The Long Term Investor

Discussion in 'Investing' started by WXYZ, Oct 2, 2018.

  1. WXYZ

    WXYZ Well-Known Member

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    Looks like a typical open today....right in line with the last few months......range bound and directionless. Although.....I am in the green at this moment.....which is absolutely meaningless.
     
  2. TomB16

    TomB16 Well-Known Member

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    I'm not WXYZ but I will share my perspective.

    As a long term investor, BitCoin is not an investment. BitCoin is a speculation. BitCoin is a hedge.

    Any FX trading is not investing.

    I'm not against BitCoin at all. In fact, I would really like to see it succeed but I have no current plan to own any.


    The reason I got out of Tesla is because it was no longer an investment. It had gotten so high, the best case was the corporation would catch up to the valuation in about 10 years. At this point, people are buying Tesla because, "It's going up!". That makes it a speculative position. I bought Tesla in 2016 because it was priced at $0.25 on the dollar based on a reasonable expectation of business accomplishments by 2021.


    I am not against making money on speculations. Gambling is fine with me. It just isn't investing and I make a point of sticking with investments.


    What hurts my brain, with regard to BTC, is the mindset of feeling bad for people who (perhaps unknowingly) lose money on BTC trading. I know tons of people who lost money on BTC trading. All of them "almost" made money but for an unfortunate, random, change.

    When someone walks into an alley and throws down big money on a crap game, I feel no need to feel bad for them, regardless of the outcome. Anyone who loses money on BTC gets zero sympathy from me. Same goes for GME, AMC, or any hot-pick.

    I cheer for people to win at the game tables but I don't feel bad for them when they lose.
     
  3. T0rm3nted

    T0rm3nted Moderator
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    I was just asking for your view on BTC and ETH because it seems like you're all about the long-term, and then when BTC does what it always does and loses 50%, it's "I'm sure everyone learned a lesson". It just seems kind of inherently backwards to talk about some stocks/investments/trades etc. in the long-term and then make posts about how BTC is doing one of it's dips again and kind of "see-I-told-you-so" type of posts, when this is nothing new. When your long-term investments were down huge during the pandemic, your posts were "I remain fully invested for the long-term as usual" knowing they'd eventually go back up, but when BTC does what it always does, it's "I'm sure everyone learned a lesson".

    Please don't take this as an attack, I'm just trying to understand your POV and see if it is ideologically consistent.
     
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  4. WXYZ

    WXYZ Well-Known Member

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    I dont take it as an attack.....we are just having a discussion.

    My view is set out in my post above. In summary I see NOTHING about bitcoin or the typical bitcoin investor that is......LONG TERM. It is simply speculative trading...no different than currency trading.....although currency being based on the full faith and credit of a country has some basis in reality.

    Am I consistent....yes....I dont see gold, silver, commodities, currency, etc, etc, etc as long term investments or those that trade and speculate in them as...long term investors. I put bitcoin in that category....although I dont see any value or utility to it....which all those other commodities actually have.

    do you have an opinion on my basic question.....what is the value or utility of crypto? If it has none.....it is NOT a long term investment.

    AND....yes I am a long term investor....but I CONSTANTLY talk about the short term markets and stock action on here every day. I am not just all about crypto....I totally agree with TomB16....there are many stocks that are the same situation....totally speculative trading vehicles being bought by young males....most of whom WILL lose their money.
     
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  5. TomB16

    TomB16 Well-Known Member

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    Agreed. Not an attack at all. It's a nice discussion, IMO.

    You've never gotten that from me.

    Again, I enjoy it when other people make money but I don't feel bad for them when they lose. As for the vicissitudes of the market, I wasn't a drama queen 40 years ago and I have no plans to start.
     
  6. WXYZ

    WXYZ Well-Known Member

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    So today.....the majority of what I am seeing as the topic of the day in the financial news is....of course....inflation. The topic WILL ramp up to the release of the data later this week. Second most likely topic in the financial news....crypto.....and the drop in price.

    Other than these two short term items....NOTHING is driving the markets today....they are directionless. Well except for the short term traders.
     
  7. TomB16

    TomB16 Well-Known Member

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    What about using BTC as a hedge against currency devaluation, AKA: inflation?

    I don't do this and have no plans to but I've considered it.

    If I lived in Hong Kong or Taiwan, I would probably own as much BTC as I could manage.
     
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  8. WXYZ

    WXYZ Well-Known Member

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    I will simply say....anyone reading this thread will NOT see any....."see I told you so"....in my comments. I think you are reading much more into my post that was there.

    (EDIT) Now if I was going on a crypto thread on here and constantly, gleefully, mocking those on the thread every time crypto went down....that would be a different story. BUT...I am not into that sort of stuff. AND...I read posts in those threads at times...but I dont post in them...because i have no knowledge or anything of value to those posters regarding their investing and I dont want to interfere in their interaction or discussion.

    BUT....regardless....if something is a major topic in the media and the investing world....I WILL post about it.

    I am STILL waiting for an answer to my question about crypto above.
     
    #6108 WXYZ, Jun 8, 2021
    Last edited: Jun 8, 2021
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  9. TomB16

    TomB16 Well-Known Member

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    If CNBC starts talking about a market crash on a 7/24 news cycle, the odds of a crash just went up 100 fold.

    How much do you think they just report random, unresearched, rubbish and how much do you think they try to impact the market? I've thought about it and believe there is an element of both motives to their propaganda but haven't reached a conclusion with regard to ratios.
     
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  10. TomB16

    TomB16 Well-Known Member

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    Perhaps you should take me off "ignore". :D
     
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  11. WXYZ

    WXYZ Well-Known Member

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    I dont have anyone on ignore....LOL.....at the moment. That was a question to T0rm3nted.....since he has a lot more crypto knowledge and experience than I do.

    I personally believe the ONLY media criteria today...even in the financial media...is daily clicks. AND...for that it takes sensationalism. OBVIOUSLY...there are many that "use" the media to push their trading and storyline behind their short term investments. I also agree with your post above.....that there is an element of both motives.
     
  12. WXYZ

    WXYZ Well-Known Member

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    I like this little article and what it documents. A good sign for the BIG CAP GROWTH portion of the market going forward.

    Ten Companies Ramp Up For Growth From Roaring Reopening

    https://www.investors.com/etfs-and-...ig-ahead-of-the-roaring-reopening/?src=A00220

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

    "S&P 500 companies are taking the adage: "You've got to spend money to make money" to heart. And investors hope they can cash in on the resulting boom.

    Analysts think 10 S&P 500 companies, including technology company Microchip Technology (MCHP), IBD 50 member Caesars Entertainment (CZR) and energy company HollyFrontier (HFC), will boost their spending on property, plant and equipment this year by more than 150% from 2020, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.

    Big bumps in capital expenditure spending, or "capex," now could position companies for a "roaring 2021"-style economic boom this year. Profit this quarter is already seen jumping by the higher amount in more than a decade.

    And S&P 500 investors are already saying as much. Shares of the 10 companies seen spending the most to upgrade their capacity are soaring. On average, they're up 27.3% this year, more than double the S&P 500's 12.6% year-to-date gain.

    "As fiscal stimulus fades, we expect a capex cycle to pick up the slack, which will be crucial for a sustainable recovery," said a BofA Global Research report co-written by Stephen Juneau, an economist at the bank.

    S&P 500 Capex: Spending To Pay Off

    The corporate spending boom is here. Companies want to be positioned when the economy reopens — and not just meme stocks soaring on speculation.

    Capex spending by S&P 500 is expected to surge more than 12% to $689.1 billion this year, say analysts based on the 427 companies in the index with updated 2021 capex spending estimates.

    And that spending is potential kindling for a roaring economy. Following a near shutdown in major parts of the economy, companies are putting money into future expansion and growth. It's a smart bet. Surging demand for goods and services is leading to shortages of everything from semiconductors to consumer goods. And it sure beats sitting on a bunch of cash earning next to nothing.

    "Today's optimism marks quite a change from the prepandemic norm," says The Economist magazine, citing data calling for global investment to jump to 121% of prerecession levels by the end of 2022.

    That investment, too, is what pays for a remarkable surge in profit. S&P 500 profit is seen jumping 61% in the second quarter of 2021 alone, says John Butters, earning analyst at FactSet. If that's right, it would be the highest quarterly year-over-year profit jump since 2009.

    And that's just the tip of a multi-year profit boom analyst foresee. S&P 500 profit is expected to jump 34.4% this year and another 11.7% in 2022, FactSet says.

    Biggest Expected S&P 500 Jumps In Capex


    Company
    Symbol Stock YTD % ch. Sector Expected % increase in 2021 capex

    Microchip Technology (MCHP) 12.5% Information Technology 410.5%
    HollyFrontier (HFC) 38.2% Energy 225.8%
    Marriott International (MAR) 7.7% Consumer Discretionary 224.4%
    Robert Half International (RHI) 44.7% Industrials 216.1%
    Alexion Pharmaceuticals (ALXN) 13.4% Health Care 213.7%
    DISH Network (DISH) 39.5% Communication Services 207.7%
    Caesars Entertainment (CZR) 49.0% Consumer Discretionary 201.8%
    International Flavors & Fragrances (IFF) 31.4% Materials 176.1%
    Old Dominion Freight Line (ODFL) 33.3% Industrials 160.6%
    FMC (FMC) 3.0% Materials 159.1%
    Sources: IBD, S&P Global Market Intelligence

    High Hopes For S&P 500 Technology Investment

    The economy's shutdown only further highlighted the digitalization of the economy. That's giving S&P 500 company massive confidence to make big investments. Shortages abound. That's good news for companies spending on adding capacity. Demand for whatever they're making is likely to be robust.

    Just consider Microchip Technology, an Arizona-based maker of a wide range of semiconductor products. Analysts think the company will plow another $250 million in investment into its operations in 2021. That's up more than 400% from its spending in 2020. And it's already happening. The company's capex already jump more than 350% in the first quarter, vs. the same period in 2020.

    Investors seem to know this spending will likely pay off. Shares are up 12.5% this year, trailing the S&P 500. But keep in mind, investors already pushed the stock 31.9% higher in 2020, while the S&P 500 rose just 16.3%.

    And that's not to belittle the massive capital spending coming from tech and tech-related giants. Communication services firm and Big Cap 20 member Facebook (FB) is seen boosting its capex this year by 34% to $5.2 billion. That's the largest dollar-increase in spending predicted by any S&P 500 company.

    But it's closely followed by big spending plans by tech giants Intel (INTC), Big Cap 20 member Alphabet (GOOGL) and IBD Long-Term Leader Microsoft (MSFT). Analysts think Intel, growing into the chip shortage, will boost spending 35.8% or $5.1 billion. Alphabet is taking up its spending nearly 20% or $4.4 billion, analysts forecast. And Microsoft is to up capex by more than 21% or $3.8 billion this year.

    S&P 500 Travel And Energy: Capex Or Bust

    Cyclical areas of the economy, which rise and fall with the broad economy, are racing back. And some S&P 500 companies are spending the money to capitalize on it.

    Casino operator Caesars Entertainment is rolling the dice on the comeback. Analysts think it will hike capex more than 200% this year, taking the tab to nearly $500 million. Investors are clearing putting in their chips for the boom. Caesars' stock is up 49% just this year to 110.65. Similarly, hotelier Marriott International is expected to bump up capital spending this year by more than 200% to more than $400 million.

    Similarly, booming energy prices are setting up the environment for capital spending. HollyFrontier, a Dallas-based oil refiner, is likely to jack up its investment spending this year by 226% to more than $1 billion. Like many energy stocks in the S&P 500, HollyFrontier's shares are soaring. They're up more than 38% this year.

    Greater investment spending doesn't necessarily translate into winning stocks. You should use time-tested rules for that. But seeing where the big spenders are in the S&P 500 at least shows you where companies are most willing to put their money where their mouths are.

    S&P 500 Bumping Up Capital Spending By The Most Dollars
    Based on analysts' forecasts for 2021 vs. 2020


    Company
    Ticker Stock YTD % ch. Sector Expected % increase in 2021 capex Expected $ increase in 2021 capex ($ billions)

    Facebook (FB) 20.9% Communication Services 34.2% $5.2
    Intel (INTC) 15.2% Information Technology 35.8% 5.1
    Alphabet (GOOGL) 36.6% Communication Services 19.6% 4.4
    Microsoft (MSFT) 12.8% Information Technology 21.6% 3.8
    General Motors (GM) 52.2% Consumer Discretionary 69.2% 3.6
    Sources: IBD, S&P Global Market Intelligence"

    MY COMMENT

    NOW this is what I like to see in companies that I own. This is REAL....creating shareholder value. This is the PROPER use of corporate cash. Compare this to......buying back your own shares. I will take the CAPITAL INVESTMENT any day...all day long....for any company that i own.
     
  13. T0rm3nted

    T0rm3nted Moderator
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    I'm not in Crypto and never have been. As far as I've read and researched, the only one that seems to have some real world value is Ethereum. I'm no expert. It's an investment to some people who see real world value in it.
     
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  14. WXYZ

    WXYZ Well-Known Member

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    Ok.....sorry.....I assumed from your posts that you were a long term crypto investor. Perhaps someone will have more for this discussion.

    Personally....I find a "crash" interesting....whether it is stocks....the general markets..... or anything else...even if I own it.

    Not...saying crypto is crashing......I DO consider the current action as normal volatility for that "asset"......although I am fairly ignorant when it comes to crypto and what is normal.
     
  15. WXYZ

    WXYZ Well-Known Member

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    Here is the economic news of the day...which...of course...everyone will simply ignore as usual.

    Job openings set record of 9.3 million as labor market booms

    https://www.cnbc.com/2021/06/08/job...-9point3-million-amid-economic-reopening.html

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

    "Key Points
    • Job openings roared higher in April, hitting a record 9.3 million, according to the Labor Department’s JOLTS report.
    • Markets had been expecting 8.18 million after the March total also hit a new standard.

    Job openings in April soared to a record 9.3 million as the economy rapidly recovered from its pandemic depths.

    The standard set in April was well above the 8.3 million in March that itself was a new high going back to 2000 for the Labor Department’s Job Openings and Labor Turnover Survey.

    Federal Reserve policymakers closely watch the JOLTS numbers for indications of labor market slack, though they run a month behind the more widely publicized nonfarm payrolls count.

    Markets had been looking for a JOLTS number around 8.18 million, according to FactSet.

    The big jump in job openings came during a month when hiring disappointed. Payrolls increased by just 278,000 at a time when economists had been looking for growth of around 1 million.

    However, the Labor Department has struggled with seasonal adjustments compounded by the uniqueness of the virus situation, and the JOLTS numbers indicated that the jobs market is poised for continued strong growth.

    One big challenge for employers, however, is finding available labor. Child-care issues, ongoing fears about the pandemic and the lure of enhanced unemployment benefits have kept the unemployment rolls at 9.3 million, about 3.6 million higher than before the pandemic.

    The hire rate for April remained subdued at 69,000, or an unchanged 4.2% from the previous month.

    Quits, which are seen as a gauge of worker confidence that they can find other employment, rose considerably, to 3.95 million. That represented growth of 384,000, an increase of 10.8% that took the quits rate as a share of the labor force up to a record 2.7% from 2.5%.

    Retail saw a particularly sharp rise in quits up to 4.3% from 3.6%.

    Total separations increased to 5.76 million, a gain of 324,000 that took the rate up to 4% from 3.8%. Layoffs and discharges edged lower to 1%, also a JOLTS low.

    MY COMMENT

    OBVIOUSLY the economy is opening far faster than the number of people willing to work. A BOOMING "sellers" market for workers. NOW is the time to be a job hunter. Those that wait too long are going to let a golden opportunity slip away.

    We have DISTORTED the economy due to the benefits NOT to work. The 20 or so states that are doing away with the extra benefits should help some with this issue going forward. This situation should be a BIG WARNING to those that advocate for a guaranteed minimum income.
     
  16. oldmanram

    oldmanram Active Member

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    Leftover from the weekend discussions
    Somewhat financially related, I wanted to wish XXgofish "Congratulations on the addition of a dependent" :banana:
    to your tax filling. And that we all started at the bottom, I have no doubt that with financial discipline, staying true to course,
    and a little help from the stock market you will realize your dream of home ownership.

    Markets are looking good , gotta go get some work done
     
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  17. TomB16

    TomB16 Well-Known Member

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    Crypto does not produce anything. It is a currency and also a commodity.

    For years, every person who mentioned crypto was trying to get rich quickly. A few did. Most did not. This is the outcome of any high risk gambling activity.

    When I buy a REIT, it will have intrinsic value. It is oddly easy to calculate. In a reasonable market, the buildings will be worth a certain amount. I can buy a REIT with roughly 4B of property, 2.5B market cap, 1.5B debt, and a P/E of 6. 10 years from now, the property can reasonably be expected to double in value. That doubling will more than double the value of the shares, assuming no dilution. This is because of the debt leverage. As well as this, the REIT is be expected to yield 5~8% of the original money invested over the course of that 10 years.

    This is a case of a corporation producing value. The assets go up in value. They also make money and distribute it to the owners. This makes a well run REIT a prime example of an investment.

    Crypto has no inherent value due to it's lack of ability to produce anything. It's only worth what someone else will pay for it. In a sense, it's a game of hot potato. This isn't strictly true, anymore, now that crypto is being used for FX and even online transactions but this activity remains extremely small compared to the capital invested in the float of various crypto varieties.
     
  18. oldmanram

    oldmanram Active Member

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    Speaking of REIT's , SPG has had a phenomenal comeback since last Oct/Nov , over double,
    What REIT's haven't come back yet Tom ? See any bargain's out there ?
    DLR seems to be getting some traction , FINALLY
    Ventas/VTR is looking ............ better
    Any thought's ?
     
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  19. T0rm3nted

    T0rm3nted Moderator
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    I have not done the research as to why, but I've read on multiple sources and heard from some people I respect that Ethereum has real world value, while the rest of Crypto basically does not.
     
  20. XxGoFish

    XxGoFish Member

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    The concept of decentralization. Blockchain. That is what good came from crypto. I am also very bearish on cryptocurrencies.

    Just look at what happened with the Colonial Pipeline hack situation. The hackers demanded their payment in BitCoin thinking it was safe, secure, anonymous. It has been reported that the FBI was able to recover all the money. That's a huge blow to crypto.

    Donald Trump also called BitCoin a scam. Regardless of your opinion of Trump. Him saying that definitely hurts also.
     
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