I imagine so. I give "advisors" a hard time on here sometimes, but some folks need to have somebody to reassure them and that is not a bad thing. There are also some that help with retirement type stuff and other life plans as one goes along. There are some out there that do a good job, so I shouldn't paint them all with a broad brush so to speak. Investors just need to study and read the fine print and research any individual they might look into. Heck, when I first started out many years ago I began with an advisor. I actually liked the person and I did not get taken to the cleaners with a bunch of churning, or risky stuff. The fees and eventually trying to make it too complex was where we parted ways.
With today being a drifting market and the NASDAQ now showing some strength.......I have HOPE that we will end the day with some gains. BUT......."HOPE".....is not the best investment plan for a day or a lifetime. I prefer to invest according to the probabilities"....that are often discussed in this thread.
It has been a short while since i have said: I continue to be fully invested for the long term as usual.
I noticed how the bank deal was dealing out the worst of the worst a couple of weeks ago. Then it was "nothing to see here." Then it was back to a crises and today it is listed as "lending crises unlikely." I even seen one article back when it started suggesting "several" failures were going to basically domino one after the other. As most of us know, this was simply not the case. This is another example of narratives serving a purpose. The fear and possibility driven by unfounded sources and distorted information. I think we know the motivation for why some of this was pushed with such vigor.....only to vaporize days later. This same example plays out every week. Sometimes it just involves something else. This is why it is so important to evaluate information and think rationally about what is going on around you.
Some earnings continue this week. Tuesday is Home Depot (HD) along with many others. Looks like Target (TGT) on Wednesday, and Wal-Mart (WMT) on Thursday. Deere and Co (DE) on Friday. Many more report this week as well. Of course the negative outlooks about any of them are already out there as usual. Let us not waste time looking at the actual fundamentals of the business and the report....when we can speculate about what is not known at the moment.
Some good basic info for any level of investor to keep in mind. Why investors ‘always misunderstand’ the difficulty of regaining a loss, says advisor https://www.cnbc.com/2023/05/15/why-an-investment-loss-is-harder-to-gain-back.html (BOLD is my opinion OR what I consider important content) "Key Points Investment loss may take longer to recover than expected. Simple arithmetic shows that investors who experience a loss always need a higher corresponding return to get back to baseline. This principle has important implications for certain investors like retirees. Have a losing investment? You may need to wait longer than you think to regain that loss. The answer lies in simple arithmetic. Yet, ”investors always misunderstand this,” said Ted Jenkin, a certified financial planner based in Atlanta and a member of CNBC’s Financial Advisor Council. Here’s an example: Let’s say you invest $10 in a stock. Its value declines to $8 — a 20% loss. The stock’s value then rebounds by 20%. You might guess you’ve broken even — but you haven’t. That 20% gain returns the stock’s value to $9.60, not the original $10. It would take a 25% increase to fully regain the initial $2 loss. This math is “why recovering what you lost is so hard, because you always have to achieve a better return than the actual return you lost,” said Jenkin, founder and CEO of oXYGen Financial. Here’s a recent real-world example. The S&P 500 stock index plummeted in the early days of the Covid-19 pandemic. The index declined from its 3,386.15 closing value on Feb. 19, 2020, to 2,237.40 on March 23, 2020 — a 34% loss. The index had recouped its value by Aug. 18 that year, when it closed at 3,389.78 — a 52% gain from the low point in March. This is perhaps a sobering math lesson for investors, who tend to feel the pain of a financial loss more strongly than a gain. But it carries important implications for certain investors, too. For example, retirees may opt to withdraw a certain share — say, 3% or 4% — of their retirement accounts every month for income. If those accounts decline in value — meaning income would decline, too — it may take “much longer than you think to get back to your regular income level,” Jenkin said." MY COMMENT It is human nature for people to fudge their investment returns......mentally and in real life. It is also human nature to ignore the gain that is necessary to erase a loss and get back to even. Any investor that can be honest with themselves is half way to being a great investor. Self-delusion is very common......especially when it comes to trading. I have yet to see a trader bragging about their returns.....EVER.....take into consideration their prior losses, their Income Tax obligations on short term capital gains that are taxed as regular income......and/or....their trading expenses.
The TECH side of the markets was a bit weak today. I had four of six stocks in the green today. that was enough for me to end up with a small gain for the day. I did get beat by the SP500 by 0.10% for the day. Not a bad day at the end. ALL the big averages ended the day in the green.....so....compared to the questionable open this morning we did well.
As the day went on I could tell there was some gathering hope for a debt deal. No doubt it will happen....this is all political theater. Stocks rise amid debt-limit hopes, economic data, Fedspeak https://finance.yahoo.com/news/stock-market-news-today-live-updates-may-15-115315911.html (BOLD is my opinion OR what I consider important content) "US stocks closed higher on Monday as investors monitored the debt-ceiling standoff, while assessing fresh economic data and Fedspeak. The benchmark of the S&P 500 (^GSPC) ticked up 0.3%, while the Dow Jones Industrial Average (^DJI) added 0.15%. The technology-heavy Nasdaq Composite (^IXIC) gained 0.66%. The ticking bomb of a potential debt default by the US government is front and center for investors again this week. President Joe Biden, House Speaker Kevin McCarthy and other congressional leaders are planning to meet Tuesday to resume budget negotiations after postponing talks set for Friday. Meanwhile, Treasury Secretary Janet Yellen said the discussions are making progress, The Wall Street Journal reported. She plans to meet senior bankers to discuss the debt limit. JPMorgan Chase & Co. (JPM) CEO Jamie Dimon said the bank has set up a “war room” looking at contingencies if the debt limit isn't raised in time. Dimon has already warned that markets will be gripped by panic as the US approaches a possible default on its sovereign debt. Some bearish voices on Wall Street, including Morgan Stanley’s Michael Wilson, have warned that the debt-limit debate could trigger sharp swings in the equity market. Most clients “believe it will ultimately get resolved, but not without some near-term volatility,” Wilson wrote in a note. Government bond yields were mixed. The yield on the 10-year Treasury traded up to 3.49%, while yields on the two-year note ticked down to 3.99%. The dollar index edged down following a 1.45% rally last week, its strongest one-week gain since late September of 2022, according to JPMorgan. The barometer of manufacturing activity in New York State plunged in May in the most in more than 3 years. The regional Fed's "Empire State" index on current business conditions plummeted 42.6 points to -31.8 this month, data showed Monday. Separately, Federal Reserve Bank of Atlanta President Raphael Bostic said Monday he does not expect any interest-rate cuts this year due to sticky inflation. Bostic's take differed from his two Federal Reserve counterparts that favored pausing interest-rate increases. Elsewhere, in Washington, former executives from Silicon Valley Bank and Signature Bank are expected to testify before the Senate on Tuesday. Meanwhile, earnings season continues with notable companies set to report, including retailers Walmart (WMT), Target (TGT) and Home Depot (HD). China’s tech giants Alibaba (BABA) and Tencent (TCEHY) are also on the docket this week. Wall Street’s calendar includes monthly retail sales out Tuesday. Economists surveyed by Bloomberg expect the headline print to grow 0.8% in April, up from a 1% drop last month. Some strategists argue that headline figures will likely be boosted by strong auto sales in the month, providing more insight on the state of the consumer. In single stock moves, Microsoft Corp's (MSFT) $69 billion takeover of Activision Blizzard (ATVI) got approval from the European Union after regulators in the United Kingdom rejected the same plan. etc, etc, etc." MY COMMENT Not too bad today for a NOTHING day in the markets. This whole week will be devoid of anything that matters. The most important event of the week will be the BIG retail earnings which are about the last to report for the past quarter......we are NOW approaching the end of a very nice.......BEAT.....of earnings. ONWARD AND UPWARD.....
I have to leave in about an hour for an evening show tonight. I am hoping that it does not get rained out since there has been some rain this afternoon. Car is packed and I am ready to go..........
YES we are finally reaching "normal" after the pandemic disruptions. Chart of the Day: PPI’s Round Trip https://www.fisherinvestments.com/en-us/insights/market-commentary/chart-of-the-day-ppis-round-trip (BOLD is my opinion OR what I consider important content) "Producer price inflation is back at pre-pandemic rates. One day after the US Consumer Price Index (CPI) hit the wires, the US Bureau of Labor Statistics released its business cousin—the Producer Price Index (PPI) Thursday. Like CPI, it decelerated, showing businesses’ cost pressures continue easing. Perhaps more interestingly, it has slowed so much that it is now back to prepandemic rates. We don’t think this is predictive, as PPI and CPI move concurrently—one doesn’t predict the other. However, it is more evidence that on the goods side of the ledger, we are getting back to normal, with one of last year’s big sentiment pressures increasingly in the rearview. As Thursday’s commentary discussed, services—and specifically shelter costs—are the primary contributor to CPI inflation these days. Given shelter costs (specifically rent and owner equivalent rent) tend to follow home prices at a roughly 15-month or so lag—and home prices have moderated significantly—services prices should decelerate over the foreseeable future. That should make the gradual return to more normal inflation rates in the rest of the CPI basket more visible. PPI gives you another way to see this. More narrow and volatile than CPI, it attempts to aggregate businesses’ input costs. Commodities weigh heavily in the headline index, so as with CPI, we think it is best to assess both headline and core—which excludes food and energy—in tandem. Both decelerated, but as with CPI, headline has slowed more than core due to falling energy prices’ outsized impact. Headline PPI’s 2.3% y/y inflation rate is now below core’s 3.2%. Yes, you read those numbers correctly. They aren’t typos. PPI inflation rates, which outran CPI inflation rates last year, are now markedly slower than consumer price inflation rates. Moreover, as Exhibit 1 shows, core is near levels commonly seen in 2018 and 2019. Headline PPI is below all 12 readings in 2018 and right in line with 2019 rates. Exhibit 1: Producer Price Inflation Is Back to Normal Source: FactSet, as of 5/11/2023. Headline and core PPI inflation rates, January 2018 – April 2023. When writing about inflation over the past year or so, we would occasionally borrow a metaphor Fisher Investments’ founder and Executive Chairman, Ken Fisher, used in his commentary: The inflation spike was like a temporary bulge the economy needed to digest. Those who read The Little Prince in their youth—or to their kids or grandkids—may recall the famous depiction of the snake digesting the elephant. Inflation was a lot like that, with the bulge gradually working its way through the economic system. It consisted of rapid money supply growth during COVID lockdowns, supply shortages, shipping bottlenecks, temporary commodity price spikes and other short-lived disruptions. All fed into the classic inflation scenario of too much money chasing too few goods. But for PPI, the bulge is now in the rearview. The dislocations of 2022 have largely had their effect. They wreaked havoc, drove inflation, and then faded—taking inflation fuel with them. Now prices are back to rising at historically normal rates, albeit off a higher base. As shelter prices continue easing, CPI should show this, too. And the more its recovery becomes apparent, the more sentiment should improve. That is a time-honored recipe for young bull markets, which the rally since last October 12’s low looks increasingly like to us." MY COMMENT Another good indicator for the economy and inflation. Now all we have to do is keep the FED from overreacting and wrecking havoc on the economy going forward. Much of the recovery that we have been slowly seeing has NOTHING to do with the FED. At this point they need to just realize that they have been lucky so far and sit down and pause for the rest of the year.
Some earnings on Home Depot. The Home Depot Announces First Quarter Fiscal 2023 Results; Updates Fiscal 2023 Guidance (HD)
Not a great earnings report for Home Depot. Home Depot posts worst revenue miss in about 20 years, lowers forecast as consumers delay big projects https://www.cnbc.com/2023/05/16/home-depot-hd-earnings-q1-2023.html (BOLD is my opinion OR what I consider important content) "Key Points Home Depot missed revenue expectations and lowered its fiscal year sales forecast. Chief Financial Officer Richard McPhail said customers are buying fewer big-ticket items, such as patio sets and grills, and taking on smaller home improvement projects. In the fiscal first quarter, colder weather and falling lumber prices also hurt sales. Home Depot on Tuesday reported its biggest revenue miss in more than 20 years and lowered its forecast for this year, as consumers delay large projects and buy fewer big-ticket items like patio sets and grills. The home improvement retailer said cold weather and falling lumber prices also hurt fiscal first-quarter sales. Its last quarterly miss of this magnitude was in November 2002. The company’s shares fell more than 2% in premarket trading. Home Depot said it now expects sales and comparable sales to decline between 2% and 5% for the fiscal year. It had previously predicted roughly flat sales for the period. Its operating margin rate is also expected to come in lower for the year, in a range of between 14% and 14.3% compared with a previously expected 14.5%, including the effect of a $1 billion investment in employee wages. Chief Financial Officer Richard McPhail told CNBC that Home Depot anticipated 2023 would be a year of moderation, after Americans’ huge appetite for home improvement during the Covid pandemic. The retailer’s annual sales have grown by about $47 billion from three years ago.Yet he said the expeccted pullback has been compounded by rising mortgage rates and a shift toward spending on services. “The state of the homeowner is that they’re very healthy,” he said. “They have healthy balance sheets. They have healthy incomes. But I do think — and our professional customers tell us they hear this from their customers — there is that shift, even if it’s temporary from larger projects into smaller ones.” Here’s what the retailer reported for the three-month period that ended April 30, compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv: Earnings per share: $3.82 vs. $3.80 expected Revenue: $37.26 billion vs. $38.28 billion expected Home Depot reported fiscal first-quarter net income of $3.87 billion, or $3.82 per share, down 8.5% from $4.23 billion, or $4.09 per share, a year earlier. Revenue fell 4.2% to $37.26 billion from $38.91 billion. It marked the second quarter in a row that Home Depot missed Wall Street’s revenue expectations.Last quarter, the company fell short of analysts’ expectations for the first time since November 2019, before the pandemic. Comparable sales for the first quarter fell 4.5%, and dropped 4.6% in the U.S. McPhail said lumber deflation accounted for more than 2 percentage points of that decrease. Spring is the holiday season of the home improvement industry. It marks a major quarter for sales to do-it-yourself customers and professionals who typically seize upon the warmer and milder weather by gardening and taking on other projects. Yet Home Depot and its competitors now faceamore unpredictable outlook. Rising interest rates threaten to dampen the appetite of prospective homebuyers and cool home values. Groceries and essentials now take a bigger bite out of households’ budgets. And with Covid largely in the rearview mirror, Americans now weigh spending on travel, dining out and other experiences when they debate a kitchen renovation or a new refrigerator. This spring, colder and wetter conditions in California and the western U.S. contributed to lower-than-expected quarterly results, he said. Home Depot in the quarter sold fewer pricier discretionary items, such as new appliances, McPhail said. He said customers may be putting off those purchases or may have already made them during the pandemic. Demand has softened for flooring, kitchen and bath items, too, he added. Even so, McPhail said Home Depot has some factors that work in its favor. Housing supply in the U.S. remains low and is aging, dynamics that will continue to prop up home improvement demand. Sales grew year over year in some categories, including building materials, hardware, plumbing and millwork, reflecting that people are still investing in their homes, he said. “Once we’re through this period, we think the medium, long-term fundamentals of home improvement are strong,” he said. Shares of Home Depot closed Monday at $288.54, down about 17% from their 52-week high of $347.25. So far this year, the company’s stock has fallen nearly 9%. That trails the approximately 8% gain of the S&P 500 index and the 1% rise of the retail-focused XRT." MY COMMENT Companies like Home Depot are and were particularly subject to the distortions of the economy and consumer habits in the pandemic. I see this earnings as part of the normalization process. EPS was a nice BEAT but Revenue was a clear miss. I very much LIKE this company and have no problem simply ignoring this report. they are the most DOMINANT hardware retail store in the world in my view. Their management is exceptional. I will certainly continue as a shareholder for the long term.
Here is more HD data: "Here's what Home Depot reported, compared with Wall Street estimates per Bloomberg: Revenue: $37.3 billion versus $38.34 billion expected Adjusted earnings per share: $3.82 per share versus $3.80 per share expected Same-store sales: down 4.5% versus down 1.42% expected U.S. Same-Store Sales: down 4.6% versus down 2.14% expected Customer transactions declined 4.8% year-over-year, but came in higher than Wall Street estimates for a drop of 5.36%. Customers also spent less per ticket than expected, up 0.2%, compared with estimates of a rise of 2.63% in average ticket sizes." https://finance.yahoo.com/news/home-depots-q1-earnings-204758188.html
Another NOTHING day in the markets today. The usual debt ceiling BS. The big retail earnings will continue for the week. Some relatively minor economic data like retail sales. NONE of this really matters except for the debt ceiling "stuff". That will be the topic of the week for those that enjoy IRRELEVANT issues that impact the markets. I expect it will be another day like yesterday......no doubt the HD earnings will impact the general averages a bit today.
Speaking of the irrelevant......here is the Retail Sales data. Retail sales rise 0.4% in April, missing Wall Street estimates https://finance.yahoo.com/news/reta...-missing-wall-street-estimates-124010321.html (BOLD is my opinion OR what I consider important content) "Retail sales rose 0.4% in April, representing only half of the growth that Wall Street had expected. Economists had projected sales would rise 0.8% over the prior month after a surprise drop in March. That decline was revised to -0.7% after initially coming in at a drop of 1%. Excluding gas station and automotive sales, retail sales rose 0.6% in April. Six of the 13 categories highlighted in the release saw declines from a month ago. Sporting goods and hobbies saw the largest decline of any category, falling 3.3% from the last month and 5.4% from last year. Furniture and home furnitures stores declined 0.7% from last month and 6.4% from April last year. Growth at miscellaneous store retailers and nonstore retailers helped keep total sales higher than the month prior. The report, released by the Commerce Department, offers a snapshot of consumer spending at a time when the Federal Reserve has been raising interest rates to curb inflation. The retail sales increase in April comes as consumer prices rose at their slowest pace in two years during the month. The report comes amid a week of highly anticipated quarterly results from retailers. Home Depot reported worse-than-expected earnings on Tuesday morning as revenue fell 4.2% from the same quarter last year. Home Depot CEO Ted Decker said the company had "expected that fiscal 2023 would be a year of moderation for the home improvement market." Target (TGT) TJX (TJX) Walmart (WMT) and Alibaba (BABA) are all expected to report later in the week." MY COMMENT PERFECT.......bad news is good news. Another indicator that the FED should simply sit down, shut up, and do nothing for the rest of the year. We are now entering the light as we exit the end of the tunnel. More and more indicators and data is lining up in favor of the current BULL MARKET.
So I will add a bit in regard to earnings and the discussed HD above. We have heard ad nauseum about the past few earnings seasons about how bad things were going to be. Last year it was reportedly going to bring the hammer down. I remember the headlines. It did not occur. Then we moved on to the current time. Well, this was sure to be it. I also remember those outlooks. Once again, it did not occur. In fact, when I think about all of the companies that endured the shutdowns, pandemic, the supply chain issues, employment issues, and all that came with it. They really had the "kitchen sink" thrown at them in a very, very difficult environment. Yet, they performed much better than expected. They navigated an unprecedented business disruption. People crowed about how a lot of companies did not turn out smashing numbers. Some actually did, but there were many that did do less than what they would have during a "normal" time. Some totally dismissed the ability and resilience of that performance. The businesses did a really good job of handling such an event. Now at this current time, we have seen further improvement. Now that is not what a lot of "experts" were telling us, but the companies came out and performed as most rational investors thought they would. And yet again what was their reason for blowing their predictions? "Well, the bar was set so low, that it was not hard to beat expectations." In my opinion, this is exactly why I do not trust any of their hot air. Always twisting the data and not letting it speak for itself. As an investor, it is a fools errand to base your plan, any amount of it, on the stuff out there today. Every company has different issues for a number of reasons. Sometimes it is bad management, maybe they lose their competitive edge, it can be specific economic conditions related to their field, or even something that another business suffers from that somehow impacts their bottom line. The list could go on for a number of reasons. In todays investing world it would seem at times that things are so short sighted. A single report, a monthly report, a two day news story, or whatever. Most long term investors view things through a much larger lens. For example, the HD story. The headline says it all, "Worst revenue miss in 20 years." Whatever. I admit I have not studied HD (WXYZ surely has), but they carry on like this is the end of the company. They then go on to list reasons for some of the missed targets. I don't know, maybe it is accurate and if it is I would not see anything overly concerning about it. That is the difference. Most long term investors evaluate their holdings/companies over a period of time. Even well before they purchase into them. Then, when they do partner into it, it is evaluated consistently and rationally. Earnings reports, management, productivity, where and how they are based, and a whole plethora of other basic fundamental business practices. There is not a single data point (most of the time) that will cause a deviation from the larger picture. We hear all of the time the quote of "What analysts expect or experts believe." Okay, I don't care what they spout, it doesn't fit into my plan. What matters is....Is this company I am invested in performing and meeting MY expectations based on my own research and knowledge.
Looks like the former CEO of SVB is literally getting blasted in front of Congress today. Some of the stuff he is getting confronted with early on. Wouldn't commit to returning any of the executive bonuses they received just hours before the collapse and left for Hawaii...to be with family of course. Then they brought out a clip of a dorky musical put together by the other failed "bank" Signature. It showed them singing and dancing about "How to build a bank for dummies." Here is a remark by one Senator....."This was bone-deep, down to the marrow stupid." Surely, it was just the tough times that took these few banks down right??? Whatever.
One thing about HOME DEPOT.......they are the most dominant company in their business. They have huge ability to capture more market share, their management is exceptional, their employees are exceptional, etc, etc, etc. They will be a long term core holding in my portfolio for a long, long, time to come. I really have ZERO concern about these earnings. This is EXACTLY the type of company that I want to own for the long term.
My primary concern as an investor....which is a function of the ten businesses that I own......is how they perform as a PORTFOLIO over the long term. I dont get too riled up over them as individuals......or......short term results. Today is a perfect example.....I am doing very nicely today....having just looked. I have a good gain in my account. I have six stocks UP so far.....AAPL, AMZN, MSFT, NVDA, GOOGL, and TSLA. My "portfolio" is performing just fine today. My non-tech names are down.....NKE, HD, HON, COST. This is just how my balance in my portfolio works. What I care about is long term success and staying power. The market cap in the SP500 of the companies that I choose to own says it all: AAPL #1 MSFT #2 AMZN #3 NVDA #4 GOOGL #5 TSLA #10 HD #19 COST #25 NKE #45 HON #51 The above represents the cream of the crop of American business.
I ended the day with a TINY loss. Same four stocks DOWN as earlier.......and same six stocks UP or FLAT as earlier in the day. the primary change at the close for me that pushed me to a very small loss was AAPL ending the day unchanged. I did get in a good strong beat on the SP500 by 0.60%. I am happy with the result today......that good beat on the SP500 will pay off later in the year.
