A really good post and a good reminder for all long termers. It is not surprising in todays time when you cruise through the financial/market media. There are so many distractions out there in the investing world. I can easily see how some people are intoxicated on the amount of information out there. Nobody wants to be average right? The problem many have is doing it on a consistent, long term basis. I suspect this will always be the case. The truth is, a long term investing plan can be and is very simple to manage. The hardest part for many is thinking they are missing out on what they perceive is everyone else doing better. Secondly, managing the emotions of investing starts to creep in and they decide I must do something. Add in all of the "noise" and "promises" of the financial world and you get under performance and bad decisions.
As mentioned earlier by WXYZ, the FED is out and about on tour again. This time it is ole James Bullard. I still contend that all of these different members of the FOMC going around speaking continuously is a poor way to do it. Sometimes it is because they communicate differently than some of the others. I really think the Chair should be the only one doing press conferences. In addition, they have already put out their plan earlier and we know they have the regular scheduled meetings on the calendar to announce updates, so why continue on with it. Short term folks probably key on the messaging no doubt when it moves the market. Long termers, well we just sit through it as usual. I just think it is pointless to have a good portion of them out trying to gin every one up about it. What else can possibly be said...they are continuing the rate increases. Nothing has really changed in that aspect.
Investing is one of the few pursuits where......being average is good. I am having a mild red day today. I just happened to look for the first time. I have been spending much of my day communicating with another art collector trying to get some historical information on one of our paintings. It is a very minor painting, but I like developing historical context.
Agreed. Average has been very good to me in investing. Also, I always like hearing some of the backgrounds/searches on your paintings.
Here is a differing view point/opinion about the FED and their talks. I'm not saying it's right, wrong, or indifferent, but it is an interesting opinion piece. As stated earlier, we just sit through it and watch the circus play out. What Bullard got wrong about a 7% fed funds rate (and why he said it anyway) (MarketWatch). Monetary policy is already much tighter than Bullard and many others acknowledge because they ignore the impact of quantitative tightening and forward guidance. An influential Federal Reserve official briefly spooked the stock SPX, -0.64% and bond TMUBMUSD10Y, 3.775% markets on Thursday by warning that the central bank may have to raise interest rates much further than the market has been expecting. But the official left out some important information that undercut his argument and which suggested that the market probably had it right in the first place. First some background, and then I’ll explain what the Fed official got wrong. Bullard’s speech St. Louis Fed President James Bullard said in a speech Thursday that the federal funds rate FF00, 0.00% —now in a range of 3.75% to 4%–would probably have to rise much further to put a damper on inflation. Without forecasting a specific number, Bullard included a chart that said the fed funds rate would have to rise to between 5% and 7% in order to be “sufficiently restrictive.” Most observers had been expecting that the Fed’s so-called terminal rate would be around 4.75% to 5.5%, so Bullard’s warning came as a bit of a shock. Bullard based his estimates on the Taylor Rule, which is a commonly (although not universally) accepted rule of thumb that shows how high the federal funds rate would need to be to create enough unemployment to bring the inflation rate back down to 2%. There are several variations of the Taylor Rule, the most extreme of which would require a federal funds rate of 7% (according to Bullard’s chart) if inflation proved to be more persistent than current forecasts project A 7% fed funds rate would probably push stock and bond prices much lower, and that was a big downer in markets that rallied in the last week on the belief that inflation was beginning to cool. Forward guidance What Bullard said wasn’t out of line with what Fed Chair Jerome Powell had said in his last press conference: That the Fed would have to raise rates higher and for longer. Bullard’s chart just put a very dramatic number on what Powell had only hinted at. What Bullard ignored in his analysis was that tightening monetary policy isn’t just about raising interest rates anymore, it’s also about reducing the Fed’s balance sheet and about forward guidance, which also tighten policy. In other words, a 4% federal funds rate today can’t be compared directly with a 4% federal funds rate back in Paul Volcker’s day, which is what the Taylor Rule does and which is what Bullard’s chart does. A recent paper by economists at the San Francisco and Kansas City Federal Reserve Banks argues that, after adding in the economic and financial impact of forward guidance and quantitative tightening, the target rate (as of Sept. 30) of 3%-3.25% was equivalent in monetary tightness to a “proxy fed funds” of around 5.25%. After a 75 basis-point hike on Nov. 2, I figure that the proxy rate is now around 6%. That’s just 100 basis points of tightening away from Bullard’s doomsday scenario. But the market was already pricing in 125 basis points of tightening! And that’s the most extreme value. Plug in other predictions for the inflation and unemployment rates and you get lower numbers out of the Taylor Rule. The median value is about 3.75%, which means the nominal fed funds rate is already into “sufficiently restrictive” territory. The “proxy fed funds rate,” which factors in the contribution of forward guidance and QT to monetary policy, is already in the middle of the range. That means the Fed’s policy may already be “sufficiently restrictive” to bring inflation down to 2%, which is definitely not a message Bullard and his colleagues want the markets to hear. If the markets believed it, then forward guidance would be weaker and the proxy rate would plunge and the Fed would have to raise rates more. We know why Bullard said what he said: He’s engaging in forward guidance, trying to make financial markets do the Fed’s work for it. If the stock and bond markets began to anticipate a “pivot” to slower rate hikes or even to rate cuts next year, it would undermine what the Fed is trying to accomplish this year. Fed officials are always going to jawbone the markets. Right now, they do that by emphasizing how high interest rates might go and how long the Fed might keep them there. The more the markets believe a 7% fed funds rate is probable, the less likely it is that the Fed will have to raise rates to even 5.50%. It’s the job of the Fed to bluff, and it’s the market’s job to call that bluff.
Well, we managed to claw back some of it, but still ended in the red. Still better than where it started out. Maybe tomorrow we can hammer out some GREEN to end our Friday. Regardless of all the "noise" currently, it is not like we haven't been dealing with it all year anyway. Focus on the bigger picture and hold on to the long term. As mentioned upthread, we talk and discuss the market daily, but that is not where our plans are anchored. Take note of the many reasonable and sound long term ideas throughout the history of this thread. There are many gems contained in it from start to current.
WELL....I ended the day in the red....but very mild. It was nice to see some strength going into the close. Perhaps that will carry over to the open tomorrow. I was close....but....I did get beat by the SP500 today by 0.06%. All in all not a bad day......for a down day. I had three stocks UP today....AAPL, NKE, and HON.
I obviously have no personal knowledge.....so what is in this article is "allegations" at this time. It looks like the management of FTX and the associated companies was totally out of control. I saw some photos of the top management earlier today. Just looking at them....there is NO WAY I would have trusted any of them with my money. They obviously did not have even the most simplistic idea of how to properly run and control a business. FTX Employees Used Company Funds to Buy Homes in the Bahamas There were no expense controls for employees whose expenses were approved by chat with personalized emojis, according to the new CEO. https://finance.yahoo.com/m/384a1efa-78de-3c89-b80d-6a017ced4333/ftx-employees-used-company.html INSANITY.
I am not saying it is the same....since I have no knowledge. BUT.....what I am seeing and hearing about this big mess reminds me very much of ENRON. Back before Enron imploded......I was considering investing in that stock. They were all over the news. SO.... went through all the data and numbers......and could not make sense of it. Considering that they were a UTILITY company.....the EXTREME money they were making and their numbers seemed crazy and very suspicious to me. In the end I decided to NOT invest in that company.....it just seemed too good to be true on many levels. In hindsight......I am so glad that I looked at what was available and made that choice.....since it would have been investing money from various family members.
Here is more on the FTX topic. Emoji for expenses, penthouses and slipshod accounting: The most damning details from new FTX CEO’s report https://www.cnbc.com/2022/11/17/ftx...d-accounting-freewheeling-expenses-perks.html
Just a complete disaster on so many levels regarding above posts. It just keeps getting worse as information comes out.
What is amazing about FTX is the level of beautiful people, politicians, financial big shots, angel investors, etc, etc, that were invested in it. it shows the true IDIOCY and incompetence of all the financial elites that were giving money to that company. It was the same with Madoff and all the hedge funds and funds of funds that were pouring money into his company. In reality many of the people in the investing business.....even at the highest levels are nothing more than shabby, sales people with absolutely no competence or ability. These are supposed to be the best of the best in analyzing business. Just look at the names in this article. FTX Collapse Will Reverberate Throughout The VC World For A Long Time https://news.crunchbase.com/fintech-ecommerce/ftx-collapse-bankman-fried-alameda/ (BOLD is my opinion OR what i consider important content) "The sudden rise and fall of FTX seemingly caught everyone by surprise. However, as fast as it happened, the effects of FTX’s collapse are not just sudden, but likely will be continuous and long-lasting. For perspective, Theranos had raised about $1.3 billion in funding and had a $10 billion valuation at its peak before the walls came tumbling down and a story started to unfold that everyone still talks about now and gave us a movie. By comparison, FTX and FTX US had raised a combined $2.2 billion at a $32 billion valuation and $8 billion valuation, respectively, before everything fell apart. Investors With valuations that large, it’s unsurprising that some of the largest names in VC and investing took part. Fellow crypto exchange Binance was one of the company’s first lead investors, taking part in a round of undisclosed value in late 2019, according to Crunchbase data. Rounds became much more significant quickly for the failed crypto exchange. In July 2021, Sequoia Capital took the lead in a $1 billion round, FTX’s largest round. That round had dozens of investors, including big names like NEA, Lightspeed Venture Partners, Insight Partners, Temasek, SoftBank Vision Fund, Thoma Bravo, SoftBank Vision Fund 2, Coinbase Ventures, Ribbit Capital, Blackstone, Multicoin Capital, Paradigm and Altimeter. Just three months later, FTX swept up another $420 million-plus, again led by Sequoia and also the Ontario Teachers’ Pension Plan. Then came its $400 million Series C at a $32 billion valuation earlier this year — with many of the same participants again: Temasek, Paradigm, Ontario Teachers’ Pension Plan Board, NEA, IVP, SoftBank Vision Fund 2, Lightspeed Venture Partners, Steadview Capital, Tiger Global and Insight Partners, among others. Facing facts Many of those investors already are willing to face reality. It’s been reported Sequoia and Paradigm have written down their stakes to zero. The Ontario Teachers’ Pension Plan Board said the $95 million it invested in FTX should have “limited impact on the plan, given this investment represents less than 0.05% of our total net assets.” Others seem ready for a more prolonged fight, as it has been reported some VC firms are considering suing Sam Bankman-Fried for alleged fraud — although that seems like a Hail Mary to try to save face. What does seem certain is that FTX’s collapse will not be forgotten by New Year’s. Such a fall from grace that involves so many marquee names in venture will likely have a ripple effect when those same firms look at their next Web3 or crypto investment. How eager will they be for that investment? How eager will their LPs be to see another deal in crypto? It may even affect their due diligence process outside of crypto deals. Even crypto-specific firms like Paradigm and Multicoin Capital could suffer from a type of “post-FTX syndrome” when looking at their next crypto deal. The effects of FTX’s fall will be long lasting — and you can bet there will be a movie made. Alameda’s far reach Aside from the FTX collapse’s effect on big-name venture firms, it also likely will have a significant impact on the crypto and Web3 ecosystem Bankman-Fried sought to foster. Earlier this week, we talked about the nearly 50 investments FTX Ventures made this year since announcing its first $2 billion funding in January. Those rounds in total raised nearly $3 billion for burgeoning startups, with FTX Ventures leading some of the biggest of those deals. However, Bankman-Fried’s other trading firm Alameda Research — also in bankruptcy — was a prolific investor in the crypto startup scene. Per Crunchbase data, starting in 2019 the firm made 180 investments. In 2021 alone, the firm completed 100 deals. Those investments totaled $2.3 billion. This year, Alameda Research slowed that pace, making only 55 investments, but those totaled $2.1 billion. It is important to note Alameda Research did not invest that amount, but rather simply took stake in rounds that totaled that amount. However, it was an investor, and it is never ideal for a young startup — many of Alameda Research’s deals were seed and pre-seed rounds — to have an early investor declare bankruptcy. Alameda Research also led or co-led 30 of those rounds, including some large ones such as: Toronto-based crypto-asset management tool 3Commas’ $37 million Series B in September, Chicago-based automated crypto investing platform Stacked’s $35 million Series A last December, and a $40 million venture round in Switzerland-based decentralized premier brokerage protocol Oxygen.org. Bankman-Fried’s reach went well beyond a failed exchange. He touched many in the crypto startup ecosystem who shared his similar vision. Now time will tell how damaging his help will turn out to be." MY COMMENT Some of the names above are the largest VC names in the USA. Talk about MORONS. I have now had a chance to hear the CEO of Alameda talking about trading, business and other topics. She was a girlfriend of SBF. She obviously has no clue how to run a company......a true business and financial MORON. Yet the money that was poured into this company was amazing. I love the Ontario Teachers pension.....they lost $95MILLION.....but thats ok.....it is just a small amount so we will write it all off and dont care.
What if all the experts are wrong.....again? What if holiday shoppers flock to the stores this year? It "might" happen. Retail earnings show rampant discounting — and holiday shoppers are waiting to pounce: Morning Brief https://finance.yahoo.com/news/reta...shoppers-are-waiting-to-pounce-110018635.html (BOLD is my opinion OR what I consider important content) "So far, Macy’s has been one of the standouts of the retail earnings season. Its shares leaped by 15% yesterday after the department store owner reported profit that beat estimates and raised its forecasts. Key to the company’s surprising success was its small build in inventory, which rose only 4% last quarter from a year earlier. Earlier this year, Macy’s (M) started offering shoppers discounts and kept it up, which helped clear out old merchandise while some of its competitors were dealing with rising gluts of apparel. The make-or-break question for retail numbers has been how companies manage that inventory amid changing consumer spending patterns. After the close Thursday, Gap (GPS) became the latest example with its numbers, with a smaller inventory boost (12% compared with a 37% year-over-year increase in the second quarter) amid “higher discounting.” Walmart (WMT) moved merchandise by offering value to consumers, especially in groceries, its Chief Financial Officer David Rainey told Yahoo Finance, which drove traffic. Target, in contrast, found that consumers didn’t want its usual, higher-margin areas of strength: pinched by inflation, shoppers saved up to buy necessities instead of apparel, electronics, and home goods. That means Target (TGT) has to put items on sale to reel ‘em in. Proportion of Consumers Waiting for Deals & the Levels They Are Looking For (Source AlphaWise, Morgan Stanley Research) “They're looking for promotions and are looking for that great deal. And I would expect that promotional focus will continue throughout the holidays,” CEO Brian Cornell said on a call with reporters. Maybe that’s why the retailer is holding its “biggest Black Friday week sale ever.” Consumers have sniffed out those deals, and suspect more are coming. According to a recent Morgan Stanley/AlphaWise survey, “70% of shoppers said they are waiting for stores to offer discounts before they begin their holiday shopping” – and they’re waiting to buy until discounts top 20% “High inventory levels will give stores an additional incentive to offer discounts as they attempt to clear merchandise off shelves. Companies offering the biggest discounts will be able to grab the largest wallet share but at a hit to margins,” Morgan Stanley’s Michelle Weaver and Katie Solovieva wrote in a note to investors. It's possible discounts will last even beyond the holiday season. Barclay’s Adrienne Yih told Yahoo Finance, "inventory in this sector probably gets cleaned up by mid-year next year.” Retail consultant Jan Rogers Kniffen disagreed, saying retail sales strength means promotions will soon be winding down. “I’m pretty sure we’re going to see the consumer shop later because they think there’s going to be deals, and I’m willing to bet there will be a lot of them that are disappointed, because we’re going to see a slow environment for promotion, totally unlike what we saw in the first half," Rogers said." What to Watch Today Economy 10:00 a.m. ET: Existing Home Sales, October (4.40 million expected, 4.71 million during prior month) 10:00 a.m. ET: Existing Home Sales, month-over-month, October (-6.6% expected, -1.5% during prior month) 10:00 a.m. ET: Leading Index, October (-0.4% expected, -0.4% in during prior month) Earnings Foot Locker (FL), JD.com (JD) MY COMMENT I dont know what people will do....but I do know human nature. If we get into a feeding frenzy over sales prices Holiday retail will BOOM. There is tons of money out there and people are going to be in a mood to relax and let go after the past couple of years. It would not surprize me at all if we see a nice shopping season for the retail businesses.
As you can see from the end of the article above.....there is absolutely NOTHING going on today in terms of earnings or economics. The markets will be left to simply run wild......up or down. Of course that means that the entire focus of the day will be the speculative news and opinion that masquerades for news these days. We are NOW open in the markets and the futures have turned into reality. ALL the averages are nicely green. We will need a real BOOMER of a day today for the week to end up in the green. If I had to guess.......we will end up with a red week. the markets are TIRED as we approach year end. This has been a WILD and CRAZY year.....as well as a very difficult DOWN market.
My account so far today looks about like it did at the close yesterday. We end another week of 2022 today. After this week we have SIX WEEKS left this year for the markets to do whatever they want to do. It will be nice to start 2023 with NO YTD loss. It will also be nice to be able to put 2022 into the books at the end of the year.....as a losing year.....and forget it. One good thing about being a long term investor......there is ALWAYS a fresh start right around the corner.
Here is the actual story of the day for much of the world. Another story that seems right out of The Simpsons.....BEER. Qatar to ban beer at World Cup stadiums in dramatic reversal two days before tournament starts https://www.cnbc.com/2022/11/18/qatar-to-reportedly-ban-beer-at-world-cup-in-dramatic-reversal.html MY COMMENT I wonder how all the hard core soccer fans around the world like the take over of their game by the WORLD ELITES?
OK....back to reality. Home sales fell for the ninth straight month in October, as higher mortgage rates scared off potential buyers https://www.cnbc.com/2022/11/18/home-sales-fell-for-ninth-straight-month-in-october.html (BOLD is my opinion OR what I consider important content) "Key Points Home sales declined for the ninth straight month in October. Sales of previously owned homes dropped 5.9% from September to October, according to the National Association of Realtors. That is the slowest pace since December 2011, with the exception of a very brief drop at the beginning of the Covid-19 pandemic. Home sales declined for the ninth straight month in October, as higher interest rates and surging inflation kept buyers on the sidelines. Sales of previously owned homes dropped 5.9% from September to October, according to the National Association of Realtors. That is the slowest pace since December 2011, with the exception of a very brief drop at the beginning of the Covid-19 pandemic. The October reading put sales at a seasonally adjusted, annualized pace of 4.43 million units. Sales were 28.4% lower year-over-year. Even as sales slow, supply is still stubbornly low. There were 1.22 million homes for sale at the end of October, an decrease of just under 1% both month-to-month and year-over-year. That’s a 3.3-month supply at the current sales pace. Historically, a balanced market is considered to be a six-month supply. The median price of an existing home sold in October was $379,100 , an increase of 6.6% from the year before. The price gains, however, are shrinking, as the seasonal drop in home prices this time of year appears to be much deeper than usual. “Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers,” said Lawrence Yun, chief economist for the NAR. “In October, 24% of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%.” Overall, homes went under contract in 21 days in October, up from 19 days in September and 18 days in October 2021. More than half, 64%, of homes sold in October 2022 were on the market for less than a month, suggesting that there is still strong demand if the home is priced right. While sales are dropping now across all price points, they are weakening most in the $100,000 to $250,000 range and in the $1 million plus range. On the lower end, that is likely due to the severe shortage of available homes in that price range. Big losses in the stock market, as well as inflation and global economic uncertainty, may be weighing on high-end buyers. First-time buyers, who are likely most sensitive to the increase in mortgage rates, made up just 28% of sales, down from 29% the year before. This cohort usually makes up 40% of home purchases. Investors or second-home buyers pulled back, buying just 16% of the homes sold in October compared with 17% in October 2021. Mortgage rates are now more than double the record lows seen just at the start of this year. But recent volatility in rates is also wreaking havoc on potential buyers. Rates shot up in June, settled back in July and August, and continued even higher in September and October. Then they dropped back again pretty sharply last week. “For many, the week-to-week volatility in mortgage rates alone, which in 2022 has been three times what was typical, may be a good reason to wait,” noted Danielle Hale, chief economist with Realtor.com. “With week-to-week changes in mortgage rates causing $100+ swings in monthly housing costs for a median-priced home, it’s tough to know how to set and stick to a budget.”' MY COMMENT NOT a pretty picture for buyers.....rates are high compared to a year ago and there is STILL no inventory as owners sit on their property......and refuse to sell or list. The real property markets are going to get much worse before they get better......especially for buyers.
May be the most subdued world cup ever. At least we get a chance to make up for it ourselves in 2026 when the goo dole USA gets to host!
HANG IN THERE......long term investors. For anyone that has been a rational long term investor for some time.....you still have HUGE gains. Not much I can say for the new and young investors.....other than......you are getting a real learning experience and education compliments of Covid, the economic shut-down and now....the bear market. It is tough to experience a bear market when you are a fairly new investor. BUT REMEMBER........this is exactly what you want. You are being given the golden gift of being able to invest funds at an extremely reduced price. The future gains will be EPIC. The hard part is having the intelligence to realize this and not sit out of the markets.......or even worse.......give in to all the get rich quick insanity that is rampant these days.
I bet there are not a lot of HOOLIGANS at the games this year. Probably because they cant afford the tickets now that the World Cup has gone ELITE.
