The Long Term Investor

WELL.....the old crypto prices continue to FALL. Those that FOLLOWED the people pushing CRYPTO as the new way to make money.......trading.....have now....lost MUCH of their money or even gotten themselves into financial problems by using leverage. As I type this Bitcoin is at $33,559.......a LOSS of 48% since the April 15 high.....just a month ago...... AND...... ETH is at $1894......a LOSS of 54% since the May 11 high.....just 12 days ago.. THESE are SIGNIFICANT drops from the recent highs.

This is the PERFECT illustration for anyone taking investing advice form random people on the internet.....especially people posting some BALONEY about "investing" in something by short term trading. You will NEVER.....hear from those people that they lost money.......but you know they did......they may have even lost A LOT of money.

THIS is a classic WHIPSAW situation. THIS is why traders and market timers CAN NOT beat long term investors and why people that CHOOSE to trade and market time will NEVER beat a long term investor. In fact they WILL....severely under-perform the average long term investor. AND OFTEN......they will end up in a financial DISASTER. Common sense tells you this....the academic research tells you this.....and ANY investing data that is accurate tells you this.

I include myself and anyone else in this comment. EVERYONE on this board has opinions and an investing style.......that does NOT mean that anyone else should follow what a poster is doing.......UNLESS.....you do your OWN homework and determine that the investment or investment style is RIGHT FOR YOU.

 

See above post.....THIS is EXACTLY why it is MORONIC for corporate management to be putting corporate CASH into something like bitcoin or any other SPECULATIVE vehicle. FUNNY.....I dont see......ANY..... articles in the financial media talking about the massive LOSSES of corporate assets by this sort of management malpractice. I did see a lot of articles pushing this STUFF as cool......a month or two ago. At that time.....you also....saw many corporate MORONS blindly jumping on this BANDWAGON.

I DONT have an issue with people CHOOSING to gamble with their own money.....it is their money.....if they LOSE IT.....WHO CARES....that is their problem. BUT...gambling with other peoples money.......business assets.....in HIGHLY SPECULATIVE vehicles as a substitute for holding CASH.....is MANAGEMENT MALPRACTICE.

As a shareholder I invested in a very specific business model......I did NOT invest in a speculative trading operation. Same with the politics, woke-ism, religion, etc, etc.........whatever issue you want to raise.......companies should STFU and keep to business.

 

We are seeing a short term......DASH TO CASH.....by many of the "traders" and others that FLAIL around based on short term news items and chasing returns. GOOD......this is a great contrary indicator. They are always WRONG in the end.

GRAPHIC-U.S. investors flee to money market funds in the week ended May 19-Lipper

https://finance.yahoo.com/news/graphic-u-investors-flee-money-133951733.html

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

"U.S. money market funds lured massive inflows in the week ended May 19 as investors turned risk averse on concerns over higher inflation levels and chances that the Federal Reserve might scale back its monetary support measures.

Refinitiv Lipper showed U.S. money market funds received a net inflow of $25.34 billion, a four-fold increase over the previous week.

U.S. inflation-protected bonds also were in demand, as they received inflows worth $1.37 billion.

The U.S. Fed minutes published this week said "a number" of officials thought that if the recovery holds up, it might be appropriate to "begin discussing a plan for adjusting the pace of asset purchases".

Overall, U.S. bond funds obtained $2.83 billion, the lowest in 10 weeks, with taxable bond funds getting inflows of $2.15 billion and municipal bond funds receiving $485 million.

On the other hand, U.S. equity funds witnessed outflows worth $5.43 billion, with growth stocks accounting for a majority of the selling.

In particular, U.S. tech funds had a net selling of $2.1 billion in the week.

Growth stocks are hit the most when there are increased expectations of higher inflation and interest rates, as they lower the present value of future cash flows, making the stocks less attractive.

However, cyclical sectors such as financial and mining sector funds had inflows of $1.29 billion and $403 milliion respectively."

MY COMMENT

LOL.....usually....."graphic emphasized in a headline.....means there is actually some type of "graphic" in the article.....NOPE. The LEMMINGS are off and running. This money is coming from the traders......the speculators.....the crypto people.....ALL bailing on their short term LOSERS. It is ALSO coming from.....people being driven out of the markets by the constant DOOM&GLOOM and FEAR MONGERING that is a daily TSUNAMI in the press.

PERSONALLY.....I consider this a great contrary indicator......since the majority is usually.....ALWAYS WRONG....when it comes to investing and market timing.

 

My little.....local....weekend real estate report on my area. OUT of 4200 homes we currently have 12 homes for sale. We are seeing the usual BIDDING WARS.......and.......homes seem to be on the market for about 7-14 days before going "pending". At this time of the year......the PEAK selling season.....we would usually have between 80-100 homes for sale. Prices as a result.....are WAY UP.

 

Be nice guys......please.

 

YES.....lets kick ass tomorrow and all week.....and if we dont....who cares.....we will make it up and much more over the long term.

 

NONE....of the recent discord here had anything to do with the markets or any drop in the markets.......and I am sure you know that.......just like everyone. AND......it is time to move on.

 

SO.....as a warm-up for tomorrow.....here are some of the issues and events for the upcoming week.

Inflation data, consumer confidence: What to know this week

https://finance.yahoo.com/news/infl...fidence-what-to-know-this-week-164539544.html

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

"Investors this week are poised to receive a number of key economic data reports offering the latest look at the state of inflation in the U.S., with investors and consumers alike jittery at the prospects of rising prices during the post-pandemic recovery.

The U.S. Bureau of Economic Analysis will release its April personal consumption expenditures (PCE) index on Friday. The print is expected to show a rise of 3.5% in April over last year for the biggest increase since 2008, according to Bloomberg consensus data. This would also accelerate after a year-on-year jump of 2.3% in March. On a month-over-month basis, the PCE likely increased by 0.6%, accelerating after a 0.5% increase during the prior month.

Stripping away volatile food and energy prices, the so-called core PCE is expected to have increased by 2.9% in April over last year, which would be the largest jump in more than two decades.

Though the core PCE serves as the Federal Reserve's preferred inflation gauge, the expected surge in this week's inflation reports are unlikely to provoke immediate concern for the central bank. Federal Reserve Chair Jerome Powell has said repeatedly he believes inflationary pressures this year will be "transitory," largely reflecting base effects as this year's data lap last year's pandemic-depressed levels. And for years previously, inflation ran well below the central bank's targeted levels.

In the words of the central bank's latest monetary policy statement, Federal Open Market Committee members wrote, "With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer‑term inflation expectations remain well anchored at 2%." In other words, the Fed has suggested monetary policy would remain as is — with interest rates near zero and the Fed's asset purchases taking place at a rate of $120 billion per month — as the economic recovery out of the pandemic progresses.

Still, the market has suggested it might need more convincing before agreeing that the jump in inflation will not be long-lasting or prompt a change in the Fed's current ultra-accommodative monetary policy positioning. Longer-duration assets like growth and technology stocks have especially come under pressure in recent months amid inflationary concerns, given prospects that higher rates might undercut future earnings potential. The information technology sector has sharply underperformed the broader S&P 500 so far this year, reversing course after outperforming strongly in 2020.

"Markets have basically made inflation the battleground issue for determining whether or not it's really this rotation trade that'll win out the rest of this year, or whether it's the tech and growth stocks that won out last year," James Liu, Clearnomics founder and CEO, told Yahoo Finance last week. "You've seen this bounce back and forth throughout the course of this year."

Heading into this week's PCE report, a number of other inflation prints have also exceeded expectations, pointing to an increase in both consumer and producer prices. Government data showed that headline consumer prices surged by a faster than expected 4.2% last month. Excluding food and energy, prices jumped 0.9% in April and were up 3.0% over the year. And producer prices also came in higher than expected, with core producer prices rising 4.1% in April over last year versus the 3.8% increase expected. These stronger-than-expected increases could portend some upside risk to this week's PCE print, some economists suggested.

"The April CPI data were stronger than our expectation, suggesting a more front-loaded impact from transitory factors, pressure from semiconductor shortages and the resurgence of demand for sectors affected by the pandemic," Nomura Chief Economist Lewis Alexander wrote in a note Friday. "Given that the core PCE price index is a chain-weighted index, an expected rise in spending for COVID-sensitive services could amplify the magnitude of corresponding prices."

Consumer confidence
Updated readings on sentiment among consumers are also due for release this week.

On Main Street, consumers have also observed rising prices. Inflation concerns have weighed on sentiment even as COVID-19 cases drop and more businesses reopen following widespread vaccinations.

"Consumers have taken notice of rising inflation, as evidenced by Google Trends and the University of Michigan survey," Bank of America economist Michelle Meyer wrote in a note, referring to the University of Michigan's Surveys of Consumers. "The expectation is increasingly for higher inflation, even if dominated by transitory stories, and we believe there is risk for further upside in the near term. But, over the medium term, we expect expectations to cool alongside the core inflation trajectory, albeit to a higher trend."

In the University of Michigan's preliminary May consumer sentiment survey, the headline index tumbled to 82.8 from 88.3 in April, "due to higher inflation—the highest expected year-ahead inflation rate as well as the highest long term inflation rate in the past decade," Richard Curtin, chief economist for the University of Michigan's Surveys of Consumers, wrote in a note at the time. However, he added that "consumer spending will still advance despite higher prices due to pent-up demand and record saving balances."

The University of Michigan's final May sentiment print due for release on Friday is expected to firm slightly to 83.0.

Other sentiment surveys will likely show similar dips for May, due in part to rising price pressures. The Conference Board's closely watched Consumer Confidence Index will be released on Tuesday, and is expected to dip to 118.9 in May from 121.7 in April. That had, in turn, been the highest reading since February 2020, or before COVID-19 cases began to surge in the U.S. last year.

Earnings calendar

• Monday: Lordstown Motors Corp. (RIDE) after market close
  
• Tuesday: AutoZone (AZO) before market open; Intuit (INTU), Nordstrom (JWN), Zscaler (ZS), Agilent Technologies (A) after market close
  
• Wednesday: Dick's Sporting Goods (DKS), Abercrombie & Fitch (ANF) before market open; American Eagle Outfitters (AEO), Nvidia (NVDA), Okta (OKTA), Snowflake (SNOW), Workday (WDAY), Williams-Sonoma (WSM) after market close
  
• Thursday: Best Buy (BBY), Dollar General (DG) before market open; Costco (COST), The Gap (GPS), VMWare (VMW), Box (BOX), Autodesk (ADSK), HP Inc (HPQ), Salesforce.com Inc. (CRM), Dell (DELL), Ulta Beauty (ULTA) after market close
  
• Friday: N/A
  

Economic calendar

• Monday: Chicago Fed National Activity Index, April (1.1 expected, 1.7 in March)
  
  
• Tuesday: FHFA House Price Index, month-over-month, March (1.3% expected, 0.9% in February); S&P CoreLogic Case-Shiller 20-City Composite Index, month-over-month, March (1.33% expected, 1.17% in February); S&P CoreLogic Case-Shiller 20-City Composite Index, year-over-year, March (12.55% expected, 11.94% in February); New home sales, April (950,000 expected, 1.021 million in March); Conference Board Consumer Confidence, May (118.9 expected, 121.7 in April); Richmond Fed. Manufacturing Index, May (18 expected, 17 in April)
  
  
• Wednesday: MBA Mortgage Applications, week ended May 21 (1.2% during prior week)
  
  
• Thursday: Durable goods orders, April preliminary (0.8% expected, 0.8% in March); Durable goods orders excluding transportation, April preliminary (0.7% expected, 1.9% in March); Non-defense capital goods orders excluding aircraft, April preliminary (1.0% expected, 1.2% in March); GDP annualized quarter-over-quarter, Q1 second print (6.5% expected, 6.4% in first print); Personal consumption, Q1 second print (10.9% expected, 10.7% in first print); Core personal consumptions expenditures, quarter-over-quarter, Q1 second print (2.3% expected, 2.3% in prior print); Initial jobless claims, week ended May 22 (425,000 expected, 444,000 during prior week); Continuing claims, week ended May 15 (3.751 million during prior week); Pending home sales, month-over-month, April (0.5% expected, 1.9% in March); Kansas City Fed Manufacturing Activity Index, May (29 expected, 31 in April)
  
  
• Friday: Wholesale inventories, month-over-month, April preliminary (1.1% expected, 1.3% in March); Personal income, April (-14.8% expected, 21.5% in March); Personal spending, April (0.5% expected, 4.2% in March); PCE Deflator, year-over-year, April (3.5% expected, 2.3% in March); PCE Deflator, month-over-month, April (0.6% expected, 0.5% in March); MNI Chicago PMI, May (69.0 expected, 72.1 in April); University of Michigan Sentiment, May final (83.0 expected, 82.8 in prior print)
  

MY COMMENT

Earnings that are interesting to.....ME.....next week are Nvidia and Snowflake on Wednesday after the bell....and.....on Thursday, Costco and Salesforce also after the bell.

The issues otherwise will the......same old-same old.....inflation and the ability of the FED to do what they have said they are going to do....about 500 times now. The markets.....ie: the professionals and big banks that would love the FED to cave for their trading purposes....will NEVER give in and just accept that the FED might do what they have said over and over. So.....this will continue as a weekly topic for a long time to come.

Inflation will ALSO be a many month topic.....with no resolution. Sooner or later this topic will LOSE all ability to move the markets as people get tired of the same old STUFF being speculated every day......day after day...... and.....simply move on.

At some point over the next 6-12 months the......ACTUAL......business results of individual companies will come back into play instead of all the general economic BLATHER that is driving the markets right now. Over time......the OPAQUE will become clear. I suspect that the majority of BIG CAP LEADERS will break free of the......DULL, TIRED,.......story line about the rotation to value.....and the impact of inflation......as earnings continue to come in at record after record over a number of FUTURE quarters.

I dont think large numbers of investors are going to BAIL on the BIG CAP tech darlings like Apple, Google, Amazon, Microsoft, and Nvidia......and.....I think earnings from these DOMINANT companies will do just fine over the next few quarters as the economy re-opens. Even inflation WILL benefit these companies...if necessary.

 

How true.....this little article on......stock investor knowledge......beating an issue to death....is so true.

What it means that everyone is talking about inflation: Morning Brief

https://finance.yahoo.com/news/infl...riced-in-markets-morning-brief-095840283.html

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

"Inflation risks are priced into the market
Everyone is talking about inflation.

And that, of course, includes investors.

According to BofA's monthly Global Fund Manager Survey published last Tuesday, "higher inflation is now the consensus." And furthermore "inflation is now again the biggest risk for markets," as initially identified by 35% of the survey's 194 respondents who manage a combined $592 billion worth of assets.

Translation: Investors are worried about inflation.


Inflation has emerged as a top concern for fund managers. (BofA Global Research)
But if investors are broadly concerned about inflation, it suggests stock prices are likely already reflecting these risks and investors have discounted, or priced in, inflation risk into the markets.

While it may not be a perfect analog, it's worth considering what happened during the early stages of the coronavirus pandemic.

On March 17, 2020, BofA's Global Fund Manager Survey identified "Coronavirus" as its biggest tail risk, and it remained on the top fo the list for the next 10 months as data consistently and persistently reflected an economy in a state of emergency. But the S&P 500 prices bottomed on March 23, 2020.

In other words, the market had priced in the coronavirus recession and discounted the pandemic's worst financial impacts by mid-March, but this risk still remained the consensus worry among investors for another year.

The threat of inflation is the most known risk in the markets right now. And so investors should consider the likelihood that the downside of inflation has been priced in.

"Unlike recent cycles, we acknowledge that inflation tail-risk is higher and that inflation data could get hotter before normalizing," JPMorgan's Dubravko Lakos-Bujas said. "This outcome, at the same time, is getting increasingly priced-in as essentially every investor we have spoken to in recent weeks is well aware of this backdrop." (Emphasis ours.)

According to Google, search interest in "inflation" is at an all-time high. The University of Michigan's recent survey of consumers revealed sentiment got dinged in May due to unusually elevated concerns about inflation in the years to come.

On the corporate side, a record number of S&P 500 (^GSPC) companies have discussed "inflation" on earnings calls as executives just can't stop talking about higher costs.

Whether or not inflation actually becomes a major problem for the economy will only be known in hindsight. And despite folks arguing that recent upticks in price represent "transitory" concerns and "reopening quirks," this debate is likely to rage on for months especially as high-profile skeptics sound alarms.

And none of this is to say the economy won't take a hit should hotter-than-expected inflation come to fruition. But the stock market may look past this event if it does indeed arrive as investors look towards a better future. Another reminder that we often see stocks rally when things are terrible. Indeed: We just did."

MY COMMENT

YES.....everyone is hearing about inflation. The constant SCREAMING about this topic is like beating investors over the head with a baseball bat. Everyone is.....talking.....about this issue. BUT...that does NOT mean everyone accepts what is being said. Obviously I dont.....and.....I see many investors that ALSO dont buy the current scenario that is being pushed. BUT.....who cares....speculating about what might happen in months or even years is simply a waste of time.

With all he awareness of this topic we are going to see price gouging by those than can use the issue as an excuse. We are also.....hopefully.....going to have EVERY business in he country.......that has any management competence at all ........prepare for this potential situation in terms of borrowing and management of corporate assets and finances. IT IS BAKED IN......way over baked.

I agree totally with this little article....any issue that has this much exposure is totally reflected in the current markets and will have little impact if it actually happens. That is not to say there will be NO impact on stocks if there happens to be some inflation....but any impact will be very short term.....and the markets will simply .....IGNORE and MOVE ON.

 

TODAY....is one of those days....at least so far....when the markets disconnect from all the media and internet DRAMA and get on with business. We have a good strong open.......obviously based on ACTUAL company results as shown by the AMAZING recent earnings. The companies LEADING the way today....are EXACTLY those that should be leading the way.....the DOMINANT companies in the American business world.

For.....the moment....we are back to being investors based on fundamental financial company data....rather than general economic speculation. I think people have been totally worn out by the recent economic SOAP OPERA DRAMA. On top of recovering and re-opening from the pandemic this economic DRAMA is exactly what you would expect from human nature. People are very skittish and erratic from the last year of constant doom and gloom as well as loss of liberty to live life. Many people are....ON EDGE....waiting for the next shoe to drop in all aspects of life. This is spilling over into the markets.

The good news......society is QUICKLY returning to normal. Masks WILL be a thing of the past. People WILL go back to work and move on. AND.....the markets WILL get back to rational and reasonable behavior.....with the NORMAL spurts of INSANITY mixed in for good measure.....as usual.