The Long Term Investor

Making some money so far today. Just a bit....mostly compliments of NVIDIA....they have been on a TEAR lately. the markets need to grow into the day and build on the open of the NASDAQ and the SP500.

 

NICE to see this little article....I hate the CELEBRITY CEO stuff......never a good thing for a company compared to a CEO that simply focuses on running the business and NOT treating it like his personal piggy bank.

When Scarcity of CEO Love Is a Bullish Signal for Stocks

https://www.realclearmarkets.com/ar...ve_is_a_bullish_signal_for_stocks_791503.html

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

"Where did all the heroes go? Hero CEOs, that is. Late in bull markets, investors typically christen a slew of rising corporate leaders as near-infallible. They go gaga on these visionaries’ views of a gigantic far-flung future their firms will supposedly dominate. But such romantic tales are hidden warnings. CEO celebration signals rising exuberance—the kind stretching expectations to unattainable heights. The good news? Lionized corporate leaders are near non-existent now—a sign this bull market isn’t near a euphoric top.

Successful visionary CEOs can juice a firm’s stock price. Usually not “old guard” legends, but fresh faces overseeing surprise turnarounds or leading boring, backward businesses to futuristic innovations. Think of the adulation Hubert Joly received while overseeing Best Buy’s retail renaissance last decade. When he took charge in 2012, most saw the firm as a brick-and-mortar dinosaur doomed by Internet retailers’ rise. When he left in 2019, operating losses had turned to stellar growth. Best Buy’s stock had soared almost 400%—more than doubling the S&P 500. While he never reached true “hero” status, Joly’s tenure illustrates this key point: When a competent leader meets a good business with untapped potential, the stock often shines, minting a hero CEO. But when heroes abound, it’s instead a warning sign: You are in a bull markets’ greedy late stages.

Take the mid-1980s bull market. Hero CEOs reigned—like Chrysler chief Lee Iacocca. He transformed a failed bailed-out automaker into a rocket stock. Pundits loved Iacocca—they used words like “visionary” and “savior” to describe him. The New York Times spilled 3,000 words alone detailing how publishers convinced him to write a book!

Iacocca wasn’t alone then. Disney’s Michael Eisner was celebrated after turning it around as that bull market peaked. And Japanese business leaders, like Sony’s Akio Morita, were widely heroed, too. And, of course, the Japanese stock market became worth more in total money value then than America’s. Many Japanese were considered just better business leaders. Pundits deemed CEO talent recruiters “kingmakers”--writing glowingly of their quests to lure presumed superstars to fill open roles.

Late in the 1990s bull market, hero CEOs rivaled Hollywood stars. Rival tech luminaries Bill Gates and Steve Jobs inspired actual movies. No kidding! America Online’s Steve Case and IBM’s Lou Gerstner, meanwhile, earned heaping praise for actually not being tech whizzes but, instead, sensible outsiders who brought mature, long-term thinking to myopic industries. And as GE’s stock soared, many dubbed CEO Jack Welch the manager of the century.

Today, though, heroes are scant. Yes, some CEOs have cult-like followings, but none hold Jobs- or Welch-like reverence. Elon Musk is as close as any. He has fervent fans—but many detractors, too, including those who sued him for Tesla’s purchase of money-bleeding Solar City. Also, more than a few suppose his many outside endeavors spread him too thin as Tesla staggers sideways this year. Jeff Bezos? More often cast as villain than hero now—nearly 200,000 people cheekily petitioned to keep him afloat in space from his rocket ride.

And forget the financial sector—since the 2008 – 2009 crisis, more often than not big banks’ and insurers’ executive bonuses are seen as symbols of rampant inequality. Even legendary Warren Buffett takes licks for Berkshire Hathaway’s lagging stock. Tech-fund manager and investment firm CEO Cathie Wood may come closest in this category to hero status, but even there, praise isn’t universal.

Overseas? After dominating the luxury goods industry for over 30 years and amassing one of the world’s biggest fortunes, Bernard Arnault is as close as Europe comes. Phenomenal results. But few make a hero of him, instead highlighting his supposedly predatory wolf-like cunning. Richard Branson? Whatever glory he got for beating Bezos to space seems gone already.

Perhaps the next hero will be an established star who makes the leap to legendary status—like Lisa Su. She took over languishing Advanced Micro Devices in 2014 and engineered a radical comeback bringing the semiconductor firm into the 21st century. Under her tough leadership, AMD got lean and mean while moving beyond the PC market to become a leading high-end chip provider for videogame consoles. Magazines fawned over her—and AMD’s share price boom. With current shortages reminding everyone just how crucial her firms’ chips are, maybe Su is set to ascend to heroe-ness.

Or perhaps some superstar emerges from a pandemic-pummeled industry—airlines, hospitality, or restaurants. Pundits love comeback sagas—and CEOs finding innovative remedies to resuscitate struggling-to-survive businesses could garner generous accolades.

CEO talent isn’t lacking. No, not at all. The point: The lack of heroes merely—and bullishly—reflects sentiment. Blind CEO reverence smacks of euphoria. When moods turn greedy, confirmation bias leaves many craving bullish narratives supporting their enthusiasm. These visions of heroes who can do no wrong inflate expectations to levels no human can meet. So cheer the heroes’ absence—it signals more bull market ahead."

MY COMMENT

Nothing is worse for a company than a celebrity, glad-handing, CEO....hanging out in Hollywood with all the other celebrities and attending all the Star studded events. They never seem to work out well over the long term....except for their own bank account.

 

Here is the economic news of the day that no one will care about....as usual.

U.S. core capital goods orders flat in July; shipments increase

https://finance.yahoo.com/news/u-core-capital-goods-orders-123907858.html

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

"WASHINGTON, Aug 25 (Reuters) - New orders for key U.S.-made capital goods were steady in July, but an acceleration in shipments suggested business investment in equipment could offset an anticipated slowdown in consumer spending and keep the economy on a solid growth path in the third quarter.

The Commerce Department said on Wednesday that the unchanged reading in orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, last month followed a 1.0% increase in June.

Economists polled by Reuters had forecast core capital goods orders climbing 0.5%.

Shipments of core capital goods rose 1.0% after increasing 0.6% in June. Core capital goods shipments are used to calculate equipment spending in the government's gross domestic product measurement.

Business spending on equipment helped to power the economy's recovery from a short and sharp COVID-19 pandemic recession, driven by strong demand for goods, thanks to record low interest rates and massive fiscal stimulus.

The momentum, which has persisted despite supply chain bottlenecks, is welcome amid signs that consumer spending is cooling as the Delta variant of the coronavirus causes a resurgence in new infections across the country.

"Core capital goods orders have made a remarkable comeback over the past year and have shown little signs of slowing," said Sam Bullard, a senior economist at Well Fargo in Charlotte, North Carolina. "While overall durable goods orders may cool in the coming months as consumers pull back on goods spending and the auto sector contends with supply problems, businesses' desire to invest and restock inventories should provide a solid demand floor."

Retail sales fell in July in part because of motor vehicle shortages. Credit card data suggests spending on services like airfares, cruises as well as hotels and motels has been slowing.

Economists at Goldman Sachs last week cut their third-quarter GDP growth estimate to a 5.5% annualized rate from a 9% pace. Bank of America Securities slashed its GDP growth estimate for this quarter to a 4.5% pace from a 7.0% rate.

The economy grew at a 6.5% rate in the second quarter, pulling the level of GDP above its peak in the fourth quarter of 2019. "

MY COMMENT

The strength of.....CORE....capital goods orders reflects the GUTS of the economy and is doing just fine. This is one of the primary economic data points of the re-opening and WILL continue as business restocks and gets back up to NORMAL operations.

 

I am posting this link for any UBER stock owners or potential buyers. I have no idea if any of the stuff....ALLEGED....in this article are true.....but it seems like a BIG WARNING to investors. HERE.....are the ALLEGATIONS:

End of the Line for Uber
Accounting tricks and tech gimmickry don’t matter when the coffers are empty.

https://marker.medium.com/end-of-the-line-for-uber-901e3077bbbc

 

I have company this week....so my posting is going to be scant....but I cant resist this little article.

Why people are getting the inflation debate wrong: Charles Schwab's Liz Ann Sonders

https://finance.yahoo.com/news/why-...harles-schwabs-liz-ann-sonders-210804614.html

(BOLD is my opinion OR what I consider important content)
"Inflation expectations are picking up as bond yields (^FVX, ^TNX, ^TYX) surge higher Tuesday and the reopening trade kicks back into high gear. As the debate heats up over whether these signs of price inflation are transitory or not, one prominent Wall Street strategist provides some context and warns not to view inflation too simplistically.

At a recent Yahoo Finance Plus webinar, Liz Ann Sonders, chief investment strategist at Charles Schwab, broke down the dynamics of inflation, beginning with the observation that "transitory" simply means "not permanent." She quipped, "y that definition, one could argue even the inflation of the 70s into the early 80s was transitory. So some of it is [a] function of timeframe."

Price inflation is typically measured sequentially (month-to-month) and annually (year-over-year), with the latter introducing what are known as base effects. As Yahoo Finance's Brian Cheung explained in a recent Yahoo U, base effects "refer to the impact of comparing current price levels in a given month against price levels in the same month a year ago."

But observers of this data require context to understand the relative importance of these numbers. Whether or not price inflation levels were already elevated or depressed a year ago adds such context. Back in March, April and May of this year, inflation was compared to the disinflationary levels in the corresponding period of 2020.

But Sonders says those base effects are largely in the rearview mirror as companies fix their supply chain disruptions. However, it depends on the category of goods and services measured, as some imbalances remain. "t really is a function of what service or commodity product you're talking about. I think some of those imbalances are probably stickier in nature, not least being semiconductors," she said.

Lumber liquidated
Sonders says the extreme price swings of lumber is a good example of why it's more helpful to dig into the different categories and segments of price inflation. "[Y]ou saw the parabolic move up in lumber. That wasn't really a shortage of lumber, it was actually a shortage of drivers to get the lumber from where it resided to where it was needed. That's easy. And we've seen a 70% decline in lumber prices since then. So I really think you almost have to go segment by segment."


Lumber's wild ride
She also notes the easing of auto and rental price pressures in the latest CPI data. "[New car prices] had been a big source of upward pressure on CPI medium to longer term. I think there are two key things... in the case of CPI, the rent component — the combination of actual rents and owners equivalent rent — account for more than 40% [of the total price increases]... So that's really what we want to watch to see whether it's starting to abate longer term," says Sonders.

Psychology of inflation
Price inflation is not sustainable if people can't afford the prices and companies don't have pricing power. But that changes as workers' wages increase, and it's a so-called wage-price spiral that can really get prices cranking to the upside.

Sonders explains that it's important to look for signs when purchasers' and workers' psychology is changing.

"When you go through real serious periods of inflation, like in the 1970s, it had a lot to do with the psychology — the psychology of workers willing to ask for higher wages ... [and] companies' willingness to pass on higher costs. And there's a psychological aspect to that which is harder to quantify, but something that we have to keep in mind as we think about the longer term implications of what we're seeing right now," says Sonders."

MY COMMENT

YES....there is NO inflation. BUT.....it really does not matter to me. the companies that I own have professional management that is well paid to deal with this sort of business issue. AND.....I will simply stay fully invested through it all anyway....no matter what happens.

 

LOL.....another day in the green.....BUT....less than $100 gain. I was basically FLAT. I got beat by the SP500 by 0.21%.

Better than red...anyway.

 

HERE is what I focus on with the day to day INSANITY.

Cooling Off

https://humbledollar.com/2021/08/cooling-off/

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

"TODAY’S STOCK MARKET reminds me of Charles Dickens’s famous line: “It was the best of times, it was the worst of times….”

It’s the best of times, of course, because the market continues to hit new highs. From a low of 2,237 in March 2020, the S&P 500 has doubled. Over the 10 years through July, the S&P has delivered an average annual return of 15.4%, including dividends, far above the historical average of 10%. Since the downturn in 2009, the market has logged just one negative year: In 2018, there was a modest, all-but-forgotten decline of 4.4%.

So why would anyone say that it’s also the worst of times? The worry is that things are too good. Investors have enjoyed seeing the numbers on their financial statements get bigger, but it also feels like climbing a ladder: With every step higher, there is farther—potentially—to fall. And it isn’t just the stock market. With interest rates near all-time lows, the potential for losses in the bond market has also grown.

As investors, we’re all taught to think long term. Everyone understands that the market can be unpredictable and volatile from year to year, so we’re supposed to stay focused on the horizon, not the day to day. But there’s a difference between what we know we should do and what we’re actually capable of doing. While the overall market results cited above have been very positive, it certainly hasn’t been a straight line. The pandemic has left millions unemployed and has turned some industries upside down. The financial markets are also displaying excesses—from cryptocurrencies to meme stocks—that make people nervous.

This skittishness isn’t just affecting those currently invested. You also see it among those sitting on the sidelines, too nervous to put money into a market that appears “priced for perfection.” In an environment like this, how can we keep our investment cool? Below are six ideas:

1. Remove emotion. What does this mean in practice? Whether you work with an advisor or not, I would draw up a formal investment policy statement. It need not be complicated—a single page will do.

In this document, you can spell out your strategy, including asset allocation targets and rebalancing rules. Then try hard to adhere to it. This can be valuable in an environment like today’s, but it can be even more helpful when the market goes haywire.

Consider what stocks did early last year. Before the Federal Reserve stepped in, the market plunged more than 30%—its quickest decline ever. The drop was terrifying, and no one knew when it would end. But investors who had asset allocation targets and rebalanced according to their plan benefitted greatly during the ensuing rebound.

2. Forget forecasting. The stock market is cruel. It can make the smartest person feel clumsy. Again, think back to last year. As Zoom took over people’s work lives, many predicted doom for commercial real estate. Others, meanwhile, worried about the election. And as the pandemic raged, many worried that we were headed for a prolonged economic downturn. One prominent hedge fund manager declared, “Hell is coming.”

Things, of course, turned out much better than anyone expected. As a result, the investor who fared best was the one who didn’t tinker too much. It’s counterintuitive, but—unlike in other areas of our lives—there’s only a loose connection between effort and results when it comes to investing.

3. Take it slow. If you have cash you’d like to invest but are hesitant to jump into the market, that’s understandable. Dollar-cost averaging is a common solution to this problem. Can you do better? Maybe. There are lots of variations on traditional dollar-cost averaging.

4. Take the long view. The late Jack Bogle, founder of Vanguard Group, urged investors to think in terms of decades. That’s because the market is entirely unpredictable in the short term but at least a little bit predictable in the medium and long term. If the market is high today, for example, it might be even higher next year. But it stands to reason that prospective returns over the next decade will be lower following a dozen years in which results were so far above average.

What does this mean for you? If you’re in retirement or retiring soon, you’ll want to build a financial buffer into your plan. I wouldn’t count on 10% returns—the historical annual average—over the coming decade. On the other hand, if you’re earlier in your career, it would defy math to conclude that an expensive market today necessarily means that returns will be below average for multiple decades into the future. Yes, you want to consider that possibility in your financial plan. But it’s just one potential outcome. If you’re 30, 40 or even 50 years old today, I wouldn’t take an overly defensive posture just because the market currently seems high.

5. Consider history. Investment commentators love debating whether the market is headed higher or lower. But these debates usually aren’t productive. I’m not predicting that the market will go down or that it’ll go up—in the near term. Instead, what I’m predicting is that over the long term it will go higher. That’s where I find history instructive.

If you went back to 1929, I’m sure there was a lot of handwringing after the market had doubled over the prior two years. Similarly, there was plenty of investor angst in 2000 and 2008. And those worries were vindicated, but only in the short run. In all of these cases, the market eventually bounced back and went much higher. I see it the same way today. Maybe the market is high and maybe the next decade will be far less profitable. But that isn’t guaranteed—and it tells you nothing about the decades after that.

6. Have faith. In recent years, I’ve heard growing murmurs that America’s economy is starting to crumble—and that we’re headed for a long period of malaise like Japan or even the Roman Empire. Are those things possible? I suppose.

But I’ve also heard powerful arguments to the contrary. Larry Siegel’s 2019 book Fewer, Richer, Greener argues that we’re entering a period of unprecedented prosperity. I’m not sure which version of the future we’ll see.

But again, consider history. As Warren Buffett noted in 2008, “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president.”

We can now add another pandemic to that list, and no doubt there will be other unnerving events in the decades ahead. Still, I believe history’s lesson is clear: Our economy—and our markets—will continue to prosper over the long term.

MY COMMENT

YOU......ME.....all of us will be just fine over the long term. You just have to believe and have the guts to act on your beliefs. The POWER of the markets, compounding and positive thinking.

 

Yeah....there are some CRAZY expectations out there on the part of young and new investors. This....along with....the gambling and options trading.......and.....the crazy reports of big gains that you see online and on message boards......is going to SUCK THEM IN. We are and will be in one of those markets where ALL EXPECTATION if positive. It will be really interesting when they hit the wall.

 

This is CLASSIC short term....new investor......stuff. Absolutely NO patience and no understanding that this type of fund is suited for those with a time horizan of 5 to 10 years. EVERYONE sees the big return last year and wants to jump in and get that return every year.

Investors Might Be Losing Patience With Cathie Wood’s ARK Funds

https://finance.yahoo.com/m/a5879479-a78b-32cc-9fac-b6d0acc965ef/investors-might-be-losing.html

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

"Cathie Wood’s ARK Invest has attracted billions of new cash since last year, but lately, those fortunes have started to reverse.

The firm’s six actively managed exchange-traded funds took in a whopping $20 billion in 2020 and another $16 billion in the first six months of 2021, thanks to the spectacular performance of the growth-oriented innovation stocks they invest in.

Since the end of June, however, investors have pulled a net $2.7 billion from the funds, according to FactSet data. The flagship ARK Innovation ETF (ticker: ARKK) bore the brunt of the losses, seeing $1.4 billion leave the fund during that period. ARK Invest didn’t respond to a request for comment.

The asset outflows are no surprise, as ARK funds have been struggling to maintain their momentum this year. Many of their stockholdings are trading at lofty valuations that are betting on huge expected growth in the future. As inflation flares up and interest rates rise, however, the current value of these growth companies’ future cash flow is being diminished.

The ETFs have tumbled from their peak since February and have largely been rangebound ever since. As of Wednesday’s close, the six funds have returned an average of 1% year to date. The S&P 500, in comparison, has gained 20% during that period. The ARK Autonomous Technology & Robotics ETF (ARKQ) leads the chart with an 8.3% return, while the ARK Genomic Revolution ETF (AKRG) finished last among peers, down by 10.1%.

ARK investors initially sat tight for the first half of the year, despite the funds’ struggles. The money entering and exiting the ETFs roughly offset each other for a few months, as some investors bought the dip on hopes that the funds would soon bounce back. For example, on the first day of April, investors poured $717 million into the ARK Innovation ETF, marking the highest daily inflows in the fund’s history. At that time, the fund was down 8% for the year and 27% below its all-time peak reached in mid-February.

That enthusiasm appears to have faded, however. In the past two months, more cash has left ARK Innovation than those that came in. A rising number of investors are now betting that ARK funds will continue to suffer. The volume of put options traded on ARK Innovation—bets that the fund would fall—are rising, while the short interest on the fund recently reached a record high. Investors that short a stock or fund would profit if the value of the asset falls.

That includes some big names. In a recent filing, “Big Short” hedge-fund manager Michael Burry disclosed that his firm, Scion Asset Management, held bearish put options against ARK Innovation at the end of the second quarter. There is even a Short ARKK ETF in the filing that, if approved by the Securities and Exchange Commission, would allow retail investors—those who can’t sell shorts or trade options directly—to make bearish bets against Wood’s flagship fund.

Wood remains unwavering. She rebutted Burry’s bearish bets on Twitter last week, saying that the hedge-fund manager doesn’t understand how the innovation space works. Wood expects inflation pressure to come down in the next three to six months. By then, the market will likely reward the disruptive innovation strategies again, she said.

In a more positive sign for the fund, ARK Innovation has gained 6.3% since last Thursday. The fund added $203 million new cash on Tuesday, the highest daily inflows in more than a month.

MY COMMENT

YES....this is simply insanity. People are pouring in and out of this fund month by month. The fund has a good week and they pile back in.

This fund is investing in young disruptive companies that will take 5-10 years to mature a bit and pay off. The investor behavior seen with people buying in and jumping ship on this fund over the short term is simply....DELUSIONAL.

I have no idea if Woods will turn out to be a long term genius or will fade. The MASSIVE media attention that she got last year has now propelled her funds way beyond REALITY with investors chasing the latest hot FAD. I am sure it is something she does NOT welcome.

 

We had some good discussion on here lately about AMAZON and their future. I do tend to agree with this little commentary on the company.

Jim Cramer: The Days of Amazon as Death Star Are Over

https://finance.yahoo.com/m/7af20a2d-e0e9-3c4f-8eb5-d2943516ca38/jim-cramer-the-days-of.html

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

"We used to call it the Death Star. That was the name for Amazon (AMZN) , a moniker so deserving that we just had to hope it wasn't trained on any of our investments.

I still love Amazon. I think that Amazon Prime represents a great value, Amazon Web Services is the dominant cloud business and Amazon advertising is incredibly strong.

But the Death Star, a name that the legendary investor John Malone used in an interview with my colleague David Faber?

Not after this quarter. This was the quarter that will go down as the one where brick and mortar struck back and the Death Star is no more.

Oh it started pretty subtly when we realized that CVS (CVS) , so often kicked to the curb off of Amazon rumors of email pharmacies, wasn't going anywhere. We used to think of CVS as a frumpy old drug store beaten up by Amazon at every turn. Now? I don't know where you got your shots - and I hope you have - but if you went to your CVS you might have seen a minute clinic within your store. Just as CVS has improved we have learned something about human behavior: people don't like their pills delivered by mail. It's just not something that's preferred. Amazon has been trying for ages to upend the back end of CVS and it has failed. Now the needle has given CVS a new lease on life and we have discovered there is a lot more than we thought.

Then there's Target (TGT) . When they bought Shipt, the same day service, we knew they meant business. But I think they have by far the best buy online pick up options to the point, as CEO Brian Cornell said on his call, "We added numbered parking lots so that we can find your black SUV among the 12 black SUVs." They've got a Target app that allows guests to end the "promo FOMO", their term for fear of missing out on the best deals currently offered. I like the fact that the Target I know in Brooklyn has a third floor largely dedicated to local uniforms from schools. You see that on Amazon let me know.

I am seeing Walmart (WMT) some major moves including today's GoLocal which will help more businesses with delivery besides its own. Arguably this is a rival to DoorDash (DASH) but I would think of it as more of a good will mission to those businesses that are worried about being beaten by Amazon even as it will be white-labeled. Not a needle-mover, sorry, and I say that even as it is owned by my charitable trust which you can follow along at Action Alerts PLUS.

I think that Walmart's plus offering where you get unlimited free delivery has some traction. I think it is time to get more. Recently Walmart offered a private label insulin that represents a 58% to 75% off cash price of branded insulin. We have seen how well Walmart handled the vaccine rollout. Why should it not offer Walmart+ people the best prices available for all pharma products the way GoodRx (GDRX) does. The latter does it algorithmically. You tell me that the 200 million people of Walmart wouldn't be an amazing buying group and Doug McMillon, the CEO could offer the lowest prices for all drugs IF you are a member of Walmart +. What a win that would be.

Now, let's talk about the most miraculous turn the tables story in retail: let's talk about what Corie Barry did at Best Buy (BBY) today. The stock of Best Buy was up 11% not just because Best Buy offers the best customer service on electric goods, phones, appliances and computers. It was up big because it is introducing one of the most amazing services imaginable: an at home tech service that's as good as your tech support at the office. Maybe better. Now as recently as April, when we all thought this country would go all in for vaccination, the idea that we would need home IT support would seem ludicrous, as ludicrous as Abbott (ABT) making all of those millions of Binax tests that seem so unnecessary with the country done and the pandemic wiped out. As ludicrous as the need to have permanent cybersecurity help that Palo Alto Networks (PANW) was developing.

Now Abbott's on the cusp of a truly blowout quarter because of its at-home Binax. Palo Alto? It's stock rallied almost 20% on an amazing quarter and even better forecast.

But perhaps most impressive is Corie Barry's Best Buy Total Tech membership program where as Barry described it, "You get unlimited Geek Squad technical support on all of the technology in their home no matter where or when you purchased it, including 24/7 to dedicated phone and chat teams." Barry continues, "You also get 24 months of product protection on most purchases as Best buy, free deliver and standard installation, exclusive member pricing, a sixty day extended return window and free shipping of on-line orders." The program has exceeded expectations and there's a real easy reason why: you have IT tech at work but nothing to speak of at home. Best Buy is replacing IT support because it helps whether you bought at Best Buy or not. When you are on that Zoom (ZM) call and things break down, who ya gonna call?

As Barry told me: "We are very excited about it and strongly believe it leverages our differentiators and our employees so genuinely believe in it." She adds that it is "a lot more fun than attaching a warranty," which I think most people dread when asked about.

Think what Barry has done here: created a membership club that will be an annuity. The people who take it are going to buy at Best Buy, not at Amazon. The one time showcase for Amazon - how we always knew these guys - has turned the tables on the Seattle giant and it is working. This stock is not done going higher.

Look, some companies have always had the jump on Amazon. Take Costco (COST) which offers what I call "extreme value", meaning the best price per given quantity and quality of an item. I have examined the company's markup and I would say it's about 12% while Amazon is priced closer to traditional retail mark-ups. Costco pre-selects great items for you, at times getting them for as little money as we have our delicious Lesser Evil popcorn to them for a Christmas promotion. Have you noticed that the people you see working at Costcos are always the same? There is the least turnover of any retailer and not just because it offers the best pay and benefits. The people who work there love it. That means you get the best, highest quality service in retail. Oh, and let's not forget a private label that is almost superior to the branded and, what can I say, a sort of whimsical sense of humor replete with free samples to back it up.

But until this quarter I always feared that any of these companies could, at some point or another, be run into the ground by a more effective Amazon. Instead I see the colossus messing around with brick and mortar no doubt just to learn what the great brick and mortar stores already know. If they really need brick and mortar drop-offs they should just buy Kohl's (KSS) -- they have an existing return drop-off relationship.

The truth is, though, the days when Amazon is Death Star are over. The retailers remaining have their force field and their shields and they are beaming Amazon's projectiles right back at the once impossible to stop retailer."

MY COMMENT

Yes there are many retail giants that are fighting Amazon for customers and business. I have no immediate plans to sell any of my Amazon holding. I continue to believe that they are one of those ONCE IN A LIFETIME companies. SO....I will ride them for as long as possible.

BUT.....there comes a time when any HOT startup company starts to become a MATURE company. This is not a bad thing. It just means that they will need to EXECUTE their business model......and......do what they do very successfully for the longer term.....over, and over, and over. They STILL have plenty of room to grow....especially their web services.....but.....as a maturing company they have to NOT lose the bubble. I cant say the Whole Foods acquisition has been a great success....as an example. At least.....they are investing a HUGE amount of money in growth and expansion of capital assets and employees.

I dont mind that they are becoming a mature company....but....I want to see them be able to ride their business model and REMAIN the money making machine that they are. I think they can do it....but....time will tell.

 

Another day....another dollar....hopefully. I like this little article....some good lessons here for the current market.

Are We in a Melt-Up?

https://ofdollarsanddata.com/are-we-in-a-melt-up/

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

"The S&P 500 recently hit its 50th all-time high of the year and it’s only August. That’s the second most for any year (through August) since 1950. Given this information, many investors are currently wondering: are we in a melt-up?

For the uninitiated, a melt-up is a “sustained and often unexpected improvement in the investment performance of an asset or asset class.” Unfortunately, it’s not just the S&P 500 that seems to be melting up. Real estate prices are through the roof (no pun intended) and used cars are now being considered an investable asset class.

All jokes aside (or not), how crazy is this market in the context of history? Are we actually in a melt-up? And if so, how early (or late) is it? Let’s find out.

What Does a Real Melt-Up Look Like?
To start, I want to examine what an actual melt-up looks like. The most recent environment that could be categorized as a “melt-up” for U.S stocks occurred during the DotCom Bubble. The bubble started around 1995, peaked in 2000, and bottomed in 2003.

From the start in 1995 to the peak in 2000, the S&P 500 went up by 233% (266% with reinvested dividends):


Looking at this chart you can see just how crazy the price action was. The market doubled in three years and then doubled again in the final two years of the melt-up.

More importantly, it did all this while experiencing only one 19% correction and two 10% corrections on the way up:


However, the celebration ended shortly after March 2000.

Over the next three years the S&P 500 would decline by nearly 50%:


To the dismay of investors everywhere, the market rallied by over 10% multiple times on its way to the bottom.

This is what it feels like to be in a melt-up. You get a huge rally (that typically lasts years) followed by a big decline. Fortunately, the decline that occurred in U.S. stocks only lasted for three years. Other markets haven’t been so fortunate. As I have written before, Japan still hasn’t recovered from their bubble in the late 1980s. Their stock market experienced the greatest melt-up of all time as prices increased by nearly 10x over the course of a decade.

Now that we have seen what a melt-up actually looks like, how does the current market compare?

How Bad is the Current Melt-Up?
As much as I want to draw parallels between today and the DotCom Bubble, the data suggests that this melt-up isn’t as bad as it seems. For example, over the last 18 months (i.e., right before COVID) the S&P 500 is up 40% with dividends. While this might seem like a lot, this 18-month return is only in the top 14% of all 18-month returns since 1920. And if we look over the last 5 years, the S&P 500 is up 123% (with dividends), which would be in the top 13% of all periods since 1920.

Either way, the returns over the past few years are high but not record breaking. We still have a way to go before they reach DotCom levels. Ironically enough, this implies that, if we are in a melt-up, this is just the beginning. I don’t say this as a prediction but as a reminder that melt-ups can last a lot longer and get a lot crazier than you might imagine. After everything we have seen recently I know how silly it might seem to say “this is just the beginning,” but we really don’t know.

Regardless of where we are in the current melt-up (or not), there are a few things you can do to survive (and thrive) throughout one.

How to Invest During a Melt-Up
Of all the things that you should do during a melt-up, the most important is to get invested. Do not sit in cash. Why? Because even if the market does eventually return to its prior levels, sitting in cash will destroy you psychologically. Just imagine how hard it would have been to sit in cash during the DotCom bubble from 1995-2000. For five years you would have to watch everyone around you (even people dumber than you) get rich while you sat on the sidelines. It would be infuriating.

Of course, some of that wealth would disappear when the bubble eventually popped, but not all of it. For anyone who stayed invested from January 1995 to the bottom in March 2003, they still would have been up 74% when all was said and done:


This goes to show the importance of being invested even when it seems irrational to do so.

But what if you can’t justify staying in the market? Is there another option? Yes, you can always de-risk your portfolio a bit.

As a melt-up unfolds, you will see the “melted-up” assets take up a larger and larger percentage of your portfolio over time. If this bothers you, then you should consider rebalancing more frequently or into a more conservative allocation. While doing things like this border on the realm of market timing, if this helps you sleep at night while staying partially invested, then I am all for it.

The last thing you can consider doing if you are in the accumulation phase of your investment journey is to buy more assets that are not melting-up. So instead of buying more U.S. stocks you could buy more bonds (or other assets) as U.S. stocks continue their rise.

This is why I have been buying more art and crypto over the past year. I have come to realize that the vast majority of my wealth (and my career) is linked to traditional financial markets. Therefore, to hedge this exposure, I have been buying more non-traditional assets over time. This doesn’t mean that I am no longer buying stocks (I am!) but I am buying them at a slightly slower rate than in recent years. Is this the right course of action? I don’t know, but if we are in a melt-up I’m hoping it pays off.

Lastly, while it may be tempting to move to cash (or bonds) after a decline of a certain size during a melt-up, the data suggests that this is much harder than it looks. As I illustrated above, during the DotCom bubble there were multiple 10% declines and one decline of nearly 20% on the way up. While you could have gotten out at any one of them, knowing when to get back in is the hard part.

Therefore, my best advice is to ride the wave and see where it takes you. It’s okay to make minor course corrections along the way, but giving up altogether is probably the worst thing you could do."

MY COMMENT

YES.....I will ride the wave for as far as possible.....just like I did in the dot-com melt up.....and....before and after. YOU build and compound enough gains and even a nasty correction is unlikely to take them all away. So i say.....melt away.....Scotty....melt me up.

One thing I WILL NOT do in a rapidly escalating market is......jump into the crazy FAD stocks that seem to dominate the conversation and suck people in for the BIG QUICK money. I will TOTALLY stick with my long term plan and my long term holdings.

 

STICKING with the BULLISH view....which is also MINE.

Opinion: The S&P 500 will keep going up this fall — for these 9 reasons

https://www.marketwatch.com/story/t...for-these-9-reasons-11629911414?mod=home-page

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

"There are plenty of absurd arguments that investors make to justify their positions. But one that is particularly maddening to me is the notion that the stock market can ever be “ready” for a correction.

Not only is there an abundance of research that proves the folly of market timing to avoid downturns, but such statements seem to indicate you can easily predict market moves in general — and all you have to do is identify the forecast and you can ensure you’re early rather than late to a trend.

As we all know, particularly after the remarkable COVID-19 disruptions and equally remarkable snap-back rally, there are never any certainties on Wall Street. So before you stick a fork in the current rally and write it off as overdone, here are plenty of reasons to stay fully invested — and to expect the current rally for stocks to keep rolling through year-end.

Strong momentum for stocks: In case you missed it, the S&P 500 index SPX, -0.53% has just notched its fastest doubling in history as it has surged from lows of around 2,240 on March 23 to around 4,500 in August. It also already has set 51 closing records this year. This kind of record-breaking momentum clearly can’t last forever, but it is important not to conflate this strong performance with the assumption a correction is “overdue.” Generally speaking, stocks tend to move higher simply because they’re moving higher — not suddenly crash out of the blue.

Earnings remain impressive: Companies across the S&P 500 have beat estimates by an average of more than 19% in the last five quarters. This has fueled a lot of the gains we’ve seen for stocks. Take tech darling Nvidia NVDA, -1.32%, which just popped about 14% in a week on a strong earnings beat, or sporting retailer Dick’s Sporting Goods DKS, 0.83%, which surged about 20% in a single session after its strong report this week. Sentiment and technical indicators aside, it’s hard to argue that there’s not true improvement in fundamentals behind this recent run for stocks.

Fed tapering fears abate: One of the bearish arguments some investors have had in 2021 is that the U.S. Federal Reserve is considering tapering stimulus efforts that include $120 billion in monthly bond purchases by the central bank, among other things. However, most reports indicate any such stimulus drawdown will not occur in the near term — perhaps not until November at the earliest. That may sound like bad news for those who are more hawkish on monetary policy, but it is undeniable good news for near-term market dynamics.

Wall Street remains bullish: According to recent data, roughly 56% of analyst recommendations on S&P 500 stocks are “buy” or equivalent. That’s the most since 2002 and a sign that there is continued upside for the stock market even after an already impressive run. There’s no guarantee that the so-called “smart-money” is correct, of course, but it’s an important indicator nevertheless.

Housing market “wealth effect”: Generally speaking, the typical American doesn’t have the majority of its wealth tied up in stocks. Rather, their home represents as much as two-thirds of their total assets — and as a result, their general perceptions of the economy and the investing environment tend to be colored by real estate more than anything else. That’s particularly good news in 2021 as housing prices continue to surge; in July, median home prices were up an impressive 18.4% over the prior year. That “wealth affect” can will go a long way toward supporting spending and investment sentiment in the months ahead.

Core inflation vs. food and energy: It’s important to acknowledge that the chatter about inflation risks in 2021 often don’t include the full story. In July, the year-on-year inflation rate in the U.S. remained at a 20-year high of 5.4%, but when you skip food and energy prices that are historically quite volatile, the “core” monthly rate of inflation was just 0.3% in July — which isn’t just modest but below expectations of a 0.4% gain.

Bigger picture, inflation doesn’t equal a bear market anyway: It’s also worth pointing out there is little direct correlation between relatively high inflation and relative low rates of returns for U.S. stocks. Take 2011, when headline inflation threatened to hit a 4% rate (again, driven largely by food and energy) and some investors feared that would upend the recovery from the 2008-2009 financial crisis. There was assuredly volatility that year, but stocks hung tough. The S&P 500 moved a few percentage points higher on the year — then gained nearly 15% in 2012 the following year.

What’s the alternative now?: Despite inflationary talk, hard assets like gold haven’t been that great of a bet for investors looking to grow their nest egg. SPDR Gold Shares GLD, 0.21%, the most liquid physical gold-backed fund out there, is actually in the red over the lasts 12 months and down about 5% from its May peak. And lest you think the bond market is safe, major bond fund iShares 20+ Year Treasury Bond ETF TLT, 0.01% is actually down 10% in the last year — even as yields have rolled back from their spring highs. Gold or bonds may be nice hedges or insurance policies, but where else other than stocks can investors actually access growth on Wall Street right now?

Most investors should ignore short-term trends anyhow: All of the above is based on the most recent headlines and trends. But for most investors, it pays to ignore those trends and stick with a long-term plan. According to Goldman Sachs research, stock market returns have averaged 9.2% per over the past 140 years. Sure, there are always a few extra bad years along the way — but if you stay invested long enough, you’re almost certain to come out significantly ahead. Keep that in mind before you try to time the next potential bear market because of short-term volatility fears."

MY COMMENT

I MUST say.....I agree with EVERYTHING above. Not much more I can say other than that. WELL.....I will also say.....we are early in the re-opening.....so.....the MELT UP and the rising markets are generally going to continue for some time. At least in my mind....to a probability. Of course I know that probability does not mean......definite....or 100% sure thing.

 

YOUR win oldmanram....was about as good as mine. I just got back from a little road trip and a show today. I was in the red today like probably everyone. My BIG WIN of the day was beating the SP500 by 0.02%. Thats it.....but I will take it. Hey....I guess I beat the averages too....except for the DOW. I was (-0.56%).

 

I guess yesterday was a little.....ONE DAY....black swan event. Although it was not really unexpected.....what is going on...."over there".....is a disaster. My wife and I BOTH grew up in military families and we currently have 2 first responders in the younger generation of our family. Thank GOD for those that serve in the military and as first responders....they put their lives on the line EVERY DAY for the people of this country and the world.