The Long Term Investor

Another good day for me today. Good being a gain....no matter how small. I had a small gain today.....green is green. PLUS....I had a beat on the SP500 by .32%.

I ended the day and the week with Eight of ten stocks UP today. The two losers were.....HON and NVDA.

It is unfair to call NVDA a "loser" after all the recent gains...but it was down at the close today. During the day the price got too high and triggered some profit taking. NO DOUBT.....direction for this stock continues to be MASSIVELY positive.

 

ANOTHER....brilliant week for the markets this week. The RALLY and the BULL MARKET continue and may even be picking up steam.

DOW year to date +4.11%
DOW for the week +2.29%

SP500 year to date +17.34%
SP500 for the week +2.42%

NASDAQ 100 year to date +42.38%
NASDAQ 100 for the week +3.52%

NASDAQ year to date +34.85%
NASDAQ for the week +3.32%

RUSSELL year to date +9.64%
RUSSELL for the week +3.56%

One of those weeks where you just HAD to be in invested. A BOOMER. The NASDAQ 100 is running away from all the other averages at +42.38% year to date.

As for where I stand at the ended of this week.......for my entire portfolio.....+36.48% year to date. Last Friday I was at +32.27% year to date. So this week I gained.....+4.21%. I cant complain about that....in just a single week.

 

HAVE A GREAT WEEKEND everyone.

My show schedule continues. The KILLER day is tomorrow with two outdoor shows. One is at mid-day...the other is early evening.....with a little 75 mile drive between them. I will be doing a 14 hour day...all together.....leave about 9AM and get home about 11PM.

Each show is three hours.......with a two hour first set.....a short intermission.....and the final set.

The conditions.......we will be playing outside in 100 to 104 degree heat.

 

Hey EMMETT

You are not able to post much now with your new....BIG-SHOT......job. BUT.....I can see you have been STILL working the phones like a maniac and driving the BULL MARKET RALLY for us little people on here.

KEEP UP THE GOOD WORK.

 

Speaking of....GOOD WORK.....I like this result.

U.S. appeals court refuses FTC request to pause Microsoft deal for Activision

https://www.reuters.com/legal/us-ap...t-pause-microsoft-deal-activision-2023-07-14/

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

"July 14 (Reuters) - A U.S. appeals court on Friday rejected the Federal Trade Commission's request to pause Microsoft's (MSFT.O) $69 billion purchase of "Call of Duty" maker Activision Blizzard (ATVI.O).

The decision removes one of the few remaining hurdles stopping Xbox maker Microsoft from closing the deal and expanding its gaming business.

The FTC had also asked Judge Jacqueline Scott Corley of the U.S. District Court in northern California for a similar stay but she rejected that request late on Thursday.

The FTC did not immediately return a request for comment.

Microsoft President Brad Smith said: "We appreciate the Ninth Circuit's swift response denying the FTC's motion to further delay the deal. This brings us another step closer to the finish line in this marathon of global regulatory reviews."

The deal, the largest in the history of the videogame industry, still needs to be approved in Britain.

Now that its latest appeal has been rejected, the FTC may drop the fight, as it has in similar situations in the past. This happened most recently in February with Meta Platforms' (META.O) purchase of virtual reality content maker Within Unlimited. The FTC lost in federal court and dropped the challenge.

The merger agreement between Microsoft and Activision will expire on July 18. After July 18, either company will be free to walk away from the deal unless they negotiate an extension.

In Britain, the Competition and Markets Authority opposes the transaction on concerns about the impact on competition in cloud gaming. On Friday, it received a "detailed and complex" new proposal from Microsoft, and extended its deadline for a final ruling to Aug. 29, although it said it would aim to rule as soon as possible.

In the United States, the FTC had argued the deal would hurt consumers whether they played video games on consoles or had subscriptions because Microsoft would have an incentive to shut out rivals like Sony Group (6758.T). Microsoft responded to that by offering 10-year licenses to rivals.

But on Tuesday, Judge Corley ruled the deal was legal under antitrust law and declined the FTC request to slap a preliminary injunction on it to give the FTC time to take it before an internal FTC judge in August.

The agency appealed the loss to the Ninth Circuit Court of Appeals, which issued its ruling on Friday.

"This case is about more than a single video game and the console hardware to play it. It is about the future of the gaming industry. At stake is how future gamers will play and whether the emerging subscription and cloud markets will calcify into concentrated, walled gardens," the FTC wrote in a filing to the appeals court.

Microsoft has struck a deal to give rival Nintendo (7974.T) access to Activision's "Call of Duty", contingent on the deal closing. The company argues that agreements like this show it does not plan to hoard the games for use on its Xbox platform and subscription service."

MY COMMENT

Glad to see this. I hope this deal closes.....anything that brings more money to Microsoft is great for me as a shareholder.

The government needs to quit trying to harm the big tech industry. Even though these companies are HUGE they could be irrelevant tomorrow. Any of these companies is one industry advance away from irrelevance. Look at the dominant companies in the 1990's and where we are today. This OLD FASHIONED view of antitrust harms the USA economy and hurts the country.

I dont know if they can simply do the deal and not sell the product in Britain...if they will not agree to allow the merger. If they can....that is what I would do. Nothing makes a product more desirable and sought after than a ban. I dont think a ban in Britain would make a bit of difference to the bottom line.

 

I see this regarding the above.

"...industry analysts see a path for a carveout that satisfies the CMA's concerns in the UK while allowing the merger to go forward elsewhere. Such a carveout could be made easier because the CMA's decision is focused solely on cloud gaming competition rather than the overall effects on the rest of the console market.

"If the decision stands and the deal receives approval in other jurisdictions, Microsoft could geofence the Activision games [on its cloud service] out of the UK," Gamma Law Managing Partner David Hoppe told Why Now Gaming. "That would presumably address the CMA’s concerns."

Wedbush Morgan analyst Michael Pachter agreed, telling GameSpot that Microsoft could "carve out Game Pass in the UK and keep all Activision Blizzard content off of the service and commit that they will keep the price of Game Pass at the current price plus no more than the rate of inflation... for the next 10 years. If they commit to that, they can appeal the UK’s inevitable approval with those carveouts, and they will win."

Of course, this kind of carveout depends on the merger deal being approved in other major markets. EU regulators are set to issue their own decision on the merger by May 22 and are widely expected to approve the deal. In the US, meanwhile, a Federal Trade Commission lawsuit attempting to block the deal is set for an evidentiary hearing on August 2."

https://arstechnica.com/gaming/2023...activision-merger-might-not-be-dead-just-yet/

 

Coming soon to a neighborhood near you.....the BIG SEVEN earnings.

Investors brace for earnings from ‘Magnificent Seven’ US growth giants

https://finance.yahoo.com/news/investors-brace-earnings-magnificent-seven-211410065.html

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

"NEW YORK (Reuters) - A handful of massive growth and technology names that have dominated the U.S. stock market in 2023 are set to report earnings in coming weeks, potentially determining the path for this year’s equity rally.

Lately dubbed the “Magnificent Seven” by investors, shares of the U.S. companies with the biggest market values soared between 40% and over 200% so far this year. Those moves have accounted for a lion's share of the S&P 500's 17% year-to-date rise and propelled the index to its highest level since April 2022.

The outsized gains have come with big earnings expectations for the seven companies: Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta Platforms. BofA Global Research projects they will increase earnings by an average of 19% over the next 12 months, more than double the an 8% estimated rise for the rest of the S&P 500.

They will need strong results to justify premium valuations. Those companies trade at an overall trailing price-to-earnings ratio of about 40 times, versus 15 times for the S&P 500 excluding those companies, according to BofA.

Their results may be crucial to the market as a whole. Fueled by their recent gains, megacap stocks have climbed to dominate benchmark indexes, causing headaches for some managers of active funds. In the S&P 500, the seven stocks comprise 27.9% of the index's weight.

Investors will look beyond second quarter results, said Bill Callahan, an investment strategist at Schroders.

“It’s also how do these big companies, which are carrying the market ... guide for the rest of the year and into 2024,” he said.

Overall, the seven companies account for 14.3% of overall S&P 500 estimated earnings for the second quarter, and 9.3% of estimated revenue, according to Tajinder Dhillon, senior research analyst at Refinitiv.

Among the reports in the previous quarter, Nvidia was one of the standouts. The semiconductor company's revenue forecast blew past estimates as it said it was boosting supply to meet surging demand for its artificial-intelligence chips, further fanning the market's excitement over AI. Nvidia shares are up well over 200% this year

Tesla is the first of the growth giants to report, with earnings expected on Wednesday. The Elon Musk-led company this month said it delivered a record number of vehicles in the second quarter.

Microsoft and Meta are among the companies due to report the following week, and investors are expected to focus on how companies are seeking to harness AI.

While AI benefits may not immediately materialize for every company, investors are eager to learn "more about how they are going to convert that into money, essentially," said Thomas Martin, senior portfolio manager at Globalt Investments.

"It’s going to take some time for that to work its way through and to show up," said Martin, who is overweight some of the megacap stocks. "Along the way, people are going to want to see some sort of progress."

There are signs market gains are broadening beyond the megacaps. The equal-weight S&P 500, a proxy for the average stock, is modestly beating the S&P 500 over the past month -- up 3.6% versus about 3% for its counterpart. The equal-weight version trailed badly for most of 2023. Strong U.S. data have driven confidence the economy can avoid a long-feared recession. A so-called "soft-landing" could lift cyclical stocks such as industrials and small-caps that are trading at cheaper valuations. But many investors say the corporate giants are nevertheless here to stay as critical holdings. Yung-Yu Ma, chief investment officer at BMO Wealth Management said that while “there is a lot priced in” to megacaps’ valuations, that did not mean they are overvalued.

"If you think about the megacaps broadly ... they have gone from a core holding of a portfolio to an almost absolute necessary major component of the portfolio once you factor in trends such as AI," he said."

MY COMMENT

How big and dominant are these companies?

Well they are probably owned by nearly every single American. Anyone that is an investor, anyone that is in a pension plan, anyone that owns an Index, anyone with a 401K, anyone with an index annuity...etc, etc, etc. Some way or another nearly EVERYONE owns one or more of these companies.

These businesses are intertwined throughout our entire economy and society. Lets hope the results are good. I do expect them to do well......I have not seen any warnings by any of these companies. I take this as a very good sign...it would be very foolish......for any of these companies.....to spring a negative earnings surprise

 

YES......the BULL MARKET....is the real deal. It should be....it has been happening for 13 months now....since July of 2022.

The 'Everything Rally' Is Back. So Is the Casino Crowd

https://finance.yahoo.com/news/everything-rally-back-casino-crowd-202438658.html

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

"(Bloomberg) -- The long-awaited broadening in the 2023 equity advance is bringing gains to corners of the market even unabashed bulls may view uneasily.

Boats seaworthy and otherwise are being lifted by the rising tide in stocks, itself part of a cross-asset “everything rally” that was the biggest in three years this week. Gains spread, with banks and commodity producers ascendant. And there were flimsier propositions: Meme stocks had their best week since January, while unprofitable tech firms jumped 11%.


“I don’t know the staying power of the ‘junk rally,’ because it’s more sentiment driven — it’s not fundamental driven,” said Abby Yoder, US equity strategist at JPMorgan Private Bank. “Regardless of whether you’re in the camp of us going into a recession or a camp of a soft landing, the reality is that growth is probably slowing.”

For bulls who have been calling for the unseating of the artificial-intelligence oligarchy that has ruled markets since December, it’s a case of be careful what you wish for, at least going by the cyclical playbook that has prevailed since the pandemic. The market gets lift, skeptics buy in — then speculative fever breaks out just in time for gains to fizzle.

Whether the pattern is repeating, this was a week of nearly unprecedented buoyancy across asset classes. Among five major exchange-traded funds tracking stocks, Treasuries, corporate bonds and commodities, each was up more than 1.7%. In data going back almost a decade, only once was there a bigger concerted rally: March 2020.

And while that particular echo may stoke bulls, a lot has changed between now and then in terms of policy and valuation. Back when Covid-19 was raging, the Federal Reserve rushed to lower interest rates and the government doled out trillions of stimulus checks to Americans. The S&P 500 was valued at roughly 14 times earnings, while 10-year Treasury yield stood below 1%.

Now the central bank is in the midst of the most aggressive monetary tightening in decades, the 10-year rate has jumped to 3.8%, and the S&P 500’s price-earnings ratio hovers near 20.

On the other hand, the prospect of a soft landing has improved, with inflation cooling and economic growth holding up. And the Fed may stop hiking interest rates after another increase later this month. Weakening prices in particular are driving the synchronized gains across assets, according to Michael Rosen, chief investment officer at Angeles Investments.

“Inflation is the scourge of investors: It harms bonds, of course, but also equities, as it erodes profit margins and destroys wealth over time for everyone,” he said. “We are not out of the woods, although good news is good news, and markets are reflecting that.”

The possible end to monetary tightening jump-started a broad risk-on move in the currency market, with traders seeking higher returns in everything from the euro to Mexico peso. The US dollar, a long-favored haven, sank the most since November, losing more than 2% of its value over five sessions.

In stocks, fringe corners, once left for dead amid stringent financial conditions, are springing back to life. A Goldman Sachs Group Inc. basket of unprofitable technology firms had its best week since January. Newly-minted shares jumped as the Renaissance IPO ETF climbed almost 7% on the week.

Retail investors, who got burned by 2022’s bear market, are staging a comeback. The Solactive Roundhill Meme Stock Index, tracking the crowd’s favorite shares, rallied about 8% this week, led by crypto-related stocks.

Day traders scooped up a net $2.8 billion of shares in the week though Tuesday, an amount that’s way above its 12-month average, according to JPMorgan Chase & Co. estimates derived from public data on exchanges.

Elsewhere, money managers are cutting their short positions while redeploying cash to stocks. An index tracking investors’ equity positioning has spiked from depressed levels at the start of the year, reaching readings higher than 68% of the time since 2010, according to data from Deutsche Bank AG.

As much as the buying urge has propelled stocks, it may sow the seed for troubles. If there is a lesson to be learned from 2023’s shocking rally, it’s that paranoia is the best thing bulls can hope for because that sets the stage for a market rebound. With gaming spirits raging back, it’s a contrarian sign to be cautious, says Jake Schurmeier, portfolio manager at Harbor Capital Advisors.

“Sentiment has clearly swung towards the positive extreme,” he said. “It certainly caught me off guard. I think 1999/2000 may be a better parallel in terms of how it ends.”"

MY COMMENT

NO....this is NOT 1999/2000. Nothing like that time period.

BUT....this sort of rally and bull market WILL broaden out from here and over time the FRENZY will continue to build. EVERYONE will suddenly be a stock and investing EXPERT. The speculators, the gamblers, the day traders, the.....FOOLS.....will all be out in force. They will all have some message about some bizarre strategy for stocks ......or.....some story about how they are the worlds best stock picker and can not lose.......till they do.

That is why the best course is to be a simple long term investor and naturally participate in the bull market.....by being fully invested all the time in the same way.........without the crazy excesses

 

A very good indicator going forward for.....real investors.

Risky assets like stocks are on fire as investors pile into the market amid tumbling inflation, Bank of America says

https://finance.yahoo.com/news/risky-assets-stocks-fire-investors-001032539.html

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

• "
  Stocks and other risk assets are "on fire," Bank of America strategists said on Friday.
  
• Investors poured $12 billion into stocks in the last week as the disinflation narrative deepened.
  
• Markets are expecting the Fed to soon pull back on rate hikes, which would be a positive for equities.
  

Risky assets like stocks are heating up, with investors pouring cash into the market in recent days as inflation appears to be in full retreat, according to Bank of America.

The S&P 500 perked up 2% the last week, rallying over 100 points. Meanwhile, investors pumped $11.6 billion into the stock market over the last week, Bank of America strategists said, a sign traders are growing more bullish on risk assets as inflation keeps cooling.

Inflation rose 3% year-over-year last month, per the June Consumer Price Index report. That's well below the 41-year-record of 9% for headline inflation notched last summer. Cooling CPI as well as a lower Producer Price Index reading on Thursday have led markets to declare "mission accomplished" in the Federal Reserve's inflation fight, the BofA strategists said.

"Headline 2% to 9% to 3% roundtrip is now complete," strategists said in a note on Thursday. "Risk assets en fuego as Goldilocks [inflation report] schools us bears."

Cooler inflation spells good news for equities, and has raised the odds that the US economy can avoid a bad recession. A so-called soft landing would be an impressive feat for the Fed, as it successfully threads the needle to bring down inflation without crushing economic growth and sparking high unemployment.

Still, some experts have warned inflationary pressures are still a threat, with core inflation accelerating 4.8% year-per-year over the last month. Core inflation pressures still need to be addressed, San Francisco Fed President Mary Daly said this week, suggesting before the June CPI was published that a "couple more" rate hikes may be needed.

Markets, though, are anticipating just one more rate increase before the Fed hits pause. Investors have priced in a 96% chance of a 25 basis-point hike in July, and an 81% chance the Fed keeps rates steady at that level in September, per the CME FedWatch tool."

MY COMMENT

GOSH......there is suddenly a rally going on. Nice of these people to finally see it. It is not real hard to see what is happening right in front of your face. What is hard is seeing it 6-12 months earlier.

The best way to capture ALL the gains and have AMAZING FUTURE SIGHT......is to simply be invested for the long term......in a rational and realistic way.

I am seeing more and more of these sorts of....JUMP ON THE BANDWAGON...articles in the media recently......especially today.

Some of us NEVER got off the bandwagon......we ride along all the time.

 

BY THE WAY EVERYONE......I have a family event all week this coming week. So I am going to be very tied up......and....will likely NOT be posting much.

THIS is your big chance to post away. PLEASE......anyone.....post as much as you wish. if you have never posted.......take this as your opportunity to join the discussion.

EVERYONE.....is welcome to post on here.....no investing experience required....no need to agree with me or anyone else.....any topic to do with money or investing.......any sort of investing, trading, etc, etc. This is NOT....."my"....thread, it belongs to everyone and anyone that wishes to post or lurk.

JUST DO ONE THING FOR ME.......make me some money in the markets while I am away and distracted.

 

A quick post....one of few today.

Bear Markets Are Transitory

https://awealthofcommonsense.com/2023/07/bear-markets-are-transitory/

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

"With inflation falling it’s looking more likely that we could see a soft landing in the U.S. economy.1

So now all of the economic pundits are fighting over who gets to take credit for it.

My stance is no one gets to take credit because everyone was predicting a recession and there are no counterfactuals.

You can’t say inflation was transitory because the Fed hiked rates so aggressively.

But I’m not going to give the Fed all of the credit because the unemployment rate didn’t rise which was their goal with the rate hikes. Plus they almost caused a banking crisis.

No one wins, which is probably always the case with economic predictions.

There is one thing we can say was transitory — the bear market.

This might seem like I’m stating the obvious because every bear market in history has been transitory.

I’m not usually a fan of taking a bullish or bearish stance on the stock market. The way you look at risk should be colored by where you are in your investing life cycle.

Extended bear markets can be risky for retirees who rely on their portfolios to fund their lifestyles. But bear markets are wonderful opportunities for young people who are saving money on a regular basis with time horizons measured in decades.

The stock market is also too unpredictable in the short-run to figure out when you should be bullish or bearish.

There are, however, times when I think it makes sense to consider long-term bullishness, even if you don’t know how the short-term is going to play out.

I wrote a post called Getting Long-Term Bullish in October of last year that looked at the historical returns from down 25% on the S&P 500 since 1950.

Here are some of the things I wrote at the time:

My general investment philosophy is the more bearish things feel in the short run the more bullish I should be over the long run.

If I’m taking my own advice right now I should be getting much more long run bullish.

It’s not easy.

Things are not great at the moment.

This is the performance chart I created since the S&P 500 was down 25% from all-time highs at that point:



I wish I could take credit for calling the bottom but this was my disclaimer at the time:

Past performance is no guarantee of future returns.

But I’m becoming more long-term bullish even if the short-term market observer in me still feels bearish.

As luck would have it, 25% down was as bad as things got for the S&P 500. Here is a look at the current drawdown on a total returns basis (dividends included):


We’ve basically completely round-tripped.

As it always does during bear markets, it felt as if the world was coming to an end and things were only going to get worse, but here we are.

Now, I’m not trying to say you should try to time the market by holding a bunch of cash to take advantage everytime stocks fall.

Market timing is hard.

Predicting the timing and magnitude of bear markets remains nearly impossible.

My point here is that you don’t stop buying stocks during a bear market. If your plan says to rebalance, then you rebalance into the pain, even when it doesn’t feel comfortable.

You don’t panic sell during a bear market just because it feels painful to lose money. And you don’t make any rash moves when your emotions are high.

Bull markets don’t last forever either.

But it’s important to remember that bear markets are temporary."

MY COMMENT

There is always a tunnel....and....there is always a light at the end of the tunnel. Bear markets are always transitory.....usually about a year to a year and a half.

Of course I tend to be a PERMA-BULL. I think of the markets as a continuous BULL MARKET.....interrupted once in a while by a correction or a bear market. Therefore......there is no reason to time anything. It is always simply a case of siting and waiting for the bull market to resume.

 

The good open we are seeing today.

Stocks climb to start the week as traders await key earnings reports

https://www.cnbc.com/2023/07/16/stock-market-today-live-updates-.html

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

"Stocks were higher Monday as Wall Street braced for quarterly reports from some of the biggest companies in the world.

The Dow Jones Industrial Average traded 13 points higher, or 0.04%. The S&P 500 climbed 0.2%, while the Nasdaq Composite
advanced 0.4%.

The second-quarter earnings season gains steam this week with results from big financial institutions such as Bank of America,

Morgan Stanley and Goldman Sachs. Results are also due from United Airlines, Las Vegas Sands and technology giants Tesla and Netflix.

Wall Street are bracing for what be a gloomy season with lower profits. Analysts forecast a more than 7% decline in S&P 500 earnings from a year ago, according to FactSet.

This week also ushers in the Fed’s “blackout period” ahead of its July policy meeting. Traders anticipate a near 97% chance the central bank increases interest rates later this month, after pausing hikes in June, according to CME Group’s FedWatch tool.

Stocks are coming off a winning week that saw the Dow Jones Industrial Average gain 2.3% to notch its best weekly gain since March. The S&P 500 and Nasdaq Composite added 2.4% and 3.3%, respectively. On Friday, the Dow rose 113.89 points, or 0.33%, while the S&P and Nasdaq slipped 0.1% and 0.18%, respectively.

“I think the market is kind of overjojyed with the disinflationary, soft landing scenario,” Ed Yardeni, president of Yardeni Research told CNBC’s “Squawk Box” on Monday. “I’ve been thinking for quite some time that we’re in a recession, but I argued that it’s a rolling recession, not an economy-wide recession. Now I think we’re in a rolling recovery.”

Shares of tech-giant Apple added 1.1%, while Tesla climbed roughly 3%. Shares of JPMorgan Chase ticked up 1.2%.

The moves came on the heels of solid big bank earnings and softer inflation reports that lifted investor sentiment. That heightened some hopes the Federal Reserve may be able to tamp down inflation without tipping the economy into a recession."

MY COMMENT

A simple look at a chart of the SP500 shows that we have been in a rolling recovery and bull market for a year now.

As to the experts and their doom and gloom regarding lower profits......irrelevant. ALL I care about is the here and now......and the future. these DOOMSTERS only care about salvaging some way to claim that their dour earnings predictions were actually correct. NOT going to happen.

 

OK......SHOW ME THE MONEY TODAY.

 

A quick post from my phone. Way to go. You certainly showed me the money today. Keep up the great work.