The Long Term Investor

LOL.....I may be WEIRD but this is one of those days that you....get out of bed.... look at the market......and you just LAUGH. NO...I dont care about the current little correction/sell-off. I have no plans to sell anything and I am NOT a trader so.....why would I care.

HERE is what we are seeing today:

1. The FOOLISHNESS of investing corporate assets in BITCOIN. DUH......this is not cash, it is not money, it not a safe haven for corporate CASH. It is LIKELY we will see some of the companies that got sucked into this CRAZY stuff get SUED by their shareholders. AND....they probably should.....any board of directors that followed this UNPROVEN FAD should be voted out.

2. The stock markets are NOW being jerked around by Bitcoin and other CRYPTO. So we are.....starting.....to see this type of invisible asset speculation impact REAL markets that are supported by actual assets. Par for the course with the way we have allowed the various futures and commodities markets to become casinos over the past 20 years.

3. The stock averages have gotten to such a high level that a day like today LOOKS very DRAMATIC. The big averages are down about 1-1.5% at the moment. NOT a big deal....but the numbers look much more dramatic......OMG...the DOW is down 400-500 points. That sounds BIG.......but.....it is NOT a big drop when you look at the percentage.

4. INFLATION......you close down the entire economy and than you think you can just snap your finger and re-open everything all at once. It does not work that way. We are seeing shortages across many many products that is rippling across the economy as we LURCH toward the re-open. This is exactly what you would expect. The price increases we are seeing at the moment are due to SHORTAGES and the law of supply and demand. This is NOT what has traditionally been seen as BAD inflation......inflation caused by price/wage spiral and monetary policy. Over the next year supply will even out with demand and in many cases will as always happens EXCEED demand........end of problem. (but see #5)

5. There is NO confidence in the ability of the government. We are raising taxes, handing out money to people that will not work, going from the greatest economy in history....back to FAILED policies of the past. We are ramping up the regulations and government insanity, we are back to a Middle East mess, etc, etc, etc. Whatever the reason, agree or disagree, this STUFF impacts the economy and investors. BUT.....again....it makes me laugh....what did they think would happen. SOME of us ACTUALLY remember history......DUH.

6. The FED will be BLABBING today....they just cant SHUT UP. The media and others are TOTALLY OBSESSIVE about when they will start to raise rates and get back to normal monetary policy. Guess what.....the FED does not run the economy....it is not their job to manage the economy just like it is not the job of government to manage the economy. EVEN if it was their job....it is IMPOSSIBLE for them or the government to manage the economy. Those of us old enough have seen this sort of FAILURE for our entire lives as Socialist and Communist countries TRY to manage their economy through government.....it NEVER works.

So.....it just seems FUNNY to me to watch all the FLAILING around on a day like today and all the media TURMOIL in response. Investing and the markets.......great ENTERTAINMENT for those that do NOT care about the short term and do NOT get all FREAKED out every time there is a little dip.....or a correction.....or even a bear market.

I LOVE seeing and hearing all the experts coming onto TV today with their explanations and commentary....it makes me laugh. In fact this is EXACTLY what we need.....actually......we need even worse, much worse.....to bring reality and sanity back into the markets. My view is it would be VERY HEALTHY for us to have a really NASTY correction or a short bear market to get back to some RATIONAL BASIS for where we are and what we are thinking. As a long term investor I welcome that type of ECONOMIC CLEANUP......it is a BITCH over the short term....but a good thing for the long term.

MY VIEW.....CALM DOWN.....DONT PANIC.....if you have been rational and reasonable with your money choices and investing.....and....are not all LEVERAGED UP.....what we are seeing is a good thing. It is an indication of SANITY.......at least......for "regular" people.

 

PLUS......GREAT NEWS......my little part of one BITCOIN that I now own has GONE UP to where I now own about 1/43 of one Bitcoin.....instead of the 1/60 of one bitcoin I owned a few weeks ago. I am MOVING ON UP.

The other mind bending little event I am seeing on a personal level today....a house down the block from me came on the market at $1.45MILLION.....and it is 400 sq ft less than my home. If it sells anywhere near that level it will be ANOTHER BIG JUMP in value for this neighborhood. OR....it just could be more INSANITY.......or BOTH.

So......the market takes with one hand and gives with the other hand. You have to LOVE the insanity and craziness of life as a HUMAN BEING. Is any of it REALLY REAL?

This stuff that we LIVE every day reminds me of some of the arguments that were taught in my PHILOSOPHY 101 class in college.

 

AND......I am NOW claiming to be the GREATEST MARKET TIMER in the world......for my sale of my TESLA stock. Well...except for TomB16 and his sale.

Well.....unfortunately.......no....just random chance on my part. Well not totally random....I had what I considered a big gain for less than a year investment........ so I took it. If I had taken it a little earlier it would have been a bigger....but I am satisfied with what I got.

ALL the media investing content that I am seeing today is CRYPTO, CRYPTO, CRYPTO. With bits of ARK and Cathie Wood thrown in for good measure. In other words the sensationalism and tabloid STUFF that people now CRAVE.

 

I could not have found a better article to go along with the posts above if I had tried....I did not.

They're Finding There's No 'On' Button for a Whole Economy

https://www.realclearmarkets.com/ar..._no_on_button_for_a_whole_economy_777779.html

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

"Think for a moment about Directive 10-289. It was passed via executive edict amidst a collapsing economy. Factories were shutting down. Workers were fleeing their jobs. Production was grinding to a halt. People were starting to panic. Government decided to do something to fix the problem. It ordered everyone to keep doing what they were doing before. It tried to stop history.

The Directive read: “All workers, wage earners and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment, under penalty of a term in jail.”





Also: “All industrial, commercial, manufacturing and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit nor leave nor retire, nor close, sell or transfer their business, under penalty of the nationalization of their establishment and of any and all of their property.”

Don’t be alarmed. It’s fiction, a snippet of the apocalyptic vision of social collapse in Ayn Rand’s Atlas Shrugged, a book that has gained new credibility over the last year when life itself became stranger than fiction. Instead of forcing the economy to stay open – which is insane but at least it hopes for continued production – our governments in real life actually forced the economy to close to stop a virus. It attempted to stop production not completely, but just enough to “flatten the curve,” “slow the spread,” “stop the spread,” “suppress the virus.”

In some ways, this is even more dangerous than Directive 10-289. In 2020, workers wanted to work, businesses wanted to open, people wanted to travel, performers wanted to make money, hospitals wanted to treat all patients, consumers wanted to shop, and civic groups wanted to meet. But in the course of a week in the middle of March, it all came crashing down by force of executive edict. This happened in most parts of the world, but for a handful of countries that defied the orders.

Here we are a year later with strange and continuing signs of dislocations. In Washington, DC, as I write, more than half the gas stations are out of gas, a result of a run on gas due to a shipping line hacking, plus don’t you dare raise prices!

More alarming is the 44% increase in job openings since January, jobs ready for the taking but without any takers. This is in the middle of relatively high unemployment that compares to a brief period after the 2008 crash and in the mid-1990s before that. This is also extremely peculiar. Think about this: labor force participation in the US today is only 61.7%, the lowest rate we’ve experienced since the grim economic times of 1976. If there’s something about today that reminds you of the 1970s, here is an example.

As an illustration, I headed for breakfast two days ago to a place that everyone knows has the best omelettes in town. There was a line of people out front ready to spend money and have a great time. The owner came out and announced to everyone that he could not open the shop because he had no one in the kitchen, no servers, no cashiers. There was no one who could cover the morning shift. He pointed to the closed sign and said he would have to hope that some people would show up by noon.

Extremely peculiar. Talk about a mismatch between supply and demand, one that affects goods, services, and labor.

As everyone knows, the Biden administration extended unemployment benefits to September. Many millions of people have decided to wait it out, live off the continuing largesse, and gradually spend the free money that arrived in their bank accounts over the last year. As a result, what looks like the very labor strike that communists predicted under capitalism is happening but not for the reasons they said. They aren’t fleeing exploitation; they are living off the capitalistic surpluses pillaged and redistributed by government.

Many of the workers who had happy jobs, were working their way up, paying their bills, and living a normal life suddenly found themselves locked out of their workplaces 14 months ago, thanks to government edicts that purported to be controlling a virus. When two weeks extended to 6 months and then a year, many people moved into other professions and undertakings.

You can’t just tell a hundred million people to sit tight for a year. They are going to find other ways to pass the time. So when business finally reopened at full capacity, not only could businesses not reacquire their old workforces; they were lucky even to have people show up for job interviews.

Mothers with children are still in a very tight spot; with many schools still closed around the country, they found themselves acting as homeschoolers whether they wanted to or not because the schools they paid for with their tax dollars refused service.

The Wall Street Journal did a deep dive into the hospitality industry and found that there aren’t even enough workers around in many places to flip the rooms after the guests leave.

“To meet demand,” reports the Wall Street Journal, “David Mariotti, general manager of Remington-managed One Ocean Resort & Spa in Atlantic Beach, Fla., said he spends about half of his 50-plus-hour workweek on housekeeping tasks when it gets busy. He drives the laundry truck, cleans guest rooms, stocks linen closets and performs other duties he did for training purposes before the pandemic.”

The lockdowns occurred in an economy that was already experiencing growing labor shortages thanks to the immigration crackdown that from 2016 sent many in the undocumented class even deeper undergroup, fleeing the country, or running out of hopes of legal immigration. Even from 2016, many foreign workers who had good access to American labor markets found themselves locked out – which is arguably a major reason why large tech firms turned so hard against Trump in the presidential election.

The lockdowns of 2020 had some features in common with Directive 10-289 from Atlas Shrugged. It was a central plan, imposed by executive order, as brutal in its enforcement as it was ignorant in its implementation. There is no on button for a whole economy. Neither is there an off button. You attempt something like that, you unleash forces you cannot control. Those forces will continue to vex markets for a very long time after slightly pensive government officials long for a return to normal life."

MY COMMENT

The PERFECT article for the current times.

 

POOR Target with their earnings....No they were not BAD....they were GREAT....but no one is going to notice or care at the moment.

Target Q1 earnings smash expectations as consumers continue to shop

https://finance.yahoo.com/news/target-earnings-q1-2021-103206310.html

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

"Mark down another retail earnings blowout at the hands of stimulus check spending and more upbeat U.S. consumers.

Target (TGT) squashed first quarter analyst estimates across the board on Wednesday as shoppers spent robustly on home goods, apparel, food and beauty items both online and inside Target's stores. Comparable sales surged 22.9% compared to a 10.8% increase a year ago as the pandemic sent consumers indoors and online in a big way. Online sales rose 50%, slowing from 141% growth last year.

Here's how Target stacked up to Wall Street estimates for the first quarter:

• Net Sales: $24.2 billion vs. $21.77 billion
  
• Same-Store Sales: +22.9% vs. +10%
  
• Gross Profit Margin: 30% vs. 28.62%
  
• Operating Profits: $2.4 billion vs. $1.53 billion
  
• Adjusted Diluted EPS: $3.69 vs. $2.22
  

"I think right now consumers are increasingly optimistic, and we're certainly expecting to continue to see strong guest traffic in our stores and visits to our site," Target Chairman and CEO Brian Cornell told Yahoo Finance on a media call discussing the results. Cornell hinted that second quarter sales trends are tracking in line with the company's guidance.

Shares Wednesday in pre-market trading rose 4%.

The company warned second quarter comparable sales and operating profit margins would be dialed back a bit versus large gains last year.

Target guided to a second quarter comparable sales increase of a mid- to high-single digit percentage, slower than the 24.3% increase last year. Operating margins are unlikely to be as high as the 10% level achieved for last year's second quarter, Target said.

For the full year, Target sees operating margins "well above" the 2020 rate of 7% with the "potential" to reach 8% or "somewhat" higher.

The results from Target join an early list of retailers blowing away analyst forecasts for the first quarter. Home Depot, Macy's and Walmart all handily beat earnings estimates on Tuesday, fueled by consumers spending stimulus checks and analysts being unable to model for the economic acceleration. Most retail CEOs have voiced optimism on the strength of the consumer as they enter the summer months and look to return to a normal life after getting a COVID-19 vaccine.

"The consumer is healthy with lower debt and strong household savings. After a year of reduced activity, consumers are ready to get out, reconnect with family and friends and celebrate life. Our customers are ready to spend and demand is rising in categories we are positioned to win in," Macy's Chairman and CEO Jeff Gennette told analysts on an earnings conference call Tuesday."

MY COMMENT

"If a tree falls in a forest and no one is around to hear it, does it make a sound?"

Sums up the current market. If a company puts up AMAZING earnings and no one cares did it really happen? Well....DUH....of course it did. It will matter as time goes by and the markets start to catch up to the ACTUAL news that matters. It will matter to the people that actually own that company....the shareholders...as the company moves forward in a stronger financial position. It will matter with increased dividends and investment in the business going forward.

 

Back in the old days.....I did EXACTLY what I am doing now...BIG CAP, DOMINANT, ICONIC PRODUCT, DIVIDEND PAYING, GREAT MANAGEMENT, companies that had the ability to mint money over many years into the future. I had some of the same companies that I have now......but....many of the companies that I owned back than were the dominant companies of the time:

COKE
COLGATE
PROCTOR & GAMBLE
PHILLIP MORRIS
GE
IBM
3M
INTEL
PEPSI
JOHNSON & JOHNSON
KRAFT
EXXON

As we got a little later in time I added companies like

HOME DEPOT
STARBUCKS
COSTCO
MICROSOFT
AMGEN
NIKE
CISCO
AMD

The LAST of my old time companies that I still own is Proctor & Gamble. I added them back in after a while when it looked to me like their management had successfully made the transition to the modern world.

The list of companies above gave me SAFETY in down markets since the companies did NOT drop as much as more so-so companies...they were the cream of the crop....I made a lot of money by reinvesting their dividends........and their dividend gave me a guaranteed return even in the worst market. It was the era when ALL companies would REGULARLY split their stock when it got up close to about $100 per share.

They served me very well for a very long time.....till the advent of TECH and the change over from the old economy to the TECH economy. When I sold them off......one by one....it was USUALLY due to some management change to an incompetent.....celebrity CEO....that could not begin to run the company and was just concerned with their own GOLDEN package of compensation and benefits. Some simply could not connect with the younger consumer.....with their products.

 

I STILL do NOT see what is going on now as classic or necessarily bad inflation. It is simply supply and demand driven increases due to shortages......artificial shortages due to the shut down.

BUT......knowing how business operates....I have no doubt that....SOME, perhaps MANY....price increases will happen over the near term due to......companies taking advantage of the situation and the EXCUSE of inflation to raise prices MORE than would be justified simply by increases in expenses or prices for their supplies and components. EVERY business is going to be tempted to TACK ON a little bit extra. As the supply stream gets up and running.....I believe much of this will simply PETER OUT.....the gouging will simply not be sustainable.

 

As to the FED.....nothing new to see there.....actually just what you would expect from....COMMON SENSE.

The Fed hinted it could reconsider easy policies if economy continues rapid improvement

https://www.cnbc.com/2021/05/19/fed...my-could-lead-to-lowerng-asset-purchases.html

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

"Federal Reserve officials at their April meeting said a strong pickup in economic activity would warrant discussions about tightening monetary policy, according to minutes from the session released Wednesday.

“A number of participants suggested that if the economy continued to make rapid progress toward the Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases,” the meeting summary stated.

Markets have been watching closely for clues about when the central bank might start tapering its bond purchases, which currently are at least $120 billion a month. The Fed balance sheet is just shy of $7.9 trillion, nearly double its level prior to the Covid-19 pandemic.

Fed officials have been steadfast that they won’t change policy until their economic goals, particularly regarding employment and inflation, have been hit. The discussion revealed in the minutes is the first time that central bankers have indicated that a reduction in purchases could happen ahead, though there was no timetable.

Stocks briefly added to losses following the release and government bond yields remained mostly higher on the session.

Chairman Jerome Powell said after the meeting that the recovery remains “uneven and far from complete” and the economy was still not showing the “substantial further progress” standard the committee has set before it will change policy.

However, since then the Consumer Price Index showed inflation rising at a 4.2% year over year pace, GDP is expected to show growth approaching 10% in the second quarter, and indicators in manufacturing and spending are showing strong upward momentum.

The one exception was a stunningly slow pace of hiring in April, with nonfarm payrolls rising just 266,000 against expectations for a 1 million gain.

At the April session, the policymaking Federal Open Market Committee voted to hold benchmark short-term borrowing rates near zero and keeping the bond purchase level intact.

Along with that decision, the Fed upgraded its view on the economy, saying growth has “strengthened” and inflation was rising.

The April meeting was held before inflation and employment numbers for the month were released.

Fed officials took a largely sanguine view of inflation at the meeting, anticipating that near-term price pressures would fade as the year goes on.

Those at the April 27-28 session said they expected rising demand with an economic reopening to combine with supply chain issues to push prices above the Fed’s 2% inflation target.

“After the transitory effects of these factors fade, participants generally expected measured inflation to ease,” the minutes said.

The minutes stated that “various participants” anticipated that it will “likely be some time until the economy had made substantial further progress toward the Committee’s maximum-employment and price-stability goals relative to the conditions prevailing in December 2020 when the Committee first provided its guidance for asset purchases.”

The Fed has set an ambitious and somewhat ambiguous goal for when it will change the ultra-loose policy it put into place during the pandemic’s early days.

Central bankers are looking for full and inclusive employment and say they will allow inflation to run somewhat above their 2% target in a new policy regime that looks for an average around that level, rather than using it as a maximum benchmark before tightening."

MY COMMENT

BASICALLY....if you take out the opinion of the writer.....they stayed the same as they ahve been for the past many months. NOTHING TO SEE HERE. this is why I dont see much in the financial media about the FED release today. NO...nothing has changed.....and....it is NOT a shock.....in the slightest...that they will....."at some point"....."when it is appropriate"....."consider".....their position. Of course.....that time was NOT NOW.

 

Off to rehearsal.....you guys finish up the markets for today..........not that there is much that can be done on a day like this when the markets just.......want to go down.