The Long Term Investor

So true Smokie.....BEWARE.....the generic "investors". You see that wording......stay away at all costs.

 

Getting used to my new MacBook. My old one finally got too screwed up. At least I got a lot of use out of it......14 years. I was able to transfer everything to the new one.....and....it is now up and running. My first post on this new machine.

I ended the day in the green today......very slight.....+0.01%. I had five stocks UP today....AAPL, AMZN, NVDDA, HD, and TSLA. They got me my small gain to end the day in the green. I will take it. PLUS....a bonus....I got in a beat on the SP500 by 0.48% today.

So....I will count that as a good day even though I made a tin percentage.

 

A future HUGE profit center for TSLA.

Tesla Supercharger network gains another partner as Rivian signs on

https://finance.yahoo.com/news/tesl...her-partner-as-rivian-signs-on-154300344.html

 

The market today.

Stocks close lower for a second straight day, Dow sheds 200 points as market rally cools

https://www.cnbc.com/2023/06/19/stock-market-today-live-updates.html

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

"Stocks fell Tuesday, the first trading day of the week, as a rally that drove the market to levels not seen in more than a year took a breather.

The Dow Jones Industrial Average fell by 245.25 points, or 0.72%, to 34,053.87. The S&P 500 slid 0.47% to 4,388.71, while the Nasdaq Compositedeclined 0.16% to 13,667.29.

Markets were closed Monday due to the Juneteenth holiday.



CNBC

“We’ve had a significant run,” said Art Hogan, chief market strategist at B. Riley Financial. “As we enter a new albeit holiday-shortened week, we’ve got to find credible reasons to continue to grind higher against the forces of negativity that still linger around potential recession, which seems to be like ‘Waiting for Godot,’ and the potential for the Fed that remain rigorous against inflation.”

Decliners outpaced advancers on the New York Stock Exchange 2.2 to 1 on Tuesday. Energy was the biggest laggard in the S&P 500, with the sector falling more than 2%. Meanwhile, Intel, Nike and Boeing dragged on the Dow, each down by more than 3%.

In contrast, homebuilders outperformed following a stronger-than-expected housing report. PulteGroup, D.R. Horton and Lennar
were each higher by more than 1%. Elsewhere, Nvidia also bucked the trend, up more than 2% while the major indexes sagged.

Investors are coming off of a strong week, with the S&P 500 hitting its highest level since April 2022. The S&P 500 and the Nasdaq Composite posted their best weekly performances since March, with the broad-market benchmark rising 2.6% and the tech-heavy index adding 3.25%. It was also the S&P 500′s fifth positive week in a row — a first since November 2021 — and the Nasdaq’s eighth consecutive positive week, a feat it previously accomplished in 2019.

Investors were seemingly receptive toward the central bank’s decision to skip a June rate hike last week. Federal Reserve Chairman Jerome Powell told a press conference on Wednesday that the central bank has yet to make a decision on policy ahead of the July meeting. However, policymakers are forecasting two more quarter-point rate increases later this year. The decision to skip a hike in June broke the Fed’s streak of ten consecutive interest rate increases.

Despite Powell’s insistence that future Fed policy will remain data dependent, stocks have been on an upswing. In the week ending June 14, investor bullishness rose to 45.2%, up from 27.4% several weeks ago, according to the American Association of Individual Investors. That’s the highest level since November 2021. Wall Street is trying to gauge how last week’s strong market sentiment will hold up in a shortened trading week that is light on economic data.

“We believe equity markets are as stretched as they can get with market participants wary of missing a potential new bull market,” Mike Wilson, chief U.S. equity strategist at Morgan Stanley, wrote in a note Tuesday.

Traders absorbed May U.S. housing starts data that topped estimates. There were 1.63 million starts last month, higher than the 1.39 million housing starts expected by economists polled by Dow Jones.

In earnings, investors will look toward a quarterly report from shipping giant FedEx on Tuesday after the the closing bell."

MY COMMENT

Not a bad day in the markets today.....for a do nothing day. Once in a while you just have to pause and let things get caught up.

Good old NVDA continues it's run up. One of my kids has some money going into their account in a day or two. I will probably buy 10 shares of NVDA and put the rest in their SP500 Index Fund.

 

Yet another FED TALK day today. Who cares? I dont even though the markets might still care a bit about what will be said. I intentionally said"the markets" since I dont think many actual investors care much one way or the other.

 

The markets today......at least so far.

Stocks fall as Powell points to more rate hikes

https://finance.yahoo.com/news/stock-market-news-live-updates-today-june-21-2023-103345740.html

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

"Stocks fell early Wednesday as Federal Reserve Chair Jerome Powell was set to foreshadow in testimony before Congress more rate hikes this year.

The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) were both down about 0.3% at the open. The Nasdaq Composite (^IXIC) fell nearly 0.5%.

"Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year," Powell said in prepared remarks released before the start of a House Financial Services Committee hearing Wednesday.

An unexpected spat flared up after President Joe Biden called China's President Xi Jinping a "dictator" on Wednesday. That's seen as undermining efforts by both sides to rekindle relations between the US and the world's second-biggest economy."

MY COMMENT

There you go....that is it. Another NO NEWS day for the markets. People dont know what to do. They are so used to a litany of market events and drama....that it is shocking when there is NOTHING that really matters. We are now in a time sapn where simply siting and doing nothing is being imposed on most investors.

Of course the lack of any news can tend to AMPLIFY the little news there is.......like the FED. I see the averages today simply reflecting the short term daily trading today. The VAST MAJORITY of investors are doing nothing so the market just lingers as the traders push their short term negative narratives.

 

Good news for TSLA and good news for our country. the more investment in India the better.

Musk Says Tesla Hopes to Invest in India After Modi Meeting

https://finance.yahoo.com/news/musk-meeting-modi-us-agenda-120315044.html

MY COMMENT

Before you get all excited......this talk is very preliminary. At least things are moving in the right direction.

 

Much of the basis of investor UNDER-PERFORMANCE is human brain based behavior. In other words human psychology.

4 ways ‘anchoring bias’ can hurt you financially

https://www.cnbc.com/2023/06/21/4-ways-anchoring-bias-can-hurt-you-financially.html

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

"Key Points

• “Anchoring bias” is a cognitive bias whereby humans unconsciously rely on an initial number or piece of information when making future decisions.
• It’s a type of mental shortcut that may have negative implications for consumers in the context of shopping, retirement savings, investing and negotiating.

Humans use mental shortcuts in everyday life to help process information and make speedy decisions. But they can lead to bad choices when it comes to personal finance.

Some of those poor outcomes are the result of “anchoring bias,” which can undermine a consumer’s rational thinking.

This cognitive bias causes the brain to overly rely on initial impressions or numbers to shape subsequent thoughts and judgments. In other words, that early information “anchors” future choices.

It’s “the idea that you get a number stuck in your head subconsciously,” said Jennifer Itzkowitz, associate professor of finance at Seton Hall University, who has studied anchoring bias in investing. “And it influences future decision-making.”

Humans are more likely to default to these mental shortcuts — known as “heuristics” in psychology jargon — when confronted by complex subjects like finance, when consumers may feel overwhelmed by information, Itzkowitz said.

“You have to be aware this bias exists or you will fall prey to it daily,” said Bradley Klontz, a certified financial planner based in Boulder, Colorado, and a founder of the Financial Psychology Institute.

Here are some ways anchoring bias may play a role in your financial life.

1. A 401(k) match can be an unintentional anchor

“Anchors” can be intentional or unintentional, said Klontz, a member of CNBC’s Advisor Council.

A 401(k) match can serve as an unintentional anchor. Companies choose the respective structure of their 401(k) match — and that structure may inadvertently influence a worker’s savings rate.

For example, a company may opt to pay a match worth up to 3% of a worker’s salary. As a result, workers may think saving 3% of their income in a 401(k) is adequate for their retirement savings — when it likely falls short.

Conversely, employers can use the anchoring concept to boost savings. For example, Google found that sending e-mails to its employees that promoted relatively high anchors (like a contribution rate of 10% or 20%) influenced workers to boost savings.

2. For shoppers, the first price seen sticks

On the other hand, many retailers use the anchoring principle intentionally to influence consumer buying behavior, Klontz said.

This often shows up when stores advertise a sale, he said.

For example, a retailer may mark down a pair of pants from $60 to $30. Consumers tend to judge the sale price relative to the original, so the new price appears cheap. But when viewed objectively, $30 isn’t necessarily a good deal for consumers — especially if a regular stream of store sales means the pants are never $60.

Take another example from the Corporate Finance Institute: If consumers first see a T-shirt that costs $1,200, and then see a second one that costs $100, they’ll likely see the second shirt as cheap. However, if that person had only seen the second shirt, priced at $100, they probably wouldn’t think it was inexpensive.

Or, take this example relative to planning a vacation, from job site Indeed: A couple might find all-inclusive tickets to Hawaii for $800 each. Then, they subsequently find tickets to Puerto Rico for $400 each, but the tickets only cover airfare. The couple might choose the Puerto Rico trip to save money, but end up paying the same amount after additional costs for a hotel room and dining are included.

“The anchor — the first price that you saw — unduly influenced your opinion,” wrote Tim Vipond, board chair of CFI Education.

3. Investing apps: Starting small can leave you short

Some mobile apps for investing entice customers by suggesting they can get started with as little as $5, Itzkowitz said.

The advertisement is meant to bring investing to the masses in a low-cost way, but may inadvertently anchor users to a paltry savings amount, she said. In turn, savers may have a false sense of financial security, she added.

“Whatever people spend on their first stock purchase, they continue spending that exact same amount,” said Itzkowitz, who recently co-authored a research paper studying anchoring in investment trading platforms like Stash, Robinhood, SoFi, and Stockpile.

Encouraging investors to start with a micro-investment “leads to lower wealth accumulation in this brokerage account due to anchoring bias,” according to the paper.

This is true across all groups regardless of factors like income, age and gender, Itzkowitz said.

4. In negotiations, anchor bias is a tricky tactic

Companies and people use anchoring as a common negotiating tactic, relative to salary negotiations or a sale, for example, Klontz said.

For example, during the hiring process, a company may try to anchor a prospective hire to a low initial salary offer. Any increase from there may feel like a win for the prospective worker but be on par with what the employer had initially hoped.

Ultimately, the key to countering anchoring bias is to continually question your financial instincts.

“Assume these things are being used in nefarious way to separate you from your money,” Klontz said. “Always be second-guessing yourself.”"

MY COMMENT

Human psychological factors are probably the greatest single impact on investor behavior. As an investor you have to.....UNDERSTAND YOURSELF and be able to make clinical and logical decisions. Of course....this is extremely difficult for most if not all people.

 

I will not be surprised if this week is simply a WASTE for investors. The three day weekend and short week killed momentum. the media is all over the FED stuff since they have nothing else to talk about. Summer is here and people are busy with other activities. The first half of the year is ending. We have gone through a HUGE RALLY. Etc, etc, etc.

In short investors are busy with other things and are pausing to consolidate the recent gains. Part of that consolidation includes profit taking.

This is EXACTLY how BULL MARKETS work. They lurch forward in starts and stops. A few steps forward and a few steps back. BUT.....dont worry....it will ALL be clear in hindsight.

 

One good thing about the market action today.......as usual it seems like a shallow and non-committal market. it could turn on a dime. Once Powell is done......we will see where the markets really want to go today.

The good semi-long news item is.....we will soon be done with the first half of the year. Starting out the second half with a nice big FAT gain......is GOLDEN. A nice head start on the final numbers that will be locked in at year end.

 

Performance art.....that is what is going on today.

I just looked at my account......down of course so far today. My LONE stock that is UP......HD.

In my one kids accounts I had $5000 to invest today. So I bought ten shares of NVDA. I got lucky and got them on sale.....by over 3%. Not that I was trying to time the market.....I would have bought them regardless of the share price today. The money was there so I did my usual.....all in all at once.....thing. I am considering this stock as a ten year hold in that account.

I see that my little buy of ten shares of NVDA.....DID NOT.....help to stabilize the stock today.

The rest of the money will go into the SP5000 at the close today as is typical in that account.

 

This little article is EXTREMELY relevant to investing.

Why You Believe The Things You Do

https://collabfund.com/blog/why-you-believe-the-things-you-do/

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

"I remember reading an article years ago about a father in Yemen who lost a son to starvation, only to have another child fall dangerously ill. Desperate, he turned to tribal elders who recommended a folk remedy: Shove a burning stick through the sick child’s chest to drain the illness. The father agreed.

Asked about the horrific procedure, the father said: “People said burn him in the body and it will be O.K. When you have no money, and your son is sick, you’ll believe anything.”

When you have no money, and your son is sick, you’ll believe anything.

That is such a powerful statement, and some version of it applies to everyone.

Here’s a universal reality: What you believe to be true is influenced by how much you want it to be true. The more something helps you deal with uncertainty, the lower the bar is for you to believe it’s true.

It’s been like that forever. Describing the Great Plague of London, Daniel Defoe wrote in 1722: “The people were more addicted to prophecies and astrological conjurations, dreams, and old wives’ tales than ever they were before or since.” You’ll believe just about anything that offers hope when a plague is killing a quarter of your neighbors.

Visa Founder Dee Hock once said, “We are built with an almost infinite capacity to believe things because the beliefs are advantageous for us to hold, rather than because they are even remotely related to the truth.”

Think about the investor whose strategy is so tied to their identity they can’t let it go when it stops working.

Or the business that so desperately wants to be good it overlooks all the ways it’s bad.

Charlie Munger once said:

If you turn on the television, you find the mothers of the most obvious criminals that man could ever diagnose, and they all think their sons are innocent. The reality is too painful to bear, so you just distort it until it’s bearable.

Even things that appear to be hard science fall into this category. There’s a thing in the legal world called Gibson’s Law, which states that, “For every PhD there is an equal and opposite PhD.” No matter what argument you’re trying to make, you can find a qualified expert who’s willing to make it, under oath, for $500 an hour.

People can be led to believe and defend almost anything, because the goal of a belief is often not to discover what’s true – it’s to justify past actions, or protect your reputation, or provide hope when it’s lacking, or to maximize your income, or to signal to others that you belong to the tribe.

So there’s one reason you believe the things you do: A belief’s allure can eclipse its truth.

A couple other reasons beliefs tend to form:

Memories of past events are filtered. You keep what makes sense and throw out the confusing details.

In the late 1940s, two psychologists – Gordon Allport and Leo Postman – came up with what they called leveling and sharpening effects in memory.

It goes something like this: In any big event – a car accident, or a terrorist attack, or a recession, pandemic, etc. – there can be literally millions of variables that you experience and observe. You see people’s emotions, you hear different opinions, you read about different perspectives. There’s no way you can remember all the details; there are just too many. So in your recollection you emphasize some memories (sharpening) and discard others (leveling).

People tend to sharpen details that make a good story and fit their existing views, and level the ones that are confusing, painful, or contradict pre-existing beliefs.

So here we have a belief-generating system: What you think is true is heavily based on what you’ve experienced, and you remember the parts of your experiences that make good stories, confirm stereotypes, and connect dots between other experiences.

Think of how complex the 2008 financial crisis was. There were billions of people making complex, emotional decisions at the same time. No one could keep track of everything. So in hindsight people tend to believe what makes sense to them, in simple narratives – the Fed ruined the economy, bailouts were unfair, wealth was destroyed. All of those could be true and believed by one person, but argued against by another person who experienced the same economy but remembers different details. Maybe the Fed saved the economy, bailouts were the best option, and it was the buying opportunity of a lifetime. Depends what you remember.

The dangerous thing is that beliefs based on experience seem evidence-based. But when we’re overwhelmed with observations in a complex world, we cherry-pick the most attractive evidence to appease our simple, story-loving minds.

It is far easier to fool yourself into believing a falsehood than admit a mistake. Changing your mind is rarer than it should be, leading us to cling to false beliefs.

Physicist Max Tegmark writes in the book This Will Make You Smarter:

The core of a scientific lifestyle is to change your mind when faced with information that disagrees with your views, avoiding intellectual inertia, yet many of us praise leaders who stubbornly stick to their views as “strong.” The great physicist Richard Feynman hailed “distrust of experts” as a cornerstone of science, yet herd mentality and blind faith in authority figures is widespread. Logic forms the basis of scientific reasoning, yet wishful thinking, irrational fears, and other cognitive biases often dominate decisions.

You can agree with every word written there and still struggle to change your mind – or take seriously those who do – for two reasons.

One, when you change your mind you can feel like all the hard-fought effort you put into establishing your previous beliefs was wasted. Even a little pain from that reality can be enough to persuade you to stick to the original belief.

Two, when you change your mind, moving from one belief to another, it can be hard to take the new belief seriously – changing beliefs offers proof that the new belief may be short-lived, especially in the eyes of others.

Both recognize an important truth: Beliefs are not just about what we know; They are social signals that offer clues about how we established our beliefs, our confidence in our intelligence, and our ability to pass reliable truth to other people. The quirk is that those signals can be counterintuitive: We should want an expert who is willing to change their mind, but what we actually want is someone who’s confident enough to never have to.

A lot of times we’re not interested in truth – we’re interested in the elimination of uncertainty, and that fact alone causes us to believe things that have little relation to reality."

MY COMMENT

CLASSIC psychology of investing above........and the basis of MUCH human belief and behavior. As you read this article think about all the investors you have known and how this would apply to their actions.

If you are really STRONG......think back and apply the above to your investing. EVERY bad investment starts out as a BELIEF.

 

I did not try to time anything.....but I see in hindsight that I got a really good entry point today for the ten shares of NVDA that I bought for one of my kids.

If I had waited for an entry point I would have missed out. SO.....the fact that I simply put the money all in as soon as it was available.........got me an entry point that I would be siting and waiting for if I was a market timer. You NEVER know if something is a good or a bad price in the moment. BUT..... if you follow the investing research........... you just ignore those little doubts and take what you can get.

 

HERE is what Powell said today.....if you care.

Powell expects more Fed rate hikes ahead as inflation fight ‘has a long way to go

https://www.cnbc.com/2023/06/21/pow...-as-inflation-fight-has-a-long-way-to-go.html

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

"Key Points

• Federal Reserve Chairman Jerome Powell on Wednesday affirmed that more interest rate increases are likely ahead as inflation is “well above” where it should be.
• “Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go,” he said.
• Powell said the labor market is still tight though there are signs that conditions are loosening.

Fed Chair Jerome Powell testifies before House Financial Services Committee

Federal Reserve Chairman Jerome Powell on Wednesday affirmed that more interest rate increases are likely ahead until additional progress is made on bringing down inflation.

Speaking a week after Federal Open Market Committee officials decided for the first time in more than a year not to push rates higher, the central bank leader indicated that the move likely was just a brief respite rather than an indication that the Fed is done hiking.


“Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year,” Powell said in prepared remarks for testimony he will deliver to the House Financial Services Committee. The speech is part of his semiannual appearance on Capitol Hill to update lawmakers on monetary policy.

Following last week’s two-day FOMC meeting, officials indicated they see rate increases totaling 0.5 percentage point through the end of 2023. That would indicate two additional hikes, assuming quarter-point moves. The Fed’s benchmark borrowing rate is currently pegged in a range between 5%-5.25%.

Noting that inflation has cooled but “remains well above” the Fed’s 2% target, Powell said the central bank still has more work to do.

“Inflation has moderated somewhat since the middle of last year,” he said. “Nonetheless, inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go.”

Fed officials generally prefer to look at “core” inflation, which excludes food and energy prices. That is showing inflation running at a 4.7% year-over-year rate through April, according to the central bank’s preferred measure of personal consumption expenditures prices. The core consumer price index for May was at 5.3%.

Monetary policy moves, such as rate hikes and the Fed’s efforts to shed bond holdings on its balance sheet, tend to work with lags. As such, officials decided to skip hiking at this month’s meeting as they observed the impact that policy tightening has had on the economy.

Powell said the labor market is still tight though there are signs that conditions are loosening, such as an increase in labor force participation in the prime 25-to-54 age group and some moderating in wages. However, he noted that the number of open jobs still far exceeds the available labor pool.

“We have been seeing the effects of our policy tightening on demand in the most interest rate-sensitive sectors of the economy,” he said. “It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation.”

Powell later said that the Fed has adjusted its approach to policy after implementing rate hikes at the most aggressive pace since the early 1980s. Included in that run was a streak of four consecutive 0.75 percentage point increases, a pace that Powell said doesn’t seem appropriate now.

“Given how far we’ve come, it may make sense to move rates higher but to do so at a more moderate pace,” he said during the question-and-answer session with committee members.

Inflation expectations, considered a key variable for where prices are heading over time, are “well-anchored,” Powell said. The closely watched University of Michigan consumer confidence survey, for instance, showed that the inflation outlook for a year from now dipped to 3.3%, the lowest since March 2021.

However, Powell also noted that getting inflation lower will require slowing down the economy to below-trend growth. He also emphasized that rate decisions will be made based on incoming data and meeting by meeting, rather than on a preset course.

The remarks also briefly touched on the banking turmoil earlier in the year. Powell said the episode served as a reminder that the Fed needs to make sure its supervisory and regulatory practices are appropriate."

MY COMMENT

Not that I really care.....but....I can see the final rate ending at 5.5% to 6%. Perhaps 1-2 more hikes between now and the end of the year.

AND......the FED is basically done. One or two more hikes is NOTHING in the grand scheme of things for investors. It is ALL ABOUT EARNINGS........it is the earnings STUPID.........going forward for stocks and funds.

 

I find this more interesting about Powell than any of the above.

Listen to the music play: Fed Chair Jerome Powell admits to being a Deadhead

https://www.cnbc.com/2023/06/21/lis...jerome-powell-admits-to-being-a-deadhead.html

"Key Points

• Powell was snapped June 3 at a Dead & Company show in Bristow, Virginia. An ensuing Twitter post created a bit of a social media sensation.
• “It was terrific. What can I say? It was great,” Powell of the show said during a House committee hearing Wednesday."

MY COMMENT

OK......I just hope he and the rest of the FED stay off the acid....for at least the rest of the year.

 

Another day and another dollar......lost.

I was down today in my stocks. ONLY two holdings were UP today......NKE and HON. I got beat by the SP500 today by 0.40%. HOWEVER.....it seems like my losses moderated as the day went on and by the close were only moderate/medium.

At least my kids 10 shares of NVDA that I purchased this morning when the stock was down by over 3%....ended the day with a gain. Actually a gain of 1.8% for the day. Not bad for a losing day.

 

So much for HUMP DAY. We now move on to the final two market days this week......ONWARD AND UPWARD.