The Long Term Investor

WELL.....I had to look......at my account. A waste of time......EXTREMELY....slight loss so far. My UP stocks were COSTCO, GOOGLE, and PROCTOR & GAMBLE. The rest....tech and non-tech....were all very slightly in the red.

At least the markets are open....we are all STILL alive....and the week is started for investors. From here....I.....SIT AND WATCH.

I continue to be fully invested as usual for the long term.

 

I am in the middle of a VERY SPECULATIVE FLIP.....right now. No...not stocks or real estate.....ART. I will be trying to buy a painting in a small regional auction this week. If I am able to get it at the price I want.....I will put it in a NATIONAL auction later this year.....and TRY to make some money from it.

It is an artist that I collect and know well and I believe the estimate in the "little" auction is very low compared to the value of the painting. Since it is a .....general.....auction.......not an art auction......and a smaller regional auction house....I am hoping that is goes UNNOTICED by other collectors. Probably a false hope.....but you never know.

I am not talking about HUGE money....a potential to make perhaps a maximum of $10,000......but......that is still good money if I can make it over the course of just a few months.

For those not used to auctions......there will be a.....buyers premium.....of 25% added onto my bid if I win. I will than have a sellers fee of 10-15%......when I sell. Add in state sales tax.....even though the auction that I will try to buy at is out of state......and you can see that the fees and expenses on this sort of transaction really add up.

 

Not that I have seen or am aware of.....at least in the small auction niche that I am in.......American Impressionistic Art. Pieces usually have a pre-auction estimate and if there is no reserve the opening bid is often half of the low estimate.....or some other formula that the auction house uses. It would be RARE for the opening bid to be the only bid.

People do make bids before the day of the auction....but they are public.......on sites like Liveauctioneers.com..... that allow pre-sale bidding. Some of the BIG auctions have their own pre-sale bidding.

As a BUYER I hate that pre-sale bidding....since....it is often inexperienced buyers and they tend to bid up the price before the live auction even starts. They would be a lot better off if they would just bide their time and wait till the day of the auction to bid. As a SELLER....I do like the pre-sale bidding if my item has a bunch of bids before the auction even starts and I can see that it is going to definately sell for a good price.

 

Looks like we are stuck in a BLAH day.....does not seem to be much movement in the averages today......from the open. The peak SUMMER doldrums........combined with the push/pull of the great earnings versus the drags on the re-opening.

The jobs data was pretty UNDERWHELMING....with massive numbers of available jobs......anyone that wants a job should be able to find one. A RECORD NUMBER available........10.1 MILLION jobs......the forecast was for 9.3 MILLION.

I find it interesting that Professional and Business Services was one of the large categories with 227,000 jobs.....well above retail and food services. Not sure what that means......but it is not what I would have expected as a lay-person.

As I have been typing....looks like the NASDAQ has improved a TINY bit.......as has the SP500 and to a lesser extent the Dow. A TINY bit of SMOKE.......now we need a bit of FIRE to break out.

 

After typing the above I was curious if my account would show any improvement. So I looked. I STILL have a very TINY loss....although it is now MORE TINY. NIKE has joined my other three UP stocks. HOPING to add a few more to the list by the close today.

 

WELL....that was a waste of a perfectly good market day.......a day to NOWHERE. I had a RED but very TINY loss day today. Basically meaningless.....I guess that is a good thing if it has to be a down day. I ended the day the same way i started....with 3 stocks in the green.....COSTCO, GOOGLE, and PROCTOR & GAMBLE. I got beat by the SP500 by 0.04% today.

ON to tomorrow....the future.

 

HERE is how we ended the day.....and the short term excuse for the markets doing NOTHING today.

US STOCKS-S&P dips, just off record as energy shares fall

https://finance.yahoo.com/news/us-stocks-p-dips-just-201526957.html

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

"NEW YORK, Aug 9 (Reuters) - The S&P 500 dipped on Monday, as fuel demand worries during a resurgent pandemic sent energy stocks lower but rising U.S. Treasury yields lifted financial stocks, keeping Wall Street's benchmark index near record levels.

Energy shares were the worst performing of the 11 major S&P sectors, down 1.48% along with crude prices as mounting coronavirus cases and the potential for restrictions, particularly in China, raised worries about the fuel demand outlook.

China reported more COVID-19 infections, while U.S. cases and hospitalizations were at a six-month high as the Delta variant spread.

Financial shares gained, buoyed by a climb in the 10-year U.S. Treasury yield back above 1.30% to its highest level since July 16 as a report on job openings showed further evidence of an improving labor market.

"In general, of the economically sensitive cyclicals, it is the interest-rate sensitives that are going to celebrate this normalization of yields, even if normal is 1.30% versus where we were a week ago, which was 1.12%. That is driving the action," said Art Hogan, chief market strategist at National Securities in New York.

Investors will watch U.S. inflation readings this week for hints about the path of Federal Reserve policy. On Monday, Atlanta Fed president Raphael Bostic said the United States should be well past the pandemic crisis before the central bank raises rates. Richmond Fed President Tom Barkin said high inflation this year may have already met one of the Fed's benchmarks for raising interest rates.

Later this month, a meeting of Fed leaders in Jackson Hole, Wyoming should provide insight into the central bank's potential plan to begin tapering its bond purchases.

The Dow Jones Industrial Average fell 106.66 points, or 0.3%, to 35,101.85, the S&P 500 lost 4.17 points, or 0.09%, to 4,432.35 and the Nasdaq Composite added 24.42 points, or 0.16%, to 14,860.18.

A strong earnings season has helped U.S. stocks climb to record highs over the past two weeks, as several consensus-beating results from major firms reinforced belief in a post-COVID economic recovery.

As of Friday, analysts expected second-quarter profit growth of 93.1% for S&P 500 companies, according to IBES data from Refinitiv. Of the 443 companies in the index that have reported earnings so far, 87.4% beat analyst expectations, the highest on record.

Sanderson Farms Inc climbed 7.41% after it agreed to be bought for $4.53 billion by commodities trader Cargill Inc and investment firm Continental Grain Co at a time when meat prices have been soaring.

Tyson Foods Inc advanced 8.69% after the meat processing company raised its forecast for fiscal 2021 revenue.

Declining issues outnumbered advancing ones on the NYSE by a 1.63-to-1 ratio; on Nasdaq, a 1.11-to-1 ratio favored decliners.

The S&P 500 posted 30 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 83 new highs and 66 new lows.

Volume on U.S. exchanges was 8.55 billion shares, compared with the 9.64 billion average for the full session over the last 20 trading days."

MY COMMENT

A .......TYPICAL.....low volume, go nowhere, August, summer market day. At least we live to fight another day.

The EARNINGS continue to GROW more and more AMAZING. We are NOW at 93.1% profit growth on reporting companies......AND.....we are seeing 87.4% BEAT expectations. I guess we......DID NOT.....hit peak earnings last quarter as many were saying. WRONG as usual.

 

What a WILD RIDE it has been for owners of Bitcoin over the past few months. NICE to see that they are now back to nearly $46,000. STILL way below the recent highs....but way better than being in the low 30's.

I am not a Bitcoin investor......but I do own a TINY fraction of one Bitcoin just for fun......like the HOARD of gold and silver that I own.....just for fun.

 

When you sell and take a profit....you never look back at what might have been. That is just GREED. Taking a nice profit is never a bad thing.

 

Well......it is nice that we are now OVER the "new normal" and pretty much back to the same old NORMAL.

No Mystery in Falling Bond Yields
Like so much else, they imply a return to (mostly) normal.

https://www.fisherinvestments.com/en-us/marketminder/no-mystery-in-falling-bond-yields

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

"Since mid-May, eurozone long-term interest rates have plummeted. In Germany, the entire yield curve—interest rates across the range of German government bond maturities—is below zero out to 30 years. This is occurring as eurozone (and German) economic growth has accelerated. Is there a disconnect—a cause for concern—as some coverage suggests? We don’t think so. Let us explain.

The recent move is largely a reversal of volatility earlier this year, when so many thought reopening would juice economic growth and inflation for a long time to come. Bond yields’ rise was global, dubbed the “reflation trade.” Long-term eurozone yields climbed into positive territory in February as vaccinations ramped up and countries began reopening. Deflation late last year turned into inflation this year with the headline rate speeding to 2.0% y/y in May (finally hitting the ECB’s target after years below it).[ii] Pundits saw this as just the tip of the iceberg, warning supply constraints and rising raw materials prices would make prices soar and stay there. Eurozone GDP has since accelerated to 2.0% q/q growth (8.3% annualized) in Q2 from Q1’s -0.3%, with economists presently projecting 2.4% growth in Q3.[iii] Q2 GDP stands -3.0% below its late-2019 peak, so a couple more quarters of rapid catch-up growth could lie ahead.[iv]

But after the rebound back to pre-pandemic GDP levels, more pedestrian pre-pandemic growth rates should follow. Countries that reopened earlier—and regained their pre-pandemic peaks—like China and America, are already experiencing this. Meanwhile, economists are penciling in similar, with quarterly eurozone GDP growth estimates falling back to sub-1% q/q next year—its typical rate range.[v] Inflation also seems to be leveling off, with June’s reading decelerating to 1.9% y/y.[vi] Inflation fears have tapered off as well, and most pundits now presume this year’s inflationary pressures are temporary anomalies. Falling eurozone bond yields are perfectly consistent with the economic outlook many see: slower economic growth and milder inflation than they initially expected.

Yields’ directionality isn’t the only thing boggling pundits. The level—sub-zero long-term yields—is also a bogeyman. Yet negative eurozone government bond yields are nothing new—they existed most of (pre-pandemic) 2019. Back then, pundits argued growing piles of negative-yielding bonds signaled the world was “turning Japanese,” buried under mountains of debt and facing lost decades of economic sclerosis. Expectations now aren’t that dire, but many still fear negative yields portend a swift return to recession in Europe. Yet 2019 is a strong counterpoint against that fear. As it turned out, the eurozone economy—and stocks—were fine with negative rates. There was no stagflation or deflation. Despite sub-zero bond yields in 2019, GDP grew. Stocks climbed, too. (Exhibit 1) 10-year German bund yields also dipped negative from June to October 2016 without any ill consequences. Germany’s GDP rose 2.1% that year and its prices didn’t deflate.[vii] German stocks rose 5.8%.[viii]

Exhibit 1: Stocks Aren’t Bothered by Negative Rates


Source: FactSet, as of 8/6/2021. 10-year German, French and Dutch government benchmark bond yields and MSCI EMU return with net dividends, 1/1/2019 – 12/31/2019.

It is also important to recognize the outside influences on eurozone nations’ yield curves. The ECB is still buying €87 billion per month in long-term bonds through its quantitative easing (QE) program. By taking bond supply off the market, the ECB adds to downward pressure on yields. With the ECB (and other central banks) meddling so much in long-term bond markets, rates there reflect QE as well as private investors’ independent assessment of economic conditions. Said differently, it is important to discern between artificial forces influencing rates’ level and the strong market forces influencing their directionality.

Compounding matters, the ECB has gone farther than other central banks in taking its short-term policy rates negative. Its benchmark rate is presently at -0.5%, versus 0.0% – 0.25% in the US and 0.1% in the UK. Meanwhile, in Japan, where yields are negative out to nine years, the BoJ’s policy rate is -0.1%.[ix] We think that goes a long way toward explaining why the eurozone’s yield curve is mostly negative and the US’s and UK’s aren’t. As those who make their living in bond arbitrage might point out: The long term is made of a series of short terms. Negative short-term rates, over a long enough while, add up to negative long-term rates.

Lastly, the latest downdraft in eurozone yields is part of a global move. Developed-market bond yields may be higher or lower in different areas of the world—in part due to structural issues like we just discussed—but directionally they tend to move together, as global markets usually do.

Overall, we don’t see cause for alarm in bond yields’ move. Perma-fast growth was never likely, which we think most now recognize. Roaring Twenties chatter, ubiquitous earlier in the year, has died down. It shouldn’t be surprising to see slower growth rates after economic activity returns to normal—and markets reflect that outlook. Low and negative developed market bond yields featured prominently in the pre-pandemic financial landscape. They seem to be picking up where they left off before lockdowns interrupted: pricing in a late-cycle, slow-growth economic expansion and little inflation in the long run, once the current distortions even out.

Stocks appear to be doing the same. While bull markets do fine in a slow-growth environment, not all categories benefit equally—growth stocks usually do best at such times, and we think the resumption of growth’s leadership this spring is no coincidence. In our view, this is all of a piece. There is no disconnect, mixed messages or conundrum. In our view, markets are behaving rationally given the likely conditions ahead."

MY COMMENT

Although I do agree with much of this little article....I STILL think the EU is going to be significantly stuck in a deflationary long term time period.

The big danger going forward is whether or not we end up doing the same. We will not know the outcome until about 12 months from now is my guess. the real crunch with the economy and the impact of DEFLATION here and in the EU will come when this BULL MARKET ends and we end up in a recession and/or a bear market.

 

Talking about the "new normal".

Weekly Market Pulse: What Is Today’s New Normal?

https://alhambrapartners.com/2021/08/08/weekly-market-pulse-what-is-todays-new-normal/

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

"Remember “The New Normal”? Back in 2009, Bill Gross, the old bond king before Gundlach came along, penned a market commentary called “On the Course to a New Normal” which he said would be:

“a period of time in which economies grow very slowly as opposed to growing like weeds, the way children do; in which profits are relatively static; in which the government plays a significant role in terms of deficits and reregulation and control of the economy; in which the consumer stops shopping until he drops and begins, as they do in Japan (to be a little ghoulish), starts saving to the grave.”

If you remember reading Bill Gross commentaries over the years you know the piece was his typical mess of weird metaphors and obscure references that really amounted to nothing more than his usual talking of his book; why you really needed to put more money in Bill Gross’s bond fund. He got a little right – the global economy has certainly grown more slowly – but there’s a lot wrong too. The slow growth he predicts is a result of what he calls D,D & R – delevering, deglobalization and re-regulation. The only one of those that came true in the subsequent decade was deglobalization and that mostly in the rhetorical sense. The last prediction in the commentary is “The dollar is vulnerable on a long term basis.” Yeah, not so much. Bill Gross’s personal new normal is as the old guy down the block who really wants you to get off his lawn. Or his sculpture.

I started thinking about this phrase earlier this week while reading and thinking about the long term impact of pandemics and plagues (example: https://www.frbsf.org/economic-research/files/wp2020-09.pdf). As I often do when I am preparing to write a commentary, I started with a Google search (something that actually is a new normal). At first I wondered if my memory was playing tricks on me because googling “New Normal” didn’t turn up any reference at all to Bill Gross. The phrase, it turns out, was coined by Roger McNamee to describe the period immediately after the dot com bust. According to McNamee the New Normal:


“calls for fresh thinking and for smart adaptation, for a focus on relentless execution and on solid performance. The New Normal also calls for a steadfast approach to business that reinforces the cardinal virtues of honesty, integrity, and authenticity.”

Coming just about a year before the founding of Facebook, I can’t imagine a worse prediction about the future than one that expects Silicon Valley to honor the virtues of honesty, integrity and authenticity. To his credit McNamee, an early investor in Facebook, became very critical of the company’s impact on society and democracy. I may have missed it but I don’t remember him giving back any of the money he made on his Facebook investment despite a dearth of said “honesty, integrity and authenticity”.

Whether McNamee or Bill Gross first used the phrase is irrelevant. I’d venture to say that there was someone before Roger McNamee that also used the phrase because we always want to know what the future holds, what the new normal will be. And we always seem to make the same mistake trying to predict it. In 2003 when McNamee was using the phrase, we had just come through the Enron and Worldcom scandals and the numerous other minor frauds that constituted the dot com bubble. A period where “honesty, integrity and authenticity” would prevail was as much hope as prediction. It’s what we wanted and Roger McNamee was smart enough to put into words what we all craved. After the 2008 crisis, we wanted an economy with less debt and more regulation (on Wall Street at least). Bill Gross was looking in a mirror not a crystal ball. It is normal to think the future will solve all of today’s problems somehow. It is also normal to assume that today’s conditions will be extended into the far future. The prosecution of Bernie Ebbers and the Enron crew seemed to herald a new era of law and order on Wall Street – at the same time some smart salesman at AIG was figuring out how to turn junk mortgages into AAA credits. Likewise, after 2008 it seemed logical to expect “austerity” to lead us to a low debt future and for Dodd-Frank to usher in an era of government oversight. Ahem.

I have no more idea what our new normal will be over the next ten or twenty years than McNamee or Gross did. I have spent a lot of time reading and thinking about the post-pandemic period and all I can say with any degree of confidence is that the post-pandemic economy – and society more generally – will be quite different than what prevailed before March of 2020. Past pandemics have produced changes that lasted or developed over decades to become the new normal. The economy is undergoing profound changes right now, attitudes about work and health and safety and family and life shifting, to produce an effect that stretches from the latest employment report to a generation of young people suffering the impact of remote learning and the influence of a now at home parent. Monetary and fiscal policy are interacting in ways no one expected a few years ago with results no one could or would have predicted. A new cold war, nominally pitting West against East, is re-ordering global supply chains and testing the boundaries between foreign and economic policies.

There are some common characteristics of past post-pandemic periods that seem to be already apparent in our current economy. Low real interest rates, a drop in labor supply and rising productivity, are all prevalent after pandemics and this one is no exception. In the case of past editions, on average those conditions prevailed for many years – decades – after the pandemic. Whether that is true with this version is yet to be determined. There are, however, differences between this pandemic and past ones so your results may vary. The drop in labor supply today seems to be more of a choice where it most decidedly was not following the Black Death. Rising productivity is a function of the lack of workers, not investment. Wages are rising, also a reflection of the changing workforce, but loose fiscal and monetary policies have stolen the wage gains through inflation. Low (negative) real rates in the past prevailed due to a lack of investment opportunities and it certainly does today as well; why else would anyone buy a 10 Year TIPS with a -1.1% yield.

The New Normal looks a lot like the Old Normal in that it is unknown and ever changing. All we can do is observe the present with clear eyes which brings me to last week’s market action. We started the week with interest rates resuming their fall, the 10 year Treasury yield hitting a low of 1.13% and ending the week up 5 basis points to 1.29%. Along the way we got a terribly disappointing ADP employment report, a stunningly good official employment report, a record high in the ISM services index, a 0.5% drop in the unemployment rate and a widening trade gap that someone, somewhere must surely be worried about. The employment situation is far from perfect and we are still short a lot of jobs since the beginning of COVID, but the market reaction was pretty clear. Friday, in the wake of the improvement in the jobs data gold fell 2.5%, the 10 Year Treasury yield rose 7 basis points, the copper/gold ratio jumped 2.6% and the yield curve steepened, all indications that the market viewed the report as quite positive. The only thing that seems to stand in the way of continued improvement in the economy is the Delta variant, shipping delays, chip shortages, a lack of willing workers, rising input and output prices, major COVID outbreaks in Asia and a government full of people who have no idea how a real economy works. There are always “challenges”.

For now, the economic outlook is still pretty good. It isn’t the boom everyone was expecting a few months ago and it probably won’t be, but the economy is still improving. The long term, the new normal? Well, our economic output is higher than the previous peak in Q4 2019 while we employ nearly 7 million fewer people. Is that good or bad? Is it possible that those 7 million people are now free to do something better than they were doing before? Something that has a bigger impact on the society as a whole, like spending more time with their kids? Or starting a new business we didn’t know we wanted or needed? Maybe. We don’t know, can’t know right now. The future and the new normal, will be determined by millions of people making the best decisions they can for themselves and their loved ones. We all have, within our own actions, a role to play in how the future develops. Here’s hoping we do a better job this time."

MY COMMENT

I dont know much....but what I do know is there is NEVER a "new normal". It is simply the present and whatever the markets happen to be doing. There will not be anything new. Take the past 80 years and we have seen it all. It is just a question of what will come next and why. AND........that is the great unknown.

ACTUALLY the "why" does not matter either.......it is simply a question of investing through whatever is happening.

ALL this philosophical stuff....is making my head hurt. Probably what is best and is the same old normal is to just....go with the flow. For me that means simply staying invested through whatever is going on for the long term.

 

Well we got the markets open for the day. Just about.....EXACTLY....like yesterday....but a mirror image....rotated 180 degrees. MILD green....just like the mild red open yesterday. ANOTHER......slow.....low volume....summer market day.

 

HERE is the economic data that no one will care about. BUT....this data might actually matter to business since it reflects productivity.

U.S. productivity growth slows in Q2; labor costs revised down in Q1

https://finance.yahoo.com/news/u-productivity-growth-slows-second-124549430.html

(BOLD is my opinion OR what I consider important content)
"WASHINGTON (Reuters) -U.S. worker productivity growth slowed in the second quarter and labor costs were far weaker than previously estimated in the first quarter, the Labor Department said on Tuesday.

Nonfarm productivity, which measures hourly output per worker, increased at a 2.3% annualized rate last quarter. Data for the first quarter was revised lower to show productivity rising at a 4.3% rate instead of the previously reported 5.4% pace.

Economists polled by Reuters had expected productivity to rise at a 3.5% rate. Productivity jumped early in the pandemic before slumping in the final three months of 2020, and has since rebounded. The see-sawing has been partly attributed to the cratering of lower-wage industries, like leisure and hospitality, which have been reopening over the past few months at an increasingly brisk pace.

Compared to the second quarter of 2020, productivity rose at a 1.9% pace. Hours worked increased at a 5.5% rate last quarter, accelerating from a revised 4.0% growth pace in the January-March period.

Overall output is now 1.2% above pre-pandemic levels but hours worked remain 2.8% below it, the report also showed. The resurgence in economic activity has not been matched by people flooding back into the workforce. On Monday, U.S. job openings jumped to a fresh record high in June, Labor Department data showed.

Small business owners across the United States grew less confident in the economic recovery in July as labor shortages remained an issue, according to a National Federation of Independent Business survey released on Tuesday.

Unit labor costs - the price of labor per single unit of output - rose at a 1.0% rate. They contracted at a revised 2.8% pace in the first quarter. Unit labor costs increased at a 0.1% rate from a year ago. They have also been distorted by the pandemic's disproportionate impact on lower-wage industries.

Hourly compensation rose at a 3.3% rate last quarter. That followed a revised 1.4% growth pace in the first quarter. Compensation increased at a 2.0% rate compared to the first quarter of 2020."

MY COMMENT

Business is in the process of learning how to operate with LESS workers. They are also learning how to operate with workers that are working from home.........OUTSIDE the USA. Once these changes happen the lost jobs will NOT come back. Employees......or rather.....potential employees.......are playing a dangerous game of chicken by not looking for work. It is a BIG SELLERS market for workers right now....but....in the near future the job situation WILL change as employers get more selective and work thorough how to run and manage their business will a slimmed down work force. It is going to be a big shock....when people FINALLY get motivated to go out and find a job and they discover that it is ONLY the lowest level of jobs that are ACTUALLY available.

 

WELL.....we seem to be seeing a BIT of a bump up in the gains showing on the averages at the moment. HERE is what is being said about the markets today....by "some" people.

Stock market news live updates: Stocks edge higher as traders eye virus risks

https://finance.yahoo.com/news/stock-market-news-live-updates-august-10-2021-221822737.html

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

"Stocks rose on Tuesday, drifting higher as traders weighed concerns over the Delta variant's latest spread against optimism over an ongoing rebound in economic activity.

The S&P 500 was little changed to slightly higher, hovering just below an all-time high. A day earlier, both the blue-chip index and the Dow sank, dragged down by energy stocks amid concerns over reinstated travel restrictions in China due to rising coronavirus infections. U.S. West Texas intermediate crude oil futures (CL=F) advanced Tuesday to recover after reaching a three-week low on Monday.

Shares of AMC Entertainment (AMC) gained after the movie theater operator topped second-quarter revenue estimates, with customers' return to the theaters taking place more forcefully than anticipated at the start of the summer. Shares of peer "reopening" stock Planet Fitness (PLNT), however, dipped after the gym's full-year sales and profit outlook missed estimates, suggesting a slower-than-expected consumer return to in-person workouts.

Investors this week have been appraising the extent of the growth slowdown that might be triggered by the latest resurgence in domestic and global coronavirus cases. According to a number of economists, the virus has already set off a measurable deceleration in U.S. consumer spending.

“In the last couple of weeks, we’ve started to see a little bit of pullback in some of the travel and entertainment-type categories, really with the most noticeable pullback in spending on airlines," JPMorgan Chase senior economist Jesse Edgerton told Yahoo Finance on Monday, citing Chase credit card spending data. "It's still a small decline compared to the absolute collapse essentially to zero that happened during the first COVID wave back in March and April of last year ... Now that we're at a higher level and people are starting to travel again to some extent, it looks like they're pulling back more than they did when they were still at very low levels last year."

Others, however, believe that these concerns will ultimately deflate, especially given they are unlikely to catalyze the same kind of economy-wide shutdowns that characterized the restrictions last year.

"I think lot of the fears around the Delta variant in particular are a bit overblown," Elyse Ausenbaugh, JPMorgan Private Bank global market strategist, told Yahoo Finance. "Although I think investors are grappling with the Delta variant and treating that as a primary brick in the so-called 'wall of worry,' I don't think it's something that derails the longer-term view."

"Ultimately, investors are going to stay focused on those super-strong fundamentals, like easy financial conditions, robust consumer demand and also that labor market recovery," she added.

Policymakers have also taken note of the pick-up in economic activity, and two Federal Reserve officials on Monday suggested the U.S. economy was nearing the threshold of "substantial further progress" in recovering that would trigger a shift away from highly accommodative monetary policy. Federal Reserve Bank of Atlanta President Raphael Bostic said the economy "would have made the ‘substantial progress’ toward the goal" set by the central bank if U.S. job gains come in as strongly as they did in June and July for another couple months, according to Bloomberg. And Richmond Federal Reserve President Thomas Barkin, likewise, said "on the price side, we made substantial progress," with inflation running well above the central bank's achieving 2% average inflation."

MY COMMENT

The last BOLD quote above is the KEY for investors. I dont care about Delta. I am a long term investor. What happens or why over the short term 1-3 months is irrelevant. What REALLY matters is the long term FUNDAMENTALS and the long term RECOVERY....which is INEVITABLE.

NOTICE.....all the out of control inflation that is HAMMERING the economy right now? Well....I dont see any of the fear mongered situations that were being pushed on this front a few months ago. There may be some anecdotal inflation and some short term inflation due to economic disruptions in supply and demand....but....for the most part there is NOT a lot being said anymore about this topic. Isn't that AMAZING.

I am too LAZY to do it....but....it would be interesting to go back to February of 2020 and put together a LIST of ALL the topics and items that were FEAR MONGERED in the financial media over the past 1.5 years......MOST of which NEVER came true or had the impact that was predicted.

The GOOD NEWS.....all this "stuff".....has actually been a HUGE POSITIVE for business and investors as the markets continue to operate in a massive BULL MARKET that is constantly disrespected and underestimated. This is a perfect recipe for CONTINUED gains. Yes....the old wall of worry.

FROM HERE.......the market direction is STRONGLY POSITIVE. Although keep in mind.....I did not specify over what time period......LOL.

 

Talking about the future...the long term future for investors.....this little article is so TRUE.

Magic beans

https://thereformedbroker.com/2021/08/09/magic-beans/

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

"Imagine the chutzpah it takes to say to yourself that you know definitively what the global economy is going to look like in six months. Now imagine thinking you could take this certainty about the future and use it to predict exactly which investment markets would rise and fall as a result – so not only can you see the economy’s future, but you can predict how all of the other investors will react to it!

Now imagine saying you could do this sort of thing consistently, out loud in front of other people.

Now imagine charging them money for it.

At this point, you’re selling magic beans. A talking dog. A singing frog. A goose that lays golden eggs. You’re a medicine show.

When I explain like this, the whole notion sounds crazy. Crazy sells.

The internet is filled with people who will believe nearly anything they read, if presented in the right circumstances. In part, it’s because they don’t spend a lot of time considering how unlikely it is that someone is willing to sell you the future for twenty dollars a month. In part, it’s because they do know better, but deep down they still want to believe. So if you speak with enough conviction, and don’t get asked too many questions about whether or not you’ve been right about these predictions historically, you can make a lot of money. The outcome doesn’t matter, you’re filling a void of rampant doubt with the opiate of your professed certainty and confidence.

So what’s the right answer? For me, it’s always been accepting the limitations inherent in trying to understand the future and arranging your bets in such a way that you can succeed despite a multitude of potential outcomes. Building durable portfolios, expecting risk to eventually be rewarded and accepting the fact that there will be good times and bad.

Again, the alternative is magic beans. Do you believe in magic?

Howard Marks wrote about the difference between having an opinion about the future versus betting heavily on that opinion as though it’s the only version of the future that will come to pass…

Many investors think their job requires them to develop a macro outlook and invest according to its dictates. Successful stock pickers or real estate buyers often make pronouncements regarding the macro outlook, even in the absence of evidence linking their investment success to accurate macro forecasts. Nonetheless, since macro developments are so influential, many people think it’s downright irresponsible to ignore them when investing. Yet:

• Most macro forecasts are likely to turn out to be either (a) unhelpful consensus expectations or (b) non-consensus forecasts that are rarely right.
  
  
• I can count on one hand the investors I know who successfully base their decisions on macro forecasts. The rest invest from the bottom up, one investment at a time. They buy when they think they’ve found bargains and sell things they consider overpriced – mostly without reference to the macro outlook.
  
  
• It may be hard to admit – to yourself or to others – that you don’t know what the macro future holds, but in areas entailing great uncertainty, agnosticism is probably wiser than self-delusion.
  

I found myself nodding my head in agreement with the entire piece. It’s impossible to spend more than five years paying close attention to the macro calls of experts and not come to this very conclusion. Unless you really, actively, don’t want to. I admit, the alternative – a complete fantasy – is very attractive and emotionally satisfying.

It’s hard not to have an opinion. It’s hard to ignore that opinion when allocating investment dollars. And when professionals share their opinions, it’s hard to avoid attaching weight to them – especially given how good some professionals are at presenting these views and expressing all the reasons for why we should heed them.

The really difficult part is that sometimes someone buys a fistful of magic beans and they do end up with an enormous beanstalk sprouting up in the yard overnight. And when you see it – someone making a big bet on a particular version of the future economy coming true – the fantasy that you too could experience this becomes more real. You become more susceptible to the fantasy, more willing to be the next customer. “I’ll take some beans as well, thank you!” Unfortunately, there’s only one Jack, we don’t live in a world full of Jacks in a landscape teeming with beanstalks. Most would-be Jacks end up empty handed – the cow has been traded for nothing, they are worse off for having believed. But that doesn’t make for a great story, so the tale that gets told over and over again is the one with the magic.

There is an unlimited slate of possible economic outcomes stretching out before us. Investing with the understanding that any number of them might come true is the sensible course of action. For the majority of people, it’s the only reasonable choice."

MY COMMENT

This little article has it ALL GOING ON. It is the perfect analysis of the behavior of many investors.....or people that "think" they are investors.

Here is the GUTS of this article and the KEY message for anyone that is trying to make a future for their family by investing:

"it’s always been accepting the limitations inherent in trying to understand the future and arranging your bets in such a way that you can succeed despite a multitude of potential outcomes. Building durable portfolios, expecting risk to eventually be rewarded and accepting the fact that there will be good times and bad."

THIS.....is exactly why the simple investor that puts it all into the SP500 and lets it ride for the long term WILL beat nearly everyone else in the end. We all CRAVE order and reason.....our brains look for patterns and reason for things....that are in the future. We look for SPECIFICS when it is only the GENERALITIES....at best.....that can be predicted.

This is what drives looking for that BIG score. This is what causes speculative investing. this is what causes the average person to very much under-perform the general averages. GUESS WHAT.....the SP500 does not have a brain.....or emotions....it just sits there and reflects the fundamental results of the 500 largest companies IN THE WORLD....actually the USA.

 

I looked at my account a few minutes ago. It is as I expected.....a mirror image of yesterday.....a TINY gain. At least I have 5 of 10 positions in the green today.....although the gains are minimal.

So.....while I was in the accounts I decided to look at the CLEANEST account.......and see what the performance figures were versus the SP500. That particular account was started with SIGNIFICANT money on January 1, 2009. SO....keep in mind that this account has a PERFECT start date.......right at the end of the 2008/2009 banking collapse. HERE is the ACTUAL data from Schwab and their account performance tool.

Account annual return......VERSUS.......the SP500.

Since 1-1-09.......+17.68%.....VERSUS.......+15.79%.

Five years.......+16.12%.......VERSUS.......+17.43%.

Three years.......+18.22%.......VERSUS.......+17.94%.

One year.......+38.45%.......VERSUS.......+34.30%.

Year to date.......+19.02%.......VERSUS.......+19.02%.

Three months.......9.10%.......VERSUS.......+5.09%.

MY COMMENT

What does this mean.....not much....other than a very nice return.......at the moment. Although "moment"....means over the past 12.5 years. So at best this is an example of the POWER of long term investing and COMPOUNDING. Does it mean that these returns are GUARANTEED in the future......no. BUT.....year by year.....the longer the time period with the great gains piling up......the less impact a NASTY MARKET over a shorter time period.......can have on the account.

This is an example of long term investing. Does it mean that anyone will get these gains....NO. This particular account was LUCKY to start up right at the end of an ICONIC NEGATIVE economic event.

Go back and look at what was going on at the time......1-1-09. People were NOT flooding into the markets. In fact....I remember......it took many years after that date for many people to decide to get back to investing. In fact......I remember a good number of posters on the site I was posting on at that time that were out of the markets for 4-5 years.

This time period at the time.....was being called....THE LOST DECADE.

In conjunction with the article above.....there were NO magic beans involved. I simply reached the point where the markets had gone down so far that I believed that........the potential was....... for another 10% drop AT MOST. I was willing to take that potential 10% LOSS to get this money into the markets. What gave me the confidence......my belief in the LONG TERM future of the companies that were put into the account......of course......the fundamentals. In other words.....PROBABILITY. ALL my investing life I have tried to invest according to......PROBABILITY. THAT is one of the most important reasons that I am a long term fundamental investor.

NOW....is it realistic to expect these types of returns over a lifetime.....NO. I know that my lifetime total return is in the 14% to 15% range. AND.....that significant BEAT of the SP500 is partly due to some BIG gains that I had back in the 1990's to early 2000's time period.......plus some pretty nice gains since the BANKING COLLAPSE of 2008. AND......there is a pretty good amount of LUCK involved. I took some....CALCULATED.....risk when I was younger that I would not take now.

AND....remember for me and anyone else......past returns are no guarantee of future returns, etc, etc.

 

Plus remember:

WARNING......this thread is simply a reflection of part of the journey of ONE INVESTOR. It is NOT an invitation or recommendation for anyone else to.....FOLLOW....what I do. I believe it is helpful for investors to see.....IN REAL TIME....the actions of ONE long term investor. EVERYONE has to follow their own path to investing success.

PLUS....keep in mind.....my ACTUAL life-long investing GOAL.....and MY DEFINITION of investing success....... is to average 10% total return over the long term. That remains my long term goal. Anything above that....I will happily take.....but my life-long investing has been based on RATIONAL EXPECTATIONS.