The Long Term Investor

Of course.....since I talked about Costco on here a few posts ago.....they are my single stock that is RED today.

The nice gains are holding over the first market hour. CRUNCH TIME will come in the mid morning time period when the sellers usually kick in. Than we will have to survive the mid afternoon weakness that often happens lately on days like this.

WE CAN DO IT.......

I anticipate many more down days in the weeks ahead. there is plenty of negative ammunition that will impact the short term forward markets. The FED will be raising rates 0.25% in just a week or so. There is a strong ........"probability".....for more negative news from Ukraine. We are going to be in this little UP/DOWN market for a while....with the short term bias being DOWN. It will end when it ends.

 

So far we are holding onto the very nice gains today. My ENTIRE account is now GREEN......very green. Even Costco....my one red stock earlier in the day.

I have no illusions that this is the start of a turn-around in the markets. BUT.....when it will happen....is unknown right now and will probably only be visible in hindsight. This is one BIG reason that trying to time yourself in and out of the markets does not work......you will RARELY realize when the market is at a bottom......and.....you will miss out on the early EXPLOSIVE gains as the market turns positive.

I suspect that we will continue to be STUCK in the little current trading range for at least another 2-6 weeks. I would be very glad to be wrong.

 

Nice to make some money today.....big money. Now if we could only string together another couple of days....that would be great. I was TOTAL green today. Plus....I beat the SP500 by 0.83%. So I lowered my loss year to date to about (-14%). With the nice gain today....I am still in middle of my recent account range. I expect to be stuck in my current range for at least 2-6 more weeks.

 

YES......I finally.......BITCHED......Amazon into splinting their stock. It took long enough.

Amazon board approves 20-for-1 stock split

https://finance.yahoo.com/news/amazon-board-approves-20-1-214514806.html

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

March 9 (Reuters) - Amazon.com Inc said on Wednesday its board approved a 20-for-1 split of the company's common stock."

MY COMMENT

You are I are on the same page RG. It is about time. They are siting at (-11.2%) total return for the past year and about +21% per year for the past three years.......not that great compared to the other 5 BIG TECH GIANTS. WAY below the other top 5 BIG CAP GROWTH companies. the high stock price has really been hurting them. Thank goodness........and as my grandmother would say....."Bless their Hearts".

 

Here is the article that RG noted above:

Amazon announces 20-for-1 stock split, $10 billion buyback

https://www.cnbc.com/2022/03/09/ama...billion-buyback.html?__source=androidappshare

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

"Key Points

• Amazon on Wednesday announced that the Board of Directors has approved a 20-for-1 stock split.
• The company also said it plans to buy back up to $10 billion worth of shares.

Amazon announced its first stock split since the dot-com boom, telling investors on Wednesday that they’ll receive 20 shares for each share they currently own. The stock soared 6% in extended trading.

The company also said it plans to buy back up to $10 billion worth of shares.

Were the split to happen as of Wednesday’s close, the cost of each share would go from $2,785.58 to $139.28, and each existing holder would get 19 additional shares for every one they own.

Amazon joins a parade of highly-valued tech companies pulling down the price of each share through a split. Google parent Alphabet announced a 20-for-one split in February. In mid-2020, Apple disclosed plans for a four-for-one split, and Tesla told investors it was instituting a five-for-one split.

Stock splits are cosmetic and do not fundamentally change anything about the company, other than possibly making the shares accessible to a larger number of investors because of their cheaper price.

MY COMMENT

It is about time. I really believe that the failure to split the very high share price was a huge drag on the stocks total return. I also had a concern that the company was starting to lose some of thee BUZZ that surrounds the company as their stock has LANGUISHED for over a year now. Sometimes you need to take care of your shareholders...psychologically. It makes people feel better to have a much larger share balance even if the price is no different.

 

This amazon split could give us a shot at a positive day or two in the markets to close out the week.

 

Better late than never. The split will happen on June 6.

 

I like this little article......on Amazon.....of course. The news of the day.

Amazon Jumps on Plan to Split Stock, Buy Back Up to $10 Billion

https://finance.yahoo.com/news/amazon-jumps-plan-split-stock-215536981.html

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

"(Bloomberg) -- Amazon.com Inc. is planning to split its stock for the first time in more than two decades in a move that would spell the end of four-digit stock prices for the biggest U.S. technology companies.

The e-commerce giant plans to boost its outstanding shares by a 20-to-1 ratio, under a plan disclosed late Wednesday, joining other technology giants like Alphabet Inc. and Apple Inc. who have turned to splits to reduce their share prices. That news combined with a $10 billion share-buyback authorization sent Amazon shares up more than 6% to $2,965 in postmarket trading.

An Amazon split has long been the subject of speculation from investors. The company conducted three splits in the two-and-a-half years following its 1997 initial public offering and then halted the practice. The topic occasionally came up at Amazon shareholder meetings but the company hadn’t taken action until now.

Share splits had almost disappeared from U.S. stock markets recently, with only two in 2019 compared with 47 splits in the S&P 500 in 2006 and 2007. But Apple and Tesla Inc., brought back the practice after splitting their stocks in 2020.

A lower stock price makes it easier for mom-and-pop traders to buy shares rather than purchase fractional stocks through their brokerage firms.

The stock split means little to investors and is most likely part of broader compensation changes underway at Amazon since workers feel less slighted if they receive an entire share of stock rather than a fraction of a share, said Michael Pachter, an analyst at Wedbush Securities Inc.

“Stocks that trade for $100 or less have a bigger base of retail investors, but I don’t think that’s why Amazon is doing this,” Pachter said. “It means absolutely nothing except that grandpa can buy little Johnny a share of Amazon stock.”"

MY COMMENT

Well.......I dont like the reasoning in the final two paragraphs of this article.....not that it matters....since it is ONLY an analyst. He is dead wrong....or should be.....companies like Amazon had better CARE what the retail investors......their OWNERS..... think.

As to his opinion that the split is being done as part of a compensation change so that employees can get at least 1 share in the Amazon employee stock plan.......and....they dont like to get just a fraction of a share. WELL.....the same applies to all the tens of thousands of current Amazon shareholders and potential shareholders. People are NOT going to buy this stock if all they get is some fractional share for their money.

There is a BIG reason that Amazon's total return on their stock SUCKS over the past 1-3 years........the big share price. There is also a reason why they were the ONLY and LAST company with this sort of high stock price. It is a DRAG on the company.

I dont care how big or dominant a company is.....foolish strategy........that FAILS to provide shareholder value to the OWNERS of the company.....will STAGNATE the company. Sooner or later people will simply abandon the stock if it is not performing. Investors....the OWNERS of the company....want to see results in the form of stock appreciation. That is the ONLY reason they own the stock.

I have ZERO intent to sell my Amazon.....but.....at times I get just a hint........a sense.....that this company is ARROGANT in its corporate culture and/or management. Not a good thing.....just ask IBM and Microsoft. This company needs to quickly establish......great post-founder management and prove itself going forward from here.

This is a very positive news event for the company and it's OWNERS.

 

I was thinking the same thing Zukodany. This is a poorly timed big announcement. It will get lost in all the short term market conditions that are going on right now.

I guess we will just have to see it as money in the bank.....for later. I think they will get somewhat of a short term bounce for one or two days. Google is a good indicator......no one is talking about their 20 for 1 split. But when it happens in July and perhaps for about 20-30 days prior....there should be some good movement in the stock. Amazon splits sooner on June 6.....but that is still a long way off. So....we may have to wait a month or two till the last 20-30 days pre-split to see any impact.

I guess I will just have to be thankful for the fact that they are finally going to split. So.....CONGRATULATIONS......to us all that are shareholders of Google and Amazon.

 

I will stick with the Amazon stories for today........so.

Amazon split could set it up for being included in the Dow Industrials

https://www.cnbc.com/2022/03/09/ama...or-being-included-in-the-dow-industrials.html

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

"Key Points

• Amazon’s 20-to-1 split makes it more palatable to the price-weighted Dow Industrials.
• Perhaps the Dow index committee may consider giving Walgreens the boot from the index as that company reevaluates its Boots unit.
• On top of Amazon and Alphabet, which had its own 20-to-1 split back in February, Nvidia could be waiting in the wings too.

Mega cap tech stocks are shedding their mega share prices with huge stock splits.

First came Alphabet back in February with its 20-for-1 stock split. Then, on Wednesday, Amazon made its move with its own 20-for-1 stock split.

Amazon’s stock price would have closed today at a split-adjusted price of $139.28. Just as with Alphabet, Amazon’s stock split makes the e-commerce giant’s stock more palatable as a component in the price-weighted Dow Industrials. At the split-adjusted price, Amazon would have the 12th-smallest weighing among the 30 stocks, which would put it right in the middle of the pack — an identical weighting to Walmart. But unlike Walmart, which is a Consumer Staples stock, Amazon is in the Consumer Discretionary sector.

Perhaps the Dow index committee may consider giving Walgreens the boot from the index as that company reevaluates its Boots unit. And although Walgreens is a Consumer Staples stock, replacing it with Amazon would still give the consumer retail good representation. Walgreens is the second-least-influential stock in the price-weighted index, sitting at $48.

On top of Alphabet and Amazon, Nvidia could be waiting in the wings too. The chipmaker split its stock 4-for-1 back in July, and its price is now sitting at $230. If added to the index, Nvidia would have the sixth-largest weighting in the Dow – far more than the Dow’s least impactful stock, fellow competitor Intel, which is sitting under $48.

Other techs that could remain vulnerable include Cisco, the fourth-least-influential stock in the index, and IBM, which has the eighth-smallest weighting and has now completed the spin-off of its Kyndryl-managed infrastructure unit.

The last major tech company to join the Dow was Apple, which was added in March 2015, a mere nine months after completing a 7-for-1 split, the fourth split in its history. (It since completed another 4-for-1 split in 2020.)

It’s over to you now, Dow committee…"

MY COMMENT

It would certainly "MODERNIZE" the DOW to see Nvidia, Amazon, and Google added to the index. I am not sure the DOW has enough relevance to really impact these stocks much if they are included. They are already all in the SP500 which has a HUGE exposure in Index Funds. I guess there are a few DOW Index funds still around. Inclusion would primarily be prestige for the company.

 

THIS will be the story of the day today.

Inflation sets fresh 40-year high: February CPI rises 7.9% over last year

https://finance.yahoo.com/news/consumer-price-index-cpi-inflation-february-2022-203614415.html

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

"U.S. consumers paid more for a variety of goods and services in February compared to the prior month and year, with prices climbing across the economy amid lingering supply and demand imbalances.

The Bureau of Labor Statistics' Consumer Price Index (CPI) rose 7.9% in February compared to last year, marking the fastest annual jump since 1982. This took out January's previous 40-year high rate of 7.5%, and matched consensus economist expectations, according to Bloomberg data.
On a month-over-month basis, consumer price increases also accelerated. The CPI rose 0.8% in February compared to January after increasing by 0.6% during the prior month.

A surge in energy prices was one of the key contributors to the latest red-hot CPI print. Even before Russia invaded Ukraine and raised concerns over global energy disruptions, oil and gas prices were on the rise, as demand for fuel oil and other energy products outstripped tight global supplies. In February, the energy index jumped 3.5% for the largest monthly rise since October. And over last year, the energy index was up 25.6%.

A further impact from the Russia-Ukraine crisis and extended jump in energy prices that has ensued will likely show up in the CPI data in March, given the invasion first began in late February. Since then, gas prices at the pump have jumped to record levels, and crude oil prices have climbed to 14-year highs and at least briefly topped $130 per barrel.

"Thursday's inflation data is continued confirmation that inflation is not transitory and has not peaked. Thursday's data is for February, which does not account for the early March spike in oil prices," Robert Schein, chief investment officer of Blanke Schein Wealth Management, said in an email Thursday morning. "We believe there will be even stronger inflation reports over the coming months, which suggests that the Federal Reserve needs to accelerate its rate hike plans, even with the renewed uncertainty that has emerged from the crisis in Russia and Ukraine."

Russia's isolation from other global economies has also driven volatility across agricultural commodities including wheat — for which Russia is the world's largest exporter — and added the specter of a further jump in food prices.

In February, the food price index rose 1% month-on-month, also picking up slightly from January's 0.9% rise. This was driven in turn by prices for food at home, which rose 1.4% and brought the annual increase in this index up to 8.6%.

Even excluding volatile food and energy prices, the so-called core CPI also accelerated in February. The core CPI rose 6.4% in February over last year to also set the fastest rate since 1982. Prices for shelter — one of the stickier inflationary categories — picked up in February, and rent prices rose 0.6% month-over-month. Airline fares jumped 5.2% to more than double the increase from January, as fading Omicron virus cases helped stoke demand for travel. However, used car and truck prices — which have been closely watched as auto supply shortages drove prices higher for pre-owned vehicles — fell for the first time since September, dipping 0.2% month-on-month.

But even given the current tight labor market and increasing wages for many workers, inflation has still been rising at a faster clip than earnings have been able to match. Average hourly earnings last rose at a 5.1% annual rate in February, Labor Department data last week showed.

“Robust pay increases have been no match for the higher costs households are facing on rent, food, electricity, gasoline, and a pervasive list of both goods and services," Greg McBride, chief financial analyst at Bankrate, said in an email on Tuesday. "The buying power of Americans is being squeezed more and more each day, and you see this reality reflected in the dour consumer sentiment readings.”"

MY COMMENT

No surprize here. At least the increase WAS in line with expectations. Is there any doubt what is going on? The massive increases in oil is impacting the ENTIRE economy and EVERY type of business and product. Oil is used in all trucking, all shipping, and most manufacturing. It cuts across the entire world and USA economy. This is one BIG reason for what is going on right now.

This opinion from the article is simply.....IDIOTIC:

"We believe there will be even stronger inflation reports over the coming months, which suggests that the Federal Reserve needs to accelerate its rate hike plans,....."

If the FED goes into a frenzy of rate increasing....they will put the country into a recession. AND....it will all be for nothing. Raising rates is NOT going to have the slightest impact on the current inflation. The factors that are causing the massive increase in oil that is sweeping through the economy along with all the supply chain issues......are NOT sensitive to interest rates and will not change no matter how much you raise rates.

I am NOT political on here.....but......there comes a time to just say what is killing the economy and the country. We have a TOTALLY INCOMPETENT.....mentally and inherently........President and administration in office. It is a repeat of Jimmy Carter....the last time we had a weak, incompetent, disrespected President. I voted for Jimmy Carter the first time and it was a horrible mistake. Now....those that voted in the current President.....well you get what you voted for. Jimmy Carter was the most incompetent President in my entire lifetime.....till now.

It is getting hard to ignore the parallels between Carter and Biden. An oil crises, a foreign policy world crises (Iran hostage crises and Ukraine), total disrespect by world leaders, high inflation and stagnant economy, an incompetent FED, etc, etc, etc.