I guess that makes some sense about the employer/employee liability thing when selecting funds. I just figured they might have a "general" investing seminar or something where someone could voluntarily get some type of education about things. Maybe not directing them to invest in a specific asset, but an overall view of how it works. Somebody would probably screw that up too or be subject to some outside influences.
One comment on this thread......there are many if not most topics on here that I have discussed in way more detail earlier in the thread. I try to NOT cover things that have been covered earlier in more detail. One purpose of this thread is to act as a long term investment primer. SO......anyone that is new.....I do encourage you to go back and start at page one and work your way through the thread....picking and choosing topics that you are interested in. UNFORTUNATELY.....it is impossible to be able to search for what you might be interested in. BUT.......there is a MASSIVE amount of content by myself and others in this thread that NEVER goes out of style and never is outdated. It is the BASICS of LONG TERM INVESTING. This is the REAL purpose of this thread.....NOT....the daily market commentary.
HERE is the economic story of the day.....which no one will care about. U.S. retail sales increase solidly in October https://www.reuters.com/markets/us/us-retail-sales-beat-expectations-october-2022-11-16/ (BOLD is my opinion OR what I consider important content) "WASHINGTON, Nov 16 (Reuters) - U.S. retail sales increased more than expected in October as households stepped up purchases of motor vehicles and a range of other goods, suggesting consumer spending picked up early in the fourth quarter, which could help to support the economy. The solid retail sales reported by the Commerce Department on Wednesday and signs of a slowdown in inflation raised cautious optimism the economy could avoid an anticipated recession next year or just experience a mild downturn. "We might be in for a soft landing after all," said Paul Ashworth, chief North America economist at Capital Economics in Toronto. Retail sales rose 1.3% last month after being unchanged in September. Economists polled by Reuters had forecast sales rising 1.0%. Retail sales are mostly goods and are not adjusted for inflation. They increased 8.3% year-on-year in October. One-time tax refunds in California, which saw some households receiving as much as $1,050 in stimulus checks, likely helped to underpin sales. In addition, Amazon held a second Prime Day promotion in October. The broad increase in sales last month was led by motor vehicles, with receipts at auto dealers rebounding 1.3%, reflecting significant improvements in supply. Furniture stores sales increased 1.1%. Sales were also buoyed by higher gasoline prices, with receipts at service stations rising 4.1%. Online retail sales jumped 1.2%. Sales at food services and drinking places, the only services category in the retail sales report, increased 1.6%. But electronics and appliance store sales slipped 0.3%. There were also decreases in receipts at general merchandise stores as well as sporting goods, hobby, musical instrument and book stores. Clothing stores sales were flat. Massive savings accumulated during the COVID-19 pandemic, and strong wage gains amid a tight labor market, have generally helped consumers to weather higher prices and borrowing costs. Households are also borrowing to maintain spending. That support is expected to fade next year as tighter monetary policy dampens overall demand, weighing on the labor market and the economy. Low-income households are believed to have already exhausted their pandemic savings. The National Retail Federation forecast this month that holiday sales would grow between 6% and 8% this year. While that would be a step down from the 13.5% notched in 2021, it would be well above the 4.9% average over the past 10 years. The Federal Reserve has raised its policy rate by 375 basis points this year from near zero to a 3.75%-4.00% range as it battles rampant inflation in what has become the fastest rate- hiking cycle since the 1980s. Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.7% last month. Data for September was revised higher to show these so-called core retail sales rising 0.6% instead of 0.4% as previously reported. Core retail sales correspond most closely with the consumer spending component of gross domestic product. A steady pace of consumer spending and a smaller import bill helped GDP to rebound at a 2.6% annualized rate in the third quarter after contracting in the first half of the year." MY COMMENT BUMMER for the FED. There is massive amounts of money sloshing around in the consumer economy. Many people have seen HUGE raises in their income over the past couple of years. The competition for workers in small businesses has basically pushed the minimum wage up to $15 to $20 range........by the action of supply and demand for workers. The bad news....but nobody cares.....ALL of the events of the past few years.....crime, costs of doing business, wages, no employees, etc, etc, etc......are GUTTING small business.
Like the markets I am....at the moment.....in the red today. My UP stocks early today are GOOGLE and HOME DEPOT. A typical short term day in the life of a LONG TERM INVESTOR as we continue to navigate the IRRATIONAL markets.
Looks like Target had a portion of its miss based on shrink. Or as they call it organized retail crime https://finance.yahoo.com/news/target-organized-retail-crime-400-million-profits-113006396.html Target stores are getting looted, and it's taking a huge bite out of profits. The discount retailer told reporters on a call to discuss its third quarter earnings results that inventory shrinkage — or the disappearance of merchandise — has reduced its gross profit margin by $400 million so far in 2022 compared to 2021. "At Target, year-to-date, incremental shortage has already reduced our gross margin by more than $400 million vs. last year," Target CFO Michael Fiddelke said on the earnings call, "and we expect it will reduce our gross margin by more than $600 million for the full year." Fiddelke detailed how there are "a handful of things that can drive shrink in our business and theft is certainly a key driver. We know we're not alone across retail in seeing a trend that I think has gotten increasingly worse over the last 12 to 18 months. So we're taking the right actions in our stores to help curb that trend where we can, but that becomes an increasing headwind on our business and we know the business of others." A Target spokesperson told Yahoo Finance via email after the call the shrinkage was mostly specifically attributed to "organized retail crime." US retail chain market Target is seen on December 23, 2013 in New York, NY. (Photo by Mucahit Oktay/Anadolu Agency/Getty Images) Organized retail crime is not just a Target issue as it has impacted other big name retailers such as Best Buy and Rite-Aid. From Yahoo Finance Editor-in-Chief Andy Serwer "Why are people stealing these days? That’s a tough one. To some degree it’s a reflection of our times. Simply put, America’s social contract is straining. Until recently we’ve been able to lay out goods—often in mammoth, big box stores with only a handful of employees. When our social contract is strong—i.e people are getting a fair shake—it’s a model that works. Now it seems more people are stealing instead. (BTW, our stressed social contract may be capping how far we can push this people-light, technology-heavy model. Last month Wegman’s ended its scan-and-go shopping app. Why? Shrinkage, of course.) I think wealth inequality has everything to do with all this. Think back to the so-called Public Enemies era in the 1930s, when bank robbers ran rampant across the land. That also coincided with the Great Depression. Less money in the hands of poor people and more stealing. Seems like cause and effect to me." A National Guard member walks outside a Target store, boarded up initially due to unrest following the killing by police of Black man Walter Wallace Jr, in Philadelphia, Pennsylvania, U.S. November 4, 2020. REUTERS/Mark Makela TPX IMAGES OF THE DAY Goods stolen from stores increased to $94.5 billion in losses in 2021, up from $90.8 billion in 2020, according to a new report from the National Retail Federation (NRF). The report found that the average inventory shrinkage rate last year was 1.44%. While that's a modest decline from the prior two years, it remains comparable to the five-year average of 1.5%. "Retailers face security-related challenges on many fronts," the NRF said. "Most of the retailers surveyed report in-store, e-commerce and omni-channel fraud are all on the rise. The majority of respondents also reported that guest-on-associate violence, external theft, ORC and cyber crimes have become higher priorities for their organizations. Challenges with labor shortages, employee retention and hiring – as well as issues related to masking and maintaining COVID precautions – have contributed to the risks of violence and hostility." my comment: wow, what a shock (yawn)
This little clip from the article, "I think wealth inequality has everything to do with all this." If this is why they believe they are getting ripped off...then no wonder Target failed miserably in earnings recently. I kind of suspected they were more or less poorly ran, but this just seals the deal for me.
From time to time we complain about all the "experts" and gloom and doom predictors on this thread. Okay, maybe more than a few times. The reason is because it serves no actionable event in the long term investment plan of many. It is simply a distraction and "noise" that offers no benefit to the long term investor. Below is an excerpt from a little letter I receive and I want to share it with my fellow long termers. I hope you enjoy it as I did. Sorry it is a bit lengthy, but worth the read. Although bear markets are unpredictable, some things occur in every bear market. Prophets of doom will appear in the financial media proclaiming the imminent end of everything that we hold dear. Every stock market rally will be called a “sucker’s rally” or a “dead cat bounce”. Bloggers on social media (a technological development of questionable value that enables village idiots throughout the USA to find each other and discuss their inanities) will claim that the stock market is a rigged game. And the forecasting business will go into overdrive. I have been expressing my disdain for forecasts for as long as I have been writing this newsletter. My scorn stems from the fact that forecasts create the idea that the future is knowable. This is folly. Yet many of us invest our hard-earned dollars based on forecasts made by people we have never met, whose credentials are unexamined, whose track record goes unmentioned and who you might not want to have as a neighbor. Economic forecasting is a big business. There are thousands of economists in the United States who generate forecasts on a regular basis. Forecasters work at every level of government. The most famous and powerful are the chairman and governors of the Federal Reserve – whose track record of failed forecasts is legendary. The President has an economic forecasting team called the Council of Economic Advisors. Congress has its own independent economic advisors in the Congressional Budget Office. There are many private companies that sell economic forecasts, and many corporations have their own staff of economists. Financial institutions such as banks, mutual funds and brokerage firms provide forecasts for their clients. In fact, there are so many forecasts that there are people who publish consensus forecasts of economic forecasters. Let's don our skeptical glasses and take a closer look at this ongoing charade. Today, all forecasters are trying to answer the big question, “Where are the economy, the stock market and interest rates headed?” America only needs one good forecaster, someone with an internet connection and a Twitter account. The fact that so many economists are still employed proves that America’s Expert Forecaster has not yet appeared. Maybe this person will appear on the scene someday, but I’m not holding my breath. Forecasting is difficult because hundreds of millions of consumers, all with their own personal motives, views and ideas make billions of economic decisions each day that determine the health and direction of our economy. Making a correct economic forecast requires knowing not only what will happen, but how consumers, investors and market participants will react to what happens. But our behavior is influenced by our emotions, which can never be modeled successfully. Thus, most forecasts are mere extrapolations of the recent past and therefore are unlikely to be correct often enough to be beneficial. Well-known market forecasters have been wrong time and time again. There is no professional danger in this because most forecasters make predictions that are close to the forecasts of other pundits. As long as you’re no more wrong than the next guy, you’re not likely to get canned. I don't think that most forecasters are villains or charlatans. Most are bright, educated professionals who believe that their forecasts will help investors. But I agree with this quote by John Kenneth Galbraith- “There are two kinds of forecasters: those who don't know, and those who don't know they don't know”. Stop worrying about what’s in store for the economy or the stock market. Nobody knows. The next time you hear a stock market or economic forecast, just add the words “or maybe not” at the end of it. The good news is that you can be a successful investor without listening to market forecasts. You don't need to predict, but you do need to plan. By investing in index funds you're not trying to guess which companies will succeed. You’re investing in the ingenuity of corporate leaders to serve their customers and make their companies thrive, despite what’s happening in the economy or in Washington, DC. My advice is to stop listening to forecasts, the future will be yesterday soon enough. (Vectors.)
Nvidia earnings: Revenue beats expectations, bottom line falls short Graphics chip giant Nvidia (NVDA) announced its Q3 earnings after the closing bell on Wednesday, beating analysts' expectations on revenue, but falling short on earnings per share. Here are the most important numbers from the report, compared to what Wall Street was looking for, as compiled by Bloomberg. Revenue: $5.93 billion versus $5.79 billion expected Adjusted EPS: $0.58 versus $0.70 expected Gaming revenue: $1.57 billion versus $1.32 billion expected Data Center revenue: $3.83 billion versus $3.7 billion expected Nvidia Q4 revenue guidance fell just short of Wall Street expectations, coming in at $6 billion. Analysts were hoping for $6.09 billion. Shares of Nvidia were up roughly 2% following the report. Data Center revenue jumped some 31% year-over-year in the quarter, but gaming revenue collapsed 51% year-over-year Chip stocks have been hammered this year, as consumer and business demand for electronics has ebbed following the explosive growth the industry saw during the pandemic. Consumers don’t need as many computers, after buying them up during shutdowns, and companies already have plenty of machines for their remote and hybrid workers.
CISCO earnings News Summary: $13.6 billion in revenue, up 6% year over year; GAAP EPS $0.65, down 7% year over year, and Non-GAAP EPS $0.86, up 5% year over year Continued progress on business model transformation: Total annualized recurring revenue (ARR) at $23.2 billion, up 7% year over year and product ARR up 12% year over year Total software revenue up 5% year over year and software subscription revenue up 11% year over year Remaining performance obligations (RPO) at $30.9 billion, up 3% year over year and product RPO up 5% year over year Q1 FY 2023 Results: Revenue: $13.6 billion Increase of 6% year over year Earnings per Share: GAAP: $0.65; Non-GAAP: $0.86 GAAP EPS decreased (7)% year over year Non-GAAP EPS increased 5% year over year Q2 FY 2023 Guidance: Revenue: 4.5% to 6.5% growth year over year Earnings per Share: GAAP: $0.59 to $0.64; Non-GAAP: $0.84 to $0.86 FY 2023 Guidance: Revenue: 4.5% to 6.5% growth year over year Earnings per Share: GAAP: $2.63 to $2.76; Non-GAAP: $3.51 to $3.58
I am late looking to see how I did today. I was moderately in the red today.....with my only UP stocks being HD and GOOGL. I also got beat by the SP500 today by 0.12%. Onward and upward from here.
My last earnings report of the week hit today......NVDA. Smokie posted the numbers above: Revenue: $5.93 billion versus $5.79 billion expected Adjusted EPS: $0.58 versus $0.70 expected Gaming revenue: $1.57 billion versus $1.32 billion expected Data Center revenue: $3.83 billion versus $3.7 billion expected ACTUALLY.....if you look at the numbers above.....Revenue, Gaming Revenue, and Data Center Revenue were......ALL BEATS. It is nice to see that BIG jump in Data Center Revenue of 31%. Even the Guidance number was not far off what was expected. Pretty good earnings all in all......I can see why the stock was UP after the report.
Since the markets love to speculate about the FED pivot.....this little story might be a market driver tomorrow. Fed's Waller: Recent inflation data 'made me more comfortable' about potential 50 bp hike in December https://finance.yahoo.com/news/feds...tential-50-bp-hike-in-december-220220874.html
The FED MINIONS are hammering the futures today. They have been out in force talking about causing a recession and raising rates strongly. They......stupidly......think that the stock markets are the economy. The bad news for them.....the markets are not the economy and regular people are not changing their behavior because of the FED. Everyone seems to be simply ignoring them....except for the stock markets. Small business is still trying to recover from the economic closure and are still struggling with the labor distortions and the supply chain. They seem to have two areas of focus......kill stocks.......and....kill the real estate markets. What they have been doing has NOT had any impact on inflation at all. The small drop that we are now seeing is simply due to the year over year comparison getting easier. Actually the government has totally thrown the FED under the bus.....you never hear a word from the administration about inflation or any steps to lessen inflation. There is never a word in support of the FED. The whole focus is on spending more money and stimulating the economy. What a joke.
HERE is the real lesson of FTX. The Early Lessons for Investors From FTX’s Collapse FTX’s collapse is yet another reminder of the importance of conducting coldly rational due diligence. https://www.fisherinvestments.com/e...arly-lessons-for-investors-from-ftxs-collapse (BOLD is my opinion OR what I consider important content) "Shall we talk about FTX? This now-bankrupt cryptocurrency exchange, whose failure has apparently made billions of dollars’ worth of its customers’ assets disappear, has hogged headlines globally for over a week now. As the saga continues unfolding and investigators swoop in, questions abound: Did the company illegally lend customers’ assets to its sister firm? Were there misrepresentations to clients and investors? Will anyone be made whole? Could better regulation have protected investors? Was the entire firm a front for money laundering? Where do all of the firm’s political donations and international connections fit in? Investigative reporters and federal investigators from several jurisdictions will pursue all of these, and we have no doubt it will be fascinating. For now, though, we think it is most helpful for investors to back-burner these juicy details, tune out the politics (which, as always, we are neutral on) and consider this saga from a personal finance standpoint. Namely: Is there anything FTX’s customers could have done to avoid getting caught in the mess and losing everything? After reviewing the situation, we see some warning signs that all investors benefit from understanding. First, understand: We aren’t calling FTX a scam or Ponzi scheme. Nor are we alleging founder Sam Bankman-Fried has committed any crimes. It will take time for the authorities to sort through everything and determine whether criminal activity was committed. Similarly, we aren’t taking a position on any of the allegations unearthed by reporters over the past week. Nor does any of this seem to carry much impact on non-crypto assets, considering the lack of linkage between FTX and stocks or bonds. The rally we have seen in those markets has occurred while FTX was falling apart, which illustrates that point pretty clearly. Yet with all that said, it does seem that customers—as it stands—have lost vast sums of money. And after reading a wealth of reporting from the fine folks at Financial Times, The Wall Street Journal, The New York Times and Bloomberg—not to mention scrutinizing FTX’s terms of service and fee schedule—we think the company had many of the common threads we have observed in sketchy situations investors are best off running from. If you have read Fisher Investments founder and Executive Chairman Ken Fisher’s book How to Smell a Rat, which illuminated the tricks used by Bernie Madoff and other financial pirates, these will look especially familiar to you. (And if you haven’t read it, what are you waiting for, it is a classic!) Again, not that we are calling anyone involved here a crook—but warning signs of trouble are warning signs of trouble, whether the situation turns out to be criminal or not. The first sign: A charismatic principal who generated borderline messianic buzz and banked on the credibility that came from big investors and celebrity connections. With Madoff, it was his ties to regulatory agencies and standing within both the Jewish and celebrity communities. With Bankman-Fried, it was the heaps of praise from venture capitalists (VCs), hobnobbing with politicians and celebrities and partnerships with a number of professional sports teams and organizations. Why do your due diligence if the Mercedes Formula One team, Major League Baseball and the Miami Heat have done it for you? Surely the glowing testimonials posted on the VCs’ websites must be worth something? Except they weren’t. If we are interpreting myriad quotes and profiles correctly, a lot of these investors couldn’t articulate what was so promising about the core business beyond its being a way to gain exposure to crypto. In place of sound business analysis, they hyped the cult of personality, heaping praise on Bankman-Fried’s philosophy, political leanings and demeanor. In one now-infamous example, investors wowed by his behavior in a pitch meeting were subsequently chagrined to learn he was playing mobile games the whole time. Now, there is nothing wrong with founders being charismatic and quirky—that is sort of the stereotype, after all. But getting past the surface is vital. One way to do that: Look at the fee schedule to see if the company’s business model lines up with a huge valuation and visions of gigantic profits. We don’t think it does. (For now, it is still online.) FTX charged a fraction of a percent on transactions, ranging from 0 – 0.7% of the trade’s value. Customers who owned its in-house token, FTT, received fee discounts of 3 – 60% depending on their holdings and trade size. Those who “staked” their FTT holdings (basically, locking them down so they could be used to verify FTT transactions on the blockchain) received additional rebates and rewards. Now, if FTX is processing a huuuuuuuuuuge volume of trades, we guess these fees could be an ok revenue stream. More likely, however, its primary revenue sources were margin fees (customers seem to have loved trading bitcoin futures on margin) and leveraged tokens that it created and sold. Those are more inherently unstable operations, which should have raised questions about its ability to stay a going concern as crypto crashed. FTT should also have raised questions, given it was one of FTX’s primary sources of backing. FTX pitched it as a way for customers to participate in its profits (like a stock!), as the company promised to use its earnings to repurchase and “burn” tokens, similar to a stock buyback, boosting their value. But its large market capitalization should have prompted customers to wonder who owned all those tokens and what the risks were if those entities had to sell—and what it would mean for FTX’s balance sheet. Lesson: Suspect business models + complex, unclear finances = run. Another warning sign is the fact that investors who used FTX had to give custody of their assets to an entity that wasn’t a registered, regulated bank or brokerage firm. Now, we know opening a crypto exchange account isn’t analogous to handing Madoff or your local con-man a check. It is an account in your name. However, because crypto exchanges are unregulated, clients didn’t have the protections that would have helped mitigate the personal damage, including regulatory checks and federal insurance via the Securities Investor Protection Corporation (SIPC). In our view, being outside the bank and brokerage world largely rendered the separate account factor moot, as there were no checks and balances. Parallel to this, because it wasn’t a publicly traded company or regulated financial institution, FTX didn’t have to publish its balance sheet or financial information, robbing customers of a major tool for due diligence. The Terms of Service, which also remain online for now, also set off some alarm bells when we read it. One of the major allegations against FTX is that they lent customers’ assets to their sister firm, Alameda Research. This is not allowed under the Terms of Service, which state in Section 8.2.6: “All Digital Assets are held in your Account on the following basis: (A) Title to your Digital Assets shall at all times remain with you and shall not transfer to FTX trading. As the owner of Digital Assets in your Account, you shall bear all risk of loss of such Digital Assets. FTX Trading shall have no liability for fluctuations in the fiat currency value of Digital Assets held in your account. (B) None of the Digital Assets in your Account are the property of, or shall be loaned to, FTX trading; FTX trading does not represent or treat Digital Assets in User’s Accounts as belonging to FTX Trading. (C) You control the Digital Assets held in your Account. At any time, subject to outages, downtime, and other applicable policies (including the Terms), you may withdraw your Digital Assets by sending them to a different blockchain address controlled by you or a third party.”[ii] (Boldface ours.) That may seem to head off the alleged lending to Alameda Research. But the problem with relying only on terms of service to assess a counterparty’s credibility is this: If every financial entity followed their own terms of service, there would be no scams. Sadly, rules are only as good as the people involved. Again, the investigation continues, and we don’t know the exact circumstances here. But if the only protection is the Terms of Service, that isn’t strong. Moreover, in our view, the Terms made it quite clear that FTX isn’t a traditional financial institution with traditional protections, including SIPC or FDIC deposit insurance. Section 2.10 states it plainly: “No deposit protection. Neither Digital Assets nor any fiat currency or E-Money held in your Account is eligible for any public or private deposit insurance protection.” (Boldface theirs.) That clause raises another question: What is E-Money? Turns out it is scrip, per Section 8.3.2 – 4: “Once we receive fiat currency that you load into your Account, we may issue you with an equivalent amount of electronic money (“E-Money”), denominated in the relevant fiat currency that you have loaded. This amount will be displayed in your Account. E-MONEY IS NOT LEGAL TENDER. FTX TRADING IS NOT A DEPOSITORY INSTITUTION AND YOUR E-MONEY IS NOT A DEPOSIT OR INVESTMENT ACCOUNT. YOUR E-MONEY ACCOUNT IS NOT INSURED BY ANY PUBLIC OR PRIVATE DEPOSIT INSURANCE AGENCY. E-Money held in your account will not earn any interest. Your Account may hold E-Money denominated in different currencies and we will show the E-Money balance for each currency that you hold.”[iii] (All-caps theirs.) Sooooo clients deposited cash, and FTX replaced that with an accounting entry that isn’t legal tender, which raises a question: What did it do with the cash? In our view, this oddity hints that the company may—may—have had the ability to perhaps do a bit more with its clients’ deposits than was commonly presumed. Again, not accusing—just observing and deducing. There are also precedents that clients could have been aware of. FTX isn’t the first crypto exchange to implode and take its customers’ money with it. In 2014, an exchange called Mt. Gox—then the most popular exchange—fell victim to hackers who stole 800,000 bitcoins. The subsequent investigations revealed that customers’ crypto holdings weren’t actually in their accounts but were held in the exchange’s master account, which was “hot”—meaning, it was fully online and exposed to potential cyber attacks. Only 200,000 bitcoins were recovered, and last we checked, the company’s creditors (e.g., its customers) are still waiting for partial settlements. It was a huge story at the time, but crypto enthusiasts seemingly memory-holed it during the 2020 boom. Had they not, they might have thought twice about storing their coins on an exchange rather than a hard wallet on their phone or computer, especially when FTX’s Terms of Service don’t inspire much confidence that customers will have any recourse if the company is hacked. They state, point blank, that FTX is not responsible for cyber attacks on any blockchain network or any client’s account. Lastly, thinking through first principles could have prompted customers to pump the brakes at the very least. At a high level, holding crypto at an exchange for long periods runs counter to bitcoin’s founding vision and the whole premise of the blockchain. Bitcoin was supposed to be a decentralized currency that operated outside of governments’ and central banks’ influence. Exchanges were necessary for an investor’s original conversion from dollars (or any other fiat currency) to bitcoin, but that was the extent of their intended purpose. Where fiat money requires some level of trust in the issuers and counterparties, bitcoin supposedly didn’t because it used the blockchain—a decentralized, irrevocable digital ledger—to verify and record all transactions. Said transactions would be peer-to-peer, with no intermediary, and all holdings would be secure in owners’ digital wallets. The most secure wouldn’t be “hot”—perpetually online and vulnerable to attack—but offline and local to the owner’s computer, phone or USB drive. But this system was too slow for the masses who wanted to speculate on crypto, hence the use of exchanges as permanent custodians, which bypass all the things that made transactions slow … and wallets secure. It perplexes us, but those who were speculating on blockchain’s future were bypassing the blockchain and its purported benefits. Again, this story is still unfolding, and new details come to light daily. But for now, we see a few broad takeaways. One: Perhaps regulators will amend the accounting rules that have made it next to impossible for American banks and brokerage firms to custody crypto assets. The Wall Street Journal published an op-ed arguing this point earlier this week, observing that these rules perhaps forced crypto owners into the Wild West of unregulated exchanges.[iv] Or, perhaps the SEC or CFTC will bring exchanges under either of their umbrellas. Either way, it seems likely that investor protections will evolve, which is a key area for anyone who owns or is considering crypto to watch. In the meantime, if you own any crypto on a competing exchange, we humbly suggest you do some thorough due diligence: Research them inside and out, discover as many potential risks as you can, think critically about what you uncover, and don’t hesitate to make changes if you think it is wise. And lastly, for everyone, please don’t invest with borrowed money—especially in hugely volatile crypto. Any transaction that risks losing more than your initial investment likely isn’t worth it." MY COMMENT This sad story of people losing their money seems to be a common theme in investing today.....as well as an age old theme. The BIG GAMBLE for big wealth. The get rich quick mentality. Following the FAD of the moment and the BUZZ. There is ONLY one sure way to accumulate financial security for most people.....simple long term investing
To add to the above. Boring is Beautiful in Investing https://awealthofcommonsense.com/2022/11/boring-is-beautiful-in-investing/ (BOLD is my opinion OR what I consider important content) "Boring is better this year in the markets. The more exciting your portfolio, the worse your performance is in this bear market. Those old stodgy blue chip stocks in the Dow that pay dividends and have stable cash flows are crushing the innovation-led stocks that have more potential than profits in 2022. This is in stark contrast to the FOMO days of 2020 and 2021 when it felt like the only place to put your money was the most intoxicating of investments. French philosopher Blaise Pascal once wrote, “All of humanity’s problems stem from man’s inability to sit quietly in a room alone.” The investor play on words here would be: “All portfolio problems stem from investor’s inability to stick with a boring old asset allocation.” Successful investing should be boring. It should be long-term in nature. It requires patience and discipline and the ability to ignore the madness of the crowds. But you can’t brag about boring to your friends and co-workers. No one writes glowing profiles about normal people who diligently save and invest their hard-earned money, keep fees to a minimum and stay the course. That’s not sexy. Sexy is SPACs, meme stocks, IPOs and life-changing amounts of money in a short period of time. Why wait decades to build wealth when you witnessed someone else do it overnight? I’m not trying to be a scold here. Of course it’s easier to extol the virtues of a more monotonous investing style now that all of the speculative junk has crashed. Although, at the height of the meme stock/Robinhood/day-trading/crypto speculative boom in early-2021, I did write a piece called It’s OK to Build Wealth Slowly. I wish I could tell you that post was some brilliant market timing call or contrarian sentiment indicator but that’s not what it was at all. That post was a self-reminder to keep my wits about me at a time when it felt like everyone else was making easy money. My portfolio is pretty dull. The majority of our net worth resides in index funds and low-cost ETFs. We also have a decent chunk of our net worth tied up in real estate. You’re never going to get rich overnight investing in index funds or housing. But index funds don’t have an ego. They’re never going to return your money to spend more time with their family. Index funds won’t see their performance impacted by going through a nasty divorce. They won’t commit fraud against you or gate your withdrawals or transfer your money from one company to the next to cover losses made from idiotic mistakes. You’re never going to get caught up in a Ponzi Scheme investing in a total stock market index fund. Don’t get me wrong, I don’t mind adding a little excitement to the mix to scratch an itch. I’ve gone out further on the risk curve with a portion of my investments over the years. I’ve invested in real estate, a handful of alternative investment platforms, some fintech start-ups and crypto.1 But I only invest in those other asset classes after my 401k has been maxed out. And some money goes into our emergency savings account. And my SEP-IRA is funded. And the 529 plans and automated investment accounts for the kids are covered. And after I put money into a taxable brokerage account. It’s only after all of those boring, responsible buckets are filled up that I’ll take some extra risk with any sort of investments outside of the mundane. A high savings rate combined with a bunch of boring, low-cost, tax-efficient investments is the margin of safety I needed before ever even considering a riskier investment profile. Everyone has a different appetite for risk. And even the boring stuff can get blown up from time to time. The stock market is obviously not immune to large losses. But one of my biggest takeaways after nearly 20 years of working in the markets is survival is an underrated quality for success. I’ve seen many portfolio managers, funds, fad investments and strategies blow up over the years. There is something to be said for diligently following a strategy that is durable enough to survive many different kinds of market environments. I don’t think it’s possible for 99% of the investing population to be exclusively invested in exciting stuff all the time. Exciting stuff doesn’t always work. Nothing does. You need the boring stuff as a ballast in your portfolio because the boring stuff always comes back in style. When the boring stuff doesn’t work it usually means underperformance. When the exciting stuff doesn’t work, you can lose all of your money." MY COMMENT The history of investing is the same thing....over, and over, and over. It is people chasing wealth and the quick money. It is people following some guru or hair-brained investing FAD or scheme. It is the failure of genetic based human behavior. It is the near impossible ability of humans to sit and do nothing. Action is taken to mean something is being achieved. Dull and boring is equated with being stupid. The reality is exactly the opposite. This has been proven time after time after time for all of investing history. Yet the lesson is NEVER learned.
Here is the story of the markets so far today. Nothing an investor can do about this sort of"stuff"....other than sit and wait. Stocks slide as investors face medley of Fedspeak and earnings https://finance.yahoo.com/news/stock-market-news-live-updates-november-17-2022-113815662.html (BOLD is my opinion OR what I consider important content) "U.S. stocks faltered Thursday morning as optimism around easing inflation and a Federal Reserve policy shift waned, while Wall Street parsed through a motley of corporate earnings. The S&P 500 (^GSPC) sank more than 1.1%, while the Dow Jones Industrial Average (^DJI) shed 260 points, or 0.8%. The technology-focused Nasdaq Composite (^IXIC) tumbled 1.4%. Comments from St. Louis Federal Reserve President James Bullard weighed on investor sentiment early Thursday as he suggested the Fed's monetary tightening campaign has so far had "limited effects" on observed inflation and that even a "dovish" policy from here would need to spike the federal funds rate at least another percentage point. Investors are in for a prolific day of Fedspeak, with several Fed policymakers scheduled to give public remarks across the country Thursday. In the economic data spotlight, filings for unemployment insurance fell last week, holding near historic lows even as a flurry of technology companies report layoff plans. Initial jobless claims, the most timely snapshot of the labor market, came in at 222,000 for the week ended Nov. 12, a decrease of 4,000 from the prior week, Labor Department data showed Thursday. A recent uptrend across equity markets lost steam after strong October retail data offset hopes for a central bank policy shift, recently reignited by a string of lighter inflation reports. An earnings miss from Target also weighed on sentiment in Wednesday’s session, with the company citing inflation and a deteriorating economic backdrop ahead of the key holiday shopping season. Other sector peers fared better during the period. Macy's (M) shares surged more than 7% at the open after the department store giant beat estimates and raised its full-year earnings guidance, buoyed by strong demand in the luxury areas of its business. Kohl's (KSS), meanwhile, topped earnings expectations but withdrew its outlook for the full year due to "significant" macroeconomic headwinds and the unexpected transition of its chief executive officer. Shares fell nearly 3% to start the session. Shares of Bath & Body Works (BBWI) soared 26% at the start of trading after the personal care and home fragrance producer lifted its full-year profit outlook. Retailers Walmart (WMT), Lowe’s (LOW), the Home Depot (HD), all beat analyst estimates. Elsewhere, as the earnings season reaches its final stretch, Nvidia (NVDA) Chief Executive Officer Jensen Huang said strong chip demand will help the company through potential economic challenges – an assurance that was enough to offset losses in its gaming business. Shares slipped 1%. Machine maker Cisco Systems (CSCO) saw shares bounce 3% after the company delivered a positive revenue outlook and said it was slashing its workforce and reducing office space. Meanwhile in Washington, D.C., Republicans won a majority in the House of Representatives Wednesday, resulting in split control of the U.S. Congress – a positive sign for investors since stocks have historically performed better in times of political gridlock. Still, strategists have asserted that inflation and economic conditions remain the center focus for markets. Principal Asset Management Chief Global Strategist Seema Shah said the outcome should be “largely irrelevant to the broad market outlook.” “Instead, it is historically elevated inflation, the Fed’s inflation response, and the resulting risk of recession, coupled with key structural policy decisions, that will determine the market’s direction.” On that front, San Francisco Federal Reserve Bank President Mary Daly said in an interview with CNBC that a rate pause is not currently an option while indicating the federal funds rate may reach the 4.75%-5.25% range. But Federal Reserve Governor Christopher Waller said Wednesday that recent economic data makes him more comfortable with the possibility of a 50 basis point increase at the central bank’s December meeting. Goldman Sachs, while projecting a 0.50% hike next month, added one more quarter-point increase in May 2023 to its outlook, raising its expectations for the peak federal funds rate to 5-5.25%." MY COMMENT See a trend in the above? MOST of the earnings and other ACTUAL business data and results are actually positive. What is negative is all the irrelevant STUFF that has nothing to do with an individual stock or business. The result.....we have an irrational short term traders market. This is one BIG PROBLEM with investors today. They think that all the irrelevant non-business garbage is how you invest. They think that investing is playing all the economic, social, political, news, baloney. Unfortunately many people.....especially younger people....have no clue that investing is based on actual fundamental business results for the actual companies that you own. ALL the other stuff is simply irrelevant.
I feel so sorry for people that have been entering retirement over the past 3 years. There were 76 million people born between 1946 and 1964, this is the Boomer generation. This translates into just about 11,000 people entering retirement each day. Many of these people are responsible for their own retirement. this is a HUGE social and financial experiment.....since this is basically the first generation to retire with their needs funded by an IRA or a 401K. In other words......self managed money that has to last for decades of retirement. Taking Retirement Withdrawals in a Declining Market Here’s what to do if you need to take retirement account distributions while the stock market is down. https://money.usnews.com/money/reti...-retirement-withdrawals-in-a-declining-market (BOLD is my opinion OR what I consider important content) "Retirees often need to take cash out of retirement accounts to handle basic household expenses on a regular basis. If you have to make withdrawals in a declining market, there are strategies you can use to minimize the damage to your long-term financial plan. Consider these retirement withdrawal strategies for a down market: Don’t panic. Be financially cautious. Try to leave money in the stock market. Postpone withdrawals. Have a strategic portfolio plan. Make sure to allocate assets properly. Should You Take Retirement Withdrawals During a Declining Market? Most investment professionals advocate leaving money in a downward-trending stock market, primarily because weak markets have historically bounced back, and you don’t want to miss that rebound. There are several reasons to avoid pulling cash out of the market. Stock values are down, so you would likely be selling at a loss. Instead, you want to aim to buy low and sell high. You may also need to stay in the market to deal with inflation over the long term. Should You Postpone Withdrawals While the Stock Market is Down? Leaving cash in a weak stock market is usually the best move for younger investors who have time to recover. But retirees tend to use market withdrawals to generate cash flow and have less time for the market to rebound. Retirees could consider alternative ways to generate cash without raiding their retirement account in tough market conditions. “In a perfect world, a retiree should try to postpone withdrawals, yet in the real world, retirees should consider alternative sources of wealth,” says Steve Parrish, an adjunct professor at The American College of Financial Services, who is based in St. Augustine, Florida. “Try to find assets uncorrelated to the market that you can utilize until the market normalizes.” Retirement Distribution Strategies for a Declining Market Taking retirement withdrawals out of a lagging stock market means a retiree is essentially selling low. Consider these strategies to minimize the damage to your long-term retirement portfolio. Don’t panic. Avoid making any major changes to your portfolio while you are feeling panicked. “Staying in the market will allow the retiree investor to see the performance of an eventual market return,” says Brian Windsor, vice president at Bogart Wealth in McLean, Virginia. “In contrast, moving a large quantity of cash accepts the losses and then you have to find the right entry point to get back in, which is typically done when the market has already recovered.” Be fiscally prudent. In a down stock market, it often makes sense to reduce household spending, which can keep you from taking too much cash out of a weak market. “First off, you have to be able to cover your essential, non-negotiable expenses like food, energy and housing costs,” Windsor says. “However, if the majority of your investments are subject to market volatility, you may want to reconsider spending a larger amount of money on discretionary expenses like a new car, big vacation or dining out.” Be strategic. You can divide your retirement portfolio into segments based on when you expect to need the funds.“Each time segment would have a specific goals-based sub portfolio,” says Clark Richard, chief executive officer at Vineyard Global Advisors, in Englewood, Colorado. For example, consider a retiree with a $3 million portfolio who seeks $100,000 in annual spendable income. The portfolio could be divided into three segments that are invested differently: The liquid portfolio. The liquid portfolio addresses retirement income needs over a one- to three-year time frame. “These funds would be held in cash or other instruments that would provide principal protection,” Richard says. “In this example, $300,000 would be invested in this portfolio.” The mezzanine portfolio. The mezzanine portfolio would address the needs over a four- to seven-year time frame. “In this example, let’s assume a government bond could be purchased that matures each year prior to when the funds are needed,” Richard says. “This portfolio would be funded with $322,696 of overall retirement savings.” The legacy portfolio. The remaining $2,377,304 of overall retirement savings would fund the legacy portfolio. “This portfolio may now fluctuate unencumbered by cashflow constraints for seven years,” Richard says. Is There a Retirement Withdrawal Strategy to Minimize Losses? While most of the stock market has experienced losses in 2022, retirement investors may see some bright spots in their portfolio. “To mitigate any damage, retirees should get more specific on what they sell for cash flow each month and pay attention to what portfolio components are doing well and what aren’t doing well,” Windsor says. Make Sure Your Assets Are Properly Diversified Diversifying your investments can help protect you from stock market downturns. “That plan includes making sure that their portfolio is allocated correctly before the market enters a decline,” says Matt Wilson, chief investment officer at Keen Wealth Advisors, in Overland Park, Kansas. “We also make sure that that each client that is withdrawing funds has a portion of their portfolio set aside in short-term fixed income and cash. The dividends and interest are used to supplement someone’s withdrawals.” It’s important to keep enough cash outside the stock market to satisfy income needs in retirement for several years. “We keep a portion of someone’s needs in short-term fixed income and cash to supplement their income needs in a declining market. That way they’re not forced to sell stocks when they are down,” Wilson says. “When the market is up, which is the case most years, we’ll sell a portion of the stocks that are up to supplement their income needs.”" MY COMMENT Most people will simply muddle along. They will not have any choice. Unfortunately they will fall victim to.......reverse-compounding. Or you might call it negative compounding. They will be forced to draw down assets during a down market creating a double whammy. The best retirement strategy.......occurs before retirement. The best strategy is a lifetime of investing in rational and realistic stocks and funds and building up the largest financial portfolio possible. It is now too late for most baby boomers.....but.....it is not too late for others that are younger.
I have not said much about the markets today as I sit here typing and reading. the good news is that the markets appear to be fighting back against the FED ATTACK today. The averages have been slowly improving....but they are still down. It will be hard for stocks to come back into the green today with this concentrated FED push to jaw down the markets today. BUT.....hope springs eternal. At the worst......I will simply use up some of the cushion that I built up recently from gains. In other words......a normal short term day for year 2022. We have only had a single UP day this week.....yet the weekly loss.....so far....is manageable. The close today and tomorrow will determine how we end the week.
