The Long Term Investor

I consider myself EXTREMELY good with money and business.....and.....visualizing the far future financially.

BUT......even as good as I consider myself......it is EXTREMELY DIFFICULT to be successful in living from and stretching personal assets. I retired at age 49......TWENTY FOUR years ago. I have been living from personal assets over that entire time. I have no pension other than Social Security. Until age 70 I did not have the Income Annuity money.

I know from experience that it is EXTREMELY DIFFICULT to manage and live from your personal assets over that long of a time. The average person WILL NOT be successful in doing so.

I am not being negative.....I am speaking from the reality of someone that did it. For example in my retirement years after age 49.....I had to navigate the BEAR MARKET CRASH of 2000-2002.....the CRASH of 2008-2009.....the pandemic.......and the one year CRASH of 2022.

You have to plan......you have to think.....you have to have the ability to visualize and project money and needs for decades.

 

WELL.....I have shows over the next four days. Today we will be playing outside in 104 to 106 degree temps. Same with the next four days. The grand finale will be Saturday when we play two shows.....one mid day and another late afternoon....in the extreme heat.

I take it......one day at a time......in these killer conditions.

 

After the very mild losses I have had some days lately....it was nice to have a barn-burner day today. I was GREEN in nine of ten stocks. The single RED stock.....HON was only down by (-0.001). Needless to say I also beat the SP500 today by 0.81%.

A very significant gain today.....CPI day.

 

The close today.

Stocks pop as inflation continues cooldown

https://finance.yahoo.com/news/stoc...oldown-stock-market-news-today-124307885.html

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

"Stocks rose Wednesday as inflation continued its cooldown in the US, weakening the case for more interest rate rises from the Federal Reserve.

The S&P 500 (^GSPC) finished up 0.75%, while the Dow Jones Industrial Average (^DJI) added about 0.25%. The tech-heavy Nasdaq (^IXIC) led the way up, rising more than 1%.

The Consumer Price Index (CPI) report slowed to its lowest rate since March 2021, bolstering hopes that Fed officials might rethink their stance that more rate hikes are needed to ease price pressures.

But the rate is still above the central bank's 2% target, and traders are pricing in a 92% chance of a rate hike at the Fed's July meeting, according to the CME FedWatch Tool.

• Stocks close higher after data shows inflation eased in June
• 
  Stocks closed higher after June's CPI report showed prices rose at the slowest pace since March 2021.
  
  The S&P 500 (^GSPC) rose 0.8%, while the Dow Jones Industrial Average (^DJI) closed 0.3% higher, or less than 100 points. The tech-heavy Nasdaq (^IXIC) was 1.2% higher.
• 
  
• The MSFT-ATVI deal could put gaming acquisitions on ice
• 
  Microsoft's (MSFT) $69 billion acquisition of "Call of Duty" maker Activision Blizzard (ATVI) got clearance from a federal judge Tuesday. But don't expect more deals from big tech in this space anytime soon.
  
  Analysts from Jefferies said in a research note that "in an ironic twist, despite the likely approval of the Activision deal, it is more unlikely now than 18 months ago that we see big tech make an acquisition."
  
  The note went on to explain:
  
  "While we do believe there are nice fits for Amazon for example, a full plate, higher interest rates, and its cost-cutting mood (including in media) lead us to believe this is unlikely. Google is fully out of video games, while Apple has rarely shown any propensity to fully embrace the industry. Big media has a stronger case, but we would remove Disney from the list as the company has more pressing issues to deal with now. Sony may need to make a counter-move and Comcast is intriguing, but we would put the likelihood as low."
  
  Consider it a case of unfortunate timing.
  
  Jefferies points out acquisitions are the only way for big tech and media to successfully build gaming businesses, noting that "we would go as far as argue that if we don't see a significant acquisition by big tech/media in the next 18 months, these companies' respective gaming strategies will either fail or remain forever sub-scale."
  
  And given the fight for profitability in the streaming business, it's looking like media companies could use a new growth area.
  
  
• Elon Musk announces new AI company
• 
  Elon Musk has reportedly been working on plans for an OpenAI competitor. On Wednesday, he announced its formation.
  
  The goal of xAI is "to understand the true nature of the universe," according to the company's website. Its team includes Musk as well as executives from companies including ChatGPT creator OpenAI, Google, and Microsoft.
  
  The team will be available for questions in a Twitter Spaces chat on Friday, according to the website.

MY COMMENT

LOVE the gains and close today. If we are lucky we will see carryover for the rest of the week. BUT....no doubt....the bank earnings will be the primary news item for Friday.

Elon Musk and AI......got to love it......this will be under his "X" business model.....since he is calling it "xAI". Keep in mind the previous change of name that Musk did for Twitter to......."X Corp". This guy has some real long term plans using Twitter as a vehicle. A true visionary.

 

YES......another good start today. I like this little article.

Prices Cool. Sentiment Warms.

https://www.fisherinvestments.com/en-us/insights/market-commentary/prices-cool-sentiment-warms

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

"Improving inflation is gaining more notice.

US Consumer Price Index (CPI) inflation slowed again in June, and a strange thing happened: People actually noticed. Headlines heralded the deceleration to 3.0% y/y, in line with the long-term average inflation rate. Pundits also cheered core CPI’s slowing from 5.3% y/y to 4.8% and—refreshingly—explained correctly that this figure is skewed higher by shelter costs, which hit CPI at a lag and, in the case of owner’s equivalent rent, are mostly imaginary.[ii] Excluding food, energy and shelter, the inflation rate is all the way down to 2.7% y/y.[iii] What should investors make of this nascent sentiment turnabout? Let us explore.

The CPI report came out at 6:30 AM PDT, and in its wake, the S&P 500 went vertical, opening about 1% higher from Tuesday’s close.[iv] It has since eased back a bit and sits up 0.75% in price terms, as we write mid-morning. So it would not surprise us if there were a bit of a positive feedback loop here and the market’s reaction influenced the tone of today’s inflation coverage. Whatever the reason, though, sentiment toward inflation does seem to have warmed, which suggests to us the improvement is getting priced in. It might still bring households welcome relief as prices slow further, but the effect is probably baked into stocks (or close to it). Markets are efficient and have long since seen the underlying improvement everyone is getting hip to now.

We seem to be at a similar point with rate hikes. After the Fed paused last month, market-based indicators penciled in two more quarter-point hikes by yearend. That remained the popular expectation following June’s CPI report, with most coverage saying inflation still wasn’t low enough for the Fed’s taste, which would probably prompt a bit more tightening ahead. Time will tell if they are correct—Fed moves are always unpredictable, and they might decide to give more weight to the continued improvement in leading inflation indicators we covered last week. The fall in money supply, for instance, is gaining more notice.

Then again, central bankers are all about saving face, and this crew has tied itself in knots on that front. When inflation started picking up in 2021, the Fed (and other central banks) deemed it transitory. Most of the world wrongly interpreted this as “ultra-fleeting” and, when inflation continued accelerating to near-double-digit highs through last summer, central bankers caught a lot of flak for being wrong. So they changed their view and described inflation as “persistent,” a word they still use. Having dug in on this front, they may decide it is a bad look to stop hiking just yet. This, despite the fact the definition of “transitory” is simply “not permanent.” And Exhibit 1 shows the spike was very much temporary.

Exhibit 1: High Inflation Looks Transitory After All


Source: FactSet, as of 7/12/2023.

Regardless, the thought of a couple more Fed rate hikes doesn’t seem to be bothering the world too much. Here, too, sentiment has changed a lot. With most economic indicators holding up ok through the Fed’s tightening campaign, few seem to think another hike or two is going to move the needle in a bad way now. The chatter has shifted from will the Fed cause a recession? to how much more does the Fed need to slow the economy to keep inflation in check? At least subconsciously, people seem to finally be fathoming that rate hikes aren’t auto-bearish or recessionary, even if they are probably crediting the Fed with more direct economic influence than it has. After all, if the Fed were all-powerful, banks’ funding costs would be right in line with the fed-funds target range rather than a few percentage points lower. The current national average savings deposit rate is just 0.4%, and average CD rates are below 2.0%.[v]

If markets are indeed moving on from inflation and Fed fears, that is good news—it means one or two fewer things weighing on sentiment. There are still plenty of other bricks left in the wall of worry, but having a couple less fears in the mix can help people get a bit more positive and eager to bid up stocks. This is how bull markets unfold: Investors gradually shed false fears, and their slowly warming spirits help lift stocks. This is the phenomenon that underpins Sir John Templeton’s famous description: “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” We still think this bull market is in that relatively dour first half, but deep pessimism seems behind us. Which seems natural, nine months to the day from stocks’ low. The gradual thaw evident in inflation reactions seems right on schedule."

MY COMMENT

YES......it is a BULL MARKET.

 

Although some people......"traders"......dont seem to understand this.

Short Selling Just Hit $1 Trillion
But it’s a losing strategy this year, as last year’s big winners have turned into 2023’s big losers.

https://www.institutionalinvestor.c...0/portfolio/short-selling-just-hit-1-trillion

BOLD is my opinion OR what I consider important content)

"Short selling in the U.S. stock market hit $1 trillion during the first six months of 2023, after climbing by $138 billion since the start of the year. But the bulk of the increase — some $110 billion — was due to the rising prices of the stocks being shorted, according to a new report from S3 Partners.

Rising prices mean marked-to-market losses for short sellers. And these losses have been most noticeable in stocks that that tanked last year but are bouncing back in a market that is up almost 17 percent on a total return basis through the first six months of 2023.

So far this year the short bet that’s the biggest loser, in terms of absolute dollars, is Tesla — one of last year’s biggest winners for short sellers. This year Tesla bears were down 78 percent, or $13 billion, on their Tesla shorts during the first half, according to S3 Partners. That’s exactly the percentage gain they made last year, as of late December, as Institutional Investor previously reported. The gains in 2022 came to $15 billion.

Still, Tesla permabears like Mark Spiegel’s Stanphyl Capital are hurting this year. Stanphyl was down more than 35 percent in the first half, which Spiegel said in a letter to investors was largely related to his Tesla short. “Our large short positions in SPY [the S&P 500 ETF] and reinflated bubble-fraud Tesla killed us in the first half of this year, with Tesla up 112 percent,” Spiegel wrote.

Another big loser for short sellers this year has been Carvana, the online used car marketplace, that was one of last year’s top shorts. The onetime hedge fund hotel stock rebounded during the first half of 2023, and shorts are down by over $1 billion, or 200 percent. If the short sellers have held onto their positions, however, they are still ahead: Last year they made $4.3 billion — a gain of 370 percent.

Crypto trading platform Coinbase Global, which has been sued by the Securities and Exchange Commission for operating illegally, nonetheless has foiled the shorts this year. The stock tumbled in 2022 during the crypto crash, but as Bitcoin bounced back this year, so did Coinbase’s stock. Even though the SEC action took some of Coinbase’s steam away, short sellers have still lost $1.5 billion, or 70 percent, this year through June 30. Last year, by comparison, they made $2.23 billion, for a 142 percent gain on their Coinbase shorts.

The biggest winners for the shorts during the first half of 2023 were regional banking stocks, which tanked in quick succession earlier in the year in the face of a downturn for tech and crypto, coupled with rising interest rates that pummeled their fixed income securities holdings. Short sellers made $1.6 billion, or 419 percent, betting on the collapse of First Republic Bank, which was eventually taken over by JPMorgan on May 1.

The next-best haul for short sellers was Silicon Valley Bank, which earned short sellers $1 billion, or a 242 percent gain, when it was seized by the FDIC in March. A third bank, Signature Bank, netted short sellers $643 million, or 308 percent, when the FDIC suddenly took it over two days after it seized SVB. The much smaller Silvergate Capital, whose stock had already fallen substantially in late 2022, earned short sellers $318 million, or a 274 percent gain, as it announced it would wind down operations two days before SVB failed.

Another bright spot for short sellers has been Trupanion, the unprofitable pet insurance company that has become a target of well-known short seller Marc Cohodes (who was also short Silvergate and Signature.) Trupanion shorts have racked up almost $300 million in marked-to-market gains during the first half, for more than an 80 percent return.

But most of the short selling done this year has been a hedge — and a way for managers to increase their long exposure, according to S3 Partners.

“While short sellers were actively shorting into a rising market, that does not necessarily mean that they were solely betting on a reversal in an overheated or overbought market,” said Ihor Dusaniwsky, managing director of predictive analytics, and Matthew Unterman, director of predictive analytics, in their report.

“A significant portion of the short selling was due to an increase in hedge fund leverage as [funds] increased both their long and short exposure,” they said. “Hedge funds increased the total notional size of their portfolios to gain more exposure to the volatile and upward trending market.”

MY COMMENT

Keep up the good work. These are the people that drive the short term trading.

 

A BEAUTIFUL day in the markets today. The initial earnings reports from Delta and Pepsi were very nice BEATS. I suspect the bank that report on Friday will also be very good. This is a great start to earnings season.

HERE are the markets today.

S&P 500 rises for a fourth day on more encouraging inflation data

https://www.cnbc.com/2023/07/12/stock-futures-today-live-updates.html

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

"Stocks rose Thursday after another key inflation reading came in lighter than expected. This came after the S&P 500 closed at its highest level in over a year.

The S&P 500 climbed 0.5%, while the Dow Jones Industrial Average added 51 points, or 0.1%. The Nasdaq Composite
advanced 1%.

Cybersecurity stock Palo Alto Networks jumped 4.6%, partially rebounding from Wednesday’s losses. Meanwhile, shares of MGM Resorts and Alphabet rose more than 4%.

June’s producer price index report rose less than anticipated, building upon optimism from Wednesday’s consumer price index data. The PPI, which measures what wholesalers pay for goods, rose 0.1% in June. Economists polled by Dow Jones had expected an increase of 0.2%. Core PPI, which strips out volatile food and energy prices, climbed 0.1% — also lower than expectations.

“The PPI confirmed the cooling inflation shown in yesterday’s CPI, but the lower-than-expected weekly jobless claims number was a reminder of continued labor market tightness,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office.

“For now, the stage appears to be set: The Fed is still on track to raise interest rates in a couple of weeks, and investors will shift their focus to corporate balance sheets as earnings season kicks into gear,” Loewengart continued.

Stocks surged Wednesday after a cooler-than-expected June consumer price index report eased some worries that the Federal Reserve may tip the economy into a recession as it fights to bring down sticky inflation."

MY COMMENT

Way to go PPI.......now we can focus on earnings. I am intentionally omitting thee FED rate hike as something that anyone will focus on. The FED is over.....last years old news.

 

If you want to see the PPI data......here you go.

June wholesale prices rise less than expected in another encouraging inflation report

https://www.cnbc.com/2023/07/13/ppi-june-2023-wholesale-prices-rise-less-than-expected.html

"The producer price index for June had a smaller-than-expected increase, the Labor Department reported Thursday, in the latest sign that inflation is calming in the United States.

The PPI for final demand rose 0.1%. Economists surveyed by Dow Jones were expecting an increase of 0.2%. The PPI climbed 0.1% when excluding food, energy and trade services, which was in line with expectations."

MY COMMENT

See the article for more on PPI. Everything continues to kine up nicely in support of a BOOMING year for investors.

 

One of my kids came into some extra money lately....about $7000. I manage their brokerage account. Up till recently they had everything in the SP500.

They recently got to the point that their account is over $300,000. So....I decided to get them started on a few shares of some top companies to go along with their Index. So I bought about $2000 of the following businesses in their account a few minutes ago:

COST - 5 shares
HD - 6 shares
GOOGL - 16 shares
MSFT - 5 shares
AAPL - 10 shares

On COST I had to go a little over $2000 in order to get 5 shares for the account.

I previously bought 10 shares of NVDA in this account......on June 21, 2023. Those shares are now UP by over 5%.

I wanted to get these purchases done now before earnings on any of these companies......plus....they had the majority of the cash needed right now. I did have to sell a bit of the SP500 Index fund to get the remainder of the needed funds for the purchase over the $7000 in cash that they had available.

I dont anticipate any more individual stock purchases in this account.....unless they come into some extra cash. They will continue to put $500 per month into the SP500 Index.

 

EVERYTHING is a negative....EVERYTHING is an issue. ALL news good or bad......is BAD. There is an....unfortunate...... OBSESSION with economic data going on now.

America's retailers have a new challenge: Cooling inflation

https://finance.yahoo.com/news/amer...ew-challenge-cooling-inflation-152510154.html

MY COMMENT

As an investor this is not something I am going to obsess over. This is why we pay management the BIG BUCKS.

 

Well as you can see I survived the show yesterday. When we started it was somewhere between 103 to 108 degrees. We do it again later today.

 

The financial gods give and at the same time take.

Mortgage rates rose to the highest point this year, but new inflation data offers hope

https://finance.yahoo.com/news/mort...new-inflation-data-offers-hope-160002443.html

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

"Mortgage rates climbed close to 7% this week, hitting their highest point of the year. But experts say rates may soften in weeks ahead based upon new inflation data.

The rate on the 30-year fixed mortgage increased to 6.96% from 6.81% the week prior, according to Freddie Mac. Rates, however, are likely to decline next week, as new government data released Wednesday showed inflation had cooled to its lowest level since early 2021.

Freddie Mac survey collects data from Thursday through Wednesday and may not reflect the latest market response to inflation data.

The rise in rates is bad news for potential buyers. Higher rates have kept homeowners from listing – keeping inventory tight and home prices elevated.

“[This week’s] encouraging inflation data could be used as a basis for another ‘wait-and-see’ approach in the upcoming FOMC meeting, which may help reverse the recent rise in mortgage rates," Realtor.com economist, Jiayi Xu said in a statement. "This, in turn, would create a more favorable environment for those looking to purchase a home in the coming fall season."

Buyers seek affordable options

Mortgage demand for purchases hit the lowest point in a month toward the end of June, but seemed to pick up modestly during the Fourth of July weekend, said the Mortgage Bankers Association (MBA).

The volume of purchase applications increased 2% on a seasonally adjusted basis for the week ending July 7, per the MBA, but remained 26% lower than the same week a year ago.

“The rise in purchase activity was driven by increases in both FHA and VA purchase applications,” MBA Deputy Chief Economist Joel Kan said in a statement.

These loans typically attract first-time buyers, who are making up a larger share of the buyer pool as “move-up buyers” remain reluctant to sell their current home and lose their existing low mortgage rate.

The problem for first-time buyers, though, is finding homes within their price budgets.

Confidence among buyers was also weak in June. At least 78% of potential buyers said they thought it was a bad time to buy, according to Fannie Mae’s latest confidence index. Only 22% of those surveyed believed it was a good time to purchase.

"Inventory — particularly affordable homes — is tight in Miami," Luis Padilla, CEO of OceanSide Reality and Padilla Team in Miami told Yahoo Finance. "We're getting a lot of heat and new incomers from Chicago, California, New York that are looking for affordability here. The problem is that locals then get pushed out, and have to move north of Orlando or out of state. It's happening a lot."

The lack of previously-owned homes for sale has kept home prices stubbornly high, but buyers may be relieved to hear that home prices may have reached a peak for the year.

The median home price in the US was $452,490 for the week ended July 10, according to Altos Research, down from $455,000 the week prior. That’s half a percent lower than a week prior and half a percent lower than a year ago.

“Home prices are flat year over year and there’s no indication anywhere in the data yet that home prices are falling from here,” Mike Simonsen, CEO of Altos Research wrote in a blog post. “It’s very common for the last week of June to be the peak of home asking prices and it looks like this year is no exception.”

There are just 465,000 active unsold US single-family homes on the market for the week ending July 10,according to Altos Research, down from 467,000 the week prior.

At this pace, economists from Realtor.com expect that the share of previously owned homes will drop by 5% for the year as a whole, Xu said in a statement.

One silver lining for homebuyers in today's market could be an influx of new construction.

Construction of both single- and multi-family homes increased 21.7% to a seasonally adjusted annual rate of 1.631 million units in May, the latest Census Bureau data found. Permits to build and housing starts also registered month-over-month gains.

Xu added: “Fortunately for buyers, new homes remain an option, as builders are continuing to add homes with a somewhat greater focus on affordable price points.”"

MY COMMENT

The poor home buyers. What a horrible time for them right now.

BUT.....I do think it is important for most people to get into home ownership as soon as they can. That does not mean just jumping on any old house.....the deal has to be right for the specific person and their situation.

Even in the current messy market....I believe it is important for people to own a home so their housing costs are locked in. As long as they are longer term home buyers and not speculators.......and....they choose a realistic and rational property to buy....they will be fine. I think it is important to get into that first home at a young age.......if possible.....to get onto the real estate train.

 

I did look at my account a short while ago. I had a nice gain. My non-tech companies were mostly down.....TSLA, HON, COST, and HD. But I dont care about the details. What I care about is my portfolio as a whole and today.....it is doing a good job for me.

 

The RALLY continues.

Stocks continue rally amid more signs of cooling inflation

https://finance.yahoo.com/news/stoc...lation-stock-market-news-today-164136266.html

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

"Stocks kept up their rally on Thursday after producer price data provided further evidence inflation is cooling and companies started earnings season stronger than analysts had expected.

The S&P 500 (^GSPC) was up 0.6%, while the Dow Jones Industrial Average (^DJI) rose 0.2%. The tech-heavy Nasdaq (^IXIC) led gains, rising about 1.2%.

A drop in headline consumer inflation to a two-year low gave markets a boost of energy on Wednesday and was acting as a drag on the dollar.

The Producer Price Index (PPI) reading for June came in at 0.1%, undershooting expectations. Meanwhile, Labor Department data showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week.

A cooldown in inflation could give the Federal Reserve reason to ease up on its rate hike campaign, though the CME FedWatch Tool shows most traders still see odds above 90% for an increase in July.

Another potential impetus for the rally arrives with the start of earnings season. Upbeat reports from PepsiCo (PEP) and Delta (DAL) got the ball rolling Thursday, but the true kickoff comes Friday with results from Wall Street banks like JPMorgan (JPM) and Citi (C)."

• 
  Fed's Bullard steps down
• 
  St.Louis Fed President James Bullard is leaving his role effective Aug. 14, the St.Louis Fed announced Thursday. Bullard is leaving to become the inaugural dean of the Mitchell E. Daniels Jr. School of Business at Purdue University. He'll start in that role on August 15.
  
  Bullard had been president for the last 15 years. Jim McKelvey, chair of the St. Louis Fed’s board of directors and the bank’s deputy chair, Carolyn Chism Hardy will lead the search committee for a new president.
  
  In the interim, the St.Louis Fed's COO Kathleen O’Neill Paese will assume the role of interim president and CEO."

MY COMMENT

We should be good for the gains today. It would take an EPIC SELL-OFF for the markets to crash from here in the last ten minutes.

ANOTHER day today that is a perfect example of why it counts to be fully invested all the time. You never know when these sorts of BIG GAIN days are going to happen. Miss just a few of them.....and....your returns will never be able to keep up with the unmanaged indexes.