The Long Term Investor

YES....Globetrotter. When I went to cash the best I could do for safety was a US Treasury Money Market Fund. Luckily that was what I had linked to that account from long before. BUT.....if there had actually been a world wide collapse......I doubt any of my money would have survived. Like EVERYONE and EVERYTHING else......I imagine I would have been financially WIPED OUT. LUCKILY.....I survived and avoided much of the financial PAIN. If my memory is right....by the time I got back in.....late March 2009.....the losses in the markets were down by about 60% to 65%. I thought at worst my risk of getting back in was a loss of 10% more from that point. I thought WORST CASE.....the markets could end up at NEGATIVE 65% to 70%.

That time period was the ABSOLUTE first time in MY LIFE that I ever even imagined that there was ANY possibility of a world wide collapse......and when I bailed I was considering that the....."POSSIBILITY"....was as high as 25%. A very SCARY time back than.......yet.....it was CLEAR that MOST people had NO IDEA how bad it was.......even as Lehman, other big financial companies and semi government agencies like Fannie Mae......were COLLAPSING.

 

Yes.....it would have collapsed most world governments......and had the worst case potential to end up as a ROAD WARRIOR situation.

ALL....due to the IDIOCY of the Mortgage Derivatives and how they were allowed to get out of control. ANOTHER EXAMPLE......of our financial and investment banking GENIOUSES unleashing products that they had NO CLUE how or what they could cause. The financial MINI-COLLAPSE in 1987.....the FLASH CRASH.....was another example of those people having NO IDEA of the impact of the priducts they created.....in that situation it was "Portfolio Insurance" (not actually insurance)....which DID NOT function as they expected.....AT ALL. That situation was compliments of the early QUANTS on Wall Street.

 

The "Portfolio Insurance" above was a computerized trading and hedging strategy developed by the early QUANTS. They were the kings of the world all full of HUBRIS about the system and how it could NOT fail.....till it did taking the markets with it in the FLASH CRASH in 1987.

 

We at least are open today....even though it is a mixed market. This is somewhat of a relevant article to the comments above.

How The Big Short Turned Into The Big Long

https://awealthofcommonsense.com/2021/09/how-the-big-short-turned-into-the-big-long/

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

"Following the 2008 financial crisis, pessimism went mainstream.

Zero Hedge became one of the biggest financial websites. Every professional investor started subscribing to Grant’s Interest Rate Observer.

Complaining about the Fed and predicting hyperinflation would immediately get you eyeballs.

Black swan funds were all the rage. Every headline detailed the next big short. You couldn’t go a day without reading about the next market crash that was coming…only this one was going to be EVEN BIGGER THAN THE LAST ONE.

I understand why this happened.

It was the biggest recession in a generation. We had two 50% crashes within the span of a decade.

This triggers the recency bias (giving greater importance to more recent events) and the availability bias (overestimating an event that had a profound impact on us).

Many households and companies were ruined by the financial crisis. Those scars run deep.

Every character from The Big Short became famous. Just think about the big-name actors that played these guys in the movie.


Pessimism sounds more intelligent when you just witnessed the financial system teetering on the edge of failure.

Everyone so badly wanted to become a contrarian that going against the tide was no longer a contrarian strategy. It was the norm.

No one believed the markets were set up for one of the best bull market runs in history because so many investors were busy fighting the last war.

I knew of one hedge fund that was early to John Paulson’s housing short. The problem is they didn’t invest enough to offset huge losses in other parts of their portfolio. There was some major regret.

So in the aftermath of the Great Financial Crisis, well after markets had already bottomed, they created a new fund to invest exclusively in big short-type investments in a concentrated manner to really juice the returns.

This sounds great in theory until you realize Paulson and all of the other people who made a killing by shorting the housing market pulled off a once-in-a-lifetime trade.

To state the obvious, there’s a huge difference between once-in-a-lifetime and once-a-year.

Needless to say, this fund was closed in short order since the financial world doesn’t come apart at the seams every single year.

I wonder if this same bunker mentality so many investors founds themselves entrenched in following the 2008 blow-up will infect the next generation of investors who came up in the current cycle but in the opposite way.

Instead of everyone being in search of the next big short what if the mistake over this next part of the cycle is constantly looking for the next big long?

Just think about how fantastic returns have been in the U.S. stock market since the bottom in 2009:


The S&P 500 is up almost 19% per year. The Nasdaq 100 is up more than 25% per year. For more than 12 years running!


Are you kidding me!?


Private equity and venture capital firms would kill for those returns.

Of course, many PE and VC funds have also crushed it in this bull market. Being a unicorn was once a novelty. Now there are hundreds and hundreds of start-ups and private companies worth at least a billion dollars.

Then there is the performance in crypto. Trillions of dollars have been created in a matter of years. The sheer number of multi-millionaires minted in this space in such a short amount of time is mind-boggling.1

It’s unreasonable to expect you can earn ridiculous riches in such a short period of time. And yet, so many people in tech and crypto have done just that in recent years.


This cycle has defied all well-reasoned financial advice.


Don’t chase yield. Don’t speculate. Don’t invest in something you don’t understand. Don’t invest in something with no intrinsic value. Don’t expect to get rich quickly.


Certain investors are now so conditioned to see huge gains in a hurry they assume it’s the norm.


It’s not.

The Wall Street Journal profiled a bunch of young social media personalities in a story last week about how the ground is shifting in the financial media.

Many young people don’t trust the old guard. They want people who speak their language or look like them or understand them to educate them on the financial markets.

Whereas in the past all it took was a market crash prediction to get attention, the younger crowd prefers a glass-is-half-full perspective. They don’t want negativity.

There was a story of a YouTuber warning his viewers about the potential risk for meme stock du jour AMC share to collapse. It didn’t go well:

After the live stream ended, Mr. Paffrath started shedding thousands of subscribers, he said. Most videos with positive titles garner more than 200,000 views, he says, while videos that have negative takes on a company or an industry in the title rarely get more than 60,000 views.

This is a complete one-eighty from the post-2008 world where people sought out negativity and bad news. This group prefers positivity.

And can you blame them? If you started investing in a post-GFC world you have a completely different view of the markets than those who came before you.

Here’s a headline from Bloomberg last week:


And the explanation from said stock-picker:

People who are “say maybe 10 years older than me, so in their 50s, they probably were in the market at the time, and they got burnt,” Yiu said in an interview at his Mayfair office. “They still think that tech today is the same thing as what happened then, and is going to go bust.”

“I think to the younger generation, most people actually understand what’s going on,” said Yiu, whose firm was started in 2017 with a 25 million pound investment from 73 year-old billionaire Peter Hargreaves. “If you look at our top 10, at one point, we are probably direct or indirect users of some of these services ourselves, whether it’s personally or through business.”

I can see both sides of this one.

To be fair, the younger optimistic types have been far more right than the older people with a pessimistic bent this cycle.2 Just think about how many old grey-haired famous fund managers have been pounding the table that this is a bubble for years now. They’ve all been wrong.

On the other hand, more seasoned investors understand the good times never last forever. Making money isn’t always this easy. Returns can’t possibly stay this high indefinitely.

Look, if you’re going to have a particular bent in this world, it pays far greater dividends to choose optimism over pessimism.

But there is a big difference between looking at the glass as being half full and assuming the glass is a bottomless pit of margaritas."

MY COMMENT

YES.....we are now back in one of those.....NEW ERA.....NEW NORMAL....times. BUT....for those of us that have invested through it ALL....we know that events simply repeat over and over. My DEFAULT MODE is to stay fully invested and NOT try to anticipate market events. I KNOW that over the long term I will get better results than most people doing this. In fact...this is what the averages do.

Even though I have seen a few of them.....I DO NOT try to invest according to or anticipate the .....next....once in a lifetime event. BUT having invested through at least FOUR....ONCE IN A LIFETIME....events in my lifetime.....I am hoping that I will not see any others. The FOUR are.......the STAGFLATION economy of the early 1980's....the 1987 Flash Crash.......the 2008/2009 possible world economic crash......and now.....the economic shut down of the 2020 Pandemic.

COME ON MAN.....FOUR....... 200 year economic events in my lifetime is plenty for me......STOP.

 

I am starting out the week with a TINY loss so far today. My WINNERS so far are....Apple, Amazon, and Google. Seems like a meaningless day so far......with decent potential to end the day in the green. At least we made it through the summer and got past Labor Day without any real market negativity. Looking good.

 

A DIRECTIONLESS day with nothing going on one way or the other. Here is how we are starting the short week.

Stock market news live updates: Wall Street aims to build on gains as COVID-era benefits expire

https://finance.yahoo.com/news/stock-market-news-live-updates-september-7-2021-114538578.html

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

"Stocks dipped in early trading on Tuesday, with Wall Street indices hovering close to last week's record highs, with analysts closely watching the end of pandemic-era jobless benefits and its impact on the labor market as the COVID-19 pandemic clouds the outlook.

Last week, the S&P 500 Index set an all-time high, and the Nasdaq Composite briefly hitting an intraday record, despite August's jobs data falling far short of market expectations. While payrolls showed the economy creating a relatively slim 235,000 new positions, the data stoked speculation that the Federal Reserve's Open Market Committee (FOMC) could alter its timetable for scaling back its stimulative bond-buying, which has propped up investor confidence.

"On balance, we expect the September FOMC statement to confirm the July minutes that tapering can begin later this year," wrote Marc Chandler, chief market strategist at Bannockburn Global Forex, in a morning research note.

"While the Fed will want to preserve the maximum flexibility, incorporating tapering into the statement would likely count as the ample notice [Fed Chair Jerome] Powell has promised in a way that notification in the FOMC minutes does not," Chandler wrote, adding that tapering would likely begin in December.

Meanwhile, Wall Street has begun scaling back expectations for growth. Goldman Sachs cut its forecast for fourth-quarter growth, citing a "harder path ahead" for consumer spending in the face of rising COVID-19 infections.

While the ongoing COVID-19 pandemic fueled by the Delta variant figured prominently in the miss, especially for softness in the leisure, hospitality and bars/restaurant sector, some analysts have also pointed to the labor shortage becoming a drag on jobs creation. A lack of available workers have prompted businesses to hike pay, adjust hours, and even lose some business.

"With respect to no job gains in leisure and hospitality, while I'm not discounting the influence of Delta on consumer behavior for some and the supply problems out of Asia because of Covid dictated restrictions, I'm mostly blaming the lack of workers," veteran market analyst Peter Boockvar said in a research note to clients on Tuesday.

He pointed to National Federation of Independent Business data on Friday that showed plans to hire, positions not able to fill and compensation all at 48-year highs, all records for the survey.

Still, investors have been mostly undaunted by the rise of the Delta variant, and dour data. The indexes' latest march to record highs has been powered by technology stocks, with the Nasdaq extending a run of outperformance from August.

With the trading week shortened by Labor Day, traders will be keeping an eye on producer prices data for hints at inflation pressures, as well as the end of a crucial source of unemployment insurance during the pandemic.

Under Congress' Coronavirus Aid, Relief, and Economic Security (CARES) Act, millions of Americans were offered additional unemployment support during the pandemic with augmented federal unemployment benefits. However, those benefits expired over the weekend, and economists think it will help bolster a labor market that's suffered from a lack of workers.

According to a Goldman Sachs analysis, "unemployed workers whose benefits ended early saw a statistically significant increase in their re-employment probability ... So we expect the benefit expiration to boost job growth in coming months."

10:20 a.m. ET: BMO ups S&P 500 target, earnings still expected to impress

August was an uncharacteristically banner month for the stock market, with the S&P stretching out a win streak to seven consecutive months. That was a bullish signal for analysts, and on Tuesday BMO hiked its year-end estimate for the broader market in a research note to clients:

Robust corporate earnings certainly provided a strong layer of support for US stocks with

Q2 marking another record-setting reporting period for S&P 500 companies in terms of

growth, surprise, and beat rates. This blistering rate of recovery in earnings, which has

again surpassed our already optimistic expectations, combined with an economic

backdrop that has improved throughout the year, has prompted us to revise our 2021 S&P

500 EPS target to $210 from $190, a 10.5% uptick (report). Given this increase, we also

raised our 2021 year-end S&P 500 price target to 4,800 from 4,500, which implies a 22.9x

P/E with the expectation that price multiples will remain above average amid still

historically low interest rates, but continue to contract in the coming months.

Still, markets are testing the downside after a long holiday weekend, with the S&P giving back nearly 0.5% from Friday's close. Meanwhile, the Dow is off by over 200 points."

MY COMMENT

As I say over and over.......we have BARELY scratched the surface of the re-opening.

 

WELL......how things change as the day moves on......I am now in the GREEN......by less than $500. Yes....I am being facetious and a smart ass toward myself. At least better than being in the red.....I guess.

 

Since it is a very SLOW market day...I am posting the info below for anyone that is starting out on their financial journey.

Retirement Accounts You Should Consider
Take a look at the many types of retirement plans available in today’s market.

https://money.usnews.com/money/retirement/articles/retirement-accounts-you-should-consider

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

"Saving for retirement doesn't involve a one-size-fits-all plan. Since every situation is unique, it's important to look for the retirement account that best lines up with your personal job situation and future goals.

Here are some of the types of retirement accounts you might be eligible to use:

• 401(k).
• Solo 401(k).
• 403(b).
• 457(b).
• IRA.
• Roth IRA.
• Self-directed IRA.
• SIMPLE IRA.
• SEP IRA.
• HSA.

Here's a look at how each type of retirement plan works and how to make the most of these long-term savings vehicles.

401(k)
A 401(k) account is offered through employers, so you'll need to check if this plan is available at your workplace. In 2021, the IRS allows you to contribute up to $19,500 to a 401(k) if you're under 50 years old. If you are age 50 or older, you can put up to $26,000 in the account. Your employer may match a certain portion of your contributions. The amount contributed to a 401(k) is deducted from your taxable income. You'll need to start taking withdrawals from the account, known as required minimum distributions, starting at age 72. When funds are withdrawn, they are subject to taxes. You may also face penalties if you take money out of the account before age 59 1/2.

Solo 401(k)
Also known as a one-participant 401(k) plan, a solo 401(k) is designed for an individual business owner without any workers. If you are self-employed and don't have any employees, you may also be eligible for a solo 401(k). The IRS allows contributions of up to $58,000 in 2021. If you are 50 or older, you can also make catch-up contributions of up to $6,500.

403(b)
SPONSORED

If you work for a nonprofit or tax-exempt organization, you may be eligible for a 403(b). This account is similar to a 401(k) and allows you to contribute up to $19,500 in 2021. If you are 50 or older, you can set aside up to $26,000. Earnings grow tax-free until you withdraw them. Distributions from a 403(b) are considered taxable income.

457(b)
A 457(b) plan is offered through state and local governments. If you are eligible for the account, you'll be able to contribute up to $19,500 in 2021, or $26,000 if you are 50 or older. You can also withdraw funds before age 59 1/2 without incurring a penalty.

IRA
An individual retirement account is only available to those with earned income. If you earn $2,000, you'll be able to put up to $2,000 into the account. The contribution limit for an IRA is $6,000 in 2021, or $7,000 if you are 50 or older. Like a 401(k), you'll receive a tax deduction for the money you put into an IRA. When you withdraw funds, they will be considered taxable income. You'll need to start taking distributions from the account after you turn 72.

Roth IRA
Like an IRA, you need earned income to be eligible for a Roth IRA, and the amount contributed cannot be more than the amount you earn. You can set aside up to $6,000 in 2021, or $7,000 if you are age 50 or older. Unlike an IRA, you'll pay taxes on the amount you contribute to a Roth IRA. However, the money grows tax-free in the account, and no income tax will be due on Roth IRA withdrawals in retirement. A Roth IRA does not require that you take distributions in retirement.

Self-Directed IRA
A self-directed IRA has the same contribution limits and eligibility requirements as a traditional IRA, but differs in the investments that you are able to make. Unlike traditional accounts, a self-directed IRA allows you to place funds into alternative assets such as cryptocurrencies, precious metals and real estate.

SIMPLE IRA
If you work at a small business with 100 or fewer employees, you may be eligible for a Savings Incentive Match Plan for Employees IRA. To participate in a SIMPLE IRA, you'll need to have earned at least $5,000 from the company during the previous two years and also be expected to receive at least $5,000 in the current year. Through this account, you'll be able to contribute up to $13,500 in 2021. If you are age 50 or older, you can make an additional catch-up contribution of $3,000. In addition, employers are required to make contributions to the account. Like a 401(k), the amount you contribute will be deducted from your taxable income, but when you withdraw funds in retirement, they will be subject to taxes. If you take money out of a SIMPLE IRA before age 59 1/2, you may have to pay a penalty.

SEP IRA
A Simplified Employee Pension IRA is designed for small business owners with several employees and self-employed individuals. If you are eligible for a SEP IRA, you'll be able to set aside up to either 25% of your compensation or $58,000 in 2021, whichever is less. You won't pay taxes on the amount contributed, but the funds withdrawn will be subject to taxes. You'll need to start taking withdrawals at age 72. If you withdraw funds before age 59 1/2, you may have to pay penalties on the amount taken out.

HSA
A health savings account can be used to build funds to help cover health costs in retirement. To be eligible for an HSA, you need to have a high-deductible health insurance plan. You can contribute up to $3,600 to an HSA in 2021 as an individual, or as much as $7,200 if you have family coverage. There is an additional $1,000 contribution allowed if you are 55 or older. The amount set aside in an HSA is tax-deductible. The funds grow tax-free and can be withdrawn tax-free if they are used to pay for qualifying medical expenses."

MY COMMENT

As you can see.....there are MANY government sanctioned ways to save for retirement and for the LONG TERM. There are many options and many of them can be doubled or tripled up. Although in my work life......I personally...... DID NOT chose to put all savings into a retirement vehicle. Being a business owner in the older days....till 1999.....I used a type of pension plan called a KEOGH ACCOUNT........a small business type of pension plan......which allowed me to contribute up to $30,000 yearly....which I did every year. The rest of my savings money went into my personal (taxable) brokerage account at the end of each business fiscal year.

 

I suspect that this is true.

Millennials will power a bull market in stocks for decades: Ark Invest's Cathie Wood

https://finance.yahoo.com/news/mill...ecades-ark-invests-cathie-wood-161357927.html

(BOLD is my opinion OR what I consider important content)
"Cathie Wood tells Yahoo Finance Live that just like baby boomers have heavily influenced the stock market for decades, their children — aka millennials — will be equally if not more important to the investing landscape in the decades to come.

And that is one reason why the closely followed Ark Invest founder and CEO is staying long-term bullish on stocks.

"This is the echo of the baby boom," said Wood on the rise of millennial investors, notably in 2021. Wood referenced research that suggests the bull market in stocks may extend to 2038 as millennials build out their portfolios.

In many respects, it's these millennials with their increasing spending power that has created the meme- stock movement that began in January. It's a dynamic that has helped power the share prices of easy-to-understand, household name companies such as GameStop (GME), AMC (AMC) and BlackBerry (BB) to dizzying new heights.

By the same token, millennial interest in markets has arguably benefited the stock price of Wood favorite Tesla (TSLA) backed by well-known CEO Elon Musk (Wood has a $3,000 price target on Tesla). And in the process, this has made Wood's investment advice highly sought after.

Adds Wood, "I lived through the baby boom years, and that equity market move was magnificent. It was a very simple assumption, and it worked. And I do feel we are in the same place now."

To be sure, many of Wood's investments through her various ETFs have a millennial vibe as they are focused on companies leading in high-profile technologies.

For example, Wood owns shares of Robinhood (HOOD) and Coinbase (COIN) — two companies at the leading-edge of the rise in cryptocurrencies. The same could be said for Square (SQ), which is also morphing into a super app as it expands deeper into crypto. Roku (ROKU) is also a top holding for Wood, a play on millennials ditching their expensive TV bill for more affordable streaming services.

"So many people ask me, 'Are we in a bubble?' We couldn't be further from it. I do not believe that the average investor understands how productive these next five to 15 years are going to be [for stocks] as these S-curves feed one another and enter exponential growth trajectories that we have never seen before," Wood said."

MY COMMENT

EXACTLY the way I feel and what I lived through with the baby boomers and the HUGE increase in stock investing over the past 4 decades. This event is NOT an echo of the baby boomers......it is going to TOTALLY swamp.....them. The Millennials are NOW the largest generation in history. AND.......as each year goes by....more and more people are investing and active in the markets. Yet another reason that I am FULLY invested......all the time.

 

WELL.....I ended the day....technically.....in the RED. So slight as to be basically flat for the day. What I do really like on a day like this was the nice beat I got on the SP500 today by 0.26%. I have been racking up some nice beats on the SP500 lately.

We live to fight another day.

 

WOW......sorry to hear that Zukodany. What a pain and how destructive that water can be.....horrible to experience a flood. Has the property flooded in the past?

 

These should make it much EASIER for the economy to record a BEAT....when the time comes.

Goldman Sachs cuts US growth forecast amid delta variant concerns
Firm lowered growth forecast to 5.7% from 6%

https://www.foxbusiness.com/economy/goldman-sachs-cuts-growth-forecast-delta

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

"Goldman Sachs Group Inc. economists lowered their forecast for U.S. economic growth this year due to concerns the COVID-19 delta variant could impact consumer spending.

The updated forecast from economist Ronnie Walker anticipates the economy will grow at 5.7% this year, down from the previous estimate of 6%. The drop comes as the firm cut its fourth-quarter forecast to 5.5% from 6.5%.

The revision was the second made this month by the firm’s economist, who on Aug. 18 lowered its third-quarter outlook to 5.5% from 9%.

"Although we expect the Delta setback to be brief, two longer-standing concerns pose challenges for consumption growth over the next few quarters," Walker wrote.

The economists see the drop in fiscal stimulus, which peaked during the second quarter, weighing on spending as it continues to fade through the end of next year.

In addition, an elevated level of spending on goods will return to normal levels, but spending on services will be slow to recover in still-depressed categories, like office-adjacent services.

Goldman revised next year’s growth forecast up to 4.6% from 4.5%.

Goldman Sachs isn’t the only Wall Street bank to tweak its economic outlook in recent days.

Last week, Morgan Stanley’s Ellen Zentner slashed her third-quarter GDP forecast to 2.9% from 6.5% amid concerns the delta variant caused a slowdown in August.

She held her fourth-quarter GDP forecast at 6.7%.

The U.S. economy has shown signs of slowing down in recent weeks.

The August jobs report released on Friday showed hiring slowed sharply last month. Nonfarm payrolls added 235,000 workers in August, well shy of the 728,000 new jobs that economists surveyed by Reinfitiv were expecting.

Other releases have shown a sharp drop in consumer confidence over coronavirus and inflation worries and a slowdown in housing."

MY COMMENT

OK. Lower away....it should make it easier to meet or beat the new expected numbers. Of course....none of these......guesses.....about the future economy will matter in the slightest to long term investors as they sit and do nothing.

 

I was SICK as a dog....last Tuesday to Saturday. I feel pretty good today and am doing normal activity. I found out yesterday that my lab work showed that I had Salmonella. I have never had.....real....food poisoning before...it was an experience. At least I did not miss anything other than a rehearsal on Saturday.

All the shows that I have this month are later in the month. I am looking forward to the milder weather as we go into the fall. Just about every show I do is OUTSIDE.....often in 100+ degree heat.