Time to.....finally....wrap up the day. First I ended solidly in the green today. And got a beat on the SP500 by 0.19%. All in all a good day. That is three green days in a row for me. We need to lock in two more this week and than keep it moving forward.
My holding reporting earnings today was NVIDIA. Here is the result from after the close today. Nvidia revenue jumps 84% from last year as gamers demand graphics chips https://www.cnbc.com/2021/05/26/nvidia-nvda-earnings-q1-2022.html (BOLD is my opinion OR what I consider important content) "Key Points Nvidia reported first-quarter results for its fiscal 2022 on Wednesday, with sales growing 84% compared to last year. Nvidia’s earnings come during a period of sustained, massive growth in its business amid a shortage of semiconductors worldwide. Nvidia said that the processors it sells specifically for cryptocurrency miners had sales of $155 million. Nvidia reported first-quarter results for its fiscal 2022 on Wednesday, with sales growing 84% compared with last year. Earnings and sales both beat Wall Street expectations, but the shares were basically unchanged in extended trading. Here’s how the chipmaker did, versus Refinitiv consensus estimates: Revenue: $5.66 billion versus $5.41 billion estimated Earnings: $3.66, adjusted, versus $3.28 per share estimated The earnings period ended May 2. Nvidia’s earnings come during a period of sustained, massive growth in its business amid a shortage of semiconductors worldwide. Nvidia said it expected $6.30 billion in revenue in the current quarter, which would be a 62% increase over last year. The number-crunching graphics processors (GPUs) Nvidia makes are essential for PC games, artificial intelligence and cryptocurrency mining. Its graphics segment, comprised mostly of graphics cards, was up 81% to $3.45 billion in revenue. Broken down by market platform instead of reportable segment, Nvidia said its gaming products were up 106% on an annual basis to $2.76 billion in sales. Nvidia CFO Colette Kress said that gamers and students are behind the increased demand for GPUs and that it expected that the current upgrade cycle would continue to be strong through the rest of the year. Sales of its consumer GeForce graphics processors drove the increased revenue in its gaming division, in addition to chips it sells to game console makers. The compute and networking segment, which includes chips for data centers, was up 88% to $2.21 billion. Nvidia said that sales were boosted partially by Mellanox, a data center company it bought last year, as well as increased demand for graphics processors in servers. Nvidia has also had supply issues for months. Its consumer graphics cards are consistently sold out around the world, and Nvidia has added new software to make them less attractive to cryptocurrency miners in an effort to reserve supply for other buyers. Nvidia said on Wednesday that it expected graphics cards to remain in short supply through the second half of the year, but that its new line of dedicated cryptocurrency chips, called CMP, could help ameliorate the problem. “CMP yields better, and producing those doesn’t take away from the supply of GeForce. So it protects supply for the gamers,” Nvidia CEO Jensen Huang said on a call with analysts. Nvidia said Wednesday that it believed cryptocurrency miners were partially responsible for its increased revenue, but “it is hard to determine to what extent.” Nvidia said that the CMP processors it sells specifically for cryptocurrency miners had revenue of $155 million. In the current quarter, Nvidia is expecting CMP sales around $400 million, Kress said. Nvidia announced last year that it planned to buy ARM, a core processor technology company, for $40 billion. Kress said that the transaction was on track to close in 2022. Last week, Nvidia announced that it plans to split its stock 4-to-1, pending shareholder approval. MY COMMENT DEFINITELY great earnings....beating all the expectations. At least there was nothing to take the SHINE off the stock split announcement. As is the norm with great earnings....the stock will probably be down for a few days. Kind of a self fulfilling prophesy compliments of the AI and program traders. This trend of a stock going down after AMAZING earnings is way too uniform to be random. NOW it is full speed ahead for the split. We might see some near term weakness......now that earnings is over.....and.....the expectations based on anticipated earnings is over.....and we have the REALITY. I would not be surprised to see the stock linger a bit or even have some down time.....until the shareholders meeting affirms the stock split and than we move forward toward the day of the split. I would think there should be some good gains in the weeks leading up to the split and/or in the immediate period right after the split.
HERE is a bit of a preview of the rest of the week. The big one for me is COSTCO reporting after the bell tomorrow. For others there will be interest in BEST BUY and SALESFORCE also reporting earnings tomorrow. Best Buy, Salesforce, Pending Home Sales: 3 Things to Watch https://finance.yahoo.com/news/best-buy-salesforce-pending-home-160115946.html (BOLD is my opinion OR what I consider important content) "The S&P 500 and NASDAQ Composite held onto gains Wednesday as strong earnings from retailers boosted optimism about a return to more normal economic times. The Dow Jones Industrial Average ended flat, however. The so-called meme stocks GameStop Corp (NYSE:GME) surged 14% and AMC Entertainment Holdings Inc (NYSE:AMC) jumped 18% after last week’s tumble in crypto may be encouraging retail traders to move back into stocks rather than digital currencies, for the time being. Amazon.com Inc (NASDAQ:AMZN) confirmed its $8.5 billion deal to buy the Hollywood studio MGM Holdings, a deal that has been rumored for weeks as streaming giants jockey for dominance. The deal is likely to spark continued consolidation in the media and entertainment industry, coming closely after AT&T Inc (NYSE:T)’s planned combination of its WarnerMedia withDiscovery Inc Class A (NASDAQISCA). In the energy sector, an activist shareholder succeeded in winning two board seats at Exxon Mobil Corp (NYSE:XOM)after opposing the oil giant’s climate strategy. Here are three things that could affect markets tomorrow: 1. Retail roll-out More retailers are out with their quarterly results on Thursday. Electronics store Best Buy Co Inc (NYSE:BBY) is expected to report earnings per share of $1.34 on revenue of $10.29 billion, according to analysts tracked by Investing.com Discounter Dollar General Corporation (NYSEG) is expected to report EPS of $2.13 on revenue of $8.14 billion, while warehouse club Costco Wholesale Corp (NASDAQ:COST) is expected to report EPS of $2.31 on revenue of $43.64 billion. 2. Salesforce earnings Tech earnings are also continuing to trickle out. Relationship management software maker Salesforce.com Inc (NYSE:CRM) is expected to report EPS of 88 cents on revenue of $5.89 billion, according to analysts tracked by Investing.com 3. More housing-related data Earlier this week, data showed housing prices at their highest in 13 years, with tight supply and high demand. On Thursday at 10:00 AM ET (1400 GMT), we get more data that will give us a window into trends for May and June. The National Association of Realtors’ index of pending home sales for April is expected to rise 0.8% from the prior month. MY COMMENT Should be an action packed end to the week over the next couple of days with the big earnings above. We are heading to the end of earnings and than will be in the summer dead time.......till earnings start back up again in July and August. SECOND and THIRD quarter earnings should be very instructive this year........and....I am thinking will be BIG. We will have to go through the typical DRAMA as we head to second and third quarter reporting.....the media and others will be pushing the...... pandemic driven earnings coming to an end......narrative. This FAKE narrative will prove to be TOTALLY FALSE as the economy is going to take a good 12-24 more months to fully re-open. LOOKING forward to the good times......and.....I continue to be fully invested for the long term as usual.
That's the TRUTH !!! Good Day UP .37% Wifey UP .41% Damn she beat me again ow well at least I stuck it to the S&P by .18% Ya know it's been a long day when you "have to" pull out the calculator to subtract 19 from 37 !!!!! Here's to continued "No News" And a steady boring climb
This is a nice little article. I INTENTIONALLY DO NOT do any International investing......but.....there is some good information for investors to consider in this article. When You Buy Broad U.S. Indexes, Your Exposure Is Not Broad https://www.realclearmarkets.com/ar...ndexes_your_exposure_is_not_broad_778913.html (BOLD is my opinion OR what I consider important content) "Most pundits believe Tech’s leadership run is done, claiming vaccine rollouts, re-openings, rising interest rates and looming inflation drive the nails in its coffin. They point to Tech’s year-to-date lag globally versus areas like Energy and Financials—arguing that trend will last. Maybe! But I think it is all just a countertrend head fake before Tech’s roll resumes. Regardless, these swings offer a key lesson: Investing in any single country or region—big or small—carries hidden sector decisions. To truly diversify, you must think globally. Always! Here is why. In the past decade, US stocks rose 291%, trouncing the rest of the developed world’s 79%. A big reason? Tech. America’s largest sector soared 587%. Huge “Tech-like” stocks in other sectors further juiced US returns (Apple and Amazon as examples). Benchmarking to broad US indexes thus involves an active, often unconsidered, Tech bias. Tech and Tech-like firms are roughly one-third of US market capitalization. In the developed world outside America, Tech is only the sixth-largest sector. It makes up just 13% of Japan’s market cap, 10% of continental Europe’s and 1% of the UK’s. Those seeing broad US indexes as a one-size-fits-all, diversified index unknowingly buy a skewed, Tech-heavy diet. Sometimes for better. Sometimes for worse. Sector skew applies almost everywhere. Collectively, the rest of the developed world sports a heavy tilt away from Tech and towards the “old economy”—Industrials, Materials and Energy stocks are 28% of non-US market cap, double America’s 14%. But individual regions and countries vary vastly. In Europe, Germany’s markets are 37% Industrials and Consumer Discretionary, with 13% of total German market cap auto-related—fully five times the world’s 2.4%. French markets look similar at a sector level: 43% Industrials and Consumer Discretionary. But its Discretionary sector is nearly entirely Luxury Goods firms. Italy is 31% economically sensitive Financials and 24% defensive Utilities—eight times the world average. The UK is 19% Financials and 20% Staples, well above the world’s 14% and 7%, respectively. Outside Europe, Japan is 40% Industrials and Consumer Discretionary with loads of autos, machinery and electronics. Australia is over 35% Financials—and 18% Metals and Mining firms, an industry totaling just 1.6% globally. Canada is similarly bank-and-mining heavy but also features an Energy sector four times bigger than the world’s. All these countries’ indexes shift in and out of favor, normally paralleling industry trends. With Energy, Financials, Mining and Industrials all leading this year thus far, it is no shock world-leading markets include Canada, the UK, Italy and France. I don’t expect this to last, though, as I have noted here before. The case for these value sectors—quickening economic growth and high hopes for stimulus—is both widely known and overblown. So despite Tech’s recent lag, tailwinds still favor Tech and big growth stocks. But that won’t last forever. Leadership shifts, often dramatically. Consider: In the US, Tech led all sectors in the 2010s and 1990s. In the 2000s, it was the worst. That wasn’t just because of the dot-com bust—Tech was tepid in the ensuing bull market, too. Energy was the 1990s’ third-worst sector, the 2000s’ best and the 2010s’ worst. The 1990s’ laggard, Utilities, roared to third-best in the 2000s. No sector—or country—leads forever. Why? Supply and demand. Booming sectors lure investors, so investment bankers push new firms public in them—see 2021’s Tech-led IPO boom. As supply rises to meet the quantity demanded—and overshoot, surpassing it—demand for the category of stocks and their leadership falters. Sometimes, returns turn tepid for years. Other times, fast plunges follow—like the 1990s Tech boom-turned-bust, when a glut of new Tech shares overwhelmed demand. This supply expansion and contraction is among markets’ biggest and most basic long-term drivers. It underpins leadership rotations. Sectors don’t lead or lag forever (although industries within sectors can go kaput). When hot industries or sectors slump, many chase heat elsewhere—a loser’s game. That makes using a global benchmark like the MSCI World Index or All-World Index crucial. They relatively right-size categories, limiting any one area’s excessive bets—critical in markets where one or two areas dominate. It is also important for more subtly skewed markets like America’s. Doing so discourages heat-chasing and the temptation to sell after big declines price in dour, easily surpassable expectations—just when investors should be buying. Ultra-narrow portfolios can soar when their tilts are in favor—and collapse when leadership shifts. Always thinking global first offers true diversification, letting you better manage risk and capture return. Remember: It’s a big, beautiful world with a lot of diversity and variance. Think globally. Always!" MY COMMENT Even though I DO NOT follow the above....this is good information for investors to consider. Many investors buy funds or indexes or even individual stocks without considering all the factors involved. There is NOTHING wrong with......doing or not doing.....what this article suggests. The point is to be an informed investor......and....understand what you are investing in. NOW......why do I NOT do the above. First I DO NOT do ANY International investing. I consider the SP500 as the PREMIER list of the top 500 companies in the WORLD. Most of the companies in the SP500 lead the world in their products and business area. MOST of the companies in the SP500....especially the top 100....market their products all over the world. These are basically INTERNATIONAL companies. I PREFER to do my international investing by holding the greatest companies in the world that market and sell their products world wide. There is no reason for me to buy foreign companies to achieve this goal. The SP500 does it all.....as does the USA business world. As to the tech bias of the indexes and the SP500.....as an investor I know this......AND.....that is my INTENTIONAL choice. The reason I like the SP500 is the very fact that it is weighted strongly toward the tech businesses. I want to INTENTIONALLY double and triple up on that side of the economy as an investor. I believe that is where the long term growth is going to be. The above is good information for investors and things they should consider in buying a fund or investment and allocating their portfolio. It is NOT important to follow the above....but....it is important to at least know and consider this info. I STILL.....along with Warren Buffett....consider the SP500 as the single best investment for most people for the long term......WITHOUT....any International exposure outside the USA.
Decent open today. Reminds me of the first three days this week. Hopefully we end the day the same as the first three days this week. At the moment....DOW is up....SP500 is up....and the NASDAQ is basically flat. Looking forward to the COSTCO earnings today and the coming end of earnings season. Earnings....have been HISTORIC this quarter......I suspect that the SP500 is going to set a record for earnings beats......perhaps somewhere between 84-90%.
HERE....is the general economic data that no one cares about: Jobless claims: Initial filings fell for a fourth straight week to set new pandemic-era low https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-may-22-2021-183122973.html (BOLD is my opinion OR what I consider important content) "Initial unemployment claims fell for a fourth straight week to set a new 14-month low as the labor market recovery made further strides toward recovering jobs lost during the pandemic. The Department of Labor released its weekly report on new jobless claims Thursday at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus data compiled by Bloomberg: Initial jobless claims, week ended May 22: 406,000vs. 425,000 expected and 444,000 during the prior week Continuing claims, week ended May 15: 3.642 million vs. 3.680 million expected and a revised 3.738 million during the prior week. As a greater percentage of the U.S. population becomes inoculated against COVID-19, more businesses have reopened and more social distancing standards have been eased. According to data from the Centers for Disease Control and Prevention, half of all Americans have now received at least one dose of a COVID-19 vaccine. This has in turn slowed the pace of layoffs and other separations, allowed more individuals to return to the workforce and pushed new weekly jobless claims closer toward their pre-pandemic pace of just over 200,000 per week. "More lifting of COVID-19 restrictions by governments and businesses, coupled with further progress on vaccinations, are helping to propel more mobility and spending on the part of consumers," Mark Hamrick, senior economic analyst at Bankrate, said in an email Wednesday. "In turn, businesses are doing what they can to position their labor and other resources to meet demand. As is widely understood now, some employers are struggling to hire all of the workers they want for a multitude of reasons." Still, however, an elevated number of Americans are still claiming unemployment benefits, even as the pace of new filings slows. More than 15.8 million individuals were claiming benefits of some form as of the week ended May 8. This included more than 11.5 million individuals on federal crisis-era unemployment benefits including Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation, which were started in the past year to alleviate some of the strain due to COVID-related job losses. But with COVID-19 infection rates falling to a near one-year low and more businesses reopening and struggling to find workers, a number of states are now rolling back some of these crisis-era benefits. Nearly two dozen states are slashing the federal $300 per week in unemployment benefits as soon as in mid-June, while the federal expiration date for these benefits is set for Sept. 6. Some have viewed these enhanced benefits as incentive for workers to stay on the sidelines, exacerbating labor shortages many in the service sector especially have been witnessing. Others, however, have said the benefits provide a necessary economic cushion for workers that have been disproportionately impacted by fallout from the pandemic. "No one knows for sure why people have been reluctant to return to the labor market — we're assuming it is due to a combination of COVID fear, childcare difficulties, and the $300 per week federally-funded enhancement to unemployment benefits — but the numbers are huge," Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note earlier this week. "The labor force in April was some 5M smaller than we would have expected if the pandemic hadn't happened." State-by-state unemployment The headline drop in weekly unemployment claims was broad-based last week, with most states logging declines in initial filings. Washington state saw new claims fall by more than 8,000 on an unadjusted basis, and Florida and New Jersey each saw new filings fall by more than 5,600. But while the unemployment picture improved on a national basis, some states still struggled with persistently elevated levels of joblessness. Nevada led the nation with the highest insured unemployment rate for the week ended May 8 at 5.7%, followed by Connecticut with a rate of 4.5%, and Rhode Island with a rate of 4.5%. The insured unemployment rate measures the ratio of people currently claiming benefits to the entire state population. Nationally, the insured unemployment rate was 2.7% for the week ended May 8." MY COMMENT OK data. BUT....it is time for some TOUGH LOVE. There is no reason to continue the elevated benefits....it is time to get people back to work......and.....eliminate the incentives to NOT work. Continuing claims are basically flat. PLUS....we have 5MILLION people that are out of the labor force. UNFORTUNATELY in today's world....people need a bit of PAIN to get back to work. This is a BIG LESSON for any sort of guaranteed income or allowing various benefits to get too high or too comprehensive.......it DISTORTS the labor markets......as people weigh working versus not working. The.....MASSIVELY....good news....the re-opening is going to happen regardless of numbers and data. People can participate or just get left behind.
Human behavior.....a killer. Talking about the labor markets and human behavior......there is a distorted labor market at the moment. Businesses NEED workers and they are in short supply. This means that at the moment....for a very brief time.....people....potential employees....have power on their side. The power to pick where they want to work....the power to get into a good job at an employer that was not open to them in the past......the power to bargain wages and benefits......the power to get a little bit of seniority. People should be taking advantage of these conditions RIGHT NOW. BUT....as always with human behavior.....many people will wait too long. Just like in investing.....people wait too long to buy and wait too long to sell. They are NOT decisive. In the current environment....those that are smart .....are out there right now taking advantage of he current conditions that favor job hunters. ALL the people just siting at home and taking advantage of the various benefits......unfortunately......are allowing a RARE opportunity to slip away.
Another data point today....pending home sales: Pending home sales unexpectedly drop in April https://finance.yahoo.com/news/pending-home-sales-april-2021-140005671.html MY COMMENT Yes pending sales are down. Some think the market is slowing down. It may be in some locations. But in property everything is LOCAL. And in my local area the market remains RED HOT. The number of active listings is WAY down. That is the reason for pending sales perhaps being down a bit here.....there is NOTHING to buy. In addition anyone with a home is afraid to list it. They are concerned that they will not be able to find a home to move to or rent in the current market. AND....we see this from the data: "Contract signings, however, were up 51.7% from a year ago, when pending home sales hit an all-time low and the COVID-19 pandemic basically ground the housing market to a halt." AND "Housing prices continue to surge at a record pace this year. Earlier this week, Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted a 13.2% annual gain in March, up from 12% in February — marking the fastest growth rate in more than 15 years." AND "the good news is inventory is up 10.5% from March, an indication that home building is picking up."
not just that but the immense shortages in supplies, mainly lumber had probably caused a lull in building. I know that we have decided to wait it out building our commercial property here in Columbus after getting some ridiculous quotes from contractors. We have already experienced a rough price war front on acquiring a property and now we’ll have to enter the construction battle zone. Utilities are looking to be on an uprise as well, look for insurance rates to climb, property tax seems to be down for us in NY thank god but I wouldn’t be surprised if they are higher in other states, power is up and down, one month we get a normal bill, another it’s super high… mainly because the incompetent folks at Con Edison in the city have suspended meter reading duties and are sending us “estimated” reads. So as you can see, it’s an interesting year so far, volatility is EVERYWHERE not just in Wall Street. But that’s when you have to take the back seat and wait for all the chips to fall down on the table and strategise. Maybe enjoy a little vacation while it happens
After looking at the numbers this morning, I'm ready to start buying art like W and Emmett. I shall start with Garfunkel.
I had Magna $MGA on my radar some months ago (they will build the Apple EV) - seems I should have bought some stock then. Still thinking about stepping in.
Well....BEZOS has announced the day he will step down as CEO of Amazon.....July 5, 2021. It has been known for some months that he was going to step down but the date was not known. He will continue as Executive Chairman of the Board. Lets hope the new CEO has the guts to split the stock.....it is way past due. When you see a leadership change from a company founder one of two things happens: 1. The new leader is NOT competent as a company leader and the company goes through a period of TURMOIL, with one or more leaders that are NOT able to sustain the prior success. or 2. The new leader is competent and the company moves on forward. Seems like to me from past experience that number 1 happens more often than number 2.....but every company is a separate situation. At least the new CEO has been with Amazon for a long time.
Here is a NASTY little situation for the economy and anyone that ends up being over the income limit for the new tax law. Of course.....no one has ACTUALLY seen the new tax law that I am aware of. the media talks about it.....BUT....there is NOTHING on paper anywhere. Biden plans retroactive hike in capital-gains taxes, so it may be already too late for investors to avoid it: report https://finance.yahoo.com/m/1770e9ed-ea6e-3fec-befc-fa86cc668a8a/biden-plans-retroactive-hike.html (BOLD is my opinion OR what I consider important content) "President Joe Biden’s proposed budget for the upcoming fiscal year assumes that a hike in the capital-gains tax rate took effect in late April, meaning that it already would be too late for high-income investors to realize gains at lower tax rates, according to a Wall Street Journal report out Thursday citing people familiar with the proposal. Biden plans to increase the top tax rate on capital gains to 43.4% from 23.8% for households with income over $1 million, though Congress must OK any hikes and retroactive effective dates, the report added. Separately, a New York Times report said Biden plans to propose a $6 trillion budget on Friday that would take the U.S. to its highest sustained levels of federal spending since World War II. Documents obtained by the Times show that Biden’s first budget request as president calls for total spending to rise to $8.2 trillion by 2031 as he aims to upgrade the nation’s infrastructure and substantially expand the social safety net, that newspaper’s report added. U.S. stocks SPX, 0.10% DJIA, 0.30% traded higher Thursday as investors sifted through data showing another fall in weekly applications for jobless benefits as well as an updated look at first-quarter gross domestic product." MY COMMENT It would be nice to see the actual tax plan that is constantly being talked about. Of course....the final plan that might pass congress will likely be very different by the time all the lobbyists and interest groups and donors get done with it.
There is an axiom in investing that not everyone can make money forever. This holds, regardless of the technique, past performance, or any mathematical proof otherwise. So many people have made so much money over the last 11 years that I wonder if we have enough of a retirement buffer. Our portfolio performance has been astonishing but so has everyone else's. If everything goes sour, I can always post a GoFundMe page.
LOTS of great articles about the NVIDIA earnings today....dealing with the current earnings and the very BRIGHT future earnings. Of course....as usual....the stock is down today.
Thank God.....there have not been many articles lately about the poor Millennials. The most talked about and over-analyzed generation in history. When you cut through all the CRAP that is put out there about them....they are doing just fine and about the same as all PRIOR generations. No, Millennials Aren’t Poorer Than Previous Generations https://ofdollarsanddata.com/no-millennials-arent-poorer-than-previous-generations/ (BOLD is my opinion OR what I consider important content) "Bet you’ve heard the narrative many times before—millennials are the poorest generation ever. There’s no shortage of articles to support this either: “Millennials are much poorer than their parents” “Millennials Just Became the Poorest Generation in History” “Millennials Don’t Stand a Chance” Unfortunately, articles like this tend to focus on the fact that Millennials own about 5% of all wealth, which is lower share than what prior generations owned around the same age. I don’t disagree with this, but it doesn’t paint the full picture. Because when you look across the standard wealth/income metrics, Millennials seem to be on (more or less) the same path as prior generations. How Millennials Are Similar to Prior Generations Using the same Federal Reserve data cited in the articles above, we can see that Millennials have roughly the same inflation-adjusted financial assets per capita as prior generations did around the same age. In the chart below I illustrate this by aligning the average age of each generation (as defined by the Federal Reserve) and then showing the inflation-adjusted financial assets after dividing by the number of households in each generation: As you can see, Millennials seem to be accumulating financial assets at the same rate that GenX and Baby Boomers did. Of course, financial assets aren’t the only metric that matters, so let’s look at total net worth (assets – liabilities) as well. Once again, after adjusting for inflation and the number of households in each generation, Millennials seem to be doing fine in terms of total net worth too: Looking at this chart, Millennials seem to be on the same general path as GenX and Baby Boomers were on when they were at the same age. In fact, Millennial wealth seems to be approaching Baby Boomer wealth (at least on a per capita basis) given that the red line (Millennials) is reaching out to the blue line (Baby Boomers) like it’s going to touch it in a few short years. It reminds me of that famous painting of Adam and God touching fingers: Jokes aside, Millennial wealth seems to be on a similar trajectory as those generations that came before. For example, from Q4 2019 to Q4 2020 (during COVID!), Millennials added over $1 trillion in total net worth, which is a 20% growth rate in wealth. If their wealth continues to compound at this rate for the next three years, they will easily surpass what Baby Boomers had at the same age. In fact Millennials only need a 13% growth rate in their per capita wealth over the next three years to match Baby Boomer per capita wealth at the same age. I don’t think this is unreasonable to beat either since GenX had a 22% annual growth rate in per capita wealth from ages 31-34 (the same average age as Millennials are now). Either way, this data suggests that the narrative around Millennial wealth isn’t as extreme as the media makes it out to be. But, the same thing is true if we examine income. For example, for households under age 35, incomes have gone up across the income spectrum since when this data starts (1989). Here is the 50th, 75th, and 90th percentiles of income for these younger households over time: And if we look at the 10th-50th percentiles (the lower end of the spectrum) we see the same thing: Though the 90th percentile of income earners seem to have lower incomes today than in 2007, across the rest of the income spectrum, incomes are slightly higher today. Of course, you might argue that these higher incomes are due to Millennials having more education, but even when we break this out by educational attainment we still see slight increases over time. Below is a chart of the 10th, 50th, and 90th percentiles of income broken out by educational attainment for all households under 35: As you can see, Millennials of all education levels generally have higher inflation-adjusted incomes today than 30 years ago. Unfortunately, these higher incomes have been eaten up by higher living costs. For example, if we look at annual rent over annual income for households under 35, we see that this ratio hasn’t gone down though incomes have gone up. The chart below shows the 50th, 75th, and 90th percentile of the ratio of annual rent over income for young renting households over time: From this chart I would say that the ratio of rent over income has increased slightly, but not significantly for younger households. In this regard, Millennials and prior generations seem to have had a similar experience. Whether we look at wealth or income statistics, I don’t see an entire generation in crisis. In fact, Millennials seem very similar to prior generations on many dimensions. Unfortunately, Millennials are still reported to be doing much worse than prior generations. So what’s going on? Well, there is one major area where Millennials do look quite different than generations of the past. Why Do Millennials Seem to Be Doing So Much Worse? Though wealth and income are mostly similar between Millennials and prior generations, when it comes to debt that’s where things are a bit different. Non-mortgage debt held by Millennials is significantly higher than Baby Boomers and seems to have been accumulated at an earlier age than prior generations: This is one metric is where Millennials have it objectively worse than Baby Boomers, but not necessarily than GenX. However, even this doesn’t tell the full story because that debt isn’t evenly distributed across all Millennials. In fact, if we look at households under age 35 over time, we can see that non-mortgage debt loads increased significantly, especially among households with at least some college experience. The chart below illustrates this by plotting the 50th, 75th, and 90th percentile of non-mortgage debt for younger households over time broken out by educational attainment: As you can see, for non-college households, non-mortgage debt hasn’t changed all that much over time except at the highest end. However, for households with any college exposure, non-mortgage debt seems to be up across the board. This makes sense given the increasing amount of student loans taken out by this cohort of households. And if you look at the net worth broken out by educational attainment, you can see that net worth has dropped the most among younger households with college exposure on the lower end of the wealth distribution (i.e. the 10th percentile): As you can see, while net worth is basically the same among households with no college exposure, there has been a significant decline among those with any college exposure, especially at the lower end. On aggregate, we can see this most clearly by looking at the change in net worth among the poorest younger households over time: While the 25th and 50th percentile of younger households show a similar level of net worth over time, the bottom 10 percent of younger households have seen a huge decrease in wealth. This is what seems to be driving the media narrative that Millennials are poorer than everyone else—selection bias. We don’t hear about all the succeeding Millennials, only those who struggle. If a Millennial came out tomorrow and tweeted about how well they were doing they would get crushed with “sick brag bro” and “weird flex, but okay” comments for hours. As a result, they don’t discuss their triumphs publicly. This is how a smaller portion of mostly educated, highly indebted households become the narrative. While their stories are important to tell, they aren’t the typical Millennial experience. I emphasize this point because by overlooking it you can send the wrong message. By suggesting that all Millennials can’t get ahead, you are painting the entire generation as victims of unfair circumstances. This is true for some Millennials, but not all Millennials. The distinction is important because it influences how policy makers (who are mostly Baby Boomers) think about these issues. When you are under the impression that all Millennials can’t get ahead, any sort of policy targeted to help younger people is seen as a massive transfer across generations. But it shouldn’t be seen that way. Because most Millennials (myself included) don’t need any sort of help to make it in America. However, some of us do. Millennials that have been burdened with negative amortizing loans, six figure loan debts, and subpar employment prospects need help. Whether that means some sort of partial loan forgiveness, tax credits, or something else entirely, a remedy is in order. Our narratives should focus on this subset of the Millennial generation and what we can do to help them rather than saying that all Millennials can’t get ahead. This is why I don’t believe Millennials are the “poorest generation ever” though we do have some of the poorest (most indebted) individuals in American history. Recognizing this is the first step towards actually improving their situation. Thank you for reading!" MY COMMENT Judging by my area....I have never lived anywhere with so many young people buying such expensive homes for their age. It is just amazing the amount of money that is out there in the younger age groups. BUT....as the article mentions......some of the young DO have problems with DEBT. Fortunately they have plenty of time to learn a lesson and work their way out of their.....self imposed.....debt load. With the oldest MILLENNIALS getting ready to hit age 40......they are becoming the MIDDLE AGE generation. As a group they seem to be doing very well and living through the same steps as all the generations before them. They have now made the TRANSITION to ADULTS.......WELCOME to the club.
I like this little article as a vehicle for some discussion. Must be a 'professional investor' to do well picking stocks: Legendary investor Bruce Greenwald https://finance.yahoo.com/news/must...picking-stocks-bruce-greenwald-141557388.html (BOLD is my opinion OR what I consider important content) "Berkshire Hathaway (BRK-B, BRK-A) CEO Warren Buffett and Vice Chairman Charlie Munger earlier this month set off fierce debate over the need for expertise in stock trading when they sharply criticized popular trading app Robinhood, with Buffett comparing it to a casino that takes advantage of people's "gambling instincts." In response, Robinhood said, "People are tired of the Warren Buffetts and Charlie Mungers of the world acting like they are the only oracles of investing." Now another legendary investor, Columbia University Professor Emeritus Bruce Greenwald — whom The New York Times once called "a guru to Wall Street's gurus" — says success in stock trading requires professional skills and specialized knowledge. Most investors are "not equipped" with the discipline to fully understand the details of each trade they make, he added. "To do well, to be on the right side of the trade, you have to be a professional investor," Greenwald tells Yahoo Finance Editor-in-Chief Andy Serwer. "I'll say something that, ironically, should absolutely dominate the investment world and doesn't," he adds. "Which is, if I'm going to be on the right side of the transaction more often than not, I probably ought to be a specialist." "You don't have internal medicine guys doing orthopedic surgery. Medicine, law is highly specialized," he says. "If I've spent my whole life trading onshore South Texas Gulf Coast oil leases, and that's all I do, you fly in from Germany and buy an oil lease from me, who do you think made money in that transaction?" For nearly three decades, Greenwald taught a popular course at Columbia University on "value investing," which identifies stocks trading at a price lower than their book value, and patiently waits for them to rise. The approach owes its worldwide renown to its most famous advocate, Buffett, who occasionally spoke as a guest in Greenwald's course. 'You have to be incredibly disciplined' Apps like Robinhood drew criticism from SEC Chair Gary Gensler earlier this month because they allegedly "gamify" stock trading and raise a potential conflict of interest for market makers that profit from the execution of high-volume trades. But Robinhood considers itself a much-needed trading platform for small investors who often lack affordable and easy access to the stock market. While many Americans hold at least some investment in the stock market, the majority of assets are owned by a small group of the wealthiest people. A Gallup poll released last June found that 55% of Americans say they have money invested in the stock market. But the richest 10% of U.S. families own 84% of overall equity holdings, according to a New York Times analysis of the Federal Reserve's 2019 Speaking to Yahoo Finance, Greenwald warned that everyday investors lack the wide-ranging knowledge to make savvy trades across different sectors of the economy. A dentist could hit on trades in dental companies, he said. "The problem," he adds. "Is once the dentist does that in dentistry, he decides he's a market genius. And he decides he can do it every place." "Now you have to be incredibly disciplined about why you're the person that's going to be on the right side of the trade, and most private time investors are not equipped to do that," he adds. He advised traders to put their money in stock indexes that spread out their investments and remove errors of judgment. "If you just buy the index, you can't be on the wrong side of the trade," he says. "And it prevents you from over-investing in the glamour stocks." MY COMMENT Where to start......well first the ARROGANCE of this. WOW....a professor at an Ivy League University that teaches an investing course for 30 years. Yeah right......that is who I am going to take any sort of investing commentary from......an academic. I did actually look to see if I could find any sort of investing results or record for this person.....of course....there is NONE.....that I could find. Typical....I dont trust so called "experts" telling people how to do something they dont apparently do themselves.....it is easy to be an expert on paper......and.....using hindsight analysis. I did see on numerous sites his.......slogan......"a guru to Wall Street's gurus"......how DUMB is that. BEWARE of people that have their own PR slogan.......especially if it is in their own BIO. How can you be a "LEGENDARY INVESTOR" with no investing results or record? If it is out there I could not find it. I can find the record for Warren Buffett. For someone that is a VALUE proponent.....apparently....it is odd that most of his quotes in the above article seem to be in terms of short term trading. A total contradiction. I DO agree with the comment....just buy an Index. There is NO NEED to worry about the "professionals".....they can typically NOT beat the broad averages. They CAN beat the vehicles.....Indexes....that they have created to compare their various NARROW investing categories to. You will see all sorts of funds that follow various investing styles.....comparing themselves to some specific little Index for their specific narrow investing style. I say......just compare yourself to the SP500 Index....forget all the little specific narrow category indexes. If a "professional" can not consistently beat the SP500......that is ALL I care about. AND....that is ALL any "regular" investor should care about. PERSONALLY....I think MOST "small" "regular" investors are much smarter than people give them credit for. In fact...my experience has been that is it ALWAYS the "professionals" that panic and jump in and out of the markets based on short term news. We have CERTAINLY seem some HISTORIC and SPECTACULAR....failures....by the professionals over the years. The portfolio insurance debacle of the 1980,s.....the CDO disaster of the 2000's......the dot com era and crash......even the pandemic where most "regular" people just rode through it and came out just fine on the other side.
