HERE is come classic advice.....I might call it...."PAY YOURSELF FIRST". Why Saving Is More Important Than Investing https://compoundadvisors.com/2022/why-saving-is-more-important-than-investing (BOLD is my opinion OR what I consider important content) "What matters more: your savings rate or your investing return? Most would probably say the latter as that gets all the attention. We often hear discussions about how to earn higher returns but savings rates are rarely mentioned. In reality, though, saving is far more important for the majority of Americans. Why? Because most people don’t save very much at all, and without savings you cannot invest. That’s true whether you make $50,000 a year or $500,000 a year. If you spend everything you make, there’s nothing left to invest. In the U.S. today, the personal savings rate is 5%, calculated as follows: (personal income less personal outlays and personal current taxes) / (disposable personal income) Powered by YCharts The 5%, however, is an aggregate number. Most save far less, with 56% of Americans unable to cover a $1,000 emergency expense with their savings and 54% of credit card users carrying a balance (don’t pay off their bill every month). I could on and on with these statistics, but they all tell the same story. The vast majority of Americans are saving very little. By extension, they are investing very little. By further extension, the rate of return on their investments is not nearly as important as their savings rate. Let’s go through some examples to drive this point home. The median household income in the U.S. is roughly $71,000. Assuming an effective tax rate (federal/state/FICA) of 15%, this leaves disposable income of $60,350. If we assume various savings rates on this $60,350 (1% to 10%) and various returns (1% to 10% annualized), where would this leave the average household after 30 years (for simplicity, we’ll assume a Roth IRA type vehicle with no taxes on gains and assume household income is static over those 30 years)? The big question: was it more important to earn a higher investment return or to save more? Let’s take a look… If a household saved 1% of their disposable income per year and earned a 10% rate of return, they would have a balance of $99,272 after 30 years. Alternatively, if they saved 10% of their disposable per year and earned only a 1% rate of return, they would have a balance of $209,927 after 30 years. That’s a 111% higher ending balance for the 10% savers as compared to the 1% savers even though their annualized investment returns were 9% lower. Note: Table Assumes No Taxes on Investment Gains and Constant Disposable Income of $60,350 per Year If you’re saving very little today, all of your focus should be on saving more. Why? Because the long-term gains from a higher savings rate will trounce the gains from earning higher returns. For instance, if a household only saved 1% per year and earned a 5% return, after 30 years they would have $40,096. Earning a 6% return would bump that up to $47,712, a 19% increase. By comparison, if their returns stayed at 5% but they were able to save 1% more per year (2% savings rate), they would be left with $80,192 after 30 years. That’s a 100% increase in the ending balance through saving 1% more versus a 19% increase from earning a 1% higher return. Clearly, savings seems to trump investing returns for the average American household. And this is great news, for saving more is something you actually can control, whereas earning a higher rate of return is infinitesimally more difficult. That’s not to say that saving more is easy. Far from it, especially when the median household income has struggled to keep pace with inflation in recent decades. It takes discipline, hard work, and saying no to a lot of things you may want but don’t necessarily need. At first, it may seem like the sacrifice is all for nothing as your balance is increasing at a snails pace. But with the passage of time the rewards will become clear, as the magic of compounding takes hold. Which is why when young people ask me about investing, I tell them to first think about saving. That starts with eliminating high interest rate credit card debt (the average rate today is nearly 20%), which is the best investment you can make. After that, it extends to building an emergency fund (3-6 months of living expenses) that can get you through hard times, without which you will never sleep well at night. When you accomplish these goals, you are ready to start thinking about investing. But when you do, don’t obsess over returns. For a diversified investor, returns will be what they’ll be; the best you can do is find a portfolio you can stick with and not let your emotions get in the way. A far better use of your time and energy is to focus on what you can control: moving forward in your career, living within your means, and saving more." MY COMMENT It is actually that simple. Save money and invest it in REALISTIC and RATIONAL investments. Let the power of compounding do the rest. Like EVERYONE the amounts involved will be very small at first....but...over time you will accumulate REAL WEALTH.
A PERFECT day for me today.....a clean-sweep....EVERY stock down for the day. PLUS.....as an added bonus a LOSS to the SP500 by 0.85%. Lets hope this is not the way we go tomorrow. I used up all my FREE MONEY gains from yesterday....today.
HERE are the NIKE earnings. Nike sales rise, but supply chain issues and inventories weigh on earnings https://www.cnbc.com/2022/09/29/nike-nke-earnings-q1-2023.html (BOLD is my opinion OR what I consider important content) "Key Points Nike first fiscal quarter revenue was up 4% to $12.69 billion, beating estimates. Nike net income was down 22% to $1.5 billion. The sneaker giant said inventory on its balance sheet was up 44% to $9.7 billion, driven by continued supply chain issues. Nike on Thursday said it had a strong first fiscal quarter despite supply chain issues, as well as declining sales in Greater China, its third biggest market by revenue. Like other retailers, Nike has been facing supply chain headwinds, such as a rise in both shipping costs and shipping times in recent quarters. The company said its inventory levels swelled during the quarter compared to the year-ago period. The company’s shares dropped about 5% in after-hours trading. Here’s how Nike did in its first fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv: Earnings per share: 93 cents vs. 92 cents expected Revenue: $12.69 billion vs. $12.27 billion expected Nike reported net income for the three-month period ended Aug. 31 fell 22% to $1.5 billion, or 93 cents per share, compared with $1.87 billion, or $1.18 per share, a year earlier. Revenue during the period was up 4% to $12.7 billion, compared with $12.2 billion a year earlier. Recently, Nike has been shifting its strategy and looking to sell its sneakers and other merchandise directly to customers and scale back on what is sold by wholesale partners like Foot Locker. The company said on Thursday its direct sales grew by 8% to $5.1 billion, and sales for its digital-brand rose 16%. On the flip side, sales for Nike’s wholesale business sales increased by 1%. In its first fiscal quarter, Nike said its inventory rose 44% to $9.7 billion on its balance sheet from the same period last year, which the company said was driven by supply chain issues and partially offset by strong consumer demand. Total sales in Greater China were down 16% to about $1.7 billion, compared with nearly $2 billion a year earlier. The company has faced disruption in its business in the region, where Covid lockdowns have affected its business. Nike had said in the previous quarter it expected issues in Greater China to weigh on its business. Meanwhile, total sales in North America, Nike’s largest market, increased 13% to $5.5 billion in the first fiscal quarter, compared with roughly $4.9 billion in the same period last year. The sneaker giant has continuously said consumer demand, especially in the U.S. market, hasn’t waned despite inflation." MY COMMENT Not too bad....EPS up, revenue up, direct sales doing well. To me......this is better than I feared with everything that is going on right now....especially in China. Looks like the company is well positioned going forward. Strong sales, good consumer demand, and a nice increase in total sales in North America AND....of course the shares were punished after hours today.
Dont know if it will be tomorrow....or even this year.....but. 'Don't try to be a hero': The stock market will — eventually — roar back, history shows https://finance.yahoo.com/news/stock-market-eventually-roaring-back-history-shows-180334088.html (BOLD is my opinion OR what i consider important content) "On the bright side of what has increasingly been a terrible year for stocks is that over time, history is filled with self-corrections and comebacks. The S&P 500 has gone on to increase on average by 29% in the three years following a 20% plus decline dating back to 1950, according to data mined by Truist chief market strategist Keith Lerner. Stocks have gained 26% on average after a 20% plus fall zooming out and using a two-year timeframe. Hang in there. (Source: Keith Lerner) To be sure, most investors probably can't wait for it to be 2025. In the meantime, while history shows markets mean revert over time, Lerner advised that investors need to be careful at the moment as markets adjust to higher interest rates and weakening economic growth. "Don't try to be a hero," Lerner said on Yahoo Finance Live (video above). The Dow Jones Industrial Average (^DJI), S&P 500 (^GSPC), and Nasdaq Composite (^IXIC) are down 9.2%, 9.7%, and 10.6% over the past month, respectively, and once-hot momentum names in tech such as Netflix and Apple are being crushed as traders unwind leveraged bets amid rising interest rates. Market sentiment has been damaged by a convergence of factors. For one, the Federal Reserve continues on its mission to stomp out inflation by aggressively hiking interest rates. In turn, that has caused ripple effects across an array of asset markets: everything from a surging value for the U.S. dollar to mortgage rates nearing 7%. Those crosscurrents are beginning to show up in economic data, with the Bureau of Economic Analysis saying Thursday first half Gross Domestic Product (GDP) declined. We also recently saw a full-year profit warning from North Face owner V.F. Corp. as retailers battle the economic slowdown as well as reports of Apple (AAPL) cutting iPhone production on growth fears — prompting a headline-grabbing downgrade on the tech giant's stock by Bank of America. Furthermore, earlier this month, FedEx (FDX) shocked the market by slashing its full year guidance. But what goes down must eventually go back up, right?" MY COMMENT RIGHT. BUT.....no one can say when it will happen. SO....stay calm.....keep your emotions in check. Invest according to your risk tolerance. Ignore the CHAFF and the media.
Well....we were RED...but have now improved to a mixed market. BUT....I am not really anticipating anything from the markets today.....with the current mental and psychological environment.
This little article TOTALLY reflects my view of Facebook. I actually think this company is toast. I dont think they will disappear......but...their days as a big tech leader are already long gone. My view is....they are and will become irrelevant. Facebook scrambles to escape stock’s death spiral as users flee, sales drop https://www.cnbc.com/2022/09/30/fac...pe-death-spiral-as-users-flee-sales-drop.html (BOLD is my opinion OR what I consider important content) "Key Points Meta is trading at its lowest since early 2019, and the stock is one of the worst performers this year in the S&P 500. The company’s problems are mounting, whether it’s the ad hit from Apple’s iOS changes or the growing threat posed by TikTok. “I’m not sure there’s a core business that works anymore at Facebook,” said Laura Martin, an analyst at Needham. A year ago, before Facebook had turned Meta, the social media company was sporting a market cap of $1 trillion, putting it in rarefied territory with a handful of U.S. technology giants. Today the view looks much different. Meta has lost about two-thirds of its value since peaking in September 2021. The stock is trading at its lowest since January 2019 and is about to close out its third straight quarter of double-digit percentage losses. Only four stocks in the S&P 500 are having a worse year. Facebook’s business was built on network effects — users brought their friends and family members, who told their colleagues, who invited their buddies. Suddenly everyone was convening in one place. Advertisers followed, and the company’s ensuing profits — and they were plentiful — provided the capital to recruit the best and brightest engineers to keep the cycle going. But in 2022, the cycle has reversed. Users are jumping ship and advertisers are reducing their spending, leaving Meta poised to report its second straight drop in quarterly revenue. Businesses are removing Facebook’s once-ubiquitous social login button from their websites. Recruiting is an emerging challenge, especially as founder and CEO Mark Zuckerberg spends much of his time proselytizing the metaverse, which may be the company’s future but accounts for virtually none of its near-term revenue and is costing billions of dollars a year to build. Zuckerberg said he hopes that within the next decade, the metaverse “will reach a billion people and “host hundreds of billions of dollars of digital commerce.” He told CNBC’s Jim Cramer in June that the “North Star” is to reach those sorts of figures by the end of the decade and create a “massive economy” around digital goods. Investors aren’t enthusiastic about it, and the way they’re dumping the stock has some observers questioning if the downward pressure is actually a death spiral from which Meta can’t recover. “I’m not sure there’s a core business that works anymore at Facebook,” said Laura Martin of Needham, the only analyst among the 45 tracked by FactSet with a sell rating on the stock. Nobody is suggesting that Facebook is at risk of going out of business. The company still has a dominant position in mobile advertising, and has one of the most profitable business models on the planet. Even with a 36% drop in net income in the latest quarter from the prior year, Meta generated $6.7 billion in profit and ended the period with over $40 billion in cash and marketable securities. The Wall Street problem for Facebook is that it’s no longer a growth story. Up until this year, that’s the only thing it’s known. The company’s slowest year for revenue growth was the pandemic year of 2020, when it still expanded 22%. Analysts this year are predicting a revenue drop. The number of daily active users in the U.S. and Canada has fallen in the past two years, from 198 million in mid-2020 to 197 million in the second quarter of this year. Globally, user numbers are up about 10% over that stretch, and are expected to increase 3% a year through 2024, according to FactSet estimates. “I don’t see it spiraling in terms of cash flows in the next few years, but I’m just worried that they’re not winning the next generation,” said Jeremy Bondy, CEO of app marketing firm Liftoff. Sales growth is expected to hover in the single digits for the first half of 2023, before ticking back up. But even that bet carries risks. The next generation, as Bondy describes it, is now moving over to TikTok, where users can create and view short, viral videos rather than scrolling past political rants from distant relatives with whom they mistakenly connected on Facebook. Meta has been trying to mimic TikTok’s success with its short video offering called Reels, which has been a major focus across Facebook and Instagram. Meta plans to increase the amount of algorithmically recommended short videos in users’ Instagram feeds from 15% to 30%, and Bondy speculates the company will likely “get tremendous revenue flow from that” algorithmic shift. However, Facebook acknowledges it’s early days for monetizing Reels, and it’s not yet clear how well the format works for advertisers. TikTok’s business remains opaque because the company is privately held and owned by China’s ByteDance. Sheryl Sandberg, who’s leaving the company on Friday after over 14 years as chief operating officer, said in her final earnings call in July that videos are harder than photos in terms of ads and measurement, and that Facebook has to show businesses how to use the ad tools for Reels. “I think it’s very promising,” Sandberg said, “but we’ve got some hard work ahead of us.” Skeptics like Martin see Facebook pushing users away from the core news feed, where it makes tons of cash, and toward Reels, where the model is unproven. Martin says Zuckerberg must know something important about where the business is headed. “He wouldn’t be hurting its revenue at the same time he needs more money, unless he felt like the core business wasn’t strong enough to stand alone,” Martin said. “He must feel he has to try to move his viewership to Reels to compete with TikTok.” A Facebook spokesperson declined to comment for this story. Zuckerberg has at least one major reason for concern beyond just stalled user growth and a slowing economy: Apple The 2021 iOS privacy update, called App Tracking Transparency, undermined Facebook’s ability to target users with ads, costing the company an estimated $10 billion in revenue this year. Meta is counting on artificial intelligence-powered advertising to eventually make up for Apple’s changes. That may amount to little more than a band-aid. Chris Curtis, an online marketing expert and consultant, has seen social networks rise and fall as trends change and users move along. And that problem isn’t solvable with AI. “I’m old enough and I was there when MySpace was a thing,” said Curtis, who previously worked at Anheuser-Busch and McKinsey. “Social networks are switchable, right?” When you look at Meta’s user numbers, Curtis said, they suggest the company is “not in a good position.” ‘Force for good or evil’ The last time Facebook’s market cap was this low, it was early 2019 and the company was dealing with the continued fallout of the Cambridge Analytica privacy scandal. Since then, Facebook has suffered further reputational damage, most notably from the documents leaked last year by whistleblower and former employee Frances Haugen. The main takeaway from the Haugen saga, which preceded the name change to Meta, was that Facebook knew of many of the harms its products caused kids and was unwilling or unable to do anything about them. Some U.S. Senators compared the company to Big Tobacco. Denise Lee Yohn, author of brand-building books including “What Great Brands Do” and “Fusion,” said there’s little evidence to suggest that Facebook’s rebranding to Meta late last year has changed public perception of the company. “I think the company still suffers from a lot of criticism and skepticism about whether they are a force for good or evil,” Yohn said. Rehabilitating a damaged brand is difficult but not impossible, Yohn said. She noted that in 2009, Domino’s Pizza was able to successfully come back from a crisis. In April of that year, a video made as a prank by two restaurant employees went viral, showing one of them doing disgusting acts with food while cooking in one of the company’s kitchens. Both employees were arrested and charged with food contamination. In December 2009, Domino’s launched a marketing blitz called the “Pizza Turnaround.” The stock climbed 63% in the first quarter of 2010. Yohn said the company’s approach was, “We’ve been told our pizzas suck, and so we’re actually going to make substantive changes to what we are offering and change people’s perceptions.” While it sounded initially like “just marketing speak,” Yohn said, “they actually really did change.” Zuckerberg, on the other hand, is not “coming across as a leader who is serious about changing his culture and about changing himself and about kind of creating a company that will be able to step into the future that he’s envisioning,” she said. Meta’s reputational hit could also harm the company’s ability to recruit top-tier talent, a stark contrast to a decade ago, when there was no more prized landing spot for a hotshot engineer. A former Facebook ad executive, who spoke on condition that his name not be used, told CNBC that even though TikTok is owned by a Chinese parent, it now has an edge over Meta when it comes to recruiting because it’s viewed as having less “moral downside.” Ben Zhao, a computer science professor at University of Chicago, said he’s seeing that play out on the ground as an increasing number of students in his department are showing interest in working for TikTok and ByteDance. In order to stay competitive, given how the market has punished tech stocks this year, Zhao said Meta and Google are “having to pay more and are having certainly to handout more lucrative stock options and packages.” The bull case Still, Zuckerberg has a history of proving his doubters wrong, said Jake Dollarhide, the CEO of Longbow Asset Management in Tulsa, Oklahoma. Dollarhide remembers when investors ran from Facebook not long after its 2012 IPO, scoffing at the company’s ability to move “from the PC to the mobile world.” Facebook’s mobile business quickly caught fire and by late 2013, the stock was off to the races. Zuckerberg’s success in pivoting to mobile gives Dollarhide confidence that Meta can cash in on its bet-the-farm move to the metaverse. In the second quarter, Meta’s Reality Labs division, which houses its virtual reality headsets and related technologies, generated $452 million in revenue (about 1.5% of total Meta sales) and lost $2.8 billion. “I think Zuckerberg is very bright and very ambitious,” said Dollarhide. “I wouldn’t bet against Zuckerberg just like I wouldn’t bet against Elon Musk.” Dollarhide’s firm hasn’t owned Facebook shares, though, since 2014, preferring the trajectory of tech companies like Apple and Amazon, two of his top holdings. “The reality is they can be perceived as a value company and not a growth company,” Dollarhide said, regarding Meta. No matter what happens in the next year or two or even three, Zuckerberg has made clear that the future of the company is in the metaverse, where he’s banking on new businesses forming around virtual reality. Meta could grow the metaverse, but there’s a long road ahead, says Jefferies’ Brent Thill Zhao, from University of Chicago, says there’s immense uncertainty surrounding the metaverse’s prospects. “The real question is — are daily users ready for the metaverse yet?” Zhao said. “Is the underlying technology ready and mature enough to make that transition seamless? That’s a real question and that may not be all up to Facebook or Meta at this point.” If Zuckerberg is right, perhaps 10 years from now Meta’s stock price from the depths of 2022 will look like the discount of the decade. And if that happens, predictions of a death spiral will be mocked like a 2012 cover story from Barron’s, headlined “Facebook is worth $15” with a thumb pointing down. Four years later, it was trading near $130." MY COMMENT This company is facing a tidal wave of users leaving over the coming years. They are yesterdays model. My primary reason for doubt about this company is.....leadership. I dont see ANY qualities of leadership in Zuckerberg. He is in way over his head and is totally hamstrung by his thinking and lack of vision. In addition I HATE their share structure that basically makes shareholders irrelevant. Not that I am a fan of the CHINESE COMMUNIST company TikTok. Anyone TRUSTING that company with user data or anything else is CRAZY.
When you get down to it.....the ONLY thing that matters for business owners (stockholders)....is EARNINGS. What should investors focus on after a rocky quarter? It’s all about earnings: Morning Brief https://finance.yahoo.com/news/what...l-about-earnings-morning-brief-100029724.html (BOLD is my opinion OR what I consider important content) "It’s the end of the third quarter, and it’s been a bumpy ride for investors. After a two-month, 17% rally for the S&P 500, the index headed downslope, wiping out its June lows this week. The benchmark’s stats are sobering: It has fallen for three consecutive quarters, for a total drop this year of nearly 24%. It’s been tough to find equity winners. While consumer discretionary and energy shares rose during the quarter, both plummeted from recent highs. Only one-third of the S&P 500 individual components are set to finish the third quarter in the green. The quarter taught tough lessons to investors about their ability to predict the future. We talked to market pros about their third-quarter takeaways and came away with nuggets of investing wisdom that are particularly pertinent in this uncertain environment for markets. In short: Stay nimble. Don’t try to call the bottom. And get ready for a doozy of an earnings season. “Don’t be a hero,” Keith Lerner, Truist Securities Co-Chief Investment Officer and Chief Market Strategist, told Yahoo Finance Live. “The moves have been violent. What we discussed in June and also in August, is to try to get a bit more tactical. You’re not going to get every call right, and it’s not always going to work out.” Many strategists have scrambled to cut year-end forecasts in light of worsening fundamentals tied to persistent inflation, rising interest rates, and slowing growth. Goldman Sachs recently slashed its year-end target for the S&P 500 to 3,600 from 4,300. While it’s tough to predict what the rest of 2022 will bring, analysts seem to be acknowledging that it’s going to be worse than they initially expected. However, it’s unclear how much worse it’s going to be. BlackRock said earlier this week that investors should avoid U.S. stocks. For how long? There’s no easy answer to that question, said Russ Koesterich, managing director at the firm and a member of its global allocation team that made the call. “There is no way to tell you the bottom is at a particular number,” he said. “As we’ve seen over the last week, whether we’re talking about the Italian election, the budget dispute in the United Kingdom, a tax on energy infrastructure, there are a lot of hard-to-quantify factors out there, all of which are being compounded by the fact that liquidity is poor, financial conditions are tightening.” 'The focus will be on earnings' Now that the Fed has clarified its intentions to keep raising rates, and given that the next policymakers’ meeting isn’t until Nov. 2, these pros have their sights firmly fixed on earnings. Analysts predict the S&P 500’s earnings growth rate for the third quarter will be just 3.2%. If that is in fact the reality, that would be the lowest growth rate since Q3 in 2020, FactSet pointed out. As of last Friday, 64 S&P 500 companies had issued negative earnings guidance for the third quarter, while just 41 issued positive guidance. “Now I think for us it’s not about inflation and central banks; it’s about earnings,” said Luca Paolini, chief strategist at Pictet Asset Management. “The focus will be on earnings because we’re going from a moderation shock, with higher interest rates, to a growth shock. This is where we feel more worried, and next earnings season is going to be really critical.” That’s been a steady refrain from strategists we speak to on Yahoo Finance Live: Earnings estimates need to come down further, and that process likely means more volatility next quarter. Investors might have to look further — much further — into the future for relief, as Lerner said. After a 20% slump in the markets, historically, “on a three-year lookout period, markets actually tend to rebound pretty strongly.” Check back with us in 2025." MY COMMENT Are you a trader or are you a business owner (Investor)? I am a business owner. As a business owner I look to the long term future of my business. That is.....EARNINGS and future EARNINGS POTENTIAL.
It is interesting how things change and sometimes how quickly it can seem to happen. The competition and constant evolution of the tech market and just how large that field has become. I'm sure they are having to evolve like many in that field. Sometimes companies think they are making a good change and it turns out to be the wrong direction. If the decision is right, they are rewarded. If it is wrong, they fall further behind. It just shows how tough it can be to stay at the top. Meta/FB has its work cut out for them to stay in the conversation with all of these other social apps, but maybe they end up with their emphasis in other areas. As the article suggests, they could be really successful after the move, but the time it takes to get there means how many new things will be out and visible by then. There are a ton of newer social apps that the young people are simply wild about, like Tik Tok. However, something just as goofy or new could lure them away six months from now. It will be interesting to see how things shake out over the next few years.
The earnings article/post above, who could have predicted their negative forecast once again. They were already doing so even in the middle of the last earnings. Actually before we were even done last time. Every time a beat came in they just kept pointing down the road. I suppose they will be right eventually. Maybe this will be the time. Certainly with all of the problems going on it would not be a total shocker for anyone. Yet, we will have to endure the chest thumping and I told you so to the extreme. The little blip "Check back in 2025", would drive a lot of folks right out the exit. I guess everyone should just pack up the tent and move the camp now. The good times are gone to never return, this is it...the end we have all been told about since 1929. This could be a lack luster earnings time. Maybe so. If it is, what is really groundbreaking about that. Inflation through the roof, supply issues, geopolitical issues, Europe energy crises, Ukraine/Russia, and crazy China. Are we surprised that we are in a bear market with any of this going on? None of it we can control as an individual investor. We are at the mercy of time itself. Control what you can control within your plan. It is the best you can do. We are having a rough time. You know it and I know it. We know the many reasons for it. Their predictions of what is to come is no better information than what you already have. If you have a sound, reasonable investing plan you are already doing everything you can to weather the storm.
Yes Smokie....but....the worse the better....in terms of predictions, doom & gloom, people leaving the markets, etc, etc, etc. That is how we hit the bottom and turn back to the UP-SIDE. So......bring it on....lets have the final PAIN and get it over with. The good news......investors LIVE more in the golden years than the PAIN years. The good times FAR outweigh the bad.....when you are talking about the LONG TERM. Just look at the returns of the past 10 years. We are WAY AHEAD of where we are with this little BLIP in the markets this year.
I want to add something that has been very helpful to me as a long term investor managing my own portfolio. Many that frequent this thread probably already do it to some extent, but maybe someone would benefit from it if they are not already doing so. Creating your own investment policy or guideline. Having this typed and saved on your PC or even written in simple notebook will work. Your investment goals both short term and long term are included. How you are going to invest and what you are going to invest in to achieve those goals are also included. A set of rules/guidelines you have set to achieve those goals. What percentages or allocations you are going to target for index funds, individual stocks, bonds, and so on. Maybe what criteria you are going to use to determine how you are going to select those type of investments. Determining what amount of risk you may or may not be willing to take. Or maybe you want to set different times to review your risk at specific intervals. You can set guidelines as to what types of investments you will allow in your portfolio or what you will not. Creating a timeline of when you will review this policy/guideline. It could be quarterly, every six months, or annually. Set yourself some guidelines or rules to go by before allowing yourself to make drastic deviations from your plan. In other words, give yourself something to review to help keep you focused on your plan and grounded. It will give you time and guidance to evaluate why or if a change really is aligned with your plan. This type of deal has helped me tremendously over a period of time. Both when times have been good and when they have been bad. It has allowed me to avoid many pitfalls and move forward with a sound plan. It provides "guardrails" to maintain your path forward. I have found that having it typed/written out holds considerable weight when reviewing what I am doing or plan to do. It gives me a roadmap in a sense. It can be easy to get caught up in the whole market timing, performance chasing, and next great thing. Giving yourself an investment policy does not mean you cannot adapt or ever change anything, but it will give you a guideline based on your own plan whether it is reasonable to do so. The great thing is, it can be as complex or as simple as you want to make it. It is not hard to create and it can be a valuable asset to reference.
It seems to me that the reason for tanking now is because so many people kept thinking "this is transient" -- after all, wasn't that what the Fed and .gov were saying? Now they realize - OMG! A debt-ridden government spending like there's no tomorrow and printing money with nothing to back it up does have consequences, after all!
LOTS of BIG CAP GREAT ICONIC companies on sale right now and into the near future. I would LOVE to have some money to pile into NIKE right now....even though this is not necessarily the bottom for the stock. It is going to be under pressure till 4th quarter earnings or beyond. In fact much of the BIG CAP ICONIC stocks are going ot be under continued pressure for the rest of the year. Nike is an indicator of what is going to happen to any company....probably MOST companies....as we go into earnings. Anything in any earnings report that can be taken as a negative.....no matter how temporary.....(I could not being myself to use the word "transitory").....WILL be taken to the extreme negative and the stock will be severely punished. WELCOME to the short term markets for the next 3-24 months.
I used to listen to Clark Howard on the business radio all the time. I remember him talking about how he dresses. He went into a convenience store and someone tried to give him some change...they thought he was homeless. Speaking of Clark Howard.....I also used to listen to Bob Brinker nearly every week...usually when I was in working on Sunday's. His concept of "CRITICAL MASS" was a great one.
Agree completely Smokie. In fact I do it all the time on here when I post my portfolio model and the commentary that goes with it. I try to keep it very simple..My two goals.....average 10% total return for the long term.....and....try to beat the SP500 each year.....(an aspirational goal that I do not actively pursue).....and...my portfolio model strategy. I have had the same goals and strategy for so long.......40-50 years......that I dont bother to write it down.....although I do confirm and repeat it on here EVERY DAY. That is a good idea to write it out. I am a very STRONG believer in the POWER OF VISUALIZATION and POSITIVE THINKING and FOCUS ON GOALS. Writing things down and focusing on them helps to ACHIEVE.
I should have some good money...perhaps $25,000....to invest after the first of the year. I expect that the good deals will be just as good......if not better......at that time. BUT....you know me....if I had it now it would go in right now. Because of cash flow needs....property taxes, income tax quarterly payment, HOA dues, horses shots, medicare supplement, etc, etc, etc....that ALL come due in January and February....I might have to put that money in over the first 2-4 months of the new year. I dont like to do it that way.....but I am a captive to my cash flow needs....even though I can project out that the money is there.
With the Nike drop today....I may as well pile on. Nike: 'It will be a difficult Christmas season' — but there's hope, analyst explains https://finance.yahoo.com/news/nike-christmas-season-earnings-analyst-explains-115219729.html (BOLD is my opinion OR what I consider important content) "Supply chains and too much inventory continue to hammer Nike, as shown in the footwear giant's latest earnings results, with the company reporting inventories up 44% year-over-year and up 65% in North America. “It will be a difficult Christmas season and Nike and other have projected that with inflation affecting consumer spending and the ongoing weakness in China,” Morningstar Equity Analyst David Swartz told Yahoo Finance Live (video above). “But I think it’s generally improving.” Nike saw revenues decline 16% year-over-year in Greater China, the company’s highest margin region. Nike executives believe inventory issues will be normalized by the end of its current fiscal quarter, but investors appear wary amid a sector-wide inventory pile up and increased discounting. “We plan to compete… in a more promotional environment,” Nike CFO Matt Friend said on Thursday’s earnings call. “And given the macro uncertainty that's out there for the consumer, we're taking a more measured approach and we're tightening our inventory buys around the world based on some of the risks that could materialize in the second half.” Nike stock (NKE) fell around 11% in early trading on Friday and was down more than 42% so far in 2022 entering the last trading day of the third quarter. Nike reported revenue of $12.69 billion for the first quarter, up 4% from last year and beating analyst estimates. The company's $0.93 adjusted earnings per share came in slightly higher than analyst expectations — but fell 22% compared to the same quarter last year. Growing strength in the U.S. dollar also proved to be a laggard for Nike in the first quarter and could be moving forward as well. Currency changes drove down reported revenue by 16% in Europe and 12% in Asia Pacific and Latin America. After exchanges, the company reported just 1% growth in Europe while Asia Pacific and Latin America remained flat. “Headwinds from foreign exchange have also shifted significantly in the last 90 days as the trend of U.S. dollar strengthening has accelerated,” Friend said on the earnings call. On the bright side, Nike showed signs of growth in its direct-to-consumer business with sales up 8%. “Nike has a very strong brand that’s why we rate it as a wide moat company,” Swartz said. “We say it has a competitive advantage because people do love Nike products and they do sell a lot of them at very good prices. Nike has to do discounting and it will continue the next couple quarters. But generally, I don’t see them having to do a huge amount of discounting.” And despite acknowledging how the gloomy macroeconomic could impact consumer demand, the retailer didn’t waiver on its forward revenue guidance — something that analysts had feared prior to the report. Friend noted that Nike met its internal guidance for double-digit revenue growth in the first quarter and now has its sights set on “low double digit” growth in the coming quarter. “We're coming off a strong quarter and we feel very good about our competitive position, and we have not yet seen any signs of slowdown,” Nike President and CEO John Donahoe said on the earnings call. “That said, we don't have any crystal ball around the external factors, whether it's FX, whether it's inflation, whether it's the impact of energy prices on consumer spending.”" MY COMMENT ALL of the ICONIC BIG CAP wide moat companies are being punished way too much in the current markets. But...you cant fight the market or the FED. Actually.......perhaps I am out of touch with the regular investor.....I STILL dont see much panic or fear selling going on. AND....not amazingly....we continue with a totally screwed up supply chain. The economy is a BIG MESS......and does not seem to be improving at all. A BIG LESSON to those that will......no doubt.....want to close down the economy some time in the future because of some event. NO ONE knows what is going on or why. The data is all over the place and the jobs and labor markets are totally screwed up.
JUST to add to the.....FUN....today as we end the week with another down week in the can. Fed's preferred inflation gauge accelerated more than expected in August Economists expected core inflation to increase in August https://www.foxbusiness.com/economy/feds-preferred-inflation-gauge-accelerated-more-expected-august (BOLD is my opinion OR what I consider important content) The Federal Reserve's preferred inflation gauge accelerated again in August, keeping prices elevated near a four-decade high, according to new data released on Friday, The Personal Consumption Expenditures (PCE) index showed that core prices, which strip out the more volatile measurements of food and energy, climbed 0.6% from the previous month and rose 4.9% on an annual basis, according to the Commerce Department. Those figures are both higher than the 0.5% monthly increase and 4.7% annual increase forecast by Refinitiv economists, indicating that inflationary pressures are broadening throughout the economy. The reading is also up from July's annual increase of 4.7%. The more encompassing headline figure rose 6.2% on an annual basis after prices rose 0.3% from the previous month, compared with a 0.1% decline in July. That increase came despite a sharp decline in gas prices. While the Fed is targeting the PCE headline figure as it tries to wrestle consumer prices back to 2%, Chair Jerome Powell previously told reporters that core data is actually a better indicator of inflation. "Core inflation is a better predictor of inflation going forward," Powell said. "Headline inflation tends to be volatile." However, both the core and headline numbers point to inflation that is running well above the Fed's preferred 2% target, a troubling sign as the central bank is already hiking interest rates at the fastest pace in decades. Policymakers have already approved five consecutive rate hikes, including three back-to-back 75 basis point increases, and have shown no signs of slowing down. At their latest meeting last week, Fed officials laid out an aggressive rate hike trajectory that would put the federal funds target rate well into restrictive territory by the end of the year. "Core inflation accelerated, likely keeping the Fed on track for another aggressive 0.75% increase to the Fed funds rate in November," said Jeffrey Roach, chief economist for LPL Financial. Despite scorching-hot inflation, the report showed consumers continued to open their wallets in August: Spending rose 0.4% after declining 0.2% the month before. However, after-tax income increase just 0.1% after rising 0.5% the previous month. Inflation-adjusted spending in 2012 dollar rose just 0.1%. "The U.S. looks poised to eke out positive GDP [gross domestic product] growth in the third quarter, after two consecutive quarters of negative growth," Roach said. "But growth may not last long. A recession looks more likely in early 2023 as the economy eventually breaks under the pressure of an aggressive FederalReserve." MY COMMENT I will follow my Grandmothers advice.....if you cant say anything nice....dont say anything at all.
