The Long Term Investor

I certainly agree with the general thesis of this little article.....but if I wanted to capture all the gains in the 30 companies discussed....I would probably do so with the SP500 Index of the NASDAQ 100.

The Ultimate Superpower in Investing

https://compoundadvisors.com/2022/the-ultimate-superpower-in-investing-2

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

"These are the top 30 stocks in the S&P 500 over the past 30 years…


Data via YCharts
What stands out? The unfathomable cumulative returns, a product of time and the magic of compounding.


What’s missing? The many periods of excruciating pain that anyone invested in these companies would have experienced.

When thinking about big winners in the stock market, excruciating pain probably isn’t the first thing that comes to mind. We tend to focus instead on the final outcome (eye-popping long-term gains), ignoring the tremendous fortitude (holding through large drawdowns) required to achieve that outcome.

The top-performing company, Monster Beverage ($MNST), is the perfect example.

It gained over 260,000% over the last 30 years. But in order to reap those incredible returns an investor would have had sit through an 88% drawdown that lasted 6 years, along with a pair of 50+% drawdowns that spanned multiple years as well.


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Everyone’s familiar with the Netflix ($NFLX) of today, the company with over 220 million subscribers. But that didn’t happen over night.

The “death” of Netflix was predicted many times, first in late 2002, not long after its IPO. Walmart was entering the DVD-by-mail business, and who could ever compete with the all-powerful Wal-Mart?

In 2006, its “death” was again predicted, when both Apple and Amazon announced plans to start movie-downloading services. Surely Netflix could not survive such a threat.

But survive they did, only to find new doubters after announcing their plans for streaming video. Netflix shares dropped 12% by mid-January of 2007 and the analyst downgrades ensued. The streaming video service would cost Netflix an estimated $40 million in 2007, a sum that was deemed “too much.”

At the time, Netflix’s biggest threat was said to come from (don’t laugh) Blockbuster. Blockbuster’s online rental service was “taking off,” adding over 700,000 subscribers in the prior 2 months.

Blockbuster’s CEO had this to say about their closest competitor: “We have everything that Netflix has, plus the immediate gratification of never having to wait for a movie.”

What happened next?

Just 3 years later, Blockbuster would file for bankruptcy protection while Netflix stock has advanced 11,000% since their streaming video service was announced in January 2007.

Since its IPO in 2002, Netflix is up over 39,000%, an annualized return of over 35%.


Netflix’s rapid ascent in recent years seems easy and inevitable in hindsight, but in truth it was anything but.


There were many struggles along the way (see the pair of 75% declines below), and many more doubters than believers.


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Everyone knows the Amazon ($AMZN) of today, with over $470 billion in revenue and 200 million global prime members. But few likely recall the struggles of its past.

Back in 1997, the year Amazon went public, fortune published an article with the following headline: “Why Barnes & Noble May Crush Amazon.”

The author argued… “Anything Amazon.com can do on the Internet, so, too, can Barnes & Noble. Once you look beyond the Website you begin to see why, in this battle at least, the odds favor the $3-billion-a-year Goliath [Barnes & Noble].”

The rest, of course is history, but not before the dot-com crash and a 94% drawdown for Amazon shareholders. It would take nearly 10 years (December 1999 to November 2009) for Amazon’s stock to hit a new high again.


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That means if you had $10,000 invested in Amazon in December 1999 it would have shrunk to just $557 in September 2001. And you wouldn’t have recouped your loss until November 2009.


How many investors would have held on throughout such a decline?

Very few.

What about the almighty Apple ($AAPL), the largest and most profitable company in the world? Surely its rise to prominence was an easy one, right?


Not exactly.

Apple’s revenue fell more than 50% from 1995 to 2001, and was all but dead in the eyes of the investing public.


In the last 30 years, Apple has suffered two agonizing declines, including an 82% drawdown which lasted over 8 years (April 1991 to September 1999). Even after the release of the revolutionary iPhone in June 2007, Apple had a drawdown of more than 60% before bottoming in early 2009.


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All of the top 30 stocks over the past 30 years have had the same gut-wrenching declines at one point or another, proving that large drawdowns are an inevitable part of achieving high returns.

I know what you’re thinking. There has to be a better way. You want to own the next Netflix, Amazon, or Apple without any of the pain.

We all do. The only problem: in trying to time or hedge your exposure, you will likely miss out on a substantial portion of the gains. Or your emotions will lead you to sell at precisely the worst time, only after a large drawdown.


To reap the biggest rewards you must be able to take the painful hits and keep moving forward. Which is why the ultimate superpower in investing is being good at suffering."

MY COMMENT

Amen to that.....we all SUFFER at times in our investing life. The key is selecting the right companies and holding as long as their is a good......PROBABILITY......of success. This can be very difficult as that future success is often hidden from current view.

It is easy to look back in hindsight at the big winners. Picking them going forward is very difficult. That is one reason that I happen to own the two funds in my Portfolio Model.

The above list of 30 companies is a nice starting point for anyone looking for a company or two to invest in. Some of them I have never heard of. I am going to take a look at that list........and.......do a little research......and see if I can identify any future prospects.

 

Here is what occurred in the markets today.......I need to know since I paid absolutely ZERO attention. The life of a fully invested....all the time....long term investor.

Stock market news live updates: Stocks close higher as investors await more earnings results, inflation data

https://finance.yahoo.com/news/stock-market-news-live-updates-february-8-2022-235001101.html

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

"Wall Street’s key benchmarks charged forward Tuesday as investors continued to weigh company earnings against the impending monetary tightening that has eroded enthusiasm for stocks in recent weeks.

The Dow Jones Industrial Average closed up 372.24 points, or 1.06%, while the S&P 500 edged 0.84 higher to end the session in positive territory. The Nasdaq Composite rose 178.79, or 1.28%, buoyed by gains in Big Tech, even as rising bond yields pressured the sector. The 10-year U.S. Treasury note hit 1.95%.

Despite recent volatility, DataTrek Research’s Nicholas Colas and Jessica Rabe point out that the S&P 500 is generating 12.4 percent net profit margins at present, based on data from the 54% of companies that have reported fourth quarter results so far. The figure beats the pre-pandemic peak of 12.0 percent in the third quarter of 2018, even if it falls below Q1-Q3 2021’s range of 12.8-13.1%.

“What we’re seeing from here on is a more sustainable pace of growth,” Principal Global Advisors chief strategist Seema Shah told Yahoo Finance Live. “You’ll still see consumers, which are very resilient backed up by excess savings, supply chain normalizations for a boost of inventories and production, and you have corporate balance sheets which are still very, very strong.”

Mixed fourth quarter results from U.S. tech giants have weighed on investors in recent weeks as they already grapple with a Fed readying to tighten monetary conditions and raise interest rates as soon as next month.

“We, as investors paying attention to what’s going on in these companies, just have to recognize that a lot can change,” JPMorgan Asset Management global market strategist Jack Manley told Yahoo Finance Live. “It’s going to be a difficult time for earnings.”

Stocks had a turbulent last week after a disappointing outlook from Meta Platforms (FB) sent the company cratering in the biggest single-day wipeout in market history, dragging other tech peers down in a broader sell-off before posted a sharp comeback following an earnings beat by Amazon's (AMZN). Another trove of results lies in store for investors this week from companies including Disney (DIS), Uber (UBER) and Coca-Cola (KO).

“The first few weeks of this year were driven much more by macro concerns — higher interest rates, pricing the Fed, inflation,” Stuart Kaiser, UBS head of equity derivatives research, told Yahoo Finance Live. “Since then, we’ve had a window of opportunity where earnings took over.”

Despite a steep sell-off in Meta, other tech companies reported strong earnings that allowed the market to recover, Kaiser added.

“Now that that’s over – about 70% of S&P companies and 80% of tech companies reported earnings – we do think the focus shifts back to the macro side of the ledger this week,” he said, adding that the European Central Bank and Bank of England are tightening monetary policy along with the Fed and a series of high inflation prints are expected in coming months. “When we put that all together, we don’t think the bumpy ride is over.”

The Consumer Price Index (CPI) will be closely watched on Thursday and is likely to show another multi-decade high print on inflation, a reading that could prompt the Fed to assert the more hawkish stance it has taken on. Economists expect a headline CPI print of 7.3% in January over last year, which would mark the fastest rise since 1982, according to consensus estimates compiled by Bloomberg.

Bank of America said in a note out Monday that more downside in equities is likely — at least according to history.

The S&P 500 year-to-date-correction from early to late January was 9.8% on a daily closing price basis. During the midterm year of a U.S. presidential cycle, corrections on the S&P 500 averaged 20%, BofA technical research strategist Stephen Suttmeier pointed out. In 17 of 21 midterm years, the S&P 500 had corrections greater than 9.8%, 15 years saw corrections of 15% or more, and nine out of 10 experienced corrections of at least 20%.

The index struggles just after a first Fed rate hike but tends to do better for the 5-, 6- and 12-month periods after initial increase, according to Suttmeier. Furthermore, the best part of the presidential cycle follows from the midterm year low through the third year of the term. Bank of America indicated that rallies off the low into year-end can be strong and have an average return of 17.6%.

“U.S. equities tend to struggle just after the first rate hike of a Fed tightening cycle, which could come as early as the March FOMC meeting, but the data suggest buying a dip,” Suttmeier wrote.

3:03 p.m. ET: Trading halted on cybersecurity firm Mandiant after reports of Microsoft acquisition

Microsoft Corp. (MSFT) is weighing the potential purchase of cybersecurity-research and incident response company Mandiant Inc. (MNDT), Bloomberg News reported, citing a person familiar with the discussions.

The deliberations may not result in an offer. Mandiant and Microsoft declined to comment.

If pursued, the move to buy Mandiant, with a market value of about $3.7 billion, would bolster Microsoft’s lineup of cybersecurity products.

Shares of Mandiant spiked after news of the deal and trading was subsequently halted due to volatility. Mandiant was up 18.59% to $17.86 per share as of 03:01 p.m. ET. Shares of Microsoft were mostly flat, trading at about $303.17 a piece as of the same time."

MY COMMENT

YES....in spite of general negativity...earnings are kicking butt. I really like this information:

"the S&P 500 is generating 12.4 percent net profit margins at present, based on data from the 54% of companies that have reported fourth quarter results so far. The figure beats the pre-pandemic peak of 12.0 percent in the third quarter of 2018, even if it falls below Q1-Q3 2021’s range of 12.8-13.1%."

This is more good earnings news for the markets.

LETS HIT IT STRONG TOMORROW.

 

TravelWC.....here is the site that I use for stock research. They have tons of information plus very detailed Fundamental data. I start with very general information as described in post #9570 and work my way from there.

https://www.macrotrends.net/

I like your Index approach in your retirement account and your more specific approach in your brokerage account. A nice balance.

 

Here is some more about earnings.

Stock market news live updates: Stock futures open higher as earnings roll in

https://finance.yahoo.com/news/stock-market-news-live-updates-february-9-2022-231253066.html

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

"Stock futures opened higher Tuesday evening as investors considered another batch of solid quarterly corporate earnings results and looked ahead to more reports.

Contracts on the S&P 500 extended gains from the regular trading session. The blue-chip index, along with the Dow and Nasdaq, each ended higher on Tuesday.

Chipotle Mexican Grill's (CMG) stock gained in late trading after the fast-casual restaurant chain posted a quarterly earnings beat and saw margins expand despite concerns over food price inflation and labor costs. Shares of Lyft (LYFT), however, declined after the company forecasted first-quarter revenue that missed expectations as the Omicron wave weighed on ridership at the start of the new year.

But an otherwise strong set of earnings results has helped underpin stocks in recent weeks, with the S&P 500 pacing toward a third straight weekly gain. Aggregate S&P 500 earnings per share (EPS) are currently exceeding consensus expectations by 6% so far for the latest quarter, according to Bank of America's update Tuesday. S&P 500 earnings are tracking toward a growth rate of well over 20% on a year-over-year basis.

"Right now what people are looking for in the markets is earnings, because we know moving through 2022 that earnings are going to come under pressure as margins contract and as the economy slows down. It's why we're concerned about things like rising interest rates, ... elevated inflation prints, [and] a policy misstep this year," Jack Manley, JPMorgan Asset Management global market strategist, told Yahoo Finance Live on Tuesday. "The what we're going to be able to avoid any of those potential pitfalls is through earnings."

Still, those concerns around inflation and the Federal Reserve's next monetary policy moves remain key areas of uncertainty for investors. And new data on these fronts is due later this week, with the January Consumer Price Index (CPI) expected to show a fresh 39-year high rate of inflation.

"I don't think I would say that we are 100% in the clear and that we're on this strong rebound," Victoria Fernandez, Crossmark Global Investments chief market strategist, told Yahoo Finance on Tuesday. "There's just too much volatility going on, and I think you're going to continue to see that."

"You have a market that's trying to digest so many elements: You've got a decently strong economy, but you've got these inflation concerns, ... you've got valuations that have been somewhat stretched, you have questions as to what monetary policy is going to look like over the course of 2022," she added. "I would be careful going all in thinking this is a rebound that won't come back some.""

MY COMMENT

EARNINGS are strong and supporting the markets. The economy....has a long way to go to get healthy. It is going to be a long fight between the economic data and the specific company data like earnings. This is a time when QUALITY MATTERS for investors in individual stocks. In some markets owning just about anything is ok....right now it is going to be ALL about owning the BEST individual businesses.

 

So true.....T0rm3nted. Imagine having held any of the 30 stocks in the chart above for that 30 year time span.

That chart of the 30 stocks shows the AMAZING returns that my mom got by holding many stocks for 50 years.....from 1964 to her death in 2014. She probably had at least 50% of the stocks in her account that she held that entire time. One was Phillip Morris (Altria) shown in the chart. It increased 46,463% over the 30 years from 1992 to 2022. She held and reinvested dividends in that stock from 1964 to 2014. (although we cut back on the dividend reinvestment late in her life because the position got too big)

 

We are UP nicely to start the day. Way better than the alternative. this seems like such a SOLID day....I cant imagine that we will close down....but who knows.

I am slowly moving back up toward my all time high....but I still have a ways to go. At this point I am down year to date by (-6.5%). NOT a big deal.

 

As an owner of Nvidia I am glad to see this little report.

Nvidia becomes 7th-largest U.S. company as it passes Facebook owner Meta for the first time

https://www.msn.com/en-us/money/top...e-first-time/ar-AATzY4R?ocid=FinanceShimLayer

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

Nvidia Corp. became the seventh-largest U.S. company Monday as it overtook Facebook parent Meta Platforms Inc. for the first time.

A reshuffling among the ranks of the most valuable U.S. companies reflects Nvidia’s swift ascent over the past few years as well as Meta’s recent fall from grace, which has shaved $267 billion off the company’s market value since Wednesday’s close, according to Dow Jones Market Data.

Nvidia finished Monday’s session with a market value of $618.2 billion, while Meta closed with a market value of $612.2 billion, according to Dow Jones Market Data. Shares of Nvidia ended up 1.7%. in the session, while Facebook’s stock lost 5.1%.

Nvidia now sits directly behind Berkshire Hathaway Inc. which ended Monday’s trading with a $706.97 billion valuation.

The chip maker has been climbing rapidly up the market-cap leaderboard as strong traction for its gaming and data-center businesses have driven improved financial performance. Wells Fargo analyst Aaron Rakers wrote Monday that he believed the ramp of Nvidia’s Ampere graphics processing unit (GPU) was still “early in its cycle.”

Nvidia was the 15th-largest U.S. company as of a year ago and the 50th largest as of two years ago, according to Dow Jones Market Data. It previously had held the No. 7 spot when it beat out Berkshire last November, but Monday marks the first time that the company is ahead of Meta.

Meta, meanwhile, recently outlined a series of business challenges that it expects could hamper results. These pressures prompted Meta to deliver a weaker-than-expected outlook last week, helping to send its shares cratering to their worst performance on record.

The social-media company is feeling the weight of recent privacy-related changes made by Apple Inc. that limit the ability of third parties to track user activities online. Meta also must contend with changing user preferences brought on by TikTok’s rise: While Meta has its own TikTok-like feature in Reels that is gaining steam with users, the company has room to improve Reels’ revenue potential.

Meta had been the sixth-largest U.S. company as recently as Wednesday, according to Dow Jones Market Data, but now Berkshire and Nvidia are ahead."

MY COMMENT

It is nice to see a company that I own become even more DOMINANT and ICONIC. This company is moving more and more into the public eye with investors. If they can keep their great management intact for the very long term this company with their products will do extremely well as we move more and more into the future.

Although...if you look back to the past.....there was a time when INTEL was being talked about like Nvidia is today.

 

Some food for thought as we begin the political season heading to the November elections.

The Threat Partisan Thinking Presents to Your Portfolio
Midterm campaigning is about to get loud—prepare now.

https://www.fisherinvestments.com/e...-partisan-thinking-presents-to-your-portfolio

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

"Editors’ Note: Our political commentary is non-partisan by design. We favor no party nor any politician and assess political developments for their potential economic and market impact only.

Midterm elections are just nine months away, and, well, buckle up: The ongoing redistricting process is reducing the number of swing districts, which looks set to make this the shoutiest midterm campaign in recent memory. For investors, this is not great news. Not because it is inherently bad for stocks—it isn’t—but because politics has infected how people think about most everything these days, including economics and markets. Setting your political opinions aside is vital to seeing the market clearly—and it is risky as heck not to do so.

The new congressional maps are still rolling in, but it is increasingly apparent that competitive districts are going the way of the dodo. This isn’t surprising—where state legislatures control the process, the majority party has every incentive to protect incumbents. This is increasing the number of safe seats, converting those that merely “lean” Republican or Democratic to a hard advantage. For example, as Bloomberg highlighted this weekend, the Cook Political Report rates just 2 seats in Texas’ new House map as “toss-up” or “leaning” to either side, with 36 safe seats (12 Democratic, 24 Republican). This is a big change from 2020, when 12 seats were competitive and only 24 safe. (11 Democratic, 13 Republican—the state picked up two House seats this year based on 2020’s census.) The New York Times crunched all the numbers and concluded fewer than 40 House seats nationally will be competitive this year, down from 73 a decade ago.[ii]

If your main goal is to stay sane during the campaign and vote for the candidate of your choosing, this isn’t great news. When candidates contest competitive seats, they tend to use more moderate rhetoric, aiming to gain the support of independents and centrists. Safe seats, by contrast, generate shouting. In both parties, incumbents in these seats risk primary challenges if they are too moderate. So to keep intraparty rivals at bay, they have to shout all the fringe talking points from the rooftops—playing to the party’s extreme wing.

If you have wondered why progressive rhetoric is getting so much louder from the Democrats—and why populist rhetoric is getting so much louder from Republicans—we think this goes some distance toward explaining it. A prime high-profile example, in our view, is Senate Majority Leader Chuck Schumer’s decision to push floor votes on progressive priorities that stand little to no chance of actually passing the evenly split chamber. In years past, the political incentives seemingly pointed him toward moderation and bipartisanship. But now, with a challenge from Rep. Alexandria Ocasio-Cortez potentially in the offing, his political survival could depend on tacking further left. There are plenty of similar examples within the Republican Party as well.

Add to the shouting the simple observation that every facet of life has become politicized—including economic and investing life. Inflation. Income growth. Unemployment. Interest rates. Supply chains. Corporate governance. Stock buybacks. How broker/dealers can execute their customers’ stock trades. All of that and more!

Illustrating this issue: The University of Michigan’s Consumer Sentiment Survey has long showed a partisan gap in economic expectations, and people’s viewpoints are increasingly detached from reality. When a Republican president is in office, survey respondents who identify as Republican have higher sentiment readings than Democrats and independents—their assessment of current conditions and expectations for the future are rosier. When a Democrat is in the White House, it flips—Democratic respondents see a much brighter future. Yet, an objective look at economic data and market returns shows conditions don’t flip when the Oval Office gets a new occupant—this is sheer bias at work. As the survey’s director, Professor Richard Curtin, noted last month: “Unfortunately, the size of the partisan divide in expectations has completely dominated rational assessments of ongoing economic trends. This situation is likely to encourage poor decisions by consumers and policy makers alike.”[iii]


We think you could add “investors” to that last sentence. We have been in this business a long time and have heard many, many investors from one party worried stocks will tumble if the other takes power. It doesn’t matter which party—partisan investors just tend to think their party’s policies are the right prescription for what (in their view) ails the economy and the other party’s policies would just make things worse. The mentality afflicts both sides, creating a risk that people will make radical portfolio decisions that run counter to their investment goals. Those who don’t like the results could sell at the wrong time and miss what we think is likely to be a strong post-midterm rally. Those who love the results could overlook emerging negatives or take on too much risk with illiquid positions or leverage.

So prepare yourself now. When thinking about your investments, take your “voter” hat off and put on some noise-canceling headphones. Turn off the section of your brain that thinks in terms of sheer “good” and “bad” and think like markets do. Stocks don’t prefer either party, and they don’t care about politicians’ personalities. They simply weigh whether the actual risk of sweeping legislation is higher or lower than what everyone expected during the campaign. To us, these midterms look very likely to deliver gridlock, bringing legislation to a standstill. That will likely be a positive surprise to those who get caught up in the noise, which creates a lot of room for stocks to rally in relief as gridlock becomes more apparent. Maybe it even lets people see past partisanship in their estimation of the economic outlook.

Seeing markets clearly when politics adds noise and fog isn’t easy. It takes discipline and a concerted effort. But it is necessary if you want to stay on track to reach your long-term investment goals."

MY COMMENTS

OBVIOUSLY...I have very strong personal opinions about current politics. BUT.....I keep those views totally out of my investing. Business is business.....and all that matters in business is RESULTS. Politics is INFECTING everything in modern life to an extreme not seen before. The media is totally out of control.....and....totally biased.

If you let all that STUFF into your investing it will kill your returns. Investing is all about REALITY and PROBABILITY. Emotional thinking in the form of politics is a KILLER for investors.

 

One trend we are seeing lately is GAMBLING masquerading as investing....therefore....this little article.

The internet turned “money” into a hobby
Why (mostly) 20- and 30-something dudes made crypto and sports betting their personality.

https://www.vox.com/the-goods/22922511/crypto-nfts-sports-betting-money-hobby

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

"In November, I went to the most unpleasant event I’ve ever attended, located in a warehouse-like bar in downtown Manhattan and devoted entirely to the subject of NFTs. It was hosted by Gary Vaynerchuk, better known as Gary Vee, the motivational speaker-slash-entrepreneur-slash-influencer whom my boyfriend was profiling for another publication. The crowd primarily consisted of hordes of men, who were not wholly unpleasant themselves but who spoke a language so impenetrable to outsiders that being around them made me feel as though I’d missed something major.

They seemed to work in tech or finance, mostly, and had come to connect with others over the thing they loved most in the world, the wild force driving the feeding frenzy of people storming the bouncer to get inside: money, and making it as quickly as possible. The event’s attendees were at the extreme end, of course, but their language has started trickling into the mainstream as well. If Instagram made everyone a photographer and Twitter made everyone a writer, perhaps whatever the internet has done to the traditional banking system is in the process of turning us all into finance bros.

There has never been a more opportune time to have “money” as a hobby. Options trading, once the provenance of professional financiers, has soared with the rise of stock trading platforms like Robinhood, which makes it extraordinarily easy to buy and sell individual stocks. Stories of artists making hundreds of thousands on NFTs of their work and of cryptocurrency enthusiasts making bank buying and selling them have abounded over the past year. A wave of legalization of online sports betting has swept the country, and with it, lucrative promotions for first-time gamblers that offer what is essentially free money. Not only did the pandemic create a mass of people who were bored and restless, it also created some people with enough financial privilege to try something a little risky with their $1,400 stimulus check.

The gamification of money, and the blurring boundaries between what constitutes investing and what constitutes entertainment, have raised plenty of concerns, and many argue that the government is too far behind the times to adequately address it. “Gambling went from being something that was super taboo to being easier than ordering food on Uber Eats,” says Josh Clayton, a 29-year-old copywriter in Brooklyn. “You watch a sports game and every commercial is an ad for sports betting.”

Josh started sports betting thanks to the massive deal that Caesar’s, one of the largest online sportsbooks, was offering new users: a free $300 to bet just for signing up, plus a match of up to $3,000. He put in $50 of his own money but cashed out with around $800. “A lot of sports fans love to talk about their teams and pretend that they’d be a better head coach than the guy who is eminently qualified and gets paid $40 million a year,” he says. “Sports betting gives you a little taste of making those decisions, and when you win, it feels like a validation of you being smart.”

It’s similar to what people who invest in stocks or crypto feel when something “moons,” or rises in value extremely quickly. “It just totally took over my life in the span of, like, a week,” said Jeff Andrews, a 40-year-old data reporter and a former coworker of mine. Less than a month ago, two of his friends who work in private equity told him about the tens of thousands of dollars they made in NFT trading, and then gave him advice on what to buy next. Since then, he’s made around $25,000, thanks to several moons he scored through tips that trickled in from multiple group chats and Discord servers.

Because of the ways in which this type of information disseminates — in subreddits, in breathless Twitter threads, on niche Discord servers — the world of betting and investing is dominated heavily by people who are already well-represented in tech, finance, and internet culture, which is to say that it is overwhelmingly young and male. Proponents of crypto love to talk about the benefits of decentralizing the financial system, how it can allow for historically underrepresented groups to build wealth, and how NFTs can be used to fund projects supporting charitable causes. Celebrities, from A-listers like Matt Damon, Reese Witherspoon, and Gwyneth Paltrow to Z-list Bachelor influencers, evangelize cryptocurrency as an almost philanthropic cause; what goes unspoken is that they stand to profit from more people investing after them.

Yet in practice, buying and selling crypto often amounts to a whisper network of people already in the know advising each other in private group chats what to buy and when. To an outsider, it can look like a perfectly legal form of insider trading, entirely shielded from any sort of oversight. The wealth gap among holders of bitcoin is 100 times worse than the US economy: the top 0.01 percent control 27 percent of the 19 million bitcoin currently in circulation.

For people who’ve long been interested in investing, the phenomenon has been somewhat bizarre to witness. “I give advice to friends who want to get into investing and tell them to put some into exchange-traded funds or index funds,” says Omar Khan, a 29-year-old who works in fintech and has been investing in the stock market since he was a freshman in high school. “Then all of a sudden these people are like, ‘No, that’s too complicated,’ and they want to get into SPACs. I’m like, hold up — you went from being too cautious to invest in an S&P 500 ETF to SPACs, which are an absolute scam?” (SPACs are a way to list private companies on the stock market, thereby allowing everyday traders to invest in them; many have criticized them as a bubble similar to the dot-com boom.)

Omar says his friends often cite supposedly heartwarming articles about people who put in a few hundred bucks in meme stocks, NFTs, or crypto and became millionaires. It’s irresponsible journalism, he argues, because it so often ignores the many people who lose even more than they put in. “In my group chats with finance friends, we’re like, ‘So many people are gonna lose so much money.’ We’re watching a train crash.” It’s worth wondering, he says, whether the low barrier of entry into this world is such a net positive. “There’s no phone call [to a broker] that you would have had to make 20 years ago. There’s no warning sign of like, ‘hey, are you sure you want to put $50,000 in this penny stock?’”

A year ago, Kevin, who asked me to use a pseudonym to protect his privacy, put $50 into a FanDuel account, which he then gambled into $750 before losing it all in an online roulette game. “It’s a sickening feeling losing that money, but I always come back thinking it will be different,” he told me over Twitter DM. The 26-year-old auto parts specialist in Erie, Pennsylvania, says he realized he had a gambling problem after repeatedly losing after a long winning streak, and then trying to win it all back. “Thankfully, I realized I had a problem before I lost something I couldn’t [get back], like my car or apartment,” he says. “I just want people to know how dangerous it is before you go in unprepared.”

Pretty much every new investor or gambler I spoke to for this story said that for the majority of their lives they’d been relatively risk-averse. Many hadn’t grown up with much money to begin with, which instilled in them a desire to save and invest responsibly in stable portfolios like 401ks, Roth IRAs, or index funds. But because of how easy it is now to gamble in sports, the stock market, or crypto, their approach had changed. While most have been careful not to bet more than they can afford to lose, the wave of sports betting legalizations across the states has watchdog organizations concerned: About 2 percent of Americans struggle with gambling addiction, some of whom end up losing jobs, families, their homes, even their lives.

Other new sports bettors have found real community and joy from the hobby. Multiple people (particularly men) I interviewed said that they now texted regularly with old friends from high school or college about their bets, and that it made talking to new people in social situations easier. “When someone says they have some money on the Australian Open, you’re like, ‘Oh, you gamble on sports too!’ And then you can have a little conversation about it,” says Dan Greene, a 33-year-old journalist.

For Madi, a 23-year-old in Minnesota (she preferred to not use her last name because sports betting still isn’t technically legal in her state), sports betting is more than just a conversation starter. As a queer woman, she says she’s almost never taken seriously as a longtime college and pro football fan, and for her, sports betting is proof that she actually knows what she’s talking about. “In a lot of social spaces, people tend to assume I don’t know much about sports,” she says. “There’s so much baggage that comes with being a female sports fan and a lesbian sports fan. So it feels really validating when I get things right.”

Richard Johnson, a 28-year-old who covers college football at Sports Illustrated, said that his interest in crypto was the product of a lifetime of learning to save. “As a Black person, this wealth was never accessible to us until, like, 50 years ago,” he says. “Our generation is not going to have Social Security or pensions. We’re not even going to fucking retire. The only way to get to the American Dream is to invest.”

A vocal backlash to the nascent concept of Web3, or a vision of the internet that runs on the blockchain and crypto, has cemented itself within the culture. Skeptics argue that the whole thing is killing the environment and is also a Ponzi scheme, which, jury’s still out! What’s significant, though, is how often the backlash comes from inside the house.

Despite turning a five-figure profit in just the span of a few weeks, Jeff still wonders whether it’s even worth it to continue investing in NFTs. He now keeps constant tabs on the rising and falling value of ethereum, newly released projects, and Discord announcements. “I’m not sleeping well because I’m so wired all the time,” he says.

More than that, though, he’s become disillusioned by the lofty promises of the true believers. “The more they explain it, the more I get queasy about it,” he says. “I thought that as I went on I’d learn about it and be like, ‘Okay, this makes sense. I understand why there’s value in this,’ and every day I am renewed with the sense that this is the stupidest fucking thing on the planet.”

Jeff, like most skeptics for whom the system has actually worked pretty well, is eager to cash out once the price of ethereum goes back up. But talking to him, and to the rest of the (almost entirely) men who’ve turned money into a hobby, made me more than anything feel like I was too late to something that hadn’t even really happened yet. Because of course it isn’t “too late” to become an overnight crypto millionaire or to cash out on an incredibly lucky bet; it’s just highly unlikely that that person will be you. Nobody wants to be a cynical spoilsport, stewing in resentment of these men who have won and will probably keep winning, who look a lot like the ones who have always won: the men who have the time, the knowledge, the energy, and, most importantly, the money to turn “having money” into its own hobby.

You can’t hate the players, of course. I asked Jeff if he’d made any money in the 20 or so minutes that we’d been talking. “Not really,” he said. “Around $200.”"

MY COMMENT

Well....whatever....it is your money. If you want to be manipulated by your brain.....and the media.....go ahead. There is a safe and sane way to invest.......by putting your money into established Index funds or stocks for the long term. There are absolutely NO BARRIERS based on sex, or race, or anything else to this form of investing. It is simply a matter of discipline.

 

YES......that is a huge issue DUCKLEBERRY....in your company and thousands of others.

I see it as a result of the last 20-30 years of a FAILING education system.......and......what has happened with society and culture over that time. I also see it as a logical extension of the......INSANE...... evolution that we have seen in the media and the internet over the past 20 years. We are now seeing younger people that were FULLY raised on the internet and social media coming into the work world.

I saw a perfect example of what I am talking about the other day in the Oregonian newspaper. An article was discussing the TOTAL FAILURE of the Portland school district to educate minority students. One solution that was being discussed was a......"NEW"....concept for teaching reading. Know what it was....phonics. The old tried and true method for teaching reading that was used in the 1950's and early 1060's....the only real way to teach reading that actually works. Of course....they were not having much success in getting the "educators" to do the necessary training in using the "NEW" concept of letters having actual sounds.

We are living the movie......IDIOCRACY. I am so glad that I retired from the small business world in 1999.

 

Well...today was very nice progress for investors....as we climb back out of the hole that we have been in so far this year. I ended with a good medium gain today. And...as a bonus I got in a beat of the SP500 on a day that it was up big. I beat it by 0.30% today.

We are all set for another couple of good days to end out the week......LETS GO.

 

For those that own Disney or Uber this looks like good news.....probably also....good news for the markets tomorrow.

Disney parks business roars back as company beats earnings expectations, stock soars

https://www.cnbc.com/2022/02/09/disney-dis-fiscal-q1-2022-earnings.html

Uber beats on revenue, says core business is bouncing back after omicron surge

https://www.cnbc.com/2022/02/09/uber-earnings-q4-2021.html

 

just to cap off a strong day....here is what happened in hindsight today.

Stock market news live updates: Tech stocks lift indexes as earnings roll in

https://finance.yahoo.com/news/stock-market-news-live-updates-february-9-2022-231253066.html

"Stocks advanced Wednesday as investors considered another batch of solid quarterly corporate earnings results and looked ahead to more reports.

The S&P 500 extended gains from the regular trading session on Tuesday. The Nasdaq outperformed, with technology shares climbing as Treasury yields paused after a recent run-up. The benchmark 10-year yield eased back from its highest level since November 2019.

Chipotle Mexican Grill's (CMG) stock rose after the fast-casual restaurant chain posted a quarterly earnings beat and saw margins expand despite concerns over food price inflation and labor costs. Shares of Lyft (LYFT) turned positive to shake off earlier losses after the company forecasted first-quarter revenue that missed expectations, as the Omicron wave weighed on ridership at the start of the new year.

But an otherwise strong set of earnings results has helped underpin stocks in recent weeks, with the S&P 500 pacing toward a third straight weekly gain. Aggregate S&P 500 earnings per share (EPS) are currently exceeding consensus expectations by 6% so far for the latest quarter, according to Bank of America's update Tuesday. S&P 500 earnings are tracking toward a growth rate of well over 20% on a year-over-year basis.

"Right now what people are looking for in the markets is earnings, because we know moving through 2022 that earnings are going to come under pressure as margins contract and as the economy slows down. It's why we're concerned about things like rising interest rates, ... elevated inflation prints, [and] a policy misstep this year," Jack Manley, JPMorgan Asset Management global market strategist, told Yahoo Finance Live on Tuesday. "The what we're going to be able to avoid any of those potential pitfalls is through earnings."

Still, those concerns around inflation and the Federal Reserve's next monetary policy moves remain key areas of uncertainty for investors. And new data on these fronts is due later this week, with the January Consumer Price Index (CPI) expected to show a fresh 39-year high rate of inflation.

"I don't think I would say that we are 100% in the clear and that we're on this strong rebound," Victoria Fernandez, Crossmark Global Investments chief market strategist, told Yahoo Finance on Tuesday. "There's just too much volatility going on, and I think you're going to continue to see that."

"You have a market that's trying to digest so many elements: You've got a decently strong economy, but you've got these inflation concerns, ... you've got valuations that have been somewhat stretched, you have questions as to what monetary policy is going to look like over the course of 2022," she added. "I would be careful going all in thinking this is a rebound that won't come back some."

2:51 p.m. ET: Meta Platforms shares end four-day losing streak as broad tech rally lifts stock

Shares of Meta Platforms (FB) were on track to rise for the first time in five days, with the stock appearing to find a bottom after sinking by 32% in total over the prior four sessions.

The decline in Meta Platforms shares came after the company offered a disappointing forecast for the current quarter, saying sales would likely come in between $27-$29 billion. This fell short of the $30.25 billion consensus analysts were expecting, according to Bloomberg data. Daily and monthly active users for Facebook also came in light for the fourth quarter. The company blamed the results on increased competition from other social media players like TikTok and Snap, and also cited increased difficulties in tracking ad performance due to an Apple iOS privacy change.

10:55 a.m. ET: Wholesale inventories revised up for December amid shortages

U.S. wholesale inventories were revised up in December to reflect a larger month-over-month increase than previously reported, as companies worked to replenish depleted inventories amid supply chain challenges.

Wholesale inventories rose 2.2% in December compared to November, coming in above the 2.1% rise previously reported for the month, the Commerce Department said Wednesday. Inventories serve as an input to gross domestic product (GDP). U.S. GDP was reported as having risen at a 6.9% annualized rate in the fourth quarter of 2021, according to the first estimate released in late January.

7:49 a.m. ET: Mortgage applications sank by 8.1% last week as rates rose

Mortgage application volume dropped last week to reverse gains from the prior period, as rising rates deterred purchases and refinances.

The Mortgage Bankers Association's weekly mortgage market composite index dropped by 8.1% during the week ended Feb. 4, following a rise of 12.0% during the previous week. Refinances fell 7% on a week-over-week basis, and more than halved compared to the comparable week a year ago. Purchases also dipped 10% on a week-over-week basis, seasonally adjusted. Unadjusted, purchases were down 12% versus the same period last year.

“Mortgage rates continued to edge higher last week, with the 30-year fixed rate climbing to 3.83%. Rates followed the U.S. 10-year yield and other sovereign bonds as the Federal Reserve and other key global central banks responded to growing inflationary pressures and signaled that they will start to remove accommodative policies," Joel Kan, associate vice president of economic and industry forecasting, said in. a press statement Wednesday.

"With rates 87 basis points higher than the same week a year ago, refinance applications continued to decrease," Kan added. "Purchase activity slowed after the previous week's gain."

MY COMMENT

Economic news continues to be mixed as we fight our way out of the pandemic and closure mess. I like that wholesale inventories are up. AND....this is what I really like:

an otherwise strong set of earnings results has helped underpin stocks in recent weeks, with the S&P 500 pacing toward a third straight weekly gain. Aggregate S&P 500 earnings per share (EPS) are currently exceeding consensus expectations by 6% so far for the latest quarter, according to Bank of America's update Tuesday. S&P 500 earnings are tracking toward a growth rate of well over 20% on a year-over-year basis.

Earnings continue to rack up gains and get better with each day of reports. This is the....mothers milk....of long term investing.

Nice to see Meta back in the plus column today.

 

Here is a damper on the Meta gain today.
Facebook parent Meta’s bet on the metaverse may never pay off

https://finance.yahoo.com/news/face...he-metaverse-may-never-pay-off-183753443.html

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

The hits keep coming for Facebook parent company Meta (FB). After a devastating earnings report last week, the company’s stock price has fallen off a cliff. On Tuesday the precipitous drop pushed Meta’s market cap below $600 billion, a sharp decline from when it closed above $1 trillion in June 2021.

Meta has been plagued by a trio of problems: Facebook is bleeding users; Apple’s (AAPL) iOS privacy changes make it tougher to target you with ads; and shiny new competitors like viral video app TikTok are enticing people away from the app their grandmother still uses.

To turn things around, CEO Mark Zuckerberg is banking on Meta’s massive investments in the metaverse, a series of interactive online worlds that became 2021’s biggest buzz word.

But there’s no guarantee those investments — which amount to more than $20 billion — will ever pay off. The metaverse is still in its infancy, and while it’s receiving a lot of hype, consumer interest could stall like it did with virtual reality before it.

If Zuckerberg’s plan does pan out, though, he could turn Meta into more than a mere social media giant.

Meta’s metaverse bet could revive user growth

The metaverse, as envisioned by tech giants like Meta, is a series of interconnected online worlds that let users do everything from chat with friends to surf the open ocean.

But the technology has yet to attract the masses. Take a tour of big-name metaverse spaces like Decentraland, and chances are you’ll see plenty of empty space where you’d think other users would be. The most successful metaverse companies include the likes of Roblox (RBLX) and Epic Games’ “Fortnite,” which allow users to play games, chat, and even watch concerts.

But Silicon Valley, and Wall Street, are betting the metaverse will be far more than that. Companies like Animoca, the parent company of the metaverse app Sandbox, hope users will access the metaverse to purchase clothes for their avatars, gamble cryptocurrencies, and see comedy shows with friends.

For its part, Meta aims to merge social media and the metaverse to let users live a kind of virtual life online. Zuckerberg envisions a metaverse where users can take the form of cartoon-style avatars and travel among virtual worlds unimpeded by the need to sign into different services and accounts.

It’s these kinds of experiences that Meta is banking on being its future growth engine. The company already sells its Quest 2 virtual reality headset, which gives users access to VR apps like “Beat Saber” as well as metaverse software like Meta’s Horizon Worlds virtual social platform.

So far sales of the Quest 2 have been strong, with the Oculus app hitting the top spot in Apple’s App Store during the holiday season, though exact sales numbers aren’t available. To date, Zuckerberg says users have spent more than $1 billion on Oculus content.

The company is also rolling out its Horizon metaverse platform to more computing platforms to expand its reach outside of headset owners. All of these services reflect Meta’s new focus on the metaverse, which it made abundantly clear with its name change in October.

“Clearly with the name change that Facebook made in October... they signaled in fact that they're going full force ahead on the metaverse,” Forrester research director Mike Proulx told Yahoo Finance. “They really do believe that that is the future way in which people will engage online. So that is a big bet that they're making.”

It’s not just Meta that’s hoping the metaverse pays off. According to crypto investment firm Grayscale, the metaverse is estimated to be a $1 trillion revenue opportunity across everything from advertising and virtual events to sales of headsets.

But so far, the metaverse is mostly for early adopters. According to an August survey of 1,263 adults in the U.S. and U.K conducted by Forrester, just 23% of U.S. consumers and 17% of U.K. consumers expressed any interest in entering the metaverse. Others said they had no interest in it or still don’t understand it.

What’s more, there’s no clear understanding of what the metaverse will actually turn out to be. We’re so early in the technology’s life that everything prognosticators like Zuckerberg pitch to the public could fall flat.

We’ve seen it before with technologies that were supposed to change the world. I’m looking at you, 3D TVs and Google Glass.

Building the metaverse will cost Meta billions

Getting users to understand and want to take part in the metaverse isn’t the only problem for Meta, though. Building out the technology itself will also be costly.

In Q4 alone, Meta spent $3.3 billion on its Reality Labs business, which works on everything from the hardware to the software needed to power the metaverse. But that pales in comparison to the more than $20 billion the company spent throughout all of 2020 and 2021 on Reality Labs.

What’s more, best estimates put a fully built-out metaverse that lives up to the expectations Zuckerberg set during his October press conference at least 10 years away.

And according to Wedbush analyst Dan Ives, it will take some time for Meta to actually turn a profit on the tech.

“Zuckerberg has major growth challenges ahead and metaverse monetization is still far off,” Ives said, adding that the company is likely to see “some dark days ahead.”

Even Zuckerberg admits that it’ll be some time before the company’s investments pay off. “This fully realized vision is still a ways off, and although the direction is clear, our path ahead is not perfectly defined,” he said during the company’s latest post-earnings conference call.

Despite that lack of clarity, Meta may have no choice but to reinvent itself. With stagnant user growth and increased competition from TikTok, Meta needs the metaverse to be everything Zuckerberg envisions. If it’s not, Facebook may just become as irrelevant as the social media sites like Friendster and MySpace that preceded it."

MY COMMENT

I am not counting Meta out yet. The company is still very young and many companies like this go through a good number of time periods of growing pains.

HOWEVER.....I think this view of the METAVERSE is delusional fantasy. I dont see any chance for mainstream adaption of cartoon character avatars and commerce by the vast majority of people. Beyond that......we are probably at least 25-50 years from any sort of internet or Metanet interface that is really usable in real day to day life.

Of course....what do I know......so we will just have to wait and see.

 

Here is the little economic news of the day....some will care.....Personally, I dont.

January CPI: Inflation reaches fresh 40-year high

https://finance.yahoo.com/news/consumer-price-index-cpi-inflation-january-2022-210344769.html

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

"U.S. inflation accelerated in January, with prices across a wide range of goods and services soaring further amid lingering shortages and supply chain disruptions.

The Consumer Price Index (CPI) released by the Bureau of Labor Statistics Thursday morning registered a 7.5% annual gain in January. Consensus economists were looking for a 7.3% rise, according to Bloomberg data. This represented the fastest rise since 1982, as well as an acceleration from the 7.0% year-over-year increase seen in December.

On a month-over-month basis, consumer price increased by 0.6%, matching December's rate.

Contributions to the headline jump in inflation were broad-based, reflecting widespread price pressures still reverberating across the recovering economy.

Energy prices remained a key contributor to the overall CPI and were up by 27% on a year-over-year basis in January. Within energy, fuel oil prices jumped 9.5% on a monthly basis, tracking the rise in crude oil prices, which rallied to a seven-year high at the beginning of the year. Electricity prices also jumped by a pronounced 4.2% on a month-over-month basis.

Gains in prices for food also contributed to the headline index, as dining at home and out each became more expensive. Food at home prices rose 1% during the month, while food away from home prices rose 0.7%.

But even excluding more volatile food and energy prices, the so-called core CPI rose by 6.0% in January over last year, also marking the biggest jump since 1982. The core CPI had risen by 5.5% in December.

Inflation and the Fed

For investors, the latest CPI serves as a key update as to whether inflation has continued to run hot enough to justify a quicker shift toward more hawkish monetary policy from the Federal Reserve. Though the Fed's dual mandate dictates promoting both maximum employment and price stability, the latter component has taken on increased importance as inflation continues to accelerate to new multi-decade highs.

"We expect price metrics to start moderating over coming months," Rubeela Farooqi, chief U.S. economist for High Frequency Economics, wrote in a note Wednesday. "However, January results in line with our estimates would confirm that consumer prices are accelerating for now and will keep officials on track to raise rates at the March FOMC meeting."

Namely, many market participants are now bracing for the Federal Reserve to begin raising interest rates from current near-zero levels starting in March before completing a series of as many as seven total rate hikes over the course of the year, according to some Wall Street pundits. Other market participants and Fed officials themselves have suggested a less aggressive path forward, however, and Atlanta Fed President Raphael Bostic told CNBC Wednesday that he expected three or four rate hikes in 2022.

But Fed officials have become increasingly wary of the threat of persistent price increases, and of consumers' expectations for further inflation becoming increasingly entrenched. In late January, Fed Chair Jerome Powell conceded that since the end of last year, the inflation situation was "probably slightly worse."

The Federal Reserve is scheduled to convene for its next policy-setting meeting on March 15 and 16."

MY COMMENT

Is there ANYONE is the world that does not know that the FED is going to start raising rates in March? they will also start to quickly TAPER. There is nothing new here and absolutely no surprise.

I lived through the BIG inflation and STAGFLATION of the late 1970's and early 1980's. I can tell you that that event in the old days was TOTALLY different than what we are seeing now. It was much WORSE.......and......the economic situation back than was DIRE. What we are seeing now in the general economy is NOTHING in comparison. That is one reason that......I simply DONT CARE.

I also dont care because these inflation numbers are......reasonable and rational......considering what we have done to the economy over the past couple of years. Much of this jump is due to energy policies of the current government......idiocy. In addition the primary cause of this situation is.....supply and demand issues. I doubt that he actions of the FED are going to matter at all on these issues. That said.....I do WELCOME the raising of interest rates and the tapering.....hopefully as quickly as possible.