The Long Term Investor

AMAZING. There is NOTHING in the news today. No DOOM&GLOOM or fear and panic stories. None of the usual drama. Nothing about the markets that is not obvious. A TOTALLY media free day. I ran through ALL my usual sites and sources.....and....NOTHING worthy of a post or a comment. I LOVE IT......peace and quiet.

I am sure this will change as the day moves on toward the close hours from now....but for now....glorious.

HERE is the ONLY item that has any remote relevance.....and....the markets are not going to care about this in the slightest. At least it is a positive for the economy in general.

U.S. job openings increase solidly in February

https://www.reuters.com/article/usa...gs-increase-solidly-in-february-idUSL1N2LZ16V

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

"U.S. job openings increased more than expected in February while hiring improved as strengthening domestic demand amid increased vaccinations and additional fiscal stimulus boost companies’ need for more workers.

Job openings, a measure of labor demand, increased 268,000 to 7.4 million on the last day of February, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday. Hiring rose to 273,000 to 5.7 million.

Economists polled by Reuters had forecast job openings rising to 6.995 million in February. The report followed on the heels news on Friday that the economy added 916,000 jobs in March, the most in seven months."

MY COMMENT

"I GOT NOTHIN". The above is about it so far today. Hopefully the lack of ANYTHING today does not hurt the markets. It could be an indication that investors........ have FINALLY......worn themselves out. I have a vague feeling that the MANIA is over. It just seems like the Reddit and GameStop and young guy day-trading is FINALLY lessening. That will mean lower volumes...if it is actually happening.

As to job openings....a good thing since it shows that businesses are reopening and/or getting back to more full employment operation. UNFORTUNATELY...government policy.........is STILL causing many people to have no interest in getting a job and going back to work. It is past time to END the EXTRA payments that people continue to receive. SIMPLY an incentive to not go back to work.

 

HERE is a little article that touches on the post above about the market MANIA.....perhaps....slowing down. Now if we could ONLY get the......media....to STFU with the constant DRAMA and FEAR MONGERING....that would be a good thing. BUT....wishful thinking.....long term investor FANTASY.

Jim Cramer: The Disastrous Acceptance Stage Has Hit Individual Investors
What crushed the individual was a lack of diversification.

https://realmoney.thestreet.com/jim...e-stage-has-hit-individual-investors-15613693

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

"Acceptance here. I'm talking the acceptance stage of grief, denial, anger, bargaining, depression and acceptance that the individual investor has gone through. Now you are seeing the dramatic decline in involvement -- 35% dropoff in traffic alone at Robinhood and volumes that are less than half of the heyday when GameStop (GME) ran supreme and everyone seemed to have strong opinions on finding the next Tesla (TSLA) if not owning Tesla itself.

When you see days like those of last week where you got a session with volume levels akin to the slowest days of last year, the day before Christmas and the day after Thanksgiving, according to the Wall Street Journal, you know the individual investor's been pretty much blown out. That's something that wasn't supposed to happen when we got that second stimulus check for $1,400. After all, so much of the first one landed in accounts that went right into the market, first in common stock and the much riskier options for many who had a taste of big wins.

What happened? What caused the decline?

Some of what happened has directly to do with a belief that the market was rigged in favor of the professional, who would never be shut out of favorite stocks the way Robinhood shut out individuals in the wake of the GameStop phenomenon.

Some of it is a belief that stocks turned out to be a mugs game when "they" stopped going up even as the S&P rallied 7% in the first quarter.

But, I think most of it came from being in the same kinds of stocks, the highest growth stocks like Snowflake (SNOW) or Zoom (ZM) or DocuSign (DOCU) , or the cannabis stocks which stopped going higher or the SPACs that could be the Tesla derivatives because they were involved in electric vehicles. Or they bought GameStop in the $300s or Tesla in the $800s or an ARK (ARKK) ETF at the absolute high.

Sadly, the Journal quotes an individual investor saying he's not going to watch his stocks. He has confidence in them, though, and knows that they will come back.

That's the disastrous acceptance stage because many of these stocks won't come back from their exalted levels because you need both the individual investor and the professional investor to agree and own these stocks and the pro has moved on to industrials and transports where the big gains at the end of the quarter came from.

The pros -- and the media -- do a real disservice to the individual investor, whom they should want in the market, by classifying the last month's winners as value stocks over growth.

There's nothing valuable, meaning inexpensive, in the class of second-half winners. In fact, it is just the opposite: I have never seen the industrials this high. The banks are cheaper versus a year ago.

No, what crushed the individual was a lack of diversification. They only owned two kinds of stocks, the meme stocks and tech, with the tech concentrated in Tesla and Tesla-lites. They are still in there and hopefully the strength in Tesla might bring some of these stocks back to life.

I think that the lack of diversification has to do with a lack of education. You need to know more than just about the go-go stocks if you are going to have staying power in this business. It means you need to know some boring stocks, pedestrian businesses like the financials or retailers or the rails.

These stocks are of no interest because of a lack of education by the brokers and a lack of knowledge by the individuals. The pros don't want to help and I wouldn't have to establish a club for individual investors if they did.

My hope is that these individuals open the drawers, look at their statements, take some losses -- they are unrealized but that doesn't mean anything because it's money that could still wither, and learn about other groups, other companies. I hesitate to say anything critical about Reddit but the obsession with a handful of stocks, namely GameStop and AMC Entertainment (AMC) , did no one any favors.

It's not too late. There will be selloffs after this and you can sell something now and put it into the market in weakness. Or you can switch over to an index fund if you don't have the time or inclination to learn about new sectors.


Otherwise you can wait, and wait, and wait for those stocks to come back. Maybe they will. But they probably won't."

MY COMMENT

The few times that I put up an article by Cramer....I usually mention that I have never seen his show and do not follow him.....no exception this time.

BUT......I believe he is right. I have seen a TOTAL lack of diversification among many young stock "players". It IS all tech, tech, tech. AND.....often GAMBLES on trying to find that next big score.

There is a reason that I have nearly HALF of my money in the......500 stock....SP500. There is a reason I own Fidelity Contra fund. There is a BIG reason that I own non-tech companies like Home Depot, Nike, Proctor & Gamble, Amazon, Costco, Honeywell.....in my very concentrated......12 stock portfolio. YES.......I consider my portfolio to be heavy on the tech side. BUT.....the tech that is in the portfolio and funds is the EXTREME BIG CAP......ICONIC......tech companies.....and is BALANCED out by the nearly half of the 12 stocks that are NOT tech and the two funds in the account.

Investing is NOT about finding that BIG SCORE. It is about racking up the gains and compounding your money. It is about days like today.....although I have not looked at the averages for a while.....the accumulation of daily, weekly and monthly and annual gains. Emphasis on......ACCUMULATION.

I think MOST.....actual investors.....know this. It will be a GOOD THING to shake the MANIA and day-traders out of the markets. Hopefully it is happening right now.

 

Gtrudeau......dont misinterpret what I am saying. I have no issue with anyone investing, trading, speculating or even gambling in the stock market.

It is.......THE MARKET.... and......THEIR OWN BEHAVIOR......that will shake them out. I have absolutely NO desire to see any sort of restrictions on any sort of investor. So....of course there is room for EVERYONE....but.....the market has a way of dealing with EXCESS. AND.....usually it is not very pretty.

I am a FREE MARKET CAPITALIST......it would be insanity for any sort of restrictions on any kind of investing or trading. Trying to protect people from their own investing behavior......SHOULD NOT....be up to government or regulatory bodies.

I am like J. G. Wentworth on the TV commercials........"It's Your Money".

 

Yeah.....to the one period post. That is the ESSENCE of simplicity for me as a poster.

You are so right Zukodany. The old USA.....the greatest country in the world. You are in a really sweet spot right now.....stocks, collectable business, real estate, your studio business. ALL you have to do is RIDE THE WAVE. CONGRATULATIONS on the good life choices and decisions.

 

LOL....I see we are now in the mid day SLUMP. I HATE when those wall street guys and investment bankers go to lunch.

 

Making money....on paper....and increasing your net worth.....a very good thing Emmett. Glad to see that you are ALSO reaping the benefits of the hot, hot, real estate market.

Nashville.....WOW....one of the hottest markets in the country......insanely HOT. It is being flooded with out of state people from California and elsewhere.

https://www.bizjournals.com/nashville/news/2021/01/19/report-nashville-expected-to-be.html

https://learn.roofstock.com/blog/nashville-real-estate-market

I am sure you would LOVE IT compared to California Emmett. My opinion....a contingency is not going to work out well.

 

oldmanram.....is in the house!!!

I thought you fell off the edge of the earth.....or.....made so much money that you were out on your new yacht on the way to your new place in Monte Carlo. GOOD to see you back and posting.

 

Gtrudeau88....no need to apologize....I understood what you meant.

I invest the way I always have for decades....but anyone else is free to do what they wish. I do not see it as a ZERO SUM GAME......their success does not limit my success. That goes back to one of the investing SINS that I posted the other day.....ENVY.

The main reason that I dont like markets that are EXTREME MANIA and EXCESS is they usually end in some sort of collapse......and.....everyone gets dragged along....for a while. I have seen a number of times when young male investors have gotten shaken out of the markets over the years....usually in a time of extreme MANIA. I think the day-trading....dot-com era.....was the worst. EVERYONE.....the taxi driver, the shoe shine boy, the plumber....were ALL trading very risky dot-com companies. A lot of people lost a lot of money and never came back to the markets.

 

At least a few months ago...here are the HOTTEST housing markets. I heard the other day that Austin was STILL......by far....number one.

The following metros ranked as the hottest markets in 2021:

1. Austin, Texas
2. Phoenix, Arizona
3. Nashville
4. Tampa, Florida
5. Denver, Colorado

Nice choice with Nashville....no state income tax, Southern charm and music and a very young demographic. A very HIP city. Beautiful scenic area.

 

I see that all the investment bankers and Wall St guys are now back from lunch and had a chance to discuss.....and determine.....the market direction. So now....we are positive again for the day....in the averages that count....the SP500 and the NASDAQ.

Got to hang in there for another hour or so till the close.

 

Posting this little article for its CONTRARY VIEW. I dont really buy it....at the moment.....and being a long term investor I DO NOT take action based on a short term PREDICTION. But for what it might be worth:

A 'significant' stock market 'consolidation' may only be months away: Deutsche Bank

https://finance.yahoo.com/news/a-si...y-be-months-away-deutsche-bank-173851762.html

(BOLD is my opinion OR what I consider important content)
"Nothing has been able to shake the new bull market in recent weeks — not a still elevated 10-year Treasury yield or threats of higher taxes on the wealthy and corporations by the Biden administration.

But the one thing that has powered the S&P 500 beyond a record 4,000 — data that indicates a strong post COVID-19 economic recovery is rapidly building — may turn out to ruin the rally. And it could play out within three months, warns widely followed Deutsche Bank Chief Strategist Binky Chadha.

"Very near term, we expect equities to continue to be well supported by the acceleration in macro growth, and see buying by systematic strategies and buybacks driving a grind higher. But we expect a significant consolidation (-6% to -10%) as growth peaks over the next three months," Chadha wrote in a new research note on Tuesday.

Chadha calls out peaking ISM data — which has been coming in hot of late — as the potential trigger point for a steep market pullback.

"Our house economics forecast implies a flattening out of the ISMs at elevated levels beginning in Q2 (64) and continuing into Q3 (63). There are a number of considerations though that suggest the monthly ISMs peak more sharply over the next three months and slow in keeping with the historical inverted-V shaped pattern. We look for discretionary investor equity positioning to be pared with a peak in the ISMs and do not expect retail to buy the dip. We then see equities rallying back as our baseline remains for strong growth but only a gradual and modest rise in inflation," explains Chadha.

Thus far, investors are hardly positioned for any sizable spring/early summer swoon in stocks — with good reason as the economic data has been impressive.

The U.S. economy created 916,000 jobs in March, the Bureau of Labor Statistics reported last week. That crushed Wall Street estimates for a 660,000 increase. The gain has some economic forecasters telling Yahoo Finance Live the economy could be on the verge of creating a million jobs a month very soon.

Meanwhile, data from IHS Markit and the Institute for Supply Management on activity in the services sector on Monday blew the doors off analyst estimates as the ISM's activity index surged to a record high, as Yahoo Finance's Myles Udland wrote in the Morning Brief newsletter. IHS Markit's reading was the best in seven years, noted Udland.

And last but not least, corporate profit estimates for the first quarter have continued to trend noticeably higher amid the acceleration in economic data.

But if economic data moderates as Chadha expects, the stock market could lose a key catalyst. That's not lost by Chadha's peers on Wall Street.

"Our view coming into 2021 was that earnings will drive markets higher and valuations will take a backseat, and actually be flat to down for the year. But the good news is actually starting to get priced in here, and we think it's going to become more challenging for investors and trickier," said Saira Malik, global equities chief investment officer and global portfolio manager at Nuveen, on Yahoo Finance Live."

MY COMMENT

The first sentence or two of this article contain the KEY WORDS......."may" and "could". Trying to predict some event and nail the tiimng to two to three months down the road is simply IMPOSSIBLE. This is one of those........investment professional....GUESSES...that can make a career for a while if right.....or....are totally forgotten if wrong.

My view....the professionals and the bankers.......and others......are SEVERELY UNDERESTIMATING the pent up demand and business power that will be seen in the earnings for at least the next 12-24 months. There will......obviously....be little corrections along the way. The economy in this country is FAR from being re-open at the moment.....and....I dont see a lot of movement along the entire West Coast....or in the East Coast lock-down states or in the Midwest disaster states.

At worst....the above....might...be describing a little correction some time in May through August time period. A TYPICAL summer correction. BUT for me being a long term investor....

I will continue to be fully invested as usual.