The Long Term Investor

The past month is the perfect example of IGNORING the short term. We are now WAY UP from the lows of the past month. All anyone had to do is just sit and do nothing to capture those gains. The current few months and the start to this year is exactly why I stay fully invested for the long term.....all the time. It is impossible to predict the EXPLOSIVE market moves UP and when a soft market will turn around.

 

Here is how we did today. AND.....I dont see anything standing in the way of tomorrow.

Dow rallies 300 points, Nasdaq gains 1.9% as chip stocks lead market rebound

https://www.cnbc.com/2022/03/23/sto...-tries-to-recover-from-wednesdays-losses.html

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

"Stocks rallied Thursday, clawing back the previous session’s losses, as falling jobless claims added to confidence in the U.S. economic recovery.

Shares that have the most to gain from a rebounding economy, including chip and materials stocks, led the gains.

The Dow Jones Industrial Average rebounded by 349.44 points, or 1%, to close at 34,707.94. The S&P 500 added 1.4% at 4,520.16. The Nasdaq Composite rose 1.9% to 14,191.84.

Stocks have seesawed this week, alternating between up and down days. The S&P 500 and the Nasdaq are on track to close the week higher.

“There has been so much volatility over the past week or so,” Victoria Fernandez, chief market strategist at Crossmark Global Investments, said. “We’re seeing a combination of some good economic news, some people going in and picking up names. That’s why we see a little bit of a bounce here.”

A drop in jobless claims to the lowest level in decades gave some investors confidence the U.S. economy could keep growing through headwinds such as the Russia-Ukraine war and higher interest rates. Initial jobless claims last week totaled 187,000, the lowest level since 1969, the Labor Department reported Thursday.

Thursday’s rally gained steam as the day went on, with technology and materials stocks leading the way.

Chip stocks climbed Thursday, with shares such as Nvidia among the favorites of traders to buy in market upswings. These chip companies also stand to benefit in a continuing global economic recovery from the pandemic. Nvidia jumped 9.8%. Intel added 6.9%, and AMD rose 5.8%.

Materials was the second-best-performing S&P 500 sector Thursday. Nucor added 4.3%, and Freeport-McMoRan rose about 3.3%.

Uber gained nearly 5% after the company announced a deal to list all New York City taxis on its app.

Meanwhile, bitcoin rose nearly 4% in another sign of rising risk appetite.

Investors are continuing to monitor the war in Ukraine and weigh the Federal Reserve’s rate hikes amid persistent inflation.

Last week, the Fed raised interest rates for the first time since 2018. Chair Jerome Powell on Monday vowed to be tough on inflation and opened the door for more aggressive half-percentage-point rate hikes.

NATO leaders met in Brussels Thursday to discuss increasing pressure on Russia, as Ukraine appears to be retaking ground in the war.

“While the stock market is attempting to recover from its correction, markets are fundamentally riskier and more uncertain than before Russia’s invasion of Ukraine,” said Richard Saperstein, chief investment officer at Treasury Partners.

The indexes are coming off a big rally last week, their best weekly performance since 2020.

All three major averages are on track to close the month higher. The S&P 500 is up 3.3% in March. The Nasdaq is 3.2% higher, and the Dow is up 2.4%.

MY COMMENT

Stock and Fund investing is inherently RISKY. That is just part of the trade off for the......probability....that you will make more on your money in these investments than elsewhere. The simple FACT is that over the long term you have good potential to make AND compound your money at about an average of 10% per year.

Of course......there is ONE BIG ASSUMPTION......that you will pick realistic and reasonable stocks and funds that will return at least as much as the SP500 over the long term. With human behavior.....this is a HUGE assumption and the reality is that MOST investors WILL severely under-perform the SP500 over the long term. The academic research shows this year after year....decade after decade.

The average investor will make a return of about 4.25%.

Why Average Investors Earn Below Average Market Returns

https://www.thebalance.com/why-average-investors-earn-below-average-market-returns-2388519

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

"Research done by Dalbar, Inc., a company that studies investor behavior and analyzes investor market returns, consistently shows that the average investor earns below-average returns.

For the 20 years ending December 31, 2019, the S&P 500 Index averaged 6.06% a year. The average equity fund investor earned a market return of only 4.25%.1

Why is this?

Investor behavior is illogical and often based on emotion. This does not lead to wise long-term investing decisions. Here's an overview of a few typical money-losing moves that average investors make.

Buying High

Studies show that when the stock market goes up, investors put more money in it. And when it goes down, they pull money out.2 This is akin to running to the mall every time the price of something goes up and then returning the merchandise when it is on sale—but you are returning it to a store that will only give you the sale price back. This irrational behavior causes investor market returns to be substantially less than historical stock market returns.

What would cause investors to exhibit such poor judgment? After all, at a 6% return, your money will double every 12 years.3 Rather than chasing performance, you could simply have bought a single index fund and earned significantly higher returns.

Want to estimate how long it will take for your investment to double? Use the Rule of 72. Divide the number 72 by the anticipated rate of return to arrive at a rough estimate.

Overreacting During Times of Uncertainty

The problem is the human reaction, to good news or bad news, is to overreact. This emotional reaction causes illogical investment decisions. This tendency to overreact can become even greater during times of personal uncertainty—near retirement, for example, or when the economy is bad.

There is an entire field of study which researches this tendency to make illogical financial decisions. It is called behavioral finance. The study of behavioral finance documents and labels our money-losing mind tricks with terms like "recency bias" and "overconfidence."4

Investors Believe They Can Predict the Future

With overconfidence, you naturally think you are above average. For example in one study, 81% of new business owners thought that they had a good chance of succeeding, but that only 39% of their peers did.5 In another study, 93% of U.S. drivers rated themselves in the top 50% of drivers in terms of skill.6

When it comes to investing, overconfidence causes investors to exaggerate their ability to predict future events. They are quick to use past data, and to think they have above-average abilities that enable them to predict market movements into the future.

Popular books, like Carl Richard's "The Behavior Gap," also do a great job of explaining the behavioral decisions that lead to the large gap between market returns and actual investor returns. Despite the research and education, the gap continues. So what can you do to avoid the fate of the average investor?

How to Avoid Losing Money

One of the best things you can do to protect yourself from your own natural tendency to make emotional decisions is to seek professional help and hire a financial advisor. If so, use a disciplined screening process to find the right advisor for you.

An advisor can serve as an intermediary between you and your emotions. If you are going to manage your own investments, you'll need your own way to keep your emotions out of the buy/sell process. Consider using the four tips below to make smarter decisions.

1. Do Nothing

A conscious and thoughtful decision to do nothing is still a form of action. Have your financial goals changed? If your portfolio was built around your long-term goals (as it should be), a short-term change in markets shouldn't matter.

2. Know That Your Money Is Like a Bar of Soap

To quote Gene Fama Jr., a famed economist, “Your money is like a bar of soap. The more you handle it, the less you’ll have.”

3. Never Sell Equities in a Down Market

If your funds are allocated correctly, you should never have a need to sell equities during a down market cycle.7 This holds true even if you are taking income.

Just as you wouldn’t run out and put a for-sale sign on your home when the housing market turns south, don’t rush to sell equities when the stock market goes through a bear market cycle. Wait it out.

4. Trust That Science Works

A disciplined approach to investing delivers higher market returns. Yeah, it’s boring; but it works. If you don't have discipline, you probably shouldn't be managing your own investments."

MY COMMENT

Yes the above return figure for the average investor is based on ACTUAL research and data. Yet.....amazingly......I virtually never run into anyone that will admit to not beating the markets. There is only one conclusion.....people lie about what they are making in the markets. They FOOL themselves. Not just once....but over and over and over.

As I have said many times....it is so simple yet, so difficult, to simply be a long term investor. And this is why I continue to be fully invested for the long term in my usual MONSTER, BIG CAP, stocks and my MARKET SETTING Index and mutual fund. This is why I dont trade, why I dont market time, why I dont try to find the next great stock.......I just stick with what is proven and iconic. This is why I continue to just do what I have been doing for over 45 years now......over, and over, and over......because it WORKS.

 

That is a nice list of companies gtrudeau88. There are a good number that I dont follow.....but still.....a nice list of companies that you are going to focus on.

I have seen enough of your posts on here to know that I trust what you post to be the truth. You are obviously giving your investing strategy lots of thought. Good for you. I like that you are focusing on about 20 companies on your list. That will make it much easier to be more intimately familiar with those companies and their performance as you fine tune and implement your strategy.

 

That is carzy Zukodany......but I agree. It is INSANE the amount of money that people seem to have now. The all cash housing market where prices dont seem to matter at all. What you are seeing matches the absolutely INSANE prices I have been hearing about lately for hotel rooms.....especially in the upscale hotels. People are just throwing money around. I have never in my entire life seen this sort of pricing and spending going on without the slightest care on the part of the consumers.

As to inflation.......I put the odds that any action by the FED is going to have any impact......at near ZERO. There is a HUGE amount of money chasing EVERY desirable product or service. It is ALL totally........ supply/demand and available to spend money.......driven. Raising interest rates is not going to impact this sort of spending at all.

I am happy to take the increase in my home value and also the increase in the value of the hard assets that I happen to own.......but......it does make me wonder where it is all headed. I suspect that where we are headed is quickly toward the typical Science Fiction movie scenario.......an extremely divided population with the majority scraping along and the ELITES living in their own little isolated and out of touch world.

 

A mixed market at the moment....with the NASDAQ down....probably due to the increase in the rate on the Ten Year Treasury.

I am hearing the typical BALONEY as to the NASDAQ BIG CAP MARKET LEADERS being sensitive to jumps in short term interest rates. I hear this repeated over, and over, and over......but I have no clue why this would be true in the slightest. I simply do not believe there is any correlation at all....other than self fulfilling prophesy. It is not like any of these companies......Amazon, Microsoft, Apple, Nvidia, Google.......have any reason or need to borrow money to support their business.....they have a license to mint money and are the largest/greatest businesses in the world.

 

I happen to agree with and like this little article....it is a good lesson for investors.

A Closer Look at Rate Hike Cycles and Stocks
Stock returns are usually up solidly during them.

https://www.fisherinvestments.com/en-us/marketminder/a-closer-look-at-rate-hike-cycles-and-stocks

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

"After the Fed’s first step up from zero last week, its dot plot of Federal Open Market Committee (FOMC) members’ fed-funds target rate projections implied more rate hikes at every meeting this year. If so, this would mean six more quarter-point increases, potentially putting the benchmark rate’s range at 1.75 – 2% by yearend. Fed-funds futures also reflect this, suggesting it is widely expected—and baked in. There is a lot of chatter about what the Fed’s running the table would do to the stock market, but stocks are often resilient as rate hike cycles get going.

Historically, stocks have done better than you might think through rate hike cycles. As Exhibit 1 shows, cumulative S&P 500 returns were positive in 11 of the last 12, with an average annualized total return of 8.6% and a median of 10.1%. Past performance isn’t predictive, of course. But as a guide, history suggests stocks can hold up for sizable chunks of Fed “tightening” stretches.

Exhibit 1: Stocks Mostly Rise During Rate Hike Cycles

Source: Federal Reserve Bank of St. Louis, Global Financial Data, Inc., and FactSet, as of 3/21/2022. Discount rate, March 1955 – September 1982, federal-funds rate target, September 1982 – December 2008, federal-funds rate target upper limit, December 2008 – February 2022, and S&P 500 total returns, March 1955 – December 2018. *Percentage Point.

Now, as the table shows, some bear markets (typically prolonged, fundamentally driven declines exceeding -20%) began during these rate hike periods: in August 1956, February 1966, January 1973, November 1980, August 1987 and March 2000. Except for one (August 1956’s), all occurred amid Fed rate hikes that caused yield curve inversions, when short-term policy rates topped 10-year Treasury yields. On most occasions, the bear market didn’t begin for several months or more after the initial hike. (Though we should also note August 1987’s bear market—the shortest until 2020’s February – March one—ended well before 1989’s inversion, which we associate more with 1990’s bear market and recession.) In other words, we wouldn’t consider rate hikes by themselves as problematic for markets. Their impact on the yield curve is the swing factor, in our view.

While this rate hike cycle is young, we have some preliminary evidence that successive rate hikes aren’t bad for stocks. The Bank of England (BoE) hiked its Bank Rate for the third straight time last Thursday. It is now back to pre-COVID levels. How have UK stocks fared during the BoE’s “tightening” so far? Since December 16, when the bank first hiked from 0.1% to 0.25%, to March 17’s move to 0.75%, the MSCI UK Index is up 5.0%. (Exhibit 2) That is admittedly rather unremarkable, but it isn’t down, and relative to the rest of the world—which mostly hasn’t started hiking yet—the UK has handily outperformed. The MSCI World Index fell -5.8% over the same stretch. To us, this is evidence that even a pretty aggressive start to tightening isn’t automatically bearish.

Exhibit 2: BoE Rate Hikes Haven’t Stymied UK Markets

Source: FactSet, as of 3/21/2022. MSCI World, World excluding UK, UK, EMU and Japan returns with net dividends and S&P 500 total returns, 12/15/2021 – 3/17/2022.

More generally, we wouldn’t take the Fed’s dot plot as gospel (nor any other central bank projections). It is possible the fed-funds range’s upper bound hits 2% by yearend—and 2.75% in 2023 (as the dot plot and fed-funds futures also imply currently). Additionally, accompanying the “tightening” that suggests, there has been an uptick in concern that if the Fed follows this path, it could err and invert the yield curve since 10-year Treasury rates are currently 2.4%.[ii] A deep and prolonged inversion could indeed tighten financial conditions enough to cause recession, especially if global yield curves follow suit. Although we think this is something to watch out for, we think it is far too premature to worry about it now.

First, Fed decisions aren’t predictable. As we have written on numerous occasions, the interest rate forecasts in the FOMC’s dot plots aren’t anything to go by. They are Fed people’s opinion of where interest rates are likely to be if economic data evolve as they expect—not policy commitments or blueprints. Reality often defies dot-plot forecasts.

Second, the Fed’s power is overrated. A series of quarter-point rate hikes (or cuts) in aggregate may affect borrowing, depending on what long rates do, but we think the Fed is more of a rate follower than a rate setter. The Fed normally moves after the fact to where short-term Treasury rates already are—a straggler, not a trailblazer. If financial conditions are tightening, market-set rates will likely show it before the Fed confirms it.

Third, for markets, Fed decisions don’t have any preset outcomes. Rate hikes aren’t inherently bearish, and cuts aren’t necessarily bullish, either. (Or vice versa.) This is because markets pre-price expected Fed moves. If the Fed does what everyone already thinks is likely, there isn’t much reason to believe any action should drive stocks further beyond random short-term sentiment swings.

As for the yield curve, 10-year Treasury yields aren’t static. Just in the week since last Wednesday, they have climbed from 2.2% to 2.4%.[iii] Never read too much into short-term moves, but further Fed hikes causing an inversion in the near term isn’t a given. In the meantime, when waiting for future Fed actions, take solace: History and the present wall of worry—which includes “tightening” chatter—point to more bull market ahead."

MY COMMENT

Other than a few days or perhaps for a few weeks.....a FED rate hike is NOTHING. I have made very good money during time periods of rising rates and I have made good money during times of a bad economy. ALL of this stuff is simply outside factors that overlay the actual business results that over the longer term determine what money an investor makes.

If investors got out of the markets or tried to time all the various factors that SUPPOSIDLY are going to impact the markets....you would NEVER be invested.

 

It seems like we just got done with earnings reports.

Two critical trends to watch as companies announce earnings: Morning Brief

https://finance.yahoo.com/news/two-...nnounce-earnings-morning-brief-090829247.html

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

"Believe it or not, the first quarter ends a week from today. That means Q1 earnings season is just around the corner.

The past three months have been particularly eventful from the perspective of risk. Geopolitical angst spiked in February with Russia’s invasion of Ukraine. The conflict has sent global food and energy prices surging. Inflation is hot with the consumer price index jumping 7.9% year-over-year in February, the biggest increase since January 1982. Meanwhile, the Federal Reserve recently raised interest rates for the first time since 2018 in its ongoing effort to cool prices.

All of these developments represent headwinds for business activity.

With this in mind, there are two trends to watch as companies announce earnings in the coming weeks.

Is demand still strong?

When uncertainty is high and sentiment is low, it would make sense for businesses and consumers to cut back on spending.

But that hasn’t been happening in recent quarters, even with inflation ramping up and COVID-19 variants presenting new health risks.

Earlier this week, Nike announced better-than-expected quarterly sales growth while adding that “demand continues to significantly exceed available inventory supply, with a healthy pull market across our geographies.”

In other words, Nike (NKE) is saying sales would’ve been even more robust had it not been for supply issues, which was something numerous companies said about the prior quarter.

On Thursday, Darden Restaurants (DRI) — parent of Olive Garden, LongHorn Steakhouse, and other popular restaurant brands — reported quarterly same-restaurant sales that jumped 38% from a year ago.

When asked about the impact of surging gasoline prices, Darden CEO Gene Lee told Yahoo Finance, “I think the consumer balance sheet is stronger than it has been previously.”

Indeed, consumer debt levels are low and cash levels are very high.

On the subject of inflation, General Mills (GIS) has been raising prices to address higher costs. And in its earnings announcement on Wednesday, the company confirmed that consumers were paying up. In fact, sales of higher priced products drove all of the company’s revenue growth during the period, which actually saw pound volume decline.

Based on these early reports, it looks like revenue could deliver again.

Are profit margins holding up?

Over the past year, corporate executives have been very vocal about how inflation was causing the cost of doing business to rise.

However, profit margins actually widened to record levels in 2021. And analysts have been predicting that margins would stay high in 2022.

With its earnings announcement, Nike reported that its gross profit margin increased to 46.6% during the three months ending in February, up 100 basis points from the prior quarter.

Despite higher pricing, General Mills actually saw its profit margins contract.

Darden reported better profit margins, but management also warned that inflation costs were much higher than it previously anticipated.

“We started the [fiscal] year with a 3% inflation assumption,” Darden COO Rick Cardenas said. “Here we are three quarters later. We're looking at 6% total inflation.”

So far, companies are painting a mixed picture for margins.

Why it matters

Revenue and profit margins are the dominant drivers of earnings growth as you can see in the chart below. And earnings growth drives stock prices.


S&P 500 year-over-year operating EPS growth
Analysts’ forecasts for earnings have been high and have only been improving.

So, it will be critical for companies to deliver on revenue and/or profit margins or else they could get punished by traders dumping their stocks."

MY COMMENT

Earnings already? I just got done with earnings when Nike reported.......or was that the start of the next earnings? Who knows. It seems like earnings reporting never ends now. I expect that the next earnings reports in a month or two will CONTINUE to be historic.....on the positive side. Consumers are spending like maniacs. The amount of free money sloshing around in the economy is amazing. I dont see any consumer resistance to higher prices at all at the moment.

PLUS......we are still in the begining of the economy getting reopened and back to normal from the pandemic closure. Over the past year we have seen HISTORIC HUGE increases in hourly wages. People have money and are going to spend it. Business is going to benefit.

 

Some day when the party ends....it is going to be a big shock. Especially to those that get very overextended....as always happens.

BUT.....for now....we are STILL in a mixed market for the day....so far.

 

I do think this little article is accurate.....especially regarding capital gains taxes that will be due in less than a month.

Day Traders Finally Retreat After Standing Firm Amid Stock Market Rout

https://finance.yahoo.com/news/day-traders-finally-retreat-standing-113012146.html

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

"(Bloomberg) -- In what looks increasingly like an uncharacteristic bout of bad timing, retail investors who hung tough during the selloff in January and February are now taking money off the table just as stocks are rallying.

Evidence of a retail pullback was visible in data from several Wall Street banks and the U.S. options clearing agency. Data from JPMorgan Chase & Co. showed their flows have slowed from a torrid pace earlier this year. Bank of America Corp.’s retail clients were net sellers of U.S. stocks for the first time this year.

Many factors may have driven the retreat. One that has been getting the attention of analysts of late is the need to pay off an outsize tax bill on massive capital gains. According to a February estimate from Morgan Stanley’s trading desk, at least $325 billion will be due at next month’s deadline, 75% higher from what was to be paid a year ago.

Of course, equities are not the sole source of that cash. Yet the pressure to meet tax obligations could mean waning demand from one key pillar of support in place since the market’s pandemic bottom two years ago. Indeed, data from JPMorgan showed broad daily retail flows this month are about 20% lower than this year’s average.

Whether appetite from the YOLO crowd will continue to subside is hard to tell. To some market watchers, their withdrawal follows a stretch of furious risk unwinding from the likes of hedge funds -- a contrarian sign that sentiment may have reached a point where the last buyer is depleted and a floor can be established for the market.

“‘There’s no one left to sell’ is the logic behind the retail finally surrendering their optimism and becoming as glass-half-empty as the rest of the world has already been,” Lawrence Creatura, a fund manager at PRSPCTV Capital LLC, said in an interview. “So professional investors use that as a tell to indicate when capitulation has occurred.”

Day traders pulled back as stocks staged a strong comeback. The S&P 500 fell to within points of its 2022 lows at the start of last week before jumping in five of the next six sessions. Up 8% over the stretch, the index clawed back half its losses incurred during the previous two months. It slipped 0.9% as of 2:10 p.m. in New York.

Retail activity has become a focal point of Wall Street attention after many bored Americans flooded into stocks during the pandemic lockdowns, emboldened by zero trading commissions offered by online brokers. Their market influence, however, has diminished this year as a hawkish Federal Reserve and war in Ukraine jolted big-money managers into action.

Bank of America’s retail clients sold more than $800 million of shares last week after pouring in almost $8 billion since January as the market pulled back.

“Retail has been a more aggressive buyer of the dip year-to-date than any other time since the global financial crisis and dip-buying has been a successful strategy,” BofA strategist Jill Carey Hall said in an interview. “Retail is not a contrary indicator. We found that the weeks we’ve seen positive retail flows, those have positive correlation with subsequent market returns even more so than hedge fund flows do.”

Ellen Hazen, chief market strategist and portfolio manager at F.L. Putnam, agrees, saying it’s too early to determine what the latest retail action means for the market.

“It used to be the case that retail investors were considered a contrary indicator because they were considered to always be late to the party. But I don’t know that that’s true any longer,” she said. “The jury is out as to whether or not the reliability of that as a contrary indicator is as high as it used to be.”

There are also signs in the options market that retail interest is cooling. Once a big fan of using bullish options to chase equity gains and make quick money, day traders have seen their demand for calls dwindling. Last week, small-lot buying of call contracts made up the lowest portion of total call volume since March 2020, Options Clearing Corp. data compiled by Susquehanna International Group show.

While amateurs were exiting, hedge funds tracked by BofA reined in their selling. Their share disposals totaled less than $400 million last week, down from $2.4 billion from the previous week.

Meanwhile, hedge fund clients at Morgan Stanley and JPMorgan were tiptoeing back after frenetically slashing their equity exposure. Last week, they trimmed short positions against stocks while adding longs, separate data from their prime brokers show.

“Unfortunately, the retail client is often wrong and moving the opposite direction of institutional cash,” said Victoria Greene, founding partner and chief investment officer at G Squared Private Wealth. “Retail selling may be signaling we saw at least a short-term bottom and support in this turnaround.”"

MY COMMENT

Of course......number one.....this stuff is irrelevant to actual long term investors.....the REAL retail investors. It is interesting that it is short term traders.....that are being called retail investors in this little article. I dont consider those people as retail investors at all. the real retail investors are the silent majority of the investing world......the long term investors.

The Hedge Funds....the options trading little guys......none of them matter at all. BUT.....I am positive there are some very big tax bills coming due next month.......and....that is part of the selling and volatile markets we are seeing.

In the......old days.....we would often see a nice BUMP UP in the markets in April.....due to people making their IRA contributions to beat the deadline and putting their IRA contribution money to work in the markets. This no longer happens with most people now using a 401K and spreading their contributions across the entire year.

 

Good news and bad news for people looking to buy a home in my little area of 4200 homes in Central Texas.

The good news......we are now UP to TWELVE listings. That is the most we have had in a long time. Although.....compared to the total number of homes......4200....it is minuscule.

The bad news.....out of those twelve listings.....TEN.....are above $1MILLION........the highest being for sale at about $3MILLION. This would have been UNHEARD of here 5 years ago. MOST homes in this area were below $1MILLION five years ago. Now out of the 12 homes for sale there is one in the $700,000-$800,000 range and one in the $800,000 to $900,000 range. Ten years ago......there were many, many homes in this area priced between $275,000 and $600,000. One of my siblings bought a very nice home in this area for about $285,000 back than.

For taxes......you are looking at about $24,000 per year for one of the homes priced at about $1MILLION. If we were buying our house today and did not have our senior tax freeze our taxes would be about $38,000. If we had to pay full taxes I dont think we would be living here.

It continues to be a.....runaway market here. AND.....I continue to be AMAZED at what is happening to home prices here. I saw some data the other day.....houses are taking about FIVE DAYS to sell. Like Zukodany was saying......it is incredible the amount of money that is out there right now. It does not seem possible......but......we see it every day around us.

 

I dont buy stocks based on analyst reports.....but since I happen to already own Tesla.....I like this one.

Tesla ‘is entering a new growth phase': Analyst

https://finance.yahoo.com/news/tesl...-after-torrid-pandemic-analyst-160124651.html

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

"Electrical vehicle (EV) maker Tesla (TSLA) is one of the markets best secular growth stories,according to CFRA Analyst Garrett Nelson.

"That's important at a time where growth is really being hurt by inflationary impacts," Nelson told Yahoo Finance Live.

"[Tesla's] is a story that's not immune to inflation, but the growth is really driven by company specific factors: The growth for electric vehicles and also the startup of two new factories, one in Germany, [which] just held the ribbon cutting. And then, in Texas, where they have a grand opening scheduled two weeks from now," Nelson said.

"They're entering really a new growth phase with the startup of these two new factories that will increase their annual vehicle production capacity dramatically. And so that's what's really driving the earnings growth going forward," he added. "Over time, they can really scale up with these larger factories. It really takes time. It's several month process to scale up to full capacity," he added.

Nelson said Tesla's strategy is to do whatever it takes to boost production. "They have a goal of increasing their annual auto sales from about a half million vehicles sold in 2020, to 20 million by the year 2030. So, that's growth of 40x that needs to happen. And so, they're going to have to really accelerate their growth by building new factories. The Texas and Germany factories essentially doubles their number of operating factories from two to four. And we believe they're looking at other factories around the world," he said.

Building factories around the world "is really going to help Tesla's growth in other markets, and achieve economies of scale, which should help drive down costs," Nelson said.

'Setting investor expectations'

Nelson, who upgraded the stocks from Hold to Buy in January, believes that the automaker's goals are within reach.

"Tesla has become very good at setting investor expectations. That's why company has now beat earnings nine of the last 10 quarters," he said.

In Tesla's latest earnings report, revenue rose 65% year over year in the quarter, while the automotive revenue totaled $15.97 billion, up 71%, according to a press statement."

MY COMMENT

With the two new factories coming on line and ramping up to full production over the next year or so......this company will now be achieving full scale production. AND....from here....as they add more new factories....it will get MASSIVE. This is a company that is moving into.......middle age......very quickly in terms of production capability and revenue growth. In terms of their potential market.....they are far from middle age......they are still a very young company.

The danger for their business will be the HUGE increase in EV production by everyone in the world over the next 20 years. If they can hold onto their brand recognition advantage over that time they will be ICONIC and DOMINANT. Continued VISIONARY management will be the key. We have seen many high end ICONIC brands.....like BMW and Mercedes.....fall to the wayside over the past 10 years. This is what Tesla has to avoid. They are in the drivers seat right now....but it will be a total knife fight to stay there.

 

I was GREEN today......by $15.17. That's right under $20.....but green is green. I got beat by the SP500 by 0.51% since my account registered my result today as 0.00%.

Stocks that I had postive today were.....Apple, Amazon, Nike, Honeywell, and Google. The other five were in the red.

I will take it since the gains today in the averages....or....small losses means that we are probably positive for the week in the general averages. A good end to a good week.