The Long Term Investor

I agree with the above by Trahn regarding Vanguard SP500 Index Fund.

dhawk:

Perhaps you might want to consider (not investing advice) putting half your funds in Vanguard SP500 Index Fund and the other half in your five stock picks. Than each week or month when you have more funds to invest put half in the individual stocks and half in the Index fund. That would still give you the highly concentrated stock portfolio that you seem to favor and would also give you exposure to the 500 GREATEST companies in the AMERICAN economy and business world. Perhaps this would help to tone down some of the high risk of investing in ONLY five stocks. Over time you could compare how the Index Fund did versus the five stocks and adjust your strategy as needed. I do a similar thing with my portfolio with 10-12 stock and 3 mutual funds.

As to doing an initial investment in the five stocks and than adding every two weeks to them. Nothing wrong with that approach. MAIN THING is not to jump in and out of the market. LONG TERM means 5-10 years to me. The DATA shows that trying to time the markets and jump in and out every time there is fear and panic is a return KILLER and the primary reason that the VAST MAJORITY of investors get a very poor return compared to the unmanaged indexes like the SP500.

If you get a chance and are inclined, let us know what your five stocks are and how you end up structuring your portfolio.

 

DONT know anything about etoro. But the little I see doing a quick search.....it would not be my choice as a LONG TERM investor. As I said earlier I use Schwab. Dont know if they are available in the UK. i prefer to use a BIG, SAFE, ESTABLISHED, long time brokerage that is set up for self directed investors and at the same time has the resources available for research or anything else. They also provide customers like me in the USA with access to virtually every investment type product on one site. Since I am NOT a trader fees are NOT an issue for me, but I find the fee structure at Schwab very reasonable.

 

HERE is the article referenced by pj96 above as well as my highlight of what I consider important content.........ACTUALLY what I consider DELUSIONAL, MODERN, GLAD-HANDING, CELEBRITY, PC, LIBERAL/PROGRESSIVE, CEO BULL SH$T:

Maximizing shareholder value can no longer be a company’s main purpose: top CEOs

https://www.marketwatch.com/story/m...s-main-purpose-business-roundtable-2019-08-19

"The heads of nearly 200 U.S. companies said Monday they are committing to a move away from the idea that the main purpose of a company is to maximize shareholder value, marking a break with a long-held conviction.

The Business Roundtable, a group of chief executives that was formed to promote pro-business interests, said it is shifting its statement of the purpose of a corporation to include all of its stakeholders, including employees, suppliers and broader society.

The group, which is currently led by JPMorgan JPM, +0.28% Chief Executive Jamie Dimon, previously promoted the idea made famous by economist Milton Friedman that companies’ primary purpose is to reward shareholders.

“While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all our stakeholders,” the CEOs wrote in a joint statement.

The group is now committing to delivering value to customers, investing in employees in ways that go beyond financial compensation to include training and education to ensure their skills are kept up to date, and embracing “diversity and inclusion, dignity and respect.”

The group is also committing to dealing fairly and ethically with its supply chain, supporting the communities in which they operate and generating long-term value for shareholders, who provide the capital companies need to invest and grow.

“Each of our stakeholders is essential,” said the statement. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”

The announcement comes at a time when business leaders and others have started questioning the role the companies they run play in the broader economy. JPMorgan’s Dimon, for example, has long argued for an end to the divisive politics that are failing to address a range of issues from income inequality to racial and gender issues, stagnant wages, lack of equal opportunity, immigration and health care.

Read: Amazon–Berkshire–JP Morgan health initiative makes an out-of-the-box choice for CEO

Dimon’s annual shareholder letter is a wide-ranging exploration of those issues, and he and billionaire investor Warren Buffett have questioned the short-termism that pervades U.S. corporate life with its emphasis on quarterly earnings beats and misses. Dimon has further criticized the excessive use of share buybacks, which are often conducted at the cost of growth initiatives.

In his 2019 letter, published in April, Dimon said share repurchases should only be considered when a clear use for excess capital over the short term isn’t visible, and only if they are repurchased at a “reasonable” price.

“We much prefer to use our capital to grow than to buy back stock,” Dimon said. “Investing for the future should come first, and at JPMorgan Chase it does,” Dimon said.

Equally, while transparency with shareholders is a good thing, earnings guidance can be “damaging,” given the “cumulative corrosiveness” of trying to “make” its numbers. He said it was easy to boost earnings results in a quarter by doing “stupid things” that help in the short term but are bad in the long term.

“And this could spiral within a company, as loyal, well-meaning employees do what they can to help a company meets its ‘earnings goal.’ ”

Dimon is not alone in lobbying for changes to how companies do business. Ray Dalio, founder of Bridgewater Associates LP, the world’s biggest hedge fund, said recently that capitalism has developed into a system that is promoting an ever-wider wealth gap that puts the very existence of the U.S. at risk.

In a two-part series published on LinkedIn, the noted investor argued that capitalism is now in need of reform — and offered ways to accomplish it.

To be sure, not every member of the Business Roundtable signed the letter. The signatories can be viewed here.

The companies and leaders who chose not to sign include Wells Fargo & Co. WFC, +0.72% , Kaiser Permanente led by Bernard J. Tyson, Blackstone Group Inc. BX, +1.27% led by Stephen A. Schwarzman, General Electric Co. GE, -2.63% led by Larry Culp, Conduent Inc. CNDT, +0.56% , Parker Hannifin Corp. PH, +0.38% led by Thomas L. Williams, State Farm led by Michael l. Tipsord and Alcoa Corp. AA, +0.87% led by Roy Harve"

MY COMMENT

This decision by the ANTI CAPITALIST (my opinion) Business Roundtable is typical for that group. This article is so full of CRAP it is nearly impossible to highlight what is FOOLISH. I would have to highlight the entire article. The main job of any REAL CEO and business is to make money for shareholders and maintain and grow the business. SUCCESS is the name of the game. NOT social policy, platitudes, political correctness, liberal/ progressive/socialistic policy, etc, etc, etc. This is TYPICAL CRAP for modern CEO types that never seem to know anything that is going on in their organization until it hits the news and is a BIG issue. DISCONNECTED FOOLS. Any company signing on to this sort of CRAP should see massive shareholder revolt........but in today's society there will not even be a whimper.

 

On the topic of RECESSION, being pushed by the media here is a little list of all the various recessions that have occured in the modern era:

https://www.thebalance.com/the-history-of-recessions-in-the-united-states-3306011

"The history of recessions in the United States shows that they are a natural, though painful, part of the business cycle. The National Bureau of Economic Research determines when a recession starts and ends.


The Bureau of Economic Analysis measures the gross domestic product that defines recessions. The Bureau of Labor Statistics reports on the unemployment rate. Unemployment often peaks after the recession ends because it is a lagging economic indicator. Most employers wait until they are sure the economy is back on its feet again before hiring permanent employees.


There have been 17 recessions throughout U.S. history including the Great Depression.


1797
The Panic of 1797 resulted from land speculation in the newly-formed United States. The bubble burst just as deflation in Europe impacted the rest of the world. Robert Morris, who helped finance the Revolutionary War, ended up in prison for his debts. He was in debt despite owning more land at that time than anyone else in the United States.


1857
The Ohio Life Insurance and Trust Company failed. In addition, approximately 5,000 businesses went under during the first year of a panic that lasted about 18 months.


1873
Jay Cooke & Company was the largest U.S. bank when it failed. Subsequent labor issues led to the Great Railroad Strike of 1877. The recession lasted more than five years.


1893
The failure of the Reading Railroad was a key component of this recession, which lasted approximately four years. Unemployment topped 10%. About 500 banks closed.


1907
Congress created the Federal Reserve System in response to the collapse of New York's Knickerbocker Trust Co. The stock market dropped about 50% during this recession, which lasted about a year.


The Great Depression
Lasting from 1929 until 1938, it was the biggest economic crisis in U.S. history. Unemployment reached 25% in 1933 and remained at 19% in 1938. The Depression ended because of three things: the New Deal, the end of the drought that caused the Dust Bowl, and increased spending for World War II.


1945
This recession lasted eight months, from February to October, although it felt longer to those who endured it. GDP continued falling until it reached -11.6% in 1946. It was a natural result of the demobilization from World War II and the sharp drop in demand for military weapons. Government spending also dropped, although business spending was robust.


1949
This 11-month recession began in November 1948. It lasted until October 1949, when unemployment reached a peak of 7.9%. It was a mild adjustment as the economy continued adapting to peacetime production.



GDP Growth Q1 (Jan.–March) Q2 (April–June) Q3 (July–Sep.) Q4 (Oct.–Dec.)
1949 -5.4% -1.4% +4.2% -3.3%

1953
This recession lasted 10 months, from July 1953 to May 1954. It resulted from demobilization following the Korean War. Unemployment didn't reach its peak of 6.1% until September 1954, four months after the recession ended. In 1953, GDP contracted 2.2% in the third quarter and 5.9% in Q4. In 1954, it contracted 1.9% in Q1.


1957
In this recession, which took place from August 1957 to April 1958, GDP fell 4.1% in Q4 1957, then plummeted another 10% in Q1 1958. Unemployment didn't reach its peak of 7.5% until July 1958. The Fed's contractionary monetary policy is considered the cause of this economic slowdown.


1960
Starting in April 1960, this recession lasted 10 months, until February 1961. GDP was -2.1% in Q2 1960, rose 2.0% in Q3, but was -5.0% in Q4. Unemployment reached a peak of 7.1% in May 1961. President John F. Kennedy ended the recession with stimulus spending. His opponent, Richard Nixon, said the recession cost him the election. He had been vice president, so voters blamed the Republicans for causing it.


1970
This recession was relatively mild, lasting 11 months—from December 1969 to November 1970. GDP was -1.9% in Q4 1969. It was -0.6% in Q1, then rose 0.6% in Q2 and 3.7% in Q3. In Q4, it was -4.2% before rising 11.3% in Q1 1971. Unemployment peaked at 6.1% in December 1970.


1973–1975
This recession lasted 16 months, from November 1973 to March 1975. The Organization of Petroleum Exporting Countries (OPEC) is blamed for quadrupling oil prices. But the OPEC oil embargo alone didn't cause such a deep recession. Two other factors contributed.


First, President Nixon instituted wage-price controls. This kept prices too high, reducing demand. Wage controls made salaries too high and forced businesses to lay off workers. Second, Nixon took the United States off the gold standard in response to a run on the gold held at Fort Knox, which led to inflation. The price of gold skyrocketed to $120 an ounce while the dollar's value plummeted.


The result was stagflation and five quarters of negative GDP growth: 1973 Q3, -2.1%; 1974 Q1, -3.4%; Q3, -3.7%; Q4, -1.5%; and 1975 Q1, -4.8%. Unemployment reached a peak of 9% in May 1975, two months after the recession had ended.


1980–1982
The economy suffered a double whammy of two recessions in this period. There was one during the first six months of 1980. The second lasted 16 months, from July 1981 to November 1982.


The Fed caused this recession by raising interest rates to combat inflation. That reduced business spending. The Iranian oil embargo aggravated economic conditions by reducing U.S. oil supplies, which drove up prices.


GDP was negative for six of the 12 quarters. The worst was Q2 1980 at -8.0%. Until the 2008–2009 recession, that was the worst quarterly decline since the Great Depression. Unemployment rose to 10.8% in November and December 1982, the highest level in any modern recession. It was above 10% for 10 months. President Reagan lowered the tax rate and boosted the defense budget, helping to end the recession.



GDP Growth Q1 Q2 Q3 Q4
1980 1.3% -8.0% -0.5% 7.7%
1981 8.1% -2.9% 4.9% -4.3%
1982 -6.1% 1.8% -1.5% 0.2%

1990–1991
This recession ran nine months, from July 1990 to March 1991. The 1989 savings and loan crisis caused it. GDP was -3.6% in Q4 1990 and -1.9% in Q1 1991. Unemployment peaked at 7.8% in June 1992.


2001
The 2001 recession lasted eight months, from March to November. It was caused by a boom and subsequent bust in dot-com businesses. The boom was partially created by the Y2K scare in 2000. Companies bought billions of dollars’ worth of new software because they were afraid the old systems weren't designed to transition from the 1900s to the 2000s. But many dot-com businesses were significantly overvalued and failed.


The 9/11 attack worsened the recession. The economy contracted in two quarters: Q1, -1.1% and Q3, -1.7%. Unemployment continued rising until it peaked at 6.3% in June 2003.


2008–2009
The Great Recession was the worst financial crisis in the United States since the 1929 Depression. It also was the longest-lasting: from December 2007 to June 2009. The subprime mortgage crisis was the trigger. That created a global bank credit crisis in 2007. By 2008, the credit crisis had spread to the general economy through the widespread use of derivatives.


The economy shrank in five quarters, including four quarters in a row. Two quarters contracted more than 5%. In Q4 2008, GDP was -8.4%, worse than any other recession since the Great Depression. The recession ended in Q3 2009, when GDP turned positive, thanks to an economic stimulus package.


Tracking Recessions
The BEA revises its GDP estimates as it receives new data. It often recalibrates its estimates in July of each year. Using the 2008–2009 recession as an example, here are the final estimates compared to the initial estimates made one month after the quarter ended. These numbers demonstrate how difficult it is to correct a recession until it's already started. They also serve as a reminder of how difficult it is to time the market with your investments.


2008

• Q1: The economy shrank 2.3%. Initially, the BEA thought it grew 0.6%.
• Q2: The economy rebounded 2.1%. The initial release said it grew 1.9%. Everyone thought the Fed's rescue of Bear Stearns ended the threat to financial markets.
• Q3: The economy shrank 2.1%, much more than the -0.3% initial estimate.
• Q4: The economy collapsed, shrinking 8.4%. The BEA initially said it shrank only 3.8%, which seemed bad enough.

2009

• Q1: The economy shrank 4.4%. The initial estimate said it shrank 4.9%.
• Q2: The economy contracted 0.6%, better than the initial estimate of -1.0%."

MY COMMENT:

Do I believe that we are on the cusp of a recession.........NO. Do I care............NO. Would it change my investing behavior........NO. Will it change my long term goals.........NO. Number of recessions in my investing life.......6 at least according to this list. I would also add in the flash crash of 1987.........that would make 7 in my investing lifetime. Have any of those 7 had any lasting impact on me or my investing........NO.

 

Could not have said it better...........myself.

 

This past week has been a GREAT one for the media click seekers and DOOM&GLOOM pushers. They were out in force.
Never mind that:

We are actually getting screwed by China.
Companies are losing trillions in tech and intellectual assets to China theft.
We and the world have GIVEN massive numbers of jobs to China.
The economy is doing very well, especially compared to the rest of the delusional world.
We have just experienced the greatest BULL MARKET in history.
etc, etc, etc.

OUR greatest mistake of the past 15 years was allowing China to join the WTO. UNFORTUNATELY in the internet age anything that happened prior to about 15-20 years ago is unknown.

It is about time we had someone take a hard line with China. As a "little person" investing my small money compared to the ELITES what am I to do in this environment? NOTHING. When I look back on this time period in five or ten years it will be a very tiny blip on a market average chart. Even if a recession happens, and it will sooner or later, because that is part of the investing reality and is NORMAL, why would I care. I know my risk tolerance and I understand the reality of LONG TERM INVESTING. As long as I maintain my focus I dont care what happens over the short term..........short term being a year or two. The UGLY REALITY right now is that many investors dont seem to have a clue that LONG TERM means at the minimum five years and better, ten years or more. I reinvest ALL dividends and capital gains in the investment that earned them, I am very CONTENT to capture shares on sale during times of financial distress, just as I, as a fully invested all the time investor, want to capture the explosive gains that happen from time to time and are usually unanticipated or expected. (for example the time period from March 2009 to present)

Here is a relevant article......as usual (BOLD is my opinion and what I consider important content):

How to Invest if You’re Worried a Recession Is Coming

https://www.fool.com/investing/2019/08/21/how-to-invest-if-youre-worried-a-recession-is-comi.aspx

"Although the U.S. economy continues to grow and add jobs, talk of a recession is increasingly in the air due to a number of worrying signs.

Business investment and consumer confidence are taking a hit due to the growing economic jitters and uncertainty over the ongoing trade war with China. An important bond market recession warning -- known as an inverted yield curve -- is spooking investors. And policymakers are actively taking steps to bolster the economy, such as the Federal Reserve's recent decision to lower short-term borrowing costs. The Trump administration is even mulling a payroll tax cut to avert a downturn.

A question I'm often asked as a finance professor and a CFA charterholder is what should people do with their money when the economy is slowing or in a recession, which typically causes riskier assets like stocks to decline. Fear causes many people to run for the hills.

But the short answer, for most investors, is the exact opposite: Stick to your long-term plan and ignore day-to-day market fluctuations, however frightening they may be. Don't take my word for it. The tried and true approach of passive investing is backed up by a lot of evidence.

Most of us have money at risk
While we usually associate investing with hotshot Wall Street investors and hedge funds, the truth is most of us have a stake in financial markets and their ups and downs. About half of American families own stocks either directly or through institutional investment vehicles like mutual funds.

Most of the invested wealth average Americans hold is managed by professional investors who look after it for us. But the continued growth of defined contribution plans like 401(k)s -- which require people to make choices about where to put their money -- means their financial security increasingly depends on their own investment decisions.

Unfortunately, most people are not good investors. Individual investors who trade stocks under-perform the market -- and passive investors -- by a wide margin. The more they trade, the worse they do.

One reason is because the pain of losses is about twice as strong as the pleasure of gains, which leads people to act in counterproductive ways. When faced with a threatening situation, our instinctive response is often to run or fight. But, like trying to outrun a bear, exiting the market after suffering losses is not a good idea. It often results in selling at low prices and buying higher later, once the market stress eases.

The good news is you don't need a PhD in finance to achieve your investment goals. All you need to do is follow some simple guidelines, backed by evidence and hard-earned market wisdom.

Investing checklist
First of all, don't make any rash moves because of the growing chatter about recession or any wild gyrations on Wall Street.

If you have a solid investment plan in place, stick to it and ignore the noise. For everyone else, it's worth going through the following checklist to help ensure you're ready for any storm on the horizon.

1. Define clear, measurable and achievable investment goals. For example, your goal might be to retire in 20 years at your current standard of living for the rest of your life. Without clear goals, people often approach the path to getting there piecemeal and end up with a motley collection of investments that don't serve their actual needs. As baseball legend Yogi Berra once said, "If you don't know where you are going, you'll end up someplace else."
   
   
2. Assess how much risk you can take on. This will depend on your investment horizon, job security and attitude toward risk. A good rule of thumb is if you're nearing retirement, you should have a smaller share of risky assets in your portfolio. If you just entered the job market as a 20-something, you can take on more risk because you have time to recover from market downturns.
   
   
3. Diversify your portfolio. In general, riskier assets like stocks compensate for that risk by offering higher expected returns. At the same time, safer assets such as bonds tend to go up when things are bad, but offer much lower gains. If you invest a big part of your savings in a single stock, however, you are not being compensated for the risk that the company will go bust. To eliminate these uncompensated risks, diversify your portfolio to include a wide range of asset classes, such as foreign stocks and bonds, and you'll be in a better position to endure a downturn.
   
   
4. Don't try to pick individual stocks, identify the best-performing actively managed funds or time the market. Instead, stick to a diversified portfolio of passively managed stock and bond funds. Funds that have done well in the recent past may not continue to do so in the future.
   
   
5. Look for low fees. Future returns are uncertain, but investment costs will certainly take a bite out of your portfolio. To keep costs down, invest in index funds whenever possible. These funds track broad market indices like the Standard & Poor's 500 and tend to have very low fees yet produce higher returns than the majority of actively managed funds.
   
   
6. Continue to make regular contributions to your investments, even during a recession. Try to set aside as much as you can afford. Many employers even match all or some of your personal retirement contributions. Unfortunately, most Americans are not saving enough for retirement. One in four Americans enrolled in employer-sponsored defined contribution plans does not save enough to get the employer's full match. That's like letting your employer keep part of your salary.
   
   
7. There's one exception to my advice about standing pat. Let's suppose your long-term plan calls for a portfolio with 50% in U.S. stocks, 25% in international stocks and 25% in bonds. After U.S. stocks have a good run, their weight in the portfolio may increase a lot. This changes the risk of your portfolio. So about once a year, rebalance your portfolio to match your long-term allocation targets. Doing so can make a big difference in performance.

Always keep in mind your overall investment plan and focus on the long-term goals of your portfolio. Many market declines that were scary in real time look like small blips on a long-term chart.


Turbulence ahead
In the long run, this approach is likely to produce better results than trying to beat the market -- which even pros tend to have a hard time doing.

Billionaire investor Warren Buffett demonstrated this by easily winning a bet that a simple S&P 500 index fund could beat a portfolio of hedge funds -- supposedly the savviest investors out there, at least judging by the high fees they charge.

In the words of legendary investor Benjamin Graham, "The investor's chief problem and even his worst enemy is likely to be himself." Graham, who mentored Buffett, meant that instead of making rational decisions, many investors let their emotions run wild. They buy and sell when their gut -- rather than their head -- tells them to.


Trying to outsmart the market is akin to gambling and it doesn't work any better than playing a lottery. Passive investing is admittedly boring but is a much better bet long-term.


But if you follow these guidelines and fasten your seat belt, you'll be able to ride out the current turbulence."

MY COMMENT

DUH.....clearly the academic, audited, research supports the above which has been repeated over and over and over and over for decades in the investment universe. The above has also been routinely derided, ignored, or forgotten over and over and over and over by every generation of investor........to their detriment. As to investment style, LONG TERM INVESTING is the only way to secure your future. I have ALWAYS wondered why you dont see all the traders, short term trading their retirement account, 401K, or other core money. Even the traders I have seen over the years that claim to be wildly successful dont seem to do this. You would think with the results that some claim to be able to achieve there would be no reason not to trade all their money. Anyway.........I continue to be fully invested as usual.

 

ANOTHER day and........another total failure for the media, INCLUDING the financial media. ALL weekend it was DOOM&GLOOM. Monday was going to be a rout. The panic was on. It would be the end of the world. BLAH, blah, blah, blah. Now........NEVER MIND. For those that are actually LONG TERM INVESTORS this stuff is a sad joke. It is a commentary on where we are now in society and in finance and investing. The sad thing is that millions of people are making investing moves based on this delusional garbage every day.

The REALITY is that NONE.......I repeat, NONE......of these people have any sort of special knowledge as to where or what the markets are going to do over the short term, especially the day to day and week to week short term. Once in a while they are right, usually when their collective foolishness actually becomes a self fulfilling prophesy. I INCLUDE in this statement the financial media and financial and investing "experts" that people THINK know what they are doing. There is a reason that for many many decades now the so called professionals can NOT beat the unmanaged averages......they dont know any more than anyone else and with their hubris and systems and trading mentality they cant even beat the averages. They come and go, one investing prophet after another rises to the top of the media pile and in a short time they are replaced by the new "EXPERT" of the moment.

TODAY and the last week or two are the perfect example of why LONG TERM INVESTING based on actual financial data in the form of company reports and analysis in the form of FUNDAMENTAL ANALYSIS is the way to invest and actually have a chance to make some money for your family. AND.....for probably the majority of people all that is necessary is to simply invest in a SP500 Index Fund and nothing else.

As to traders, if you are short term trading based on various systems, chart reading, theories of human behavior, etc, etc, etc, is there any validity or reason to what you think you are doing when some daily tweet, fed comment, or other news items of the day causes the markets to jump up and down like a jumping bean? Not to mention the media crap above. There is no way you can be ahead of the curve as a short term trader when it comes to this sort of stuff.

Now on the topic of short term trading I will mention as I do every time I talk on this topic.......I DONT follow any of the trading stuff on this site because it is not what I do. So when I talk trading I am talking in general and NOT about any of the traders on this site. In addition my opinion is that if you want to trade YOUR OWN MONEY, have at it. Why would I care what anyone does with their own money. In fact I can see how the challenge of trading could be very mentally and emotionally stimulating as a daily intellectual exercise. So if you have the funds and wish to try to be among the very few that can actually successfully trade....have at it. It is REALLY no different with LONG TERM INVESTING. The vast majority of people that think they are long term investors will fail, many miserably, to beat any of the averages. (DUE TO HUMAN BEHAVIOR and abandoning what works long term every time there is any sort of short term panic)

If I had to boil down long term investing to one word and one driving force it would be......."PROBABILITY".

At the moment DOW +151 points.

If you want to compare your results for the year here is where we are year to date:

DOW year to date +10.57%
SP500 year to date +14.34%

WOW......who would have known, you would think from all the media WAILING recently that we were way down. NO, actually the REALITY is that the SP500 is kicking ass this year and the DOW is not far behind. I will personally take any year that both are at or above 10%......add in dividends and total return is also kicking ass for the year. As a LONG TERM INVESTOR I am content to take any total return of 10% or more per year EVERY TIME I can get it. I am EXTREMELY PLEASED to double my money every 6-7 years.

 

I like this little post/article. It pretty much sums up where we are today in EVERYTHING......including investing.

The Lunatics Have Taken Over The Asylum

https://ritholtz.com/2019/08/the-lunatics-have-taken-over-the-asylum/

(BOLD is my opinion and comment)

"And they want you to know they’re in charge. Even though concomitantly they’ve broken the system.

We used to live in an era of authority. Oh, I don’t mean “authoritarian,” I mean we respected those who paid their dues, via education and experience, to tell us what was going on, instruct us and lead us.

But today everybody is a leader. And what followers there are are so deep into their beliefs that they hate you and what you do, whatever it is, if it impacts them at all, sometimes even if it doesn’t!

People used to know their place. There was a ladder, and if you chose not to climb it, cool, but don’t tell us what is going on, what to believe.

If you lived through the sixties…we didn’t get everything we sought, but society did change, the youth had power, and then these same youth became narcissistic greedmongers in the eighties, and the nineties were an economic triumph, and then the internet blew it all apart.

You could understand the world prior to the internet, now you’re not sure what is going on. And every time you look, you’re insulted, you’re late to the game, you’ve got it wrong, to the point where you push back and say no, I do know, or lick your wounds and stray from the fray. Yes, the most important thing in the twenty first century isn’t money, although that is very important, but personality. Are you willing to get in someone’s face? Are you willing to stand up to criticism? Are you willing to bark back? Are you willing to do and say what’s expedient? Then you’ve got a chance.

We didn’t expect it to be this way, especially after the fall of the wall, the end of Communism, we expected harmony to reign worldwide.

But this didn’t suit the purpose of the most narcissistic. And the funny thing is once people got their freedom, they surrendered it, it was just too scary to go your own way on a big scale, better to leave your adventures to the small screen, on a computer or smartphone.

So we were always waiting to get to the show, but now baseball is not only not America’s pastime, the only people who pay attention are fans, the number of which is dwindling. The World Series used to be everything now it’s barely a thing. And playing baseball in November is like skiing in July. The timing is wrong for all but diehards, and the conditions are not optimal for skilled geniuses to prevail.

But then action sports died. As well as ESPN. The X-Games was a thing, but now the Olympics have surfing and skateboarding and once you kowtow to public opinion, you’ve lost it. Kinda like STEM studies. The liberal arts are history and college is a bona fide finishing school for business students. It’s a rat race, and if you drop you, you can’t even survive, you can’t pay the bills.

And of course there is overarching change, like the on demand culture, that the oldsters still can’t quite get a grip on, for decades they were told acquisition was key, that he or she who died with the most toys wins, and now kids don’t even get driver’s licenses, never mind cars, and we’re supposed to care about your expensive iron? We rent what we need when we want it. And the badges of honor are where you’ve been, what experiences you’ve had, and the number of followers you’ve got.

That’s even more important than money, your horde. Which is paraded on your Instagram or Twitter account. This is where you prove your worth. And maybe you can turn it into cash, but for those who grew up in an era where you had to have skill to make big bucks, it’s hard to fathom a world where you can game the system and become rich on nothing. Credit the Kardashians, they were there first.

And they represent the “beauty” tribe. You know, remake yourself with plastic surgery until you fit present norms of beauty. But what happens when hair comes back after you’ve eradicated it, when thin lips are in, when thin eyebrows are in… You’re lost in the past, but this represents how we’re all living for today. The Earth is gonna burn up, and supposedly Social Security is gonna dry up, and if Jesus doesn’t come back to save us we’re screwed anyway, so we might as well party like it’s…

Not 1999. But Prince O.D.’ed, Tom Petty too. Used to be that was seen as tragic, now all it gets is a shrug of the shoulders and endless Twitter tributes. Yup, the stars are just like us, addicted to opioids.

And we’ve got a President who lies at will, oftentimes multiple times a day, but he wants to keep his Twitter count up, he too is playing the game, and those inured to the old game are flummoxed and left out, losers.

And Trump has illustrated those left behind, and racist, want their say too. It’s not only rich people in the Republican party… They want government off their backs while they invade your life and tell you when and where you can get an abortion, if you can. Which is head-spinning if you’re a Democrat, but you can scream all you want, you can’t get your message out.

No one can get their message out. Even Taylor Swift. She nailed the marketing game two years ago, but two years is a long time, especially in an era where everything is forgotten almost instantly. They shoot up the school at Columbine, kill kids in Newtown, and it’s part of the social fabric, even though there are people denying it ever happened. But I dare you to name the mass shootings since. There are too many. It’s like following baseball to know, that’s right, everything is its own vertical, and it doesn’t translate to the mainstream. The media keeps on telling us we live in one homogenous country but this is patently untrue. The coastal elites used to call the vast middle “flyover country,” but today they’ve got a zillion channels and high speed internet and they’re just as sophisticated as the coasts and they can’t stop telling the coasts they’re wrong. California is a disaster, even though the truth is it’s on an economic run. We live in the land of perception, where you need a campaign to get your message across, being right is not enough, you’ve got to sell it!

And all the destinations are a shadow of themselves. Number one on the “Billboard” chart? Only relevant to the record companies and those who might appear there, which is a fraction of musicians. Opinion piece in the “New York Times”? Only read by dedicated “Times” readers. A larger tribe than ever because of digital distribution, but with smaller influence than ever, because the news does not spread. Only rumors, gossip and disasters spread. The whole nation is the 10 o’clock news.

So everything you used to want to be is devalued. If you’re into it for more than money, i.e. fame and recognition, it’s now impossible to reach everybody, you cannot get acknowledgement, the game has not only been disrupted, someone pulled away the board and all we’re left with is our game pieces.

The center does not hold. Even though Democrats keep telling us it’s still there. Give the Republicans credit, they line up behind Trump, because they realize there is no center, only charismatic leaders with tribes. You don’t infect people with facts, but personality. Facts are fungible, personality is forever, which is why you can’t admit you’ve made mistakes.

And mainstream culture is whipsawed. We go from male abuse of women to women controlling the dialogue with men not allowed to stand up and debate the issue. Kaepernick stands up for his community and then Jay Z gets in bed with the overlords. A$AP Rocky is guilty and our President says to let him go, to forgo another country’s laws. And this Greenland nonsense… Why don’t we make it easy and just buy China. It’s a good media story, and it’s everywhere so more people believe it, but it will never ever happen. Ain’t that today, it’s all about a good story.

So no wonder we’re looking for strongmen. We want someone to lead us out of this mess. And these rulers tell us if we give them all the power, they will literally fix everything, health care, welfare, business…everybody will have their own home and plentiful food and a job…meanwhile, this is a trifecta that’s hard to get these days, but despite all their naysaying, putting down of other tribes, deep down inside people are optimistic, they believe in change, no matter how delusional.

Everybody can’t have everything, but they believe they can, and if they can’t it’s got to be somebody’s fault…the immigrants, the rich, the corporations, the government. It’s never your fault in America, and if per chance it is, you just apologize and go to rehab and your followers forgive you.

And the old guard still plays by the old rules in the old game, even though it’s got no resemblance to today. “Billboard” Top 100? DNC centrism? Hell, there aren’t even any ratings on Netflix, which is a good thing, because it all comes down to what is good and what you want to watch. But if they eliminate likes from Instagram… How are you gonna make it? It’s like likes are part of your brain, your DNA, you probably put them on your college application. But why go to college at all when you can make bank as an influencer, like Olivia Jade, whose parents wanted to buy prestige with a USC degree. Meanwhile, Olivia Jade is living a jet set life and the rest of us are in the back of planes that crash because Boeing had to make money and the government provided no oversight. But we keep hearing the government is bad and regulations need to be eviscerated.

Confused yet?

This is now. When you’re not sure of your motivation. But chances are you don’t have a regular job, you’re a contractor or a gig worker so you’ve got to constantly be working. Ever found an Uber/Lyft driver without a dream? Ask them, they’re all gonna be rich, they’re working on it.

So there’s no center, everybody’s deluded and they keep trying to shout you down. They don’t want reasoned debate, they just want it their way. But they’re running on emotion not knowledge, and when confronted with knowledge they reject it, excoriate it, because it makes them feel small. It’s not only the underclass, can you explain to me why the wealthy are such anti-vaxxers, despite all the documentation saying otherwise? And they think just like they live behind gates, their kids won’t get measles, they’ve got too much money, and even though they’re atheists they believe God will protect them.

No one can save us, not immediately. For now, it’s getting worse. We’ve got to agree on the facts, agree that everybody can’t be rich and famous and that we’re in it together. But now the whole world is positively tribal. We’ve got smartphones but we’re living in the Middle Ages. It’s gonna take a long time to get out of this mess. Once you give everybody a voice, which is what the internet did, you end up with chaos. And the only people saying to secede from the scrum are those addicted to their smartphones anyway. False prophets.

But we’re lacking any real prophets today. And your history is easily searchable, so if you were a bully in kindergarten your entire future is in the dumper.

Forget grades, you’re being rated on personality, emotion, soft skills in an era where they keep telling us it’s about hard skills, i.e. the aforementioned STEM.

Being nice and altruistic might make you feel good, but don’t expect any kudos for it. If you want to win today, fire up your social network and promote yourself. You’re the best ever! Even though we can no longer quantify “best.” But we should buy what you’re selling even though you’ve got no portfolio, YOU DESERVE IT!"

MY COMMENT

YES, yes, yes. Of course......I am right with this post AND I deserve to be right.

 

AND....the perfect companion article to the above.....for ALL those WOKE CEO types and others that have no clue how the business world operates and why our capitalistic system has provided the USA with the most dominant, successful, and free culture in the history of the world.

Milton Friedman Was Right on Corporate Guidance, and "Woke" CEOs Ignore Him at Shareholders Peril

https://fee.org/articles/milton-fri...d-woke-ceos-ignore-him-at-shareholders-peril/

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

"The Business Roundtable, an association that counts among its members the CEOs of some of the largest public companies in America, announced this week a fundamental change in its new definition of the purpose of a corporation.

Mainstream media genuflected. Milton Friedman rolled over in his grave.

Motivated By Profit
The Nobel prize-winning economist and best-selling author helped to create the predominant view that the purpose of a corporation, particularly a large, publicly-traded one, is to increase its profits. To quote Friedman:


There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

In fact, the overriding tenet of corporate finance, present in every college textbook, states that the role of the finance manager is to increase shareholder value.

Not according to this enlightened group. By their progressive definition, a corporation is not to independently pursue profit, but rather, pursue profit congruous with social good.

It’s as if the pursuit of profit is somehow immoral, the aim of increasing shareholder value doesn’t require the care of customers, employees, and suppliers, and our free market system hasn’t produced more prosperity for more people than any other economic system in the history of humankind.

Social Responsibility
So who decides the definition of social responsibility? What metrics determine if C Suite execs have achieved annual goals? Profits be damned, we reduced our carbon footprint by 2 percent, we saved four polar bears, and we made the world a better place for our kids by .0002 percent last year.

We can only imagine the squishy, subjective claims of success these modern CEOs will announce.

In his monumental essay in The New York Times on September 13, 1970, Friedman said,

The discussions of the "social responsibilities of business" are notable for their analytical looseness and lack of rigor.

There is also the distinct possibility that the CEOs who endorsed this modern corporate “manifesto,” which includes 181 of the 188 members of the Business Roundtable, were trying to appease the current wave of progressive political voices.

Or a less cynical view might be that it was an attempt to seek relief or approval from the activist investors who constantly agitate public companies through shareholder meeting protests and the like. Both groups have grown more and more hostile to capitalism. If the latter is true, corporate groupthink is worse than we thought. You know what they say: if you give a mouse a cookie, he’ll soon want a glass of milk.

Corporate Social Activism
We have seen this experiment into corporate social activism—let’s just call it what it is—with devastating effects on corporate reputation and shareholder value. Starbucks under Schultz, Target Corp., Dick’s Sporting Goods, IBM, Disney’s ESPN, Kellogg’s, etc. The results have been a punishing lesson about mixing non-corporate ideas with P&L statements almost immediately remedied upon backtracking their social initiatives.

In his essay, Freidman’s words were prescient.

This short-sightedness is exemplified in speeches by businessmen on social responsibility. This may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of government bureaucrats.

Abandoning a 50-year-old view on the purpose of a corporation also undermines the belief in markets themselves. On this issue, Professor Friedman offered this dire warning:

[T]he doctrine of "social responsibility" involves the acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scarce resources to alternative uses.

A simple review of the 20th century should convince us all that’s not a road we want to travel.

The Free Market's Impact on Shareholders
Thankfully, a handful of leaders has rebuked the Business Roundtable. The Council of Institutional Investors was one such group. “There’s no mechanism of accountability to anyone else,” said Ken Bertsch, the council’s leader. “This is CEOs who like to be in control and don’t like to be subject to the market demands."

In The Wall Street Journal, Michael Bordo, a Rutgers University economics professor and former student of Dr. Friedman, said the Business Roundtable’s new stance would have corporate executives behave like regulators. “That’s not what business is; that’s what government is,” he said. “I still think Friedman was right.”

However, there is one voice conspicuously absent in the dissent. Where are the independent board members? After all, the CEOs are employees who work at the direction of directors and shareholders.

The resources these CEOs propose to spend in the pursuit of social good are not their own. Those resources are capital invested by shareholders; not by the growing category of “stakeholders” these modern CEOs seem so intent on pleasing.


It is the fiduciary responsibility of the directors to protect such assets… and maybe even the entire free market system, too.

MY COMMENT

LIKE talking to the wind. A waste of time. HOPEFULLY this WOKE "stuff" will go out of style like much of this stuff that we have seen at other times in history when the world was crazy. HOPEFULLY, at least before we end up in a full blown IDIOCRACY.

 

yes I dont agree with the political content side of the one article, but I did enjoy the very sarcastic social commentary in the article, that is why I posted it. As to the Friedman article, being a long time business owner I agree completely.

As to your question my current top stock pick would be:

Boeing - With (perhaps) the 737 fix being submitted in Sept and jets flying by the new year along with the future resolution of China trade I see this as a good dividend stock as well as having a very large upside in share price ($100 per share upside) I dont see this as a buy for someone that is looking to hold for only a year or so. (potential for disappointment or delay in the 737 mess)

https://marketrealist.com/2019/06/boeing-declared-quarterly-dividend/

"For the last seven years, the company has raised dividends once every four quarters. Boeing raised its quarterly dividend by 20% in February to $2.055 from $1.71. The company’s quarterly dividend rate has grown ~389% between 2012 and 2018.

In 2018, Boeing paid $3.95 billion in dividends, which was over three times higher than the $1.26 billion it spent in 2011. In the first quarter of 2019, it returned $1.16 billion to shareholders in dividend payouts.

Dividend yield and payout ratio
Boeing has an impressive dividend yield that’s higher than the industry average and almost at par with top peers in the aerospace and defense space. The company’s dividend yield of 2.2% is significantly higher than the aerospace and defense sector average yield of 1.3%. Lockheed Martin (LMT) has the highest dividend yield in the sector of 2.4%. Other peers United Technologies (UTX) and General Dynamics (GD) have yields of 2.3% each.

Boeing’s dividend payout ratio is the second-highest in the Aerospace & Defense sector after Lockheed Martin. Lockheed Martin has a dividend payout ratio of 43.1%, while Boeing distributes 40.5% of its earnings. United Technologies and General Dynamics have payout ratios of 37.3% and 33.8%, respectively."

I also like COST. Which I also own and will continue to do so.

Is the Expectation of a Special Dividend Driving Costco Stock?

https://marketrealist.com/2019/07/special-dividend-driving-costco-stock/

JNJ has some real exposure with the opioid issues, although I do own it and will continue to do so. I do like the fact that they are a drug company that is also (in my opinion) a consumer company. My family and I were long term (over 60 years) holders of the tobacco company PM-MO. A massive dividend producer while at risk of being dragged down by the tobacco litigation in later years. Having held through all that "stuff" and having made a very large amount of money reinvesting those dividends, I dont see the exposure to JNJ as being as large......but it is definately an issue.

I have never followed or looked at VZ or ABBV so have no opinion.

Why AbbVie (ABBV) is a Great Dividend Stock Right Now

https://finance.yahoo.com/news/why-abbvie-abbv-great-dividend-131501361.html

I used to be much more dividend oriented in my concentrated stock portfolio. For many many years having owned PG, MO, Kraft Heinz, JNJ, CL, IBM, etc, etc. Obviously my portfolio is more oriented toward the BIG CAP growth side of things now and not as much emphasis to dividends (although they are ok in my stock holdings).

 

ANOTHER KILLER day for stocks and funds and the markets in general. I saw this headline today:

"Stocks Rally On Hopes That Trade Tensions Will Ease"

BALONEY.......the real reason that stocks are strong, in spite of historic media jawboning to the down side and trying to talk us into a recession, is because the markets REFUSE to go down. The economy is BOOMING, earnings are great with the majority of companies beating estimates, unemployment is at record lows, employment is at record highs, consumer confidence is at record highs, companies are making lots of money, wages are going up more than people think as companies are competing for employees in a booming economy. Everyone has help wanted signs out and in classic........supply and demand, capitalistic fashion........wages are going up because companies have to raise them to attract potential workers.

ALL the day to day micro reasons for this or that in stocks and ALL the media CHAFF and, I hate to say it,........fake news,.......or lets say, off the cuff opinion being reported as news with absolutely no verification.........is BALONEY. What really counts and is driving the markets UP is the ECONOMY. In spite of all the bitching, this is one of the best economies we have seen in the past 10-30 years. What we are experiencing now is not as great as the Regan BOOM, but is in my opinion, having lived through both events, the next greatest BOOM of the past 30-40 years.