The Long Term Investor

I think the comic market is very secure now Zukodany. They are a fully established collectable now in the auction world.

I will add to the article posted on here that you mention......what are to me.....the most important rules.

1. Buy the best established, quality, item you can afford.

2. ONLY....buy items that have a REAL and established market.....usually national or regional auction houses....like Heritage Auctions, etc, etc, etc. Anything that is NOT sold at auction is likely suspect or a "manufactured" collectable or a fad.

Of course the number one rule is to buy what you LOVE and are passionate about.

 

I got hammered in the markets today. Looks like we are fully back to the typical day in the markets that we have mostly seen since the first of the year. Every single one of my stocks was in the RED today. Many by 2-6%. Prices on these ICONIC companies are getting ridiculous. BUT....that does not mean they can not continue to go down another 10% or more.....over the short term.

I also got beat by the SP500 by 1.90% today.

 

When I looked at my account at the close I took a look at AMAZON. I have talked about them lately and the fact that I am considering them a TWO YEAR WATCH stock in my portfolio. I will evaluate the company over that time and if they dont do better I will sell all my shares. Of course I will still own shares as part of my SP500 Index fund.

Here is a very simple aspect of what I am seeing. I looked at the numbers for their stock YTD and 1 year. Both were significantly negative for those time periods. What gives me more concern is the fact that for.......3 years.....the gain is now ONLY 10.56%. If we continue to see more weakness....they will go negative for the 3 year time period. That takes us back well before the pandemic.

 

Here is what investors ENDURED today.

Dow falls nearly 500 points as bear market bounce loses steam

https://www.cnbc.com/2022/06/27/stock-market-futures-open-to-close-news.html

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

"U.S. stocks fell on Tuesday, erasing earlier gains as the market failed to keep its rebound from the bear-market lows going.

The blue-chip Dow Jones Industrial Average fell 491.27 points, or 1.56%, to 30,946.99. The S&P 500 dropped 2.01% to 3,821.55, and the Nasdaq Composite was the laggard, down 3% to 11,181.54.

At one point, the Dow was up as much as 446.83 points, or 1.4%. The S&P 500 and Nasdaq gained as much as 1.2% and 1%, respectively. However, the major averages reversed those gains after the release of disappointing economic data.

The consumer confidence index fell to a reading of 98.7, down from 103.2 in May and missing a Dow Jones estimate of 100, according to The Conference Board. The weak data came as fears of a recession have increased lately as the Federal Reserve tries to combat surging inflation with aggressive rate hikes.

The Conference Board also said 12-month inflation expectations for its consumer confidence survey were at 8% for June, the highest level in data going back to August 1987.

“Right now we are at an inflection point in the economy, where actual spending and economic activity is still positive, however, consumer confidence and financial conditions (especially interest rates) are indicating a slowdown ahead,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “If we are able to avoid a recession then the stock market is fairly valued, however, if we do go into recession then we would expect the lows for the year haven’t been hit yet.”

Wall Street was coming off of modest losses from the previous session. Investors are still searching for a market bottom and hoping last week’s rally sticks, although there doesn’t appear to be a clear catalyst for a meaningful rebound.

“One of the trickier calls in this business is evaluating the difference between a bounce in a bear market vs. the start of a more durable advance,” wrote Chris Verrone, technical analyst with Strategas. “The current bounce, +8% over the last 4 trading days, has been impressive on the surface as most moves of this context tend to be, but again has yet to signal any resounding internal or leadership improvement.”

Retail stocks fell after the release of the consumer confidence data. Bath & Body Works lost 5.8%. Lowe’s fell 5.2%, while Home Depot and Macy’s each lost more than 4%. The SPDR S&P Retail ETF was down by 3.7%.

Shares of Nike fell 7% after the sportswear company issued weaker-than-expected revenue guidance for the current quarter. Nike said it sees flat to slightly up revenue for its fiscal first-quarter versus the prior year, and low double-digit revenue for 2023 on a currency-neutral basis, as it continues to manage Covid disruption in Greater China.

Chip stocks saw big declines, with Nvidia down 5.3% and Advanced Micro Devices lower by 6.2%. Marvel fell 4.9%. Meanwhile, Qualcomm added 3.5% after an analyst predicted Apple will use its modems for the 2023 iPhone.

On Tuesday, China relaxed its Covid restrictions for inbound travelers, cutting their quarantine time upon arrival by half to seven days. That gave travel and casino stocks a lift. Wynn Resorts and Las Vegas Sands rose 3.2% and 4%, respectively. Airlines initially moved higher but gave back gains as the market turned negative.

Disney shares initially got a lift from the news, after the company announced its Shanghai Disneyland will reopen this week. However, shares turned lower with the rest of the market."

MY COMMENT

I see NOTHING short term that is going to turn things around. Earnings even if good....will produce market drops due to GUIDANCE. I think may companies will very much downplay guidance.....this will result in good earnings being irrelevant.

In addition we are facing another FED rate hike of .75%....plus.....more to come over the rest of the year. Another big negative.

At some point inflation, rate hikes, and falling investments WILL start to impact the economy and consumers. Mortgage rates are going to jump to 6.5% to 9%....another big negative.

I have ZERO doubt that we are either already in a recession or will soon be in a recession.....not that it matters.

To put it simply.....it is "likely" that the short term will continue to be brutal.......a continuation of the year to date.

 

One bit of good news.....GOOGLE.....will be doing their stock split in about 2.5 weeks. As of now the 20 for 1 stock split will be issued on July 15.

 

Tiresmoke.

I have been thinking about you over the past month or two. How are you doing?

I know you were house hunting. Were you able to find a home? I hope so.

I know that you had your retirement accounts in the SP500 for the long term. You also were able to take a more concentrated approach in your regular brokerage account outside your retirement.....on chip stocks. I am curious are you still following that approach or have you re-balanced your brokerage account?

 

As we wait for the markets to settle today. Nothing really new here...just a slight downward revision.

US Economy Slipped 1.6% in First Quarter

https://www.newsmax.com/finance/str...m-negative-1-5-percent/2022/06/29/id/1076556/

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

"The U.S. economy shrank at a 1.6% annual pace in the first three months of the year even though consumers and businesses kept spending at a decent pace, the government reported Wednesday in a slight downgrade from its previous estimate for January-March quarter.

It was the first drop in gross domestic product — the broadest measure of economic output — since the second quarter of 2020, in the depths of the COVID-19 recession, and followed a strong 6.9% expansion in the final three months of 2021. Inflation is running at 40-year highs, and consumer confidence is sinking.

The 6.9% expansion of U.S. gross domestic product (GDP) in the final quarter of 2021 was the fastest growth for the U.S. economy in 40 years.

Still, the negative number for 1Q22 does not necessarily signal the start of a recession, although many leading economists and Wall Street CEOs have been warning of a recession next year, or possibly in the fourth quarter of 2022.

The first-quarter dip may have been caused by two factors that may not be a barometer of the underlying health of the economy.


The first is a bigger trade deficit — reflecting Americans' appetite for foreign goods and services — slashed 3.2 percentage points off the change in January-March GDP.

The second, related to the snarled supply chain, is a slower restocking of goods in stores and warehouses, which had built up inventories in the previous quarter for the 2021 holiday shopping season, trimmed another 0.4 percentage points off first-quarter economic growth.

Consumer spending, which accounts for around two-thirds of economic output, rose at a 1.8%% annual rate from January through March. And business investment grew 5%.

Still, the U.S. economy, which has enjoyed a brisk recovery from 2020′s short but devastating coronavirus recession, is under pressure as the Federal Reserve raises interest rates to rein in inflation that’s running at a 40-year high.

The rebound caught businesses by surprise, and an unexpected surge in customer orders overwhelmed factories, ports and freight yards, leading to shortages, delays and higher prices. In May, consumer prices rose 8.6% from a year earlier, biggest year-over-year jump since 1981.

In response, the Fed sped up its plan to raise interest rates, hiking its benchmark short-term rate by three-quarters of a percentage point, heftiest increase since 1994. The Fed hopes to achieve a so-called soft landing — slowing economic growth just enough to bring inflation down it its 2% target without causing a recession.

Higher borrowing costs are already pinching the housing market.


For the full year, the economy is still expected to turn in respectable growth: 2.5%, according to the World Bank."

MY COMMENT

WELL.......DUH. It is not hard to see what is going on in the economy now and why it is happening. this story reflects a slight downward revision of GDP for the first quarter. I am sure it will be all over the news with the current emphasis on DOOM & GLOOM.

As to the "expectation" of 2.5% growth this year........total FANTASY.

 

Lets "hope" that this view is correct.

June’s Global Flash PMIs Still Look Ok
With more businesses reporting growth than not, recession still doesn’t look like a foregone conclusion.

https://www.fisherinvestments.com/en-us/marketminder/junes-global-flash-pmis-still-look-ok

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

"Another month, another round of flash purchasing managers’ indexes (PMIs) giving an early read into major economies’ business activity. Though they mostly ticked down in June, prompting more recessionary chatter, their levels still indicate overall expansion. It may not be gangbusters, but stocks don’t need perfection to mount a recovery from this year’s downturn—just for reality to beat dreary expectations.

PMIs are surveys that aim to measure growth’s breadth. Readings above 50 indicate the majority of surveyed firms reported expanding business activity, with growth (and contraction) theoretically accelerating the further readings drift from that marker. PMIs don’t say anything about how much their businesses grew (or shrank), only that they did, so they are a timely but loose estimate of economic activity at best. Among the various readings, the composite PMI combines services and manufacturing, but it is a narrower measure of their “output” that focuses only on production. The services and manufacturing PMIs are broader, including new orders, backlogs, suppliers’ delivery times and employment. That is why, for example, the composites for June’s US, UK and eurozone PMIs can be below each of their services and manufacturing PMIs.

Exhibit 1 shows major economies’ PMIs remain above 50—though they are down from the spring, implying deceleration (Japan excepted). The US and eurozone’s June flash composites, released with only 85% – 90% of responses in, fell to the low 50s, continuing a generally slower trend. This includes both services, which comprise the bulk of developed market economies, and manufacturing. But while low-50s PMIs aren’t historically robust, they generally coincide with pedestrian growth.

Exhibit 1: Major Economy PMIs


Source: FactSet and S&P Global, as of 6/23/2022. Flash PMIs are preliminary estimates based on 85% – 90% of responses.

Also note, the downward trend isn’t global—Japan’s composite PMI rose and the UK’s was flat. Japan’s lift was services-based as COVID restrictions eased there. Reopening-related boosts helped buoy UK services, too, as more workers returned to the office and patronized surrounding businesses. However, Japanese and UK manufacturing weakened alongside the rest of the developed world as Chinese lockdowns hit global supply chains.

As a whole, the picture here appears mixed. Business activity growth is less broad-based. But through mid-June at least, the pockets of strength seemingly outnumbered the pockets of weakness. Whether that translates to actual economic growth, we will see when output data roll in.

For many, this isn’t exactly consoling. As we wrote in early June for the eurozone, there are some discrepancies between “soft” survey data and “hard” sales and volume data, with some signs of contraction in the latter. In the US and UK, May retail sales fell -0.3% m/m (nominal) and -0.5% (real), respectively. But we don’t think this is conclusive, as it may reflect a continuing shift back to services spending from goods—a return to normal, not necessarily weakness. Hard services data tend to lag, which is why timelier PMIs are helpful and looking at both provides a fuller picture, if only in broad brushstrokes.

Based on our read of all the data so far, it is premature to declare a recession is underway. Some quantitative efforts to derive GDP from monthly indicators—like the Atlanta Fed’s GDPNow—might seem to disagree, but these models aren’t air-tight. GDPNow currently predicts 0.3% annualized Q2 growth given available data.[ii] But the most telling component, personal consumption expenditures—71% of GDP—won’t be released until month end, and that is just May’s number.[iii] More broadly, these nowcast models are young, with a spotty record of accuracy. The New York Fed’s proved so inaccurate that they have temporarily ceased publication, pending methodological improvements. The St. Louis Fed’s attempt currently estimates 3.9% annualized growth in Q2, but neither it nor the Atlanta Fed’s model predicted Q1’s inventory-fueled GDP contraction.[iv] Absent a foolproof tool, investors must survey the entire landscape and make their best judgments. For now, we are inclined to interpret PMIs as more evidence economies aren’t uniformly weak despite well-documented struggles.

Notably, though, even survey data have some weak points worth monitoring. Deteriorating new orders may suggest demand is faltering—but it is too early to tell. Relative services strength may be fading, but whether that is normalization following the initial reopening boom or something worse—e.g., cost of living pressures taking a more lasting toll—remains to be seen. Meanwhile, manufacturing’s downtrend, beset by component shortages, could reverse as supply chains recover. Some businesses, particularly in the consumer world, apparently overstocked trying to compensate amid surging goods demand. They may just have inventory overhangs they need to work through—a more temporary hiccup than needing to get lean to correct prior excess.

We also see some other encouraging nuggets. The PMI surveys indicate falling backorders, which could be signaling easing supply chain and price pressures. This may be occurring as headwinds from China’s choppy reopening fade. One hint: The New York Fed’s Global Supply Chain Pressure Index, which aggregates transportation costs, input-output prices and other measures—like PMIs’ delivery times, backlogs and inventories—to gauge the overall intensity of bottlenecks’ disruption on world trade. (Exhibit 2) While still at lofty levels, it has started subsiding and may be past its peak.

Exhibit 2: Global Supply Chain Pressures Elevated, but Easing


Source: Federal Reserve Bank of New York, as of 5/18/2022. Global Supply Chain Pressure Index, January 1998 – May 2022.

For investors, the most salient aspect of the latest PMI releases may be their accompanying bearish sentiment. Given the market environment, it isn’t surprising. But we still think it is notable that PMI coverage widely extrapolates imminent recession—which the data don’t confirm, at least yet. The evidence, as we have explored, is more mixed. While recession is possible, we think the global economy’s resilience is just as remarkable given the challenges it has faced year to date. This is an underappreciated positive to us.

Recession uncertainty has undoubtedly weighed on markets lately. But by the same token, it lowers the expectations bar reality needs to clear to surprise stocks positively. In our view, increasing economic clarity in the second half—even if it just muddles through—will likely provide relief."

MY COMMENT

WELL.....we will find out soon when the second quarter data comes out the reality and the truth. I expect that even if GDP is negative the various groups and agencies will come up with various excuses and reasons why the two quarter drop.....this time.....in NOT a recession.

 

This is a big question for house shoppers at the moment. I tend to agree with this little article in general. BUT....local conditions are going to be all over the board over the next year or two.

Should I wait for real estate prices to crash before I buy a house? Here are 3 simple reasons why this housing downturn is nothing like 2008

https://finance.yahoo.com/news/wait-real-estate-prices-crash-144500571.html

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

"Two years in, this decade has already brought a global pandemic, record-setting inflation, rising interest rates and a country more divided than ever before.

So why not a housing crash too?

Americans who lived through the 2008 crisis may be watching the red-hot market starting to cool and getting flashbacks. And for prospective homeowners, it might be appealing to put your plans on pause until the market bottoms out so you can snag a house at a great price.

But experts say there are good reasons to believe that however this shakes out, it won’t be a return to 2008 — which will no doubt be a relief to anyone whose apple bottom jeans and boots with the fur have been long put away in storage.

1. Lenders stopped being so lax

Blame it on the banks. A huge contributor to the housing crisis in 2008 was dicey lending practices within the financial industry. Years of deregulation made it easier — and more profitable — to hand out risky loans.

The Dodd-Frank Act, which was signed into law in 2010 aimed to prevent that by increasing oversight in the industry.

While the act’s effectiveness has been called into question over the years, it has undoubtedly forced lenders to be stricter about their lending practices, which means far fewer borrowers are likely to land in hot water.

The median credit score of newly originated mortgages was 776 in the first quarter of the year, according to the Federal Reserve Bank of New York. But nearly 70% of new mortgage holders had a credit score of 760 or more.

The New York Fed added in its quarterly analysis that, “credit scores on newly originated mortgages remain very high and reflect continuing high lending standards.”

2. Homeowners are doing fine

The onset of the pandemic could have been catastrophic for the housing market if millions of homeowners had no choice but to default on their loans.

Fortunately, mortgage forbearance programs allowed struggling borrowers to pause their payments until they could get back on their feet. And it worked: by the end of March, the share of mortgage balances 90-plus days past due remained at 0.5% — a historic low.

And compared to 2010, when delinquencies on single-family homes hit a 30-year high of 11.36%, the rate was just 2.13% in the first quarter of 2022.

On top of that, rising home prices has translated into increased equity for homeowners. In total, mortgage holders now have $2.8 trillion more in tappable equity compared to a year before, according to Black Knight, a mortgage technology and data provider. That’s a 34% increase and more than $207,000 in additional available equity per borrower.

3. There’s still plenty of supply

“It’s not always as simple as supply and demand — but it almost always is,” host Dave Ramsey said on The Ramsey Show earlier this month.

Ramsey says the major issue in 2008 was there was a “tremendous oversupply because foreclosures went everywhere and the market just froze.” The crisis wasn’t down to the economy or interest rates, it was “a real estate panic.”

In comparison, now, there’s a huge demand and a shortage of supply. But the Federal Reserve’s efforts to dampen demand by raising interest rates is starting to work. And new housing is starting to slowly come on the market as well.

What Ramsey says we’re seeing now is a softening in the rate of increase of prices, but he doesn’t anticipate they’ll go down like they did in 2008."

MY COMMENT

With most homeowners having increased equity and the current borrowing standards.....I dont see a big jump in foreclosures. Rather.....I see local conditions primarily dependent on jobs being the factor that might impact housing prices in local areas. In other words if jobs are FLEEING some local area....there will potentially be weak housing prices in that area.

All in all I think that most homeowners are going to see the recent value increases in their home stick for now.

 

Just looked for the first time today. I am minimally in the red.....less than $1000. At the same time I have 6 stocks UP and 4 stocks DOWN.

just going by the negative general averages.....I expected worse before I looked. From here to the close the day is very much up in the air. On the positive side.....the Ten Year Yield is down. On the negative side.....the FED was talking earlier today.

WHATEVER.

 

Yeah.....the stuff we hear from the FED is just platitudes and nonsense. I do think that they need to normalize rates and their balance sheet.....but do it with a medium term plan that gives confidence and clarity to investors and the markets.

Unfortunately they are either testifying, giving speeches, meeting, discussing the meeting, issuing reports about 15-20 days of each month. It did not use to be this way with the FED. It is a total waste and nothing more than EGO GRATIFICATION.....nothing more than busy work. Just do your job instead of taking about how you are going to do your job....all the time.

 

Thanks TireSmoke. I was wondering how you were holding up with your three chip company portfolio. I am right in there with you as an owner of Nvidia. Sounds like you are taking the right approach to the investing and the house hunt.

 

NICE.....I ended the day in the green. I did not expect this. Plus....I managed to beat the SP500 by 0.26%. Not huge money but I will take it. My gain today was driven by 6 of my stocks that were UP.....versus......4 that were down.

Hump Day....comes through for me.

 

Here is how the markets did in general today.

Dow rises modestly in volatile trading as Wall Street struggles to recover

https://www.cnbc.com/2022/06/28/stock-market-futures-open-to-close-news.html

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

"Stocks fluctuated on Wednesday, after the major averages made a failed attempt at a bounce in the previous session, and as the market prepares to close out the worst first half of the year since 1970.

The Dow Jones Industrial Average finished the day up 82.32 points, or 0.27%, to 31,029.31, while the other benchmarks closed slightly in the red. The S&P 500 slipped 0.07% to 3,818.83, and the tech-heavy Nasdaq Composite inched lower by 0.03% to 11,177.89.

Investors continued their search for the bottom of a vicious market sell-off as the second quarter comes to an end Thursday. Concern over a slowing economy and aggressive rate hikes consumed much of the first half of 2022, and fears of a recession are rising.

“We expect significant volatility this summer, with ‘face-ripping’ short-covering rallies followed by economically-inspired market slumps,” Wells Fargo senior equity analyst Christopher Harvey said in a note Wednesday. “While a much anticipated market ‘washout’ could catalyze a more sustained move higher, we think the market will not sustain a rally until it believes the Fed will toggle from a 50-75bp tightening to a more mundane 25bp increase.”

The S&P 500, which is down about 20% in 2022, is on pace for its worst first half of the year since 1970, when the index lost 21.01%. Meanwhile, on a quarterly basis, both the Dow and S&P 500 are on track for their worst performance since 2020. The Nasdaq is headed toward its worst three-month period since 2008.

On Wednesday, General Mills shares rose about 6.4% after the company topped earnings and revenue forecasts for its most recent quarter.

Shares of Goldman Sachs added nearly 1.3% after Bank of America upgraded them to a buy and said the bank will thrive even in an economic slowdown.

Amazon gained 1.4% after JPMorgan reiterated its overweight rating on the stock and Redburn initiated it at a buy. Meta Platforms was up 2%, while Apple and Microsoft gained more than 1% each.

Meanwhile, chipmakers led declines after Bank of America downgraded several chip stocks due to rising competition. Teradyne fell 5.2%. Advanced Micro Devices and Micron each lost more than 3%.

Carnival slid 14.1% after Morgan Stanley cut its price target on the stock roughly in half and said it could potentially go to zero in the face of another demand shock. The call dragged other cruise stocks lower. Royal Caribbean and Norwegian Cruise Line Holdings fell about 10.3% and 9.3%, respectively.

Bed Bath & Beyond shares plummeted roughly 23.6% after the company posted a huge miss on quarterly earnings and revenue expectations and announced its CEO is stepping down.

On Wednesday, Federal Reserve Bank of Cleveland President Loretta Mester said she will advocate for a 75 basis point hike to interest rates at the central bank’s July meeting if economic conditions remain the same by then.

“I haven’t seen the kind of numbers on the inflation side that I need to see in order to think that we can go back to a 50 increase,” she told CNBC.

Wednesday’s moves followed steep losses for the major averages the day before. The benchmarks all started the session with strong gains, but disappointing consumer confidence data halted those advances and sent stocks tumbling.

“The overwhelming mentality remains gloomy, with most people just trying to avoid bear-market rallies, convinced the SPX has several hundred points of further downside over the coming months,” wrote Adam Crisafulli of Vital Knowledge, in a note.

Although investors are expecting continued volatility and negative earnings revisions, Leuthold Group’s Jim Paulsen said that underneath the turbulence, financial markets have been “essentially restored to normal.”

“The fight against runaway inflation is intense, and recession fears are rampant,” he wrote in a note Wednesday afternoon. But “financial markets have been substantially revalued, with the S&P 500′s P/E ratio now below average and the 10-year Treasury at an above-average real yield.”

MY COMMENT

YES......the hunt for the bottom will continue. We are not there yet.....or, if we are......no one can see it yet.

Investors will just have to continue to hang in there. It seems to me that people are doing a better job this time around in just siting and waiting for the market to turn. In the past a market like this would have brought RAMPANT PANIC.