The Long Term Investor

Good morning....stock market masochists. It is another DOWN day in the markets.

Why? Well the Ten Year Treasury is nicely UP today. The financial media is full of sound bites, opinion, innuendo, speculation, and intentional manipulation. The government is spending money like a drunken sailor.......and doing everything they can to totally sabotage and NOT work to support the FED. Negativity is settling in.....hard..... and is rampant.

I looked at my account a few minutes ago and I am now within about three days of losses of being back at my LOW OF THE YEAR. The markets are going to test the prior lows in January of 2023 and may very well exceed those lows.

This is what happens in an extended BEAR MARKET. We are finally seeing some capitulation......but probably nowhere near the end of the negative markets. There is UNIFORM opinion out there right now that the first half of 2023 will be terrible for stocks. The start of the new year is NOT going to be some MAGIC CURE to the markets of 2022.

That is how we are going to start the new year.....2023. The question will be......where do we end 2023....a year from now.

 

The above is my short term analysis of where we are and where we are headed right now.

BUT.....long term,,,,,,we are looking at the same GOOD results that usually happen. AND.....you will have to be invested to actually get those long term average returns. SO....

I continue to be fully invested for the long term as usual.

 

I will say.....I can not imagine the mind set right now of all the millions of people that are facing retirement in the next few years. Or.....the mindset of all those that are retired and are counting on their own assets to fund retirement.

I am so GLAD that I disconnected my own retirement from my stock account performance. That gives me strength and confidence to be a long term investor.

 

Here is the day at this moment.

Stocks fall into final 3 trading days of 2022

https://finance.yahoo.com/news/stock-market-news-live-updates-december-28-2022-122013283.html

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

"U.S. stocks turned lower Wednesday as investors hobbled toward the end of a gruesome 2022.

The S&P 500 (^GSPC) slumped 0.4%, while the Dow Jones Industrial Average (^DJI) shed around 100 points, or 0.3%. The technology-heavy Nasdaq Composite (^IXIC) declined 0.5%.

Equities began the holiday-shortened week on a down beat, with the S&P posting a 0.4% loss and the Dow closing just 0.1% above the flatline. Technology stocks dragged the Nasdaq down 1.5%. Losses were led by an 11% slide for Tesla (TSLA) that sent shares to their lowest close since August 2020.

Tesla's tailspin came after Reuters reported Tuesday that the electric carmaker will reduce output at its Shanghai factory in January, adding to woes from a separate report by Reuters over the weekend that said Tesla would suspend production a day earlier than planned at its Shanghai Gigafactory over rising COVID-19 infections in China.

Tuesday's losses bring Tesla down 70% from its November 2021 all-time high, with declines intensifying over the past couple of months over concerns around CEO Elon Musk's management of social media platform Twitter. Shares were just above flat Wednesday morning.

U.S. and global stocks are on pace for their worst drop since the 2008 financial crisis. Pessimism around the outlook for financial markets and the economy amid a backdrop of rising interest rates and fears a recession is underway have thrown a wrench in prospects for the seasonal year-end rally markets stocks typically experience at the end of December.

Investors' cautiousness over the year ahead also outweighed a move by China to ease travel restrictions this January as the world's second largest economy further reopens after three years of zero-COVID protocols.

“The question is no longer about the speed with which China reopens,” China Beige Book International Managing Director Shehzad Qazi told Yahoo Finance Live on Tuesday. “The real question now is how quickly can Beijing undertake the policies that are necessary for it to gain control of the virus?"

"We haven't hit the peak of COVID cases — that is still ahead of us — which means that some of the bad news is still ahead of us, and until we are past that point, we can't really start talking about an economic recovery."

Elsewhere in markets, oil retreated after climbing on demand expectations from China's loosening of COVID curbs and the reopening of U.S. refineries after this week's winter storm closures. West Texas Intermediate (WTI) crude futures were trading just below $80 per barrel Wednesday morning.

U.S. Treasury yields also took a breather Wednesday after charging higher the previous day. The U.S. dollar index was little changed."

MY COMMENT

Nothing new.....nothing going on. It is simply a BEAR MARKET drop happening right now to end the year. As we approach market lows.....again.....the question will be whether or not the markets can bounce back once again. Or.....will we simply keep dropping and establish a new low for the bear market.

I can see....perhaps....another 10% drop in the markets in general. At that point stocks will be so cheap....I dont see how anyone could avoid being a buyer.

 

The other news today.

U.S. pending home sales sag more than expected in November

https://finance.yahoo.com/news/u-pending-home-sales-sag-150319999.html

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

"(Reuters) - Contracts to buy U.S. previously owned homes fell far more than expected in November, diving for a sixth straight month in the latest indication of the hefty toll the Federal Reserve's interest rate hikes are taking on the housing market as the central bank seeks to curb inflation.

The National Association of Realtors (NAR) said on Wednesday its Pending Home Sales Index, based on signed contracts, fell 4% to 73.9 last month from October's downwardly revised 77.0. November's was the lowest reading - aside from the shortlived drop in the early months of the pandemic - since NAR launched the index in 2001.

Economists polled by Reuters had forecast contracts, which become sales after a month or two, would fall 0.8%. Pending home sales dropped 37.8% in November on a year-on-year basis.

"Pending home sales recorded the second-lowest monthly reading in 20 years as interest rates, which climbed at one of the fastest paces on record this year, drastically cut into the number of contract signings to buy a home," said NAR Chief Economist Lawrence Yun. "Falling home sales and construction have hurt broader economic activity."

Contracts declined in all four regions, led by a 7.9% drop in the Northeast. All four regions also recorded double-digit declines on a year-over-year basis, with contract signings in the West down by 45.7%, by far the largest regional drop.

"The Midwest region — with relatively affordable home prices — has held up better, while the unaffordable West region suffered the largest decline in activity," Yun said.

The overall decline in signed contracts suggested that existing home sales would continue to fall after posting their 10th straight monthly decrease in November.

The housing market has suffered the most visible effects of aggressive Fed interest rate hikes that are aimed at curbing high inflation by undercutting demand in the economy. By the Fed's preferred measure, inflation is still running nearly three times its 2% goal, having risen earlier in 2022 at its fastest pace in 40 years.

This month the Fed raised rates again by half a percentage point, capping a year that saw its benchmark rate shoot from near zero in March to between 4.25% and 4.5% now - the swiftest rates have risen since the early 1980s. Fed officials projected rates would climb further in 2023, likely topping 5%.

Unlike other parts of the economy - many of which have yet to show a significant impact from the Fed's actions - the housing market has reacted in near real-time to the jump in borrowing costs engineered by the central bank.

The 30-year fixed mortgage rate breached 7% in October for the first time since 2002, more than doubling in the span of nine months. This pulled the rug out from what had been a red-hot housing market fueled by historically low borrowing costs and a rush to the suburbs during the coronavirus pandemic.

Data last week showed the combined annual sales rates of new and existing homes through November had slumped by 35% since January - among the fastest falls on record - to the slowest since late 2011. New single-family housing starts and permit issuance skidded to a two-and-a-half-year low last month as well.

MY COMMENT

The stand off between buyers and potential sellers continues. In my local area there are now about 35 active listings.....out of about 4200 homes. In other words there is NOTHING to buy.

 

There is simply NOTHING positive out there in the news today.

I do see that there should be some massive discounts by retailers over the next week or two. Good news for consumers and inflation fighters.

I also see what is going on right now and the current mind-set as being a good contrary indicator.

I also see the end of the FED rate increases in the near future.

That is about the best I can come up with for the.....SHORT TERM.

 

Speaking of RETESTING the year lows.

Dow headed back below 30,000, slim chance of soft landing for economy in 2023: CNBC CFO survey

https://www.cnbc.com/2022/12/28/dow...-chance-of-soft-landing-for-economy-cfos.html

NOT.....going to post the article.....read it if you dare. I dont want to be a DEBBIE-DOWNER any more than I already have today.

Some times it is hard to live in REALITY and see the probabilities. The key is to have your financial life set up so when reality hits.....you are STILL good. You dont want to be in a position where your financial and investing decisions are being driven by short term events.

 

Once we hit year end on Friday.......I WILL post my ACTUAL year results for my entire portfolio. I will also post the results for my two funds for the year......Fidelity Contra fund and the SP500 Index fund.

That is one point of this thread......to show EVERY move that I make and every result.........the good, the bad, and the ugly.

 

I noticed yesterday.....that my one of my credit cards appears to have taken a vacation to California. There were four charges at California gas stations....a couple for the usual $1 test run by the fraudsters. I am LUCKY that I look at it....EVERY DAY. So I caught it early and canceled the card. Of course I will lose nothing....it will be absorbed by the credit card company or the merchant.

So a little warning to people on here.....keep track of those cards.

 

With nothing positive going on today....I will say:

HAPPY NEW YEAR TO ALL.

I have enjoyed your company all year long. Anyone that wishes.....please feel free to post anything you wish about money or investing. No need to agree with me or anyone else. No need to be any particular sort of investor. The more active this thread and this board......the better for everyone.

I also want to give a NEW YEAR.....THANK YOU.....to the mods and others that manage this board. STOCKAHOLICS is the best financial board I have seen in my lifetime of message board posting. Please......encourage your family and friends to patronize this board. We are one big FAMILY......and .....like any family we all have different views and opinions on every topic.......that is a good thing. I am looking forward to continued interaction with everyone here in 2023.

 

WELLCOME back Sunshine.

I am still hanging in there with TSLA. I dont really see much change on a FUNDAMENTAL level. Most of what is going on now is news driven by the TWITTER media line and the attempt to CANCEL Elon Musk. As long as Musk is able to stand firm....they will lose interest after a while and move on to easier targets.

I will have some money...perhaps $15,000 to $20,000 to invest after tax time....starting about mid April. I will probably simply put it all in the SP500 Index Fund. BUT......if the bear market continues it will be tempting to put some in the individual stocks. If I do put some in the stocks I will probably NOT put any in TESLA.....I will just stick with what I have now.

COURAGE.

 

TODAY.....in the RED of course. I also got beat by the SP500 by 0.33%. I have not followed anything today since this morning.....but....obviously the day did not go well.....excerpt for the shorts.

My ONLY up stock today was.....TESLA. My current year to date is right on (-30%).

I am now one bad day away from once again being at my YTD LOW in my account. I have been at this point four times already this year. Each time the market turned up and I regained my cushion. Curious to see if it does that again or if this is the retest of the prior low....that takes the markets down another step or two.

 

I guess Santa is toast....at least for this year. We all got coal.

Stocks continue year-end slide, Tesla snaps 7-day losing streak

https://finance.yahoo.com/news/stock-market-news-live-updates-december-28-2022-122013283.html

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

"U.S. stocks sank Wednesday, extending a sharp year-end slide as investors hobbled toward the end of a gruesome 2022.

The S&P 500 (^GSPC) dropped 1.2% after losses picked up into the close, while the Dow Jones Industrial Average (^DJI) shed 366 points, or 1.1%. The technology-heavy Nasdaq Composite (^IXIC) declined 1.4%.

Losses continued across the board Wednesday after equities began the holiday-shortened week — a period that normally sees a seasonal end-of-year rally — on a down beat. In the previous session, the S&P 500 posted a 0.4% loss and the Dow closed just 0.1% above the flatline, while technology stocks dragged the Nasdaq down 1.5%.

Tesla shares (TSLA) clawed back 3.3% Wednesday, snapping a seven-day selloff that brought the stock down nearly 70% from its November 2021 all-time high, with declines intensifying over the past couple of months over concerns around CEO Elon Musk's management of social media platform Twitter.

Tesla's tailspin continued this week after Reuters reported Tuesday that the electric carmaker will reduce output at its Shanghai factory in January, adding to woes from a separate report by Reuters over the weekend that said Tesla would suspend production a day earlier than planned at its Shanghai Gigafactory over rising COVID-19 infections in China.

Meanwhile, Apple's (AAPL) stock tumbled 3%, falling below the key technical $130 level and setting a fresh 2022 low Wednesday for a second day, while also weighing on the broader market.

"One of the most important items we’ll be watching over the next week or two will be the action in Apple," Miller Tabak Chief Market Strategist Matt Maley said in a note Wednesday. "The reason that the $130 level is so important is because it’s where the lows from June come in (which was the low for 2022)."

"Therefore, any meaningful break would give the stock a key 'lower-low'…and that would be quite bearish because Apple has already broken below its trend-line from the March 2020 pandemic lows (and below its 200-day moving average)."

U.S. and global stocks are on pace for their worst drop since the 2008 financial crisis. Pessimism around the outlook for financial markets and the economy amid a backdrop of rising interest rates and fears a recession is underway have thrown a wrench in prospects for the seasonal year-end rally markets stocks typically experience at the end of December.

Investors' cautiousness over the year ahead also outweighed a move by China to ease travel restrictions this January as the world's second largest economy further reopens after three years of zero-COVID protocols.

“The question is no longer about the speed with which China reopens,” China Beige Book International Managing Director Shehzad Qazi told Yahoo Finance Live on Tuesday. “The real question now is how quickly can Beijing undertake the policies that are necessary for it to gain control of the virus?"

"We haven't hit the peak of COVID cases — that is still ahead of us — which means that some of the bad news is still ahead of us, and until we are past that point, we can't really start talking about an economic recovery."

Elsewhere in markets, oil slipped 1.2% after climbing on demand expectations from China's loosening of COVID curbs and the reopening of U.S. refineries after this week's winter storm closures. U.S. Treasury yields charged higher, with the 10-year note topping 3.8%. The U.S. dollar index rose."

MY COMMENT

The Treasury yield did not help the markets today. We are going to end the year exactly as we started. That is a good thing if you like.....SYMMETRY.

It will be nice to start fresh after this week ends.....I might actually be able to say I have NO LOSS or even a GAIN in my account YTD for some brief moment after the first of the year.

 

Being in the market for KEY DAYS is critical for long term investors.....of course.....the opposite is true as to critical down days. I choose to take the bad with the good rather than try to be a FAILING market timer.

Five days that killed the year’: These trading sessions accounted for 95% of the S&P 500’s losses in 2022

https://finance.yahoo.com/m/1f56634d-5261-315a-8b49-4f48fa686586/‘five-days-that-killed-the.html

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

"Just five trading sessions accounted for more than 95% of S&P 500 index losses in 2022, according to an analysis by Datatrek co-founder Nicholas Colas in a note published Wednesday, as stocks headed for their worst year since 2008.

He described them in the note as the “five days that killed the year”: Two were caused by disappointing inflation data, while the others were triggered by weak corporate earnings and commentary from Federal Reserve Chairman Jerome Powell.

September 13 (-4.3%)

On the worst day for stocks since 2020, the release of the August U.S. consumer price index report sent traders into a panic when the data showed annual headline and core inflation running hotter than expected.

The headline number came in at 8.3% for the 12 months through August, while core inflation — which strips out volatile food and energy prices — accelerated at 6.3%.

Economists and analysts were particularly rattled by the monthly core inflation number, which came in at 0.6%, double the expected rate of 0.3%, stoking concerns about stubbornly high housing costs as energy prices began to decline after earlier being the biggest driver of this year’s inflation.

May 18th (-4.0%).

Retail giant Target Corp. TGT, +0.17% missed first quarter earnings expectations by a wide margin, elevating worries about the U.S. consumer’s ability to cope with inflation into a full-blown panic one day after Walmart Inc. WMT, -1.75% highlighted similar concerns.

Adding to the pressure on the market, during an event hosted by the Wall Street Journal Powell acknowledged that “there could be some pain involved” as the FOMC raised interest rates.

June 13 (-3.9%)

This day’s punishing selloff was also triggered by the release of CPI data, as the numbers for the month of May came in higher than expectations. The S&P 500 finished the session in bear-market territory for the first time in 2022, down 21.8% from the record highs reached in early January.

April 29 (-3.6%)

The market’s decline on this day was also triggered by a corporate earnings disappointment. However, this time, the focus was on e-commerce, and the ripple effects sent many of the megacap technology stocks reeling.

Amazon.com Inc. AMZN, -1.47% — which like both Target and Walmart is a member of the consumer discretionary sector of the S&P 500 — missed earnings expectations for the first quarter while reducing its guidance. The stock ended the day down 14%, its biggest single-session decline since 2006. Apple Inc. AAPL, -3.07%, Microsoft Corp. MSFT, -1.03% and Google owner Alphabet Inc. GOOGL, -1.57% were also down sharply.

May 5 (-3.6%)

Markets tumbled one day after Powell assured investors during a post-meeting press conference that the Fed wasn’t considering interest-rate hikes of greater than 50 basis points. Of course, this statement didn’t age well, as the central bank went on to hike interest rates by 75 basis points at the following four consecutive meetings.

According to Colas, investors can glean some helpful insights about the root causes of this year’s market misery from these five sessions.

To wit, investors had clearly realized by the spring that stubbornly high inflation would force the Fed to raise its benchmark interest rate more aggressively than it was letting on. Also, inflated expectations for corporate earnings helped contribute to the pain as U.S. consumer spending waned.

U.S. stocks sold off far more often than they traded higher this year, a deviation from the historic pattern since World War II whereby stocks typically climb far more often than they fall. Through Tuesday’s session, the index fell during 141 trading days (including Tuesday), while finishing higher during 107 up days.

The S&P 500 was on track to finish 2022 down more than 20% as of midday on Wednesday as all three of the main indexes were trading in the red, with the S&P 500 SPX, -1.20%, Nasdaq Composite COMP, -1.35% and Dow Jones Industrial Average DJIA, -1.10% adding to their losses with just two more trading days left in the year."

MY COMMENT

Interesting.....but.....not really relevant to anything." Just goes to show that we only missed it by......."that much". Just five days worth.