J&J reported today. One of my eleven stock holdings. They beat expectations and at the moment have a small gain. Shows the power of being an ICONIC, earnings GIANT. This is in spite of all the litigation issues and problems. (BOLD is my opinion and wwhat I consider important content) "08:44 AM EDT, 10/15/2019 (MT Newswires) -- Johnson & Johnson (JNJ) reported third-quarter results that were ahead of expectations on Tuesday as the blue-chip company saw sales rise across its segments, driven by pharmaceuticals, while lifting its full-year guidance ahead of previous projections. Sales were up 1.9% year-on-year to $20.7 billion, ahead of the consensus on Capital IQ for $20.1 billion. In the US, sales rose to $10.8 billion from $10.7 billion last year and were up 2.6% on a reported basis to $9.94 billion internationally, the New Brunswick, NJ-based company said Tuesday. Adjusted earnings rose to $2.12 a share from $2.05 a share last year, while analysts were looking for $2.01 a share. "Our third-quarter results represent strong performance, driven by competitive underlying growth in pharmaceuticals and medical devices, as well as continued optimization in our consumer business," said Alex Gorsky, the company's chief executive. Pharmaceutical sales rose 6.4% on an adjusted, operational basis to about $10.9 billion, driven by sales of Stelarza for treating immune-mediated inflammatory diseases and Darzalex, which is used for multiple myeloma, a type of cancer. Medical device operational sales rose 5.3% to $6.38 billion, driven by electrophysiology products, Acuvue contact lenses, wound closure products for surgery and trauma products for orthopedics. Consumer sales were up 1.3% to $3.47 billion, aided by Neutrogena beauty products and Tylenol over-the-counter painkiller sales. The gain was offset by lower sales in baby care. Johnson & Johnson sees full-year adjusted earnings of $8.62 to $8.67 a share, up from the July guidance range of $8.53 to $8.63 a share. Estimated reported sales are now in a range of $81.8 billion to $82.3 billion, better than the July outlook of $80.8 billion to $81.6 billion. "As we look ahead, we remain confident in the strength of our broad-based business model, which is fueled by our disciplined portfolio management, focus on transformational innovation and dedicated employees," Gorsky said." MY COMMENT Lower sales in baby products? DUH.......that baby powder litigation is a category killer. They have multible fronts open in the litigation department with a number of products including opioids. BUT....this is the POWER of being a WORLD WIDE MARKETING, ICONIC PRODUCT, AMERICAN, DIVIDEND PAYING, DOMINANT, company.
As I said above......ELEVEN stock holdings. It is now eleven since I have sold off Chevron in most of the acccounts. It was a long time holding and has done well for me over the past years, but has lagged the rest of the portfolio for some time now.....about 5-10 years. So I cut it lose to focus on the remaining stocks and funds. PORTFOLIO MODEL "Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 55% of the total portfolio and the fund side at about 45% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing. As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a VALUE style component (Dodge & Cox Stock Fund), a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 12 stock portfolio. STOCKS: Alphabet Inc Amazon Apple Boeing Costco Home Depot Honeywell Johnson & Johnson Nike 3M MSFT MUTUAL FUNDS: SP500 Index Fund Fidelity Contra Fund Dodge & Cox Stock Fund CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (65+). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)" ost
Dow pops 250 points on blockbuster earnings https://www.cnn.com/2019/10/15/investing/stocks-markets-today-dow-jones/index.html "Wall Street celebrated on Tuesday after the latest results from corporate America suggested maybe the sky isn't falling after all." MY COMMENT The first sentence of the article says it all. Remember how over the past week, couple of weeks, month, quarter........we have been hearing that earnings are not going to be good. The impact of the tax cuts is over. The trade war and tariffs. The recession. Business is not investing and is afraid to do anything. Etc, etc, etc. ALL BALONEY.......as usual. Makes you wonder if the media and experts that spout this nonsense are either complete IDIOTS (PROBABLY) or trying to talk the economy down (PROBABLY) or have some personal, political, or other agenda (PROBABLY). BEWARE this CRAP. BEWARE anything you hear or read in the financial or regular media. Invest based on a SINGLE criteria......actual financials reported by the companies and funds that you invest in or are interested in. REAL audited data. NOT the daily GARBAGE that is spouted by the media "experts".
Something that few people seem to understand is that we will be hit by market crashes and recessions in the future but that doesn't mean they will be identical to 2008. They could be short lived or less severe. My guess is the next event is likely to be both. You can't ignore all that much opportunity before a 10~30% price rollback becomes less insignificant than the missed gains.
NICE earnings for one of the portfolio model stocks. Honeywell: Honeywell Tops Q3 Earnings Forecast, Tweaks 2019 Profit and Revenue Estimates https://www.thestreet.com/investing...ks-2019-profit-and-revenue-estimates-15129708 (BOLD is my opinion and what I consider important content) "Honeywell International Inc. (HON - Get Report) posted much stronger-than-expected third quarter earnings Thursday, and boosted the lower end of its full-year profit guidance even as it forecast revenues that fell shy of Wall Street forecasts. Honeywell said adjusted earnings for the three months ending in September came in at $2.08 per shares, up 2.45% from the same period last year and just ahead of the Street consensus forecast of $2.01 per share. Group revenues, Honeywell said, fell 15.5% to $9.086 billion, a figure it expects will come in at $36.9 billion for the year, a modest reduction from prior forecasts thanks in part to a slowing global economy. Full year earnings, however, will likely come in between $8.10 and $8.15 per share, a 15 cent improvement at the lower end from its prior forecast. Fourth quarter earnings were guided in the range of $2.00 to $2.05 per share. "Overall, we had a strong third quarter, which was a continuation of very strong performance year-to-date," said CEO Darius Adamczyk. "We are well positioned in attractive end markets with multiple levers for value creation heading into 2020. We remain committed to delivering outstanding returns for our customers, shareowners, and employees over the long-term." Honeywell shares were up 2.56% to $167.82 in trading Thursday. MY COMMENT WORKS for me. Nice gain of $3.89 today as a result. I HOPE this poor economy and weakening business environment (sarcasm) keeps up for a long while
BOEING.......google Boeing news and you will see what is going on in the short term with this company at the moment. Downgrades by the IDIOTS (analysts) that value companies, are out today. DUH...........genius. The stock has been hammered by management, engineering, and business issues since the 737 FIASCO started to unravel and especially with the disclosures of the past week or so. I DO own the stock and intend to continue to do so. I see the current issues as being short term.........6-12 months.......and will just ride out the pain, much of which has occurred already. I have added shares in my recent purchases and until last Friday was still positive on most of my shares. With the fact that management does not seem to be able to get a handle on the 737 issue and with the continued pushing back of the re-certification of the 737.......it seems apparent that things are not going as well as the company has tried to put out there in the media. ( MAJOR UNDERSTATEMENT) I would not be surprised to see a major management shake up. BUT........the reason I post this is because I see a MAJOR purchase opportunity in this stock. I feel that this company is going to be a great buy over the next months. If I had free cash it would go into this company today and over the next months. I would try to buy on any downturn from this point on. Of course, this is a ONE YEAR turn around, perhaps a little more. The TURN AROUND will come, but it is going to take 6-12 months or even a little more in my opinion. When the turn comes it will result in a BIG gain from the levels we are going to see over the near term. BUT.........for disclosure.......you know what they say about trying to catch a falling knife. I am ignoring that old advice since I see this issue as about 98% a Public Relations issue and NOT a business or financial issue. ANYONE buying this stock needs to have the guts to wait out any unforeseen news or issues over the near term........6-18 months. I dont give specific investing advice.......so anyone considering buying this stock do so ONLY after you evaluate the company and your personal situation. In this post I am stating my opinion and what I am going to do.......NOT......advising others.
BOEING will report earnings this Wednesday. Here is what one TV personality says about the company at the moment: "Boeing is expected to report earnings in the morning and hold a conference call after the market opens. The planemaker’s stock plummeted nearly 7% Friday on news it withheld vital information from the FAA about what employees knew about its 737 Max issues that caused two fatal crashes. The company is expected to report $2.04 EPS and more than $19.7 billion in revenue. “The story is horrifying, but ... you’ve got to start thinking about what’s going to happen when this plane gets off the ground, which I think is going to happen in the next six months,” Cramer said. “I know this is a very contrary view to what everyone’s thinking, but you have to think like that if you’re going to make good money on Wall Street.” MY COMMENT Obviously I agree with the second paragraph. ALTHOUGH, I extend the potential for this issue to impact the company to perhaps as much as 12-18 months out of conservatism and due to the way the company has been stringing along the return of the 737 for months now.
Boeing shares.......at the moment UP 2.14%......$7.10 per share. Lets see how things go when earnings are reported tomorrow.
BOEING......released earnings today for the quarter. Not too bad considering. At the moment stock is up $3.00. Over the past three days since I posted on Monday the stock is UP significantly. BUT still a screaming buy for those with the fortitude to wait a year or so for the total recovery. As I predicted in my post Monday, they have now REPLACED the head of the Commercial division, a very high level executive. I would guess that the CEO job is still at risk even though they have sacrificed the Commercial group head. Perhaps last Monday will be the LOW of this entire event. Time will tell. It will depend if more STUFF comes out, drip by drip over time. Will the Boeing 737 Max ever fly again? https://theweek.com/articles/873442/boeing-737-max-ever-fly-again (BOLD is my opinion and what I consider important content) "Boeing's now-infamous 737 Max was grounded around the world back in March. Assumptions at the time — including from yours truly — were that the worst-case scenario might keep the planes on the ground for a few months, and cost Boeing around $5 billion. Well, here we are seven months later. The 737 Max remains on the ground, in what is now arguably the biggest crisis ever for the century-old company. Boeing has bled out at least $8 billion. And its third quarter results, released Wednesday morning, saw a 21-percent decline in revenue from last year's second quarter, to $20 billion, and 51-percent decline in profits to $1.17 billion. It doesn't seem crazy to wonder if the 737 Max will ever fly again. To be fair, most observers still assume it will. Boeing's stock price has actually been pretty stable since the initial hit from the grounding, bouncing between $340 and $390 per share. Which suggests investors remain confident that the whole issue will eventually get worked out. Boeing reported a $2.9 billion loss in the second quarter, after the crisis was well underway. Its quarterly sales fell to $15.8 billion — a 35-percent drop from last year's second quarter. Both those results and the latest third quarter hits are not good. But for a company that was pulling in a staggering $100 billion in annual revenue and roughly $10 billion in annual profits before the crisis began, they're manageable setbacks. Both Boeing and the Federal Aviation Administration are hopeful that the 737 Max could be recertified to fly by the end of this year. The pilot union for Southwest Airlines, the biggest purchaser of the 737 Max, recently predicted February of 2020. And European regulators suggest this coming spring. But if nothing else, the saga of what was once meant to be Boeing's flagship airliner is a lesson in how wealthy, powerful, and knowledgeable people can have no idea what they're doing. Like many of its corporate contemporaries, Boeing's institutional culture has come to prize financialization, profits, cost reductions, and corner-cutting. The 737 Max was meant to be Boeing's newest answer to competition from the European manufacturer Airbus. But Boeing also wanted the 737 Max to technically remain a mere update of its earlier model airliners, so as to avoid the regulatory rigamarole associated with rolling out an entirely new craft. To gain improvements in size and fuel efficiency without crossing that threshold, Boeing had to design the plane with its advanced and heavier engines in an oddball spot. This caused the plane to perform in a strange manner. To correct for that, Boeing introduced the Maneuvering Characteristics Augmentation System (MCAS), to automatically adjust the plane to cancel out the performance oddity without having to bother the pilot. Indeed, Boeing considered the MCAS such an innocuous addition that the company didn't even include it in the literature for the pilots. But the production process was under immense pressure; a lot of the MCAS software creation was outsourced to cheap labor; and there were at least two design choices that, to this day, no one can explain the logic for: The MCAS did not require agreement between two different sensory systems to function, and its automatic corrections were both extremely powerful and would repeat endlessly. A multiple agency report, released earlier this month, also condemned the FAA's oversight of the process. The agency lacked much of the in-house expertise to scrutinize Boeing's design, and farmed out a lot of the oversight to company engineers and employees to essentially act as the agency's boots on the ground. This, of course, left those employees serving two masters, pressured to both assess the plane and also deliver it on-time and on-budget. Nor did Boeing properly inform the FAA about the development of the MCAS, particularly some significant changes made to the system midway through the process. It was a more or less perfect example of a philosophy that sees government's two greatest duties as minimizing its own spending and footprint while essentially acting as a handmaiden to business efforts. It's also worth noting that inexperienced pilot error, and the slipshod cost-cutting of the Jakarta-based Lion Air, played some role in at least one of the crashes. Put it all together, and in October of 2018 and March of 2019, two 737 Max airliners overwhelmed their pilots and nosedived to earth, killing a total of 346 people. Boeing's CEO, Dennis A. Muilenburg, had also served as the chairman of the corporate board. But following the release of that scathing assessment of Boeing's internal process and FAA oversight, Muilenburg was stripped of the chairman title. He's now set to face a Congressional hearing any day now, while Boeing's board met in the last few days to figure out how to weather the latest fallout. And the company just replaced the head of its commercial airlines division. Meanwhile, in a display of just how little trust they have in their American counterparts, European regulators have decided they'll recertify the 737 Max according to their own timetable and assessments, rather than their customary practice of coming to joint decisions with U.S. regulators. Further adding to the hothouse atmosphere is yet another report that Boeing may not have properly informed regulators about complaints from one pilot about the MCAS system back during simulation runs in 2016. In short, new and deeper layers of stupidity and malfeasance just keep emerging in this particular tale, and there's no particular reason to think we've hit bottom. Thus far, the most dramatic course of action Boeing has even considered is temporarily halting production of the 737 Max. That discussion apparently surfaced in July, but there's been no decision made. Even going that far seems to strike many people as borderline unimaginable, given the hit not just to Boeing's business and its jobs, but to parts suppliers and buyers and the rest of the economy. Outside of a thought experiment from Barron's in July, no one appears to be seriously contemplating what would happen if the 737 Max wound up staying on the ground permanently. The bitter irony is that, Barron's didn't think even this worst-of-worst-case scenarios was an existential threat. My initial prediction that Boeing would cruise through the crisis was based on the company's sheer pre-crisis scale. And while I wasn't nearly cynical enough about the depth of the problem or Boeing's incompetence, the company's latest report shows the buffer provided by those resources still holds. As Barron's noted, Boeing has other aircraft lines that could step up to fill the sales hole left by the 737 Max's demise. No doubt, it would be a smaller and more chastened company without the airliner. But it would probably survive." EARNINGS INFO: Boeing Eyes 737 Max's Return After Q3 Earnings Miss; Buybacks On Hold https://www.investors.com/news/boeing-earnings-q3-2019-boeing-stock-737-max/ "Boeing (BA) offered more details on its plans to return the grounded 737 Max to service Wednesday, after Q3 earnings missed forecasts. Boeing stock rose. Boeing said it expects regulatory approval of the 737 Max return to service will "begin" in Q4 and production to increase from 42 per month to 57 per month by late 2020. But CEO Dennis Muilenburg warned the FAA and other regulators will ultimately determine the timing, adding that the approval process could "include a phased approach and timing may vary by jurisdiction." Boeing had halted 737 Max deliveries while slowing production during the grounding. It now expects to deliver planes produced during the grounding over several quarters, with the majority delivered in the first year after return to service. Earlier Wednesday, Boeing said costs to produce 737s increased by $0.9 billion to reflect assumptions on the return to service and the timing of planned production rate increases. But there was no significant change to estimated potential concessions to customers on the 737 Max grounding. Muilenburg also said Boeing is in the process of delivering certification items and final software for training products, noting that certification documents have also been shared with international regulators and are undergoing review concurrently with the FAA. "We're going to lean forward and provide every piece of data we can we're going to make sure the depth of analysis is complete, we're going to answer every single question," he said. Shares of the Dow Jones component rose 1.7% to 342.85 on the stock market today, after rallying 3% earlier as Boeing's CFO said stock buybacks will remain on hold until the 737 Max returns to service. It had halted them earlier this year after the planes were first grounded. The relative strength line, which tracks Boeing stock vs. the S&P 500 index, is at the lowest since early 2018. Boeing stock is the biggest weight in the price-weighted Dow Jones industrial average. Boeing Cuts 787 Output, Delays 777X Boeing earnings per share tumbled 59% to $1.45, far below estimates of $2.04, as revenue fell 20.5% to $19.98 billion, better than views for $19.34 billion. Operating cash flow swung to a $2.42 billion outflow from $4.56 billion inflow. Commercial aircraft revenue sank 41% to $8.25 billion. Boeing already announced that its Q3 commercial deliveries fell 67% year-over-year to 63 aircraft. Defense revenue grew 2% to $7.04 billion. Global services revenue climbed 14% to$4.66 billion. Total backlog was $470 billion and included net orders of $16 billion vs. $474 billion and $9 billion in net orders in Q2. Boeing also will reduce the production rate of the 787 to 12 airplanes per month for approximately two years beginning in late 2020, citing the "global trade environment." Meanwhile, the company is now targeting early 2021 for first delivery of the 777X, though Emirates said recently it no longer expects to receive the first 777X before "April or the second quarter" of 2021. This past summer, Boeing had backed its first delivery view of 2020. Despite all the turmoil, Muilengurg said Boeing is "continuing to drive forward with our efforts evaluating" a new midmarket airplane with an entry into service in the mid-2020, the main focus is getting the 737 Max back in the air. Boeing 737 Max Outlook While the aerospace giant expects the Boeing 737 Max will begin the process of returning to service in Q4, customers like Southwest Airlines (LUV), United Airlines (UAL) and American Airlines (AAL) have continued to delay that timeline and now see it coming back in early 2020. Meanwhile, the costs for the ongoing Boeing 737 Max grounding may expand. Boeing reported a $4.9 billion after-tax charge ($5.6 billion pretax) over the jet in Q2, and Credit Suisse on Monday predicted $3.2 billion in additional charges over the next four months. But despite the continued pressure on cash flow, Boeing announced late Monday that its quarterly dividend will remain $2.055 a share. Boeing also said Tuesday it performed a dry-run of a certification flight test last week as it prepares for the FAA to approve software changes to the plane's flight-control system. Analysts turned on Boeing stock after internal messages emerged last week that suggested the company misled the Federal Aviation Administration about the Boeing 737 Max's flight-control system — called the Maneuvering Characteristics Augmentation System, or MCAS — which is blamed for the two deadly crashes. Boeing earlier pushed back on the messages saying it was unfortunate the messages "could not be released in a manner that would have allowed for meaningful explanation." The company said Tuesday that Kevin McAllister, the head of the commercial aircraft unit, is leaving Boeing. Global Services unit chief Stan Deal will take over the commercial business. Meanwhile, Boeing 737 Max design flaws and a lack of information on how to handle malfunctions with a flight-control system played a role in the October 2018 Lion Air crash that killed 189 people, Indonesian investigators told victims' families Wednesday. Indonesian investigators said late Tuesday that flaws in the design of the Boeing 737 Max and lack of information on MCAS malfunctions contributed to last year's Lion Air crash." MY COMMENT YES.......I think the 737 will fly again. The first article headline is a little sensational. All things considered, the earnings are not bad and OBVIOUSLY there has been a lot of interest in the stock since the LOW on Monday. I continue to hod Boeing as part of my many portfolios and continue to be fully invested for the LONG TERM as usual.
EARNINGS continue with AMZN reporting at the close today. MSFT has reported and had a good quarter. I have not looked at any data, but my FEEL is that earnings are comming in nicely and well ahead of the negative general view of how earnings would be this quarter. Microsoft Shares Rise After Q1 Earnings Beat; Slowing Azure Growth Caps Gains https://www.thestreet.com/investing...beat-slowing-azure-growth-caps-gains-15138634 (BOLD is my opinion and what I consider important content) "Microsoft Inc. (MSFT - Get Report) shares were indicated higher in pre-market trading Thursday after the world's biggest tech company posted stronger-than-expected first quarter earnings late last night, although gains were capped by slowing growth from its Azure cloud business. Microsoft said earnings for the three months ending in September, the company's fiscal first quarter, came in at $1.38 per shares, up 17.4% from the same period last year and well ahead of the Street consensus forecast of $1.24. Group revenues, Microsoft said, rose 14% to $33.1 billion, topping analysts' estimates of a $32.24 billion tally. Revenue growth from Azure, however, slowed to 59% over the period, a torrid pace but down from the 76% rate it had seen last year. Still, revenues from Microsoft's workhouse 'intelligent cloud' division rose 27% to $10.8 billion, a figure the company expects to improve to between $11.24 billion and $11.45 billion in the current quarter. "Every Fortune 500 customer today is on a cloud migration journey, and we are making it faster and easier," CEO Satya Nadella told investors on a conference call late Wednesday. "The quintessential characteristic of every application going forward will be AI. And we have the most comprehensive portfolio of AI tools, infrastructure and services. Azure AI now has more than 20,000 customers, and more than 85% of the Fortune 100 companies are using Azure AI in the last 12 months." Microsoft shares were marked 0.92% higher in pre-market trading Thursday to indicate an opening bell price of $138.50 each, a move that would bump the stock into a year-to-date gain of around 36.3% and a market value of just over $1.07 trillion. Microsoft, which has a near 20% share of the global cloud infrastructure market, behind only that of Amazon Inc. (AMZN - Get Report) , said it sees "double digit revenue and operating income growth, driven by continued momentum in our commercial business" for the 2020 fiscal year, with a slight improvement in operating margins. "It is probably unfair to expect one company to halt a sector's valuation correction that was overdue but has probably gone far enough. But if fundamental execution and outlook commentary is enough to slow the sector's fourth 30%+ valuation blowdown since 2013, this was what the doctor ordered," said Canaccord Genuity analyst Richard Davis, who carries a buy rating on the stock with a $155 price target." MY COMMENT YES.......everything is lining up for a very nice year end Christmas RALLY. If earnings continue to be strong and beat the general expectations there will be NOTHING in the way of a very nice end of the year SANTA CLAUS RALLY..........except for the usual general negative media STUFF and other events that pop up. I dont discount the ability of news, media, politicians, swans, etc, etc, to try and perhaps succeed in driving the markets down to the end of the year, but I believe the probability is for a gain to the end of the year. ESPECIALLY for those that invest in CREAM OF THE CROP businesses.
MORE earnings.......MMM 3M sinks after cutting full-year, Q4 guidance for earnings, sales https://seekingalpha.com/news/3509010-3m-sinks-cutting-full-year-q4-guidance-earnings-sales "3M (NYSE:MMM) -2.8% pre-market after reporting better than expected Q3 earnings but missing revenue expectations by a wide mark and cutting its full-year earnings guidance, hurt by slowing demand in key markets such as China. Q3 revenues fell 2% Y/Y to $7.99B, with safety and industrial sales sliding 5.7% to $2.8B, below $3B consensus; transportation and electronics sales falling 4.4% to $2.5B, in line with expectations; health care sales gaining 4.7% to $1.7B, below $1.8B consensus; and consumer sales added 1.7% to $1.3B, in line with expectations. Sales in Asia-Pacific, the company's biggest market outside the U.S., slumped 5%, while Europe, Middle East and Africa fell 4.1%, and sales in the U.S. rose just 0.8%. 3M cuts its full-year adjusted EPS guidance to $8.99-$9.09 from its prior forecast of $9.25-$9.75, and slashes its FY 2019 organic local-currency sales outlook to a 1%-1.5% decline vs. its prior outlook of negative 1% to positive 2% growth. For Q4, 3M sees EPS of $2.05-$2.15 - including a ~$0.15 negative impact from the recently closed acquisition of Acelity, which was part of previous guidance - vs. $2.37 analyst consensus; Q4 organic local-currency sales are expected to decline 1%-3%." MY COMMENT COMMON story over the past few years for many companies.....better than expected earnings but revenue miss. AND lowering expectations going forward. STILL one of my old school holdings that has done well for me over the many years of ownership. I am satisfied with how the company has done for me and at this time dont expect to make any changes in any of the holdings in my portfolio model. I will continue to be fully invested for the long term as usual.
AMAZON showed nice strength today with the come-back. When I looked this morning they were down about $65 now when I looked was down $19 for the day. Earnings of course is the reason. Here is detail: Amazon earnings fall for first time in more than two years, stock drops in late trading https://www.marketwatch.com/story/a...-years-stock-drops-in-late-trading-2019-10-24 (BOLD is my opinion and what I consider important content) Amazon’s spending on one-day delivery and other initiatives sends profit down year-over-year for first time since 2017, forecast calls for even more spending in holiday quarter Amazon.com Inc. profit fell for the first time in more than two years in the third quarter, and the company expects another earnings decline in the holiday-shopping season, which sent shares down more than 7% in late trading Thursday. Amazon AMZN, -1.09% reported third-quarter profit of $2.1 billion, or $4.23 a share, on sales of $69.98 billion after the market closed Thursday. Sales rose from $56.58 billion a year ago, but earnings declined from $5.75 a share, the first time Amazon earnings have shrunk year-over-year since June 2017. Analysts on average expected Amazon to report earnings of $4.59 a share on sales of $68.83 billion, according to FactSet. Amazon had been on a run of record profits until last quarter, when increased spending on the transition to one-day delivery for Prime customers and other initiatives began showing up in its results. The e-commerce giant reported profit topping $10 billion in 2018, more than triple its previous annual record, and had reported record quarterly profit totals for four consecutive quarters before breaking that streak with second-quarter results. “We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery,” Amazon Chief Executive Jeff Bezos said in Thursday’s earnings announcement. “Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers.” Amazon’s forecast for the holiday quarter came in short of estimates for both profit and sales, as the company predicted net revenue of $80 billion to $86.5 billion with operating income of $1.2 billion to $2.9 billion. Analysts on average were predicting fourth-quarter operating profit of $4.19 billion on sales of $87.39 billion, according to FactSet, after Amazon reported operating income of $3.79 billion on revenue of $72.38 billion in the holiday quarter a year ago. “Significant investments tied to the rollout of one-day shipping will depress Q4 profits, we assume compounded by the shorter holiday shopping window,” Baird Equity Research analyst Colin Sebastian said in a note after the numbers hit. In a conference call Thursday afternoon, Chief Financial Officer Brian Olsavsky said that Amazon’s holiday-season guidance for a revenue-growth decline from the third quarter to the fourth quarter was mostly related to the international e-commerce business. Specifically, he noted that India’s Diwali festival took place completely in the fourth quarter last year and started in the third quarter this year, while Japan increased its consumption tax beginning Oct. 1. Amazon shares increased 1.1% to $1,780.78 in the regular session Thursday, then plunged toward $1,650 a share in after-hours trading after results were announced. The stock has gained 18.6% in 2019, but declined more than 10% in the past three months, as the S&P 500 index SPX, +0.41% fell about 0.5%. Amazon prepped investors and analysts for the spending increase and resulting profit decline, projecting an $800 million charge in the second quarter for the one-day delivery change. Amazon ended up spending more than that in the second quarter, however, and Chief Financial Officer Brian Olsavsky said in July that Amazon would spend even more in the third quarter. Olsavsky said in the call that the fourth quarter will see even larger costs from one-day delivery efforts. “So, as we head into Q4 we’ve added what’s just nearly $1.5 billion penalty in Q4 year-over-year for the cost of shipping, which essentially is transportation costs, the cost of expanding our transportation capacity, things like adding additional roles and shifts in our warehouses,” the Amazon CFO said. Amazon’s worldwide spending on shipping jumped 46% year-over-year in the third quarter to a record $9.6 billion, more than a half-billion dollars over what Amazon spent in the busier holiday season a year ago. The company, which cut back on hiring a year ago after absorbing the Whole Foods workforce and hiring quickly in 2017, also increased its total employee count by 22% to 750,000 people. Amazon added nearly 100,000 employees just in the third quarter, according to Thursday's release, which Baird analyst Sebastian deemed the “most surprising metric” in the report. “The biggest driver at this time is the people that we’re adding for fulfillment and transportation roles, especially as we head into Q4 and add this additional transportation capacity to service one-day [delivery],” Olsavsky said when asked about the third-quarter hiring. Amazon Web Services, Amazon’s leading cloud-computing business, reported revenue of $9 billion and operating income of $2.26 billion, 71.6% of Amazon’s total operating profit. Revenue grew 35% from the year before, down from a growth rate of 46% at the same time last year, as declining growth rates for cloud-computing services such as Microsoft Corp.’s MSFT, +0.56% Azure continue to be an issue for the largest players. The domestic e-commerce business provided net sales of $42.64 billion and operating income of $1.28 billion, while international operations recorded an operating loss of $386 million on sales of $18.35 billion. Amazon’s brick-and-mortar retail offerings produced their lowest quarterly revenue total since Whole Foods Market was officially absorbed in 2017, with $4.19 billion in net sales falling 1.3% from the year before and 3.2% sequentially. Amazon stock was down 5.6% in premarket trade Friday. MY COMMENT Whole Foods is a drag on the company, but I expect long term they will know how to monetize the Whole Foods product line and experience. They continue as the leader in cloud services. It is SO NICE to see a company that is using their money to actually grow the business through additional employees and additional services like one day shipping for their customers. NOT the usual corporate WASTE OF MONEY on buybacks and other CRAP that does nothing to actually grow the company in the future. I consider this a good report and a reflection of building blocks being put in place that will make money in the future for the company and shareholders.
@WXYZ Just to say a few words about this topic: I really really enjoy reading your comments. Food for thought I may say. Thanks and keep posting! Have a great weekend. PS: by the way, about BA (Boeing) I think you are absolutly right. We are seeing a great op at present levels. I have some, as well some from their biggest competitour (Airbus).
Thanks, RG. Feel free to comment or post any time on any investing topic or your portfolio. SOME will remember that I invested $830,000 in a couple of accounts on October 7, 2019. In my usual fashion and in accord with the research, I went all in all at once. NO market timing and NO dollar cost averaging. YES........I know......short term data is irrelevant and meaningless. But I also know it is interesting for most people to see how a big move like this works out, even over the short term. SO.......right now: UP $18,000. Eleven stocks are UP 2.06% Three funds are UP 3.33% On the funds....SP500 UP 2.92%, Fidelity Contra Fund UP 1.8%. And Dodge & Cox Stock Fund UP 5.68%. On the stocks eight are UP and three are DOWN. BEST is MMM at +9.99% and AAPL at +9.04%. Worst is BA at (-9.58%). Other two down stocks are NKE and J&J. I expect that over the long term all will become nicely positive. Considering all the negative news for NKE, J&J, BA, and some of the other stocks I am VERY pleased with the short term results. I now have a little bit of a cushion for the inevitable market pull back that WILL happen over the short term. Hopefully I will add to that cushion over the last couple of months of the year with a nice SANTA CLAUS RALLY.
One of my companies reported today. Alphabet dips on earnings miss https://www.cnbc.com/2019/10/28/alphabet-googl-earnings-q3-2019.html (BOLD is my opinion and what I consider important content) "Google parent company Alphabet reported third-quarter earnings that missed earnings per share expectations. The company’s stock fell as much as 4% in after hours trading. Here’s how the company did in comparison to analyst expectations: Earnings per share: $10.12 vs. $12.42 per share expected, per Refinitiv consensus estimates. Revenue: $40.5 billion vs. $40.32 billion expected, per Refinitiv consensus estimates. Traffic acquisition costs: $7.49 billion vs. $7.48 billion, according to FactSet. Paid clicks on Google properties from Q3 2018 to Q3 2019: 18% Cost-per-click on Google properties from Q3 2018 to Q3 2019: -2% The company met investors’ expectations on traffic acquisition costs. The metric represents the payments Google makes to companies like Apple for its search engine to be the default browser on their devices. It’s a key figure that analysts and investors look at to assess the health of Google’s business. Google’s advertising revenue hit $33.92 billion, compared to $28.95 billion in Q3 of last year. Google’s “other revenue,” which includes hardware like its Pixel phones and cloud products, came in at $6.43 billion, surpassing expectations of $6.32 billion, according to Factset. The company earned $6.18 billion last quarter and $4.64 billion in last year’s Q3. Alphabet said its revenue from “other bets,” which includes its subsidiaries outside of Google like the self-driving car company Waymo, came in at $155 billion, which more than last year’s Q3 $146 million in the year-ago quarter. It lost $941 million during the quarter, up from a loss of $727 million a year ago. Capital expenditures increased from $5.28 billion in the year-ago quarter to $6.73 billion as the company expands its headquarters expansions in Silicon Valley and other areas." MY COMMENT It is what it is. I dont obsess over one report or short term data. Revenue was good but earnings per share missed. On these BIG, ICONIC, DOMINANT, companies I prefer to see annual data. Poor Google has been having a hard time lately with all the bitching and moaning about breaking up the company, etc, etc. They need to step it up with the cloud stuff. No problem with continuing to hold this company for the long term.
Well, it looks like my NOK dump has paid off. Fully invested at the moment and short on cash, but watching BA.
Did NOT know that US News And World Report was even alive anymore. I used to subscribe to the magazine for many years. Here is their report on AAPL earnings that were released today: Apple Stock Higher After Impressive Quarter https://money.usnews.com/investing/...0/apple-stock-higher-after-impressive-quarter BOLD is my opinion and what I consider important content) "Apple, Inc. (ticker: AAPL) reported its fiscal fourth-quarter earnings after the market close on Wednesday afternoon and exceeded Wall Street expectations on both earnings and revenue. Shares initially traded higher by less than 2% after management delivered positive commentary on the critical holiday quarter. Apple reported fourth-quarter earnings per share of $3.03 on revenue of $64.04 billion. Both numbers beat consensus analyst estimates of $2.84 and $62.99 billion, respectively. Revenue was up 2% from a year ago. Apple investors also got their first official insight into the performance of Apple’s newest family of lower-priced iPhone 11 devices. Apple reported fourth-quarter iPhone revenue of $33.36 billion, down 9% from a year ago. Analysts had anticipated $32.42 billion. Services revenue was $12.51 billion on the quarter, up 18% from a year ago and ahead of analyst expectations of $12.15 billion. Apple’s iPhone revenue showed signs of stabilization in the fourth quarter after dropping 13.4% in the third quarter. Apple took a gamble by lowering the prices of its new iPhone models compared to the previous year’s models for the first time. The company’s fourth-quarter numbers suggest that gamble is paying off. Despite an ongoing trade dispute, Apple reported $11.134 billion in Greater China revenue in the quarter. Thanks to the lower-priced iPhones, Greater China sales were down just 2.4% compared to a year ago. Wearables, home and accessories revenue was another bright spot on the quarter, up 54.3% from a year ago to $6.52 billion. “We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from services, wearables and iPad,” Apple CEO Tim Cook says in a statement. Cook says Apple is optimistic about the critical holiday quarter as well, especially ahead of the launch of streaming service Apple TV+ in two days. Looking ahead, Apple guided for fiscal first-quarter revenue of between $85.5 billion and $89.5 billion, gross margin of between 37.5% and 38.5% and operating expenses of between $9.6 billion and $9.8 billion. The midpoint of revenue guidance was above consensus analyst estimates of $86.92 billion. Apple has been a market leader in 2019, gaining more than 50% year-to-date in 2019 ahead of this week’s report. Much of Apple’s 2019 gains may be attributed to a relief rally after the tech giant has mostly navigated the trade dispute unscathed up to this point. Unfortunately, Apple is not quite out of the trade war woods just yet given the company is facing potential 15% tariffs on certain Chinese imports, including iPhones and iPads, starting in December. Bank of America analyst Wamsi Mohan says strong services growth, an aggressive capital return program and tailwinds from 5G wireless network rollouts in 2020 give long-term investors plenty of reasons to be buying AAPL stock. “There is an overarching concern among growth managers (who are materially underweight) that near term expectations do not matter as much heading into a potentially strong 5G cycle in 2020, which can create an upward bias on any pullback,” Mohan says." MY COMMENT Earnings are mostly over for my portfolio. Over all impressive results. Apple is the cherry on top along with the rate drop by the FED today. Onward and upward........to infinity and beyond. Oh yes......by the way.....earnings have been a bummer for all those experts and professionals predicting a poor showing. FIGURES.....
I suspect that MOST if not ALL poor investing behavior stems partly from risk intolerance. EVERYONE that invests thinks they can take the risk, especially when they start to invest in a BULL market and stocks and funds are going up, up, up. The inevitable shake up, correction, recession, or whatever happens and suddenly the "investor" finds out that they don't have the strong stomach they thought they had when all was good. Of course, a BIG FACTOR in this is the often delusional "stuff" that is out there these days telling people how they should be investing. Much of it is TRADING mentality being pushed as investing. There is a HUGE difference between being a trader and being an investor........especially being a LONG TERM INVESTOR. I have nothing against being a trader.......IF, BIG IF,.........the person doing the trading is doing so with knowledge of the risk they are taking and understand what they are doing. Too many people these days are trading while thinking they are investing and really have no understanding of the risk they are taking till it is too late. Once the confidence to invest is shaken and lost it can take many years for a person to be able to stomach starting up again. ANYWAY, here is a nice little article on the subject of risk: Halloween Factors In Focus http://www.servowealth.com/blog/halloween-factors-in-focus (BOLD is my opinion and what I consider important content) "With Halloween fast approaching, now is a good time to discuss the part of investing that people are often most afraid of—losing money! To get ahead with your investment portfolio, of course, you have to take risk. Unfortunately, many don’t understand what the investing risks are or how to handle them at various stages of life. Let’s examine this topic in more detail this month. Keeping It Safe Will Cost You We can’t begin to discuss risk without first reviewing the potential rewards. If we look at the period from 1970-2018, the first year where data exists on both US and international stock indexes, we find that a well-diversified asset allocation—the Dimensional Equity Balanced Strategy Index—earned a return of +13.1% per year. One dollar over this period grew to $419.20, a substantial sum (the S&P 500 Index of large US stocks grew to $117 after a +10.2% gain). The “risk-free” return over this period—represented by One-Month Treasury Bills—was just +4.7%, so $1 grew to only $9.45. But these are “nominal returns.” Over the same 49-year period, the rate of inflation in the US was +4.0%. Net of inflation, accepting the risk of stocks rewarded you with over 9% per year in “real” (inflation-adjusted) gains; risk-free T-Bills earned just +0.7%, or about 13x less. If we also consider the taxes owed on dividends and bond interest, stock returns would be lower than 9%, but T-Bill returns would be negative! The lesson for long-term investors is clear—if you need to grow your savings so that you can eventually retire and rely on your portfolio for ongoing income, you have to hold stocks. Keeping it safe will cost you. Learning About Losses What then, has been the “price” for the significantly higher long-term return on stocks? Short-term losses. Over the last 49 years, there have been eight occasions where the Dimensional Equity Balanced Strategy Index fell 20% or more (-5% to -10% losses are more common but not as traumatic), the classic definition of a “bear market.” The table below lists each of these episodes. Bear markets happen about once every five years. Sometimes they are clustered in a relatively short window—1970 and 1973/1974 or 1998 and 2002. Other times we've gone a decade without a big decline. Sizable losses are relatively infrequent, but to be expected. Big declines don’t last long. Many lasted only a few months, and only the 73-74 and 07-09 periods lasted longer than a year. Most bear markets are over before we knew they started. There doesn’t appear to be any pattern in the duration of the declines; the two longest were followed by bear markets just three and five months long. Proximity also seems random—after 1974, the first subsequent decline (1987) was 12 years later; after 2009, the next bear market (2011) occurred just two years later. In the throes of a bear market, you often hear that at “average” rates of return, it will take many years to recover losses, further frustrating investors already unhappy from their setback. But stocks don’t tend to experience “average” returns during recoveries. Gains have been significantly higher early on and full recoveries happen far sooner than expected. In all but two bear markets since 1970, stocks have declined, rebounded, and reached new highs within two years! In the case of the 1973-1974 and 2007-2009 periods, the entire cycle took just over three years. Considering the significant potential rewards to owning stocks, the short duration of most setbacks seems almost too good to be true. Surviving The Storm What, if anything, should you do about stock market declines? The answer depends on your investment goals. People saving for retirement and those investing exclusively for their beneficiaries are different than those who need an ongoing paycheck from their portfolio. If you’re not withdrawing money, you can afford to ignore bear markets. The values you see on your statement might not be ideal, but you aren’t forced to sell at those prices. You can wait until markets recover and your portfolio value is higher. Selling, in hopes of getting back in at lower prices, or avoiding further declines, sounds better. But “timing the market” is notoriously difficult. In reality, you will usually miss out on a surprising but significant recovery and the losses from liquidating your portfolio (and missing out on gains) will dwarf any additional declines. If you’re still saving for retirement, or adding to your portfolio consistently, then bear markets are not to be feared, but instead celebrated. Lower stock prices allow you to accumulate more shares that will eventually be more valuable. You can buy lower and improve your future retirement prospects if you’re able to hold tight. You read that right—there’s a benefit to bear markets! If you need ongoing income from your portfolio, you may not want to sell stocks while they are down. This is one case where holding bonds can help. In all eight bear markets, the return on an index of short-term bonds—the Dimensional Fixed Balanced Strategy Index (One-Year Treasury Notes prior to 1973)—was positive, ranging from +1.3% to +9.0%. Bonds might not have big returns, but if you stick to high credit ratings and short-term maturities, you can be confident that they will hold up when stocks decline. Instead of getting in and out of the stock market attempting to capture gains while avoiding losses, you should hold a few years of your spending in short-term bonds, selling bond fund shares during bear markets and stock fund shares in bull markets. Since 1970, a portfolio with just four years of withdrawals in bonds (15% to 20% allocation) would have prevented you from having to sell stocks before they had fully recovered their bear market losses! This approach also has the benefit of keeping most assets in higher expected returning stocks, making your long-term growth and legacy goals more likely. Preparing, Not Predicting This article isn’t a suggestion that stocks will soon be heading lower. No one, least of all me, can predict that. But how you invest in preparation for bear markets, and how you respond to them, impacts whether you will be successful financially. Too many investors are over allocated to bonds and “alternative” investments, or they panic and bail on stocks after a rough stretch. They’re trying to avoid losses but they wind up missing out on the returns they could have, need, and deserve. By periodically confronting the reality about the risks of investing I think you’ll be better prepared, with my help, to handle them. You will also be more confident and successful in the process." MY COMMENT YES.........I could BOLD that entire article. Being a LONG TERM INVESTOR is all about being able to psychologically manage and tolerate the normal market risk. You HAVE to understand the probabilities and be able to stay invested to take advantage of the probabilities. You have to be very CLINICAL about the whole process. You have to understand your personality and be able to be honest with yourself and NOT give in to GREED. You have to understand whether you are investing or trading. Either is fine in a vacuum.......the problem is when people think they are investors but their behavior and style is actually short to medium term trading. The risk levels and risk tolerance and knowledge required to do either trading or long term investing are very different. As a LONG TERM INVESTOR, I am fully invested ALL THE TIME. I ride out the various corrections and recessions as normal market behavior. I have the experience and mentality to do so. I have been retired since age 49. Over that time I have had to live off personal assets and manage my long term future. Until recently, I tried to keep at least FIVE YEARS of living expense money in cash or a safe cash equivalent. I would replenish that pot of money during periods of record highs in the general markets. Now this strategy is not relevant to me any longer since my annual living money comes from Social Security and my self created pension in the form of income annuities.
Outstanding. Thanks. A couple of years ago, I met a gentleman through a shared interest and we became fast friends. He assessed that we have done well with investing. He asked a few questions and I gave him guarded answers. I will walk miles out of my way to not give advice. (I'm just as tight with what I own in real life as I am online. Perhaps more so and that includes with friends and family.) A couple of days later, he mentioned to someone at a group lunch that he "started investing" and that he was doing "very well". I suspected he was doing some dangerous things but said nothing. Several days later, he came to show me his account and it turns out he was furiously trading and had lost a significant amount of money. The point is, this is a highly intelligent man. I won't go through his CV but he is an accomplished and successful businessman. He has also proven to be entirely unobjective with no self awareness. In other words, he is every man. Meanwhile.... I have a ton of respect for my Mom. She has a nice little portfolio of long term stable companies and she has been living off it for many years. My parents did not come from money, to say the least, so her success is 100% self made. Whenever the topic of investing comes up, my Mom quickly disclaims any success and points out that she is not nearly as successful as most people. This is incorrect. She is more successful than the vast majority of people. The disconnect is that she is comfortable with 10% annual gain and she believes others who claim huge numbers.
