The Long Term Investor

I like it already.

 

Agree completely as usual Zukodany. I dont think anyone with money in the BIG RATIONAL STOCKS is going to sit for years without any traction.....only if we have a multi-year BEAR market. Which we will actually have two or three times in any investors lifetime.

AND....even as long term investors.....when or if the time comes to sell Apple or Amazon....we will know it and will simply do it and move on. I held MSFT from about 1990 till 2002....at that time in 2002.....it was pretty obvious that the party was over for MSFT. So....I sold all shares. Years later.....when the new management took over and proved that they had the right stuff......to get the company booming again....I bought the shares again.

BUT....as to Google, Apple, Amazon, and the rest of the stocks that I hold....I think they have a long time and a good way to RUN from here......so I have no plans....like you....to do anything at all.

In real life....and in my former business life....I used to ask that same question that you posed above.......WHY? It always amazed me the BLANK LOOKS I would get with that question.

 

Here is a pretty good article on the housing markets. I have seen this happen in real life. One of my nieces and her husband sold their house with the intention of waiting for what they wanted to come on the market. After about 6 months of waiting they were priced out of the market where they lived. It took them another 3 years to get into a house and over that time their old house rocketed in price......as they rented and fell further behind.

The home sales boom means you might end up renting
America’s high home prices could turn us into a nation of renters.

https://www.vox.com/recode/22407667/home-sales-boom-rent-housing-single-family-rental

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

"Noelle listed her house on a Thursday last August and accepted one of several offers above her asking price the following Tuesday. The 36-year-old auction house employee wanted to capitalize on the red-hot real estate market to sell her family’s home of 10 years in order to make enough money to buy her dream house. She’d planned on living in a nearby Long Island rental for six months to wait for prices to calm down and better options to come on the market. Now, Noelle thinks it could take two years, and she’s even considering buying a fixer-upper to give her family options.

“This is going to be a different summer than we expected,” Noelle told Recode. Her old house had a pool and a big backyard. Her rental has a small backyard, no pool, and is not as big as the four-bedroom colonial she had.

Noelle, who requested that we not use her last name, is one of the millions of Americans contending with the double-edged sword of a booming housing market. The sellers’ market is making those who already own homes even wealthier, while high prices push homeownership further out of reach for many Americans. In turn, the housing boom is creating a new population of home renters: people who in years past would have been able to afford a home but are now getting priced out.

While some people prefer renting a home to buying one, the home rental trend can’t be divorced from the high price of homes, which is forcing many people to rent what they can’t buy. Home prices are astronomically high, but houses are nonetheless being plucked off the market faster than ever. In March, the median single-family home in the US sold for a record $335,000 and typically spent just 18 days on the market (it took twice as long in the already hot market in March 2019, when the median price was $261,500), according to the National Association of Realtors.


Most recently, the pandemic and the premium that it put on private indoor and outdoor space has driven demand and prices. But like many things, this was an existing trend that the pandemic merely accelerated, and it has its roots in a confluence of factors, from an aging millennial population to an influx of private equity.

What’s driving up prices on houses
Some 5.6 million single-family homes sold last year — more than at any time since the housing bubble — and the prices of those homes were up 9 percent from a year before, according to the National Association of Realtors. The organization expects average housing prices to go up another 9 percent this year — another huge jump from the typical 3-5 percent annual price growth and far above the rates at which people’s income is rising.

Though not the root cause, the pandemic did accelerate those costs, as schooling and working from home made having a nice, large living space all the more important.

“It has reminded us all of the importance of home and how essential it is to have a safe space of shelter from the outside world,” Zillow Group principal economist Chris Glynn told Recode.

The pandemic also allowed subsets of Americans who remained employed — usually those who were more gainfully employed in the first place — to save money for a downpayment, as there was less for them to spend their money on.

“It’s like everybody got locked in their house and got forced to save, which is a home-builder’s dream,” John Burns, CEO of his eponymous John Burns Real Estate Consulting, told Recode.

Coupled with historically low mortgage interest rates, this past year has encouraged many Americans to try their luck buying a house.

The reasons are demographic as well. Millennials, who make up the largest living cohort, have arrived at the age where they’re forming new households and buying their first and even second homes (though that milestone happened later than in previous generations). And as millennials with growing families flock to the housing market, the supply of homes has not been enough to keep up.

Many people, including older Americans who don’t move as much as young ones or who were afraid to let people visit their homes in the pandemic, are holding onto their homes longer, meaning many existing homes — which make up the vast majority of home sales — have not been entering the market.

Additionally, new home construction, though it has ramped up lately, has been depressed since the Great Recession devastated the construction industry. High lumber prices are also delaying and driving up the cost of new housing.

Finally, investor interest in renting out single-family homes as an asset class has led them to buy up much of the housing stock that individuals once would have. Buying homes to rent means there are fewer to buy to live in, which, by extension, has led more potential buyers to rent.

Investors — which include everyone from individuals looking to earn extra income to pension funds to foreign governments — are competing with individuals to buy houses. And it can be more attractive (and quicker and safer from a financial standpoint) to sell a whole development to investors in a single-family rental company than to a series of individuals.

“Now they’re selling a lot of these homes in bulk for rentals because institutional money is coming into play,” Ivan Kaufman, founder and CEO of Arbor Realty Trust, which finances commercial real estate, said. “So it’s exacerbated the lack of supply of homes for sale.”

The rise of single-family rentals
During the Great Recession, when the housing bubble popped and when millions of Americans foreclosed on their homes, investors swooped in to buy those homes at a discount. The low prices made it feasible for big business to enter a market controlled by mom-and-pops, usually individuals who owned and maintained a single or a few rental properties as an extra income source. New technologies also made it easier to price and buy properties around the country, rather than relying on local experts, as well as to lease out and even maintain properties.

Individuals still dominate as single-family rental landlords, but companies and corporations are taking a bigger share of the pie. In 2018, the last available year for this data from the US census, companies and partnerships made up about 16 percent of single-family rental ownership while real estate corporations and real estate investment trusts controlled a growing 2.3 percent. Now about 20 percent of all home-buying activity is from investors, according to Burns, who thinks that number is going up. Many of these investors will rent out those properties, rather than live in them themselves. And a growing 4.5 percent of new home construction is being purpose-built for rentals, more than double the historical average, according to Arbor Realty Trust.

Institutional ownership of these rentals can be a good or bad thing for renters, depending on how you look at it. Corporate ownership means you can probably contact someone about repairs day or night and don’t have to worry about your landlord being on vacation. But it also means that rents are bound to go up with the market (whereas a mom-and-pops might leave rents alone for good tenants).

Regardless, single-family rentals are becoming an increasingly important way to house the aging millennial population.

“Think of the sheer size of this population,” Selma Hepp, deputy chief economist at CoreLogic, a property analytics firm, said. “More of them are buying and more of them are looking to rent.”

But renters are outpacing buyers. The number of renter-occupied households has grown 29 percent since 2000, according to John Burns Real Estate Consulting estimates using Census data, while the number of owner-occupied households grew just 17 percent. Kaufman from Arbor said that more than half of those renters are leasing houses rather than apartments — a longstanding trend that’s expected to grow post-pandemic. About 60 percent of new single-family renters are coming from cities, driven by the same trends boosting the home-buying market.

Stock in single-family rental companies like Invitation Homes and American Homes 4 Rent are at all-time highs. Occupancy rates for single-family rentals are at a generational high of more than 95 percent.

Single-family rentals are fitting the desire to live in a house without the cost of actually buying it.

“You have a supply-and-demand imbalance, and the rental market is an option for people who can’t afford to buy homes,” Kaufman said.

Monthly housing costs are much lower for single-family rentals compared with single-family home purchases, according to Harvard’s Joint Center for Housing Studies, and the typical income of families living in those rentals is more modest as well. And while rental prices are growing, they’re going up nowhere near as fast as home-buying prices. Home prices in February were up 17 percent compared to a year earlier, while single-family rent was up less than 4 percent, according to data from CoreLogic.

Of course, with the higher housing costs of purchased homes also come the equity of those homes that people can sell later — an important way to build wealth. The rise of single-family rentals is one of many trends portending the erosion of personal ownership. Thanks in part to digitization, people are renting rather than owning everything from music to farm equipment, ultimately giving them less control over what happens with that stuff.

What this all means for the future of housing
The breakneck pace of home price growth is going to continue until there’s enough supply to meet demand, which Lawrence Yun, National Association of Realtors’ chief economist, doesn’t expect to happen until sometime next year.

“Next year at least the multiple offers will go away,” Yun said, referring to the situation of receiving numerous offers above the asking price. “But I think the prices will be higher next year, so it’s a trade-off.”

The thing is, with the notable exception of the Great Recession which was caused by a housing bubble, housing prices generally tend to go up. And this housing boom is much different from the last one in its fundamentals: People are putting more money down and their credit ratings are high, so the likelihood of a crash is low.

Remember, in the pandemic, the US has also been in a recession while these housing prices have skyrocketed. So even if that growth slows to a normal level in the low single digits, it will have still jumped 20 percent in the past two years alone, further putting homeownership out of reach for many Americans whose incomes haven’t grown in lockstep. If people who have just sold their home and who have excellent credit are having trouble, that’s bad news for the rest of America.

“As homes become prohibitively expensive, more and more people fall out of the race of home buying,” CoreLogic’s Hepp said. Fewer people in the market for homes, in turn, would cause prices to slow down, she said, but it could be too late for many.

Under all this pressure, homeownership, which is currently at a respectable high 65.6 percent, could begin to fall. It’s already down from about 68 percent last year, though during the pandemic there were some issues with census data collection, which means the true rate is unclear.

What is more clear is what a lack of homeownership could mean for Americans.

“Homeowners are getting sizable wealth gain. Renters are getting left out.” It’s creating a greater divide between the haves and have-nots

It could also make the existing low homeownership rates for Black Americans worse. Yun urged for more housing development to help alleviate the problem.

One potential release valve in all this is the potential for American office workers, at least, to work from anywhere. That’s causing many Americans to try and buy homes in areas like the South and Southwest where the costs aren’t so high and where their paychecks from remote work can go further.

Untethering people from their offices could lead to a “great reshuffling” of where people decide to live, Zillow’s Glynn said, “with an eye toward locations that they may not have ever considered before.” He’s seeing lots of interest in places in the Sun Belt, like Austin and Charlotte. Of course, just because people can work from home, doesn’t mean their bosses will let them do so forever.

For those hoping to stay where they are and buy a new home, Yun suggests they “maneuver carefully” and include things like a contingency clause that the sale will only go through if they’re able to get another house.


And if that doesn’t work, they can always rent.

MY COMMENT

GOOD LUCK.....to the MILLENNIAL generation. Home prices in DESIRABLE cities and their suburbs are SKYROCKETING. Way too few listings.....way too many buyers......way too high of prices. AND....in many areas....no end in sight.

I have talked about my home on here a few times. I bought at $800,000......over market by about $50,000 .......because we wanted a rare one story with an exceptional, desirable, floor plan.....and we bought while it was "coming soon". TWO YEARS LATER.......yes TWO YEARS......the house is NOW worth $1.3MILLION. How do I know....a house with a similar floor plan four houses down sold for $1.2MILION a few months ago......and a week ago.....a house with an IDENTICAL floor plan sold for $1.5MILLION.....in one day in our small neighborhood of 85 homes.

Good for my net worth....but an extreme example since we live in the hottest housing market in the USA.....at the moment. AND.....these prices are cutting across all levels of homes in our area.......from the bottom of the market at $550,000.....to the top of the market at $7,000,000 or above. Eight years ago the bottom of the market here in our area was about $250,000.....now that house is at a minimum of $550,000. In the past two years the lowest priced homes in our area have gone from $380,000 to about $550,000.

I will....however.....say, I have lived through THREE real estate collapses in my life. Prices do NOT always just go straight up. BUT...what is going on now.....I have NEVER seen such a market in my 45+ years of home buying. Over that time we have bought and lived in 10 different houses.

 

APPARENTLY Janet Yellen is now trying to walk back her comments about interest rates needing to rise......PLEASE....JUST SHUT UP.

Dow Jones Futures: Janet Yellen Walks Back Rate Hike Warning; Split Market Rally Returns As Apple, Nvidia Lead Tech Sell-Of

https://finance.yahoo.com/m/7f83aa42-31cb-335c-b6cb-f28b50a6edcc/dow-jones-futures-janet.html

"Dow Jones futures rose slightly late Tuesday, along with S&P 500 futures and Nasdaq futures. The stock market rally technically was mixed Tuesday, but tech stocks suffered significant losses. Treasury Secretary Janet Yellen after the close tried to walk back earlier comments when she said interest rates may have to rise "somewhat."............

"Yellen Warns Of Higher Interest
Treasury Secretary Yellen conceded that the Federal Reserve may have to hike interest rates as the government unleashes further massive spending.

"It may be that interest rates will have to rise somewhat to make sure that our economy doesn't overheat," Yellen said at a Monday event that was aired Tuesday morning.

After the stock market close, Yellen tried to walk back her "somewhat" comment, at least somewhat. She said she's "not predicting or recommending" rate hikes. Yellen added that she's not concerned about inflation."

HERE is another more comprehensive article about YELLEN tanking the markets today:

Yellen’s comments on inflation spark confusion, clarification as White House tries to navigate economic pressures

https://www.msn.com/en-us/news/poli...ate-economic-pressures/ar-BB1glVWk?li=BBnb7Kz

MY COMMENT

JUST SHUT UP....these people really are MORONS. I have met and known a lot of politicians, high level judges, Senators, Representatives, etc, etc over my life.....they were.......ALL......EGO MANIACS. Very charismatic and great connecting with people....and....many of them are simply...... DUMB. BUT....great artists at the performance art known as politics.

Some day I "might" tell the story of how we ended up sitting in the Senate Gallery during the final historic vote on the Clinton tax increase.....an invitation only event.....but it will probably get the FBI knocking on my door.

 

HERE.....is a nice little article on ANNUITIES. It is too long to post.....but if you are considering an annuity of any type this is a good starting point. My view is like many people......the ONLY good annuities are the BASIC income annuities.....either immediate or deferred. You pay your money and get a guaranteed income stream for a time period or for life. the OTHER sorts of annuities that are tied to life insurance and stock indexes or other "things" with high fees.....not for me.

16 Things You Need to Know Now About Annuities
An annuity can provide lifetime income, but there's more to how an annuity works than meets the eye.

https://money.usnews.com/investing/...s/things-you-need-to-know-now-about-annuities

 

I mentioned the other day in a post......SELL IN MAY AND GO AWAY......the old investing superstition. Heree is a little oarticle ofn the topic of this particular superstition.

Pundits’ New Take on the May Myth
“Sell in May and go away” isn’t a popular sentiment this year.

https://www.fisherinvestments.com/en-us/marketminder/pundits-new-take-on-the-may-myth

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

"May is off and running, and in a fresh and somewhat sensible twist, the vast majority of this week’s financial commentary does not think you should sell in May and go away until a certain British horse race or Halloween, depending on your preferred version of that old investing adage. We agree! But a quick exploration of why pundits aren’t all aboard the Sell in May train this year is telling about sentiment.

Much of this year’s Sell in May commentary didn’t outright dismiss the age-old myth, which states investors are best off skipping the summer months. The adage began life as a snappy saying that referred to old British traders’ penchant for taking the summer off until the mid-September St. Leger Day horse race, leaving liquidity low and making it appear beneficial to simply sit out the season. Then as the years went by and the six-month stretch from April 30 to October 31 delivered weaker average returns than its opposite six months, “weaker” incorrectly became synonymous with “bad,” and Sell in May became all about trying to avoid a pullback.

Now, the full range of S&P 500 data, which stretches back to 1925, shows this is a terrible idea. The six months from April 30 to Halloween have delivered positive returns in 69 of 95 years, a 73% frequency of positivity.[ii] Its 4.3% average return may not sound astronomical, but it compounds over time, and if you don’t capture it, you miss a big chunk of stocks’ long-term returns.[iii]

That, in our view, is the real reason to thumb your nose at Sell in May. Well, that and the fact that stocks don’t care about the calendar and any benefits the myth might once have carried became priced in many decades ago. (Same goes for the January Effect, Santa Claus Rally and September being the worst month.) But some articles had a different reason: the fact that Sell in May has been an especially huge bust in recent years. That is true! The past nine straight Sell in May windows have been positive, averaging 6.2% gains.[iv] But leaning on it as reason to shun Sell in May smacks of heat chasing and presuming the recent past will predict the future. It basically translates to, “stocks will keep going up because they have gone up.”

We are bullish, of course. But when we see a chorus of pundits being bullish for less-than-sensible reasons, it gives us some pause, as it is generally a gateway to having irrational expectations. It starts with things like “ignore Sell in May because it hasn’t worked in nearly a decade.” Later, it snowballs until you get something like, “sure the yield curve is inverted and leading economic indicators point downward, but those don’t matter because stocks are up 20% over the last year, corporate earnings rose last quarter and <insert newfangled technology here> will dominate the world in 2040, bringing big riches for ground floor investors today.”

We aren’t there yet, obviously. There is still some skepticism laced in this year’s financial coverage, particularly on the inflation front. But sentiment’s ascendance remains critical to watch, because when pundits run out of worries, it is time to start looking for what they might be missing, for that is usually when bear markets begin."

MY COMMENT

So sell in MAY does NOT work. Well that is SHOCKING......who would have guessed. HERE is the guts of this little article:

"The six months from April 30 to Halloween have delivered positive returns in 69 of 95 years, a 73% frequency of positivity. Its 4.3% average return may not sound astronomical, but it compounds over time, and if you don’t capture it, you miss a big chunk of stocks’ long-term returns"

Sounds about right to me.......I dont see how ANY investor can think that is is a good thing to just ARBITRARILY exit the markets for 5 months every year. But than again...there are MANY THINGS that investors do ARBITRARILY that are contrary to the actual investing research and data. The bottom line....it it their money.....and....they can play with it as they like......all investing is VERY personal.

 

Some of these DAILY little articles are worth posting. I think this one has some good messages for investors going forward beyone the short term.

Stock market news live updates: Stocks mixed, technology shares recover after concerns over higher rates abate

https://finance.yahoo.com/news/stock-market-news-live-updates-may-5-2021-221440867.html

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

"Stocks were mixed Wednesday after a technology-led selloff a day earlier, with growth stocks recovering some losses spurred after a key policymaker suggested interest rates might need to rise to prevent an economic overheating.

The Nasdaq gained 0.9% shortly after market open before paring gains, after the index fell 1.9% during Tuesday's regular session for its worst day since March. The S&P 500 and Dow turned slightly negative.

The sharp move lower in growth stocks a day earlier came after Treasury Secretary Janet Yellen suggested Tuesday that interest rates might need to rise to stave off an overheating in the economy, with economic activity picking back up much faster than expected as vaccinations take place and social distancing standards get eased. She added in later remarks, however, that a near-term interest rate hike was not something she was "predicting or recommending," as that decision lies with the Federal Reserve.

Still, some companies have also said that surging demand and supply chain shortages have pushed prices higher, hinting at signs of overheating that have worried some market participants. Mentions of inflation on first-quarter earnings calls have surged by 800% year-over-year, according to Bank of America strategist Savita Subramanian.

"I think to some extent the market is now taking a bit of a pause thinking that some of the best news may be behind us at this point on stocks, including the growth stocks, especially as we look to more reopenings," Rob Haworth, U.S. Bank Wealth Management senior investment strategist. "I think it's two-fold: One, a great earnings season that people wonder if it will be repeated, and two, looking more to that reopening story."

Plus, with stocks having reached record highs last week, equities were vulnerable to a pull-back at the slightest trigger, many strategists noted. And as first-quarter earnings season winds down, investors will be left to contemplate the future policy landscape, which may be somewhat less constructive for corporate profits.

"I do think there's a potential for a short-term bounce in volatility due to those excessive valuations and all of the uncertainty that currently stands with respect to the infrastructure spending bill, ultimately how it’s going to be funded, and certain taxation policies," Kevin Mahn, chief investment officer at Hennion and Walsh Investment Management, told Yahoo Finance.

"But, beyond the short-term bouts of volatility, there is continued reason for optimism, whether it’s consumer confidence, whether it’s the strength in earnings, recognizing that thus far we have an 86% beat rate for the companies that have reported," he added. "So there are reasons for optimism, but we would recommend that investors also consider adding diversification to their portfolios to help withstand those short-term bouts of volatility.”

10:20 a.m. ET: U.S. service sector activity unexpectedly cooled in April: ISM

U.S. service sector activity unexpectedly cooled in April after rising in March, with supply chain disruptions and price pressures beginning to weigh on the expansion.

The Institute for Supply Management's April purchasing managers' index (PMI) came in at 62.7 in April from 63.7 in March. Consensus economists were looking for a print of 64.1, according to Bloomberg consensus data. Readings above the neutral level of 50.0 indicate expansion in a sector.

Beneath the headline figure, prices accelerated in April, and ISM highlighted that a survey respondent said "there is pricing pressure for goods and services in the market.” Business activity and production slowed, as did new orders.

8:28 a.m. ET: Private payrolls rose by 742,000 in April, missing expectations: ADP

Private payrolls rose less than expected in April, but still increased by the most since September as COVID-19 vaccinations and reopenings stoke economic activity.

U.S. employers added back 742,000 payrolls last month,ADP said in its closely watched monthly report on Wednesday. This followed a revised rise of 565,000 jobs in March. Consensus economists were looking for private payrolls to increase by 850,000, according to Bloomberg data.

As has been the case over the past few months, the service-providing sector saw most of the job gains, with these rising by 636,000. But the goods-producing sector also saw more job gains, with payrolls up by 106,000 for the month as rising demand for manufactured goods helped fuel employment increases."

MY COMMENT

The economic data released today......Private Payrolls and Service Sector activity......above.....is positive in spite of the fact that service sector activity cooled.....and....private payrolls rose less than expected. All in all the economy is moving forward. In my view it is the......small business service businesses....that are lagging. After all....what big business closed at all during the pandemic? The brunt of the closures and the big hit from the pandemic and the forced closures was on......small business. The brunt of the problems finding people willing to work a job is on.....small business.

As to the general markets.....we continue to climb a HUGE wall of worry. NOW everyone is worried if the great earnings can repeat going forward. In addition we see HUGE selling by the Hedge Funds and short term "professionals". So as usual we have a SPLIT MARKET......the professionals selling and the normal investors plugging away as usual.

As to.....excessive valuations......they are shrinking daily as earnings come in MASSIVELY better than expected. The re-opening story is STILL in the early stages......in fact....the majority of the country is STILL NOT re-opened. HOPEFULLY we will ditch the incentives to NOT WORK soon and give people a reason to actually go back to work. It is the loser level service small businesses that are hit hard by the CRAZY incentives to NOT WORK.

 

HERE is a basic lesson for ANY investor in this little article.

The first thing people like Warren Buffett ask when you offer them something: Morning Brief

https://finance.yahoo.com/news/warren-buffett-on-price-versus-value-morning-brief-095654774.html

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

"Any business proposition is worthwhile for the right price

In one of the more light-hearted moments of Berkshire Hathaway's annual shareholders meeting on Saturday, Ajit Jain, vice chairman of Insurance Operations, was asked if he'd be willing to underwrite the insurance to cover Elon Musk's SpaceX mission to Mars, assuming Musk asked.

"This is an easy one," Jain said. "No, thank you. I'll pass."

However, billionaire investor and Berkshire Chairman Warren Buffett took a different perspective.

"Well, I would say it would depend on the premium," he said.

This is a good example of how value investors think. Before deciding on a business proposition, they consider the price of the offer relative to what they estimate is the intrinsic value of the business, regardless of how unappealing that business may seem.

In his 1989 letter to Berkshire Hathaway shareholders, Buffett offered an illustration of how this thinking might be applied: “If you buy a stock at a sufficiently low price, there will usually be some hiccup in the fortunes of the business that gives you a chance to unload at a decent profit, even though the long-term performance of the business may be terrible. I call this the ‘cigar butt’ approach to investing. A cigar butt found on the street that has only one puff left in it may not offer much of a smoke, but the ‘bargain purchase’ will make that puff all profit.”

In insurance, the question is if the premium paid would make it worthwhile to take the risk of having to cover potential losses. And so, Buffett is essentially saying that Berkshire should see how high a price Musk and SpaceX would be willing to pay for the coverage. Maybe they'd be willing to overpay.

Buffett continued.

"I would say that I would probably have a somewhat different rate if Elon was on board or not on board," he said. "I mean, you know, it makes a difference."

The comment drew laughter, maybe because people think Musk can be reckless. And therefore, any insurance underwriter may be exposed to a greater degree of risk.

On the flip side — as Bloomberg Opinion columnist Matt Levine articulated — maybe "SpaceX will be more careful if its chief executive officer is on board, so it should be cheaper to insure."

"It makes a difference," Buffett said. "I mean... that's called getting skin in the game."

We're not going to attempt to model out what this insurance policy should look like.

But the point of this discussion is that any good investor should consider the price before dismissing what might be a great value proposition.

MY COMMENT

YES.....value is a huge part of long term investing. Another way of looking at the same thing is......probability. The KEY factors for me in forming an opinion on probability is the initial price of an asset versus the inherent value.......AND......the future growth potential.

Whether I was looking at art, comic books, stocks, funds, real estate.....whatever.....this his how I would evaluate a purchase......assuming that the purchase is being made for investment and profit. In the past value investing primarily looked at inherent value versus price to buy. NOW....I believe that FUTURE GROWTH POTENTIAL is even more important of a factor. This is why I like to buy companies that are a little bit beyond their early life. I prefer to buy a company when I can SEE that the future is bright for their business model.....that they are on the way to becoming a dominant, iconic, company......and will have many years to run and grow.

 

I just got around to looking at my portfolio today. A stronger day than I expected....so far. I had LOW expectations today even though the averages are green.

 

oldmanram

That new toy should be a money pit for a while. It seems like when you buy something like that you spend the first year getting it all set up and equipped the way you want it. Nice layout for someone like you with a family of 5.

Those two articles above are nice......lots of good wealth building tips.....I definately recommend them to anyone that is a long term investor.

I dont follow INTEL...but if I owned it....I am not sure what I would do. On one hand I might sell and just put the money in a SP500 Index Fund while I watch and wait to see how the new CEO does. On the other hand I might just sit on it for a while and see how he does. He definately has the experience working in the business on the technical side as well as CEO experience.

Your daughters are lucky to have such good parents and family......taking the time to try to educate and teach your kids goes a long way to helping them be successful. Even if you dont think they are paying attention....it still sinks in.

 

HERE are the headings of the article posted by oldmanram above.....there is some good discussion in the article under each heading.

https://financialmentor.com/true-wealth/ten-commandments/13166


"1st Wealth Building Principle: Get Deeply Motivated
2nd Wealth Building Principle: Give More Value Than You Take
3rd Wealth Building Principle: Live With 100% Integrity
4th Wealth Building Principle: Be Courageous
5th Wealth Building Principle: Be Disciplined
6th Wealth Building Principle: Avoid Conspicuous Consumption
7th Wealth Building Principle: Build Supportive Environments
8th Wealth Building Principle: Apply Leverage To Build Wealth
9th Wealth Building Principle: Treat Your Wealth Like A Business (Because It Is)
10th Wealth Building Principle: Steward Your Wealth"

 

Today was another day that FOOLED ME. When I left off this morning....all the averages had a nice gain and looked like they were picking up steam. I just looked and see that I ended up in the red today and......obviously....the markets backed off during the course of the day. I was beat.....again....by the SP500 by .30%.

 

HERE is a bill working its way through congress.....with a pretty chance of passage. Some changes to the retirement account system.

SECURE 2.0 retirement bill clears committee and moves closer to passage

https://finance.yahoo.com/news/secu...ee-and-moves-closer-to-passage-172143637.html

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

"In 2019, Congress passed and then-President Trump signed the SECURE Act, which instituted a range of changes to the country's retirement system. It included provisions to help get more part-time workers to save and improved access to annuities.

That bill represented the first major retirement legislation since 2006. Now lawmakers are looking to move much quicker in following up with a retirement bill informally being called SECURE Act 2.0 making its way through Congress.

The bill, officially called the Securing a Strong Retirement Act of 2021, cleared the House Ways and Means committee in a hearing Wednesday and is now before the full House of Representatives. Proponents are hoping for a full House vote in the coming weeks.

The bill is “building on the success of the SECURE act,” said Rep. Richard Neal (D., Mass.), chairman of the House Ways and Means at a hearing on Wednesday. He said that the provisions will “make it easier for the American family to prepare for a financially secure retirement."

The legislation is sponsored by both Neal and the Republican ranking member, Rep. Kevin Brady (R., Tex.), and has support from different groups like the AARP, many of whom wrote letter to the committee offering supportive words. Ahead of Wednesday’s hearing, David Abbey, deputy general counsel at the Investment Company Institute, said the bill “will help American workers better plan and invest for their retirement.”

The bill is expected to have bipartisan support in the Senate as well. Secure Act 2.0 would need to be considered in the upper chamber before heading to President Biden for his signature later this year.

Here are a few ways the legislation will change the way Americans save for retirement.

Required minimum disbursements
A key provision raises the age people must start taking mandatory distributions in private retirement plans (401(k) plans and IRAs). The SECURE Act increased the required minimum distribution age to 72, from 70. The new bill lifts it to 75.

Proponents note it will give retirees – who are living longer than previous generations – more flexibility as they manage a longer retirement.

The legislation also exempts retirees from minimum distributions for the rest of their life if they have less than $100,000 in all of their retirement plans at age 75. (As it stands now, when you reach age 72, you're required to withdraw a certain amount of money from your retirement accounts each year and pay taxes on that amount.)

The coronavirus stimulus bill passed last March allowed retirees to skip their minimum distributions that year if they desired.

Some lawmakers want to take it even further: “My goal is to get rid of it completely,” Brady said of the age restriction in a recent appearance at the Bipartisan Policy Center Solutions Summit streamed on Yahoo Finance.

Automatic enrollment
Another significant measure would push employers to automatically enroll new employees in the company’s retirement plan, if one is offered. Employees could opt out, but the default would be enrollment.

"It's an embarrassment that we don't have that yet," Christian Weller, a professor at the University of Massachusetts, told Yahoo Finance recently about automatic enrollment. (Studies have shown that employers with auto-enrollment retirement plans have higher rates of participation.)

At Wednesday’s hearing, Neal touted the provision, saying it would help move toward his goal of “enrollment for all.” Brady added that the bill will help workers save earlier and he also touted provisions that would allow employers to help their workers pay back student loans while also saving for retirement.

The idea is to allow individuals to pay down student debt instead of contributing to a 401(k) plan, but at the same time get an employer match in their retirement plan.

One-third of private sector workers currently don’t have access to a retirement plan at work, so the change would not necessarily impact them and further exceptions could blunt the impact on current retirement plans that are grandfathered in or certain businesses that can receive exemptions from the new requirement.

Some advocates argue that Washington should go further and consider creating some sort of national retirement option for workers who don’t have access to a plan through their jobs. State-level IRA plans have been gaining traction around the country but the coverage only applies so far to the few states that have opted to set up such programs.

Other provisions
Other provisions in the bill include changes to the SAVERS credit, which lets certain lower-income workers get additional tax breaks when they save for retirement. This change would simplify the program and index the credit to inflation.

The bill also provides a "clearinghouse" for employees to find lost retirement accounts through a national database. Recent studies have found that tens of thousands of retirement plans go unclaimed when workers move from company to company and lose track. The bill would also help workers who move from state to state who participated in different state-level plans.

There are also provisions in the bill to help workers older than 50 to catch up on contributions. The provisions would increase the catch-up amounts and also index the allowed amounts to inflation.

Like the SECURE Act, Secure 2.0 moderates changes to the private retirement system but doesn’t address the more challenging issue of Social Security, which could run low on funds as early as 2031.

Another contentious retirement issue is multi-employer pensions. The American Rescue Plan passed earlier this year included $86 billion to help shore up some of those troubled retirement plans."

MY COMMENT

Some good sensible changes in the bill above. With the support it has from both sides of the aisle.....it sounds very likely to pass.

 

Part of the reason that Amazon has been waffling this week could be the fact that Bezos sold......739,000 shares.....this week. Here is the information.

Bezos Sells $2.5 Billion of Amazon and Signals More Coming

https://finance.yahoo.com/news/bezos-sells-2-5-billion-213230699.html

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

"Jeff Bezos sold about $2.5 billion of Amazon.com Inc. stock, his first big disposal this year after offloading more than $10 billion worth of shares in 2020.

Bezos sold around 739,000 shares this week under a pre-arranged trading plan, according to U.S. Securities and Exchange Commission filings. He plans to sell as many as 2 million shares, according to a separate filing.

The world’s richest person continues to hold more than 10% of Amazon.com, the primary source of his $191.3 billion fortune, according to the Bloomberg Billionaires Index.

In the 15 years after Amazon.com went public in 1997, Bezos sold about a fifth of the online retailer for roughly $2 billion. The value of his stake has ballooned in recent years to such an extent that he can now sell relatively small amounts for billions of dollars.

Amazon stock is little changed this year after rallying 76% in 2020 as the Covid-19 pandemic kept people away from physical stores and encouraged online shopping.

The Amazon founder has used stock sales to fund rocket company Blue Origin, while he’s committed $10 billion to the “Bezos Earth Fund” to help counter the effects of climate change.

The rocket maker said Wednesday it has set July 20 for its first mission carrying people to space and plans to auction off one seat on its New Shepard rocket.

Bezos would be far richer if it weren’t for his divorce from MacKenzie Scott. She received a 4% stake in Amazon as part of the split and quickly became one of the world’s most important philanthropists."

MY COMMENT

I believe that the REFUSAL to do a stock split is severely hurting the stock at this point. Few small investors want to put money into a stock and end up with less than one share. Few......small investors...... have $10,000 to put into one stock at one time. It is very discouraging to people to invest that amount of money and ONLY see 3 shares in their account. Human nature and human psychology make it very difficult for people to buy this stock. The company needs to WAKE UP and do a split....perhaps 10 for 1 or 8 for 1 would make sense.

Since a split would be a neutral event.....that is what everyone always tells us.....it would not make any difference at all. SO.....just in case it might make the shares more attractive to small buyers.....why not?