The Long Term Investor

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 10 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 ten 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.

 

HERE is my little Central Texas.....LOCAL....real estate update. In our area of 4200 homes there are now 15 homes actively for sale. the lowest priced home at the moment is $650,000. A brutal market for those trying to get into this area. We typically have a few homes in the $500's.

The market seems to have slowed as we head toward the start of school. BUT is STILL a definite sellers market. Homes that are priced WAY OVER market or have condition issues are tending to sit. The HGTV affect is in full force as buyers want homes that are in "TV SHOW" condition.

 

THIS is good news for Amazon shareholders.

NSA Grants $10B Cloud Computing Contract to Amazon

https://www.newsmax.com/finance/streettalk/nsa-cloud-computing-amazon-aws/2021/08/10/id/1031801/

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

"Amazon Web Services recently won a secret government cloud computing contract worth about $10 billion from the National Security Agency, an agreement that’s being challenged by Microsoft, Nextgov reports.

The contract, which is codenamed "WildandStormy," was not publicly announced, but Microsoft was informed of the deal in July, prompting the company to lodge a bid to protest with the Government Accountability Office. These filings revealed the code name and show that the deal is the second major cloud computing agreement that the U.S. intelligence community has made in the last year, after the CIA split its C2E contract between five companies, including AWS and Microsoft, as well as Google, Oracle, and IBM.

"NSA recently awarded a contract for cloud computing services to support the Agency. The unsuccessful offeror has filed a protest with the Government Accountability Office. The Agency will respond to the protest in accordance with appropriate federal regulations," a spokesperson for the NSA told Nextgov.

A spokesperson for Microsoft confirmed that the company has filed a bid to protest the contract.

"Based on the decision we are filing an administrative protest via the Government Accountability Office. We are exercising our legal rights and will do so carefully and responsibly," they said.

AWS previously agreed to a $600 million contract to provide cloud computing services to the CIA in 2013, and later provided services to the NSA as well. Microsoft previously won the Pentagon’s Joint Enterprise Defense Infrastructure contract over Amazon, but their contract was cancelled last month following several years of legal wrangling.

Chris Cornillie, an analyst at Bloomberg Government, told Nextgov that this contract "just reiterates that Amazon is still the cloud provider to beat across the federal government. Microsoft has come a long way and made it a two way horse race in government, but Amazon was forming relationships and gathering security certifications a decade ago and Microsoft is still playing catch-up."

MY COMMENT

Microsoft or Amazon....either one is fine with me. These contracts that are discussed in this little article are going to come at $25 BILLION plus. Good business for shareholders.

 

I KNEW before I looked a minute ago that I was likely to be in the red with the NASDAQ being down today. AND......yep, I was in the red for the second day in a row. the good news...the amount was so TINY as to be insignificant. BUT....I still got beat by the SP500 by 0.20% today.

My NON-TECH holdings did their job today and made up for just about ALL of the tech losses. In the green were......NIKE, COSTCO, HOME DEPOT, HONEYWELL, and PROCTOR & GAMBLE.

 

I dont have to win every day......I WILL celebrate the all time highs hit by the DOW and the SP500 during the day today.

Stock market news live updates: S&P 500, Dow eke out intraday records as traders eye virus risks, infrastructure bill

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 were mostly higher on Tuesday, drifting to the upside as traders weighed concerns over the Delta variant's latest spread against optimism over an ongoing rebound in economic activity.

The S&P 500 and Dow each eked out record intraday highs, while the Nasdaq dipped. A day earlier, both the S&P 500 and Dow sank, dragged down by energy stocks amid concerns over reinstated travel restrictions in China due to rising coronavirus infections. Investors on Tuesday eyed the passage of a sweeping $1 trillion infrastructure bill by the U.S. Senate, with the legislation to rebuild roads, bridges and other physical infrastructure across the country now headed to the House of Representatives.

U.S. West Texas intermediate crude oil futures (CL=F) advanced Tuesday to recover after reaching a three-week low on Monday. Treasury yields rose across the curve, and the benchmark 10-year yield broke above 1.34%.

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."

MY COMMENT

The rest of this little article is just a REPEAT. I WELCOME the action in the DOW and especially the SP500 since a hefty percentage of my account is in the SP500 and the Fidelity contra Fund which tends to track and often slightly beat the SP500.

This sort of diversification is why I have the 5 non-tech stocks in my portfolio as well as the funds. I like to CONCENTRATE a part of my money.....and....at the same time invest across a broad swath of stocks......with the ENTIRE account focus on the BIG CAP world.

 

GOOD positive thinking and analysis.....my kind of STUFF.

The stock market is on a stunning winning streak

https://finance.yahoo.com/news/the-stock-market-is-on-a-stunning-winning-streak-105924198.html

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

"The stock market is on one impressive stretch headed into year-end, which may bode well for future returns.

Through late last week, the S&P 500 (^GSPC) had gone 189 days — or nine straight months — without being more than 5% from a 52-week high, according to researchers at Sundial Capital Research. The S&P 500 also had logged its 43rd day with a 52-week closing before November.

Sundial says 2021 has been one of the most "consistent" years ever for markets.

That recent bout of consistency in markets could be chalked up to an impressive second quarter earnings season, headlined by big earnings beats and growth as corporate America rebounds from the COVID-19 pandemic. Meanwhile, traders have bid up stocks to record valuations also in the hopes the Federal Reserve pushes offering the tapering of bond purchases into 2021.

Whatever one's view of why the market's rally vibes have continued, the data suggests the bulls have reason to be encouraged over the next few months.

Sundial Capital Research went back decades and found that it took an average of 75 days — and more than an additional 10% gain for the S&P 500 — before there was a 5% pullback when stocks had gone nine consecutive months without a 5% retrenchment. It often didn't pay for investors to be too concerned about the market's outlook until the S&P 500 actually declined by 5% or more and held below its 200-day moving average, Sundial says.

"If we focus just on the price action of the most benchmarked index in the world [S&P 500], then 2021 compares with some of the easiest years ever for investors. Those precedents suggest further good times ahead, with worries only when larger trend indicators start to fail," the researchers added.

With the momentum in toe, several Wall Street firms have started to raise their outlook on the S&P 500 for this year.

Mostly notably, Goldman Sachs Chief U.S. Equity Strategist David Kostin raised his S&P 500 target to 4,700 from 4,300 a week ago. For 2022 year-end, Kostin is now modeling for S&P 500 4,900 compared to 4,600 previously.

"The combination of higher-than-expected S&P 500 earnings and lower-than-expected interest rates drive our upgraded price targets," Kostin explained."

MY COMMENT

I remember a BUNCH......(market term of art)....of commentary at the start of the year predicting a small gain year this year. SO far......AMAZING GAINS.....as to the predictions of a poor year...not so much. We are a third of the way through August and the numbers continue to be GREAT. We continue to be all SET UP for a very nice end to this year and an AMAZING three year run for the averages....especially the SP500.

 

Well since I ONLY have 10 stocks.....and.....I have always been very proactive in following the markets.....even before the internet by subscribing to Investors Business Daily and listening to business radio for about 2 hours a day on the drive to and from work.....I could say I evaluate my holdings EVERY DAY. So if there is a split, or a leadership change, new tech, business changes....I tend to be aware of them IMMEDIATELY.

I also tend to evaluate fundamentals every quarter when each company reports.

So the answer is I continuously am aware of what is going on with my holdings and their financials. BUT....that does not translate into buying and selling on some schedule. I tend to sell.......ONLY.......when I have lost confidence in a company and their stock. I DO NOT chase returns.....so I tend to be SLOW to sell if it is one of my BIG CAP holdings. I DEFINITELY.......DO NOT.....have any sort of financial formula or data point....that controls my decisions. As long as a company meets my criteria.......BIG CAP, AMERICAN, DIVIDEND PAYING, GREAT MANAGEMENT, ICONIC PRODUCT, WORLD WIDE LEADER IN THEIR FIELD, LONG TERM HORIZON......I am very SLOW to sell. I am willing to tolerate slower growth as long as the company meets the above criteria.....since.....one of my primary goals is steady long term growth....that will allow my portfolio to compound. I also tend to look at the mix of the portfolio as a......WHOLE.....and recognize that different stocks will thrive at different times in different markets. If my portfolio is meeting my long term goal......average gain of 10% or more per year......and performing well....I tend to not want to make any individual stock changes.

 

Here is an interesting little article. It deals with times in the PAST when various movements impacted the markets. It is a comparison of some past times when events happened......similar to those we saw with the WallStreetBets movement recently. It is a long article so, I will not post it. BUT....it shows that this sort of event is NOT anything new. In other words.......no.......it is not a "new normal".

Populist Prophets, Public Profits, and the Pied Pipers of Lucre

https://www.aier.org/article/populist-prophets-public-profits-and-the-pied-pipers-of-lucre/

 

I like this little......fundamental.....oriented article.

Unlike In Your Diet, Lots of "Fat" Is Great In Stocks

https://www.realclearmarkets.com/ar...et_lots_of_fat_is_great_in_stocks_789452.html

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

"Earnings, earnings, earnings! Often, that is all pundits dissect. How much profit did a company report? Did it meet Wall Street’s expectations? Will firms’ earnings soar or sag next year? Fine questions! But investors stuck in this myopia miss a far better gauge of future growth: gross operating profit margins. That they’re rarely considered gives them power, particularly in late-stage bull markets—like now. Here is why “fat” margins offer you an edge—and how to deploy them now.

Earnings do matter—stocks are ownership stakes in firms’ future profits, after all. But past profits lack predictive power. Why? Accounting gimmickry lets firms twist and tweak short-term results. I am not referencing Enron or WorldCom-type chicanery. Firms perfectly legally decide when to readjust depreciation, take write-downs, repurchase shares or upgrade facilities. One time expenses can whack profits one quarter, yet never recur. All this distorts reported earnings, obscuring what matters most: a firm’s core business strength and long-term growth capability.

Equally important: The huge attention net earnings receive means new forecasts or results are pre-priced near-instantaneously. When the actual release comes, markets will have largely anticipated the results. When the profit data hit newswires, the stock may zig zag briefly as reality and expectations line up. But that happens too fast for almost anyone to act—with little lasting effect.

What to do when ubiquitous, pre-priced data leaves no one an investment edge? As I explained last summer, analyze the data devotees themselves. Look for what they miss—or dismiss. Today, most see gross margins as relics of a pre-digital era, when traders barked orders across bustling exchange floors and desktop computers had less power than today’s smartphones. Data-driven managers claim gross profit margins are too rudimentary to compete with their complex algorithms. Ironically, when I started 50 years ago gross margins were still taught exactly because they are so simple! No need for supercomputers. Just subtract the cost of goods sold from sales—easy to find even then. Divide the result by sales. Done! Nowadays, with so many pundits dismissing them, gross margins aren’t only easy to calculate, they have power.

As I detailed in July, this bull market looks late stage, despite its young age. The value stocks that normally lead the beginning of bull markets didn’t—quality growth stocks did, a late-stage regularity. After a few month value surge growth stocks have resumed their leadership. That should continue—and gross margins are key to finding them.

Crucially, gross margins offer a clear view of a firm’s ability to self-finance future growth. Fatter gross margins enable more capacity for sales, marketing and R&D expenses to fuel growth. They allow easier financing of capital expenditures, mergers and acquisitions or anything else driving future expansion.

Fatter gross margins also provide a downturn buffer, letting firms profit even as costs rise or demand drops, trashing lesser competitors. Late-bull-market investors crave such stocks. Consider: As bull markets age, those invested throughout the upturn develop acrophobia, worried a bear market will erase their gains. Newly optimistic buyers, meanwhile, want growth with some stability. Fatter gross margins offer both groups relative comfort. Thin-margin, typically value, firms get punished during downturns when profits evaporate. They fare best in early bull markets’ relief rallies.

Presently, America’s market is among the world’s fattest. Its profit margins average 33.1%, compared to 26.0% for the non-U.S. developed world. Among the plumpest of the plump: big Tech stocks. In the US, the sector boasts 48% gross margins, with Software industry firms leading the blubberbrigade at 71%. Tech-like companies in the Communication Services sector’s Interactive Media & Services industry carry whopping 63% gross margins. In Health Care, US Pharmaceuticals firms average 64% and Biotechnology an even-better 74%. Health Care Equipment & Supplies firms are a stellar 56%, too. Pockets within Consumer Staples—like Household and Personal Products—also top 50%.

The overseas world offers pockets of fat margins perfect for diversification. European Health Care sports 56% gross margins. Look to Switzerland, France, Denmark and Germany for that. Japan and the UK offer plenty of fat Pharma, too—the former’s gross margins sparkle at 75% and the latter’s aren’t far behind at 65%. The Luxury Goods industry averages 54% worldwide. Europe dominates it—target France, Switzerland and Germany. For more fat-margin Consumer Staples stocks, look to the UK and Japan.

What about the value sectors pundits have hyped for months on end? Gaunt! Globally, the Materials, Energy, Industrials and Utilities sectors all fall short of 25%. Value-heavy Financials? Gross margins don’t work on them, due to their business models. For banks, net interest margins are key. Banks borrow at short-term rates to finance long term loans. The gap between the two determines net interest margins. Long rates are low globally, with America’s 1.3% 10-year yield among developed markets’ highest. With the Fed and other central banks pinning short rates near zero, net interest margins should be weak.

While most investors focus on minutiae and complexity, don’t be fooled: There is magic in gross operating profit margins’ sneaky simplicity. Use fat gross margin stocks to beef up your portfolio in America and globally."

MY COMMENT

Some good opinion here....for fundamental investors.

BUT....my big criticism of fundamental investors is when they tend to be....all about the data. The data becomes the......be all, end all.....and they lose track of the......BUSINESS. The analysis of numbers overwhelms the intuitive process of looking at a business......as a living...whole...business....not just a bunch of numbers on a spread sheet.

This is one BIG reason that from what I have seen MOST of the investing GREATS....value their time when they just sit and day dream and THINK.

I think we FOCUS way too much today on earnings minutia and stock buy-backs. Show me a company with great management with a WAR CHEST that allows them to invest back into the company......and....invest in plants and equipment....and make acquisitions...and I will show you a successful company. This is why Warren Buffett did what he did....by piling up the money and using it to acquire new businesses.....as he built a HUGE CONGLOMERATE.

In other words......as the article above is discussing.....the ability of a business to FUND and SELF-FINANCE future growth.

 

I have been slow to look at my account today......since....I knew it was not the type of day that was going to favor my account. AND....I was right.....I am very slightly in the green. This is a day when my BIG CAP TECH names are not being rewarded. My account is being pushed slightly into the green by my other holdings. My green stocks today are.....AAPLE, COSTCO, HOME DEPOT, HONEYWELL, and PROCTOR & GAMBLE. Other than APPLE the sort of stocks that you would expect to be doing well with the passage of the infrastructure bill in the Senate.

As usual....just the day to day short term CHAFF.

 

HERE is the MIXED economic data....that no one will care about.

July consumer prices jump 5.4%, but core inflation rises less than expected

https://www.cnbc.com/2021/08/11/cpi-report-july-2021.html

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

"Key Points

• Prices that Americans pay for everyday goods and services accelerated in July, but about where economists had expected.
• Excluding energy and food, CPI rose by 0.3% last month, shy of economist expectations of a 0.4% increase and well below June’s rise of 0.9%.
• Used car prices, which rose rapidly between April and June, gained just 0.2% in July after a climb of more than 10% in the prior month.

Prices that Americans pay for everyday goods and services accelerated in July as pent-up demand for travel and restaurants kept inflation hot, but about where economists had expected.

The Labor Department reported Wednesday that its consumer price index rose 5.4% in July from a year earlier, in line with June’s figure and matching the largest jump since August 2008.

The government said CPI increased 0.5% on a month-over-month basis, matching a consensus forecast from economists surveyed by Dow Jones.

So-called core inflation, which excludes energy and food, rose by 0.3% last month, shy of a forecasted 0.4% increase and well below June’s rise of 0.9%. The core figure is up 4.3% over the last year, a slight deceleration from June’s 4.5%.

Economists often consider core CPI to be a more reliable indicator since it’s insulated from the frequent swings in petroleum and food prices.

Sharp decelerations in inflation in select areas of the economy that had seen rapid price increases in the spring helped keep the headline numbers in check.

Used car and truck prices, which rose rapidly between April and June as Americans looked to vacation, gained just 0.2% in July after a climb of more than 10% in the prior month.

Apparel prices were flat after a 0.7% increase in June, and transportation services prices actually declined after a pop of more than 1% at the end of the second quarter.

The Federal Reserve has been keeping a close eye on inflation reports since it’s the central bank’s job to maximize employment and keep prices stable.

Chairman Jerome Powell and other officials acknowledge the recent acceleration in prices but believe that the inflation is “transitory” and that prices won’t continue to increase at their current pace for too long.

“Today’s CPI data should help assuage investor fears that the Fed is too laid-back about inflation pressures,” wrote Seema Shah, chief strategist at Principal Global Investors. “The details of the data release suggest some easing in the reopening and supply-shortage driven boost to prices, and tentatively suggests that inflation may have peaked. Investors in the transitory camp will feel slightly vindicated.”

The Fed has kept interest rates near zero for the past 12 months and continues to flush financial markets with $120 billion in emergency monthly bond purchases. Some members of the central bank, including Vice Chair Richard Clarida, have started to give forecasts for eventual interest-rate increases.

As one of the most-cited inflation gauges, the consumer price index measures changes in how much American consumers pay for everyday goods and services including groceries, gasoline, clothes, restaurant meals, haircuts, concerts and automobiles.

The CPI and other price measures have been on the rise in 2021 in large part thanks to a comeback in consumer spending and U.S. gross domestic product as Covid restrictions eased.

Economic activity as measured by GDP rose at an annualized rate of 6.5% in the second quarter as Americans flocked to restaurants, headed for summer vacations and otherwise resumed activities that Covid-19 had hindered.

Consumer spending, bolstered by the nationwide rollout of vaccines, jumped 11.8% during the three months ended June 30, the second-fastest rate since 1952.

At the same time, the pent-up demand for travel, retail and restaurants has left many businesses scrambling to keep up and led to several hiccups on the supply side of the U.S. economy.

Employers who have struggled to find workers have hiked pay or offered signing bonuses to help fill the record 10.1 million job openings across the economy at the end of June. The leisure and hospitality sector, which includes restaurants, bars and hotels, has one of the highest levels of job openings at more than 1.6 million.

But instead of absorbing higher labor and material costs, some businesses have begun to pass on the impact of higher wages to their consumers. A concurrent shortage of semiconductors has whacked auto production and is a leading cause in a recent spike in new and used automobile prices."

MY COMMENT

MOVE ON.......NOTHING to see here. We are seeing the erratic disruptions of the economy caused by closing the economy and now re-opening. This is causing large supply and demand issues with resulting rise in prices. NO DOUBT....we are also seeing some businesses taking advantage of this as an excuse to raise prices.

The above data is just as distorted and erratic as you would expect.....so nothing new or unexpected. ACTUALLY.....the good news above is the data that was LOWER than expected or in line with expectations. This is an indicator that those that believed inflation would be transitory were probably correct.

I am STRONGLY in the camp that we are NOT going to see out of control......general....inflation. What we see is going to be very specific and rolling....due to disruptions in supply/demand.

 

HERE is the short term view....today.

Stock market news live updates: S&P 500, Dow rise to intraday records after consumer inflation meets estimates

https://finance.yahoo.com/news/stock-market-news-live-updates-august-11-2021-221825867.html

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

"Stocks rose to fresh highs Wednesday to extend gains from a day earlier, with optimism over an in-line inflation print and passage of a major infrastructure bill in the Senate helping boost equities.

The S&P 500 and Dow gained, with shares of industrials and materials companies, as well as other names closely tied to the economic recovery, leading the way higher. Equities took a leg higher in the pre-market session after the Labor Department's consumer price index rose at the expected 0.5% monthly rate in July, helping assuage investors' concerns over unchecked inflation during the recovery.

U.S. West Texas intermediate crude oil futures fell more than 1% after CNBC reported the White House had requested that OPEC and its allies further increase production in order to meet rising demand for energy during the recovery.

Elsewhere, developments out of Washington also helped fuel the latest move to new highs in equities, with the Senate passing a more than $1 trillion infrastructure plan with bipartisan support. The plan – which includes a number of Biden administration priorities to help revamp roads and bridges nationwide as well as boost environmental and broadband initiatives — next heads to the U.S. House of Representatives.

Despite some uncertainty over the future of the bill in the House, investors clung to optimism that the plan will ultimately be signed into law, providing yet another infusion of government support into the recovering economy.

"Realistically, what an infrastructure bill is going to mean is additional spending into the economy. Just like the stimulus has helped the economy for the last year, that's more money that can be going into the economy and helping businesses get through the slump they have been in previously," Courtney Dominguez, senior wealth advisor for Payne Capital Management, told Yahoo Finance."Generally speaking, the economy looks to be on good footing, and this is only going to be an added benefit on top of that."

As a number of pundits have pointed out, data on the U.S. recovery has come in mostly strongly, especially in terms of the demand side of the economy. The National Federation of Independent Business' small business optimism survey released Tuesday reflected a record high level of job openings for July, tracking with the pick-up in labor activity reflected in last week's "official" government jobs report.

According to some strategists, this ongoing recovery in economic activity bodes well for cyclical and value stocks in the near-term. However, the specter of a growth deceleration in the coming months also makes the case for a balance approach with higher-growth stock names.

"You saw this strong jobs report on Friday, you saw the 10-year [Treasury yield] move up, and you immediately saw the pop in financials. Going forward, you're going to continue to see those strong numbers, and I think that will continue to help the net interest margins of financials stocks," Stephanie Lang, Homrich Berg Principal and chief investment officer, told Yahoo Finance. "As we move into later this year, I think the defensives are going to be strong, because I think there's going to be more volatility and the earnings [comparisons over last year] are going to be tougher. We really like to have a barbell strategy where you have some of the cyclical names like financials, but have a barbell with tech names that are more secular growers and have acted more defensively."

Meanwhile, earnings continued to trickle in from major corporations. Shares of Coinbase (COIN) advanced in early trading after the largest U.S. cryptocurrency platform reported second-quarter earnings and revenue that handily exceeded expectations, with both user growth and trading volumes surging despite crypto price declines late this spring. On Wednesday, companies including Bumble (BMBL), eBay (EBAY) and Sonos (SONO) are set to post quarterly results.

10:26 a.m. ET: Shares of steelmakers, materials companies extend gains on back of infrastructure plan passage in the Senate
Stocks that would benefit from increased government spending on physical infrastructure extended gains on Wednesday following the Senate's passage of a more than $1 trillion infrastructure proposal a day earlier.

In the S&P 500, the utilities and materials sectors outperformed and each gained nearly 1%.

Steelmaker Nucor Corporation (NUE) was one of the best-performers in the blue-chip index, gaining nearly 4% intraday on Wednesday to reach an all-time high. Vulcan Materials Company (VMC), Commercial Metals Company (CMC) and U.S. Steel (X) also advanced strongly,

9:30 a.m. ET: S&P 500, Dow open at records after consumer price inflation data meets estimates

8:39 a.m. ET: Consumer price index rises 0.5% monthly pace in July, matching estimates
Consumer prices rose at a pace consistent with consensus estimates in July, the Labor Department reported Wednesday. Still, however, the rate of increases was well above pre-pandemic levels as reopening-related demand spikes and base effects continue to occur.

The consumer price index (CPI) rose 0.5% in July compared to June, according to the government's latest monthly report. This was in-line with estimates, and pulled back from the 0.9% monthly rise from last month. The print came as price increases categories in some major categories cooled. Used car and truck prices, for instance, pulled back to post an only 0.2% monthly increase, down from the 10.5% surge posted in June.

Excluding food and energy prices, the CPI rose at 0.3% month-on-month, coming in a tick below the 0.4% rise expected.

Over last year, however, consumer prices unexpectedly held at the same rate as in June, coming in at 5.4% to match last month's print as the highest level since 2008. Consensus economists were looking for a 5.3% rise."

MY COMMENT

The DRAMA of the short term.....irrelevant....except for the fact that this daily stuff represents a slow.....step by step....re-opening of the economy and business. Over the longer term ALL this stuff.......which along with earnings has in my view been WELL to the positive side.....WILL add up to good returns for stock and fund investors. MOST of the day to day negative stuff.....does NOT have the power to impact the markets over the longer term.

 

Duckleberry_fin and I had some discussion above about review and evaluation of holdings in a portfolio. Here is an example.....AMAZON.

The stock has had VERY POOR performance this year. Year to date it is showing a gain of $108 after nearly 8 months....that translates into a gain of 3.14%. So.....would I do anything with this stock.....NO. I still see the company as one of the most ICONIC companies in the world. Their DOMINANCE and earnings power are EXTREME.

SO....why the lingering year? I attribute it to ONE primary factor.....the FAILURE of management to appreciate the impact of the HIGH share price and their FAILURE to do a stock split. HOPEFULLY....the new CEO will come to this conclusion. If not.....I think the stock will continue to LINGER.....in spite of their DOMINANCE. Without a stock split I can see this situation continuing for 6-18 more months. In other words for the remainder of the re-opening.

 

I have been tied up all day till now. I finally had a chance to see what I did today a few minutes ago.

LOL.....I was in the green by $36......today. HEY....green is green. PLUS....I got beat by the SP500 by 0.03%....because my return today was 0.00%. DEAD even......for me a totally NOTHING day.

 

So far this week....it is as though it never happened. My losses the first two days of the week were so minimal and my gain today was so minimal......I should have just taken the entire week off. I cant remember another three day span when I basically ended up perfectly flat. I guess my portfolio is PERFECTLY balanced.