The Long Term Investor

OK.....here you go.....anyone that has not been paying attention for the past 6+ months to what the FED is going to do.......here it is all spelled out for you once again.

Stock market news today: Stocks wobble as investors evaluate Fed minutes

https://finance.yahoo.com/news/stock-market-news-today-february-22-2023-120842564.html

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

"U.S. stocks zigzagged between small gains and losses Wednesday as investors pored over minutes from the Federal Reserve's last meeting earlier this month.

The latest readout from the U.S. central bank's Jan. 31- Feb. 1 gathering indicated officials were intent on proceeding with "ongoing increases" but open to reaching an endpoint later this year.

The S&P 500 (^GSPC) teetered up 0.1%, while the Dow Jones Industrial Average (^DJI) turned negative. The technology-heavy Nasdaq Composite (^IXIC) was a modest 0.3% higher.

"Participants concurred that the Federal Open Market Committee had made significant progress over the past year in moving toward a sufficiently restrictive stance of monetary policy," the minutes said.

"Even so, participants agreed that, while there were signs that the cumulative effect of the Committee's tightening of the stance of monetary policy had begun to moderate inflationary pressures, inflation remained well above the Committee's longer-run goal of 2% and the labor market remained very tight."

Discussions also reflected that most members favored the smaller 0.25% increase delivered during the latest policy decision but some in the group preferred raising rates by 50 basis points.

Cleveland Fed President Loretta Mester admitted in a speech last week she would have favored the more sizable hike but officials did not want to surprise the markets, which were pricing in 0.25%.

"The worst of inflation may be in the rear view but it remains well-above the Fed’s target," Mike Loewengart, head of model portfolio construction at Morgan Stanley's Global Investment Office said in a note. "Bottom line is that many market headwinds aren’t going away and investors should expect volatility to stay as they parse over the impact rates being higher for longer will have."

Earlier in the day, St. Louis Fed President James Bullard in a televised interview with CNBC said the U.S. central bank must bring the federal funds rate to a range of 5.25% to 5.5% in order to bring inflation back down to its 2% target.

Wall Street banks have recently revised their expectations for upcoming rate hikes by the Federal Reserve. Teams at Goldman Sachs and Bank of America said last week they estimate three more rate increases this year. Ahead of February's interest rate increase, some market participants had seen that move potentially marking the end of the Fed's rate hiking cycle.

Coinbase (COIN) was among movers on Wednesday, falling 5% even after the cryptocurrency exchange reported fourth-quarter results that beat Wall Street estimates and losses for the full year that were narrower than feared.

Elsewhere in specific names, Palo Alto Networks' (PANW) stock jumped nearly 12% after the cybersecurity firm raised its annual profit outlook and said it was working on managing costs.

Chinese search engine Baidu (BIDU) reported better-than-expected fourth quarter results, boosted by strength in its cloud, advertising and artificial intelligence segments. Shares were down 3% in the afternoon after reversing gains from earlier in the session.

Meme stock darling AMC Entertainment (AMC) was on watch after the Allegheny County Employees’ Retirement System filed a class action lawsuit in Delaware alleging the movie theater company created preferred shares without their permission.

In the bond market, Treasury yields were steady early into the day after rising sharply Tuesday to the highest levels since November.

The moves follow a steep sell-off Tuesday that saw the S&P 500 nosedive 2% below 4,000, the Dow wipe out 700 points and the Nasdaq plunge 2.5% — the moves coming as investors adjust their expectations to higher interest rates for longer."

MY COMMENT

OK.....here it is once again. Same as we have been hearing for at least 6-8 months now. Any investor ........or media person......that is now adjusting their expectations has been delusional.

My view is that everyone knows this.......but many...... have been using it to manipulate people for trading purposes.....by circulating and pushing an expectation that is FALSE.

 

As for the rest of us that have been living in the world of REALITY......we continue to sit, wait, and watch the fun.

 

A micro-red day for me today. But....I managed to beat the SP500 by 0.08%.

Basically a flat day for me with five stocks UP and five stocks DOWN. My winners today.....AAPL, AMSN, NVDA, HD,.....and TSLA.

Looking forward to tomorrow.

 

Here is what I have been waiting for today.....NVIDIA earnings.

Nvidia stock rises after slight beat driven by A.I. chips

https://www.cnbc.com/2023/02/22/nvidia-nvda-earnings-q4-2023.html

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

"Key Points

• Nvidia stock rose on Wednesday after the company reported slightly higher revenue and net income than Wall Street expected, despite a year-over-year decrease in both categories.
• Data center revenue, which includes AI chips, increased 11% on an annual basis to $3.62 billion.

The stock rose on Wednesday after the company reported slightly higher revenue and net income than Wall Street expected, despite a year-over-year decrease in both categories. Here’s how the chipmaker did versus Refinitiv consensus expectations for the quarter ending January:

• EPS: $0.88, adjusted, versus expectations of $0.81
• Revenue: $6.05 billion, versus expectations of $6 billion

Nvidia forecast $6.5 billion in sales in its first quarter, higher than the $6.33 billion expected by Wall Street.Nvidia reported $0.57 in GAAP net income per share.

Although both revenue and earnings were down from last year’s $1.32 per share and $7.64 billion in sales, Nvidia has increasingly been seen by investors as one of the chip stocks best positioned to endure an economic slowdown that hurts PC and semiconductor sales.

Nvidia has a successful business selling chips to console makers like Nintendo. And its data center graphics processors are increasingly an essential tool for artificial intelligence software like ChatGPT and Microsoft Bing’s AI chatbot. The stock was up about 45% in 2023 before Wednesday’s earnings report.

Most of Nvidia’s sales of GPUs for artificial intelligence fall into the company’s data center category. Data center revenue increased 11% on an annual basis to $3.62 billion.

Gaming revenue was down, as expected, as sales were highly elevated in the past few years. The pandemic encouraged gamers to upgrade their systems with new graphics cards from companies like Nvidia. Nvidia reported $1.83 billion in fourth-quarter gaming revenue, a 46% drop from the same time last year.

Other categories, including professional visualization and automotive chips, remain much smaller than the company’s gaming and data center businesses. Nvidia’s professional visualization business for designers reported $226 million in revenue, down 65% annually, and automotive revenue was $294 million, up 135% from last year."

MY COMMENT

A beat is a beat.....so good enough for me. We will see what the market thinks tomorrow.

 

Well I have now finished up all the tax returns that I do for myself, family, and the family trust. Everyone ended up owing just what I anticipated when I calculated estimates last April. This is the first year in a long time with no tax surprises for anyone.

My sibling is very happy to not have the big tax bill they had last year.

I will print the returns about a week before they are due in April. I learned the hard way......a few years ago.....that Turbo-tax will not let you go back and change a return and reprint it.......after you print it originally. My sibling got in a late document after I printed their return.....and it would not let me go back and add it to their return. I had to do the whole thing over.

The family trust return is also a pain since I have to purchase a copy of Turbo-tax Business and download it onto my computer. There is no online version that has the trust return that I need.

Nice to be finished....except for the printing.

 

A nice little rally for the open today. Green across the board.

 

An interesting situation......and......a lesson.

When a savings account is very risky

https://www.axios.com/2023/02/18/compound-banc-high-yield-savings-7-apy

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

"Compound Banc pays an eye-popping 7% on deposits — or at least things that look and feel a lot like deposits. But it's not a bank, and the deposits — technically, they're risky bonds — are not insured by the FDIC or anybody else.

Why it matters: People looking for improbably high interest rates on their money have learned the hard way to avoid crypto. That's created an opening for dollar-denominated products taking advantage of various regulatory loopholes — and of the fact that Americans are increasingly comfortable handing over their money to digital institutions.

The big picture: Compound Banc's product is marketed as a high-yield digital account. Savings start compounding immediately at a 7% APY (annual percentage yield); savers can withdraw their money at any time without any fees or penalties. "No if and or buts about it," says the homepage.

• The product is aimed at very small investors: The minimum investment is just $10.

The catch: Compound Banc is neither a bank nor a brokerage, and its savings bonds, if you read its SEC filings, are characterized by "a high degree of risk." Accounts at Compound Banc are not insured by the FDIC, the SIPC, or any other government regulator.

• "We primarily lend to sub-prime real estate borrowers," notes Compound on page 7 of its offering circular.
• The company's co-founder and chief strategy officer, Yuvraj Tuli, tells Axios he can source healthy "first-lien secured mortgages" with a one-year maturity, and with a loan-to-value ratio of 60% or lower, yielding between 13% and 14%. Some of these he can buy on the secondary market; others Compound will originate itself.

How it works: If the mortgage investments fall in value, that doesn't affect the amount of money Compound owes to its bondholders, which will continue to compound at a 7% annual rate.

Between the lines: "There is no source for any kind of repayment here," says Saule Omarova, a law professor at Cornell who was nominated by President Biden to be America's top bank regulator. "You just hope to god there is no run and all the real estate assets are doing fine."

• If Compound Banc loses money on its subprime mortgage investments, it could become insolvent, owing more money to its bondholders than it owns in assets. Its most recent SEC filing shows total assets of just $20,642 as of June 30, 2022, although since then it says it raised $5 million in equity capital from an obscure Bahamas-based shop called 26 Capital.

"It's the least risky investment someone can make," according to Compound's Tuli, even though the official SEC offering circular says otherwise. In fact, the least risky investment someone can make would be to put money into one of the FDIC-insured savings accounts that Compound is comparing itself to.

• "They certainly are being misleading about the risks involved with this," according to Pat McCoy, a law professor at Boston College with an expertise in financial regulation. "It’s seductive. It’s so beautifully done, it’s so optimistic."

• The fact that Compound Banc has managed to go live without any real regulatory oversight — they say they have already issued some $1.5 million in bonds — demonstrates the limits of America's existing regulatory infrastructure.

The regulatory arbitrage
How is Compound Banc legal? Well, it might not be, according to experts Axios spoke to. (Both the FDIC and the CFPB declined to comment to Axios.) But the first thing Compound is trying to do is to walk a fine line between looking like a bank and being a bank.

The background: Since 1933, only banks have been allowed to accept deposits. But the law doesn't have a clear definition of what counts as a deposit — and since the rise of money-market funds, the financial-services industry has been pushing the limits of how close it can get to selling something that looks like a deposit without having to be regulated like a bank.

• Compound Banc claims that it is not accepting deposits — rather, it's selling bonds. "It’s a bond product, but the consumer experience is behaving like a traditional savings account," is how Compound investor Sahibjeet Kaur, of 26 Capital, put it to Axios.
• Besides, enforcing that particular law would fall under the purview of the Department of Justice, and "historically, DOJ has not been too keen to enforce the legal prohibition on deposit-taking," as Omarova tells Axios.

The Office of the Comptroller of the Currency, which regulates banks, responded to a query from Axios by saying simply that "the OCC does not regulate Compound Banc."

• In other words: Not our problem.

You can't call yourself a bank unless you're a bank. But can you call yourself a "banc"? Not really, says McCoy.

• In some states, that's explicitly forbidden, but in others, including Florida, where Compound is registered, the term can sometimes be used, if there's regulatory permission.
• That permission did come, from Russell Weigel III, the commissioner of Florida's Office of Financial Regulation. But in granting it, Weigel explicitly specified that "the company will not engage in business purporting to be a financial institution."
• What's more, even if Florida allows Compound's use of the word "banc," that doesn't mean federal regulators would be OK with it. "If the FDIC investigated, it would be very concerned about the impression generated by 'banc'," McCoy tells Axios.

Compound is selling up to $75 million in deposit-like bonds — the maximum allowed under Regulation A, a way for small companies to issue bonds without incurring the expense and scrutiny associated with a full public securities offering.

• "They’re playing this multilayered regulatory arbitrage game," says Omarova.

What's next: Compound doesn't intend to stop at $75 million. Kaur, the investor, tells Axios that as soon as Compound has issued its first $75 million in bonds, it will spin up a second $75 million issue, and so on. Eventually, he says, after two or three offerings, it might be more economical to do a public S-1 offering, since those aren't capped in size.

• In theory, the amount of money in Compound accounts could grow much faster than Compound's own assets.
• Even those customers who regularly check SEC filings will only find infrequent and out-of-date updates on how much Compound has in assets or how those assets are performing.

The two regulators who are best placed to scrutinize Compound Banc are the FDIC and the CFPB, both of whom declined to comment to Axios. For the time being, however, only the SEC has the obligation to scrutinize Compound.

• Both the FDIC and the CFPB have the authority to issue a temporary cease-and-desist order, says McCoy: "They could shut it down very quickly." The idea would be to stop the solicitation of investor funds, at least temporarily, while simultaneously putting out a press release warning customers about the risks involved.

Compound Banc's website "raises a number of significant questions that I suspect will quickly doom this scheme," says banking policy analyst Karen Petrou of Federal Financial Analytics.

• Petrou was one of two experts who used the word "Ponzi" in conversations with Axios. That's not necessarily because they think Compound Banc is a Ponzi, and more because they are concerned that its business model is prone to Ponzi-like death spirals like the one we saw at the now-bankrupt crypto exchange, FTX.
• Here's how that could happen: Compound Banc's liabilities continually grow at a rate of 7%, while its assets are tied up in volatile mortgage products. Customers have only infrequent glances into how much those mortgage products might be worth — much like FTX customers didn't have visibility into the asset side of FTX's balance sheet.
• So long as a firm isn't asked to give its customers' money back — meaning that its inflows exceed its outflows — it survives, even if it's insolvent. Only when customers collectively decide to withdraw their money, do they discover what is (or isn't) backing it.

Where it stands: As this newsletter went to press, only in very small print at the bottom of the Compound Banc homepage does the company say that its product isn't FDIC insured, even though higher up it explicitly compares its yields to the "FDIC National Average."

• The homepage does, however, lead with the yield on the bonds, expressed as an "APY." That's a regulated legal term under the federal Truth in Savings Act, which means the CFPB forces regulated banks to show their APYs on an apples-to-apples basis. Using that term therefore "buttresses the impression that this is a regulated bank savings product," according to McCoy.
• Products regulated under the Truth in Savings Act offer various consumer protections, none of which Compound seems to be offering.
• There's also nothing on the website that makes clear that the bonds are high-risk, beyond a tiny link to the official SEC offering circular. Indeed, Axios received one email from Compound with the subject line "Avoid Risk and Earn Big."
• Compound Banc COO Anoop Singh told Axios in a statement that "investors should be reviewing our extensive Risk Factors before making an investment."

The bottom line: It's incredibly easy, these days, to spin up a slick website that looks like that of a regulated financial institution. It's the job of regulators to make sure consumers aren't misled.'

MY COMMENT

I have no thoughts on the various......"ALLEGATIONS".....above. Much of this, if not all, appears to be legal.....or at least unregulated at the moment.

This is an important lesson to investors to NEVER invest without understanding what you are investing in and to NEVER invest without understanding an offering circular.

It is also a big lesson in the need for investors to do their due diligence when something seems to be an outsize return......for the category of product it seems to be. This "might" be a good investment for people that understand the product and wish to invest in this area......but.....too many people invest in products like this based on assumptions of what it is and ignorance.

 

The markets are slipping a bit at the moment....but.

Stock market news today: Stocks gain after back-to-back losses for S&P 500, Dow

https://finance.yahoo.com/news/stock-market-news-today-february-23-2023-122852056.html

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

"U.S. stocks scrambled firmly higher Thursday as Wall Street looked to rebound from four consecutive days of declines for the S&P 500 (^GSPC).

The benchmark U.S. equity index climbed 0.8%, while the Dow Jones Industrial Average (^DJI) added 120 points, or 0.4%. The technology-heavy Nasdaq Composite (^IXIC) advanced 1.1%.

A batch of economic data hit traders' desks before markets opened Thursday. The government's second estimate of fourth-quarter GDP was downwardly revised to 2.7% compared to 2.9% reported last month in the preliminary reading, reflecting weaker consumer spending and higher inflation figures in the final three months of 2022.

Meanwhile, filings for unemployment insurance fell last week to 192,000, the Labor Department said Thursday. Economists surveyed by Bloomberg expected jobless claims to come in at 200,000.

In individual stock moves, shares of NVIDIA Corporation (NVDA) rallied 12% after the chipmaker reported fourth quarter results late Wednesday that beat analyst estimates, even as gaming revenue nearly halved from last year. The company said it would partner with artificial-intelligence platforms amid a boom in interest for the technology, spurring optimism about its growth prospects.

Shares of Lucid Group (LCID) tanked nearly 13% after the electric vehicle maker's fourth-quarter earnings missed estimates, while a drop in preorders for its Air sedan signaled waning demand for its cars.

Alibaba (BABA) shares jumped 3.5% after the Chinese e-commerce giant unveiled better-than-expected quarterly results, benefitting from easing COVID-19 restrictions in the final three months of 2022.

Shares of Etsy (ETSY) were down more than 3% even after the online crafts marketplace reported revenue for the fourth quarter that topped Wall Street estimates, citing a boost from solid holiday shopping demand.

Meanwhile in the bond market, U.S. Treasury yields resumed their ascent, with the benchmark 10-year note topping 3.95% early Thursday.

On Wednesday, investors received a readout of minutes from the Federal Reserve's Jan. 31- Feb. 1 meeting that indicated officials were intent on proceeding with "ongoing increases" in interest rates to quell inflation. Investors are now expecting the federal funds rate to peak at 5.5%.

The majority of Federal Open Market Committee (FOMC) members supported this month's smaller 25-basis-point hike, but a few participants indicated a desire to lift rates by a heftier 50 basis points.

In upcoming meetings, "the case for switching back to 50 basis points is weak, in our view," Pantheon Macroeconomics Chief Economist Ian Shepherdson said in a note. "But if the early data for February — notably payrolls, retail sales, and the CPI — are not materially softer than in January, the compromise would be to forecast another couple of rate hikes beyond the December projections."

"We think the Fed has already done enough and needs to wait for the full effect of its actions to work through," Shepherdson said."

MY COMMENT

Even though the markets are UP at the moment....no doubt.....the Ten Year treasury yield is weighing on the averages.

At least we continue to have ZERO news that means anything to the markets. Just another day in the......"NORMAL"......markets.

 

NVIDIA is no doubt producing some of the good feelings in the market today.

Nvidia results show its growing lead in AI chip race

https://finance.yahoo.com/news/nvidia-results-show-growing-lead-125858336.html

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

"(Reuters) - As the artificial intelligence boom takes off, Nvidia Corp is expected to emerge as the biggest - though not the only - winner among chipmakers after years of focusing on the technology has made it a go-to supplier for tech firms.

AI has emerged as a bright spot for investments in the tech industry, whose slowing growth has led to widespread layoffs and a cutback on experimental bets.

The surge in interest helped Nvidia report better-than-expected quarterly earnings on Wednesday and it forecast sales above beat Wall Street expectations, in stark contrast to a projected loss and dividend cut from rival Intel Corp.

Nvidia's market valuation dwarfs that of Intel, AMD https://fingfx.thomsonreuters.com/gfx/buzz/byprlqlbkpe/MicrosoftTeams-image (9).png

Nvidia shares rose nearly 14% to $236.70 on Thursday. They have jumped more than 60% since the turn of the year, nearly three times the gain in the Philadelphia Semiconductor Index.

The company got its start in the graphics chip business for PCs by helping video games look more realistic, and then rode the cryptocurrency wave as its chips were used for mining. Now, the next push comes from generative AI.

Nvidia's surge Thursday has boosted its market value by more than $70 billion. That brings it to more than $580 billion, about five times that of Intel. It is the seventh-largest publicly traded U.S. firm.

The key to the company's success is that it controls about 80% of the market for graphic processing units (GPUs), which are specialized chips that provide the kind of computing power required for services such as Microsoft-backed OpenAI's wildly popular ChatGPT chatbot.

SPECIALIZED CHIPS

Graphics processing units are designed to handle the specific kind of math involved in AI computing very efficiently, while generic central processing units (CPUs) from Intel can handle a broader range of computing tasks with less efficiency.

AI is taking over the tech industry and, according to research firm Gartner, the share of specialized chips such as GPUs that are used in data centers is expected to rise to more than 15% by 2026 from less than 3% in 2020.

Advanced Micro Devices, whose shares also rose after Nvidia earnings on Wednesday, is the second-biggest player in the GPU industry, with a market share of roughly 20%.

"The two companies that are leading the AI revolution on the hardware and processing side are Nvidia and AMD and, in our opinion, these two companies are head and shoulders above everybody else," Piper Sandler analyst Harsh Kumar said.

Lisa Su-led AMD has made big investments in AI in recent years, including a series of chips designed to compete with Nvidia's fastest offerings. Intel holds a less than 1% share of the space.

Chipmakers set to reap gains from AI arms race https://www.reuters.com/graphics/AI-CHIPSNVIDIA/gdvzqdxnnpw/chart.png

"The enthusiasm around ChatGPT and the potential use case it unlocks likely represents an inflection point in adoption of AI," said Lei Qiu, a technology fund portfolio manager at AllianceBernstein, which has a 0.54% stake in Nvidia.

"While it is hard to pinpoint exactly how big AI is today as a percent of (Nvidia's) revenue, it has the potential to grow exponentially as large tech companies race to develop similar types of AI applications," Qiu said.

Nvidia's strength in the AI industry has also attracted the attention of venture capitalists and startups, which are investing billions of dollars and promising improvements such as lower electricity consumption.

None of them have so far made a big dent in Nvidia's business.

INTEL NO LONGER INSIDE

All of this is bad news for Intel, which is also shedding CPU market share to AMD in the data center and personal computer industries that it once dominated. The company now risks losing out on the next growth leg of the industry.

It has in recent months made efforts to sharpen focus on GPUs including a move in December to split its graphic chips unit into two: one focused on personal computers and the other working on data center and AI.

Still, analysts say the company has a long way to go before Intel can make a dent in the market.

"Intel has more designs it has built to try and penetrate the (AI) market ... but to date it's seen a disappointing amount of traction despite its plethora of solutions," Wedbush Securities analyst Matthew Bryson said."

MY COMMENT

I am glad that I own this stock in ALL the portfolios that I own or manage. ALL of them are set up exactly the same as my Portfolio Model. I just do the same thing over and over and over....as an investor and formerly as a business owner.

The key to the success of this company is of course their products......but.....the real key is their management. Superb management. The bottom line for any company is management. You will not find many great companies that have bad management.

I used to own INTEL in the old days.....the 1980's and 1990's. They had a good run.....but.....they have now squandered what they achieved back than. I put much of the blame on their management.

 

This is a good thing for investors.....at the moment.

US Fourth-Quarter GDP Revised Lower on Weaker Consumer Spending

https://finance.yahoo.com/news/us-fourth-quarter-gdp-revised-141546845.html

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

"(Bloomberg) -- US economic growth in the fourth quarter was weaker than previously estimated, reflecting a downward revision to consumer spending as the Federal Reserve’s preferred inflation figures were revised higher.

Inflation-adjusted gross domestic product, or the total value of all goods and services produced in the US, increased at a 2.7% annualized rate during the period, Commerce Department data showed Thursday. The figure compares with a previously reported 2.9% advance.

The details of the report point to an economy that was losing steam at the end of 2022. Stripping out trade, government spending, and inventories, a key gauge of underlying demand known as inflation-adjusted final sales to private domestic purchasers rose just 0.1%, the weakest since the start of the pandemic.

Household expenditures increased an annualized 1.4% in the final three months of 2022, restrained by a third-straight quarter of declines in spending on durable goods such as motor vehicles. Consumer spending was previously estimated as rising 2.1%.

While the rapid slowdown in personal spending in particular spurred concerns about the health American consumers, it also bolstered hopes that the economy was slowing in a way that could be consistent with a so-called soft landing.

Recent figures, however, point to a rebound in consumer spending at the start of 2023 and a startlingly strong job market highlighted by the lowest unemployment rate in more than 53 years. That, combined with upward revisions to fourth-quarter inflation, shows risks of more persistent price pressures.

The GDP data showed the personal consumption expenditures price index increased an annualized 3.7% in the fourth quarter, more than the 3.2% pace initially reported. The core measure that excludes food and energy rose an upwardly revised 4.3%.

Solid hiring against a backdrop of limited labor supply has driven up wage costs for companies and risks keeping inflation elevated. While the Fed has aggressively boosted interest rates to cool price pressures, raising the risk of recession, healthy employment growth is a big tailwind for the economy.

Separate figures Thursday showed initial applications for unemployment insurance unexpectedly declined to a three-week low.

While consumer spending was revised lower, business spending was firmer than first reported. Nonresidential fixed investment climbed an annualized 3.3% compared with an advance estimate of 0.7%, largely reflecting stronger outlays on structures and intellectual property.

Personal consumption is poised to be a bigger support for first-quarter growth. The latest Federal Reserve Bank of Atlanta’s GDPNow forecast, as of Feb. 16, sees 2.5% economic growth during the period. Inflation-adjusted spending data for January will be released Friday."

MY COMMENT

I see this as generally good news....but.....the data is definitely mixed with the inflation figure being revised upward. Some of these revisions appear to be pretty significant. My view continues to be that this sort of data is NOT very reliable. Luckily.....as a long term investor I DO NOT rely on this type of data.

You would think that with all of our current computing technology and data collection that we could put out basic reliable data of this sort. But.....no.....it appears that we are incompetent as usual.

 

"HERE IS MY PORTFOLIO.

I have no plans to sell anything or do anything. As a long term....fully invested all the time investor......I will do nothing in response to the current short term events and environment.

AS USUAL.........HERE is my current PORTFOLIO MODEL.

I am once again posting my PORTFOLIO MODEL. My initial criteria to start the process to consider a business are.......BIG CAP, AMERICAN, DIVIDEND PAYING, GREAT MANAGEMENT, ICONIC PRODUCT, WORLD WIDE LEADER IN THEIR FIELD, LONG TERM HORIZON, etc, etc, etc.

PORTFOLIO MODEL

"Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 59% of the total portfolio and the fund side at about 41% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing.

As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 10 stock portfolio. At the same time the funds double and triple up on my individual stock holdings............that I consider the BEST individual businesses in the WORLD.

STOCKS:

Alphabet Inc
Amazon
Apple
Costco
Home Depot
Honeywell
Microsoft
Nike
Nvidia
Tesla

MUTUAL FUNDS:

SP500 Index Fund
Fidelity Contra Fund

CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (72). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)"

MY COMMENT

This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my ten stock holdings there is MUCH doubling and tripling up on the stocks. THAT is INTENTIONAL. I strongly subscribe to the view of Buffett and some others that TOO MUCH diversification kills returns. I do NOT believe in the current diversification FAD that most people seem to now follow.......or think they are following. I DO NOT do bonds and think the current level of bonds held by younger investors.....those under age 50.....is extremely foolish.I DO NOT do market timing or Technical Analysis."

 

SO.....as the morning has progressed the DOW is now flirting with being in the RED. The SP500 and the NASDAQ have also backed off from earlier although they are still in the GREEN.

I blame the Ten Year Treasury yield....which even though it is currently down a bit today.....is up at 3.918%.