The Long Term Investor

Reading the above little article made me think about BEAR MARKETS for some reason. It has now been 12 years since we had a REAL bear market. AND....even that one.....although nasty.....lasted only one year. We have been off to the races for the past 12 years. In hindsight even this PHONY pandemic stock drop.....was extremely minimal and is NOT something I would characterize as a REAL bear market.

SO.....my view is......anyone age 35-40 or below has NEVER seen or invested in a REAL bear market. None of the young financial writers, none of the young TV people, none of the young business leaders and owners, none of the young politicians, none of the young investment advisors, none of the young investment bankers, professional traders, or hedge fund guys,.......none, none, none. Combine this with the fact that the current media environment has ESCALATED to insanity since the last real bear market 12 years ago.....and.....you have a really interesting situation next time we meet the BEAR. It WILL happen.....bear markets are inevitable. AND....when it does the.......new normal....that EVERYONE will be talking about will be the death of stock investing and the.....fact......of the moment....that stock investing is dead forever.

It WILL happen and It WILL be very interesting. That is one thing about investing....it is GREAT entertainment. One big SOAP OPERA of human behavior.

 

Having just looked at my accounts.........I am surprised once again. For the past week or so....considering the lack of market energy at the open....I have expected to see my accounts in the red when I look in the morning. BUT....they had been routinely surprising me to the green side. Today is no exception. With the SP500 fighting to stay positive and the NASDAQ flipping between red and slightly green today....I had no expectation for my accounts.

One of the accounts that I manage for a relative has just hit a MAJOR milestone........she will be very happy when she sees the email that I am about to send her.

As investors.....most of us....are BASKING IN THE GLOW of the current markets. The SP500 is UP....year to date by.....14.40%.....after only 6 months. We have a SOLID potential to end the year between +20% to +30%. I think I have been in the green now for the past 6 market days. Earnings are coming up and they will KICK ASS. Everything is GREAT. YET....much, if not most, of the financial media coverage is negative and/or fear mongering.

You have to LOVE IT......the excitement and drama of being an investor. CELEBRATE when the times are good.....and.....ignore it when they are bad. OR....CELEBRATE when the times are good....and....bitch about it when they are bad.......BUT....DO NOTHING. The investor version of the NIKE slogan, "JUST DO IT"........JUST DO NOTHING.

 

I am very interested in the short term NVIDIA drama. We are now 14 market days from the BIG stock split. I am curious to see how the financial media covers this event as it gets closer and closer. At the moment the stock is down about $6 today. Not too shocking considering the gain of about $38 yesterday. Plenty of time today for the stock to pull off a small gain today.....or not.

What I am going to be interested to watch......as the countdown to the split happens......is how much of a FRENZY is whipped up by the financial media.

 

WOW....another BANNER day for the markets and my account....at yet another personal all time high. Nvidia DID manage to come out positive as I speculated in the post above. It ended up by $1.67 or 0.21% for the day. I had my 7th green day in a row today.

Account NICELY in the green. Plus a good beat on the SP500 by .65%. My RED stocks today were HON, GOOGL, and PG. My BIG winners of the green stocks were Apple +1.15%, NIKE +2.36%, and Microsoft +1.00%.

Three days to go for this week and there is a....possibility...that I can get to 10 green days in a row if the rest of the week continues in the current trend. I dont see anything changing over the next few weeks from the current market conditions.

 

Break out the....cheap.....champagne. Good enough for the cheap stuff but not the expensive stuff.

Stock market news live updates: S&P 500 and Nasdaq eke out fresh record highs after strong consumer confidence data

https://finance.yahoo.com/news/stock-market-news-live-updates-june-29-2021-221700919.html

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

"Stocks gained on Tuesday to set fresh all-time highs, with equities buoyed by another set of strong economic data.

The S&P 500 ended narrowly in the green to set another record high. The Nasdaq also ticked up to record intraday and closing highs, and the Dow closed slightly above the flat line. Stocks got a boost Tuesday morning following the release of the Conference Board's June consumer confidence index, which rocketed more than expected to the highest level since February 2020 as consumers' concerns over inflation impacts retreated and spending plans accelerated.

Stock leadership over the past several weeks has see-sawed between the tech-heavy Nasdaq and cyclical-heavy Dow. The most recent run of tech outperformance, with the Nasdaq having set four record closing highs over the past week alone, has coincided with a steadying of Treasury yields, with the yield on the benchmark 10-year note holding below 1.5%.

"There was some worry after the initial June FOMC [Federal Open Market Committee] meeting that they were going to turn hawkish and maybe do a preemptive strike if needed," Chris Gaffney, TIAA Bank president of world markets, told Yahoo Finance. "But they walked that back with commentary over the past few days. And I think the market is again confident that they're going to stay out of the way and that we're going to see continued growth and actually a good environment for stocks going forward."

“As this recovery continues to mature, I think we’ll continue to see another rotation from growth into value, and some of the cyclicals will come back in favor,” he added. “We’ve had several head fakes between value and growth rotations, and markets have been somewhat choppy. But we think cyclicals are going to be set up for a recovery and come back into favor.”

Others agreed that the current technology-led market may ultimately run its course.

“This is probably the greatest debate in the macro universe right now, which is whether the reflation trade has anymore legs. Should you be in cyclicals, value, commodities, EM [emerging markets], or is it a moment for growth stocks, tech stocks, to really outperform long term?” Clocktower Group Chief Strategist Marko Papic told Yahoo Finance.

"I do think there's this ... cyclical mini-hiccup in growth that's coming up. And that's really a combination of this upcoming fiscal cliff, which will be significant," he added. "And you have generally just concerns that the current pace of growth won't be kept up, and that has given a bid to bonds, brought the yields lower and definitely given growth stocks a little bit of a kick in the rear."

"Broadly I would say that investors should not fall in love with this interregnum, with this period of outperformance by growth," Papic said. "And that's because although there are some intra-cyclical hiccups in growth that we all kind of understand, the fact of the matter is that the Fed is probably far behind the curve. And that's because this cycle does not have the headwinds to [economic] growth that the last cycle had.""

MY COMMENT

GREAT. But...I dont buy the value versus growth stuff. I believe BOTH will do very well going forward and the BIG CAP GROWTH names will get a good kick in the pants from the upcoming earnings.

We are in the middle of an old fashioned SUMMER RALLY. NONE of the so called professionals called this. As to inflation...all you need to know is.......Ten Year Treasury yield DOWN to 1.475%.......Gold down substantially to $1761....Silver down substantially to $25.75. I dont see anything indicating a fear of inflation........in REALITY.

 

Here is the other.....cheap champagne......story of the day. I prefer the cheap stuff anyway.

There's still lots of room for the S&P 500 to run: BofA

https://finance.yahoo.com/news/bof-...to-run-past-this-all-time-high-200402040.html

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

"Despite experiencing high yearly growth and reaching new all-time highs earlier this week, the S&P 500 (^GSPC) still has room to grow, a new Bank of America (BAC) Global Research report said.

The recent rally is a sign of a strong summer for the index, according to the report. It confirms “a bullish cup and handle that sets up bullish summer seasonality with upside potential to 4400-4420.”

As of late, market growth has been characterized by a back-and-forth battle between tech-driven growth stocks and cyclical, commodity, and value stocks. The growth stocks underwent a rebound this quarter after a less-than-stellar Q1, and were accounting for a large portion of the stock market growth.

But this week, value stocks, led by cyclical stocks benefiting off improving economic conditions, pushed back against growth stocks’ progress. The former category of stocks accounted for much of the uptick in the SPX Tuesday, which vaulted over the 4,290-point benchmark.

The data from February and March support a bullish month of July, the report found. “The May-June cup and handle resembles the bullish February-March cup and handle pattern that preceded an upside breakout entering the seasonally strong month of April,” analysts said in the report. “Sustaining last week's cup and handle breakout, or holding the SPX supports highlighted above, would bode for the seasonally strong month of July.”

Several indicators support the conclusion that the SPX has room to grow. New lows for the US high yield option adjusted spread (OAS) confirm new highs for the SPX, the report found. “The high yield OAS is below the trough levels from 2020, 2018 and 2014 in the 3.23 to 3.03 area to its lowest level since the 2.50-2.33 range last seen in 2007, 2005 and 1997.”

The report makes a distinction between the performance of the S&P 500 market index and the S&P 500 equal-weighted index, which remains within a bullish trend but did not reach a high last week. “Although this is a lack of confirmation for last week's new highs on the SPX, we are on alert for a breakout from a May-June triangle pattern on SPW,” the report said. “A push above 6170 is the signal needed to confirm the triangle for upside beyond the recent highs near 6185-6206 toward 6445.”

Not all of the report’s findings were bullish. The authors cautioned of “scary negative levels” of net free credit. As of May 2021, free credit in customers’ cash accounts stood at $213 billion, and free credit in margin accounts stood at $253 billion, while debt balances in customer margin accounts totaled over $860 billion.

“This means that free credit balances net of margin debt (net free credit) moved to a record negative level of -$414b in May,” the report said. “If net free credit begins to rise, it could send a bearish signal for US equities.”

The Global Research report also noted that the Dow Jones Industrial Average (^DJI) and Transportation Average both failed to set new highs last week, resulting in a bearish divergence. “Dow Theory is not bearish but in a corrective phase within a primary bull market,” the authors concluded."

MY COMMENT

MUCH of the above is Technical analysis stuff which I dont use or accept as meaningful. BUT....many do use and follow this stuff. This article and the one above WILL provide a good basis for a positive market tomorrow and for the rest of the week.

My view of the SP500 going forward for the summer is EXTREMELY POSITIVE.......based on the fundamentals of the BIG CAP companies that make up the index and the upcoming BLOW OUT earnings that we are going to soon start to see.

With the re-opening of the bank stocks to dividends and buybacks.....we are likely going to see the big bank stocks BOOM from here into their earnings which should be very good.

We should ALL.....celebrate, celebrate....dance to the music. Let the good times roll....let the champagne flow. Well as I said the cheap stuff...about $4 per bottle.....max. Lets not get too crazy over a little summer rally. BUT.....after the past year....we all deserve to have a bit of celebration at passing through the DISMAL months of the economic shut-down and moving into the Summer and Fall. There will be plenty of time to worry later.

 

I am NOW....as of today....+$7000 on my little NVIDIA split play that I started on May 21, 2021 at $599 per share. A gain to date of 33.70% since May 21. As I said previously my....aspirational goal....is 40-50 post-split shares profit, which I will hold for the long term as part of my pre-existing position in NVIDIA. We are quickly closing in on my....aspirational....share price pre-split of $810 to $850.

I think I will need to get to a profit of $8500 to $11,250......to get my 40 to 50 post split shares.......I am assuming that the price will hit a high of about $212 to $225 per share in the days immediately post-split.

I dont want to JINX myself........this is FAR from a done deal at this point with 13 market days till the split. Some big black swan could fly in and bite me in the butt. For example.......some very negative announcement on the ARM deal. So....I will sweat this out for the next two and a half weeks.....unless the gains get so big that I cash in before the actual split. I do not expect this to happen.

I continue to be fully invested for the long term as usual.....and.....at the same time being a market hunter/gatherer.......I will once in a while take what I can short term.....based on the probabilities.

 

At the moment we have the....."NATTERING NABOBS OF NEGATIVISM"....on the run.

BUT....dont go CRAZY just because we are in a little summer rally. Keep the faith....but stay rational and reasonable. Another nice thing about long term investing.......it helps in the down times....but more importantly....it helps to keep an investor......safe, sane, and steady.....during the CRAZY positive times.

 

I think you are correct...Zukodany. All the fear over......interest rates.....the re-opening.....inflation.....having already hit peak earnings and re-opening.....the FED.....the virus....seem to have all gone away for the moment.

BUT.....sure as anything....there will be a knock on the door and when you open it..........

 

My portfolio has now fought its way back.....versus...the SP500. I am now at +14.00%. The SP500 is at +14.26% as of the close today. Earlier in the year I was significantly ahead of the SP500. Than the tech stocks sank and I have been slowly fighting my way back up to the level of the SP500 ever since.

It is nice to NOW....at the half way point in the year....to get a fresh start at a level that is just about EQUAL to the SP500. We can fight it out for the rest of the year from these levels.

 

The RISING stock market has been good to those that were near retirement. Good luck to ALL that have seen the markets push them over the top.....for retirement.

'Fat' 401(k)s causing people to retire early: Oxford Economics

https://finance.yahoo.com/news/fat-...-retire-early-oxford-economics-202802644.html

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

"The stock market’s all-time highs are doing wonders for workers’ 401(k)s, with the largest number of 401(k) and IRA millionaires in history, according to Fidelity data.

As a result, many people are dropping out of the workforce to retire earlier than planned, turning their backs on a job seeker’s market.

The Federal Reserve is letting the economy run especially hot in an attempt to bring back people into the workforce, Oxford Economics' senior economist Bob Schwartz wrote in a note to clients. But that hot economy and resulting hot market mean bigger 401(k) balances – so some workers may not feel as compelled to continue working when they check their inflated retirement accounts.

“Some of the retirees may come back if the job market is hot enough, but the muscular boost to 401(k) plans over the past year may keep a larger fraction of senior workers on the golf course than anticipated,” Schwartz wrote.

Last year, account balances increased 21% on average, largely thanks to the market’s rise, rather than contributions, Vanguard reported. The fund firm’s average and median 401(k) balances in 2020 hit $129,157 and $33,472, respectively.

Schwartz pointed out that the number of people who have retired has spiked since the pandemic began, with 2.5 million workers deciding enough is enough. Amid early pandemic layoffs, a lot of that was probably involuntary, as people cared for family members, lost their jobs. According to a May Federal Reserve report, 29% of 2020’s retirees retired due to the pandemic.

The Fed wrote that it’s likely many who retired because of Covid-19 would return to work, and now given the improved job market, there’s even more reason to go back to work.

The big question, then, is whether these two factors balance each other out. Oxford Economics says no.

“One likely reason is that ageing baby boomers are entering their golden years with considerably stronger balance sheets than they expected, thanks to surging asset prices and lower debt burdens,” Schwartz wrote, noting that household wealth increased 23% ($25.6 trillion) over the past year thanks to rising home values and ever-higher stock market.

“However, wealthy households with the fattest portfolios reaped the biggest gains, and it’s unlikely that their appreciated assets greatly affected retirement decisions,” Schwartz continued. “That said, it’s important to remember that older households hold more wealth than younger ones, and the improved balance sheets of senior workers may well have tipped them over into retirement.”

This would include even those in lower-paying jobs, which often provide access to retirement plans.

“Here the improvement over the past year has been even more remarkable. According to the Federal Reserve data, assets in defined contribution plans, mostly 401(k)s, surged by 34% over the past year, exceeding the gain in the broader measure of net worth by the widest margin in at least a decade,” Schwartz wrote.

With that big gain, according to Schwartz, “it’s not a stretch to believe that some senior workers feel they have enough to retire on a few years before their planned exit from the labor force.”

“Historically, when people retire,” he continued, “there is only a slim chance they return to work.”

MY COMMENT

GREAT. Why not retire if you can? The recent BIG stock market gains over the past 2.5 years adds up to +64.08%. Add in the recent HUGE...historic....gains in house prices......and...you probably have tens of thousands of baby boomers that are suddenly looking at downsizing and retirement.

The change over at the work place is going to ONLY ESCALATE over the next 10-20 years as the baby boomers turn the work world over to the younger generations. I agree.....once people retire the odds of them going back to work are SLIM.

 

Stock futures looking good for tomorrow. AND.....as has been the case for the past couple of weeks.....there is NOTHING.....going on that is likely to impact the markets for the rest of this week. I suspect that the markets the next three days will be a REPEAT of the past 5-10 market days.

 

LOL.....yes....the economic news of the day that no one cares about.

Private payrolls increased by 692,000 in June, beating expectations: ADP

https://finance.yahoo.com/news/adp-...rket-pandemic-economy-recovery-121542029.html

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

"Private payrolls rose more than expected in June as businesses sought out more workers to fill job openings present across the recovering economy.

ADP reported Wednesday morning that private payrolls increased by 692,000 in June for a sixth straight monthly rise. Consensus economists were looking for an increase of 600,000, according to Bloomberg consensus data. In May, private employment grew by 886,000 jobs, according to ADP's downwardly revised print.

The services sector brought back another sizable number of jobs in June to help fill the employment deficit caused last year by the pandemic. Leisure and hospitality jobs rose by 332,000 in June, adding to the 414,000 brought back in May. Education and health services also posted job gains of 123,000, also adding to a rise of 130,000 from the prior month. Information and management jobs were the only categories to post net job losses in June.

The goods-producing sector saw job gains across the board, with each of mining, construction and manufacturing industries bringing back workers on net. Construction payrolls increased by 47,000 to nearly match May's 50,000. Manufacturing jobs decelerated to see a rise of 19,000 jobs, or less than half the May gain.

Recent economic data has pointed to a labor market still making strides toward recovering, but at a slowing pace compared to the start of the year. New jobless claims, for instance, have popped back above 400,000 per week – a level well off pandemic-era highs, but persistently elevated compared to pre-virus levels.

And purchasing managers' indices from both IHS Markit and the Institute for Supply Management have pointed to slowing improvements in employment after an initial reopening-fueled surge. Employers across industries have reported having trouble finding qualified workers to fill job openings, capping what has otherwise been a strong ramp-up in economic activity.

"This lack of worker supply has been attributed to four key factors. Firstly, many schools are on remote learning, forcing parents to stay at home as well," James Knightley, ING chief international economist, wrote in a note Tuesday. "Secondly, there is still some hesitancy to return to work from some people given the pandemic is ongoing. Thirdly, many people who lost their jobs may have chosen to take early retirement, particularly with surging equity markets having boosted pension pots. Then fourthly we have the extended and uprated federal unemployment benefits that may have diminished the financial attractiveness of returning to work."

"We strongly suspect that labor market strains will linger for several more months given we are now entering school summer holiday season and for most people the Federal benefits will continue through to September," he added.

Friday's "official" monthly jobs report from the U.S. Labor Department will serve as a key data point to confirm the trends seen in ADP's data.

Last month, ADP's first print for May overstated the pace of private payrolls gains compared to the Labor Department's report. The government's data showed 492,000 private payroll gains in May, or less than half the sum reported in ADP's initial estimate.

"The signal for Friday’s official numbers is unclear. ADP’s measure undershot the official payroll data for most of the pandemic, but suddenly overshot in April and May," Ian Shepherdson, chief economist for Pantheon Macroeconomics, said in an email Wednesday morning. "This abrupt swing likely was due to ADP’s model overweighting the strength of macroeconomic variables like retail sales and jobless claims, while ignoring the shortage of labor supply. Payroll growth has not kept pace with demand because the participation rate remains depressed."

The ADP report has typically been an unreliable indicator of the results in the government report due to differences in survey methodology, with ADP counting individuals on active payrolls during the survey period as employed, whereas the Labor Department includes those receiving paychecks during the survey period. The absolute error between the ADP and Labor Department private payrolls data has been 486,000 since January, according to an analysis from High Frequency Economics.

The Labor Department will release its June jobs report on Friday, which is expected to show the U.S. economy added back 700,000 non-farm payrolls, including 610,000 private payrolls."

MY COMMENT

IF........BIG IF......this data is even remotely accurate it is due to ONE reason. The fact that about 20 states have cut off the extra.....insane.....unemployment money, $300 per week. It is very simple.....if you pay people enough...they will NOT work. Cut off the extra money...for not working....and they WILL actually go out and get a job.

BUT......this is a TOTAL NON-STORY:

"The ADP report has typically been an unreliable indicator of the results in the government report due to differences in survey methodology"

No one cares about this stuff in reality. It is just FLUFF....and for that matter....inaccurate FLUFF.

 

TYPICAL open today. Same thing we have been seeing for the past 2-4 weeks. A soft open.....with the DOW being the best average and the SP500 and NASDAQ bouncing back and forth from red to green. This type of action is simply a function of the summer lack of market activity. A typical summer market....dull, slow, boring, lingering, etc, etc.

 

Yes....like oldmanram....a SLIGHT loss today. AND....I got beat by the SP500 by a whopping 0.07%. I was out all day and just got back in. Obviously I did not miss anything....a "nothing" day. BUT....once in a while the markets have to take a little breather and consolidate the recent gains. That is what I think happened today.

Lets see how we end the week over the next couple of days.

 

I saw this little article a short time ago.

Seven Reasons to Be Extremely Optimistic About the Economy Right Now

https://slate.com/business/2021/06/economy-optimism-inflation-wages-hiring-jobs.html

MY COMMENT

Read it if you wish. BUT....here are my 7 reasons to be EXTREMELY optimistic about the economy right now.

1. Re-opening.
2. Re-opening.
3. Re-opening.
4 Re-opening.
5 Re-opening.
6 Re-opening.
7 Re-opening.

It REALLY is that simple. Any other explanation or argument is just.....SUPERFLUOUS FLUFF.

 

I think we are ALL pretty much aware of the content of this little article. BUT....it never hurts to review.

Stock market news live updates: S&P 500 posts fifth straight monthly advance, closes out first half of the year sharply higher

https://finance.yahoo.com/news/stock-market-news-live-updates-june-30-2021-221416248.html

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

"Stocks were mixed on Wednesday, with the S&P 500 gaining for a fifth straight session to end the day at yet another record closing high. Traders considered stronger-than-expected prints on private payroll gains and pending home sales and looked ahead to more economic data out at the end of this week.

Wednesday's session also marked the final day of trading for the month of June, the second quarter, and the first half of 2021. The S&P 500 closed out both the month of June and the first half of the year with sharp advances. The blue-chip index increased more than 2% in June for a fifth straight monthly advance, and has increased by about 14.4% for the first half of 2021.

The Nasdaq gained more than 5% in June and has increased 12.5% for the year to date. The Dow ended June little changed, underperforming against the other two major indexes as traders rotated back into technology and growth stocks. The index has still held onto a 12.7% advance for the year-to-date, however.

In the S&P 500, the information technology, real estate and communication services sectors came in as the top-performers for the April through June quarter, and only the utilities sector ended the quarter lower.

Other asset classes have posted more mixed performances. The 10-year Treasury yield hit a year-to-date peak of 1.77% in March but ended the quarter yielding just under 1.5%. West Texas intermediate crude oil has increased more than 20% in the second quarter, with the rebound in energy prices coinciding with a pick-up in energy demand and fast-improving travel trends. Cryptocurrencies, however, have had a tougher second quarter, and Bitcoin has tumbled from around $59,000 at the end of March to around $35,000 as of Wednesday, albeit while still being up significantly over a multi-year horizon.

"One of the big calls we've made is, stocks will outperform bonds, and that's one of the big ways we're constructing our portfolios," Ryan Detrick, LPL Financial chief market strategist, told Yahoo Finance. "We still think that's the play, that stocks will probably do better than bonds the second half of this year as the economy continues to improve, open up, and it'll be led by those earnings which will justify pretty pricey multiples."

The major U.S. stock indexes have moved only modestly so far this week, hovering at or near record levels while traders await more catalysts to push equities higher. Many have pointed to the prospects of another batch of strong corporate earnings results as a likely source of upcoming strength, given the firming economic backdrop as pandemic risks in the U.S. recede further.

On Wednesday, traders got stronger than expected update on the labor market in ADP's June private payrolls report. This underscored the ongoing economic recovery with a sixth straight monthly increase in employment, with jobs rising by 692,000 versus the 600,000 expected.

Consumer confidence has also risen and pointed to Americans' increased propensity to spend, with the Conference Board's consumer confidence index racing to the highest level since February 2020 in June.

"If you look at what's really been powering the economy and powering the stock market, it's been the fact that there's been so much fiscal stimulus pour into the economy," David Lefkowitz, UBS Global Wealth Management head of equities for the Americas told Yahoo Finance. "What's really crucial though is that a lot of that fiscal stimulus has actually not been spent year. It's sitting on the balance sheets of consumers."

"It's a lot of dry powder for continued gains in the economy, and that translates into good news for corporate profits down the road," he added."

MY COMMENT

OK....be honest.....all you media types......all you professionals on Wall St.....anyone else.....how many of you predicted this MAJOR RALLY so far for 2021. RIGHT.....hardly any of you. How many of you predicted....out of control inflation.....yes most of you. How many predicted out of control interest rates.....right most of you. How many of you were WRONG in most of your predictions for this year....just about all of you.

I would guess that the average poster on this site was MUCH more accurate in their analysis of the coming year back in December or January.

I CONTINUE to say.....YES.....there is no inflation......AND.....EARNINGS this year are going to be CRAZY HUGE......actually historic.