The Long Term Investor

Twenty years......Imagine being an investor like some of us that have 50+ years.

How the market has changed in the 20+ years I’ve covered it

https://www.cnn.com/2023/03/03/investing/investing-lessons

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

"New York CNN —
There have been a LOT of changes on Wall Street since I first joined CNN in November 2001.

The Dow was trading just below 10,000 at the time. It’s now a little above 33,000. And some of the companies that were still among that blue chip average are no longer in the Dow. Eastman Kodak (KODK) was a Dow stock. So were Alcoa (AA), GM (GM) and Philip Morris (PM).

Oil prices were hovering around $18 a barrel more than 21 years ago, an unimaginable level given its current price of about $78 — and it’s been even higher in recent years.

Amazon (AMZN) still was generating the majority of its revenue from the sale of books, CDs and DVDs. Google (GOOGL) was a young, privately held startup in late 2001 and Facebook didn’t exist. Nor did YouTube, Twitter, Snapchat (SNAP) or TikTok. Bitcoin and other cryptocurrencies were nearly a decade away from being created.

You get my point. The market landscape now is starkly different than it was two decades ago. That being said, I’d like to think that many rules of investing remain constant.

If I’ve learned anything in my nearly three decades as a financial journalist (I started my career just out of college in 1995 at the long-defunct Financial World magazine) it’s that “this time is different” is perhaps the biggest myth in investing. There are variations on that theme but, to quote Led Zeppelin, “the song remains the same.”

Today’s meme stocks may be popular with the Robinhood crowd for example, but before individual investors were touting the likes of GameStop (GME) and AMC (AMC) on Reddit (which was founded in 2005, by the way) individual investors chatted about hot tech stocks on message boards such as RagingBull.com, Silicon Investor and Yahoo Finance.

There always have been fads in tech, and momentum investing has moved markets for decades. Traders will always seek to capitalize on headlines. Heck, my first story for CNN – as a freelancer in October 2001 – was about small biotechs that were surging due to concerns about anthrax and other possible bioterror attacks in the wake of 9/11.

Over the years I’ve seen dot coms crash and rise again. I’ve written about B2B (aka business-to-business) software companies, cloud computing firms, IPOs and SPACs, and cannabis/pot stocks. There have been more flavors of the month in the stock market during my CNN career than at your local Baskin-Robbins.

Pay attention to prices

That’s why investing strategists say most people should continue to invest for the long haul and try to have a truly diversified portfolio. Hint: If you own big stakes in Tesla (TSLA) and Ford (F) and not much else, having exposure to both electric vehicles and gas guzzling cars doesn’t count as a diversified portfolio.

Still, experts also remind investors to not be afraid of taking some risks. It’s fine to have a lot of your money in S&P 500 ETFs and other funds that will track the broader market. But it’s also okay to channel your inner Warren Buffett and look for individual winners.

“Passive investing should be a core of your portfolio, but that doesn’t mean there’s not a place for actively picking stocks,” said Andrew Patterson, senior economist at Vanguard.

You may be unable to go through a lifetime completely avoiding stocks that totally implode, but if you also own big, long-time winners (think Buffett’s Berkshire Hathaway (BRKB), Walmart (WMT) and Microsoft (MSFT)) that can more than make up for any dogs in your portfolio.

“A few very good decisions can make the difference and make up for any duds,” said Bill Stone, chief investment officer with The Glenview Trust Company. “You have to have humility and accept you will make mistakes. But you have to let your winners win.”

This means looking for stocks that are on sale. Investors sometimes make the error of ignoring stocks that have been beaten up a bit for fear that they will never rebound. Stocks that get unfairly punished can wind up as great bargains.

“If you have a plan to get through the good times, it should be a plan to get you through more challenging times as well,” said Vanguard’s Patterson.

Cash is king

Along those lines, I wrote a story in January 2003 about Apple (AAPL). Many on Wall Street and Silicon Valley were writing it off as a niche maker of Mac computers and ignoring its newer iPod and iTunes digital music businesses.

I argued that Apple wasn’t getting enough credit for the tons of cash on its balance sheet and for its expansion into new growth areas. (The first iPhone was four years away.)

Apple’s stock was trading at 23 cents a share (adjusted for splits) at the time – yes, you read that right – and its market value was a trifling $5.4 billion. Apple shares are now worth more than $145 apiece and the company’s market cap is $2.3 trillion.

“Valuation always matters,” Stone said. “Don’t overpay.”

Another key takeaway for investors? Don’t sweat what you can’t control. Inflation jitters and worries about Federal Reserve rate hikes rocked the markets last year and have led to more volatility this year as well.

But it’s impossible to time the market. You will never pick exactly when a recession begins or ends or whether stocks are at a top or bottom.

“We still continue to believe that over long periods of time, stocks provide a reasonable hedge against inflation,” Patterson said. “Bonds are back, too, given where yields are. They provide diversification and income.”

So as I get set to leave CNN, the current market landscape may look a bit different now than it did when I first started. But investing for the long term is as savvy an idea in 2023 as it was at the beginning of this century."

MY COMMENT

What a ride it has been over the past twenty, thirty, fifty years for investors. BUT.....as pointed out here.....the game remains the same and what works and what does not work are STILL the same. Long term investing.....good. Let winners run......good. Passive investing and logical rational investing in superior stocks.....good. Market timing.....bad. Speculative trading....bad.

At least in my little world.

 

Sound familiar?

Four generations talk about their different investment strategies
We spoke with a member of Gen Z, Gen X, and the millennial and baby boom generations to learn how they invest and save money.

https://www.fastcompany.com/90854987/investment-strategies-gen-z-gen-x-boomer-millennial

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

"Right now, the stock market is sideways and it’s hard to know exactly what to do. Pull out and keep everything under a mattress? Stay the course and pray for better days?

Fast Company spoke with people from four different generations (Gen Z, millennial, Gen X, and baby boomer) to understand their investing strategies. Of course, one voice doesn’t represent a generation, but it can show how a particular life era—juxtaposed with different economic climates—can shape someone’s journey.

Despite their age and circumstantial differences, common trends emerged among the investors we spoke with: Hold steady, don’t worry too much about changes, and invest as much as you can.

The Beginner
“Alex,” 18
Location: Georgia
Occupation: High school student
Net worth: Under $25,000


My story: I’m still a high school student, and am also dual-enrolling in a few college courses. I have had two jobs that I’ve recently quit to focus on school. I worked at two different Chick-fil-A locations. If I were to sell every single thing I have to my name, it would amount to less than $25,000. The largest two factors are my whole bank account and my car.

I started investing last year, since that’s when I turned 18 and could buy stocks and whatnot legally. I bought my first stock hardly two days after my 18th. Not a whole stock though, about $5 worth of Procter & Gamble. Also, just this week I created a Roth IRA with Robinhood. I have $75 in there. It’s not a lot of money, but how many people can say they have invested for their retirement at 18? Not a lot, so I’d like to think I’m ahead of the game a little.

In the short-term, I want to graduate college without debt, and if I’m lucky, have some money in the bank to pay for life afterwards until I have a job lined up. In the long term, I want to not have to worry about retirement, and make sure I’m financially secure throughout my life.

Biggest lesson I’ve learned: Don’t be scared when you see your portfolio drop. The market has its ups and downs. When I first put some money into investing, it stayed still for a few weeks, then dropped like 10% or more. I’d lost a decent amount of money (for being poor in the first place) and was scared that I’d just thrown it all away. I got pretty stressed about it until my father gave me this piece of advice: “Don’t look at it.” And he was right. It was nothing to worry about, and a few days ago my account [gained] since then and I’m profiting. So really, you don’t have to check your portfolio every hour. You’ll be fine for the most part.

Advice to new investors: I’m not sure if I’m qualified to give advice, but the best I can do is to tell you to start now. It doesn’t matter how young or old, doesn’t matter the hour of the day, or how much money you have. Start investing for your future now, be ahead of the game.

The Dreamer
Nwanneka Onuekwusi, 35
Location: Washington, D.C.
Occupation: Management consultant
Net Worth: $900,000


My story: I went from a net worth of about $30,000 to $920,000. For most of my twenties, I didn’t think about money. I took pay cuts to work at jobs that I found interesting. Then I went to business school and a professor made us do an exercise where we listed what we want to do and what scares you. We had to write down ways to counteract our fears. I realized I was scared of an emergency like a family member getting sick. My net worth was about $20,000-$30,000. I wanted to save up a nest egg, so long-term I can do what I want to do. After business school, I didn’t want to earn less than $150,000.

I was an economics major undergrad; I always thought about investing, but I started in 2017 after business school, when I got a job that paid about $150,000. I read The Intelligent Investor and The Richest Man in Babylon. They were so helpful and underpinned my strategy.

I had a simple strategy of maxing out my retirement contributions and trying to save $5,000-$6,000 a month to invest in ETFs. I also invested my year-end bonus. This amounted to about $70,000-$120,000 between 2017 and 2021. I layered on more as I did more research and my income went up. I did REITs (real estate investment trusts), and angel investing with some classmates, which you can only do as an accredited investor (when your income is over $200,000, if you are single). I also invest in art through Masterwork, which buys famous art pieces and creates shares in [them], so the general public can invest.

Originally my goal was to make $1 million by the time I was 40, but I’m already at the $920,000 mark. I’m passionate about investing, especially as a woman of color. A lot of friends and family ask me for advice. I actually recently quit my job and am taking time off—I hope to write about personal finance at a blog I’ve created called Simplified Wallet.

Biggest lesson I’ve learned: Keep it simple! When I first started, I had so many different ETFs. Now I just have three. Automate deposits, set calendar reminders, and make it difficult to withdraw the money you’re investing.

Advice to new investors: Start from wherever you are; it’s okay if it’s just $100. A lot of places are trying to make it accessible. I used Fidelity: They have ETFs and mutual funds. You can’t go wrong with an ETF. You are betting on whole U.S. economy. Oh, and avoid high fees. At the very least, get a high-yield savings account. A lot of good banks have 3% interest.


The Zen Investor
“James,” 55
Location: Washington, D.C.
Industry: Advertising
Net worth: $2 million

My story: I was the first person in my family to graduate from college. I saw firsthand the impact on people’s lives when you don’t have resources, when you can’t work. My grandparents were the pension era and worked in the same company for 40 years. My grandmother lived another 30 years on the pension widow benefits. My parents started in a pension-based job and in the 1980s the rules changed to 401(k)s, and they were left to figure it out; it didn’t end well. They didn’t have the foundational knowledge to plan their own retirement. I realized that no one is going to take care of me and I needed to have enough resources, so I wouldn’t have to rely on other people.

I started investing when I got out of college—there was a matching program where you put in 5% of your salary. I had the benefit of success very early in my investing career. It was double digit growth. I started to get these statements where I’d saved $20,000 and it was worth $30,000 the next year. All I had to do was save and then it grew. I became really interested in investing and personal finance. I wonder if it would be different if I was 25 now and the market was down 25%? Would that change my approach and philosophy?

Today, I make about $225,000 a year from my job and I have a few side gigs: I sell rare books, rent my house on Airbnb, and help people sell things when they are downsizing. It makes about $10,000. That’s how I pay for travel, or if I need a little extra like when a family member had a medical emergency. I currently set aside 40% of my salary for investing. Half of my investments are in a 401(k) and SEP-IRA, 25% are in real estate, and 25% in brokerage. I meet with my financial adviser twice a year.

I usually check the markets once a day. If it’s up, I know I’m up. I use S&P as a benchmark. Once a month I’ll go into my spreadsheet and update numbers and get a sense of what’s happening big picture.

I like my job. I plan to stay put for now, but I might move into a preretirement phase where I take my skills to a local nonprofit that can’t pay as much and is more aligned with my personal values and desire to generate meaningful impact. I consider it a glide path to retirement where I just need to bring in enough money to pay my existing lifestyle because my savings will be set; I’m about five years away.

Biggest lesson I’ve learned: I think of investing as a bar of soap. The more you touch it, the smaller it gets. I keep socking money into low-cost mutual funds and it grows. Warren Buffett said the stock market is a device to transfer money from the impatient to the patient.

Advice to others: You can do it if you are patient and smart. Live below your means, be frugal, and invest over time. Don’t focus on whether it’s up or down. Just trust the process. Oh, and read The Millionaire Next Door.

The Founder
Bruce Epstein, 59
Location: Florida
Occupation: Founder of a healthcare communications company
Net worth: “Less than Warren Buffett”

My story: We had no money. None. My father was a shoe salesman. I wanted to make sure I had money. I knew what it was like not to have any; it was important to me. I started investing in high school. I bought a stock and sold it three days later. It didn’t move. I couldn’t figure out why.

I went to Rutgers for pharmacy school. After that, I went to work as a sales representative for a pharmaceutical company. And at that time, I knew I wanted to get more education, so I got my MBA at NYU at night, while still working my job. I got promoted to market research from sales. In 2005, I started my own company.

After I got my first full-time job, I started investing about 15% of my salary. My goal was to beat the S&P 500, which I now know was unrealistic. I started making good money in 2001. I had a few hundred thousand in my 401(k), some money in the bank, and owned my own house, but didn’t feel secure. I started making really good money in 2006, which changed my perspective on my family’s future, and then the business took off in 2010.

I started investing half of my posttax income. My goal became wanting to retire, but I realized I actually love working to help myself and others around me. I’ve taught at Rutgers since 2005. I stopped last year, but now teach at six different pharmacy schools. I want pharmacy PhDs to know they have options beyond retail or hospital pharmacy.

Now my goal is to create a family real estate legacy and a charitable legacy focused on educating the underprivileged. Because I’m comfortable, I’ve changed my strategy into growth mixed with wealth preservation. Right now, my portfolio is 60% stocks, 20% real estate, and 20% munis. Real estate has relatively low returns at first, but if you can afford to put up the money, it becomes a real cash cow in 10 or 15 years, and the tax advantages are great, especially for transferring to your family once you’ve died. But I’ve learned to manage it myself—it saves a huge amount of time and energy. I got my real estate license last week.

I don’t feel comfortable sharing my net worth. I’ve learned all I need to do is let people know I’m comfortable, so if I bring them a nice bottle of wine, they don’t feel like they have to reciprocate.

Biggest lesson I’ve learned: Don’t try to beat the S&P 500. There are a lot of people who do this full-time and they were better than I was. I tried to time the market. I’d pull money out at the wrong times. I lost half my gains. Over 10-15 years, I gained 4%, which is better than a CD but about half as well as I could have done.

Advice to others: If you are working for someone, put your money in Fidelity or Vanguard. Let it sit there and don’t look at it, or look at it once a year. The only thing you should change is the amount you put in it over time: You should get between 6-8%. Once you are ahead of the trend of what you need to retire comfortably, consider investing in rental real estate close to where you live, work, or plan to retire, too.

MY COMMENT

More members of the great silent majority of investors. The lessons learned are always the same. No matter your age the path to wealth is always the same. Invest for the long term. Ignore the day to day events and swings. Put up as much money as you can...every month. Start young. Have realistic and rational goals. Be persistent and focused on a lifetime of investing.

 

Here is a perfect example of the financial media at work......distorting the facts.....subtly.....and probably unintentionally. I suspect the reporter is not even aware of this.

3 big things in investing you might have missed this week

https://finance.yahoo.com/news/3-bi...ou-might-have-missed-this-week-120033007.html

MY COMMENT

Read this if you wish or are interested in the three areas discussed.....Salesforce, retail inventory, and TESLA Investor Day. This seems like a routine financial article with the usual reporter opinions thrown in.

What I find interesting is this........ little.....line in the TESLA section of the article:

"Tesla shares finished the week down about 3% compared to a slight gain for the S&P 500."

Here we have a little statement in the article that is included as a BASIC FACT. BUT....think about it. Was there a "slight gain" for the SP500 this week? HELL NO.

The SP500 this week was UP by.....drum roll please.....+1.90% That is a HUGE gain for only one week.

I see this sort of distortion of the facts all the time. This sort of off the cuff......wrong....statement in articles is common. On a subconscious level this eats away at investing reality. On a conscious level this sort of lazy or incompetent stuff....makes me wonder about the level of competence of financial reporters. I doubt that this is intentional.....but.....it makes me wonder how a financial and investing writer can be so wrong about something this basic.

 

I agree that this will....."probably"....happen soon.

A Costco membership price hike is coming soon, analyst says
"It's a question of when, not-if."

https://finance.yahoo.com/news/a-co...ke-is-coming-soon-analyst-says-195733525.html

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

"Attention shoppers: Now may be the time to purchase a Costco membership.

UBS US Hardline & Broadline and Food Retail Analyst Michael Lasser told Yahoo Finance (video above) that the company likely sees the current moment as "an opportune time to charge a little bit more for the members because we're delivering so much value to them.

UBS holds Buy rating on shares of Costco and $575.00 price target.

"I suspect that they'll announce it later this spring and implement it early this summer," Lasser said. "What they find is that as they get the profit infusion from this fee, because it really is pure profit, that they take a portion of that and reinvest it back in lower prices. And that helps to drive the model. It helps to differentiate Costco versus other retailers out there."

Costco saw same-store sales increase 6.8% last quarter, primarily driven by consumer shifts to essentials like fresh foods and away from discretionary items, and announced that 92% of U.S. members were renewing. Membership fees brought in $1.03 billion last quarter, up 6.2% year over year.

Asked about raising prices in the latest earnings call, Costco CFO Richard Galanti reiterated: "It's a question of when, not-if." He also explained how the company leverages "wow items" like the $4.99 rotisserie chicken to keep Coscto members coming back.

"If you go do the homework on what the cost of processing and selling a rotisserie chicken, our $4.99 price... is an investment in low prices to drive membership, to drive sales in a big way," Galanti explained.

In December, longtime Costco CEO Craig Jelinek told Yahoo Finance that the retailer had "no plans to change" the prices of its $1.50 hot dog and soda combo.

Costco last raised membership prices — a Costco Gold Star membership costs $60 per year and an Executive Membership goes for $120 — in June 2017. Lasser noted that the company raises prices every 5 years and seven months on average, which suggest the next hike is imminent.

"Costco offers a very good deal for the consumer," the anayst said. "You pay to shop there. And the reason why you pay to shop there is because you find prices that are as good or better than anywhere else.""

MY COMMENT

Costco has about 123MILLION members. So for every dollar of membership fee increase....that is $123MILLION dollars. Costco has a history of raising the membership fee by $5 each time. Going back to 1983 there have been SEVEN fee hikes....each one $5. So it is likely they will stick to their long term habit and raise the fee by $5 once again.

That will generate approximately $615MILLION dollars for the company. ALL of which is basically free money to the bottom line.

Seems like a no brainier to own this Company.......the greatest warehouse retailer in the world.

 

I talk about owning the most ICONIC, BIG CAP, companies in the world. Here is where each of my ten stocks ranks in the SP500 by weight:

APPLE 1.
MICROSOFT 2.
AMAZON 3.
NVIDIA 4.
GOOGLE 6.
TESLA 7.
HOME DEPOT 17.
COSTCO 28.
NIKE 44.
HONEYWELL 55.

This is my primary investing portfolio theme........DOMINANT, BIG CAP, WORLD WIDE MARKETING, ICONIC PRODUCT, companies.

Other stocks in the top 25 that I will NOT EVER own....because.....I do not invest in drug companies, insurance companies, banks, auto companies, oil companies, health care companies,......EXXON, UNITED HEALTH, JP MORGAN, JOHNSON & JOHNSON, VISA, MASTER CARD, VISA, CHEVRON, ABBVIE, MERCK, ELI LILLY, BANK AMERICA.

That leaves the following companies that are in the top 25.....that I "COULD" invest in....but choose not to at this moment......BERKSHIRE HATHAWAY, META, PROCTOR & GAMBLE, BROADCOM, PEPSI, AND COKE. Of these I will NOT EVER invest in META.

I have owned COKE, PEPSI, and PROCTOR & GAMBLE in the past as part of my BIG CAP portfolio.

 

The week ahead.

Jobs report, Powell testifies: What to know this week

https://finance.yahoo.com/news/jobs-report-powell-testifies-what-to-know-this-week-142816879.html

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

"The state of the U.S. labor market and the outlook for the Federal Reserve will be the primary drivers for financial markets in the week ahead.

On Friday, the February jobs report is expected to show 200,000 jobs were created last month, a slowdown in the pace of job growth from January's unexpectedly strong reading that showed 517,000 jobs were added to the economy in the year's first month.

The unemployment rate is expected to remain steady at 3.4%, the lowest since 1969, according to data from Trading Economics.

Economists at Bank of America, led by Michael Gapen, wrote in a note to clients Friday that they "suspect some of [January's strong report] was noise and related to unseasonably warm weather." The firm estimates job gains were closer to 350,000 in January, a number still far stronger than expected but close to the average monthly job gains seen over the last six months.

Wage growth will also be a key focus of the jobs report, with average hourly earnings expected to rise 0.3% over the prior month and 4.7% over last year, with the annual figure an acceleration from the 4.4% gain seen last month.

Elsewhere on the economic calendar, Wednesday will hold the week's key data with ADP's monthly read on private payroll growth, the January report on job openings from the BLS, and the Fed's Beige Book all set for release.

A key question for investors in the coming weeks will be whether data from February corroborate the view that the U.S. economy accelerated in the early part of 2023 or whether strong reports prove to be one-offs.

Gapen's team, for its part, has consistently noted that elevated cost of living adjustments for Social Security beneficiaries — in addition to the aforementioned weather impacts on the labor market — likely boosted spending in January.

Investors will also have an eye on Washington, D.C. this coming Tuesday and Wednesday as Federal Reserve Chair Jerome Powell will speak before the Senate Banking Committee and House Financial Services Committee on Tuesday and Wednesday morning, respectively.

In the Fed's semiannual monetary policy report to Congress published Friday, the central bank affirmed its commitment to keeping rates elevated in an effort to bring down inflation, writing: "The Federal Reserve is acutely aware that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials. The Committee is strongly committed to returning inflation to its 2 percent objective."

The Fed also included a chart showing the three main inflation measures — goods inflation, services inflation, and services inflation excluding housing — that officials have emphasized in recent months.


The Federal Reserve's three key inflation measures show goods inflation slowing, housing inflation still rising, and "core" inflation remaining stubbornly high. (Source: Federal Reserve)
"Core services price inflation remains elevated," the central bank wrote in its report. Noting that housing services prices have risen rapidly, the Fed wrote: "Because prices for housing services measure the rents paid by all tenants (and the equivalent rent implicitly paid by all homeowners)—including those whose leases have not yet come up for renewal—they tend to adjust slowly to changes in rental market conditions and should therefore be expected to decelerate over the year ahead."

The central bank continued: "In contrast, prices for other core services—a broad group that includes services such as travel and dining, financial services, and car repair—rose 4.7 percent over the 12 months ending in January and have not yet shown clear signs of slowing. Some softening of labor market conditions will likely be required for core services price inflation to abate."

On the earnings side, results from Ulta Beauty (ULTA), Dick's Sporting Goods (DKS), and BJ's Wholesale (BJ) will be highlights with investor focus remaining on the retail sector.

Last week, all three major averages rallied with the Nasdaq pacing gains, rising nearly 3% while the Dow and S&P 500 both logged weekly gains just shy of 2%. This coming as the 10-year Treasury note reached a four-month high during the week, eventually settling just below the 4% level as investors continue to brace for more rate hikes from the Fed.

Overall, the events this week should inform investors about the Fed's ongoing effort to raise interest rates in an effort to tamp down inflation.

"The February employment report and Fed Chair Jerome Powell’s testimony to Congress next week should give a clearer indication of whether recent talk of interest rates going 'higher for longer' is justified," wrote Andrew Hunter, deputy chief U.S. economist at Capital Economics."

MY COMMENT

A particularly meaningless week this coming week. the media will HYPE it like crazy....but all the economic data is simply meaningless to more than a day or two. As to the FED......who cares......we all know from the past ONE YEAR of the constant talk what will be said.

I do think it is interesting and instructive here.....that the Bank of America economist quoted believes that the real jobs number for January was REALLY about 350,000. What is CRAZY is that means the number reported.......517,000 jobs......was WRONG by a WHOPPING......167,000 jobs. This shows how worthless all the economic data really is. WHAT A JOKE. You cant trust any of these government numbers.

 

I tend to agree.....Advocate.

BUT....on the other hand with all the attention we give these numbers and how we rely on this data.......it is ridiculous to see that variance. Either the numbers are accurate.....or....they are worthless. Yes.....the media HYPES this stuff every day. BUT....at the same time....GOVERNMENT.....is relying on........and using...... this CRAPPY data to impose things on people.

 

I hate to EMPHASIZE TSLA........since It is my smallest holding....but this is a classic business story of using pricing power and industry dominance to increase market share.

Tesla Slashes Model S and X Prices for the Second Time This Year

https://finance.yahoo.com/news/tesla-slashes-prices-model-model-052419668.html

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

"(Bloomberg) -- Tesla Inc. reduced prices of its more expensive models again, days after Elon Musk said cuts earlier this year had piqued interest in the company’s electric vehicles.

The Model S and X now start at $89,990 and $99,990 in the US, down a respective 5.3% and 9.1%, according to Tesla’s website. The company lowered prices of the higher-performance Plaid versions of each vehicle by 4.3% and 8.3%.

At $109,990, Plaid iterations of the S and X now cost $26,000 and $29,000 less than they did in early January.

Musk said last week that desire to own Teslas was “indistinguishable from infinite,” and that demand will “go crazy” as the company makes its cars more affordable. Reducing prices of S and the X models again suggests those vehicles may have gotten less of a boost from cuts the company made across its lineup seven weeks ago.

“We found that even small changes in the price have a big effect on demand, very big,” Musk said during Tesla’s March 1 investor day.

Tesla shares rose 0.5% as of 6 a.m. New York time Monday, before the start of regular trading. The stock has climbed 61% this year after plunging 65% in 2022.

Tesla’s dynamic pricing is unique in the automotive world, where manufacturers typically only make changes to what they suggest their retailers charge from one model year to the next. Reductions to the Model 3 and Y in January made those vehicles cheaper relative to the average price of a new vehicle in the US than ever before.

The changes to the 3 and Y were at least in part driven by Tesla wanting those models to qualify for tax credits made available by the Inflation Reduction Act. After the Biden administration changed how it distinguished between passenger cars and sport utility vehicles in early February, thereby raising the price limit for Model Ys to be eligibile for credits, Tesla bumped prices back up.

MY COMMENT

CLASSIC....business strategy.

 

I just HATE the trading mentality that is pushed by the brokerages, the big banks, the news media and many in the investing community. Fortunately most people IGNORE it and continue to be long term investors.....at least in their 401K and other accounts that really matter.

I just read a little article that ended with the common phrase......."HAPPY TRADING".

SURE.....this little thread.....to the extent I can find articles....focuses on long term investing. BUT....the dominant story-line everywhere is............"trading".

BUYER BEWARE.

 

As I sit here shuffling around the financial sites on the internet.....I see that futures are UP and the Ten Year Yield is down at 3.917%. A good combination to start the day when the markets open in about 17 minutes.

 

As to the above:

Treasury yields fall as investors prepare for key economic data, Fed Chair Powell comments

https://www.cnbc.com/2023/03/06/us-...-key-economic-data-fed-chairman-comments.html

 

I just checked my account.....a little early today. I have a nice gain to start the day.....a good beginning. Seven stocks UP and three DOWN. My DOWN stocks today are.....NKE, TSLA, and NVDA. My best winners today are......AAPL + 2.3% and COST +1.22%.

We need to build from here to the close. We are having a nice little rally over the past 4-5 market days. It is nice that the FED will not be doeing anything till the end of March. At that point I expect another rate hike of 0.25%. The good news is we are looking at about ONLY 2-3 more hikes....totaling about 0.75%. The impact of those hikes on actual business results.....ZERO.

We will soon be done with all the......"psychological".....trauma of the FED that the markets have had to endure for the past year or two. I am hearing and seeing more and more people in the media complaining about the constant FED TALKING and the constant attempts by the FED to trash the markets. People are tired of it. I have no problem with the FED doing their job and raising rates.....but......get off everyone's back with the constant NEGATIVITY and EGO driven media appearances.

COURAGE.....ENDURE.

 

When you think back to what we have all ENDURED over the past 2+ years.......it is easy to get caught up in the negative thinking. BUT.....if you look at the FACTS....it is "all good" as usual for investors that simply ignore the short term and all the drama. A quick look at the SP500 for the past....four years.....shows the following:

2019 +31.44%
2020 +18.39%
2021 +28.99%
2022 (-18.11%)

I would call four years......a long term time period.....although at the bottom end of the long term range. Over this past four years the SP500 has significantly outperformed to the positive side of the historic range. In REALITY we have been in a time period of VERY nice gains over the past four years......even though.....your brain will try to tell you a different story.

YES....more confirmation of the POWER of simple SP500 Index based investing.

 

HERE.....is some good news because of inflation.

Inflation boosted the 2023 federal income tax brackets. Here’s how your taxes may compare to 2022

https://www.cnbc.com/2023/03/06/inflation-boosted-the-2023-federal-income-tax-brackets.html

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

"Key Points

• The IRS makes annual inflation adjustments, including changes to the federal income tax brackets, standard deduction and more.
• Based on soaring prices, the agency boosted the income thresholds for each bracket for 2023, applying to returns filed in 2024.
• “This year’s annual adjustments are more significant than usual,” said Mark Steber, chief tax information officer at Jackson Hewitt.

After a year of soaring prices, the IRS made annual inflation adjustments for dozens of tax provisions, including the federal income tax brackets for 2023, which may affect next year’s taxes, experts say.

While the rates didn’t change, the brackets show the federal income taxes you’ll owe on each portion of your taxable income, which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

“This year’s annual adjustments are more significant than usual,” said Mark Steber, chief tax information officer at Jackson Hewitt, noting that “record-setting high inflation” contributed to the change.

Steber said you’re likely to notice a difference on next year’s tax return.

The goal of yearly inflation adjustments is to offset “tax rate bracket creep,” he said, which happens when you owe more income taxes after wage increases without economic benefit due to inflation.

How the 2023 federal income tax brackets changed

There was roughly a 7% change in the federal income tax brackets from 2022 to 2023, said Kyle Pomerleau, senior fellow and federal tax expert with the American Enterprise Institute.

Marginal tax brackets for tax year 2023, married filing jointly
The table shows the income brackets for married couples filing jointly for the 2023 tax year.
Table with 2 columns and 7 rows. Currently displaying rows 1 to 7.

$22,000 or less 10% of the taxable income
$22,001 to $89,450 $2,200 plus 12% of amount over $22,000
$89,451 to $190,750 $10,294 plus 22% of amount over $89,450
$190,751 to $364,200 $32,580 plus 24% of amount over $190,750
$364,201 to $462,500 $74,208 plus 32% of amount over $364,200
$462,501 to $693,750 $105,664 plus 35% of amount over $462,500
$693,751 or more $186,601.50 plus 37% of amount over $693,750


Marginal tax brackets for tax year 2023, single individuals
The table shows the income brackets for single individuals for the 2023 tax year.
Table with 2 columns and 7 rows. Currently displaying rows 1 to 7.

$11,000 or less 10% of the taxable income
$11,001 to $44,725 $1,100 plus 12% of amount over $11,000
$44,726 to $95,375 $5,147 plus 22% of amount over $44,725
$95,376 to $182,100 $16,290 plus 24% of amount over $95,375
$182,101 to $231,250 $37,104 plus 32% of amount over $182,100
$231,251 to $578,125 $52,832 plus 35% of amount over $231,250
$578,126 or more $174,238.25 plus 37% of amount over $578,125
Table: Gabriel Cortes / CNBC Source: IRS

How other tax provisions changed for 2023

The standard deduction also increased by nearly 7% for 2023, rising to $27,700 for married couples filing jointly, up from $25,900 in 2022. Single filers may claim $13,850, an increase from $12,950.

With roughly 90% of Americans claiming the standard deduction rather than itemized deductions, the change may have a “large impact on taxpayers’ bottom line in 2023,” Steber said.

There were also boosts for dozens of other tax provisions, including the 401(k) and individual retirement account contribution limits, federal estate tax exemptions and more.

Of course, the impact of these shifts may vary by individual. “Each taxpayer situation is unique and any changes or adjustments can impact taxpayers very differently, depending on their facts and circumstances,” Steber said.

“Overall, it can be good for some, but not as favorable to others,” he added.

How to prepare for 2023 tax bracket changes

With tax law changes going into effect and others being proposed, 2023 may be “another year for the record books in terms of tax complexity and tax refund volatility,” Steber said.

To prepare, he urges taxpayers to “pay close attention to their taxes throughout the year,” including a mid-year check-up and another in December to avoid “refund shock” or a possible surprise balance at tax time.

“That was a larger increase than usual,” he said. “And that is because inflation has been higher than usual,” explaining that inflation was “very modest” the decade prior to the pandemic."

MY COMMENT

Lower taxes is always good news. In addition....if we see inflation staying high for July, August and September....we could see another good year of Social Security cost of living increase. We will not see as much as this year.....but....we have a shot at an increase of 4-6%.

 

For me today.....5 stocks UP and 5 stocks DOWN. BUT....I did have a nice but moderate gain overall. I also got in a nice beat today on the SP500 by 0.39%.

Basically a "nothing day" for the markets. No real news.....and....the markets were held back today by the Powell testimony to happen this Tuesday and Wednesday.

I dont know why anyone has any expectations regarding the testimony. He is not going to say anything we have not already heard at least a thousand times over the past 9 months.

I guess all the short term traders are hoping for some misstatement or blooper that they can hype in the media to trade from for a day or two.

 

The day in a nutshell.

Stock market news today: Stocks pare gains, finish mixed as Wall Street braces for busy week

https://finance.yahoo.com/news/stock-market-news-live-updates-march-6-2023-123642397.html

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

"U.S. stocks lost steam Monday afternoon, after rallying earlier in the session, kicking off a mixed tone to the start of a busy week.

The S&P 500 (^GSPC) ended the session near the flatline, while the Dow Jones Industrial Average (^DJI) increased 0.1%. The technology-heavy Nasdaq Composite (^IXIC) edged down 0.1%, reversing its gains from earlier in the trading session.

The yield on the benchmark 10-year U.S. Treasury note hovered near 4% Monday afternoon, before settling at 3.98%. Crude oil traded higher, with U.S. benchmark WTI up at $80.55 a barrel. The dollar index moved lower trading at $104.34.

U.S. stocks gained on Friday to close out a volatile week, while bond yields pulled back from their recent highs. The three major indexes rose for the week, with the Dow Jones adding 1.7%, the S&P 500 closing 1.9% higher, and the Nasdaq gaining 2.6%. The yield on the benchmark 10-year Treasury settled back below the key 4% level, and the two-year yield fell to 4.86%. Economic data released on Friday showed the services sector grew in February.

This week, Wall Street will be paying close attention to the jobs report out Friday. The February jobs report is expected to show 215,000 new jobs have been added to the economy, according to economist estimates, a slower pace from January’s blowout number of 517,000 job additions.

The unemployment rate is expected to hold steady at 3.4%. Another key point from the report will be wage growth, with a 0.3% month-to-month bump in average hourly earnings anticipated and 4.7% over the last year.

Economists at Bank of America, led by Michael Gapen, believe a deceleration from January will be tied largely to weather shifts and a general mean-reverting nature of payrolls. "Typically, when payroll growth records a sizable increase or decrease, we see a reversal in the following month," the firm noted.

Also, investors will be keeping an eye on Federal Reserve Chair Jerome Powell's two-day biannual monetary policy testimony on Capitol Hill, which begins Tuesday.

Other highlights this week include ADP’s monthly read on private payroll growth, January’s report on job openings from the Bureau of Labor Statistics, and the Fed’s Beige Book.

In single stock moves, Apple (AAPL) shares gained 2% on Monday as Goldman Sachs analyst Michael Ng initiated coverage of Apple with a buy rating and a price target of $199. Ng noted Apple's success in hardware design and brand loyalty has led to a growing installed base of users that provide visibility into revenue growth. And Apple's valuation is attractive relative to its historical multiple and to peers.

Ciena (CIEN) shares jumped 4% Monday after the company posted better than expected results that topped analysts expectations amid strong demand in its networking platforms business.

Shares of BridgeBio Pharma (BBIO) surged more than 50% after the company topped Wall Street's expectations in a study of children with achondroplasia, a genetic condition that slows bone growth.

Snap (SNAP) shares climbed 9% after the social media company started kicking off dozens of children in Britain off its platform each month compared to their rival TikTok that has blocked tens of thousands underage accounts.

Spirit Airlines (SAVE) shares tanked nearly 9% following reports that JetBlue Airways is bracing for turbulence from the Justice Department as it tries to block the airline's planned takeover of Spirit Airlines in the coming days, The Wall Street Journal reported.

On the earnings front, Dick's Sporting Goods (DKS), Oracle (ORCL) and BJ's Wholesale (BJ) are set to report results this week."

MY COMMENT

Actually a very dull and boring week on tap......that is probably a good thing. Nothing new is going to be said by Powell. If the markets want to FREAK OUT......they will just have to make something up.

 

Here is a preliminary take on Powell this week.

Fed’s Powell heads to Capitol Hill this week, and he’s going to have his hands full

https://www.cnbc.com/2023/03/06/fed...-capitol-hill-and-hes-got-his-hands-full.html

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

"Key Points

• Federal Reserve Chairman Jerome Powell appears before Congress this week as part of semiannual testimony on monetary policy.
• Democratic legislators in particular have been worried that the Powell Fed risks dragging down the economy with its determination to fight inflation.
• Markets also have been torn between wanting the Fed to bring down inflation and worried that it will go overboard.

Federal Reserve Chairman Jerome Powell appears before Congress with a tall task: Convince legislators that he’s committed to bringing down inflation while not pulling down the rest of the economy at the same time.

Markets have been on tenterhooks wondering whether he can pull it off. Sentiment in recent days has been more optimistic, but that can swing the other way in a hurry should the central bank leader stumble this week during his semiannual testimony on monetary policy.

“He has to thread the needle here with two messages. One of them is reiterating some of the comments he has made that there has been some progress on inflation,” said Robert Teeter, Silvercrest Asset Management’s head of investment policy and strategy.

“The second thing is being really persistent in terms of the outlook for rates remaining high. He’ll probably reiterate the message that rates are staying elevated for some time until inflation is clearly solved,” Teeter added.

Should he take that stance, he’s likely to face some heat, first from the Senate Banking Committee on Tuesday followed by the House Financial Services Committee on Wednesday.

Democratic legislators in particular have been worried that the Powell Fed risks dragging down the economy, and in particular those at the lower end of the wealth scale, with its determination to fight inflation.

Slow out of the blocks

The Fed has raised its benchmark interest rate eight times over the past year, most recently a quarter percentage point increase early last month that took the overnight borrowing rate to a target range of 4.5%-4.75%.

Markets also have been torn between wanting the Fed to bring down inflation and worried that it will go overboard. The central bank’s slow start in tackling the rising cost of living has intensified fears that there’s virtually no way it can bring down prices without causing at least a modest recession.

“Inflation is a pernicious problem. It was made worse by the Fed not recognizing it in 2021,” said Komal Sri-Kumar, president of Sri-Kumar Global Strategies.

Sri-Kumar thinks the Fed should have attacked sooner and more aggressively — for instance, with a 1.25 percentage point hike back in September 2022 when inflation as measured by the consumer price index was running at an 8.2% annual rate. Instead, the Fed in December began reducing the size of its rate hikes.

“I don’t believe in this no-landing scenario,” Sri-Kumar said, referring to a theory that the economy will see neither a “hard landing,” considered as a steep recession, nor a “soft landing,” which would be a shallower downturn.

“Yes, the economy is strong. But that doesn’t mean you’re going to glide by with no recession at all,” he said. “If you’re going to have a no-landing scenario, then you’re going to accept 5% inflation, and that’s politically unacceptable. He has to work on bringing inflation down, and because the economy is so strong it’s going to get delayed. But the more delay you have in recession, the deeper it’s going to be.”

‘Ongoing increases’ ahead

For his part, Powell will have to find a landing spot between the competing views on policy.

A monetary policy report to Congress the Fed released Friday that serves as an opener for Powell’s testimony repeated oft-used language that policymakers expect “ongoing increases” in rates.

The chair likely “will strike a tone that is both determined and measured,” Krishna Guha, head of global policy and central bank strategy at Evercore ISI, said in a client note. Powell will note the “resilience of the real economy” while cautioning that the inflation data has turned higher and the road to taming it “will be lengthy and bumpy.”

However, Guha said that Powell is unlikely to tee up the half-point, or 50 basis point, rate hike later this month that some investors fear. Market pricing on Monday pointed to about a 31% probability for the larger move, according to CME Group data.

“We think the Fed hikes 50bp in March only if inflation expectations, wages, and services inflation reaccelerate dangerously higher and/or incoming data is so strong the median peak rate ends up going up 50,” Guha wrote. “The Fed cannot end a meeting further from its destination than it was before the meeting started.”

Interpreting the data will be tricky, though, going forward.

Headline inflation actually could show a precipitous decline in March as a pop in energy prices last year around this time distorts year-over-year comparisons. The Cleveland Fed’s tracker shows all-item inflation falling from 6.2% in February to 5.4% in March. However, core inflation, excluding food and energy, is projected to increase to 5.7% from 5.5%.

Guha said it’s likely Powell could guide the Fed’s endpoint for rate hikes — the “terminal” rate — up to a 5.25%-5.5% range, or about a quarter point higher than anticipated in December’s economic projections from policymakers."

MY COMMENT

Here you go.....the reality will happen tomorrow and Wednesday. As to this event............WHATEVER.

 

This one is for Emmett. He mentioned a recent outsourcing at his company. THIS.....is the future of many, many, jobs here in the USA. We are just seeing the tip of the iceberg at this time on this issue.

Boeing is cutting 2,000 HR and finance jobs, outsourcing some to India

https://www.cnn.com/2023/02/07/business/boeing-job-cuts/index.html

"Some of work conducted by the staff being let go will be contracted out to Tata Consulting Services in Bengaluru, India,"

MY COMMENT

From what I see in other sources is that 700 jobs in HR and FINANCE are being outsourced to India.

As this stuff gains speed over coming years.....it will HOLLOW OUT.......our ability to manufacture, manage, and control our businesses.....it will snowball from here.

We have recently seen many industries that are at the mercy of China and products or components being produced there.....baby formula, medicines and antibiotics, various chemicals, most of our tech, nearly anything we buy online, etc, etc, etc.

 

As to the above.....from a "PURE" business standpoint......it is a no-brainer.

No withholding, no Social Security employer contribution, no 401k match, no medical/disability or other benefits, much lower wages, no training or other employee costs, no vacation or other holiday pay, no benefits like family leave, no worry about government regulations, etc, etc, etc.

It is a miracle that this stuff is not happening quicker and is not further along......but at this point....I see it as inevitable. The perfect storm of tech, AI, and remote work.....plus.....numerous poor countries around the world with a willing and able work force.