The Long Term Investor

POOR COINBASE....not a pretty day. All I can be thankful for is BAILING early and ending up with a LOSS of only.....$1300.

My after the fact analysis....FOR THE HISTORICAL RECORD.

I started out good. I got the opening price on 120 shares when it opened......$381. THAN......big mistake.....I had to do my husbandly duties......and.....watch a show that my wife wanted me to watch with her. The stock had not opened yet.....so I watched the show. Pretty interesting about the COVID PLAGUE cruise ship that got caught in Japan and ended up with over 700 cases.

When the show was over.......I checked the computer and saw that the stock had opened at $381 and at one point I had a gain of.......$5760. I probably would have been tempted to sell and lock in that $5000+ if I had been aware at that time. BUT.....by the time I was seeing it on the computer....I had a gain of just under $3000. As I watched it from there the gains slipped away till my gain was about $2000. At that point I was tempted to sell and take a couple of thousand......but....decided NO.....I will wait and see if it recovers the prior gains. NO GUTS NO GLORY. From there it was STEADILY DOWN. When it got to a loss of about $1300.....I decided to BAIL and sold all shares.

In hindsight........I am GLAD that I sold when I did since it ended the day at $328.....which would have been a loss of $6360.....if I had not sold.

I decided to sell when I did because it looked like the DEFINITE direction at that point was DOWN......and.....the way it was slowly but steadily dropping.....I had no confidence in it making a come-back or stabilizing.

I thought this was a very dangerous trade at the time....but....I was hoping to be able to ride the MOMENTUM. There was NO share lock-up.......with it being a direct listing. I knew going in that this would allow anyone to sell and insider selling might snowball into a steady drop that buyers could not compete with. I had also seen earlier in the day that the company gave each of their 1700 employees 100 shares each before the listing opened. I was afraid that all those employees would be selling those shares after the open.....since it was free money.........and ALSO...creating a steady drop in price that buyers could not overcome. I dont know if this is what happened.....but.....it made me concerned......gave me a reason to be very quick to sell.

By the end of the day the general markets gave me a much larger loss today........so.....the end of my 7 day GREEN streak........and......an ABANDONED trade. SO.....we move on to TOMORROW and the rest of EARNINGS.

 

I will have to keep an eye on Coinbase as a potential long term holding at some point in the future......there is MUCH potential for them to end up being the SCHWAB of the crypto world and the DOMINANT brokerage. Time will tell. If they are solidly heading in that direction at some point in the future I will look at the stock at that time. HERE....is kind of a wrap-up for the stock after ONE DAY of public trading.

Coinbase shares close 14% below opening price after trading debut

https://finance.yahoo.com/news/coinbase-direct-listing-stock-cryptocurrency-bitcoin-172655492.html

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

"Coinbase Global (COIN) shares ended their first day of trading at $328.28 apiece, falling below their opening price of $381.

Coinbase's closing level gave the stock a fully diluted valuation of nearly $86 billion. Earlier, in the day, the stock's valuation easily exceeded $100 billion, with shares rising to as much as $429.54 in the minutes immediately following its opening trade.

The stock was given a reference price of $250 per share on the Nasdaq on Tuesday, though no shares traded hands at that price. Coinbase's direct listing differed from a traditional initial public offering in that no new shares were issued in the process, with existing shareholders instead directly selling the stock to the public.

Coinbase, the largest cryptocurrency exchange in the U.S., hit the public markets amid a record-setting rally in cryptocurrency prices and broadening adoption of digital assets. The public debut was one of the most highly anticipated in the U.S. this year, with public and institutional interest in cryptocurrencies swelling in recent months. Companies including Tesla (TSLA), Square (SQ), BNY Mellon (BNY) and PayPal (PYPL) have either added significant holdings of bitcoin to their balance sheets or begun facilitating transactions in cryptocurrencies, and legacy banks Morgan Stanley (MS) and Goldman Sachs (GS) recently announced they would begin offering bitcoin exposure to their wealth management clients.

"Coinbase is a foundational piece of the crypto ecosystem and is a barometer for the growing mainstream adoption of bitcoin and crypto for the coming years in our opinion," Wedbush analyst Dan Ives wrote in a note. "Given the still nascent and volatile nature around Bitcoin we believe less than 5% of public companies will head down the Bitcoin investment path in some capacity over the next 12 to 18 months, but could move markedly higher as more regulation and acceptance of this currency takes hold further down the road."

Bitcoin prices reached a record high of more than $64,000 on Wednesday, and comprise most of the total cryptocurrency market capitalization of over $2 trillion. The boom in demand for digitally native, non-interchangeable assets has been further underscored by the rise in non fungible tokens (NFTs) in the digital art and collectibles world, most of which have been built on the ethereum blockchain.

"Crypto has the potential to be as revolutionary and widely adopted as the internet. The unique properties of crypto assets naturally position them as digital alternatives to store of value analogs such as gold, enable the creation of an internet-based financial system, and provide a development platform for applications that are unimaginable today," Coinbase said in its prospectus. "These markets and asset classes collectively represent hundreds of trillions of dollars of value today."

Coinbase, for its part, makes the vast majority of its money via transaction fees from trades on its platform by retail and institutional users. Revenue for the year ended Dec. 31 more than doubled to $1.3 billion. On the bottom line, Coinbase swung to a profit of $322.3 million for the full year 2020, versus a net loss of $30.4 million in 2019. More than 43 million retail users and 7,000 institutions use the Coinbase platform, the company added.

For the first quarter of fiscal 2021, Coinbase estimated it would post net income of between $730 million and $800 million, compared to net income of just $32.26 million in the first three months of 2020.

'Will be worth more than Goldman Sachs'
Even staunch cryptocurrency proponents, however, have noted that Coinbase's recent, rapidly growing results could be subject to volatility due to competition and price changes in digital assets.

"The biggest risk here is that 90% of Coinbase’s revenue is still tied to retail trading volume. And it’s very expensive — 250 basis points in transaction fees on average on those retail users, that’s expensive. So I think there’s going to be margin compression and challenges to Coinbase’s business model," Meltem Demirors, chief strategy officer at digital asset investment firm CoinShares, told Yahoo Finance. "Their margin is someone else’s opportunity, and already we see competitors in the space that are offering the same service, albeit with smaller brands, at much better prices."

Coinbase's results would also be subject to fluctuations in notoriously volatile cryptocurrency prices, which tend to dictate retail investor interest in cryptocurrencies overall, Demirors added.

"Historically, bitcoin in particular has gone through these two to three year cycles where we see a period of tremendous expansion and growth and then we see a 30% to 40% correction, sometimes even greater," she said. "So the risk here is Coinbase could have some of that same volatility that bitcoin and other digital assets have historically had."

Still, the opportunity for growth remains significant for cryptocurrencies and for Coinbase, Demirors maintained.

"I firmly believe within the week it will be worth more than Goldman Sachs," Demirors said. "Goldman today employs 40,000 people. It was founded in 1869, $120 billion market cap. Coinbase, founded in 2013, employs less than 4,000 people, and it's going to have a bigger market cap. So again, what I think we're watching here is a new guard coming in. And frankly, if financial institutions don't start to pay attention to this and take notice and build things that their clients want, their clients are going to leave."

At the same time, however, Coinbase's elevated valuation has given some investors pause. The stock already easily surpassed the $100 billion mark during intraday trading on Wednesday.

"Really to be comfortable buying at this price, you really have to have a strong belief, firm conviction, that cryptocurrency is the way of the future and that it’s going to be a long-term, sustainable trend," Bankrate.com's Jim Royal told Yahoo Finance. "But of course, you’re also betting on, at least to some extent, the continued rise in price of major cryptos such as bitcoin [and] ethereum raising increased trading volume ... And so those are really key drivers to the success of Coinbase.”

However, a number of investors are still on the sidelines when it comes to investing in bitcoin and other cryptocurrencies. In Bank of America's latest April global fund manager's survey, the firm found that 74% of respondents answered "yes" when asked whether they believed bitcoin was in a bubble, compared to just 7% of respondents who gave the same answer about equities."

MY COMMENT

It will be interesting to watch Bitcoin and other Crypto's and Coinbase over the coming years. the....obvious...challenge for Coinbase will be to maintain their fee based income source....or....transition to other sources of income over the years. No doubt....cheaper alternatives exist and will be a challenge. The advantage that Coinbase has at the moment.....and I believe their advantage going forward......is their level of security that has NOT been breached. If they can quickly get the reputation as the SECURE broker for Crypto that can be TRUSTED.....they will have a chance to become DOMINANT. There are going to be many many Crypto brokers......offering the same basic fees. The key to differentiate a particular business will be REPUTATION for safety and security.....and gaining absolute TRUST of customers....along with EXTREME customer service.

NO DOUBT....someone....perhaps Coinbase........WILL become the DOMINANT player as a Crypto brokerage. Whoever that company is will have the potential power to........RIVAL......the BIG BANKS and the current BIG BROKERS.

 

Yeah.........it was a QUICK sale.......the obvious momentum after the initial gain........which I missed..... was ALL steadily down. A little entertainment for the day.

A GREAT OPEN today......but...I will be out of touch all day. I will check in tonight.

 

BIG and NICE green day today. Lots of green......and....a good beat of the SP500 by .39%. As strong of a day as we have had in a while.

 

HERE is what was important today.....in hindsight.

Dow Jones Futures: Stock Market Rally Rebounds As Treasury Yields Plunge; 3 Tech Giants Flash Buy Signals

https://www.investors.com/market-tr...elds-plunge-adopt-sp-500-strategy/?src=A00220

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

"Dow Jones futures tilted lower Thursday night, along with S&P 500 futures and Nasdaq futures, amid mixed China economic data and recovering Treasury yields. The stock market rally had a strong session Thursday as the 10-year Treasury yield tumbled despite a slew of robust economic reports.

Tech titans led the way, with Nvidia (NVDA), Adobe (ADBE) and Facebook (FB) making bullish moves around entry points. Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN) and Google parent Alphabet (GOOGL) also had solid advances.

All of those stocks fell Wednesday, as the market that day favored cyclical stocks such as Freeport McMoRan (FCX).

S&P 500 Steady Ascent
The mini-rotations have made the market rally challenging, despite the general uptrend. But look at a chart of the Dow Jones and especially the S&P 500, and you'd struggle to see much volatility. While Apple stock, Facebook, Microsoft, Google, Amazon, Adobe and Nvidia are big weights in the S&P 500, the benchmark index also boasts non-tech giants such as Goldman Sachs (GS), General Motors (GM), Deere (DE), Home Depot (HD), Target (TGT), FCX stock and many more. So while some of these names and sectors will lead or lag on any given day, the broad-based S&P 500 has been rising modestly most days.

In the current market rally, investors should strive for sector balance like the S&P 500 does, but focus on leading stocks. In addition to Nvidia, Adobe and Facebook stock, Goldman Sachs, GM, Freeport McMoRan, Deere and Target arguably are all actionable now, with Amazon nearing an early entry. Home Depot is extended.

Nvidia, Adobe, Microsoft, GM and Google stock are all on IBD Leaderboard. Freeport McMoRan, Google and Goldman stock are on SwingTrader. Microsoft and Adobe stock are on IBD Long-Term Leaders.

In overnight news, DraftKings (DKNG) rose after announcing it'll be the NFL's exclusive sports betting partner. It'll also remain the NFL's fantasy football partner.

Alcoa (AA) easily beat quarterly profit views, also topping on revenue. The aluminum giant climbed overnight.

Dow Jones Futures Today
Dow Jones futures were 0.1% below fair value. S&P 500 futures declined 0.2% and Nasdaq 100 futures fell 0.4%.

The 10-year Treasury yield rose 5 basis points overnight to 1.58%, recouping some of Thursday's dive.

In addition to the hot U.S. economic data Thursday, China released key reports Friday morning local time. Q1 GDP growth surged 18.3% vs. a year earlier, amid China's coronavirus shutdowns. That was slightly below views. March industrial production shot up 24.5%, also missing. But March retail sales spiked 34.2%, far above estimates.

Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.

Coronavirus News
Coronavirus cases worldwide reached 139.67 million. Covid-19 deaths topped 2.99 million.

Coronavirus cases in the U.S. have hit 32.22 million, with deaths above 578,000.

Stock Market Rally
The stock market rally rebounded solidly Thursday, with the Dow Jones, S&P 500 and Nasdaq 100 all setting record highs.

The Dow Jones Industrial Average rose 0.9% in Thursday's stock market trading, crossing 34,000 for the first time. The S&P 500 index climbed 1.1%. The Nasdaq composite jumped 1.3%. The Nasdaq 100 popped 1.5%. The Russell 2000 edged up 0.4% after rebounding 1% on Wednesday.

The 10-year Treasury yield plunged 11 basis points to 1.53%, the lowest in several weeks. That's despite retail sales and jobless claims that were much better than expected, while other reports also showed strong growth. On Tuesday, the 10-year yield fell despite consumer prices rising more than views.

Accelerating economic growth and falling Treasury yields are a recipe for a broad-based advance, aside from rate-sensitive financials. But even those charts generally look fine.

Trillion-Dollar Stocks Rally
The major indexes are likely to fare well when Apple, Microsoft, Amazon and Google are up more than 1%. Apple stock has a market cap north of $2.2 trillion, while the other titans are worth more than $1.5 trillion. All are on the S&P 500 and Nasdaq composite, with Apple and Microsoft stock are also on the Dow Jones Industrial Average.

Apple stock rose 1.9% to 134.50, moving toward a 145.19 cup-base buy point. Volume has generally been sluggish as AAPL stock builds the right side of its base.

Microsoft stock climbed 1.5% to 259.50, now slightly extended from its 246.23 entry from a flat base, which was part of a base-on-base pattern.

Google stock rallied 1.9% to 2,285.25, also extended from its flat base.

Amazon stock advanced 1.4% to 3,379.09. On Tuesday, AMZN stock hit resistance just below its Feb. 3 high of 3,434, which could be seen as the start of a cup base within a longer seven-month consolidation. It's possible Amazon stock will form a handle around these levels.

Top ETFs
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 0.8%, while the Innovator IBD Breakout Opportunities ETF (BOUT) was up 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) gained 1.85%, with Microsoft and ADBE stock major components. The VanEck Vectors Semiconductor ETF (SMH) perked up 1.3%, with Nvidia stock and many other chip plays faring well, offsetting weakness in Taiwan Semiconductor (TSM).

SPDR S&P Metals & Mining ETF (XME) added 1%, with FCX stock a major holding. Global X U.S. Infrastructure Development ETF (PAVE) moved up 0.5%. U.S. Global Jets ETF (JETS) fell 0.9% as Delta Air Lines (DAL) retreated as it kicked off airline earnings reports.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) climbed 1.4% and ARK Genomics ETF (ARKG) 1%.

Tech Giants Reclaiming Buy Points
Nvidia stock leapt 5.6% to 645.49, rushing back above a 615 buy point from a cup base, according to MarketSmith chart analysis, after dipping below that entry Wednesday. NVDA stock is on the edge of the 5% chase zone, which ends at 645.75. The relative strength line for Nvidia stock is near a consolidation high.

Adobe stock rallied 2.5% to 523.25, moving back above early entries of 506.61 and 507.02, while clearing another entry at 519.70. ADBE stock is nearing the official buy point of 536.98 from a consolidation going back to early September.

Facebook rose 1.65% to 307.82, back above the alternate entry of 304.77 just above the top of its long consolidation. FB stock had fallen for five straight sessions, but never dropped below the official 299.81 buy point."

MY COMMENT

I was out of touch all day today.....and will be for much of the rest of this week. BUT there is little doubt that the falling ten year yield MUST have had a big impact today....in spite of the fact......that I see little mention of it in the media.

The record highs in the averages continue. Earnings are going to be the KEY FACTOR going forward.

 

AND.....as to earnings.

So far in earnings season, companies are reporting numbers way above what Wall Street expected

https://www.cnbc.com/2021/04/15/so-...bers-way-above-what-wall-street-expected.html

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

"Everyone knew earnings were going to be good, but this is really good.

“There’s evidence every day that growth is clearly improving around the world, today from the US to Australia,” Ed Hyman, chairman and head of the economic research team at Evercore ISI, said in a note to clients.

You can see it in a string of recent economic reports. Everything is stronger than consensus estimates: from March retail sales to weekly initial jobless claims (lowest since March 2020) to April’s Empire and Philadelphia Fed manufacturing reports.

And, most importantly, you can see it in the early crop of earnings reports.

To date, 34 companies in the S&P 500 have reported first-quarter earnings. Of those, 88% have beaten their 1Q 2021 EPS estimates by an average of 22%, according to the Earnings Scout.

Traders have been expecting significant upside to earnings, but this is even stronger than those expectations. Companies on the whole usually report earnings above analyst consensus, but not by 22%. Prior to 2020, the historic average beats were in the 3%-6% range.

Stocks open higher on strong earnings, encouraging retail sails data
What happened? “When the companies withdrew their guidance in 2020, the analysts went very conservative,” Nick Raich, who tracks corporate profits at Earnings Scout, told me.

Some of the early reporters have beaten by even wider margins:

Analysts underestimate earnings
(% Q1 beat above consensus)

USBancorp 49%
JPMorgan 48%
Bank of America 25%
Citigroup 28%
UnitedHealth 17%
Pepsi 8%

How long will these amazing earnings continue?
Will these huge earnings beats continue? Don’t bet on it, Raich tells me.

“Analysts cannot see the future. The reason they are so far off is that with no clues from the companies, they get very conservative,” he said. “As companies give more guidance and the pandemic recedes, you will see the analyst estimates start to narrow.”

Still, that is not a reason to be pessimistic. What matters for stocks is earnings estimates for future quarters, and here there is also good news.

“The majority of the companies that have reported are seeing their second quarter estimates raised, which is very positive” for stocks, Raich said.

Some have expressed concerns about higher material costs. Several food companies have recently reported higher costs, and some are trying to raise prices. That could impact profit margins.

“Given our view that further upside in the S&P 500 this year must be supported by greater than expected EPS growth, we’ll be keeping a close eye on what companies are saying about margin tailwinds and headwinds in the weeks ahead,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, said in a recent report.

Still, most are coming to believe that higher costs are either temporary or companies will be able to successfully pass them on so they won’t impact profits.

Regardless, Raich said, earnings estimates are continuing to rise, and that is what matters. “If you are going to be bearish, earnings are not the reason. Earnings are sending a very positive signal.”"

MY COMMENT

YES......earnings ARE sending a very positive signal. AND....we are seeing at the same time....how utterly incompetent the various analysts REALLY ARE.

In my simple opinion.....earnings are going to continue to be very strong this reporting period.....AND....for the next 2-3 quarters. In-between earnings we will see all the USUAL media "stuff".......mostly unsupported speculation and opinion. This will make for a volatile and erratic market.....but it will be the EARNINGS....that bring things back into focus and DRIVE the averages and.....especially......the BIG CAP GROWTH stocks to more and more new highs.

A GLORIOUS time to be a long term investor. These are the....potential....glory days when the ......probabilities.....favor some big gains. That does not mean....guarantee......but....I will take "probability" any time I can.

I continue to be fully invested for the long term as usual.

 

With today's nice gains....I have now BREACHED.......barely......8% year to date total return.

BUT....there is STILL much work to be done since the SP500 is at 11.03% year to date. By "work to be done"......I mean.....doing nothing........other than letting the long term trend be my friend. It is all about TRUSTING the markets and my portfolio and letting time do its thing.

The POWER of long term investing and the POWER of compounding. LAST day of the week tomorrow....lets hit it hard.