The Long Term Investor

I am sure my view is no surprise. I think the financial media and all the BIG EXPERTS are usually predicting to the low side of things. First the media is INHERENTLY negative and gets caught up in their negative stories. Second the BIG EXPERTS typically dont know what they are talking about......the dirty little secret.....they are really NOT experts.

I also believe that many in the financial business INTENTIONALLY low ball their predictions since they would rather be wrong to the UP side of things. No one wants their clients complaining at year end.......and.....the way to avoid this is to downplay the expectations.

ALL of the so called "experts" have been wrong about earnings for at least the past 3-4 quarters. The earnings in general have been WAY BETTER then they expected. I dont see anything new on the horizon for 2022. ALL of the market impacts......inflation, supply chain, tapering, interest rates......are very well anticipated at this point in time. AND.....it is likely that ALL of the anticipated events and hangovers from the shut-down will continue to slowly RESOLVE in 2022.

At worst in 2022 I am expecting the big averages like the SP500 to meet their long term historic averages.....about 10-11%. At best I can see........total returns in the 16-20% range for 2022.

YES......as always there will be corrections and bumps along the way. We may even see some time in the year where we have an extended correction that lasts for 2, or 3, or 4, months. That is just how it works in a NORMAL market. AND as usual......it will be the UNKNOWN EVENT that will be the big potential danger to the markets.......some world event, some massive or severe terrorism, some death of a leader, some CRAZY government action, some unknown economic or financial situation, etc, etc, etc. Living with those unknown events is just part of the experience of being a long term investor. Fortunately really severe events of that type dont happen often. But when they do.....look out below.

I know from all the data and research that the SP500 will be POSITIVE about 70% of the time on an annual basis. So we start the year with the averages STRONGLY in favor of the SP500 being positive for 2022.....at the minimum. I will take those odds all day long. Even if the SP500 is MILDLY positive......a total return of 4-8%......where else am I going to make that on my money in 2022?

At this point the SP500 is UP by 86.65% for the past three years and by 108.76% for the past five years. Plenty of cushion for even a down year. WELL OVER my goal of 10% per year long term average total return. So as is my custom over the past 45+ years.....

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

 

My question is......are we going to see APPLE hit the historic $3 TRILLION in market cap before the end of the year?

 

HERE is a bit of a preview of the week ahead. It will be a FULL five day week since the markets ARE open on NY eve.

Santa Claus Rally watch: What to know this week

https://finance.yahoo.com/news/santa-claus-rally-watch-what-to-know-this-week-142909627.html

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

"As traders return from the holiday-shortened week, the price action heading into the new year will be closely monitored — especially given the relatively light economic data and earnings calendar for the coming days.

The S&P 500 (^GSPC) is entering the period known for ushering in the so-called Santa Claus Rally, or seasonally strong timeframe for stocks at the end of each year.

The term, coined by Stock Trader's Almanac in the 1970s, encompasses the final five trading days of the year and first two sessions of the new year. This year, that Santa Claus Rally window is set to start on Monday, Dec. 27 — or the latest a Santa Claus rally has started in 11 years, due to the timing of the holidays this year.

According to data from LPL Financial, the Santa Claus Rally period encapsulates the seven days most likely to be higher in any given year. Since 1950, the Santa Claus Rally period has produced a positive return for the S&P 500 78.9% of the time, with an average return of 1.33%.

“Why are these seven days so strong?” wrote Ryan Detrick, LPL Financial chief market strategist, in a note. “Whether optimism over a coming new year, holiday spending, traders on vacation, institutions squaring up their books — or the holiday spirit — the bottom line is that bulls tend to believe in Santa.”

And if history is any indication, the absence of a Santa Claus Rally has also typically served as a harbinger of lower near-term returns.

"Going back to the mid-1990s, there have been only six times Santa failed to show in December. January was lower five of those six times, and the full year had a solid gain only once (in 2016, but a mini-bear market early in the year)," Detrick added.

“Considering the bear markets of 2000 and 2008 both took place after one of the rare instances that Santa failed to show makes believers out of us," he said. A bear market typically refers to when stocks drop at least 20% from recent record highs. "Should this seasonally strong period miss the mark, it could be a warning sign."

And this year, investors do have considerable additional concerns to mull heading into the new year. Though stocks closed out Thursday's session at fresh record highs before the long holiday weekend, December still marked a volatile month to start, with renewed concerns over the Omicron variant and the potential for tighter monetary policy from the Federal Reserve weighing on risk assets. Plus, prospects for more near-term fiscal support via the Biden administration's Build Back Better bill have dwindled, and inflation concerns spiked further. Last week, the Bureau of Economic Analysis reported core personal consumption expenditures (PCE) — the Fed's preferred inflation gauge — rose at a 4.7% year-over-year clip, or the fastest since 1983.

"If the U.S. was not battling the Omicron variant, U.S. stocks would be dancing higher as the Santa Claus Rally would have kept the climb going into uncharted territory," Edward Moya, chief market strategist at OANDA, wrote in a note last week. "It is too early to say for sure if we will get a Santa Claus Rally, but given all the short-term risks of Fed tightening, Chinese weakness, fiscal support uncertainty and COVID, Wall Street is not complaining."

Economic calendar

• Monday: Dallas Federal Reserve Manufacturing Activity Index, Dec. (13.0 expected, 11.8 in November)
  
  
• Tuesday: FHFA House Price Index, month-over-month, October (0.9% in September); S&P CoreLogic Case-Shiller 20 City Composite Index, month-over-month, October (0.9% expected, 0.96% in September); S&P CoreLogic Case-Shiller 20 City Composite Index, year-over-year, October (18.6%. expected, 19.05% in September); S&P CoreLogic Case-Shiller Home Price Index, year-over-year, November (19.51% in October); Richmond Fed Manufacturing Index, December (11 expected,11 in November)
  
  
• Wednesday: Wholesale Inventories, month-over-month, November preliminary (1.7% expected, 2.3% in October); Advance Goods Trade Balance, November (-$89.0 billion expected, -$82.9 billion in October); Retail Inventories, month-over-month, November (0.5% expected, 0.1% in October); Pending Home Sales, month-over-month, November (0.5% expected, 7.5% in October)
  
  
• Thursday: Initial jobless claims, week ended Dec. 25. (205,000 during prior week); Continuing claims, week ended Dec. 18 (1.859 million during prior week); MNI Chicago PMI, December (62.2 expected, 61.8 in November)
  
  
• Friday: No notable reports scheduled for release"

MY COMMENT

I dont believe in superstitions. So I put no weight on the SANTA data one way or another as a prediction tool. I do believe that the data shows a STRONG BIAS for the end of the year to bring positive market returns. I see NOTHING in the way of stocks over this next week......except....the return of some of the TRADERS to Wall St.

 

Here is the irrelevant economic news that now one will care about. If they did....this is the sort of report that would drive the markets tomorrow.

US retail sales up 8.5 percent this holiday season

https://news.yahoo.com/us-retail-sales-8-5-013714626.html

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

"US consumers were in the mood to spend this holiday season, with retail sales soaring 8.5 percent over last year, a study released Sunday showed.

Online sales were up 11 percent and in-store sales up 8.1 percent between November 1 and Christmas Eve, according to the Mastercard SpendingPulse study.

The increase, which was the strongest in 17 years, does not reflect automobile sales.

"Consumers splurged throughout the season," said Steve Sadove, senior advisor for Mastercard and former CEO of Saks Incorporated.

The boom saw "apparel and department stores experiencing strong growth as shoppers sought to put their best dressed foot forward," he said.

Americans flocked to clothing, which experienced a 47.3 percent increase in sales year-to-year as well as jewelry, with a 32 percent increase.

The period included several weeks before the Omicron Covid-19 variant spread widely in the United States.

Department store sales were up 21.2 percent, while electronic products experienced 16.2 percent growth.

"It's been a resurgent season for retailers as consumers stocked their carts with gifts and gadgets," Mastercard said.

The study also indicated that US households made their purchases earlier than in years past, including to lock in "guaranteed by Christmas" delivery."

MY COMMENT

This is NOT just economic data.....this is actual FACT. A reflection of the STRENGTH of the consumer economy.....right now. All the fear mongering and talk about Omicron, inflation, etc, etc......had ZERO impact.

BUT......yeah.....we are being told that next year will be a poor year for the markets and will see much lighter earnings. I dont believe it. There is NOTHING standing in the way of the economy right now. The raising of interest rates three times that is anticipated......WILL....be a non-event. Each raise....might....cause a few days of pause in the markets. After all....the current Ten Year Rate is at historic 100 year lows. I dont think investors are as STUPID as some people think they are.

 

Looks like the markets are embracing.....TRUTH.....today. So....we are nicely UP for the open.

Inflation be damned: Here's why Americans spent a ton for the holidays

https://www.cnn.com/2021/12/27/investing/premarket-stocks-trading/index.html

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

"Supply chain problems and the Omicron variant didn't spoil the holiday shopping season. In fact, shoppers turned out in droves.
What's happening: Despite a sluggish start, US retail sales rose 8.5% year-over-year between Nov. 1 and Dec. 24, according to a new report from Mastercard (MA). An uptick in clothing sales, in particular, helped drive the spending surge.

"Consumers splurged throughout the season, with apparel and department stores experiencing strong growth as shoppers sought to put their best dressed foot forward," Steve Sadove, senior advisor for Mastercard, said in a statement.

The report, published over the weekend, includes three big takeaways about the state of the retail industry.

Early shopping: US retail sales grew by 0.3% in November, a sharp decline from the previous month and less than economists had predicted. But that data may have looked weak because so many more people shopped in October, when sales jumped 1.8%.

Mastercard found that consumers had no problem pulling out their wallets earlier than usual as they tried to avoid delayed shipments and product shortages and took advantage of special promotions. Between Oct. 11 and Dec. 24, total retail sales rose 8.6% compared to last year.

Foot traffic is up: Labor shortages and fears about shipping delays hung over Black Friday. But it remained the biggest day of the holiday shopping season, Mastercard found. Over Thanksgiving weekend, US retail sales rose 14.1% year-over-year.

Shopping in person played a major role as Americans showed comfort browsing again. In-store sales over Thanksgiving weekend jumped 16.5% compared to 2020. Over the entire holiday period, they rose 8.1% compared to 2020 and 2.4% compared to 2019.

Online shopping grows: Still, e-commerce continues to grab a bigger slice of the pie. Online sales grew 11% compared to the same period last year, despite a mixed Cyber Monday.

Online shopping accounted for 20.9% of total sales over the holidays. That's an increase from 20.6% in 2020 and 14.6% in 2019.
So why did the all-important holiday season manage to be merry for retailers, despite plenty of curveballs?

In spite rising prices, Americans were eager to spend the extra money they'd pocketed over the course of the pandemic. Stimulus checks and child tax credit payments for tens of millions of families have boosted incomes this year and eased financial strain.

That's contributed to a gap between how consumers say they feel about the economy and how they're actually behaving.

A buoyant stock market that lifts confidence and wage increases have also propped up sentiment in the face of inflation anxiety.

Yet economists and investors are closely watching what happens to shopping patterns as pandemic-era savings are used up and lingering inflation forces some families to make tough choices.

A survey by Gallup published in early December found that 45% of American households report that inflation is "causing their family some degree of financial hardship."

Unsurprisingly, lower-income households are the most affected. Of those earning less than $40,000 a year, 71% said recent price increases have caused hardship. For middle-income households, that figure was 47%. It fell further to 29% for households making $100,000 a year or more."

MY COMMENT

In absolutely TYPICAL fashion the writer of this little piece just......HAS TO.....go to the doom and gloom in the last couple of paragraphs. In articles like this it is the norm to put out the good news....but....at some point in the article you see that little word that is the SIGNAL for what is to follow. That word is........."YET".........and than away they go with the typical laundry list of doom and gloom topics.

As I have said many times on here......there is a big difference between what people are ACTUALLY experiencing in their OWN lives and how they answer economic opinion polls. They answer the polls based on how they are expected to answer.......what they are supposed to say based on polite concern for society and others. At the same time in their own lives....they are doing just fine.

We see that in these holiday numbers. YES.......people are actually doing ok. YES....many people have more money than ever from all the FREE MONEY payments. YES......the general economy is better than reported. YES....people are exhausted and tired of all the stuff being pushed on them. YES.....people just want to move on. SO.....we simply will....regardless what we are "SUPPOSED" to do or feel. People are going to just move on and things will be just fine.

As noted in this little article:

"That's contributed to a gap between how consumers say they feel about the economy and how they're actually behaving"

This so called "gap" is typical.....I have seen it through my entire investing life. It......actually.....is a reflection of REALITY.

 

There is one path to financial success for the vast majority of people......hitch a ride on the back of free market capitalism.

The More Wealth Inequality, the More Comfortable Your Retirement

https://www.realclearmarkets.com/ar..._more_comfortable_your_retirement_809438.html

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

"Two years of COVID malaise, with most news from here to Timbuktu so dreary, is there anything to toast this New Year’s? Few fathom it, but yes—beyond the COVID clouds and trials and tribulations since 2019, people and firms have already sown the seeds of a brighter, more prosperous future. Look to this to avoid getting sideswiped by gloom.

Capitalism gets a bad rap, labeled by many very smart fools a dirty system rife with inequalities. In reality, it’s actually the lack of a system in purest form. It’s fertile soil for long-term growth, innovation, problem solving and the improvement of human well-being. When governments let it, the market’s invisible hand directs capital to creative people who deploy it to make things and solve problems that are better than before. Markets create a wide-open space for the profit motive—the mother of all incentives—to do its work for the future benefit of all, not just some.

Starting a business is a risk. Growing one is, too. But the incentive of potentially big profits—if the risk pans out—motivates. Most fail so incentives must be strong. That allure has long driven seemingly crazy risk takers to solve societal problems big and small. It drives businesses to face challenges head on and adapt to changing landscapes—so many examples since 2020 began.

Witness all the firms that didn’t just survive but thrived as the forced shift to remote working created new business opportunities in digital services. Amazon built its own logistics network and amassed a fleet of delivery trucks when locked-down consumers turned to it for everyday goods. “Curbside pickup” allowed retailers small and large beef up their online sales capabilities on the fly. And how about the many brewers and distillers that migrated from booze to hand sanitizer, filling an acute shortage and reaping rewards in route?

Then: COVID itself. The vaccines may have been partly seeded by governments in some cases, but the innovation was largely privately driven. COVID pills that could greatly ease pressure on hospitals came chiefly from the private sector’s work, one prominent treatment founded (and funded) by a husband-and-wife team who saw opportunity and plunged.

Over the longer term, there is no shortage of opportunities for creative people to reap big profits by tackling societal challenges. Climate, a touchstone issue globally, is an obvious example. While governments focus on reducing emissions, there is huge potential for technology to remove particulates from air and atmosphere. Carbon-free power sources that can actually produce energy at scale are another tree with big low-hanging fruit. So is water treatment, desalination, collection and delivery, particularly in the developing world. Ditto for infrastructure improvements to protect coastal communities if sea levels rise, like offshore dikes.

Cancer. Infectious disease. Chronic and autoimmune conditions. Those are just easily visible problems of today—more will arise. How might inventors and capitalists solve these problems? No clue. But know that humanity won’t just cave and utter a collective, “Well, life was fun while it lasted!” Many seemingly crazy risk takers, guided by the invisible hand, will try to tackle the problems. Most will fail. Some failures will seed future successes. And a few will change the world for the better. This force has kept technological advancement rolling—new ideas and inventions morph off old ones. The simple collision of Moore’s Law, which holds that computer power gets exponentially faster and cheaper each year, and similar laws in battery power and disk storage near-guarantee it. Combine that with continued advances in medicine and engineering, and the possibilities are near-limitless as each new development and discovery compounds mankind’s accumulated knowledge.

It’s already started. Britain contracted private manufacturers to build its first mini-modular nuclear reactors—a profit-driven solution to wind and solar power’s intermittent and somewhat unpredictable generation. In 2021, the world’s first self-piloting electric container ship completed its maiden voyage. Pharma firms are researching how mRNA technology can fight cancer.

This will mint scores of those terrible billionaires like me along the way. To some, that is so horrid. But starting a firm that is weird, different and successful is horridly hard and heart attacking until success is in hand. Those doing it often forsake steady income, make big up-front investments and work 90 hour weeks. You up for that? Why? And why shouldn’t they be rewarded? They largely can’t really spend their supposedly ill-gotten gains. Too much. The more self-made billionaires hog the Forbes 400, the more future entrepreneurs will see taking risk is worthy, humane and a social good, not bad. Preserving the system that made them wealthy preserves the profit motive and gives creative thinkers incentive to take a big risk. Super bright fools condemning capitalism be damned. They should be for humanity’s sake.

It also benefits all investors. Every start-up that mints a fortune for a founder when going public becomes a long-term investment opportunity for everyone who owns stocks. Owning stocks means owning a share in the future earnings all of this creative problem-solving will generate—in your 401(k) or after tax savings. It may not make you billions, but it is a steady path to building a sizable nest egg, thanks to the magic of compound growth. Owning stocks—shares in the “ism” that is behind so much of society’s long-term advance—and all things material you have—is the path most trodden to funding a comfortable retirement."

MY COMMENT

I was a SUCCESS as a small business owner. That gave me the funds to invest in stocks and funds for the long term. I did not have to be a BILLIONAIRE.....all I had to do it hitch my future to ICONIC companies that made others very rich. All I had to do was piggy back on what they were doing.

At this point the VAST majority of NON-GOVERNMENT workers are tied to capitalism for their retirement with their 401K and IRA accounts. The money they are counting on is directly tied to private businesses in the form of stocks and funds.

It is interesting that MANY that demean capitalism are working for the government and have nice benefits and pensions that the rest of us dont have. AND....at the same time if you look at the finances of those people.....most of them are also holders of STOCK in private companies........often the same companies that they BASH.

Personally I CELEBRATE the very rich. They are the basis for our system and provide the money and jobs for the rest of society. They actually provide the vast majority of money that the government spends.

MY message.....if you cant fight them.....join them. Our financial markets allow ANYONE to participate. Take advantage of this FACT and you can achieve financial freedom and security for your family.

 

It is a GLORIOUS day to be a long term investor.

Stock market news live updates: Stocks edge higher, building momentum for Santa Claus Rally

https://finance.yahoo.com/news/stock-market-news-live-updates-december-27-2021-123550439.html

(BOLD is my opinion OR what I consider important content)
"U.S. stocks charged higher on Monday as trading commenced after the holiday weekend, building on a strong start to the typically-bullish end-of-year-run known to investors as the Santa Claus Rally.

All three major indexes gained in the session’s open heading into a quiet final week of 2021. The Dow, S&P and Nasdaq each ticked up modestly amid lower trading volumes and light economic and corporate calendars ahead.

The S&P 500 closed at a record on Thursday, along with the Dow Jones Industrial Average and Nasdaq, buoyed by positive data that suggested the Omicron variant was less likely to lead to hospitalizations. The indexes recouped losses after recent volatility as the market assessed the impact of the virus on the economy.

Investors will tune in to see whether Thursday’s gains sustain momentum for the year-end Santa Claus Rally — one in which stocks climb higher in the final seven trading sessions of a year, plus the first two trading days of the new year.

For reasons unclear, over the past 92 years, the S&P 500 gained 77% of the time during the year-end rally period, according to data from Sundial Capital Research. The average gain in this nine-day trading period tallied 2.66%.

The market will head into 2022 with several key considerations to weigh but with its biggest focus on the course of the pandemic and rising inflationary pressures as well as on measures the Federal Reserve could take in response.

“Inflation and Omicron are the two most important catalysts for the stock market right now,” APAC CEO at Qraft Technologies Francis Oh told Yahoo Finance. “I think that those catalysts are priced in through the market volatility… still I think the market will cautiously move off.”

Merck (MRK) received authorization last week from the U.S. Food and Drug Administration for its at-home COVID-19 drug, just one day after Pfizer (PFE) was also approved for use of its own treatment.

The pill developed by Merck in conjunction with Ridgeback Biotherapeutics, called molnupiravir, was shown to reduce hospitalizations and deaths by around 30% in clinical trial data. Pfizer's pill was reported to be 90% effective at preventing hospitalizations and deaths in high-risk patients.

“One of the ways pandemics end is significant mutation of the virus. It looks like Omicron may be our friend in that regard, significant mutations different enough from the parent that it doesn’t make people as sick,” True Health Initiative President Dr. David Katz told Yahoo Finance Live.

Investors processed a trove of economic releases ahead of the holiday weekend.

The Labor Department reported that initial jobless claimstotaled 205,000, sustaining a downward trend from the highs of their pandemic peak and reflecting labor market tightness brought on by a demand for workers heading into the new year. The latest print brings the four-week moving average for new claims to its lowest in 52 years, ticking up by 2,750 week-over-week to reach 206,250.

Meanwhile, U.S. consumer prices accelerated at the fastest pace in nearly four decades as shoppers confront rising inflation levels ahead of the holidays.

“Workers have a lot of power, and that’s likely to result in continued wage gains,” Girard chief investment officer Timothy Chubb told Yahoo Finance. “What worries us from an inflation standpoint is, at what point do we potentially see some of those inflation risks sort of hand the baton to the labor market?”

Meanwhile, November sales of new U.S. homes jumped 12.4% to a seven-month high of 744,000, buoyed by low mortgage rates and higher demand in the housing industry.

U.S. durable goods orders rose by 2.5% in November, up from the prior month, boosted by a sharp rise in aircraft orders.

“We’ve been saying that this is definitely a buy the dip sort of market because we expect more earnings upgrades to come,” Anik Sen, PineBridge Investments global head of equities told Yahoo Finance Live. “We think that the real debate should be about the length and strength of the economic cycle ahead.”

9:53 a.m. ET: Airline stocks descend following weekend of cancellations
U.S. travel stocks slumped in early trading after major airlines reported hundreds of cancellations and delays amid staffing shortages caused by an uptick of COVID-19 cases among crews and personnel.

More than 2,800 flights were disrupted over the Christmas weekend, caused by the latest coronavirus wave and inclement weather from a winter storm in the northwestern part of the country.

American Airlines (AAL) dropped -2.70% to $17.77 per share at market open. United Airlines (UAL) and Delta Air Lines (DAL) each tumbled 2% to $44.01 and $38.47 per share, respectively.

Cruise ship operators also took a hit, with Carnival Corp. (CCL) sinking 3.5% to $20.45 per share, Royal Caribbean Cruises (RCL) down 3.1% to $77.07 per share and Norwegian Cruise Line Holdings (NCLH) trading down 4.14% to $21.78 per share."

MY COMMENT

A very nice open today. It is STRANGE when the markets actually seem to be moving based on REALITY and REASON. We have a good shot at seeing that sort of event this week.

 

So...being a long term investor....why do I put all this short term day to day stuff on here?

WELL.....for me....I am a former business person, I studied psychology, marketing, and business in college and grad school. I have a law degree but am not licensed to practice. I have been exposed to investing for my entire lifetime. I have been an investor for my entire adult life.

SO.....for me....with my background....I like to now what is going on and why. My daily focus keeps me up to date and informed even though I DO NOT short term trade or try to market time. The daily focus satisfies my personality. It ALSO keeps me from being STUPID. If I know what is going on and why....I am able to put up with.........AND IGNORE...... all the short term insanity. Knowing what is going on in the world and why gives me the confidence to just sit and be long term as an investor.

Now....if your personality is different........if knowing all the daily stuff drives you crazy or makes you nervous......just ignore it. Turn off the TV. Do your life in accordance with how your personality works and do whatever allows you to be a LONG TERM INVESTOR.

 

So I just looked at my account for the first time today. I am siting right at.......JUST BELOW......1% away from an all time high. It would be a nice end to the year to be at an all time high to close out the year. I am sure that many on here are already at an all time high right now. Who would have thought when you look back at all the DOOM and GLOOM that we have had to put up with over this year.

I think perhaps the greatest TRAIT of a good investor is simply the ability to.....ENDURE.

AND....as we sit and ENDURE.....this time of the year is a good time to look back and evaluate all that happened over the past year. It is a good time to mentally take stock of family and friends and the BLESSINGS that we have experienced over another year of life. A time to CELEBRATE.

SO I will say....in my usual early fashion......HAPPY NEW YEAR.......and......I SALUTE the OLD year ........2021.

 

I had a really nice STRONG GREEN day today. PLUS......I beat the SP500 by 0.33% as a bonus.

My only down stock was poor AMAZON. A great company having a so-so year. They were down by 0.82% today. For the past one year they are up by +7.4%. The verdict is STILL out on the new management. It is way too soon to know that result.

 

Thank you SANTA.......now......lets get going on the remaining four market days for 2021.

Stock market news live updates: S&P 500 closes at all-time high jump-starting the Santa Claus Rally

https://finance.yahoo.com/news/stock-market-news-live-updates-december-27-2021-123550439.html

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

"The S&P 500 closed at an all-time high on Monday — again.

For the second consecutive trading session, the index soared past its previous record as markets charged higher heading into the final week of 2021. All three major U.S. indexes gained in a promising sign for stock market bulls that a Santa Claus Rally is well underway.

At close, the S&P was up 1.38% to 4,791.19, while the Dow saw a 350-point jump to 36,302.38. The Nasdaq Composite also gained 1.39%, closing at 15,871.26.

The S&P's move marked its 69th record close of the year after the index hit an intraday high in morning trading, up even as COVID-19 cases rise."

MY COMMENT

I am currently at a NEW ALL TIME HIGH. I am seeing a very good...."probability"....that I will end the week and the year at an all time high. The market direction at this point is definately POSITIVE for the rest of the week.

 

The SANTA rally and the markets are on fire. The rally started on December 20 when the SP500 stood at 4537. Here we are five market days later on December 27 and the SP500 is at 4791. This is a SANTA gain of +5.6%.

AND.....there is GREAT potential for continued gains over the rest of this week. We are in pretty good shape right now for a total SANTA RALLY of about +10% by the time we get to the end of the day......and the last market day of the year.......on Friday, December 31.

 

Speaking of AMAZON and the slow year they have had this year.

Why Amazon Stock Is Poised to Rally, According to One Analyst

https://finance.yahoo.com/m/e6ea7f7e-bb76-3fe8-be35-0f48e0da9381/why-amazon-stock-is-poised-to.html

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

"Shares of Amazon.com have lagged the broader market this year. It’s not just Barron’s that is bullish on the stock heading into 2022; an analyst at Monness Crespi Hardt sees about 33% upside for shares.

Analyst Brian White reiterated his Buy rating and $4,500 price target in a note on Monday. Amazon stock closed down 0.8% to $3,393.39 on Monday, while the S&P 500 index was up 1.4%. Amazon shares are up only 4.2% in 2021, well behind the S&P 500 index’s 28% rise.

“After a strong stock performance in 2020, Amazon has trailed this year’s healthy market rally; however, we believe the company’s fortunes are poised to change in 2022,” White wrote. “In our view, Amazon is uniquely positioned to exit this crisis as one of the biggest beneficiaries of accelerated digital transformation.”

Amazon’s flagship e-commerce business gets plenty of attention, but White is especially upbeat about the company’s Amazon Web Services business. He points to expansions beyond its core public cloud to solutions that support on-premises configurations, the internet of things, and other projects.

He thinks the stock’s growth path is very attractive, across e-commerce, AWS, digital media, advertising, Alexa and more.

“Moreover, the company has started to deliver more attractive profit trends over the past couple of years,” White wrote. “However, as Amazon continues to aggressively invest back into the business to grow at a rapid rate, the company’s profitability is well below its long-term potential. Therefore, we believe traditional P/E metrics are not applicable, nor other profit metrics, thus we value the stock on an enterprise-value-to-revenue ratio.”

Amazon stock was among Barron’s top stock picks for 2022. While the stock isn’t cheap, its fast-growing businesses like AWS and advertising have the high margins to warrant more optimism.

MY COMMENT

I still see AMAZON as one of those once in a lifetime ICONIC companies. Microsoft was another one in the 1989 to 2002 time period. Amazon is pouring a lot of money into employees and infrastructure at the moment. Time will tell if this investment will pay off. Judging from past history.....it will.

They NEED.....strongly need.....to split this stock. Ten to one would be about right. That would kick start an EPIC rally in the stock. Management needs to WAKE UP on this issue and do the right thing for shareholders.

I have no plans to sell or cut back on AMAZON in my portfolio.

 

HOMEOWNERS continue to see their net worth go up with rising house prices.

Home price growth in the US slows for third straight month

https://finance.yahoo.com/news/case-shiller-home-price-october-2021-140005044.html

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

"Home price growth in the U.S. has slowed for the third straight month.

Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted a 19.1% annual gain in October, down from 19.7% from September. The 20-City Composite posted a 18.4% annual gain, down from 19.1% a month earlier. The 20-City results came in very close to analysts’ expectations of a 18.5% annual gain, according to Bloomberg consensus estimates.

“In October 2021, U.S. home prices moved substantially higher, but at a decelerating rate,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI. “All 20 cities saw price increases in the year ended October 2021. October’s increase ranked in the top quintile of historical experience for 19 cities, and in the top decile for 17 of them. As was the case last month, however, in 14 of 20 cities, prices decelerated — i.e., increased by less in October than they had done in September.”

Despite the slowdown in the pace of growth, the October reading was the fourth-highest reading in the national index’s 34 years of data, according to Lazzara. The top three were the three months immediately preceding October. Historically low inventory, low interest rates and pent-up demand from the COVID-19 pandemic have been pushing home prices upward.

"Since the start of the pandemic, house prices in the U.S. have been inflated by historically low interest rates, supply restrictions which included a foreclosure moratorium, and increased savings for a down payment due to limited options for discretionary spending," said Zillow Senior Economist Kwame Donaldson, in a statement. "House price growth is now slowing because many of these supports have expired or are dwindling. But other supports remain – the U.S. labor market touts low unemployment and robust wage growth, a tsunami of millennials are reaching the peak age for first time homebuyers, and the for-sale inventory unexpectedly tightened in October and November."

Once again Phoenix led the 20-City Composite by posting a 32.3% annual gain. Tampa and Miami followed by posting a 28.1% and 25.7% annual increase, respectively.

“Home prices continue to appreciate at double-digit rates — two-to three-times faster than a year ago — across all metropolitan areas reported by the CoreLogic S&P Case Shiller Index,” said CoreLogic Deputy Chief Economist Selma Hepp, in a statement prior to the results. “Unfortunately, the rate of home price growth will be limiting for many young buyers who have yet to accumulate sufficient equity gains, and an expected increase in mortgage rates next year will present further challenges. Together, these two factors will keep a lid on continued home price acceleration.”

Last week, the National Association of Realtors said the median existing-home price for all housing types in November was $353,900, up 13.9% from November 2020 ($310,800), as prices increased across the U.S., furthering indicating that prices are still heading north.

Soaring prices have been bad news for first-time homebuyers in particular. In November, the share of first-time homebuyers fell to 26%, down from 32% a year ago, according to the NAR.

But according to a new survey by Realtor.com, first-time homebuyers are optimistic as inventory is expected to pick up entering the new year. Seventy-two percent of first-time homebuyers expect to make a purchase in 2022.

“In the face of competitive market dynamics, our recent survey shows that first-time home buyers are adjusting with 9 in 10 planning to employ some kind of tactic to navigate the competition, compared to just 8 in 10 in our previous survey last spring,” said Realtor.com Chief Economist Danielle Hale in a statement prior to the results.

MY COMMENT

In my little neighborhood of 4200 homes....there are right now SEVEN homes for sale. They range from a high of about $3MILLION to a low of $650,000. In this area of Central Texas we have been in a BOOMING market for years now. There is no slow down in the Fall and Winter. I expect that inventory will rise some starting in January....but not enough to make buying a home a pleasant experience for most buyers. It is going to continue to be an EXTREME sellers market in this area for a long time.

I think it will take interest rates back in the 5-7% range to put a dent in the housing markets. The demand for home ownership among younger people is EXTREME.

This recent BUMP UP in home equity is a nice little BONUS for the baby boom generation facing retirement or in retirement.