The Long Term Investor

That was an AMAZING job of managing the market averages today Emmett. A true professional. You did not try to force it....you let the markets drift down to negative......than at just the right moment..... punched it......and than let the momentum carry you to the close on an upward trajectory all the way to the end.

I have to admit...you had me worried for a while early in the day.......but the MASTER was in complete control.

WELL DONE.

 

HERE is what it looked like today.

Dow climbs more than 200 points, S&P 500 closes at record as industrial stocks rise

https://www.cnbc.com/2021/08/02/stock-market-futures-open-to-close-news.html

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

"U.S. stocks moved higher on Tuesday and the S&P 500 set a new record high as broad market strength outweighed the travel names held back by Covid fears.

The Dow Jones Industrial Average jumped 278.24 points, or 0.8%, to close at 35,116.40 after briefly falling more than 100 points earlier in the session. The S&P 500 gained 0.8% to notch a new all-time closing high of 4,423.15, while the Nasdaq Composite added about 0.6% to settle at 14,761.29. The Dow is within 0.5% of a record.

Tuesday’s move for stocks served as something of a mirror image to Monday’s market action, which saw a late-day slump drag the Dow and S&P 500 into the red while the tech-heavy Nasdaq held on to a meager gain.

That sort of day-to-day volatility is to be expected after the strong run for stocks since spring of last year, said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research.

“Everyone knows that valuations are fairly high. The S&P 500 is up nearly 100% since the March low of last year. … So the market tends to be a little skittish to any kind of news right now,” Frederick said. “My outlook for most of Q3 has been that I’ve been expecting the market to be mostly sideways with slightly elevated volatility.”

The 10-year Treasury yield stabilized on Tuesday after falling back to near five-month lows on Monday. As yields rebounded from their decline midday back to the unchanged mark, stocks rose.

The Dow was bolstered by stocks tied to the economic recovery, including banks and industrial companies like Caterpillar and 3M. Health care stocks such as Amgen and Johnson & Johnson outperformed as well. In the technology sector, Apple and IBM rose nearly 1.3% and 1.9%, respectively.

On the other hand, shares of companies that would be hit hardest by potential new health restrictions, including airlines and cruise lines, fell on Tuesday, limiting upside for the market.

The spread of the delta coronavirus variant continued to cloud the outlook for the economy. The seven-day average of daily coronavirus cases in the U.S. reached 72,790 on Friday, surpassing the peak seen last summer when the nation didn’t have an authorized Covid-19 vaccine, according to data compiled by the Centers for Disease Control and Prevention.

However, on the positive side, the U.S. reached the 70% Covid vaccine milestone, according to the CDC.

“The delta variant of the virus is now rapidly spreading in the U.S. and a modest pullback in activity can’t be ruled out,” Solita Marcelli, CIO Americas at UBS, said in a note. “But any potential slowdown should be somewhat muted.”

Oil stocks moved higher were another source of strength, even as the price of West Texas Intermediate crude drifted down to about $70 per barrel. Adam Karpf, a managing director at CIBC Private Wealth focused on energy, said the move in oil was due more to trading patterns than the delta variant taking a major bite out of global growth.

“Assuming that this will be kept under control ... we’ve had several months and weeks of a strong crude oil market and energy industry, and this is a breather,” Karpf said.

One notable outperformer on Tuesday was retail brokerage Robinhood, which closed about 24% higher and pushed well above its first price from its initial public offering last week.

Meanwhile, the second-quarter earnings season continues with Under Armour shares rising 7.5% after the company beat estimates on the top and bottom lines. However, Clorox’s stock fell more than 9% after a disappointing report.

Shares of Simon Property jumped 2.5% after the mall owner said sales bounced back to pre-pandemic levels, up 80% from a year ago. It also reported a relatively high occupancy rate.

Through Friday, 88% of S&P 500 companies had reported a positive earnings surprise for the second quarter, which will mark the highest percentage since FactSet began tracking this metric in 2008.

MY COMMENT

88% of SP500 companies reporting positive earnings surprise for the quarter.......an all time record. TRULY an AMAZING reporting period. These companies are on STEROIDS.

I listened to a lot of the day on satellite radio......the come-back today shows the STRENGTH of the markets. They REFUSED to go down today......investors and stocks could have just as easily given up.

 

A very nice day for me today.....every holding was in the green. And the cherry on top.....a beat of the SP500 by 0.20%. I am just slightly below my all time account high.....so I have now gained back the recent losses.

The current market is RELENTLESS......so far refusing to go down and stay down.....in spite of Delta or anything else. The GREAT earnings are helping investors to look out into the future and take CONFIDENCE that things are going to be very nice about 6 months down the road.

That is my view......as usual....the long term is always POSITIVE. You just have to be willing to look far enough out to see it. At this point far enough out seems like about........3-6 months. People have learned how to manage and live with COVID from what I am seeing.......at least investors have.....and they are not going to let it panic them anymore.

 

WELCOME necaisjackie......hope you choose to become a regular poster.

I have NOTHING for your question since:

1. I am NOT a trader....I am a long term investor.
2. I do not believe in or use Technical Analysis.

The type of FUNDAMENTAL ANALYSIS that I believe in and use can be done with a simply hand held calculator.......or......found online with a quick search.

Emmett or RG might have some tips for you.....or perhaps someone else that uses that type of analysis.

 

This is OLD TIME STUFF.....but there are some lessons here for modern investors.

The 22 maxims of Sir John Templeton

https://monevator.com/22-maxims-templeton/

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

"When it comes to legendary investors, Sir John Templeton was a legend’s legend.

Templeton is immortalised as the man who brought international investing to North Americans. Touring the world in his twenties – still a racy thing to do eight decades ago, at least out of uniform – Templeton was one of the first to see the potential of Japan. He backed its firms to the hilt.

Later he did the same with the tiger economies of South East Asia.

Templeton’s winning career as a fund manager and stock picker in foreign markets is immortalized in names like the Templeton Emerging Markets Investment Trust.

But there are plenty of other reminders from John Templeton’s life that can teach us about finding success as an investor.

Templeton did things differently
The most famous of Templeton’s contrarian actions happened in 1939.

On the eve of the Second World War, when Templeton was all of 26-years old, he borrowed a then-massive $10,000. He had decided to buy 100 shares in each of 100 companies whose beaten-up stocks cost less than a $1.

Templeton judged the market was in headless chicken mode due to fears about the upcoming conflict. He wasn’t sure which shares would prosper. But he was convinced they were all trading out of whack.

The profits he banked when the markets recovered initiated a lifetime of running money.

Templeton had learned to read the emotional moods of markets by visiting cattle auctions during the Depression Era with a bargain-hungry older uncle. Perhaps economists would have quicker to get to behavioural economics if they’d spent less time with mathematical models and more time watching farmers yelling at each other!

Even with today’s knowledge though, it takes a rare mindset like Templeton’s to see opportunity on the cusp of a life-or-death conflagration.

Popping the bubble
Fast-forwarding 60 years, and Templeton was actively shorting the Dotcom Bubble. In his 80s! He was no perma-bullish Warren Buffett.

I’ve wondered before about the return sheets of the greatest old investors. Often there’s a presumption that their out-sized success comes courtesy of time and compound interest.

But to be actively betting against your grandkids’ smartest peers on Wall Street by shorting the most popular stocks – and winning – is something else.

What’s more, Templeton chose his targets in a cunning fashion. He studied the Dotcoms that had recently IPO-d, and looked for when the lock-in deals that restricted their freshly-minted founders from selling up would expire. Thus he anticipated who’d first dump their shares on the market. Kerching!

Man of mystery
Passing on little stories about Templeton’s profitable exploits matches how I learned about the man myself.

I’ve never read an investing book about Sir John Templeton, in stark contrast to my other favourite investors. (Templeton passed away at the grand old age of 95 in 2008).

Rather, I found out about Templeton through mentions in unrelated books, word of mouth, and magazines and websites.

That’s how I came across Templeton’s 22 maxims for investing success.

These pointers are most applicable to active investors trying to beat the market.


But there are also nuggets that passive investors should appreciate, too.

Enjoy!

The 22 investing maxims of John Templeton

1. For all long-term investors, there is only one objective: ‘maximum total real return after taxes.’

2. Achieving a good record takes much study and work, and is a lot harder than most people think.

3. It is impossible to produce a superior performance unless you do something different from the majority.

4. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.

5. To put ‘Maxim 4’ in somewhat different terms, in the stock market the only way to get a bargain is to buy what most investors are selling.

6. To buy when others are despondently selling and to sell what others are greedily buying requires the greatest fortitude, even while offering the greatest reward.

7. Bear markets have always been temporary. Share prices turn upward from one to twelve months before the bottom of the business cycle.

8. If a particular industry or type of security becomes popular with investors, that popularity will always prove temporary and, when lost, won’t return for many years.

9. In the long run, the stock market indexes fluctuate around the long-term upward trend of earnings per share.

10. In free-enterprise nations, the earnings on stock market indexes fluctuate around the book value of the shares of the index.

11. If you buy the same securities as other people, you will have the same results as other people.

12. The time to buy a stock is when the short-term owners have finished their selling, and the time to sell a stock is often when the short-term owners have finished their buying.

13. Share prices fluctuate more widely than values. Therefore, index funds will never produce the best total return performance.

14. Too many investors focus on ‘outlook’ and ‘trend’. Therefore, more profit is made by focusing on value.

15. If you search worldwide, you will find more bargains and better bargains than by studying only one nation. Also, you gain the safety of diversification.

16. The fluctuation of share prices is roughly proportional to the square root of the price.

17. The time to sell an asset is when you have found a much better bargain to replace it.

18. When any method for selecting stocks becomes popular, then switch to unpopular methods. As has been suggested in ‘Maxim 3’, too many investors can spoil any share-selection method or any market-timing formula.

19. Never adopt permanently any type of asset, or any selection method. Try to stay flexible, open-minded, and skeptical. Long-term results are achieved only by changing from popular to unpopular the types of securities you favor and your methods of selection.

20. The skill factor in selection is largest for the common-stock part of your investments.

21. The best performance is produced by a person, not a committee.

22. If you begin with prayer, you can think more clearly and make fewer stupid mistakes.

MY COMMENT

SOME of the above I agree with....some I dont. BUT....knowing history and looking at the success of those that were GREATS in their field is NEVER a bad idea. STUDY what others have done investing....and....take away what is useful to you and leave the rest.

What a time span of investing....from the 1930's......all the way into the early 2000's. IMAGINE all the events that happened over that time span. Makes the little events we are dealing with seem very.....MINOR.....in comparison.

 

HERE is a bit of history on TEMPLETON......I dont know much about him....interesting investor.

John Templeton

https://en.wikipedia.org/wiki/John_Templeton

"According to Templeton, he called his broker the day World War II began and instructed him to purchase every stock trading at less than a dollar. This stratagem helped make him a wealthy man."........

"Money magazine in 1999 called him "arguably the greatest global stock picker of the century".[18] Templeton attributed much of his success to his ability to maintain an elevated mood, avoid anxiety and stay disciplined.[19] He rejected technical analysis for stock trading, preferring instead to use fundamental analysis.[14]".........

"Templeton focused on buying stocks he calculated were substantially undervalued, holding them until selling when their price rose to fair market value. His average holding period was about four years. He believed holding assets priced above fair market value in hopes they would further increase in price was speculation, not investing. However, Templeton did not buy stocks merely because they were undervalued but also took care investing in companies he determined were profitable, well-managed and with good long-term potential."........

"By emphasizing overlooked or unpopular stocks Templeton was in many ways a contrarian and became known for his "avoiding the herd" and "buy when there's blood in the streets" philosophy to take advantage of market turmoil.[20] He also was known for taking profits when values and expectations were high.[21] He was among the earliest American investors to devote substantial focus to investment opportunities in then-overlooked foreign markets such as Asia and Eastern Europe.".........

"In 2005, he wrote a brief memorandum predicting that within five years there would be financial chaos in the world, anticipating a collapse of the housing market and decline in yields on government-issued bonds to near zero. Templeton also predicted within the next few decades a major decrease in traditional schooling due to internet-based learning options. Initially privately circulated to family and a small number of Franklin-Templeton management, the memo was eventually made public in 2010.[22]"........

(BOLD is mine)