The Long Term Investor

I was just thinking about the above post about my siblings account.

My sibling probably has about a 15-20 year life expectancy. My kids have about a 50-60 year life expectancy. So this account which I am managing right now for my sibling has a potential to be around for the next 70-80 years......once my kids ultimately inherent that account.

That is REAL LONG TERM INVESTING.

 

DONT FIGHT IT....Zukodany.........go with the force. Or in investing language....dont fight the tape.

As a longer term investor.....it does not matter if things are rational, or irrational.....it does not have to make sense.......just RIDE THE WAVE.

 

Or in another context.....ALL that we are told is mostly BS. We see that every day with all the stock and money experts. Obviously the politicians too.

We get so overwhelmed by all the BS....sometimes we are surprised by ACTUAL reality.

 

AMEN....Zukodany.

 

Here is how it is after earnings:

Nvidia shares spike 26% on huge forecast beat driven by A.I. chip demand

https://www.cnbc.com/2023/05/24/nvidia-nvda-earnings-report-q1-2024.html

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

"Key Points

• Nvidia reported first-quarter earnings for its fiscal 2024 on Wednesday, with a stronger-than-expected forecast that drove shares up 26% in extended trading.
• Nvidia CEO Jensen Huang said the company was seeing “surging demand” for its data center products.

Nvidia reported first-quarter earnings for its fiscal 2024 on Wednesday, with a stronger-than-expected forecast that drove shares up 26% in extended trading.

Here’s how the company did versus Refinitiv consensus estimates for the quarter ended in April:

• EPS: $1.09, adjusted, versus 92 cents expected
• Revenue: $7.19 billion, versus $6.52 billion expected

Nvidia said it expected sales of about $11 billion, plus or minus 2%, in the current quarter, more than 50% higher than Wall Street estimates of $7.15 billion.

Prior to the after-hours move, Nvidia stock was up 109% so far in 2023, mostly driven by optimism stemming from the company’s leading position in the market for artificial intelligence chips. Nvidia CEO Jensen Huang said the company was seeing “surging demand” for its data center products.

etc, etc, etc."

My COMMENT

The stock is currently Up by $75.22 after hours.......or......24.63%.

 

I think this is OLD NEWS at this point......less than 24 hours after the fact.

Nvidia stock explodes after 'guidance for the ages': What Wall Street is saying

https://finance.yahoo.com/news/nvid...ges-what-wall-street-is-saying-120105455.html

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

"Nvidia (NVDA) has cemented its status once more as Wall Street's market darling after an upbeat AI-fueled earnings call and an outlook that rocked the financial models of already bullish analysts.

Shares of the chip giant exploded 27% in pre-market trading on Thursday as results trounced analyst estimates. The company's ticker page was the most active on the Yahoo Finance platform, followed closely by rival chip players such as AMD (AMD) and Intel (INTC).

If the pre-market gains in Nvidia hold, the company’s market value would rise more than $200 billion, which would mark the biggest one-day rise in history. Apple's $191 billion pop in November 2022 is the current record holder.

It was Nvidia's outlook that truly surprised the investing masses.

The company expects second-quarter revenue to come in at about $11 billion, plus or minus 2%. Wall Street was anticipating $7.2 billion.

Nvidia founder and CEO Jensen Huang told analysts on the conference call the very upbeat outlook reflects a fundamental shift to accelerated computing. In turn, that places Nvidia's chips that power generative AI in high demand.

"We're seeing incredible orders to retool the world's data centers. And so I think you're seeing the beginning of, call it, a 10-year transition to basically recycle or reclaim the world's data centers and build it out as accelerated computing," Huang said. "You'll have a pretty dramatic shift in the spend of a data center from traditional computing and to accelerate computing with SmartNICs, smart switches, of course GPUs and the workload is going to be predominantly generative AI."

Here's the vibe on Wall Street after Nvidia's big quarter and outlook.

Ruben Roy, Stifel (Hold rating; $370 price target, up from $300): "Nvidia's recent momentum continued as first quarter results beat consensus expectations and the company's second quarter revenue outlook was significantly above high expectations. Nvidia remains in the sweet spot of AI-infrastructure wallet share as build outs of accelerated computing networks continue. As the company's data center numbers grow, questions on the near-term supply environment are likely to continue. For now, while not providing explicit longer-term guidance, Nvidia management noted that data center-related demand visibility has increased and that the company has procured substantially higher supply for the second half of the year. We raise our estimates and target price and continue to view Nvidia as the best positioned near-term beneficiary of CSP capex spending trends."

Tristan Gerra, Baird (Outperform rating, upgrade from hold; $475 price target, up from $300): "We raised our estimates above consensus and added a Fresh Pick designation to Nvidia on March 20 reflecting our channel feedback about strong H100 orders notably related to ChatGPT emerging in March but we failed to upgrade at that time. As AI-related order momentum continues into the second half, annualized earnings of $10 are at reach within 2-3 quarters in our view, reflected in the valuation post earnings. Our raised next two-year EPS forecast assumes continued AI-related momentum driven by two secular growth trends: continued adoption rate for parallel processing-based acceleration in data centers, and the emergence of AI models notably related to ChatGPT and LLMs [large language models], all of which require GPUs."

Atif Malik, Citi (Buy rating; $420 price target, up from $353): "While we had raised our target price and estimates into the earnings, Generative AI upside was bigger than we expected. Nvidia expects data center sales to roughly double in the July quarter driven by Gen AI demand from CSPs, consumer internet companies, and accelerated computing in enterprises. Nvidia estimates only ~4% of the $1 trillion data center CPU installed base over the last four years has been GPU accelerated, implying AI adoption remains in early innings."

Dan Ives, Wedbush (no rating/price target): "There is not one better indicator around underlying AI demand going on in the hyperscale/cloud and overall enterprise market than the foundational Nvidia story. We view Nvidia at the core hearts and lungs of the AI revolution given its core chips train and deploy generative AI applications like ChatGPT. The Street was all awaiting last night's Nvidia quarter and guidance to gauge the magnitude of this AI demand story with many skeptics saying an AI bubble was forming and instead Jensen & Co. delivered guidance for the ages.""

MY COMMENT

The above analyst views are FUNNY. I love the first guy with a "HOLD" rating on the stock. ALL of these estimates and evaluations are likely to be BLOWN AWAY today.

At the moment the stock JUST OPENED at +74.29.....or +24.33%. Current share price is $379.68. BUT......this may turn out to be the high of the day for the stock. I am sure the after hours FRENZY that we saw pre-open.....will relax some as the actual day happens.

Wherever the stock ends the day.....it will be a very good day for owners of NVIDIA.

 

HERE is the open today.....

S&P 500 and Nasdaq jump as Nvidia fuels tech rally

https://www.cnbc.com/2023/05/24/stock-market-today-live-updates.html

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

"The S&P 500 and Nasdaq Composite jumped Thursday as investors cheered the latest quarterly results from Nvidia. Meanwhile, the Dow Jones Industrial Average slid after Fitch Ratings placed the United States’ AAA rating on a negative rating watch.

The S&P 500 climebd 0.6%, and the Nasdaq popped 1.5%. The Dow traded 106 points lower, or 0.3%.

Nvidia shares surged 25% after the artificial intelligence beneficiary gave stronger-than-expected revenue guidance for its fiscal second quarter, while also reporting beats on the top and bottom line in the previous quarter. Several analysts covering the stock hiked their price targets on the stock following the results.

Other semiconductor stocks followed Nvidia higher, including AMD and Taiwan Semiconductor, which rose around 9% each. The VanEck Semiconductor ETF (SMH) popped 6.7%.

“The macro point is that innovation in technology can outweigh the headwinds of a slowing economy, or higher interest rates,” said Dylan Kremer, co-chief investment officer of Certuity. “Technology in particular and growth stocks are not dead.”

Meanwhile, Fitch Ratings put the U.S.′ AAA long-term foreign-currency issuer default rating on a negative watch. The rating agency said the ongoing debt ceiling negotiations have raised the risks that the government could miss payments on some of its obligations. However, Fitch said it still expects a resolution before the X-date.

“I think everyone is looking at the Nvidia story and running with it because it is a welcome break from debt ceiling talks, banking fears, and inflation along with Fed tightening,” said Ed Moya, senior market analyst at Oanda.

Debt ceiling negotiations continued to weigh on the major averages. The talks hit a hurdle earlier Wednesday. Later, House Speaker Kevin McCarthy indicated negotiations were making progress, but that major headwinds remained to solidify a deal.

A revision from the Commerce Department on Thursday showed stronger economic growth than previously thought. U.S. gross domestic product increased 1.3% on an annualized pace from January through March, a 0.2 percentage point increase to previous estimates. April pending home sales data is also on deck after the open. Economists polled by Dow Jones expect a rise of 0.8%, up from the decline of 5.2% the prior month."

MY COMMENT

SO......US GDP was raised to 1.3% from January through March. Not great....but an increase. So....once again I ask all the experts.......where is the recession?

The NVIDIA FRENZY is nicely knocking the FED and the DEBT BALONEY out of the news at this moment. Hopefully it can do so for the rest of the day and into tomorrow. it would be nice to not have to hear the DEBT BALONEY for a few days leading into the three day weekend.

 

A fun day so far today. BUT....in reality a NOTHING day. Just more of the same....BUD is still in the dog house.....the DEBT negotiations continue......we had a great open but we are seeing some FADE.......it is a very SHALLOW market.

it was nice to see the NVDA earnings BLOW OUT. A great way to end earnings reporting season. A nice final KICK IN THE BUTT for all the experts and analysts that said earnings this time were going to SUCK. Earnings this time around were a CLEAR VICTORY for the little people.....the retail investors that tend to strongly be long term investors.

 

You know.....I make fun of the lack of a recession.....all the time.

BUT.....I really dont care if we end up having a recession later in the year. I have been an investor through many recessions, over the last 50+ years. I have often seen that recessions do not necessarily mean a down stock market. The general economy is NOT the stock market.

Now in the current 24/7 INSANE media coverage......any recession no matter how mild will be fear mongered through the roof. Of course the little recession that we had last year......that did not match up with all the expert predictions......was IGNORED by the media and the professionals.

What I believe is a predictor of the future is NOT whether or not we have a recession.....but.....what we just saw in the GREAT earnings. It is clear that the inventory issues are a thing of the past, the supply chain issues have mostly resolved.......and....business is in recovery mode. It took a long time....but we have finally moved on from the economic shut-down.

We have seen increasingly good forward guidance from business compared to the past couple of quarters. It is likely that we will see better and better numbers from business as they report for the next 2-3 quarters. THIS is what will drive the markets longer term.....not whether or not we have a mild recession.

 

If you are into....IRRELEVANT....economic data, here you go:

Jobless claims rise less than expected after fraudulent filings are wiped out
Unemployment fraud in Massachusetts caused US jobless claims to spike in previous weeks

https://www.foxbusiness.com/economy/jobless-claims-rise-less-expected-fraudulent-filings-wiped-out

and

U.S. Pending Home Sales Held Flat in April -- NAR

https://www.marketwatch.com/story/u-s-pending-home-sales-held-flat-in-april-nar-50270b8c

 

AND.....dont underestimate the ability of the FED to screw things up.

Fed Traders Are Fully Pricing In Another Rate Hike Once Again

https://finance.yahoo.com/news/fed-traders-fully-pricing-another-130107185.html

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

"(Bloomberg) -- Traders are now fully pricing in another quarter-point interest rate increase by the Federal Reserve within the next two policy meetings and a more than one-in-two chance that it could be as soon as next month.

The shift came as US rates rose across the board, led by the front end, fueled by increased optimism about a potential deal on the debt ceiling and economic data.

As recently as the first week of May, when the central bank raised rates for the tenth straight time, the market had near-total confidence that there would be no additional hikes this year, and that the Fed would cut rates as many as three times by year-end.

That view, which was based on recession risk posed by a spate of regional bank failures and indications from some policy makers, has been overtaken by concerns about persistently high inflation globally and tight labor-market conditions that predominated earlier in the year. The threat of contagion in the banking system has ebbed, and the fracas around the debt ceiling has yet to unleash haven demand that could pull expected rates lower.

The rate on swap contracts linked to the July gathering climbed to 5.34% on Thursday, more than 25 basis points above the current effective fed funds rate of 5.08%. The Fed tends to move in multiples of 25 basis points, so that indicates such a move is seen by the market taking place either in July or at the Federal Open Market Committee’s next meeting in June. The June contract showed around 14 basis points priced in, suggesting a better than even chance the move would be at that meeting.

Contracts further out continue to suggest the Fed will need to cut again within the coming year, but the extent of anticipated easing is considerably less than it was.

The two-year Treasury yield rose as much as 15 basis points to 4.52%.

“I thought we made some progress” in debt-ceiling talks that had negotiators working past midnight on Wednesday, House Speaker McCarthy told reporters Thursday morning. “There are still outstanding issues. I’ve directed our team to work 24/7 to solve this problem.”"

MY COMMENT

If the FED is SMART they will now pause for the rest of the year.

BUT......we know they are clearly NOT smart. SO.....dont be surprised if they do a 0.25% hike in either June or July.

I can see them doing a.......hopefully.....final hike of 0.25% in June. Or.....I can see them pausing for a month and then doing a final 0.25% hike in July.

Whether they simply pause or do another rate hike.......DOES NOT MATTER. They are basically DONE no matter what they do. Any power of the FED impacting the markets....other than for a few days....is now over with. Not that we need them anyway. The economy is going to take care of itself over the rest of the year and will be just fine.

 

I just looked at my account for the first time today.

A HUGE gain.....compliments of you know who. I do have some stocks that are DOWN today.......the non-tech bunch......AMZN, COST, HD, and HON.

I see that in my accounts and in my siblings account....with the big gain today for NVDA....the stock is now the #1 largest holding in all accounts. A couple of the other tech stocks that I own are close behind.

In my siblings account.....the buy of 148 shares that I added to the existing position on 9-20-22.....eight months ago....is now UP by 190% over that eight months.

I am eager to see how COSTCO did on their earnings.....after the close today. I have no idea how they will do.....since I dont try to anticipate earnings. I prefer to just wait and see the real thing when it happens.

 

I have a graduation to go to tonight......a grandchild is graduating from High School. They will be off to college in the fall here in Texas. An exciting time for a young person......tonight will be the last time their High School class is all together.

In our usual family style of the older generations taking care of educating the younger generation.....they will go to school next year at a major Texas university........ with NO DEBT. Between the parents, step parents, grandparents, and others like my sibling.........the cost of college will get covered.

One great college benefit that is available in Texas is a program for military VETERANS. It covers the tuition for the children of veterans that go to a state school for up to four years....four years total for all children. You can split the four years between multiple children....so one of my kids and their spouse will be using this program to cover tuition for two years for two kids. The first of the two is the grandchild that is graduating tonight. This program will cover their first two years of tuition....a value of about $24,000.

 

If you are a Texas Military VETERAN.....you will want to check out this benefit for yourself or a family member....to pay for college tuition.

HAZELWOOD ACT

https://www.tvc.texas.gov/education/hazlewood/#TiAbmqua

 

Very good Zukodany.....over the long term it all averages out.

Anyone else having a good year?

I suspect that I am about +23% YTD with the earlier losses this week and the big gain today. That would put me at a loss of about (-16.6%)......from my all time high my all time high.

 

Here is where we might.......SOON....be headed.

Exclusive-Slimmed-down U.S. debt ceiling deal takes shape

https://finance.yahoo.com/news/exclusive-slimmed-down-u-debt-155518204.html

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


"WASHINGTON (Reuters) -U.S. President Joe Biden and top Republican lawmaker Kevin McCarthy are edging close to a deal on the U.S. debt ceiling, with the parties just $70 billion apart on discretionary spending, according to a person familiar with the talks.

What is likely to emerge will not be a hundreds-page long bill, something that could take lawmakers days to write, read and vote on, but a slimmed-down agreement with a few key numbers, this source and another person briefed on negotiations said.

The expectation is that negotiators will hammer out top line numbers for discretionary spending, including a number for military spending, but leave lawmakers to hammer out the fine details of categories like housing and education through the normal appropriations process in the months ahead, the second source said.

In 2022, U.S. discretionary spending reached $1.7 trillion, accounting for 27% of the overall $6.27 trillion spent, according to federal figures. About half of that was for defense, an area some lawmakers have said should not be cut.

The end result would likely just put guardrails on future budget talks, not spell out detailed spending, sources said.

The White House declined to comment.

On Wall Street, the S&P 500 rose less than a percent, U.S. Treasury bonds fell in price and the U.S. dollar scaled to its highest levels since March as markets digested more optimistic-sounding news on the debt limit from Washington."

MY COMMENT

Sounds about right.....this will allow the DEMS to save a little face.......on the PHONY DEBT BS.

SO.......we are are now done with earnings......enjoying the NVDA BOOM......about to be done with the DEBT BS.......and either done or nearly done with the FED. Looks like we might have a pretty clear lane for the markets for the rest of the year.

Of course......never underestimate.....the media and traders and others.......to come up with new and exciting issues and ways to fear monger the markets.