The Long Term Investor

I have......once again.....posted my current portfolio and investing style in the post above. As has been the case in my family going back 70+ years.....I am a LONG TERM INVESTOR. I am fully invested for the long term....all the time. My GOAL is to capture ALL the gains....especially....those that happen in explosive moves that can NOT be anticipated. The key to investing success.....for me.....the POWER of COMPOUNDING over the long term.

In this thread....I post....in REAL TIME.....any and all moves that I might make. I post any stocks or funds that I sell......and......any that I buy....on the day it happens. I wear my....investing heart....on my sleeve. I have been posting in this way since about 1995......about 26 years now......starting on the old MSN Money Boards.......a few other boards.....and since October of 2018 on STOCKAHOLICS.

 

There is a hole in my keyboard......where the period used to be....Emmett.

 

I got back from a little road trip about two hours ago. Left at 11:00 and got back at 8:00. A good 3 hour show. NICE to see some shows coming back onto my calendar. Now have 6 shows in place. A little different than before the pandemic.......when......I would do at the minimum about 100 - 120 per year.

I have been playing with some numbers tonight. JUST....a snapshot of where my....12 stocks.....and.....two funds.... are at the end of the first quarter. All in all I am very satisfied with where I am at this point in the year. A good starting point for the rest of the year. Because of the INTENTIONAL OVERWEIGHT in the tech area in my portfolio......I have PLENTY of room to add gains going forward. In spite of the current little tech mini-correction.....I am very close to an all time portfolio high.

Portfolio total return year to date +3.0%

Needed to equal all time portfolio high +1.6%

GAIN OR LOSS PER STOCK POSITION YEAR TO DATE

AMAZON (-.78%)
MICROSOFT +1.1%
GOOGLE +23%
APPLE (-4.6%)
TESLA (-9.3%)
NIKE (-5.7%)
COSTCO (-6.8%)
HOME DEPOT +16.7%
HONEYWELL +4.8%
PROCTOR & GAMBLE (-2.9%)
SNOW (-14.7%)
NVIDIA +5.37%

Seven positions down and five up. I am very confident in my portfolio going forward. The positions that are negative are....ALL....big cap MONSTER companies....the cream of the crop of American business.....Amazon, Apple, Tesla, Nike, Costco, and Proctor & Gamble. Snow is a long term speculative holding....limited to 100 shares.

As we move on out from under the shadow of the pandemic and into the four quarters of earnings numbers this year......i expect to see a SIGNIFICANT GAIN in the tech holdings that are currently negative.

 

I was thinking while driving today.....about my investment GOAL. I have one PRIMARY GOAL......average 10% or better for the long term.

My second goal is more aspirational.....kind of a fun exercise....not a critical goal....try to beat the SP500 each year.

I would bet that if you asked many other investors....especially the young guy, traders,.....they would say that a GOAL of a long term total return average of 10% or better was a pretty low to moderate goal.

Well....for me...I like goals to be realistic. The way I look at it is.......the long term average total return for the SP500 is about 10% per year. I ALSO know that the majority of the PROFESSIONAL money managers CAN NOT beat the SP500 over the long term. So.....if I achieve that low sounding goal.......10% total return long term..... it means that I am equaling the SP500 over the long term. If I BEAT that goal of 10%.....which I am........than I am beating the majority of professional money managers over the long term.

That is good enough for me. What I want from my goal is to double my money every 5-7 years.....and....to let the power of compounding do the heavy lifting over TIME. For me....this is what it means to be a long term investor.

 

At the moment.....EVERYTHING....seems to be lined up for a very good day for investors.....and.....also a good week. Here is a little article on the COMING tax increases and the markets.

Don't Worry, Stocks Already Priced the Biden Tax Hikes

https://www.realclearmarkets.com/ar...den_tax_hikes_you_needlessly_fear_771183.html

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

"Tax hikes are coming! Tax hikes are coming! Yikes, Yikes, Yikes! Pundits tizzy it up over President Biden’s rumored plan, fearing multi-faceted new, huge hikes will whack stocks. They warn budget reconciliation means Biden can slam-dunk it all with Democrats only. Take a deep breath: Internal Democratic divisions will dilute any tax legislation that passes. But, even if I’m wrong on that, it still won’t whack stocks. Let me explain.

Pundits say rising stocks, at new all-time highs, “ignore” looming tax overhauls, teeing up future market shocks. That’s silly. Stocks don’t ignore anything. But pundits’ focus on plans for huge Uncle Sam spending—heavily paid for with more taxes. Biden, of course, campaigned on bumping up the top personal income tax, corporate tax rate, and taxing capital gains at personal income rates for individuals earning over $1 million—almost doubling that rate.

Many fear that is just the start—fearing rumored proposals for taxing financial transactions, like stock trades. Or a wealth tax Senate Democrats introduced last month. Others fear estate and gift tax exemption maximums get slashed—while raising rates on transfers exceeding those ceilings. Some even fret him making all these increases retroactive to 2021’s start. Most investors say hikes hurt stocks.

Scared yet? Quiver all you want but, remember: Markets never forget and never, ever “ignore” headline stories. They were weighing potential Biden plans even before he unveiled his campaign trail tax stances—in 2019! All throughout 2020’s campaign, Biden and other Democrats whose campaigns fizzled hyped hikes. About the only folks unaware he would push a hike now spent most of recent times in some soundproof bunker in Siberia without WiFi—and can’t sway much--much.

Markets’ primary job is pre-pricing widely known information. As I wrote here February 28th, that is one of the last year’s chief lessons. Yet still, so, so many investors ignore it. Value fans. Vaccine chasers. Now it’s those who fear tax changes will whack stocks. Presuming that is bear-market fuel presumes markets are near-totally inefficient, given the long-lasting and abundant chatter over tax hikes. Fortunes have been lost on such theses—and investment careers wrecked. We just saw that in the hedgies who bet against GameStop on widely held theories about storefront retail’s weakness. Fixating on what everyone knew set them up for a surprise.

Taxes touch investors directly, globally. Few folks like them. So tax changes never escape scrutiny. This is why history shows that changes to taxes—whether corporate, income or capital gains, hikes or cuts, of any type or size, and counter to common belief—have no pre-set market impact. Stocks pre-price them and defuse them. Don’t take my word for it. Consider the data.

As I showed you last October, America has hiked corporate taxes—Biden’s first target—13 times since good stock market data start in 1925. In the ensuing 12 months, the S&P 500 rose 9 times and fell 4. Returns averaged 11.1%, slightly north of their long-term 10% annualized average.

Like personal income taxes. America has hiked the top bracket 14 times since 1925. Stocks averaged 16.8% in the year following the hike, rising in 10 of 14. The trend you are noticing here—nicely positive returns that occurred regularly following hikes—applies to capital gains, too. Something resembling the modern capital gains system came into force in 1954. Following the 10 hikes since, stocks have averaged 10.7% returns, falling just once.

Even when Congress hikes corporate, personal income and capital gains together, they lack power to wallop stocks. There have been 11 simultaneous hikes to at least 2 of those tax types. The median return 12 months after is 11.8%, with stocks rising 9 times.

Does that seem counterintuitive? Try this: The returns following hikes beat those 12 months after cuts! Stocks averaged just 3.2% gains following the 11 corporate tax cuts since 1925. Personal income tax cuts? We’ve done that 16 times. Average returns after them were flat. Following capital gains tax cuts, returns averaged just 6.7%—pretty bland!

To be clear: I’m not taking a pure contrarian view that tax hikes are bullish. But these data show you the conventional wisdom arguing hikes are auto-bearish is just dead wrong. They lack anything close to the surprise power needed to hit markets hard. If anything, the stock pain was long before the legislation as the initial pre-pricing digested the odds of this, that or the other.

It is fine to hold the opinion that tax hikes aren’t good generally--on Main Street and otherwise.(For disclosure, I generally share that view outside of capital markets impacts—while viewing some taxes as preferable to others for business and consumers.) Maybe you think rates are too high (or low!) to be fair. Maybe you could even make the argument that hikes are suboptimal for the economy. But markets don’t traffic in fairness—nor do they weigh what’s optimal for the here and now. They deal in what is likely, pre-pricing the probably future it into stocks near-instantly.

So if—and it is a big “if” (see my prior writings here and elsewhere)—tax hikes that aren’t hugely diluted before becoming law actually pass in 20201, don’t fear for your portfolio. Glacial moves that everyone watches with keen self-interest lack the power to hit stocks hard."

MY COMMENT

I tend to agree with this little article. I dont see tax increases having a HUGE impact on the markets. I will depend of the HOARDS of corporate lobbyists.......and....company management to deal with the tax issue.....as they always do.

NOW.....the general economy and ESPECIALLY JOBS.....that is a different story. My opinion is that tax increases....as being discussed....will severely impact the general economy and especially jobs. I have ZERO confidence in....government....to manage the economy....or....to have a clue how tax increases will impact people and behavior. I ALSO have ZERO confidence in government to take money out of the private sector.....and....direct the spending of that money........and.....by implication.....the economy.

BUT.......as usual.....the general economy is NOT the stock markets. The two are very different and I expect that the stock markets WILL continue to be disconnected from the general economy.....as usual.

 

This is pretty much where we are at the moment......the start of a......potentially....explosive week for long term investors. If something happens and it...FIZZLES.......well, that is why I am a long term investor. Pay me now....or.....pay me later.

Stock market news live updates: Stocks jump as traders digest jobs report, look ahead to Fed remarks

https://finance.yahoo.com/news/stock-market-news-live-updates-april-5-2021-112641523.html

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

"Stocks jumped Monday morning as traders took in last week's much stronger-than-expected monthly jobs report and looked ahead to a busy week of commentary from Federal Open Market Committee (FOMC) members.

The Dow gained more than 200 points, or 0.7%, shortly after the opening bell. The S&P 500 and Nasdaq also gained, with the latter outperforming as technology stocks extended recent gains. Treasuries were mixed across the curve, and the yield on the 10-year Treasury note ticked down slightly to about 1.72%. Shares of GameStop (GME) sank more than 16% after the company announced an up to $1 billion share sale. Meanwhile, shares of Tesla (TSLA) jumped more than 7% after the electric vehicle-maker posted first-quarter deliveries that more than doubled over last year.

Traders on Monday returned from a long holiday weekend after Friday's stock market closure in observance of Good Friday. As a results, Monday's regular trading session marks the first since the March jobs report was released Friday morning, which showed that the economy gained a stunning 916,000 payrolls last month with an unemployment rate that ticked down to 6.0%.

This week's calendar will be relatively light in terms of new economic data, and very few corporate earnings results are slated for release. However, a number of Fed policymakers are scheduled to speak, offering their own assessment of how the latest, estimates-topping data informs their perspectives on when to tweak their ultra-accommodative monetary policy going forward. Chicago Fed President Charles Evans, Richmond Fed President Thomas Barkin and St. Louis Fed President Jim Bullard are each slated to deliver public remarks later this week, and Fed Chair Jerome Powell will speak at an an International Monetary Fund panel on the global economy Thursday afternoon.

The central bank is also poised to release the meeting minutes from its March FOMC meeting on Wednesday. While these will not account for the latest batch of economic data, the notes will offer a glimpse at policymakers' thinking over whether some members were inclined to look past the first signs of a faster-than-expected economic recovery in dictating the direction of monetary policy.

"At last month’s meeting, the FOMC significantly upgraded their economic forecasts yet kept their median interest rate projections unchanged. As such, a close eye will be kept on any discussions that shed light on the disconnect between the hawkish economic forecasts and the dovish dots," Wells Fargo economist Sam Bullard wrote in a note Monday morning. "While the consensus of the FOMC continues to suggest that the committee will wait for their forecasts to be realized before taking policy action, it will be interesting to see if there is any intense discussion about the implications of the stronger outlook, particularly around inflation. Most Fed officials expect any pick-up in inflation to be “transitory,” yet we suspect there are a few officials that are pushing back on that narrative."

9:30 a.m. ET: Stocks open higher, extending overnight gains
Here's where markets were trading shortly after the opening bell:

• S&P 500 (^GSPC): +29.12 points (+0.72%) to 4,048.99
  
  
• Dow (^DJI): +241.9 points (+0.73%) to 33,395.11
  
  
• Nasdaq (^IXIC): +109.32 points (+0.81%) to 13,586.48
  
  
• Crude (CL=F): -$1.30 (-2.12%) to $60.15 a barrel
  
  
• Gold (GC=F): -$3.40 (-0.2%) to $1,725.00 per ounce
  
  
• 10-year Treasury (^TNX): -0.5 bps to yield 1.718% "

MY COMMENT

YEP......PROBABLY...heading to a good week. The DOW and SP500 are at RECORD HIGHS. Business and the markets are starting to really HUM.

Of course.....the ego maniacs....at the FED just can not sit down and shut up. THAT....is the one big danger of the week.

 

I believe that the .....media line....that VALUE is the place to be for investors.....will tend to be simply the.....media line. Value stocks will do fine....but that DOES NOT mean that the big cap growth stock will do poorly. My opinion.....take the top 20 stocks in the SP500 and you have the MASSIVE guts of the.......AMERICAN....... markets and the economy. These companies are MONSTER money machines. They have long term staying power......and.....WILL BOOM in a booming economy and/or BOOMING market.

Why growth stocks could rally from here

https://finance.yahoo.com/news/why-growth-stocks-could-rally-from-here-131510258.html

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

"Over the past seven weeks, we have seen two different markets. Growth stocks have been in a correction (as seen in the Nasdaq Composite) while other sectors such as value and the “opening up the economy” stocks have been in a strong uptrend (as seen in the S&P 500 and Dow Jones).

From here, we will start to see growth pick up again and participate to the upside for the following reasons.

Sentiment
The correction in growth stocks had less to do with interest rates and more to do with the excess bullish sentiment that was created earlier this year. This led to a large supply of equities that came to market via secondary offerings and SPACs, as many companies like to take advantage when prices are high. The price action of the past seven weeks helped to deflate that bullishness, as many winners from last year corrected 30%-50%. In addition, there has been a slight increase in put buying over the past two weeks, and last week saw the largest tech outflows since September 2020.


Source: Bank of America Global Research
Seasonality
Over the next four to six weeks, the news cycle will shift from interest rates and geopolitical nonsense to focusing on fundamentals and the upcoming earnings season. According to Ryan Detrick at LPL Financial, “stocks have closed higher in April an incredible 14 of the past 15 years.” He goes on to say that since 1950, April has been the second-best month for stocks, and the best month over the past 20 years. Also, any money normally taken out to pay capital gains taxes will be delayed until mid-May with the recent IRS tax filing extension.

Technicals
Last week saw two positive developments in the Nasdaq Composite. On Wednesday, March 31, the index triggered a follow through day (FTD). A FTD is a big up day that occurs on higher volume than the previous day. It does not guarantee that a market has bottomed, but no market bottom has occurred without one. Rather than getting too technical, think of it as a bullish sign that big institutions are coming back into the market. The second positive development is that the index got back above its 50-day moving average on Thursday, April 1.


Chart is provided by Market Smith.
The Fed
We continue to be in a very favorable environment for equities. As I have written many times, there is a coordinated effort from all the major central banks to keep interest rates low and the markets high. Fed Chair Powell is committed to his near-zero interest rate policy until the economy shows strong signs of recovery from the pandemic. As they say, “Don’t Fight the Fed!” Well good luck fighting all the global central banks. Don’t argue with it; take advantage of it while it lasts.

Semiconductors
The strongest area of growth right now is the semiconductor sector. The main ETF (SMH) already started to resume its uptrend a week before the Nasdaq Composite, and this could be a leading indicator for technology overall. The sector is benefitting from the chip shortage as semiconductors are not just going into computers and smartphones, but also into cars, appliances, medical equipment, and much more. The group within the sector that will benefit the most are the chip equipment makers. Many of these large cap leaders closed at all-time highs last week. Examples include Applied Materials (AMAT), KLA Corp. (KLAC), ASML (ASML), and Lam Research Corp. (LRCX).

Over the next four to six weeks, we could see a rally in stocks that takes the Nasdaq Composite back to new highs and the S&P 500 to 4200. The rally will see technology stocks participate ahead of their Q1 earnings reports, and under-invested fund managers might be forced to put money back to work if the S&P 500 starts to see double-digit gains on the year. In addition, the favorable low interest rate environment provided by the Fed will continue to act as a strong backdrop for equities."

MY COMMENT

I have no doubt that.....ANY...market rally WILL be strongly positive for the BIG CAP GROWTH stocks. Earnings are going to show the FOOLISHNESS of the....media line......that the GREAT earnings numbers that have been released over the last two quarters by the BIG CAP MONSTER stocks......are simply due to the pandemic.

The media and....the so called professionals.....with their short term focus and focus on trading and....."looking good".....will ONCE AGAIN.....be wrong compared to the little investors. THEY.....the so called professionals....will once again be the ones playing catch up.....as usual when the market boom ........and.....ESPECIALLY earnings move the big cap names strongly UP.

 

That is a good one Zukodany. Reminds me of the secret decoder ring that you got by......hounding your mom to buy Ovaltine....referenced in the movie Christmas Story.

 

The INSANE....real estate market. With the Spring rush happening....my little area is now averaging about 10 listings at the start of the week. Than as the week goes on......4-6 of them go pending.

I am noticing that we are NOW averaging about 3-4 homes at any time......coming back on the market after being pending. With the CRAZY prices....I assume these are either homes that would not appraise.....and/or.....were locked up by buyers with an offer that included an option time. This allows the potential buyer to take the home off the market for 7 days.......and have some time to think about the purchase without fear of the home being bought out from under them. It also allows the buyer to play the market for a week or so.......and hope for a better house....while they have the one home locked up.

 

NO I have not Emmett. Sounds like it might be right up my alley......I will check it out.

I do see this little blurb from the author:

"To me, every opinion maker needs to have "skin in the game" in the event of harm caused by reliance on his information or opinion (not having such persons as, say, the people who helped cause the criminal Iraq invasion come out of it completely unscathed). Further, anyone producing a forecast or making an economic analysis needs to have something to lose from it, given that others rely on those forecasts (to repeat, forecasts induce risk taking; they are more toxic to us than any other form of human pollution)"

I like his concept that leaders, company management, politicians, etc, etc...need to take REAL responsibility.......and....the buck needs to actually stop with them.....WITH CONSEQUENCES. We constantly see this with the typical MODERN....glad-handing....celebrity CEO. They suck huge amounts of money out of companies with their salary and HUGE option benefits when things are good. When it all goes to sh*t.......they bail with even MORE in money and benefits. They NEVER pay the price for their incompetence.

 

FANTASTIC.....market day today. This little rally has now KICKED me up to within .5% of an ALL TIME HIGH in my primary account. IF.......we can hold on to the close...which is a long way off.....I suspect that MOST people that have a long term perspective and invest in RATIONAL stocks and funds will be at or very near to personal all time highs.