Our USUAL open today....at least we are used to it. A nice little article here. Odds favor the Dow being higher at the end of 2021 and 125 years of history supports this https://www.marketwatch.com/story/t...-about-two-in-three-11623737505?mod=home-page (BOLD is my opinion OR what I consider important content) "Odds are good that the U.S. stock market will be higher at the end of December. Don’t get too excited; these odds have nothing to do with how strong the U.S. economy is right now or the stock market’s impressive returns so far this year. In fact, the chance of a winning second half of 2021 would be the same even if stocks were in a bear market or the economy was in recession. The reason why has to do with the stock market’s efficiency. Its level at any given point reflects all available information up to that point. For example, if on June 30 the odds were better-than-usual that stocks would be higher in six months’ time, traders would have already bid up prices to take those better odds into account. They wouldn’t wait until later in the year to up their bets. That’s also true if the odds of a higher market were worse than usual. If traders at the midyear mark knew that the market would most likely be lower in six months’ time, they would sell immediately rather than wait. The net result of their actions in both cases would that the market’s odds of rising in the second half of the year are more or less the same. Those odds are 66.9% — about two out of three — based on the Dow Jones Industrial Average DJIA, -0.05% back to its creation in the late 1890s. Notice from the chart below that these odds are largely the same regardless of what has happened with the Dow through mid-year. In those calendar years in which the Dow rose over the first six months, it in the second half rose 72.4% of the time. The increase from 66.9% to 72.4% is not significant at the 95% confidence level that statisticians often use when determining if a pattern is genuine. Or take the first years of the presidential four-year term, which is the year we’re in now. Over the second halves of those years, the stock market has risen 64.5% of the time. That is not statistically significantly different than the odds that apply to all years. You may be disappointed that a strong first half doesn’t increase the odds of a strong second half. Yet no one complained a year ago when the identical statistical analysis suggested that there was a two-out-of-three chance the stock market would be higher at the end of 2020. Sure enough, it was: Following a 9.6% decline for the first half of last year, the Dow rose 18.6% in the second. It’s because of the market’s efficiency that a buy-and-hold strategy is so hard to beat over the long term. When you deviate from that buy-and-hold approach, you’re in effect betting that you know more and have greater insight than the collective wisdom of millions of other stock market investors. It’s not out of the question that you do, but — as history has shown numerous times — it’s a low probability bet" MY COMMENT YES......very true. For the SP500 the odds that any particular year will be up is a bit over 70%. In my view....these odds are one of the primary reasons for LONG TERM investing. Long term investing is......PROBABILITY....based investing. ADD in.....fundamental analysis.....and company data, along with the probabilities, and you have a very powerful tool for investors. Over the longer term.....10+ years......the probabilities make it just about impossible to lose money.....at least in the big market averages like the SP500. Of course...investing in individual stocks......skews the odds....one way or the other...depending on the correctness of your analysis of the business and the events and conditions that will impact any particular business......over time. This is one reason that I continuously evaluate the totality of the stock side of my portfolio with the fund side which is composed of the SP500 and Fidelity Contra Fund which tends to equal or slightly beat the SP500. This does not involve any sort of complex calculation......since I start each portfolio at 50/50.....stocks versus funds......a quick glance at my portfolio tells me the current percentage on each side of the portfolio compared to the whole. Currently I am at about 55% on the stock side and 45% on the fund side. Not a perfect calculation....but close enough to give me a general idea. I try to keep my BASIC long term investing focus very simple.....about half based on the SP500.....about half based on BIG CAP GROWTH stocks.
AS USUAL I am once again posting my PORTFOLIO MODEL. My initial criteria to start the process to consider a business are.......BIG CAP, AMERICAN, DIVIDEND PAYING, GREAT MANAGEMENT, ICONIC PRODUCT, WORLD WIDE LEADER IN THEIR FIELD, LONG TERM HORIZON, etc, etc, etc. 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 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. At the same time the funds double and triple up on my individual stock holdings............that I consider the BEST individual businesses in the WORLD. STOCKS: Alphabet Inc Amazon Apple Costco Home Depot Honeywell Nike Microsoft Proctor & Gamble Nvidia MUTUAL FUNDS: SP500 Index Fund Fidelity Contra 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. (71). 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)" MY COMMENT This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my twelve stock holdings there is MUCH doubling and tripling up on the stocks. THAT is INTENTIONAL. I strongly subscribe to the view of Buffett and some others that TOO MUCH diversification kills returns. I do NOT believe in the current diversification FAD that most people seem to now follow.......or think they are following. I DO NOT do bonds and think the current level of bonds held by younger investors.....those under age 50.....is extremely foolish.I DO NOT do market timing or Technical Analysis.
Today is FED day. Thank God we can move on after today and tomorrow. I so....MISS....the old days when the FED Chair talked perhaps every 3 months. It was not that long ago that the FED Chairman would talk once in a while....and the rest of the FED members would just keep their mouths shut. This constant FOCUS and OBSESSION with the FED is a relatively new thing....perhaps about 15-20 years. AND....it is ESCALATING year by year. All this does is foster trading and a short term focus on the economy and the markets. Not...a healthy thing for investors trying to ACTUALLY make money.
I commented on this the other day....here is another take on the transitory nature of price increases.....using LUMBER as an example. Lumber Prices Are Falling Fast, Turning Hoarders Into Sellers https://finance.yahoo.com/m/98f59323-6717-3a5c-99be-94f9e95b4820/lumber-prices-are-falling.html (BOLD is my opinion OR what I consider important content) "Lumber prices are falling back to Earth. Futures for July delivery ended Tuesday at $1,009.90 per thousand board feet, down 41% from the record of $1,711.20 reached in early May. Futures have declined 14 of the past 16 trading days. Cash lumber prices are also crashing. Pricing service Random Lengths said Friday that its framing composite index, which tracks on-the-spot sales, dropped $122 to $1,324, its biggest ever weekly decline. The pullback came just six weeks after the index rose $124 during the first week of May, its most on record. Random Lengths described a chaotic rout in which sawmill managers struggled to provide customers with price quotes. It said late Tuesday that its index had dropped another $114, to $1,210. Economists and investors have wondered if sky-high prices for wood products would doom the booming housing market. Builders raised home prices and many stopped selling houses before the studs were installed, lest they misjudge costs and sell too cheaply. Lumber became central to the inflation debate: whether a period of runaway inflation was afoot or high prices were temporary shocks that would ease as the economy moved further from lockdown. The rapid decline suggests a bubble that has burst and the question is how low lumber prices will fall. Even after tumbling, lumber futures remain nearly three times what is typical for this time of year. Lumber producers and traders expect that prices will remain relatively high due to the strong housing market, but that the supply bottlenecks and frenzied buying that characterized the economy’s reopening and sent prices to multiples of the old all-time highs are winding down." MY COMMENT A classic supply disruption and distortion of the market due to the pandemic. Prices rocketed due to lack of supply and lack of production. NOW....with the price increases MILLS are ramping up and supply is rocketing. We are going to see these sorts of distortions with many products over the next 6-12 months. As the economy re-opens we will see the economy get back into the typical supply demand balance. This stuff is also.....exacerbated ......by price gouging and hoarding.
About half of the stock side of my portfolio is BIG CAP tech companies. SO.....I like the view expressed in this little article. 3 historic precedents show tech stocks will go higher https://finance.yahoo.com/news/3-historic-precedents-show-tech-stocks-will-go-higher-133034044.html (BOLD is my opinion OR what I consider important content) "After a strong year in technology (Nasdaq Composite up +43.6% in 2020), it is perfectly normal to see the market consolidate and correct those large gains. Coming out of these corrections, it is common to see another leg higher in the market, and there are three historical precedents that demonstrate that. You might be thinking “What correction? The S&P 500 closed at an all-time high last week.” Please keep in mind I’m referring to growth stocks, which have clearly been in a correction since early February of this year. The first example is 1995. That year, the Nasdaq Composite was up +40% and the rally continued into May 1996. After correcting close to 20%, the next move higher began in September 1996, and ultimately accelerated into the great bull market of the late 1990s. Chart is provided by MarketSmith In 2003, the Nasdaq Composite gained +50% and eventually peaked in January 2004. After consolidating for seven months, the next leg up began in September 2004. According to Mike Cintolo, Chief Analyst at Cabot Growth Investor, “The upmove after that didn’t get far into new high ground, but it was an excellent stretch. That’s when Apple (AAPL) and Google (GOOG, GOOGL) really began their mega-runs.” Chart is provided by MarketSmith Finally, in 2009, the Nasdaq Composite rose +44% and continued into April 2010. After a four-month correction, the index resumed its advance in September 2010, and then gained over +30% into early 2011. More importantly, for growth stock traders, many stocks such as Lululemon (LULU) and Chipotle Mexican Grill (CMG) saw triple-digit gains during that run. Chart is provided by MarketSmith These three historical precedents provide a decent blueprint for today’s Nasdaq Composite. Last year’s gain carried into this year before peaking in February. Since then, the index has corrected for approximately four months, and is now looking to make another move higher. We still have to get through a few events in June such as the Fed meeting this week, the annual Russell 2000 rebalancing on June 25, and normal end of the quarter portfolio adjustments. There could be some volatility around these events, but eventually, it looks like technology is ready for the next leg higher. It could begin in early July as the market starts to anticipate the next round of earnings reports. Regarding the upcoming Fed meeting, it seems like market participants have had the same fears before every recent meeting. They are worried the Fed will hint at “tapering” or slowing down their monthly bond purchases, and eventually map out a course for raising interest rates. Fed Chair Powell has made it perfectly clear that he will take his time with this process, and I don’t see anything being done until early 2022. Many people might disagree with the Fed’s actions because several economic measures are back to pre-pandemic levels; however, the Fed would rather be late in normalizing rates than early. Don’t argue with it — take advantage of this equity friendly environment. If there’s an unforeseen event that causes the market to stall over the next few months, it’s possible the next leg higher could be delayed until the fourth quarter. Either way, I wouldn’t see any sustained downside because there’s so much liquidity in the markets, and sentiment gets very negative very quickly on any minor decline. For example, during the Nasdaq Composite’s -5% drop in early May, equity put buying spiked to levels not seen since late October, right before the last presidential election. From a contrarian point of view, this constant one-foot-out-the-door mentality helps to keep a floor to the market when overall fear rises. Whether the next move higher starts in July or later this year, these three historical precedents show that we are likely to come out of the recent correction in technology with a new, sustained uptrend. Potential growth sectors to focus on are Semiconductors, Medical Products, and Software." MY COMMENT I DO agree with this article....but...not particularly based on the three examples. I MAINLY agree based on the anticipation that the next one or two quarters of earnings WILL set off a......TECH BOOM....as the BIG CAP TECH giants show stronger and stronger earnings. This will be.....CONTRARY TO....the media line that their GIANT earnings the past few quarters.....might.....simply be due to the pandemic. DOMINANT companies....WILL....simply continue to be DOMINANT, well into the future. I am willing to ride that wave as far as I can.......hopefully for DECADES longer.
AS EXPECTED......by just about everyone....the FED has spoken and they did NOTHING. It is like they will do TWO rate hikes in 2023....that is it. If the short term markets FREAK OUT over a couple of rate increases by the end of a.....YEAR AND A HALF....from now.....it is TEMPORARY INSANITY. They continued the asset purchase program. Fed holds rates at near zero, projects two possible rate hikes by end of 2023 https://finance.yahoo.com/news/fed-fomc-monetary-policy-decision-june-2021-143205185.html Stock market news live updates: Stocks dip as traders digest Fed decision https://finance.yahoo.com/news/stock-market-news-live-updates-june-16-2021-221336682.html MY COMMENT I will NOT even post these articles in more detail. NOTHING happened....but....the market reaction to this is simply SILLINESS. NOT worth even discussing.......as a long term investor. Actually not even worth discussing....."if".....I was an investor with a horizon of ONLY a few days.
Back home now......and able to check how I did for the day. Red of course......but a MORAL VICTORY....a beat of the SP500 by .32%. At leas tit was nice to see four of my ten positions in the green.....AAPL, AMZN, NVDA, and NKE. these helped to hold the loss for the day down to a very reasonable level.
Here is a little article on the short term markets having HISSY-FIT.....because...... we might see two......yes two....rate increases by the end of 2023.......TWO AND A HALF YEARS FROM NOW. Stock market news live updates: Stock futures extend declines after Fed outlook signals rate hikes https://finance.yahoo.com/news/stock-market-news-live-updates-june-17-2021-221209986.html (BOLD is my opinion OR what I consider important content) "Stock futures opened lower Wednesday evening as investors contemplated the Federal Reserve's latest monetary policy decision and updated projections, which signaled a quicker path to higher interest rates than previously anticipated. Contracts on the S&P 500, Dow and Nasdaq added to earlier losses. Each of the three major stock indexes ended Wednesday's session lower after the Fed's new projections pointed to two rate hikes by year-end 2023. Federal Open Market Committee members also upgraded their forecasts for economic growth and inflation, affirming market participants' concerns over sustainably higher prices. While the Fed left rates on hold at the conclusion of this month's meeting and kept the pace of asset purchases unchanged, market participants are now gearing up for a potentially less accommodative tilt to Fed policy. "There was a more hawkish tone from the Federal Reserve, mostly coming from the Committee but [Fed Chair Jerome] Powell also offered an upbeat assessment of the economy with small steps toward the exit," Michelle Meyer, Bank of America U.S. Economist, said in a note Wednesday. "The big surprise came from the dots where the median expectation is now for 2 hikes in 2023 with only 2 dots away from 2022 also showing a hike." "While Fed officials are talking about 'transitory' inflation, some clearly believe in greater persistence, which was reflected in upside risks to the PCE [personal consumption expenditures outlook] in the SEP [summary of economic projections]," she added. On the other hand, however, the Fed also acknowledged that the labor force could be under pressure for some time, given the considerable difficulties the economy has had in recovering all of the jobs lost during the pandemic even as more reopenings take place. Powell said during his press conference Wednesday that the economy ultimately remained "a ways off" from reaching "substantial further progress" toward the Fed's goal of maximum employment that would signal a start to tapering. But much of the employment data has been trending in the right direction, albeit with some moderation in the rate of improvements, and some lingering concerns over labor supply shortages. The Labor Department's weekly jobless claims report Thursday morning is expected to show a seventh consecutive decline in initial unemployment filings to a new pandemic-era low. "Even with the eventual tapering of asset purchases, and subsequent moderate increase in interest rates, we think it’s clear that the backdrop for the economy will generate significant employment improvement," Rick Rieder, BlackRock's chief investment officer of global fixed income, said in an email." MY COMMENT The good news is......I doubt you could find......A.....single investor that sold on this NON-NEWS today. NO ONE.....could even begin to think......that we would go all the way to the end of 2023 with NO rate increases. ANY drop in the market averages today HAD to be simply program trading based on key words in news articles. ACTUALLY.....I am amazed that they are saying......."ONLY"....two rate increases all the way out to the end of 2023. Investors are now CRAZY...but they are not this crazy.
ACTUALLY.....here is the truth about this NON-STORY. Powell downplays rate hike forecasts as Fed reiterates accommodative stance https://finance.yahoo.com/news/powe...eiterates-accommodative-stance-204055223.html (BOLD is my opinion OR what I consider important content) "Federal Reserve policymakers on Wednesday delivered a surprise by signaling two interest rate hikes by the end of 2023. But Fed Chairman Jerome Powell downplayed those forecasts as anything other than speculation. The forecasts in question concern the “dot plot,” a quarterly map of each Federal Open Market Committee member’s expectations for rates over coming years. In an updated release Wednesday, the median member now expects two rate hikes by the end of 2023, a noticeable jump from the March projection for no rate hikes through that time horizon. “The dots are not a great forecaster of future rate moves and it’s just because it’s so highly uncertain,” Powell told reporters after the central bank’s announcement that it was holding interest rates at near zero. Powell added that dot plots should be taken with a “big grain of salt,” reminding Fed watchers that the central bank will guide policy based on outcomes, not outlooks. The Fed's June 2021 Summary of Economic Projections show the median member of the central bank's policy-setting committee seeing the case for two rate hikes by the end of 2023. Source: Federal Reserve Bond markets jumped after reading the dot plots when they were released at 2 p.m. ET. The U.S. 10-year Treasury yield (^TNX) surged as high as 10 basis points to 1.59%, but fell as Powell talked down the dot plots in his press conference. “These are 18 different forecasts and I can’t stand here and say what was exactly in all 18 peoples’ minds,” Powell said, reiterating that those forecasts are not the primary discussion in policy meetings. The dot plots present a challenge for the Fed, which is attempting to guide market participants through an economic bounce-back of unprecedented speed. "This is an extraordinarily unusual time, and we really don't have a template or any experience in a situation like this,” Powell said. “We have to be humble about our ability to understand the data." A 'discussion' about possible tapering The FOMC this week took the first step towards paring back its aggressive money printing policies by kicking off discussions over tapering its asset purchase program. Since the depths of the pandemic, the Fed has been absorbing about $120 billion each month in U.S. Treasuries and agency mortgage-backed securities. Up until this week, the Fed had insisted that it was not “thinking about thinking about” slowing those purchases. But Powell said Wednesday the Fed had a “discussion” on possible tapering this week, which may involve defining the vague “substantial further progress” goal that the central bank established in December 2020. The Fed chairman said whenever the Fed gets ready to taper, policymakers will give market participants “advance notice” before announcing anything. “Our intention for this process is that it will be orderly, methodical and transparent,” Powell said. The taper talk comes as inflationary pressures continue to rise. The new projections show the median member of the committee viewing inflation rising at a faster clip than its last round of forecasts in March, expecting core personal consumption expenditures (the Fed’s preferred measure of inflation) clocking in at 3.0% in 2021 (compared to 2.2% in its March forecast). But the Fed expects those pressures to alleviate in the following years, with core PCE falling down to 2.1% in 2022. Powell said he still expects much of the upward pressure on prices to be temporary, owing to supply chain bottlenecks. But he acknowledged the risk of inflation running away. “Inflation could turn out to be higher and more persistent than we suspect,” reiterating that the central bank has the tools to address that if needed. The next FOMC meeting will take place July 27 and 28." MY COMMENT I find it NUTS that the FED is releasing this sort of garbage....dot plots. What next.....the entrails of a duck? Thank goodness that this sort of "stuff" does not have any impact on REAL INVESTORS.......or ACTUAL companies....... in the slightest.
HERE is a little story that must reflect something about the economy or inflation or something.....I guess. Jobless claims: Initial filings unexpectedly rose to 412,000 last week https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-june-12-2021-185005209.html (BOLD is my opinion OR what I consider important content) "Initial unemployment claims unexpectedly rose last week to end a six-week streak of improvements, even as economic activity ramped further and reopenings broadened out. But in the coming weeks, a phase-out of enhanced unemployment benefits across many states may decrease the total number of claimants. The Department of Labor released its weekly report on new jobless claims on 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 June 12: 412,000 vs. 360,000 expected and a revised 375,000 during prior week Continuing claims, week ended June 5: 3.518 million vs. 3.425 million expected and a revised 3.517 million during prior week New filings broke back above the psychologically important 400,000 level for the first time since mid-May. Even with the increase, the four-week moving average for new jobless claims decreased by 8,000 to 395,000, given the drop in new claims over the past several weeks. Continuing jobless claims for regular state programs, reported on a one-week lag, also unexpectedly increased, but have still come down sharply from the more than 5 million reported each week as recently as early January. Importantly, this week's jobless claims data reflect the last survey period during which full federal pandemic-era unemployment benefits were in place across all U.S. states. On June 12, Alaska, Iowa, Missouri and Mississippi became the first states to significantly reduce or fully slash enhanced federal unemployment benefits ahead of their official September expiration date. The move would affect claims for hundreds of thousands of individuals. Officials from these and the about two dozen states that have opted for this early phase-out have done so with the hope of incentivizing workers to rejoin the labor force, with social distancing standards having eased across the country and job openings at record highs amid widely cited labor shortages. The benefits set to be reduced or eliminated include the supplemental $300 per week in federal unemployment insurance, Pandemic Unemployment Assistance (PUA) for gig workers and Pandemic Emergency Unemployment Compensation (PEUC) for the longer-term unemployed. Altogether, the total number of individuals claiming unemployment benefits across all programs was 14.8 million for the week ended May 29, the most recent date for which data is available. This was down by more than half a million from the previous week, with the pace of declines accelerating markedly from the prior week. The majority of these comprised workers claiming benefits through the PUA and PEUC, which totaled 11.3 million. Many economists have suggested that the ongoing labor supply challenges are due to a variety of issues, including but not limited to enhanced unemployment benefits. Others have cited a combination of concerns, including lingering worries about contracting COVID-19 and finding childcare, as adding to the strain for workers. "Most industries are reporting acute labor shortages, but that could even out by fall as the pandemic-era unemployment benefits are phased out and schools reopen allowing parents to return to work," Anu Gaggar, senior global investment analyst for Commonwealth Financial Network, said in an email. State-by-state unemployment The increase in new filings last week was consolidated across just a few states, including Pennsylvania, where claims rose by nearly 22,000 on an unadjusted basis, and California, where claims rose by about 15,700. About half of U.S. states still posted declines in new claims last week, albeit by smaller margins. Some states continued to post elevated insured unemployment rates, with the proportion of total claimants to the state's overall population coming in well above the national average. Nevada's insured unemployment rate came in at 4.6% for the week ended May 29, which has come down precipitously from the state's pandemic-era high of more than 26% last year, but has held stubbornly above the national average of 2.5% Rhode Island and Alaska rounded out the top three state with the highest insured unemployment rates at 4.5% and 3.9%, respectively." MY COMMENT Pretty OBVIOUS stuff. People are going to take the summer off if they have the EXCESS benefits. I suspect that we are NOW at FULL EMPLOYMENT......for those that really want to work. the current employment data is probably a pretty good picture of what the economy would look like if we had a GUARANTEED INCOME in place.
Looks like ALL the averages are starting the day in the green. The FED story-line of yesterday did NOT have any legs beyond that one day. Typical stuff.
I am starting to see some articles encouraging people to pull money out of their homes. With the HUGE increases in house values in many areas there is going to be TEMPTATION to....once again....use your house as a piggy bank. The vehicles.....cash out refinance......home equity loans....etc, etc, etc. The danger...if this catches on as a strategy......is when the housing market crashes or corrects or drops back to more normal levels people that pulled money out may end up UPSIDE DOWN. The other danger is locking in a higher payment that people will not be able to afford as property taxes and insurance continue to quickly escalate. I dont see this as a danger to the economy.......and....you cant protect people from themselves.
Want another ANTI-INFLATION indicator? Gold and silver are BOTH down significantly. Neither one is doing what you would expect if inflation was a big fear. Silver has been very strong for a long time....hovering around $28 per Oz. It is down over 5% today at about $26.28. Gold is NOW down to $1783......like silver.....a drop of nearly 5%. I am not an "investor" in gold or silver........but do see these items as having some small predictive value for inflation.
An unfortunate WASTE of corporate money.......that creates NO real value. This stock market boosting scheme has come roaring back https://finance.yahoo.com/news/this...g-scheme-has-come-roaring-back-171323249.html (BOLD is my opinion OR what I consider important content) "The data is in, and it says stock buybacks are back in a big way as companies seek out ways to keep their stock prices at elevated levels. First quarter stock repurchases clocked in at $178.1 billion among S&P 500 companies, up 36.5% from the fourth quarter of 2020, according to new data out Tuesday from S&P Global. Buybacks were up 100.9% from the second quarter 2020 pandemic low of $88.7 billion. Stock buybacks have the effect of lowering the number of shares outstanding for companies. By extension, that helps to boost per share earnings and potentially a company's stock price. S&P 500 Global said 335 companies reported buybacks of at least $5 million in the first quarter, up from 244 in the fourth quarter of 2020. What's no surprise is that the world's biggest, cash rich companies continue to be the most aggressive around in terms of buybacks. S&P Global said the top 20 companies for stock buyback activity accounted for 53.3% of the first quarter buybacks, up from the historical pre-COVID 19 average of 44.5%. That top 20 — led by Apple, Alphabet, Microsoft, Berkshire Hathaway and Facebook — repurchased $94.9 billion in stock for the first quarter. In the fourth quarter of 2020, the top 20 bought back $74.7 billion of their stock. S&P Global sees buyback activity staying firmly intact for the balance of 2021. "Buybacks are expected to continue at a higher level in 2021 as big banks, via Fed approval for the second half of the year, have returned to the buyback market, and more companies are expected to expand their buybacks to discretionary purchases used to reduce share count and increase earnings-per-share," S&P Global senior index analyst Howard Silverblatt said. The buyback activity appears to be having its intended consequence in the the broader market. Silverblatt calculates that 5.9% of S&P 500 companies reduced share counts by at least 4% year-over-year in the first quarter. Subsequently, the buyback boost coupled with strong first quarter earnings has helped support a historically high forward price-to-earnings multiple for the S&P 500 and stocks at a record level. Concludes Silverblatt, "For the remainder of 2021, strong cash-flow issues are expected to continue to dominate the buyback headlines, but the broader market and economic story may be the breadth, expenditures and willingness of the companies, which mostly shut down their programs over COVID uncertainties, to return to buybacks."" MY COMMENT Personally I consider stock buy-backs as an unproductive use of corporate money. Basically a WASTE of money. It does not create anything of real value for a company compared to investing that money in capital items or the ACTUAL business. If they just want to spend money...rather than investing it in the business....give it back to shareholders as a dividend. I am NOT a fan of BOOSTING executive compensation by buying back stock and FALSELY SKEWING annual results. I am also not a fan of the stock options game as played today for the benefit of higher management. Surely........(dont call me Shirley).....there has got to be some ACTUAL business use for this money....something that will actually increase the fundamental business results of the company going forward for the long term.
NVIDIA continues to SOAR today. I dont really see anything BIG in the news. At the moment...up by 2.65%.....or.....$18.86 per share. I have to assume that this is related to the split....which is STILL a good way off (July 20).
Having just looked.....I am starting out the day nicely in the green. Seven of my ten stock holdings are UP. I have......so far....made up the losses from yesterday. AND..... I continue to be fully invested for the long term as usual.
Nvidia now up about $30 per share. This is the ONLY news item that I see that.....might.....have something to do with this move. Nvidia price target boosted to Street high of $854 at Jefferies https://www.marketwatch.com/story/n...to-street-high-of-854-at-jefferies-2021-06-17 (BOLD is my opinion OR what I consider important content) "Shares of Nvidia Corp. NVDA, +4.27% are up 2.8% in Thursday morning trading after Jefferies analyst Mark Lipacis boosted his price target on the stock to $854 from $740. The new target is the highest listed on FactSet. Lipacis is more upbeat about Nvidia's prospects following a recent conversation with the company's chief financial officer, Colette Kress, which highlighted the potential for software licensing in the data center. "While software is mostly embedded within hardware sales today, enterprise AI software in the data center can potentially be licensed similarly to how VMware licenses its system software," Lipacis wrote. He noted that Kress said that it was possible for the company to break out software sales as a revenue line item once it becomes a meaningful portion of the business. Lipacis also relayed Nvidia's expectation that its Arm acquisition will close in the early part of 2022. "Nvidia plans to help ARM build its model beyond just mobile by bringing ARM to the data center, automotive and IoT [Internet of Things] markets," he wrote. "These progressions for ARM are viewed as not something ARM can do as effectively as a stand-alone company." Nvidia shares have gained 37% over the past three months as the S&P 500 SPX, -0.01% has risen 6%." MY COMMENT I would not be surprised to see this price target hit shortly after the split date. MY....short term price target for the stock....which I posted a couple of pages back is.....$810 to $850. this is my EXPECTATION for the short term just after the split date. with today's gain....which is now at $34 per share...with a share price of $746.14....this is an actual strong possibility. From the time I started to type this post the price per share went from $30 to $34. Of course.......we are very early in the day and a long way from the spit date......and....it is impossible to predict the short term.
WOW......really making some money today. I hope I can hold on for the next 40 minutes. My BIG CAP GROWTH stocks are booming today. One of the better days in a long time. Over the past months the big cap world has been LINGERING. It is nice to have an old fashioned BIG CAP day. Eight of ten positions UP very strongly.....NVIDIA is leading the charge up by $37, or, 5.21%.
I like this little article.....I think there is some truth here. Opinion: The real culprit for the selloff in the stock market? Hint: It wasn’t the Fed https://www.marketwatch.com/story/t...arket-hint-it-wasnt-the-fed-11623946624?rss=1 (BOLD is my opinion OR what I consider important content) "The real cause of the air pocket the stock market hit this week was excessive bullishness. That’s not the prevailing narrative, of course. The almost universal blame is being put on the Federal Reserve’s rate-setting committee for accelerating its road map for raising rates. Yet that acceleration does not, in and of itself, justify a significant revaluation of equities’ value—a revaluation that took nearly 400 points off the Dow Jones Industrial Average DJIA, -0.52% in the immediate wake of that meeting. The Dow was down more than 200 points at midday on Thursday. In fact, the present value of stocks’ expected future earnings and dividends barely changed after the Fed’s meeting. Both before and after that meeting, the median expectation of members of the Fed’s interest-rate-setting committee has been that the federal funds rate would rise to 2.5% when economic conditions returned to normal. The sole thing that changed was whether that increase would begin no earlier than 2024, which was the prior expectation, or instead start in 2023—with the fed funds rate rising modestly to just 0.50% by year’s end. Be my guest calculating the impact that single change has on the present expected value of the stream of a stock’s future earnings and dividends. John Graham, a finance professor at Duke University’s Fuqua School of Business, said in an interview that it’s “minimal.” I submit that the real culprit behind Wednesday’s selloff was the excessive bullishness that prevailed before the meeting. When there’s too much optimism, even the slightest provocation can cause significant disappointment. To explain the market’s reaction, therefore, we must turn to contrarian analysis rather than fundamental analysis. Consider how bullish the several dozen Nasdaq-focused COMP, 0.99% market timers I monitor were before Wednesday’s meeting. As you can see from the accompanying chart, their average recommended equity exposure (as represented by the Hulbert Nasdaq Newsletter Sentiment Index, or HNNSI) had climbed into the upper shaded zone—which means that it was higher than 90% of all daily readings since 2000. The stock market historically has struggled in the wake of HNNSI readings this high—regardless of what the financial headlines were on each of those prior occasions. The good news is that, in the wake of the stock market’s midweek drop, the market timers began to quickly retreat from their erstwhile bullishness. To the extent they continue their retreat, odds increase that the market’s decline will be modest and short-lived. A strong contrarian trading buy signal will come when the HNNSI drops into the lower gray zone on the chart—representing the lowest 10% of the historical distribution. As you can see from the chart, however, the last time that happened was at the bottom of the market’s waterfall decline in March of last year. Since then the market timers on balance became only moderately bearish as the market declined, and instead were quick to turn bullish again when the market showed any sign of strength. As I argued in a column at the beginning of this month, this behavior points to a trading-range market—in which both rallies and declines are subdued. What we’ve seen since then suggests this trading range will continue for at least a while longer." MY COMMENT I agree that we have been stuck in a trading range market for the past couple of months.....if not longer. We are seeing a typical.....mixed market....today. The DOW is down.....the NASDAQ is up.....and...the SP500 is trying to stay in the green. Now that we have the FED out of the way HOPEFULLY we can get a few weeks......3-4.......of peaceful investing before the next round of "stuff".........the FED and economic data.......begins in July. For those that are OBSESSIVE about inflation.....the Ten Year Yield is at 1.518......not exactly an indicator of it actually happening at this moment.
