The Long Term Investor

mizugori.....probably the "Hello Kitty" impact.

Sorry.....I was looking for Nike news today to see what was going on and saw this. I could not resist. I will keep looking for the reason. ASSUMING.....a big assumption......that there is a reason.

Pairs of the Nike Air Presto ‘Hello Kitty’ Collab Are Available Via the Resale Market Now
https://www.yahoo.com/lifestyle/sanrio-x-nike-air-presto-135643173.html?fr=yhssrp_catchall

 

Actually NIKE is up today.....at least right now.

Here is one little article that I found from yesterday.

Nike (NKE) Stock Sinks As Market Gains: What You Should Know

https://finance.yahoo.com/news/nike-nke-stock-sinks-market-214509647.html?fr=yhssrp_catchall

Nike does not report earnings till late June.....so whatever is causing them to be erratic is not related to earnings.....at least as far as I can tell.

 

I like this little article.

Keeping Tabs on the Latest Economic Data
Amid unsettling volatility, what do developed-world data say?

https://www.fisherinvestments.com/en-us/marketminder/keeping-tabs-on-the-latest-economic-data

"A bevy of economic data came out recently—to a fairly consistent negative reception. But in our view, sour sentiment tied to the ongoing correction is causing many investors to underrate economic conditions today. Here are the major releases from the developed world that hit the wires last week and our thoughts on what they signal.

One item gaining many headlines: US productivity, which suffered its biggest fall in 75 years. While that perhaps sounds alarming, it is just a twist on Q1’s GDP report, and the -7.5% annualized decline was simply a function of math. Productivity, as the US Bureau of Labor Statistics defines it, is output per hour. Take it apart, looking at the denominator first. Workers’ hours rose at a 5.5% annualized rate last quarter, suggesting growth created more work and jobs.

Meanwhile, output—as measured in this data series by GDP excluding government, nonprofit and household sectors (i.e., private sector business production)—fell -2.4% annualized.[ii] But as we detailed earlier, private sector inventories mainly drove Q1 GDP down. The inventory drawdown came after massive stockpiling in Q4 to counteract supply chain problems. Stripping out inventories, business spending and investment rose 9.2% annualized in Q1, a historically strong rate. Bigger picture, productivity measures are backward-looking, and they normally fluctuate during an expansion.

Headlines last week were also abuzz over the US’s record trade deficit. But we don’t think this was very meaningful for investors, either—not least because it reflected late-lagging March data, already embedded in Q1 GDP. Moreover, while “deficit” implies something wrong—and that belief is widespread—imports exceeding exports isn’t inherently bad. Imports reflect consumer demand. Trade data showing they hit record highs is good! (Exhibit 1) Even better, exports hit a record, too! Judging by this measure, global trade is hardly in retreat. Some might say, yah but record amounts of trade just reflect sky-high prices—it is only inflation. But using quarterly GDP data, which is inflation-adjusted, US trade still hit new highs in Q1. Notably, US petroleum exports also hit new highs. Worries about whether America’s oil industry will respond to high global prices abound—and in our view, this is one sign among many those concerns aren’t warranted.

Exhibit 1: US Trade Is Booming




Source: Federal Reserve Bank of St. Louis and Census Bureau, as of 5/4/2022.

As you can see, American imports have exceeded exports for the series’ entire history. We habitually run trade deficits, so that isn’t a relevant feature, in our view. More interesting, to us: The trade deficit is normally wide when the economy expands. Very often, the deficit shrinks when the economy is in recession, like 2008. So while the data are backward-looking, the record-high deficit today seems less like a sign of trouble and more like evidence the economy was growing at Q1’s close.

Looking abroad, the latest eurozone economic releases provide a glimpse at how inflation and the war in Ukraine are affecting data, as March reports reflect the first full month since the invasion. Real eurozone retail sales fell -0.4% m/m in March, led lower by a -2.9% drop in automotive fuel.[iii] These data mostly just add detail to the currency bloc’s Q1 GDP slowdown.

Meanwhile, March German and French industrial production (IP) fell -3.9% m/m and -0.5%, respectively.[iv] An -11.2% m/m decline in vehicle production led Germany’s drop as component shortages weighed. A similar circumstance struck in France, as motor vehicles slid -7.3% m/m. The situation should improve when China reopens and global supply chains adjust to the war’s impacting components usually sourced from Ukraine. The process won’t be frictionless, but it should see gradual improvement in due time.

Furthermore, data out on German factory orders and trade in March show continued weakness, as the former declined -4.7% m/m, again led lower by a -15.7% drop in vehicle production.[v] Manufacturing export orders fell -6.7% m/m with orders outside the eurozone down -13.2%. German trade data give some insight there. Germany’s overall exports declined -3.3% m/m in March, with sales to Russia plunging -62.3% as sanctions restricted trade. Exports to China, its biggest trading partner, fell -4.3% m/m amid Chinese lockdowns. While this isn’t great, obviously, these downswings are also largely one-offs—especially the drop in business to Russia, which greatly reduced Germany’s already small exports to the country. As for China, it may see continued negativity in the short term, but reopening should eventually boost exports as factories there resume sourcing German components.

For investors, stocks don’t need perfection. The bull market just needs reality to exceed current dour expectations. With so many expecting a lasting economic downturn, dour takes on mixed data suggest reality has a low bar to clear—a reason to remain bullish, in our view."

MY COMMENT

This little article.......in my mind.....points out the FALLACY of investors in BUSINESSES.......in the form of stocks.....relying on general and other economic data as a stock indicator. In reality the.......ONLY.....business indicator that really matters is the FUNDAMENTAL data from the business about their business results.

It is the same as the blanket statements that we hear in the financial media every day......like....."the BIG TECH companies are sensitive to the Ten Year Treasury yield". This BALONEY takes on a life of its own over time as it is repeated over and over and over. No one with any credentials ever has the GUTS to mention that the....emperor has no cloths. No one wants to be mocked or derided as stupid....so this sort of garbage becomes established FACT.

This is one reason why long term investing works and is provable. None of this short term excuses stuff matters.....over the longer term it is irrelevant. Over the longer term all you see is the business results and the resulting impact on stock value and total return.

 

This little article shows the truth about what is actually happening now and......more importantly......what will be proven to be SMART over the long term.

BofA: ‘More buying of the dip’ seen among retail and institutional investors

https://finance.yahoo.com/news/bof-...il-and-institutional-investors-152147423.html

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

"The S&P 500 (^GSPC) continues to further its 52-week low point as inflation came in hotter than expected for April. CPI rose by 8.3%, down slightly from March’s 8.5% but still above consensus forecasts.

In light of the market trough, however, a recent Bank of America (BAC) Global Research report notes that retail and institutional investors continue to “buy the dip.”

“More dip-buying: last week, during which the S&P 500 was -0.2%, [private] clients were net buyers of U.S. equities ($2.4B) for the fourth consecutive week,” the report reads. “Private clients have been the biggest net buyers of U.S. equities YTD (where they have been more aggressive buyers of the dip this year after missing out on what has generally been a successful strategy for much of the post-GFC (Global Financial Crisis) period).”

According to the May 10 BofA Securities Equity Client Flow Trends report, the trading week prior to last (April 25-29) exhibited an opposite dynamic where buying was led by institutional clients. Institutional clients have also been net buyers of equities year-to-date, while hedge funds have been net sellers.

In addition, BofA said that its corporate clients are taking advantage of the cheaper valuations currently seen in the market by ramping up stock buybacks.

“Buybacks by corporate clients accelerated to the highest weekly level since late Jan. following tepid trends for the majority of this earnings season so far,” the report reads. “YTD, corp. client buybacks as a % of S&P 500 mkt. cap (0.07%) are in line with 2021 YTD levels at this time but below 2019 (0.13%) levels.”

Markets ended the month of April with steep losses as investors contended with expectations of a hawkish Federal Reserve. And now that the Fed has indeed embarked on a more aggressive interest rate hike plan by raising rates by 50 basis points for the first time since 2000, markets are struggling amid heightened volatility.

Uncertainty is high as hot inflation could signal increasingly steep rate hikes in the coming months as the Fed looks to quell surging prices. Moderating energy prices contributed to the slight deceleration seen in April, but the indexes for shelter, food, airline fares, and new vehicles placed a heavy upward burden on overall CPI.

What they’re buying

Over the past couple weeks, BofA’s clients have continued to buy large and mid-cap stocks but sold small-caps. The Russell 2000 (^RUT) broke under the key 1,800-point support on Monday and remains under as of Wednesday morning.

“Clients bought stocks in six of the 11 sectors, led by Energy (largest inflows since Nov. 2021) and Real Estate (third consecutive week of inflows) — two sectors that fit our "inflation-protected yield" theme,” the report reads. “Financials and Communication Services saw the largest outflows. Rolling 4-week avg. flows for Financials turned the most negative ever last month, with more muted but continued outflows in recent weeks.”

In terms of single stock versus ETF purchases, ETF inflows outpaced single stocks last week for the biggest round of ETF inflows seen since late March. Most of the inflows were into large-cap and broad market funds across blend, growth, and value styles.

“Clients sold ETFs in six of the 11 sectors, where Communication Services ETFs saw the largest outflows (in tandem with single stock outflows),” the report reads."

MY COMMENT

Buying dips is usually always a good strategy. BUT......for this to lead to investing success you have to be buying.........first......superb businesses with real fundamentals........and......second.....you have to be a long term holder of those businesses. Trying to buy dips with a short to medium term time horizon.....less than 2-3 years.......is simply speculation. For dip buying to work......you need to be a very clinical long term, PROBABILITY based, investor.

 

I guess I will sign off for now and go look at my account for the first time today.

If we can avoid.......some FED person shooting off their big mouth today.......we have a good chance for a nice positive day in the markets.

LETS GET OUT THERE AND MAKE SOME MONEY TODAY.

 

GREAT. I called it in post 10727 above. We had a chance for a green day till one of the ASSES at the FED had to open their big mouth.

St. Louis Fed's Bullard: Inflation 'broader, more persistent' than originally thought

https://finance.yahoo.com/news/st-louis-fed-bullard-inflation-broader-204913783.html

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

"Federal Reserve Bank of St. Louis President James Bullard said that high readings on inflation still concern central bank officials, reinforcing the need for higher interest rates.

“Inflation is broader and more persistent than many have thought and the Fed will have to act in order to keep inflation under control and we’ve got a plan in place,” Bullard told Yahoo Finance in an exclusive interview on Wednesday.

The Bureau of Labor Statistics reported Wednesday morning that prices in the United States rose by 8.3% between April of this year and April of last year. That yearly pace of growth in the Consumer Price Index is a tick down from the 8.5% pace observed in March, but Bullard emphasized that more action from the Fed will be needed to further push inflation down.

The Fed is in the process of withdrawing its pandemic-era monetary support from the economy. The main focal point of that effort: raising interest rates from the near-zero level it slashed borrowing costs to in 2020.

The first rate hike in March raised the short-term interest rate by 0.25%. Last week, the Fed moved to raise rates by 0.50% — the largest single meeting move since May 2000. Those rate hikes have raised the Fed’s target policy rate to a range of 0.75% to 1.00%.

Bullard said moves of 0.50% in at least the next two meetings would be a “good benchmark for now,” adding that he would like to see the Fed raise the target rate to 3.5% by the end of the year. Atlanta Fed President Raphael Bostic and Cleveland Fed President Loretta Mester both told Yahoo Finance Tuesday that 0.50% moves were their baseline expectations through at least the June and July meetings.

“The committee has, based on public comments from my colleagues, coalesced around a plan of 50 basis points per meeting so I think we can proceed on that,” Bullard said.

On the prospects of an even larger interest rate bump (0.75%), Bullard said it was “not my base case.”

The St. Louis Fed chief said he is not concerned about the Fed tilting the U.S. economy into a recession, despite market jitters over the risks of an abrupt end to the post-pandemic recovery. Bullard pointed to the strong jobs market as a sign of economic health, where government data released last week showed the unemployment rate at a near 50-year low of 3.6% in April.

“Our probability of recession is not particularly elevated at this time,” Bullard said.

The next Fed decision is scheduled for June 15."

MY COMMENT

What an A-hole. The probability of recession is not particularly elevated at this time? What planet is this guy on? We are in all likelihood already in a recession.

I swear they are INTENTIONALLY tanking the markets to try to slow down consumer and other spending and to cool off the economy. Nearly every time we have a RARE shot at a green day they have to come out and open their big mouths.

 

Not a good day for my account with my particular stocks. In the RED. AND.....got hammered by the SP500 by 1.47% today.

I dont see much movement toward people capitulating in the slightest. SO......I will continue to slide my downward prediction forward with.......at the minimum......a 5-10% downside going forward from today. I dont see any bottom remotely in sight. Although that is the way it is with bottoms......you can not see them at the moment......only in hindsight.

The way this market is HUGGING the FED comments and the general economic data.....it is going to be a very RED year for many more months. With MOST investors owning many of the big tech names and other modern type stocks.......I believe the general pain level will get to the point eventually where the average investor has a loss of 30-40% year to date.

 

I dont say the above out of negativity. I really dont feel any negativity at all right now. BUT.....I can see it coming. I HOPE I am wrong.

 

SP500 is now approaching a BEAR MARKET being down as of today by.......ONLY...... (-17.44%).

HERE is the bad news scenario:

The S&P 500 is having its worst year so far in six decades: DataTrek

https://finance.yahoo.com/news/sp-500-having-worst-year-in-six-decades-data-trek-205311482.html

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

"The S&P 500 (^GSPC) rebounded ever-so-slightly on Tuesday, but failed to recoup losses from Monday’s ugly session and hovers closer to a bear market in the midst of sky-high inflation and a hawkish Federal Reserve looking to end easy money at last.

Recent analysis from DataTrek Research, a market research firm, revealed how the index's performance this year looks in the larger historical context.

“While there’s still 3 weeks of trading left in May, 2022 has been the worst year-to-date return (-16.3 pct) so far relative to overall down years for the index save 1962,” Jessica Rabe, co-founder of DataTrek Research, wrote in an email newsletter.

Based on past data, it is likely that the index will continue to underperform throughout the year, Rabe noted.

“Even if the S&P were able to recover some losses by the end of this month, it’s likely YTD negative return would still fit the pattern of a down January-May period that’s highly typical for losing S&P years,” she wrote.

The S&P 500 entered a free-fall last week, augmenting analysts’ forecasts for a bear market. The index has endured five consecutive weeks of decline, the most since 2011. By midday Tuesday, the S&P 500 was trading at 4,025, slightly up from Monday’s close. If the index drops below 3,854, this would represent a 20% decline from the intraday high, which experts warn could qualify as a bear market.

Losses accelerated last week as investors priced in the Federal Reserve’s decision to raise the target interest rate by .50%, the most aggressive rate hike in 20 years. The move adds to what has already been an extraordinarily hawkish year for monetary policymakers, who have been struggling to slow 40-year high inflation levels that have increased every month.

Other headwinds, including the ongoing conflict in Ukraine and the national labor shortage, have contributed to a poor year for the stock market thus far.

According to DataTrek, S&P 500 losses during the first five months of the year bode poorly for the index as a whole during the rest of the year. Based on historical trends, the S&P 500 will continue to underperform during months June-October when negative returns are recorded during the first five months of the year, however, in November and December losses are generally reigned in and returns flatten out.

“The performance of the S&P during the last two months of a down year is essentially flat on average,” Rabe wrote in the report. “The average return is -1.0 pct from the end of October through the end of December during down years for the S&P.”

This could mean that investors waiting to “buy the dip” may have to wait a little longer before losses subside.

The S&P 500 is but one stock market barometer investors use to monitor market performance; the Dow Jones Industrial Average (^DJI) and Nasdaq Composite (^IXIC) are the two other largest stock indices in the U.S.

This year, the Nasdaq has had by far the worst year out of the three. The Nasdaq is down over 4,000 points, or 26% since January, while the S&P 500 is down 17% over the same period. The Dow has declined by 4,500 points, or just over 12%, since 2022 began.

The putrid performance of tech stocks has driven much of Nasdaq’s decline, as the index is very tech-heavy. Seeking Alpha reported Tuesday that new data from Societe Generale (SCGLY), a French multinational investment bank, shows that Nasdaq has lost $7 trillion in market cap in six months, essentially wiping out all of its gain made following the announcement of Pfizer’s coronavirus vaccine."

MY COMMENT

You know this is the first time I have seen a group of losing stocks described as.....PUTRID PERFORMANCE. But that is exactly right.....the big tech stocks have been totally PUTRID this year. What is SAD is the fact that much of this loss is not really justified by anything at all. But that is just the way it is.

Considering that we are at just the beginning of the tightening by the FED......and.....so far there is obviously ZERO impact on inflation.......and......the other market conditions just about ALL being negative.......this year has the potential to end up with a STRONG LOSS. In fact if we start to see general consumer negativity along with.......MALAISE........we have the potential to end up in a major, multi-year, BEAR MARKET.

It is way too early to know where we are going to head from here.....but......I dont see anyone in government or the economic world giving me any confidence at the moment.

This could end up as one of those time periods where investors will be SEVERELY CHALLENGED in their underlying assumptions about their own risk tolerance and ability to sit and stay in the markets. For me:

I remain fully invested for the long term as usual. AND......I have no plans to do otherwise.

 

I say the above out of honest analysis. I would love to be wrong by the time we get to the end of the year. BUT....having lived through the four DISMAL years of Jimmy Carter.......I know that wishful thinking does not do any good when you are in that sort of incompetent environment.

It has been a very long time since we have had a long BEAR MARKET lasting from 12-24 months. BUT......they do happen and are part of the normal market process once in a while. When they happen....... it is usually due to factors outside the markets themselves.......like we are seeing all around us right now.

 

The only good news I can see today is the fact.......that I am not Cathy Wood. She is having a BRUTAL year.

Tumble in Coinbase pushes Wood's ARK fund closer to pandemic low

https://finance.yahoo.com/news/tumble-coinbase-pushes-woods-ark-180427270.html

"NEW YORK (Reuters) - A collapse in cryptocurrency company Coinbase Global Inc pushed star stock picker Cathie Wood's ARK Innovation ETF down nearly 8% on Wednesday, putting it within 10% of its low touched in March 2020 at the start of the coronavirus pandemic.

Coinbase, the fund's second-largest holding at nearly 7% of assets, fell more than 28% to record lows Wednesday after the company missed first-quarter estimates and its chief executive said the company had no risk of bankruptcy.

The declines in Coinbase added to the pain for Wood's ARK Innovation fund this year.

ARK did not respond to a request for comment.

The fund outperformed all other actively managed U.S. equities in 2020 on the strength of its portfolio of companies such as Zoom Video Communications Inc and Teladoc Health Inc that rallied during the pandemic-induced economic lockdowns.

That strong performance made Wood a household name and led to appearances on magazine covers and billions of dollars in inflows from retail investors, though some now consider her the poster child for the so-called pandemic bubble.

ARK is down nearly 60% for the year to date, and nearly 76% below its high in February 2021. It traded at $37.98 at mid-afternoon, 8.6% above its low of $34.69 hit in March 2020 before the Federal Reserve and Congress unleashed an unprecedented $5.2 trillion to support the economy.

In a webinar Tuesday, Wood blamed much of the fund's losses on the Fed taking a too-aggressive path of rate hikes at a time when the global economy is in what she believes is a recession.

But other investors disagree. Matthew Tuttle, whose $460 million Tuttle Capital Short Innovation Fund shorts ARK's portfolio, blamed Wood's losses on "multiple compression."

"These companies make no money, in a zero interest rate environment they can, and do, command high multiples (but) in a rising rate environment they don't," he said."

MY COMMENT

As to Coinbase......it is not a great BOOST for a stock when the CEO is saying......."no, I dont think we are going to go bankrupt".

 

I will take what I can get this year.......so here it is.

Social Security recipients could see biggest cost-of-living increase in 40 years
Social Security benefits could jump by 8.6%, highest since 1981

https://www.foxbusiness.com/money/s...d-see-biggest-cost-of-living-raise-since-1981

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

"Social Security recipients are poised to receive the biggest cost-of-living raise in over four decades as inflation rapidly erodes the buying power of retired Americans.

The Senior Citizens League, a nonpartisan group that focuses on issues relating to older Americans, estimated on Wednesday the adjustment could be as high as 8.6% in 2023, based on April inflation data, which showed that consumer prices soared 8.3% from the previous year, close to a 40-year high.

The annual Social Security change is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or the CPI-W, which jumped 9.4% over the past year.

Should Social Security beneficiaries see an 8.6% increase in their monthly checks next year, it would mark the steepest annual adjustment since 1981, when recipients saw an 11.2% bump. The Senior Citizens League previously predicted the COLA for 2023 could be 8.9%, but the headline inflation figure has subsided slightly since then.

The Social Security Administration will release the final adjustment percentage in October.

The estimated figure could still be subject to change and ultimately hinges on whether inflation has actually peaked or will continue to rise. While economists pointed to Wednesday's figure as evidence that inflation may be subsiding, they noted that prices rose more than expected and are still near a record high – suggesting any decline could be painstakingly slow.

Excluding gas and food, which are more volatile measurements, so-called core inflation actually rose more in April than it did the previous month, alarming some experts who called it a worrisome development.

"One does not get the sense that this is going provide any relief to households experiencing a loss in purchasing power and to policymakers who will attempt to restore price stability without causing a recession," said Joe Brusuelas, RSM chief economist.

The average Social Security benefit in 2022 jumped by 5.9%, which amounted to a monthly increase of $92 for the average retired American, bringing the full amount to $1,657, the Social Security Administration announced last year. But soaring inflation has already eroded the entirety of the increase, according to calculations by the Senior Citizens League.

Social Security recipients have lost 40% of their buying power since the year 2000, according to new research conducted by the Senior Citizens League.

"That’s the deepest loss in buying power since the beginning of this study in 2010," said Mary Johnson, a policy analyst at the Senior Citizens League who conducted the research.

Although Social Security benefits have climbed by 64% since 2000 thanks to cost-of-living adjustments, typical senior expenses through March 2022 have actually grown by more than double that rate, 130%. In order to maintain the same purchasing power as there was 22 years ago, Social Security would have to increase by $539.80 per month.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

The Senior Citizens League has pushed Congress to adopt legislation that would index the adjustment to inflation specifically for seniors, such as the Consumer Price Index for the Elderly, or the CPI-E. That index specifically tracks the spending of households with people aged 62 and older."

MY COMMENT

This is about the best I can come up with today. SO.......show me the......"FREE"......money.

 

OK....enough. We move on from here. Tomorrow is a fresh start from "0". The beginning of the rest of the year.

 

I am keeping in mind.....as context.....what I posted back in post 9011......my results for year 2021:

"Here is how I ended 2021:
Total account gain for 2021, currently ten stocks and the two funds below..........+34.76%."

So, I figure perhaps the worst case situation.....FOR ME...... this year will be......losing a year of gains. In business I always liked to figure worst case and best case. Based on where we are right now.....anything better than a LOSS OF 34.76% this year......will be good with me.

Sometimes you just have to go back a year.....in order to move on up.