketMinder Editorial Staff has round up examples of illicit activity garnering financial headlines recently—and has some tips on protecting yourself.

Watch Out for the Pump and Dump

Stories of huge investing successes may tempt some to chase big returns, leaving them susceptible to a common investment scam: the pump and dump. This scheme often involves shares of tiny companies that trade for less than $5 a share—also known as penny stocks. These thinly traded securities usually trade on over-the-counter (OTC) markets rather than major stock exchanges. Some were caught up in January’s Reddit frenzy, hence the heaps of attention now.

In a pump and dump, stock promoters typically claim a forthcoming announcement or big new investment strategy will bring big returns for a certain company, making this a ground-floor buying opportunity. Their goal is to get unwitting investors to buy shares on the false premise—thereby pumping up the price. The hucksters then sell (aka dump) their own shares. Since penny stocks often lack liquidity, those left holding the bag usually have to take a major, if not total, haircut.

“Pump and dump” isn’t new, but promoters have adapted with the times. Instead of landlines, they use emails, blog posts and social media. Yet the telltale signs remain the same: claims of possessing exclusive information nobody else has; promises of quick riches; appeals to act now or miss out. These tactics aim to exploit folks’ greed—something to be mindful of with optimism increasingly widespread today.

Tread Carefully With New Fads

Nonfungible tokens (NFTs) have taken the world by storm in recent weeks—and related fraud showed up almost as quickly. NFTs are pieces of digital content that use blockchain technology to create a verifiable, unique certificate of ownership. Essentially, they create scarcity for digital assets, enabling the existence of digital collectibles—which include artwork, tweets and sports video highlights. Some NFTs have fetched sky-high prices, with a piece of NFT art recently selling for a record $69 million at auction.

The hype and popularity have led to rampant NFT deception, with thieves stealing artists’ work and selling it without permission.[ii] Buyers have little recourse if they buy a NFT of a fake or stolen digital work. We aren’t anti-NFT, but it is important to understand what you are buying. NFTs are receiving attention in the investment world due to their association with cryptocurrencies, but they aren’t securities. They aren’t listed on exchanges and don’t have transparent, on-demand pricing. They are illiquid collectibles—the same category as fine art, beanie babies and baseball cards. It is critical to do your research, as getting caught up in a speculative frenzy and buying something you don’t understand may leave you with buyer’s remorse, not to mention a worthless fake.

Beware Wolves in Taxpeople’s Clothing

Few want to run afoul of the IRS—a fear some shady characters try to take advantage of. Though the IRS extended the federal filing deadline to May 17, some taxpayers may be dealing with new, pandemic-related situations—adding to their stress and giving more reason to be cautious with any purported tax-related communications. Predators may impersonate IRS agents through phone calls, text messages and email to intimidate unsuspecting folks into giving personal information. One cybersecurity firm recently identified a new hacking campaign that uses fake tax documents to gain access to users’ computers.[iii]

The IRS also started issuing another round of Economic Impact Payments (i.e., COVID relief checks) in mid-March. Some miscreants offer to expedite or provide your payment in exchange for personal information and/or a fee. Ignore those shams. Qualified recipients can find their payment status on the IRS website. Generally, recipients don’t need to take any additional action, as payments are sent via direct deposit or by mail (as a check or debit card).

Whether for taxes or stimulus payments, the IRS won’t send unsolicited texts, emails or social media messages. Most notices will arrive through regular mail delivered by the USPS. The IRS will also never demand payments via gift card or cryptocurrency or threaten arrest or lawsuits.

How to Arm Yourself Against a Widespread Problem

According to the US Federal Trade Commission (FTC), consumers filed 2.1 million reports of fraud—and reported losses of more than $3.3 billion—in 2020, up from 2019’s $1.8 billion.[iv] These numbers likely understate the damage, as not all victims report their losses, and one research outfit estimates 2020 consumer losses exceeded $50 billion.[v] This isn’t just an American phenomenon: The UK reported about £2 billion ($2.8 billion) in consumer losses last year.[vi]

We don’t share these figures to scare. Our intent is to highlight how widespread the problem is, reinforcing the importance of guarding yourself. Despite their best efforts, regulators can’t stop every con artist. So here are some simple, actionable tips to protect yourself:

• Don’t respond to unsolicited, unexpected communications—especially those asking for personal information. If you think a message is legitimate—or just aren’t sure—reach out to the government agency or institution directly, using their official, publicly listed contact information.
• Don’t click on links in unsolicited emails. Doing so could install malicious malware on your computer, leaving you vulnerable to hackers.
• Do update your passwords, ensuring you have a unique and complex password for each online account/profile you own. If you are worried about keeping track of these try using a secure password manager.

Ask yourself some basic, high-level questions, too. Are solicitations playing on your emotions? Does an offer sound too good to be true? While charlatans, like cockroaches, will likely be with us until the end of time, some healthy skepticism and constant vigilance can go a long way in helping you avoid being a victim.

MY COMMENT

As investors we have to be CAREFUL. The human brain will con its owner. ALL cons work because of one thing.....GREED. The best defense.....slow down.....there is nothing that must be bought or purchased or invested in right now......as your ONLY chance. If you are being PUSHED to invest in something.....it is probably a MISTAKE.

 

SO......we are a long way from the close.....BUT....here is where we are. I EXPECT a nice positive day today......and.....a good close for investors. AS USUAL.....the future market direction is......ALWAYS.....positive.

US STOCKS-Wall Street climbs on boost from financials, tech stocks

https://finance.yahoo.com/news/us-stocks-wall-street-climbs-142837400.html

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

"U.S. stock indexes broadly rose on Friday, with technology and financial shares providing the biggest boost as investors bet on what is expected to be the fastest economic growth since 1984.

The S&P 500 and the Dow were set to end a choppy week higher as an end-of-quarter rebalancing of investment portfolios led to alternating boost from stocks that stand to benefit from a re-opening economy, and beaten-down technology shares.

The S&P 500 value index, which includes energy, banks and industrial stocks, has gained more than 9% this year, easily outperforming growth shares, which are down 0.4%.

"Investors are thinking about an economic recovery over the balance of the year and are taking a step back to evaluate valuations, fundamentals and some of the macro economic drivers," said Brian Vendig, managing executive at MJP Wealth Advisors in Westport, Connecticut.

"You have people trying to get back to work, you have checks in hand to consumers and you have other policy measures that are coming to support the economic reopening."

L Brands jumped about 6% after the Victoria's Secret owner raised its current-quarter profit forecast for the second time this month as it benefits from consumers spending their stimulus checks and relaxation of COVID-19 restrictions.

Wall Street's main indexes rebounded in late-day rally on Thursday as weekly jobless claims hit their lowest level since the COVID-19 pandemic began and President Joe Biden highlighted the brightening economic outlook. Bank stocks added 1.3% as the U.S. Federal Reserve said it would lift income-based restrictions on bank dividends and share buybacks for "most firms" in June after its next round of stress tests.

Energy stocks jumped 1.4%, tracking a boost in crude prices after a giant container ship blocking the Suez Canal spurred fears of supply squeeze.

Nine of the 11 major S&P sectors rose with utilities and consumer staples in the red.

At 10:00 a.m. ET, the Dow Jones Industrial Average was up 150.22 points, or 0.46%, at 32,769.70, the S&P 500 was up 18.76 points, or 0.48%, at 3,928.28, and the Nasdaq Composite was up 46.73 points, or 0.36%, at 13,024.41.

Nio Inc slumped about 6% as the Chinese electric vehicle maker said it would halt production for five working days at its Hefei plant due to a shortage in semiconductor chips.

Latest data showed U.S. consumer spending fell by the most in 10 months in February as a cold snap gripped many parts of the country and the boost from a second round of stimulus checks faded, though the decline is likely to be temporary.

Advancing issues outnumbered decliners by a 3.47-to-1 ratio on the NYSE, and by a 1.99-to-1 ratio on the Nasdaq.

The S&P index recorded 21 new 52-week highs and no new low, while the Nasdaq recorded 33 new highs and nine new lows."

MY COMMENT

YES........the future for stocks and funds is......ALWAYS POSITIVE. BUT.....one group of investors are the exception......and.....MUST EXERCISE CAUTION. The Baby Boomers. The oldest boomers are now in their 70's and mid to late 60's. Over the next ten years the MAJORITY of boomers will be in their mid to late 60's. I suspect that MANY people are way over-invested in stocks and funds with NO APPRECIATION of the danger of being invested in these vehicles.......when your time horizon is shorter.

By short.....I mean 10 to 15 years. It is VERY possible to take a HUGE HIT over ten years in stocks and funds. ESPECIALLY when the money is critical and you are no longer working and adding to your portfolio every year. Many have NO pension. We are the FIRST GENERATION......well modern generation.....to enter retirement with ONLY our own assets to survive on. Watch out.....it is not any fun to survive on just Social Security.....or......experience the fear and panic of seeing your investments that you are depending on for living expenses......PLUMMET.

AND.....as I constantly harp on......the HUGE black swan siting in the corner of the room is......GOVERNMENT POLICY. It does not matter.....in the slightest....how positive everything in the private economy is.....EVER. GOVERNMENT through regulation, taxes, policy, law, etc, etc......has the power to change everything.