The Long Term Investor

At this moment it is a good day for my kids account. ALL of the stocks that I bought a few shares for them today......are in the GREEN. (COST, HD, MSFT, AAPL, and GOOGL). In addition the NVDA that I bought for them on June 21, 2023.....is also up nicely today.

Their first day with a little stock portfolio (other than the SP500 Index that they own) has been a success.

Not that one day matters......at their age these stocks might be owned for many decades.

 

WELL.....another one of those....BOOM, SMASH, BASH....days in the market today. GAINS for everyone....party time.

The CPI and PPI are cooperating. Earnings are starting with a BANG. No one cares about the FED. We are on a BIG ROLL.

I suspect we will start to see some real money pour into the markets. None of the professionals will be able to stand the pressure from their clients to participate. Many of the little retail investors that have been lingering will soon give up and come back into the water.

AS for me......I had another BIG GAIN today. I had a single down stock.......HD. I also kicked a little butt on the SP500 today by......0.93%.

I am now within about 6% of my all time high. We have managed to turn around ALL the losses of 2022 in about 6.5 months.....at least for those that have stayed fully invested.

 

Can you believe NVIDIA? Up another $20.75 or 4.73% today. How long can this keep up? I remember all the "professionals" saying it could not go up any further when it was at about $400 per share.

The big test will come after the earnings on August 23. Has the frenzy over the anticipated earnings gone too far?

 

That +200.41% for NVDA....YTD is insane. I did not realize it was that BIG. Like many people I did notice when it suddenly became the largest holding in my portfolio.

That is the sort of stock that can lead to life changing money. BUT.....on an epic run up like this......you never know when it will end. I see the greatest danger to this company being some event that precipitates a management change.

BUT......I will just.......ENJOY THE RIDE.

 

SO.....the banks reports that are in are showing STERLING results. I notice that all the "experts" seem to be....mostly.......laying low and not talking much. They got so embarrassed last earnings season.....they are holding back this time.

Stocks pop amid upbeat Wall Street results

https://finance.yahoo.com/news/stoc...esults-stock-market-news-today-133642937.html

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

"Stocks rose at the open Friday as upbeat results from JPMorgan (JPM) and Wells Fargo (WFC) lifted those big banks' stocks.

Banks helped lift the Dow Jones Industrial Average (^DJI), which added about 0.5% as quarterly earnings from Wall Street names started rolling in. The S&P 500 (^GSPC) was up 0.25%, while the tech-heavy Nasdaq (^IXIC) was up around 0.3%.

Investors were weighing quarterly updates from the financial sector, with the focus on any signs of impact from this spring's bank failures and the subsequent draining of deposits across the system.

JPMorgan and Wells Fargo shares were on the rise after they both reported a surge in profits in the second quarter. Meanwhile, BlackRock (BLK) stock slipped after its revenue fell year over year.

All the major benchmarks look on track for weekly wins after signs that inflation is cooling and that the labor market is robust have lifted hopes that a strong economy can give stocks momentum to run higher after a stellar start to the year.

• Consumer sentiment hits highest level since Sept. 2021
• 
  US consumers haven't felt this good about the economy in almost two years, according to the University of Michigan's latest reading on consumer sentiment.
  
  The UMich consumer sentiment index for July came in at a reading of 72.6, up from 64.4 last month and 51.5 in July 2022. This marks the highest reading for the index since September 2021.
  
  In a statement, Joanne Hsu, director of the survey of consumers for the University of Michigan, said, "The sharp rise in sentiment was largely attributable to the continued slowdown in inflation along with stability in labor markets...sentiment is now about halfway between the all-time historic low of 50 from June 2022 and the February 2020 pre-pandemic reading of 101."
  
  
  Notably, however, Friday's reading showed a slight uptick in consumer inflation expectations, a number that has been closely watched by Federal Reserve officials. Consumers now expect prices to rise 3.4% over the next year, up from 3.1% last month. Over the next 5-10 years, prices are expected to rise 3.1%, up from 3% in June's reading.
  
  On Wednesday, the latest inflation reading showed consumer prices rose 3% on a headline basis in June, the least since March 2021. On a "core" basis, which strips out food and energy, prices rose 4.8% over the prior year.
• 
  JPMorgan profits surge in second quarter
• 
  JPMorgan (JPM) stock popped nearly 3% in early trading on Monday after the company reported second quarter earnings highlighted by 67% growth in profits compared to the year prior.
  
  The largest US bank reported earnings of $14.5 billion while revenue of $41 billion was up 34%.
  
  "The US economy continues to be resilient," said JPMorgan CEO Jamie Dimon. "Consumer balance sheets remain healthy, and consumers are spending, albeit a little more slowly."
  
  JPMorgan’s results demonstrated that it is still able to make lots of money from its loans while leaning on its sprawling franchises to generate additional revenue. Its net interest income, which measures the difference between what it charges to make loans and pays for deposits, rose 44% from a year ago to $21.9 billion."

MY COMMENT

The markets are starting to really ROLL ALONG. If we can sustain the very good start to earnings we will be in a good position for an EPIC RALLY over the second half of the year.

 

HERE is another good earnings report in the banking world:

Citigroup posts better-than-expected earnings and revenue

https://www.cnbc.com/2023/07/14/citigroup-c-q2-earnings-report-2023.html

MY COMMENT

Of course the share price is being impacted by the MICRO-FOCUS of the markets on the fact that they had a revenue drop year over year. net income was down as a result. Their Investment Banking is an issue. SO.....a good report...mostly a beat.....but some soft spots.

 

This is what happens when a great company goes from founder management to a new CEO. It is also what happens when a company becomes a mature company.

Amazon has become one of the most boring stories in tech

https://finance.yahoo.com/news/amaz...-stories-in-tech-morning-brief-102017352.html

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

"Pardon me while I wake up from a snooze triggered by thinking about Amazon Prime Day this week.

The whole annual spending ordeal came and went with little fanfare. And I think that says a lot about Amazon (AMZN) and the broader tech industry at the moment.

Adobe Analytics said that across both days, $12.7 billion was spent online in the US — representing 6.1% growth year over year. Amazon put out a press release using the word "ever" two times in the headline (a pet peeve of this journalist) to hype up its performance.

All in all, people spent money this week. Amazon probably gained some new Prime members, which will open the door for them to spend more money on Amazon this holiday season.

Great.

But who cares about Prime Day when it's stacked up against a game-changing year for tech? I mean, really.

Nvidia (NVDA) is pushing the AI revolution forward with its powerful new chips. AMD (AMD) CEO Dr. Lisa Su blew me away when she described what's next with her company's own generative AI chips.

Then we have Microsoft (MSFT) and Google (GOOG, GOOGL) going head to head on AI product releases. Did I mention Microsoft is about to own Call of Duty maker Activision Blizzard? Huge deal. Broadcom (AVGO) also moved closer this week to securing its deal for VMWare (VMW). Huge deal.

ChatGPT continues to capture everyone's attention.

And Meta Platforms (META) is powering ahead with AI while also stealing millions of users from Elon Musk's Twitter. I was impressed by what Meta is working on when chatting with top exec Nicola Mendelsohn at Cannes.

Meanwhile, Apple's (AAPL) new $1,000 plus AR/VR goggles could usher in a new wave of human interaction. And the company is now worth over $3 trillion.

Yet, we have Amazon Prime Day in the summer.

"Yes, Amazon has become boring in the tech space because while their core business is good (obviously) they aren't innovating the way we’re used to," Sevens Report Research founder Tom Essaye quipped to me via email. Tom is right.

What was the last big innovation you have seen from Amazon? Alexa?

It's certainly not the consumer-facing website, which increasingly looks like an overrun flea market.

What's the deal with Whole Foods? I am an avid shopper and love the fish department. But I go in there and leave every single time thinking how Amazon has basically done nothing to reinvent this brand and the industry with a major innovation.

Under CEO Andy Jassy, all investors have been rewarded with are headlines on layoffs and less-than-amazing top- and bottom-line growth.

The stock price has lagged too — shares are down about 17% compared to a gain of around 9% for the Nasdaq since Jassy started in early July 2021. Over the last five years, Amazon stock is trailing the Nasdaq by over 30 percentage points.

Now, none of this is to say that boring can't be wildly profitable for Amazon. The company's web services cloud business will get its fair share of business as workloads powered by AI tools demand more capacity.

"We are likely on the precipice of an explosion in AI workload growth in the 2H as GPU capacity comes online, with incremental workload growth here more than offsetting the workloads that have been taken out of the system through the current rationalization cycle," Deutsche Bank's Lee Horowitz said in a recent note. "Importantly, our checks here leave us confident that AWS will accrue more than its fair share of these workloads/dollars, supporting meaningful revenue growth reacceleration into 2024."

Point well taken.

But to really get Amazon's stock and brand back in sizzling territory — where its peers reside — the company's culture of innovation has to resurface.

"Bottom line, they haven't innovated recently the way we're used to," Essaye said.

And this innovation needs to show up not just internally, but externally for consumers and investors to see."


MY COMMENT

This FIZZLE in AMAZON started with the appointment of the new CEO....JASSY. AND......I say....it will continue for as long as he is the leader of the company. He is in way over his head and he is NOT a strong leader. He is just going through the corporate motions.

The problem is not their core business being BORING. Look at COSTCO.....they are the perfect example of a retail business that does well through superb management and superb focus on their core business model and customer service.

Amazon is just going through the motions. Their business results are ok.....but not what they should be. Fortunately for them....going through the motions...is good enough to hang in there for a long, long, time. It is a shame that this company is being allowed to just sit and stagnate under this management team. It will NOT change till the board or BEZOS wakes up and looks for a new CEO.....with vision and energetic focus.

As I have often said......I have this company on about a 1-2 year watch. At this point I am willing to wait and watch.

 

If you are into the big banks......I like this comparison article.

JPMorgan, Wells thrived in 2Q. Citigroup didn't.

https://finance.yahoo.com/news/jpmorgan-wells-thrived-in-2q-citigroup-didnt-141017564.html

The big difference between them:

"Citigroup, for example, struggled with a recent drought of deal making that is making day-to-day life more difficult for all of Wall Street. Its investment banking revenues fell by 24%, to $612 million. Trading was another weakness. Revenue from that activity fell 13%"

"What Citigroup revealed is that a number of problems continue to plague even the biggest institutions, especially those that rely heavily on revenues from dealmaking and trading.

Citigroup's profit tumbled 36% in the second quarter, largely because of weaknesses in its Wall Street unit."

 

NVIDIA.......UP another $17.70.....or.....+3.85% today. The EPIC RUN continues.

We have seen some epic stock runs over the past year or two. Many of them like the Reddit driven market a year ago were CRAZY and not sustainable.

This is different.

This company is now by far the MOST DOMINANT chip company in the world. They have supremely competent management.....founder management.....with engineering background directly related to their core business. Their products are the gold standard. The company is positioned PERFECTLY for the AI trend that is going to last for a long time. This is a REAL company with REAL management and REAL dominance world wide.

RIDING THE WAVE.

 

Stocks are on a good run today. Earnings news has been generally good. No one cares about the FED. There is NO recession going to happen.....and.....the economy is strong....especially for big business. The pandemic supply issues and disruptions are now over and mostly resolved.

We are well on our way to a nice close for the week.

Although at this moment the markets are still green....but are backing off from earlier levels. Looks like typical mid morning weakness. OR.....could be some profit taking after the big jump of the past few days. At least it is a nice change from the lingering and boring markets of the past couple of weeks.....when the markets were consolidating the recent gains and pausing a bit.

If this keeps up we are going to see a lot of short traders capitulating and providing fresh capital to drive the market even higher.

I think it is pretty safe to now say.....YES.....THE BULL MARKET IS REAL.

 

ENJOY THE BULL RUN.....but do not lose track of what is important......the long term generation of wealth for you and your family....in a way that can be sustained.

Don’t ‘drive yourself as crazy as the markets are,’ advisor says — here’s how to navigate volatility

https://www.cnbc.com/2023/07/07/how...atility-according-to-a-financial-advisor.html

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

"Key Points

• Market volatility refers to the uncertainty about the direction the market will take on any given point in time and how it will impact your portfolio, says financial advisor Lazetta Rainey Braxton.
• “Don’t get so wrapped up in the markets” said Braxton. “Best protect you, your money and your legacy.”

When the market is volatile, it’s important to be mindful of your other assets and think of your portfolio in a holistic way, said certified financial planner Lazetta Rainey Braxton, co-founder and co-CEO of virtual advisory firm 2050 Wealth Partners.

“When we are thinking about market volatility, that means that there is uncertainty about what direction the market will go and how that will impact our clients,” said Braxton, who is a member of CNBC’s Financial Advisor Council.

Investors need to be clear where they stand on risk, based on their goals, Braxton added. Your best bet is to look at the diversification in your portfolio, rather than focusing exclusively on the market’s direction.

“It’s so important to think about your financial future from a holistic perspective,” said Braxton. “If you focus only on investments, you’re going to drive yourself as crazy as the markets are.”

‘Don’t get so wrapped up in the markets’

Your broader portfolio consists of all of your assets, said Braxton. In addition to what’s invested in the market, those assets might include cash savings, real estate and your human capital.

“Don’t get so wrapped up in the markets,” she said. “Best protect you, your money and your legacy.“

Keep your home and human capital in mind when you strategize your financial plan, she said. Protect your assets with insurance, including life insurance and policies to protect your home, auto and other possessions. Invest in your human capital by refining your skills to preserve your main source of income, especially in economic downturns.

Cash is also important to ensure you have liquidity. That way, you’re not forced to sell investments at an inopportune time, she said, “in case the markets get tough.” Even though inflation is likely to erode the value of those savings, protecting your liquidity will help you spread out the risk.

“It’s good to have balance and think about your portfolio of assets in a diversified way,” said Braxton."

MY COMMENT

As humans se get all caught up in excitement or or disappointment. What is really important is all the boring times in-between. It is all about planing your financial life for the long term. That includes EVERY assert as a unified whole....your entire net worth.

At different times some of your assets will be performing well.......others will linger. That is ok. A good life plan and a good financial plan is based on the WHOLE.....not just the individual parts.

 

For me.....a good MEDIUM level gain today so far. I have a single stock down today.......HON.

My kid.......is off to a successful start as an individual stock owner....ALL....of their stocks have a gain. Of course all of them have only been held for two days....except for NVDA which was purchased on June 21. Their stocks......COST, HD, NVDA, AAPL, GOOGL and MSFT.

Can you see a similarity to my typical portfolio here?

I am easing them into small positions in my typical stocks.....when they have some cash to add to their account once in a while. They remain mostly invested in the SP500 Index......the stocks represent about 5% of their account total in this one account. Thy have two accounts.....this one which is their primary account which is a taxable brokerage account. They also have a ROTH IRA account which I started when they were a teen and contributed to for them till they were in their late 20's. That Roth account just sits and compounds......with no further contributions....since they have a HUGE pension plan at work that they contribute to.

Their two accounts total about $330,000.

 

On a business level....not social or political......the Bud Light saga just keeps on giving. Very entertaining. NOW.....it is the DREADED STAR OF DEATH.

Costco just planted the 'death star' on Bud Light cases — a sign that it won't restock the beer amid controversy, plummeting sales. Wild speculation or one more devastating blow to the brand?

https://finance.yahoo.com/news/costco-just-planted-death-star-133000145.html

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

"Shoppers at Costco have noticed an asterisk on the price tag for Bud Light beer across the beverage aisle. Experienced Kirkland members have seen the sign before and call it the “death star.” It could be an indication that one of the largest retailers in the country may be considering not restocking the troubled beer brand.

The star of death

Casual shoppers would barely notice a small asterisk on a price display above a shelf. These days most of the attention is on the price. However, Kirkland members believe the asterisk has special significance for Costco’s supply chain decisions. The asterisk is often associated with items that are being discontinued.

These items are usually marked down to get rid of supply on the shelves. It’s a subtle sign to Costco employees not to restock an item after the inventory is depleted. Devoted shoppers look for the asterisk to spot deals and have even nicknamed it the “death star” on the Facebook page Costco Fans.

Now the star is being spotted over cans of Bud Light. “Is it just me…Or am I the only one who noticed that Costco has applied their infamous 'Star of Death' on Bud Light being sold!” said one Twitter user.

Shoppers believe it means the Bud Light cans could soon be taken off Costco’s shelves.

The company hasn’t acknowledged these claims directly. But if true, BudLight sales could see a significant impact. Costco is one of the top three mass retailers in America, based on sales volume per store. It’s a critical part of any major consumer brand’s distribution network. Losing a spot on Costco shelves isn’t good news.

Costco’s move could potentially trigger other big retailers to follow suit.

Brewing controversy

Bud Light sales have been plunging since spring after an ill-fated social media marketing campaign caused political backlash. Data from Bump Williams Consulting and NielsonIQ suggests the brand sold 28.5% fewer beer cans in the week ended July 1. The week before, sales plunged 27.9%.

In response, Anheuser-Busch has initiated a temporary rebrand of the Bud Light product. Aluminum bottles of the beverage will feature camouflage prints and images evoking the “Folds of Honor” program that offers special educational assistance to the spouses and children of disabled and deceased U.S. Army veterans.

What comes next?

Bud Light’s marketing woes are undeniable. However, the parent company’s marketing efforts could stem the tide. Meanwhile, Quora user Dimitri Vulis believes Costco’s so-called Death Star isn’t as dramatic as its name suggests.

Some items that have received the death star in the past have been brought back into distribution at a later date. It’s also worth noting that Costco itself has never acknowledged the “death star” or elaborated on its purchase decisions.

Meanwhile, researchers at Cornell University believe the impact of politically-motivated boycotts is often temporary. Sales and brand reputation take a hit initially but recover over the long run as the media cycle turns and public attention moves on.

However, industry insiders disagree. Catarina Tucker, the founder of Barnastics, a bartending service, told Fox News that the brand has seen a significant shift in consumer preferences. She believes the sales dip could be permanent as consumers move on to other beer brands."

MY COMMENT

I hate to tell the researchers at Cornell.......this is NOT a politically motivated boycott. It is and was an instantaneous consumer reaction to a HUGE marketing GAFF. An EPIC gaff. One that will be taught in Business Schools for decades.

This sort of brand sea-change is NOT something that is going to change. They can not just wait it out or ramp up alternative advertising.

BUT....I do love the concept of the Costco DEATH STAR.

Who said business could not be entertaining.

 

WELL.....the NASDAQ just went red. We will see if the averages can hang on to close in the green.....or....if the traders are going to drive them red by the close.