Some bonds are JUNK. I could never get myself to buy junk bonds. If I want to gamble on a company in trouble, I buy the stock. Sometimes it works. I made a little change flipping GE, UAL, JBLU. Old school US Series E, EE, or whatever will still mature to face value. But in a bad economy, that dollar is worth less adjusted for inflation. Better to have the dollar worth less, than have 35¢ from the original dollar. I hear you. Many of us have heard of "Rich Dad, Poor Dad". Some people have poor dad. Paycheck doesn't stretch far enough for savings. Poor dad knows nothing financial to teach his son. So unfortunate when there's no dad at all. Or when a grandma is raising kids on SSI. And when the kid grows up to be a poor young adult, where does he learn about finances? Schools don't teach budgeting, managing debt, or even how to balance a checkbook. For years, I have told friends in the financial sector that they need to do financial education outreach. Hold classes and investment clinics. Not just rent a booth at a street fair, hand out balloons, and say that your financial institution supports a minority community.
Yes........TomB16.......and look where you and your mom are now. In spite of everything you are both successful investors and doing well. My family was not rich either as I was growing up.......successful businessmen and lawyers and nurses but not rich. BUT, my mom had a talent for math and business having worked in her fathers financial businesses (real estate brokerage, abstract company, and Savings & Loan) during and after high school. So she got into putting $50 a month into Fidelity fund in the mid 50's.....that is how she started. She also bought a few stocks. She got a BIG addition to her investing when she inherited a $14,000 portfolio from her father in about 1964. That $14,000 plus her prior mutual fund money was invested in a similar fashion to what I do now and over the next 50 years grew to over $2MIL when she died. JWalker........yes I have used that 50/50 portfolio model for a long time now. If I am investing a new account I start out at 50/50. Over time it seems like the stocks always perform better........at least so far. After a while most of the portfolios that I have settle into about 58-62% stocks and 42-38% funds. I let both sides of the portfolio.........INTENTIONALLY.......run, with NO re-balancing. I like to let winners run. Welcome Emma Richardson......feel free to post and ask questions as you wish. If I was in your position.....just starting out.......what I would want someone to tell me is: "Start simple....something like a SP500 Index Fund.....investing is not complicated. Put everything into that fund and add to it as much as possible. Dont buy or do anything else for at least a year. Over that year follow the SP500 daily, read why it is going up or down each day. Read everything you can about investing and the markets and companies. Invest for the long term. Hang out on a site like this.....etc, etc"
It's a pleasure to meet you, Emma. I'm extremely impressed with your introduction and delighted you posted. You come across as someone who is capable, intelligent, and humble. In other words, someone who is going to succeed. I'm not sure there is a resource that is an ultimate authoritative resource. Perhaps the only exception I can think of is Jack Bogle's book on index investing. Jack not only broke ground on that genre of thinking, he created the Vanguard company to implement it. Index investing is very mathematical. If you decide to pursue index investing, his master's thesis from Princeton, or one of the derivative works he published over the years, are probably high value pieces of work. Beyond that, I could load you up with a bunch of reading I felt of value, and I'd be pleased to do it, but I don't know if it would be of particularly value to you on your journey or the best use of your time. Reading here is a great start. Let me know if you are looking for something specific. Congratulations on your journey. Your children are fortunate to have a sharp Mom. Here is everything I know about investing. Literally. https://www.stockaholics.net/threads/tombs-investing-101.10505/
Thank you all. I’ve just checked out Jack Bogles Book, looks a great place to start - the perks of Amazon Prime mean it lands on my doorstep tomorrow !
A relatively BORING day today......earnings causing the drop at the open and lingering weakness. The END of the day is very much up for grabs. SO.......here is a simple, little article that discusses many of the generalities of investing habits of successful investors. I dont agree with EVERYTHING here......but.....all in all the information is CRITICAL HABITS for investing success. GOOD information for newer investors and a GOOD reminder for more experienced investors. What would Sir John do? How to use Templeton’s 16 rules for investment success in today’s stock market https://www.marketwatch.com/story/w...ent-success-in-todays-stock-market-2020-07-27 (BOLD is my opinion OR what I consider important content) "Sir John Templeton, the famed value investor who passed away in 2008, was my great-uncle, and he seeded my investment business when I was 24 years old. At my firm, Templeton & Phillips Capital Management, we are always asking the question: “What would Sir John do?” Of course, Sir John’s investment genius was too brilliant and creative for us to answer with detailed accuracy. Yet experiences with him as a mentor created profound lessons and principles that are a guide to the current market climate. Thankfully, Sir John took the time to record certain principles into his “16 Rules for Investment Success.” In light of today’s unusual market environment, which I have no doubt he would have found interesting, let’s take a quick review of the rules and how we can use them in 2020. 1. Invest for maximum total real return: Investors are especially prone to this mistake in the current environment of share price volatility. While it may feel comfortable hiding out, Sir John paid close attention to the potential loss of purchasing power. Even with today’s low rate of inflation, most of the U.S. Treasury yield curve is losing money in terms of purchasing power. In order to obtain even a less-than 1% real return (the value of an investment after taxes and inflation), Treasury bond investors must venture into 20- and 30-year issues, which exposes them to the risk of sharp paper losses if inflation and/or interest rates rise. It’s not much better in the muni-bond market, where issuers face declining sales taxes and underfunded pensions that could undermine investors’ safety. On the corporate side, investment-grade debt has 50.3% of its issues in the lowest BBB tranche (compared to 7% in 2000), leaving bondholders vulnerable to downgrades into junk status. Accordingly, investors looking to “play it safe in bonds” should tread carefully now; they’re effectively searching for nickels and dimes on the train tracks. 2. Invest — don’t trade or speculate: Trading leads to unforced errors. First, traders deprive themselves of the market’s greatest gift: compound interest through earnings, cash flows and dividends. Second, traders probably underestimate their competition: high frequency algorithms, artificial intelligence driven hedge funds, and pro desk traders, to name a few. If you would not bet your life savings in a tennis match against Roger Federer, why would you bet your savings against stock-trading pros? 3. Remain flexible and open-minded about types of investments: We routinely challenge the consensus, and this includes our own consensus. Many investors label themselves as value or growth and become closed-minded. We insist on investing in bargains, but even atypical growth firms can become value. When Amazon.com AMZN, -0.14% traded at 14x cash flow in March, it matched its low valuation from November 2008, and having come to understand the company better over the preceding years, we did not hesitate to purchase the shares for the first time at our firm. We still own them today. Do not unnecessarily limit yourself as an investor, stay open minded to possibilities. 4. Buy low: “Buying at the point of maximum pessimism” as Sir John put it, is critical to investment success. Panics and bear markets are a reliable source for excess return. Everyone wins in a bull market, and investor returns will be determined by their behavior in a bear market. 5. When buying stocks, search for bargains among quality stocks: Quality has become a casual term today, but our definition includes prudent balance sheets, low capital intensity and the “rinse and repeat” effect of reinvesting corporate cash flows into sustainable growth projects. Quality stocks create wealth through compounding the latter effect, when bought at a discount. Most important, they eliminate common investor mistakes such as trading into worse investments or paying too much in commissions and taxes. See Rules No. 1 and 2. 6. Buy value, not market trends or the economic outlook: Owning a rising stream of earnings and cash flows builds wealth, not guessing at market moves or economic outcomes. Numerous studies have shown that a selection of firms can produce rising sales and earnings, leading to positive share price returns in a recession. The current environment is a time for active investors to show their meddle through bottom-up stock picking. We are focused on firms with the ability to take market share in this challenging economy. 7. Diversify. In stocks and bonds, as in much else, there is safety in numbers: It is impossible to track all of the variables and probabilities that could affect a particular business, much less a market of stocks in a given industry or country. Some level of diversification is necessary, or as Sir John also said, “The only investors who shouldn’t diversify are those who are right 100% of the time.” 8. Do your homework or hire wise experts to help you: In the digital era of today, doing your homework and educating yourself is more possible than at any time in history. If want to select an expert apply Rules 1-8 as a filter, and pay close attention to performance and whether it justifies their fees. 9. Aggressively monitor your investments: Even iconic blue-chips can unravel. Despite spending more than 100 years as a member of the Dow Jones Industrial Average DJIA, -0.39% , and along the way navigating the Great Depression, numerous recessions, crises, and wars, the bottom fell out on GE GE, 2.61% shareholders when it began to suffocate under the weight of poor acquisitions from the preceding 10 years. By the time COVID-19 wreaked its economic havoc, GE shareholders had lost 83% from its recent high in 2016. 10. Don’t panic: Selling your portfolio amounts to market timing, and if you are thinking of selling following a share price panic then you have already proven that you are not a good market timer. Remember Rule No. 4. Focus on the long-term and try to become a buyer. During the 1987 stock-market crash Sir John was elated, claiming his purchases would make their returns “for years to come.” 11. Learn from your mistakes: All investors make mistakes, and they should be expected. Every investing mistake should be seen as an opportunity to improve, and it is important to take the lesson and move on. Whenever I saw Sir John make an investment mistake his demeanor never changed, and he moved on to the next idea. It was a powerful example that I revisit often. 12. Begin with a prayer: Sir John’s use of prayer to begin meetings was an act of mindfulness and focus. Investors and executives today are better grasping the benefits of thought control, mindfulness, and meditation in their daily routines. Sir John said, “If you fill your mind to capacity with thoughts that you think are good and productive, you won’t have room for the bad ones.” 13. Outperforming the market is a difficult task: Sir John’s view was that once an investor grasps the complexity of the markets and their fellow competition, it is difficult to beat savvy peers, much less the passive indices that are both fully invested and do not charge fees. Taking these factors into account he thought that investors generating long-term outperformance versus the market are doing much better than the casual observer realizes, and that outperforming by a significant degree represents a “superb job.” In our view, for an investor to outperform the market it requires an edge over the competition, and therefore investors must seek and develop an edge through methods including better information, better selection methods, or wiser behavior (i.e., contrarian). We focus on the latter. 14. An investor who has all the answers doesn’t even understand all the questions: I am always suspicious of investors who offer certainty to every single investment question, as I feel it harms their credibility. In my experience, seasoned and successful investors are intellectually humble and have no problem admitting that some answers cannot be known. 15. There’s no free lunch: On my first day of college economics the professor wrote on the board the “universal law” he labeled “TANSTAAFL” – “There Ain’t No Such Thing As A Free Lunch.” This rule has proven so inviolable that its real meaning is elevate the role of critical thinking in all business and investment matters. Most often, any offer disguised as a free lunch is either not free, or not lunch. 16. Do not be fearful or negative too often: This rule reminds me of a quote from Socrates that my father has kept on his desk since I was a child, “Nothing is stable in human affairs, therefore, avoid undue elation in prosperity or undue depression in adversity.” Based on our studies the average investor should expect to spend approximately a third of their life in a bear market. These events are to be expected, and once an investor learns how to harness share price declines into stronger future investment returns these unexpected events will become sought after. In reality, optimists will carry the day and corporate profits, as well as the share prices that track them will rise even higher than most professionals anticipate." MY COMMENT INVESTING is NOT complex or difficult. What is difficult is throwing aside all the NEGATIVE human and brain behaviors that kill most investors. AND.......like everything....sports, music, business......ANY activity......SIMPLE is extremely difficult for humans. Develop good investing skills and habits through repetition and training........and.....repeat over and over and over. EASY to say.....very difficult to do in real life.
Just an all around BLAH day today in the markets. TYPICAL short term stuff.......nothing to see here......just move on. Continuing with my recent focus on "SIMPLE" in investing, here is the ultimate in simplicity in this little article. YET......this is the secret to lifetime wealth and financial security. With Investing, Your Best Asset Is Time Maximizing time, being patient with the market, and budgeting properly are key ingredients for a successful investor. https://money.usnews.com/money/blog...ticles/with-investing-your-best-asset-is-time (BOLD is my opinion OR what I consider important content) "Play the long game: The most valuable asset to an investor is time. The longer an investor has to earn returns, the more resources they can generate. Compound Interest You probably have heard many sage financial pros mention the power of compounding interest, which is the addition of interest to the principal sum. Compound interest is affected by the rate and frequency over time. The best way to illustrate how time matters to an investor is to compare two different scenarios: Scenario A: Invest $2,500 annually for 40 years. Scenario B: Invest $10,000 annually for 20 years. One might assume that investing more would generate greater future values, but in this case, that is false. Assuming a 6% annual rate of return, investing $2,500 for 40 years will produce a higher future value than investing $10,000 over a period of 20 years. Scenario A generates about $387,000, compared with Scenario B that generates nearly $368,000. It would only take roughly $2,375 per year for 40 years to generate the same amount that investing $10,000 for 20 years would generate. Even though Scenario B invested more than Scenario A, it did not produce as much future value. Leveraging time when investing can save an investor a lot of money. S&P's Strong Performance Over Time Investors often feel the need to generate high returns with their portfolio. If history is any indication, generating a 6% return is not out of the question. Between 2010 to 2019, the S&P 500 showed annual gains in most of those years. According to data from New York University's Stern School of Business, when the S&P 500 made gains in recent years, they were generally strong gains. For example, the annual return on the S&P 500 in 2017 was 21.6%. It should be noted, however, that this data includes dividends. Also, the S&P 500 generated a loss in 2018, with an annual return of -4.2%, the NYU data shows. What is the average return of the S&P 500? According to historical records, the average annual return of the S&P 500 since its inception in 1926 through 2018 is about 10%. There may be little reason to try to reach for greater returns when the S&P 500 has produced double-digit gains regularly. Of course, there is no guarantee for the future, but if historic trends are any indication, there is a reason for optimism over the long term. Takeaway Successful investing is more than trying to identify the next big stock. The best asset an investor has is time. Referring back to socking away $2,375 per year in investment over 40 years, that equates to $45.67 per week. For some, that is weekly lunch or gas money. So it's worth figuring out your monthly expenses and assessing what you can squirrel away for investments or your nest egg. Budgeting plays a role. Typically, budgeting is not about what the money gets spent on, it is about why communication is important. Identifying money that can be saved and invested is a better way to prepare for retirement than hoping your retirement turns out to be what you wanted. Investing over a longer time frame normally outweighs investing heavily in a shorter time frame. Investors often seek greater returns but fail to understand the historical performance of the S&P 500. It may be more beneficial to make consistent contributions over the course of time. Stocks that fail to fly high can weigh down portfolios for longer than one desires. There is a need to live for today, but there may also be a desire to build for tomorrow. Failure to communicate may have you heading in the wrong direction. MY COMMENT YES.......it really is that simple. Save what you can and PLOP it into a SP500 Index Fund every week or month. With DISCIPLINE and TIME you will BEAT almost everyone you know. As a long term investor.......HABITS.....are critical. You have to understand, appreciate, and exercise the simple investing behaviors to do well. My PRIMARY investment goal is very simple.........achieve a long term average total return of 10% per year. My PRIMARY INVESTMENT GOAL is totally focused on the long term. My SECONDARY investment goal is short term.......try to beat the SP500 each year. BUT.....this second goal is a PASSIVE GOAL. I dont trade, or get all into a frenzy, or get all caught up in trying to make this goal. I simply put into place......what I consider.....a superior long term portfolio in a way that I believe will give me a shot at the second goal each year. I use the second goal as a MEASUREMENT of performance NOT as something to chase after short term.
VERY surprised today when I looked at my primary account. I was POSITIVE.........by $205. BUT......positive is positive. And....even better......a SP500 beat by .33%. Another one of those days when stocks showed strength in the face of the media being full of bad.......but TOTALLY expected......economic news. Stocks staged a pretty good comeback today even though you would not know it by the closing numbers. I am NEVER surprised by the BLARING HEADLINES about the employment numbers or the WORST drop ever for the GDP last quarter. WELL......DUHHHHHHHH. We just voluntarily shut down the entire economy and put a HUGE amount of people out of work......not to mention.......how many businesses we have now KILLED. Seems like OLD NEWS to me.
To ME........this is the news of the day. It is ABOUT TIME one of these BIG companies did a stock split. Apple earnings: Apple crushes Q3 expectations, announces 4-1 stock split https://finance.yahoo.com/news/apple-q3-earnings-2020-203224360.html (BOLD is my opinion OR what I consider important content) "Apple (AAPL) reported its Q3 2020 earnings on Thursday, surpassing expectations for the period. These are the most important numbers from the report compared to what analysts were expecting as compiled by Bloomberg. Revenue: $59.7 billion versus $52.3 billion expected Earnings per share: $2.58 versus $2.07 expected iPhone revenue: $26.42 billion. Services revenue: $13.2 billion versus $13.1 billion expected Accessories: $6.5 billion versus $6.1 billion expected Apple’s quarter was far outpaced what analysts had expected of the company thanks to strong performance from its accessories and services arms. Both iPhone and Mac revenue were also up in the quarter. With the company’s stock price approaching $400 a share, the firm announced a 4 to 1 stock split alongside its earnings report. Apple’s earnings come just a day after CEO Tim Cook sat before the House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law to answer accusations that the company abuses its market power to stifle competition in the Apple App Store." The company’s Q3 report, however, hasn’t been much of a focus for analysts, as much of the conversation about Apple has revolved around the tech giant’s upcoming launch of its iPhone 12. The next-generation iPhone is expected to be Apple’s first 5G-capable device and could lead to a so-called “super cycle,” during which the company would see a larger than normal uptick in iPhone sales. The idea is that consumers who have held on to their devices for several years will jump at the chance to get a new iPhone with a new form of cellular connectivity that promises dramatically increased data. But with consumer personal consumption spending in Q2 falling a whopping 34.6% due to COVID-19 shutdowns, and more than 50 million Americans out of the workforce, investor hopes of a massive uptick in year-over-year iPhone sales in the coming quarters may not be in the cards. Apple’s stock was up more than 4% following the report." MY COMMENT I believe that this WILL the the catalyst for a decent rally into the weekend tomorrow. It is about time someone did a stock split. I think it is EXTREMELY FOOLISH that more of these BIG companies do not do stock splits, Amazon, Google, etc, etc, NEED to do a stock split. It has just been the last 10-15 years that this trend of NOT doing splits has been the dominant thinking. BEFORE the past 15 years or so EVERY company did splits when their shares got to the point of being too expensive and discouraging buyers. There is a REAL psychological barrier to someone investing $1500 or $2000 and only getting ONE SHARE of something. YES.....in theory......it should NOT matter if you only get one share at $2000 or 20 shares at $200.....but it does matter. In addition......again.....even though a split should be a price neutral event.......in theory.....it does NOT work that way in real life. News of a split energizes shareholders and encourages those thinking of buying a stock. It creates.....BUZZZZZZZZZZZ around a company. I expect that APPLE stock will follow the NORMAL course that you often see with split announcements. The GAINS will happen before the actual day of the split. People will buy the stock and drive up the price heading to the day of the split. When the split actually occurs it will often be a non event or a minimal event. All in all.......I would say that this split announcement WILL drive APPLE stock to new record highs. HERE is the timing for the stock split: The shares will be distributed to shareholders at the close of business on August 24, and trading will begin on a split-adjusted basis on August 31.
Of course......here.....is the OTHER potential DRIVER of the markets tomorrow: Amazon Q2 earnings blow past estimates as coronavirus buying boosts revenue, profit https://finance.yahoo.com/news/amazon-earnings-q2-2020-201101073.html (BOLD is my opinion OR what I consider important content) "Amazon (AMZN) posted second quarter earnings on Thursday that blew away Wall Street estimates, bolstered by consumer trends during the coronavirus pandemic that have catapulted the tech giant into one of the crisis’ biggest beneficiaries. The company’s results are even more impressive given that it acknowledged spending over $4 billion during the quarter on COVID-19 related costs. Here are the results compared to estimates from consensus compiled by Bloomberg: GAAP earnings per share: $10.30 vs. $1.51 expected Revenue: $88.9 billion vs.$81.24 billion expected The quarter’s performance was boosted by operating cash flow that surged 42% to $51.2 billion for the trailing twelve months, compared with $36.0 billion comparable year-ago period. Net sales soared 40% compared with $63.4 billion a year ago, and Amazon’s Web Service (AWS) — the company’s massive cloud operation — saw 29% growth as more companies shifted to working remotely. Patrick Moorhead, president and principal analyst at Moor Insights and Strategy, noted that AWS’s growth during the quarter was “larger than the entire annual revenue of many cloud plays. AWS is well on its way to creating an annualized, $40B revenue company. This makes AWS larger than Salesorce.com and SAP.” Meanwhile, Amazon also said it plowed over $9 billion into capital projects, and saw its grocery delivery capacity skyrocket by more than 160% amid a threefold spike in online grocery sales during the quarter. “We’ve created over 175,000 new jobs since March and are in the process of bringing 125,000 of these employees into regular, full-time positions,” CEO Jeff Bezos said in a statement. “And third-party sales again grew faster this quarter than Amazon’s first-party sales. Lastly, even in this unpredictable time, we injected significant money into the economy this quarter, investing over $9 billion in capital projects, including fulfillment, transportation, and AWS,” he added. A surging stock The stock — which rallied by over 6% in after-hours trading — has been on a tear since the coronavirus pandemic resulted in widespread lockdowns, with home-bound consumers flocking to the website for their needs. Year to date, Amazon has rallied by over 63%, far outpacing the S&P 500 Index. Amazon’s results boosted the net worth of Bezos, the world’s richest person, by almost $10 billion to $189.5 billion, according to Bloomberg’s Billionaires Index data. The billionaire is his company’s single largest individual stockholder, owning over 11% of the shares outstanding. Amazon has notched multiple consecutive record closes — along with the other cohorts within the high-flying “FAANG” tech stocks that include Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Alphabet’s Google (GOOG). According to Q3 guidance provided by the company, net sales for the next quarter are expected to check in between $87 billion and $93 billion, a 24% - 33% gain from the comparable period in 2019. Coronavirus-related spending is seen topping $2 billion in Q3, Amazon said, on operating income that is expected to fall within a $2 billion to $5 billion range. Daniel Salmon, an analyst at BMO Capital Markets who ranks Amazon at No. 4 among a “mega cap pecking order” of top stocks, said this week that the stock’s “long-term opportunity is stronger than ever, and we also continue to see outperformance over the next 12 months.” However, he added that the bank was “cautious” given the recent surge, and the potential for Amazon to ramp up investment spending." MY COMMENT AMAZING company........they have ONLY been selling the broad mix of products since about year 2000. ONLY 20 years from being a seller of books and music to becoming a CONSUMER BEHEMOTH. The modern definition of a conglomerate. While EVERYONE else was selling off business units and various products to create.......shareholder value.......corporate CEO talk for creating CEO wealth.......Amazon has been adding every imaginable product line possible. I STILL say this is a ONCE IN A LIFETIME company.
Our portfolio went up considerably, today. These are scary times. It doesn't seem like the worst idea to sell off a significant amount of equity but that's not our game....
Well......yeah......there is ALWAYS a correction just around the next corner. BUT......for those that are investors.......not playing at the markets.......the ONLY course is to resist the temptation to try to time the markets and let your investments run for the long term. BUT....keep in mind that "I" am an investor that has isolated his investment funds from having to EVER use them. So, that gives me a uniquely long term view of things and the ability to stomach risk that the average person may not be able to stand. There is nothing wrong with some taking of profits and reallocating that money.....depending on someones situation. My problem with taking profit is.......what am I going to invest those profits in? I currently hold what I wish to hold and DO NOT want to diversify or DILUTE what I hold.
The risk u mention, is relevant to me now. Im very at ease with my long term holdings. Disclaimer, i was nervous AS hell when i bought them! But as my positions have matured, and lucky for me, faster than i had hoped, it gave me a sense of ease with the overall market. but just well....i guess it was yesterday...thursday, its still today to me, i made a smallish, IPO play, and that is what has me nervous. My smallest allocation, (minus my single apple share, soon to be 4), has me the most nervous. Its also a short term play. Hoping to ride some hype and scalp some pennies. Im not The least bit worried about my long term holdings, of which is about 84% of my portfolio if my on the spot math is correct. there is a lot of wisdom in your posts, although they are one sided toward long term, there is a reason, i know. Its because u know that long term is in it to win it.
okay if you know enough about the company and believe in what they do. I'm sitting on a few, watching, and liking it so far. But not enough that if I lose.money, I starve. One is ACI Albertsons. Grocery stores. In my market, they are the #1. Nationwide, they are behind KR Kroger.
"there is a lot of wisdom in your posts, although they are one sided toward long term, there is a reason, i know. Its because u know that long term is in it to win it." ABSOLUTELY........MY posts will always be this way. The ONLY thing that matters is what counts and works in investing. Making and compounding money. The RESEARCH and my life long experience tells me that the way to make money and keep it is to ALWAYS be long term. NO market timing, all in all at once, NO trading, NO selling, etc, etc. Being HUMAN......once in a while.....I might violate my MANTRA. BUT......I try not to.....ever. HERE is a little article on the APPLE split.... Apple's stock split may not be good for the Dow https://finance.yahoo.com/news/apples-stock-split-may-not-023842930.html (BOLD is my opinion OR what I consider important content) "(Reuters) - Apple announced a stock split on Thursday and it may not bode well for future gains in the Dow Jones Industrial Average. The iPhone maker made the surprise announcement in its quarterly report, saying it will split its stock four-to-one when trading opens on Aug. 31, Apple's first share split since 2014. Stock splits have become rare on Wall Street in recent years, with just three S&P 500 members announcing splits in 2020, compared to an average of 10 a year over the past decade, according to S&P Dow Jones Indices. Splitting their stocks is a way for companies to make it less expensive to buy individual shares, potentially attracting retail investors who make small trades. Amazon's shares cost $3,051 each, while an Alphabet share sells for $1,538 and Chipotle Mexican Grill's shares cost $1,148. With Apple's stock surging 6% in extended trade to $408 following its strong quarterly report, the split means shareholders will receive three shares for every one that they own. Investors will be able to buy shares for closer to $100 each. Apple said it hoped to make the shares "more accessible to a broader base of investors." However, brokerages increasingly let customers buy parts of shares, making the benefit of share splits less clear than in the past. "Stock splits have become far and few between because people no longer care if it's a $500 or $100 stock, because investors can now buy fractions of shares," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Splitting Apple's shares means the Silicon Valley company will have less influence within the Dow, which is weighted to the price of the shares of its 30 components. Apple was added to the Dow in 2015, and the 230% gain in Apple's stock since then has been a major factor driving gains in the Dow, widely viewed as a reflection of the U.S. stock market. Apple currently accounts for about 10% of the Dow, and after the share split, it will make up only a quarter of that, ranking it the 18th most heavily weighted stock in the Dow. Potential future gains and losses in Apple's stock will have less influence in the Dow's performance. Apple's stock split will not affect its weight within the S&P 500, which is based on market capitalization." MY COMMENT I DONT CARE what is good for the DOW. A FAKE average that is NOT a business......that is the DOW's problem. I care about what is good for me as a shareholder of the BUSINESS called Apple. I STILL think this current trend of HUGE stock prices is rediculous. It is NOT good for shareholders.....it robs them of gains that occur when splits are announced. This is part of the REWARD for owning part of a company and sharing in the business risk. AS to the BS about......now you can buy fractional shares so splits dont matter.......BS. It is STILL a BIG psychological barrier to buying a stock to invest $1000 and end up with 1/2 share or 1/4 of a share in your account versus investing $1000 and seeing 10 shares in your account. Simple human nature. NOW......in theory......a split should be a totally neutral event....but it is not......at least from what I have experienced with EVERY stock I have owned that has done a split.
Interesting little article here: Big Data Has Yet to Hit the Ball Out of the Park https://www.realclearmarkets.com/ar...t_to_hit_the_ball_out_of_the_park_500567.html (BOLD is my opinion OR what I consider important content) "I think for most people, the term “big data” has little specific meaning, it’s just one of those things like “machine learning” and “data science” that mean computers are taking over. A recent paper (Samuel Bray and Bo Wang, “Forecasting unprecedented ecological fluctuations,”PLOS Computational Biology) illustrates the literal meaning. The authors take advantage of recently available “big data” biological datasets—ecological systems sampled at high frequency over long periods of time—to “tackle the grand challenge” of forecasting “rare large-amplitude ‘Black Swan’ fluctuation events” with “significant ecological and economic impact.“ Can study of plankton, forests and marine mollusks help predict financial crises? Traditional biology and economics focused on equilibrium relations, which are usually the only kind that can be studied when you have only a few data points—like quarterly GDP growth or annual population surveys over a few decades. But to quote John Maynard Keynes, “Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.” The equivalent prediction by a population biologist would be, “The ecosystem may undergo a sudden dramatic change, but when it’s over, I expect surviving and new species populations will stabilize at new levels.” Big-data advocates claim they don’t need deep study of the specifics of economics or biology or any other field they wish to predict, that more and better data are sufficient. There are an infinite number of things that can cause crises, so it’s pointless to try to think of them all. But there seem to be a limited number of mathematical ways crises play out, so you don’t need to know the cause to predict the outcome. Studying the smallest and briefest changes, if you have enough of them measured with enough precision, can predict the evolution of the largest changes. Nassim Taleb who coined the modern usage of “Black Swan,” disagrees. He claims long-term outcomes are dominated by rare large events that happen because they are unexpected. Prediction is pointless because if successful it makes the event expected, and therefore some other Black Swan happens instead. For example, before 9/11 we knew there were airplane hijackers, but previous ones had wanted to survive. We knew there were suicide bombers, but previous ones had been low-skill people with simple plans operating close to home. But if someone had anticipated high-skill suicide hijackers with complex plans operating across thousands of miles, we would have taken precautions, and the terrorists would have done something else. Taleb tells the story of the hypothetical legislator who foresaw the possibility of 9/11 and pushed a law requiring locks on cockpit doors. This prevents 9/11, so of course the locks are deemed to be useless overregulation. Perhaps some bad event occurs because a lock jams, or flights are delayed due to lost keys. Business groups contribute to the legislator’s opponent, leading to her defeat. There could thousands of people who prevented terrible Black Swans and were rewarded with defeat and obscurity, while the people who over-reacted afterward are showered with wealth and power. We do in fact have a Black Swan forecasting system, Hollywood disaster movies. Like the authors of this paper, they take small scale events—say lines for gasoline and electricity blackouts during the 1970s oil crisis—and use them to predict large events—like theMad Maxfranchise. A depressing amount of security arrangements are designed to prevent wildly implausible disaster movie scenarios instead of being sensible general precautions that do not rely on specific predictions. An equally depressing amount of financial regulation is designed to prevent the last disaster; like generals who are always prepared to fight the last war; when the next war is more likely to be a reaction to the last war than a repeat of it. In fairness to the authors, they recommend a more rational and systematic forecasting technique than screenwriters trying to guess what will scare the public most. But the basic question applies. Are big events caused by the same forces that drive day-to-day changes? Or are they reactions to previous and distant big events? Does a sudden dramatic change in an ecosystem result from an unstable system randomly drifting to a crisis point? Or is there some longer-term evolutionary principle at work that builds punctuation into equilibrium via natural selection? These are big questions, and ancient ones. They are important in almost every field of human study. They have been argued in finance as far back as the early 1960s when Benoit Mandelbrot, the father of chaos theory, taught Eugene Fama, the father of efficient markets (and like biology 60 years later, it was the availability of big data sets—tick-by-tick cotton prices for Mandelbrot, and long-term daily stock price histories for Fama). Big data has stepped up to the plate to answer them, but has yet to take a big swing, much less hit the ball out of the park." MY COMMENT The "little " investor ALWAYS has a way of making FOOLS of the Quants and others that think they have invented some MAGIC SYSTEM for predicting and making money in the markets. We CRAVE order and reason as humans. We strive to create systems that control and being reason to everything. We ALWAYS FAIL in those systems because we are HUMAN.
