The Long Term Investor

YES....it really is simple.

Buffett's 3 Best Rules for Stock Investing

https://www.investopedia.com/news/b...te-yahoo&utm_source=yahoo&utm_medium=referral

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

"In 2018, business news leader CNBC examined decades of public comments by Berkshire Hathaway's hugely successful CEO Warren Buffett to learn what's behind his remarkable investing accomplishments. It came up with his three core recommendations for buying stocks.1

These are:

• Invest within your circle of competence.
• Think like a business owner when buying equities.
• Buy at inexpensive prices to provide a margin of safety.

CNBC noted that from 1965 through 2017, shares of Buffett's Berkshire Hathaway Inc. (BRK-A) delivered a compounded average annual return of 20.9%, more than double the 9.9% return for the S&P 500 Index (SPX).21

The upshot was that the cumulative gain for Berkshire Hathaway stock was 155 times greater than that for the S&P 500 over that period.


Circle of Competence

Buffett believes that investors should avoid going too far afield from their expertise when buying stocks.

Instead, before they buy, investors should make sure that they fully understand how a business operates, how it makes money, and the future sustainability of its business model and profits. He referred to this as "operating within what I call your circle of competence" during the 1999 Berkshire annual meeting.1

With the notable exception of smartphone and personal computer maker Apple Inc., Buffett passed up on a number of winning investments in the technology field precisely because he did not feel sufficiently competent to judge their business models.

Berkshire Hathaway increased its stake in Apple over time. In June 2023, it owned 5.8% of Apple's outstanding shares. Apple stock made up 50% of its stock portfolio.

You're Buying a Business

A second key insight that Buffett gained as a college student in 1949 came from reading The Intelligent Investor, the seminal book by value investing pioneer Benjamin Graham.

As Buffett said during the 2002 Berkshire Hathaway annual meeting, "You're not looking at things that wiggle up and down on charts, or that people send you little missives on, you know, saying buy this because it's going up next week, or it's going to split, or the dividend's going to get increased, or whatever, but instead you're buying a business."1

The key tenet of Graham's book is that buying stock makes you a part owner of a business. As such, you should not be concerned about short-term fluctuations in stock prices.

Indeed, Buffett believes that such price movement, typically referred to as volatility, represent temporary "noise" that should be ignored by long-term investors.

Margin of Safety

A third rule that Buffett learned from Graham is to buy stocks with a large margin of safety. That is, investments that sell significantly below their intrinsic value.

This bargain-hunting approach to investing should limit your potential losses in case your estimate of intrinsic value was too high, or if unforeseen events damage a company's once-rosy prospects.

Coming up with an accurate estimate of intrinsic value is not easy. But the Graham method, as employed by Buffett, rests on rigorous fundamental analysis of the data pertinent to a company, its industry, and the general economy.

Buffett stands out among investors in his decades-long ability to make astute judgments of value.
Other Advice From Buffett


Never Look at a Headline

For the average investor who lacks Buffett's analytic prowess and sharp eye, casting their lot with the long-term prospects for the U.S. economy and the U.S. stock market may be the safest bet.

"The best single thing you could have done on March 11, 1942--when I bought my first stock--was buy a stock index fund and never look at a headline...as if you had bought a farm."4



Buffett noted that a theoretical $10,000 investment in an index fund back then would be worth more than $51 million in 2018, including reinvested dividends.4


Make the Most of a Good Opportunity


This ties into a well-known saying of Buffett's. "Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble."5


Take advantage of solid investment ideas whenever you can. And invest as much as you can because they won't always be available. Lower values and a drop in prices may not return.


Temperament, Not Intellect, Is Key


Keep a cool head when others around you are madly buying or selling. That's what makes and keeps investors successful.5


It's vital to analyze and understand what's happening with a company and its business. Resist going with the herd or with popular mouthpieces who call for particular actions.

Remain objective and leave emotions out of your research and investment decision-making."

MY COMMENT

I suggest looking at the market action over the past week......and.....apply the above to what we just saw the markets and investors do.

to be a successful long term investor requires that you be in the markets. Ignore the noise and the daily commentary. Slow and steady does win the investing race.

 

YEAH.......you guessed it.......government regulation.

Corporations say they have a new No. 1 risk, and they’re spending big to defeat it

https://www.cnbc.com/2023/09/22/cor...-1-risk-theyre-spending-big-to-defeat-it.html

"Key Points

• Fears about government regulation have spiked sharply this year and are now the No. 1 threat to business, according to chief financial officers surveyed by CNBC.
• Forty percent of CFOs say it’s their top concern, according to the Q3 CNBC CFO Council survey, up from roughly 5% at the beginning of the year when inflation dominated corporate risk planning.
• The biggest companies in the market are spending big in response, with a surge in lobbying among S&P 500 companies."

 

The week to come.....actually....a pretty busy week.

Labor strikes, inflation and Nike earnings: What to know this week

https://finance.yahoo.com/news/labo...arnings-what-to-know-this-week-143054933.html

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

"After a hawkish outlook from the Federal Reserve sent stocks tumbling last week, the news onslaught is expected to continue in the week ahead.

Updates on labor strikes, a fresh read on the Fed's preferred inflation gauge and earnings from Costco (COST) and Nike (NKE) await investors.

The Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation indicator, out Friday morning will be the week's biggest economic data release. Tuesday and Friday will bring consumer sentimentchecks from the Conference Board and the University of Michigan, respectively, while housing data and an update on quarterly economic growth alsodot the schedule.

On the earnings side, along with results from Nike, Carnival (CCL), Costco, and Micron (MU) will be key highlights.

Elsewhere in corporate news, two labor disputes are ongoing as the United Auto Workers (UAW) strike enters its third week without a deal, and talks have heated up between Writers Guild of America (WGA) and the Alliance of Motion Picture and Television Producers (AMPTP) amid a four-month lon) fell more than 3.5%. Meanwhile the Dow Jones Industrial Average dropped almost 2%.

Stocks enter the week looking to bounce back from another down week. Last Wednesday featured the Fed's persistence on a "higher for longer" strategy with interest rates spawned a sell-off. Over the last five trading sessions, the S&P 500 (^GSPC) slipped nearly 3% while the Nasdaq Composite (^IXIC) fell more than 3.5%. Meanwhile, the Dow Jones Industrial Average (^DJI) dropped almost 2%.

Afterthe Federal Reserve opted to hold interest rates steady in a range of 5.25% to 5.5%, Fed Chair Jerome Powell noted in a press conference that inflation remains "well above the longer run goal of 2 percent."

The Summary of Economic Projections showed inflation ending 2023 lower than officials had previously thought, however. The SEP indicated the Federal Reserve sees core inflation finishing at 3.7% this year — lower than June's projection of 3.9% — before cooling to 2.6 % next year and 2.3% in 2025.

Those projections will be put to the test once again this week. Data on Friday is expected to show "core" PCE — which strips out the costs of food and energy — rose 3.9% over the prior year in August, down from a 4.2% increase in July. The Fed targets 2% inflation, on average. Over the prior month, "core" PCE is expected to rise 0.2% in August, unchanged from July.

Wells Fargo's economics team agrees with the consensus projection for 0.2% month-over-month growth but believes the mounting headwinds facing the consumer could eventually force an economic slowdown.

"If our forecasts are correct, real personal consumption expenditures will continue a 12-month streak of growth," Wells Fargo's team of economists wrote in a research note on Friday. "That said, the loosening labor market, less marked improvement in inflation and resumption of student loan payments are headwinds to real PCE in the coming months. Consumer confidence, which we forecast declined to 105.7 in August [from 106.1 in July], should give an early read next week as to how consumers are faring in this kind of environment."

Data for new home sales and the S&P CoreLogic Case-Shiller US National Home Price index are expected on Tuesday. Economists project new home sales fell 2.2% month-over-month.

As the data comes in, expect Wall Street to discuss if another rate hike, which the Fed projected on Wednesday, will be needed. As of Friday, investors aren't betting on it, as futures markets have just a 37% percent chance a rate hike happens by the end of the December meeting, per the CME FedWatch Tool.

"Even with the more hawkish dots we’re still comfortable thinking that the hiking cycle is over," JPMorgan chief US economist Michael Feroli wrote in a note on Wednesday. "We would be getting more concerned about the Committee walking into the policy mistake of overtightening if it weren’t for the fact that the more influential members are likely less hawkish than the median dot."

On the corporate side, the auto sector will remain in focus as strikes continue at plants operated by the Big Three automakers Stellantis (STLA), GM (GM), and Ford (F).

On Friday, the UAW intensified the stoppages, expanding the strikes to 38 more locations across 20 states. Thus far, auto stocks have had mixed reactions with GM the biggest loser, falling roughly 4% over the past week.

Ford's stock rallied on Friday as UAW president Shawn Fain noted the union had made “real progress” with Ford over the past week.

“The UAW strike is about to get a lot nastier which could have a massive impact on GM's EV plans as well as billions of lost revenue/production depending how long this UAW debacle lasts,” Wedbush Securities managing director Dan Ives wrote after the UAW press briefing on Friday.

Meanwhile, an earnings report from Nike could also have implications across multiple companies in the retail sector. Wall Street analysts project Nike’s earnings per share to decrease about 20% from the same period a year prior to $0.75 while revenues are expected to top $13 billion, a 2.5% increase froma year ago, per data complied by Bloomberg.

When the retail giant reports Thursday after the bell, investors will be keenly focused not only on what Nike says about itself and the state of the consumer but also other key areas of retail. Nike will provide a look at a continued consumer slowdown in China, the health of the wholesale market, which some have said is under pressure, and perhaps an update on retail crime.

“Global business trends have likely been slightly worse than expected, but this is probably already priced into the stock and contemplated in the lower-end of Nike's FY24 guidance range,” UBS analyst Jay Sole wrote in a note to clients previewing the earnings announcement. “We believe the 'bar' for the event is a 1Q EPS beat, offset by a below-consensus Q2 guide, with Nike's FY24 outlook remaining unchanged. Our view is Nike will meet this bar.”

The week ahead will also bring another potential macro challenge into center stage as a government shutdown looms on October 1.

But even if a shutdown comes, it will not "sink" the economy, Oxford Economics wrote in a note on Friday.

"The chances of a government shutdown this fall are more likely than not, but we think it will have only a slight impact on output – around 0.2 [percentage points] of annualized GDP per week – with half of that impact being reversed," Nancy Vanden Houten, Oxford Economics' lead US economist wrote. "Overall, it is unlikely to have a material impact on Q4 GDP, but it does come at a time when we think the economy will be shrinking."

From a stock perspective, the shutdown could likely bring choppiness, Truist Co-Chief Investment Officer Keith Lerner told clients in a note earlier this week. But that doesn't mean it will bring doom.

"Government shutdowns tend to be high profile though low-impact market events," Lerner wrote. "While uncertainty around these events tends to heighten investor angst and add to short-term market volatility, the historical evidence suggests a minimal lasting market impact.""

MY COMMENT

I will be most interested in how my......former.....holding NKE does this week. I suspect it will be a negative week for them....but I hope not for all the shareholders of this once ICONIC company. They continue to struggle with their dependence on China and management that seems to be neutered by world and market events.

My Costco will also report this week.

The economic news will drive some of the week especially the PCE.....but....for longer term investors this is not what really counts with any particular company that might be in a portfolio. What counts is fundamentals and earnings which we will see in a few weeks.

 

TIME.....probably the most important item for long term investing.

Factoring time into your investments

https://finance.yahoo.com/news/factoring-time-into-your-investments-142307789.html

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

"Stocks fell last week, with the S&P 500 falling 2.9% to close at 4,320.06. It was the worst week since March. The index is now up 12.5% year to date, up 20.8% from its October 12 closing low of 3,577.03, and down 9.9% from its January 3, 2022 record closing high of 4,796.56.

It’s been a rough couple of weeks in the stock market. After hitting its 2023 closing high of 4,588.96 on July 31, the S&P has been struggling to regain its footing.

But as TKer Stock Market Truth No. 2 reminds us, it’s typical for stocks to experience big drawdowns in any given year. Dealing with market volatility is what investing in risky assets like stocks is all about.

This market slump has had me thinking about a discussion I recently participated in with Bespoke Investment Group’s Paul Hickey and CappThesis’ Frank Cappelleri on the Facts vs. Feelings podcast, hosted by Carson Group’s Ryan Detrick and Sonu Varghese.

As we were wrapping up, Ryan asked us for a timeless piece of investing advice. All of our answers hit on a similar theme. Here’s a lightly edited transcript from the podcast:

Frank: Know your timeframe. And don’t change. You can either be a trader, a short-term trader. Or if you’re long-term, I think you have to be market agnostic.Paul: Your holding period. A one-day holding period, it’s a coin flip. The longer you’re willing to stick to it, the better. We call it the Montana rule. … Markets have never been down over a 16 year stretch or longer. Time heals in the markets.Me: Time in the market beats timing the market.

Regardless of if you’re trading for the short term or investing for the long term, making money in the stock market is a process. And processes involve time.

So, whether you’re a chart guru like Frank or you’re a data god like Paul, the key variable when considering a trade or an investment is time.

‘Time heals in the markets’

In some cases, it might be appropriate to operate on tight timeframes. In many other cases, the move is to have a long timeframe.

The chart below backs up Paul’s observation. From Bespoke Investment Group: "Historically, the odds of the S&P 500 being up over any one-month timeframe have been 62.6%. Over a year, the odds of being up jump to 74.6%, and over eight years, they jump to 97%. Since 1928, all 16+ year time frames have seen positive returns."


And by the way, this only works if you stay put in the market. The more you weave in and out of the market, the more you risk missing out on those important stretches of gains that can make or break your long-term performance. As the saying goes, "Time in the market beats timing the market."

In the stock market, time pays. It’s the valuable edge investors can take advantage of as they build long-term wealth in a market where the long game is undefeated.

Reviewing the macro crosscurrents
There were a few notable data points and macroeconomic developments from last week to consider:

The Fed keeps rates unchanged. On Wednesday, the Federal Reserve kept monetary policy tight, leaving its target for the federal funds rate unchanged at a range of 5.25% to 5.5%.

From the Fed’s policy statement: "Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have slowed in recent months but remain strong, and the unemployment rate has remained low. Inflation remains elevated."

The Fed also raised its estimates for GDP growth in 2023, and 2024; lowered its estimates for the unemployment rate in 2023, 2024, and 2025; and lowered its estimate for core PCE inflation in 2023. It also raised its projection for the fed funds rate in 2024 to 5.1% from 4.6%. Taken together, these revisions were considered hawkish.

Interest rates are up. The yield on the 10-year Treasury note hit 4.5% for the first time since 2007.


While rising interest rates represent a headwind for consumers and businesses, keep in mind that consumer and business finances are unusually strong.

Household finances are in good shape. From WSJ’s Nick Timiraos: "Debt service payments as a share of household income edged ever so slightly *lower* in Q2 from the previous quarter and from the year-earlier quarter."


Unemployment claims fall. Initial claims for unemployment benefits declined to 201,000 during the week ending September 16, down from 220,000 the week prior. It was the lowest print since January. While this is up from a September 2022 low of 182,000, it continues to trend at levels associated with economic growth.


Job openings stabilize. From Indeed’s Nick Bunker: "Online job postings aren't falling like they were earlier this year. In fact, they aren't falling at all. The Indeed Job Postings Index has moved sideways over the past 3 months."


Home sales cool. Sales of previously owned homes fell 0.7% in August to an annualized rate of 4.04 million units. From NAR chief economist Lawrence Yun: "Mortgage rate changes will have a big impact over the short run, while job gains will have a steady, positive impact over the long run. The South had a lighter decline in sales from a year ago due to greater regional job growth since coming out of the pandemic lockdown."


Home prices ticked up. Prices for previously owned homes rose month over month and were up from year-ago levels. From the NAR: "The median existing-home sales price climbed 3.9% from one year ago to $407,100 – the third consecutive month the median sales price surpassed $400,000."


Homebuilder sentiment falls. From the NAHB’s Alicia Huey: "The two-month decline in builder sentiment coincides with when mortgage rates jumped above 7% and significantly eroded buyer purchasing power. … And on the supply-side front, builders continue to grapple with shortages of construction workers, buildable lots and distribution transformers, which is further adding to housing affordability woes. Insurance cost and availability is also a growing concern for the housing sector."


New home construction drops. Housing starts fell 11.3% in August to an annualized rate of 1.28 million units, according to the Census Bureau. Building permits rose 6.9% to an annualized rate of 1.54 million units.


Gas prices are up from a year ago. From AAA: "The national average for a gallon of gas hit what may be 2023’s peak price of $3.88 earlier this week, only to slide a few cents in the following days. Today’s average is $3.86 – a penny more than a week ago."


Spending is holding up, according to September card data. From JPMorgan Chase: "• As of 17 Sep 2023, our Chase Consumer Card spending data (unadjusted) was 0.5% above the same day last year. Based on the Chase Consumer Card data through 17 Sep 2023, our estimate of the US Census September control measure of retail sales m/m is 0.23%."


The entrepreneurial spirit is alive. Small business applications, while down slightly from the previous month, remain well above prepandemic levels. From the Census Bureau: "August 2023 Business Applications were 466,163, down 0.9% (seasonally adjusted) from July. Of those, 149,785 were High-Propensity Business Applications."


Survey says growth is cooling. From S&P Global’s September Flash U.S. PMI: "PMI data for September added to concerns regarding the trajectory of demand conditions in the US economy following interest rate hikes and elevated inflation. Although the overall Output Index remained above the 50.0 mark, it was only fractionally so, with a broad stagnation in total activity signalled for the second month running."


But… : "Despite a muted sales environment, US businesses registered greater hiring activity during September. The rate of job creation quickened to the fastest since May and was solid overall. In fact, the pace of employment growth was among the most elevated seen in the past year amid some reports that staff retention was improving. Companies also noted that vacancies were filled with greater ease than had been seen in recent months."


Keep in mind that soft survey data isn’t quite as reliable as hard data.

Most U.S. states are still growing. From the Philly Fed’s State Coincident Indexes report: "Over the past three months, the indexes increased in 40 states, decreased in eight states, and remained stable in two, for a three-month diffusion index of 64. Additionally, in the past month, the indexes increased in 30 states, decreased in 13 states, and remained stable in seven, for a one-month diffusion index of 34."


Near-term GDP growth estimates remain positive. The Atlanta Fed’s GDPNow model sees real GDP growth climbing at a 4.9% rate in Q3.


Putting it all together
We continue to get evidence that we could see a bullish "Goldilocks" soft landing scenario where inflation cools to manageable levels without the economy having to sink into recession.

This comes as the Federal Reserve continues to employ very tight monetary policy in its ongoing effort to bring inflation down. While it’s true that the Fed has taken a less hawkish tone in 2023 than in 2022, and most economists agree that the final interest rate hike of the cycle has either already happened or is near, inflation still has to cool more before the central bank is comfortable with price stability.

So we should expect the central bank to keep monetary policy tight, which means we should be prepared for tight financial conditions (e.g., higher interest rates, tighter lending standards, and lower stock valuations) to linger. All this means monetary policy will be unfriendly to markets for the time being, and the risk the economy slips into a recession will be relatively elevated.

At the same time, we also know that stocks are discounting mechanisms, meaning that prices will have bottomed before the Fed signals a major dovish turn in monetary policy.

Also, it’s important to remember that while recession risks may be elevated, consumers are coming from a very strong financial position. Unemployed people are getting jobs, and those with jobs are getting raises.

Similarly, business finances are healthy as many corporations locked in low interest rates on their debt in recent years. Even as the threat of higher debt servicing costs looms, elevated profit margins give corporations room to absorb higher costs.

At this point, any downturn is unlikely to turn into economic calamity, given that the financial health of consumers and businesses remains very strong.

And as always, long-term investors should remember that recessions and bear markets are just part of the deal when you enter the stock market with the aim of generating long-term returns. While markets have had a pretty rough couple of years, the long-run outlook for stocks remains positive."

MY COMMENT

A simple and critical lesson for any investor......the POWER of time. But you have to be in the market to get the gains. Market timing is simply for FOOLS. You will end up churning your own account, and likely miss out on the primary market gains before you see and understand what is happening.

The above is also a pretty good survey of where we are right now in the economy....but.....this is now hindsight analysis.

 

As to the above.......I say:

Time is on my side, yes it is
Time is on my side, yes it is

 

Same open today as the last couple of weeks. BUT.....we have now turned positive in the SP500 and the NASDAQ.

 

Here is the KEY content.

Assessing the Damage of the Latest Pullback

https://lplresearch.com/2023/09/22/assessing-the-damage-of-the-latest-pullback/

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

"No Major Flight to Safety…Yet

Despite the recent pullback in stocks, there have been no major signs of a sustainable flight to safety. As shown below, the S&P 500 Equal Weight Consumer Discretionary (SPXEWCD) vs. S&P 500 Equal Weight Consumer Staples (SPXEWCS) ratio chart continues to generate higher highs and higher lows, indicating the equal weight consumer discretionary sector is outperforming the equal weight staples sector. Why is this important? Given the economic implications between discretionary spending on things consumers want vs. spending on things consumers need, relative performance between the two sectors is often used to identify offensive (consumer discretionary outperforming) or defensive (consumer staples outperforming) leadership trends. For now, offense remains on the field.



View enlarged chart

SUMMARY

The S&P 500 is down nearly 4% on the month, and technical damage is beginning to mount. While weak September seasonality is capturing the blame, selling pressure has primarily been driven by a jump in interest rates. Benchmark 10-year Treasury yields have climbed roughly 40 basis points, surpassing resistance off the October 2022 highs. The recent breakout raises the question of how high yields will go—an important question that could continue to weigh on risk sentiment.

Technically, the S&P 500 has broken to the downside of a symmetrical triangle formation. Additional downside support below 4,330 comes into play in the 4,200 to 4,300 range, followed by the 200-dma at 4,189. Momentum has turned bearish, and breadth is also deteriorating. However, despite the recent pullback, there have been no major signs of a sustainable flight to safety. Overall, we believe the market is down but not out. Pullbacks are completely normal within the context of a bull market, and while the jump in rates is concerning, the S&P 500 remains in an uptrend and above its rising 200-dma."

MY COMMENT

Click on the link to see the rest of the article.

 

This article is a LITANY of short term "stuff" that is supposedly impacting the markets.

Stocks slump, struggle to shake off Fed rate worries

https://finance.yahoo.com/news/stoc...orries-stock-market-news-today-133422245.html

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

"Wall Street stocks struggled to advance on Monday, as the Federal Reserve's "higher for longer" interest rate strategy continued to pile on pressure as a US government shutdown loomed.

At the opening bell, the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) were both down about 0.3%, after losing grip of earlier gains as 10-year Treasury yields (^TNX) jumped to their highest levels since 2007. The Nasdaq Composite (^IXIC) fell about 0.4%.

Oil prices have resumed their rally, raising the prospect of inflation staying high — and that has fired up debate about whether the Fed will find itself restricted from cutting rates in the near term. Investors are now getting ready for a fresh read on PCE inflation due out Friday for more insight.

With less than a week left to avert a government shutdown, investors are starting to assess its potential impact on the economy, given there's little sign of progress on a budget agreement by lawmakers. A reading on second-quarter GDP is scheduled for Thursday.

Meanwhile, Sunday's tentative deal to end the Hollywood writers' strike lifted media stocks in the early going. But there's less optimism around the autoworkers' strike, after Ford (F) said despite progress in some areas, there are "significant gaps to close" before it can reach a new labor agreement with the UAW.

Elsewhere, signs of growing debt woes at Chinese property developers — Evergrande, in particular — rattled nerves about the impact on the world's second-biggest economy.

In individual stocks, Amazon (AMZN) has signed a deal to invest up to $4 billion in startup Anthropic, pulling in a crucial partner in its push to become a major player in AI.

Eyes are also on Booking Holdings (BKNG), whose brands include Booking.com and Priceline, after its proposed $1.7 billion buy of ETraveli was blocked by the EU antitrust regulator."

MY COMMENT

Not a bad article....a good summary of the ridiculous "stuff" that is supposedly impacting the markets right now.

You can pretty much boil down the short term markets to one thing right now....the Ten Year Treasury. Sure, the rest of these news items are the factors that the Computer Trading programs are using to make their micro-second trades. This is the reason for the day to day nothingness in the markets.

The other thing contributing to the current markets is the great divide between the day trading, speculating, professionals and the long term......ignored and disrespected......silent majority of investors who are just siting and waiting at the moment.

NONE of the events above will have any real impact long term.

We are simply seeing the markets take a......PAUSE THAT REFRESHES. There is really no ENTHUSIASM for stocks to drop right now.....or......to go up. We are in one of those market pauses that is common after a period of big gains. In reality I see the market direction as still....strongly positive.

 

YEAH....no one cares about the FED.

Why the Federal Reserve hasn't spooked the stock market... yet

https://finance.yahoo.com/news/why-...t-spooked-the-stock-market-yet-100042632.html

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

"Corporate America isn't being frightened by a Federal Reserve that may have one more interest rate hike in its inflation-busting arsenal.

And that could be a prime reason why markets — broadly speaking — are shaking off a setup of higher interest rates well into 2024.

"I don't think so," Cisco CFO Scott Herren told me when asked if the potential for another rate hike from the Fed was a worry to his capital allocation.

Herren's comments on Yahoo Finance Live came about an hour after Cisco revealed a $28 billion deal to buy security player Splunk. The purchase price will be funded with a mix of cash and new debt.

If Herren and his CEO Chuck Robbins were terrified of the Fed, the dynamic duo wouldn't be paying more for that new debt versus one year ago.

Nor would they be risking paying a 31% premium to buy Splunk into a Fed-fueled economic slowdown. Nor would they be putting their own jobs on the line by signing off on spending $28 billion.

"As I talk to my peers, CFOs at other companies, I think we are all monitoring the environment. It's time to be prudent. But they are not stopping. They are not shutting down business. By the way, you can't ever time what's going to come with the FOMC. I would never try to do that," Herren added.

A few weeks removed from losing out to J.M. Smucker to buy Twinkies king Hostess Brands (at a big premium, too), General Mills CEO Jeff Harmening doesn't sound like an executive going back into the cave.

Quite the contrary.

He would still like to pull the trigger on a deal if the price is right.

"We're also disciplined as to how we do it. And we've always been disciplined. We've got a good balance sheet. We like our core business. But we will still be on the lookout for assets that we think can accelerate our growth and things that we will be particularly capable of doing well. But we'll be disciplined as we do that," Harmening told me on Yahoo Finance Live.

Meanwhile, new IPOs continue to arrive on the market, from a chip player in Arm to a food delivery outfit in Instacart.

Both stocks have sucked wind following their IPOs, but execs at these companies pushed forward in getting their companies to market.

Experts have told me the deal activity and IPO activity aren't yet done for 2023, despite the unknown quantity that is the Fed.

I think that says a lot about economic resilience and how maybe, just maybe, markets won't fall off a cliff in 2024 as the last round of rate hikes filter through civilization. Dare I say this is the soft landing so many pundits think could happen?

"This is a Fed that sees an opening for a soft landing and will try not to blow it," Evercore ISI strategist Krishna Guha said.

Execs and investors are betting on that, full stop."

MY COMMENT

I would say the economy and the consumer is demonstrating ZERO concern for the FED. People are not worried about them at all in their daily lives.

SURE.....they usually screw things up royally. BUT....this time around and after all the fear mongering and hype of the last couple of years...people have just moved on.......even if the media can not bring itself to do so.

This sort of stuff is simply a distraction for long term investors. for continued success....do not....give in to it or let it distract you from your goals and investing plan.

 

I like how the markets closed today. Especially considering the very vague open that we had and the early negativity. Investors shook off all the fear and doom and decided to simply move on.

I had a CLEAN SWEEP today.....all stocks in the green. I also got in a beat on the SP500 by .42%. A good way to start the new week.

 

I have heard of a lot of people on TicToc lately bad mouthing the 401K. This is the sort of IDIOCY that makes these Social Media....peer pressure sites......dangerous. Not to mention that many of the people posting this "stuff" are trying to sell annuities and even worse....insurance. Dont even get me started on the Chinese government controlling the site.

I am not a cheerleader for the 401K....but....if there is a match available it is insanity to leave that free money on the table.

Is a 401(k) Worth It in 2023? Pros, Cons and Costs
Weigh the potential benefits and drawbacks of a 401(k) as you consider how to save for the future.

https://money.usnews.com/money/retirement/401ks/articles/are-401-k-s-worth-it

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

"If your employer offers a 401(k) plan, contributing to it is an easy way to set aside funds for retirement.

These accounts are designed for long-term saving and include some key advantages. However, you’ll want to be aware of the potential downsides attached to a 401(k). Once you understand the pros, cons and costs, you’ll be better equipped to make decisions for your financial future.

Some of the considerations to keep in mind with a 401(k) include:

• Pro: You can place funds into the plan every year.
• Con: You might not be able to save enough.
• Pro: Employers might add to the account.
• Con: Contributions from employers might be minimal.
• Pro: Maintaining the account can be simple.
• Con: Some 401(k)s include higher fees.
• Pro: 401(k)s can help you budget for retirement.
• Con: It can be difficult to access funds early.
• Pro: You’ll save on taxes while working.
• Con: You might pay higher taxes later.

Pro: You Can Place Funds Into the Plan Every Year

You might decide to automate contributions to the plan by setting up a transfer of money from your paycheck into the account each month. You’re allowed to make 401(k) contributions of up to $22,500 of your salary in 2023. If you’re 50 or older, you can put an additional $7,500 into the plan for a total of $30,000.

Con: You Might Not be Able to Save Enough

You might start by contributing less than the limit every year as you pay off other expenses such as student loans. If you're looking to buy a home or pay off credit card debt, it could be difficult to save as well. Over time, you may be able to move more funds into the account.

If you earn a high salary, you might be looking for a way to save even more than what is allowed in a 401(k). In these cases, you could consider additional investments or savings vehicles, such as stocks, bonds or annuities. You may decide to maintain a 401(k) with your employer, and then build a diversified portfolio to prepare for the future. You could also check to see if your company provides additional retirement benefits or plans for high earners.

Pro: Employers Might Contribute to the Account

Some employers offer to match up to a certain amount of your contributions to the plan. “That’s free money for you,” says Rafael Rubio, president of Stable Retirement Planners in Southfield, Michigan.

Suppose your company’s policies indicate a match of 50 cents for every dollar you save in the plan up to 5% of your salary. If you earn $60,000 a year and contribute $6,000 to the account, your employer will contribute $1,500.

Con: Contributions from Employers Might be Minimal

Not all employers offer a 401(k) match, and even if they do, the match might not seem like much. A match of 50% of your contributions up to $500 would indicate that if you contribute $2,500 to the account, the employer would add $500.

If you’re unsure whether your company provides a match, can check with your employer. If there is a match, it is worthwhile to contribute enough to get the maximum match.

Pro: Maintaining the Account Can Be Simple

When you place funds into the 401(k) plan, you’ll be able to purchase different types of investments. “Plan sponsors traditionally put together a list of 20 to 25 mutual funds, half of which are target-date funds,” says Chris Gure, an investment consultant at Fortress Financial Partners in Raleigh, North Carolina. A target-date fund is a collection of investments designed to grow more conservative over time until a set date in the future. Target-date funds usually coincide with the year that an individual expects to retire. If you’re looking for a streamlined way to plan for retirement, this could be to your advantage.

Con: Some 401(k)s Have Higher Fees

Often, 401(k) plans come with a number of expenses that might include management fees and recordkeeping fees. “Plans are required to distribute fee disclosures annually,” says Julian Schubach, vice president of wealth management at ODI Financial in Lynbrook, New York. Still, it can be difficult to find these communications. “Most participants have no idea what fees they are paying,” Schubach says.

To learn about the costs involved with your 401(k), ask your HR department or plan sponsor to help you decipher the fine print.

Pro: 401(k)s Can Help You Budget for Retirement

As you contribute funds to your account, you’ll be able to monitor the balances of your investments. If you’re over 50, you’ll have a chance to place even more into the plan every year. A financial advisor can work with you to estimate how much you’ll have at retirement. You’ll then be able to think through your income in your post-working years, which also might include funds from Social Security or a part-time job.

Con: It Can Be Difficult to Access Funds Early

When money is placed into your 401(k) account, the plan is designed for the funds to remain there for a long time. “In most circumstances, distributions from a 401(k) plan prior to age 59 1/2 are subject to early withdrawal penalties of 10% plus federal and state income taxes,” says Chance Burroughs, a financial advisor at Manske Wealth Management in Houston. Certain plans allow for a 401(k) loan or hardship withdrawals if you run into a financial emergency. However, if you borrow from the account, you’ll usually have to pay the amount back plus interest within five years.

Pro: You’ll Save on Taxes While Working

When you contribute money to your 401(k) plan, the amount is deducted from your salary. You won’t be taxed on it during the year you make the contribution. If you earn a salary of $100,000 and place $20,000 into a 401(k), your taxable income will be $80,000 for a year. This could give you a tax break, which might enable you to pay for other expenses or save even more.

Con: You Might Pay Higher Taxes Later

With a 401(k), you will have to pay income tax on your contributions and the investment gains when you withdraw funds from the account. “Without knowing for certain how your 401(k) will perform or what the taxes will be in the future, your 401(k) can be a ticking tax time bomb,” Rubio says.

To lower your risk of high taxes, it can be helpful to monitor the account and forecast your upcoming income. Think about your required minimum distributions, which are withdrawals you’ll need to start taking after age 73. You might calculate how much you’ll have to take from the account in retirement. “This will allow you to estimate what tax implications you will have,” Rubio says.

The exercise may also allow you to determine whether to invest more in other accounts like a Roth IRA, which taxes the contributions in the year you make the deposit but not when you withdraw the funds later."

MY COMMENT

To me....most of the "cons" above are a real stretch. The bottom line....without a 401K plan most people will NEVER get around to saving for retirement. BEWARE the content on Ticktock.

If it was me I would do enough in my 401K to capture the matching funds. After that I would either/or put additional funds into a ROTH IRA and/or a taxable brokerage account.

 

Welcome blake. Feel free to join in and post any time you wish.

Well.....I was never under a 401K since I was always a business owner. Back in my day....I retired in 1999 and sold/liquidated my business....I had a KEOGH Plan for my retirement as well as for my employees.

As to what I said........I love the free money aspect of a 401K with the employer match. I would capture that match to the maximum if I was under a 401K. After that......my personal choice would be to save for retirement in a ROTH IRA.....since I could totally control the account and the investments. In a ROTH I would not be limited to the fund choices and investment list of the 401K and I could also make sure that my fund choices.....or I should say "probably" ETF's......would be the lowest fee possible.

My personal preference would be the ROTH IRA over the regular IRA or 401K, since it would allow all the growth inside the account to be tax free of capital gains taxes and on retirement there would be ZERO income tax or capital gains tax on the withdrawals.

If I had additional long term or retirement money after maxing the 401K match and the ROTH IRA for myself and my spouse....I would put the rest of my long term savings into a taxable brokerage account.

In my working years.......I used my taxable brokerage account for long term investment and savings. I was very glad when I retired that this money was NOT subject to regular income tax rates .....just long term capital gains rates. I was lucky to be able to structure my assets and accounts so now in "late retirement".......age 70 on...... my income taxes are the lowest I have paid in the past 40+ years.

In comparison....my sibling....who is retired and in their early 70's....is now paying massive income taxes in retirement.

When I was in business.....my KEOGH retirement plan allowed me to put away $30,000 per year for retirement. I did often max out that limit. Through much of my work life there was no ROTH IRA yet.

The KEY POINT....is whatever you choose to use....401K, IRA of some form, brokerage account or a mix of all.......DO SOMETHING. Have the DISCIPLINE and forward thinking to take care of your retirement. it will come faster than you think.

 

Just got done repairing an area to a bedroom ceiling where one of my roof vents allowed water in. We have a tile roof and I had to have a roofing company come out and remove the tile in that area and fix the vent flashing.

I have all the tools and stuff needed to do sheet-rock repairs. Luckily I did not have to replace any of the sheet-rock....just remove the old mud and texture....mud over the area....sand it and re-texture.

At one time we had a house that had many cracks in the walls so I got really good at repairing sheet-rock issues and matching wall finishes.

I do hate painting.......but.....did it myself since it was a small area....about 9 sq ft.

 

How old are you blake? What are you doing for your retirement savings?

 

Sounds like you are doing EVERYTHING right Blake. For your age you are way ahead of most people......in your financial habits, knowledge, and discipline.....and net worth. If you continue on the path you are already on......you will have the resources to do whatever you want to do in life.

WELL DONE.

Sounds like you have a lot you could contribute to this thread and board.......so feel free to participate as much as you wish.

I will also mention.....anyone else that is a reader or lurker.....feel free to participate. The more participation the better for the thread and the board. It is not necessary to have any particular level of knowledge or assets to be active.....just do it.

 

OK....my type of little article.

24 Things I Believe About Investing

https://awealthofcommonsense.com/2023/09/24-things-i-believe-about-investing/

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


"Here are some things I believe about investing.

1. I believe simple beats complex. The problem is simple is much harder to implement because complex will always sound more intelligent and appealing.

2. I believe the timing of buy or sell decisions matters less than your holding period. Picking tops and bottoms is for the lucky and the liars. Patiently holding onto your investments is more important for most investors than timing.

3. I believe you should ignore what billionaires and legendary investors think about the markets. These people don’t share your circumstances, time horizon or risk profile. Why should you take investing advice from them?

4. I believe self-control can make you far more money than just about any other trait as an investor. I know plenty of high IQ people who are terrible investors because they don’t have the right temperament.

5. I believe every investor in risk assets should be comfortable seeing their money incinerated on occasion. During bear markets and corrections some of your money simply vanishes. That’s just part of investing.

6. I believe being bullish or bearish matters less than progress towards your goals. Your personal financial circumstances should dictate how you invest far more than what you think will happen in the markets. You don’t need to have an opinion on whether markets are going higher or lower in the short-run.

7. I believe risk management is important but you have to take risk to make money. Managing risk is a major component of portfolio management but you can’t avoid risk altogether. You have to invest in something.

8. I believe process is more important than outcomes but at some point performance matters. A successful investment process requires making good decisions over and over again. But you have to understand the difference between discipline and delusion if your process isn’t working.

9. I believe a good strategy you can stick with is vastly superior to a great one you can’t stick with. Perfect is often the enemy of good when it comes to investment behavior.

10. I believe it’s basically impossible to forecast the economy. Even the Fed can’t figure out the path of interest rates, inflation and economic growth and it’s part of their job. If we’re being honest, no one truly understands how the economy works.

11. I believe it’s much easier to explain what just happened than predict what will happen next. The only constants in finance are human nature and moving the goalposts when you’re wrong. Pundits are very good at telling you why something unexpected was obvious in hindsight even when all of their predictions about the future have been wrong.

12. I believe defining what you won’t invest in is more important than what you will invest in. Investors have never had it better but the paradox of choice can be paralyzing. You can find liberation by limiting yourself to certain types of investments and ignoring everything else.

13. I believe there are many different paths to being a successful investor but only a handful of ways to fail. There is no one-size-fits-all when it comes to investing the right way. But unsuccessful investors typically exhibit the same poor investment behavior — market timing, overtrading, trying to outsmart the market, being overconfident in your investment abilities, investing based on political beliefs, etc.

14. I believe markets are right most of the time but not all the time. Markets are kind of, sort of efficient. But just because markets can be crazy at times doesn’t mean it’s easy to beat them.

15. I believe fighting the last war can get you into trouble. The next risk is rarely like the last risk.

16. I believe every investor has their own behavioral blindspots. Knowing yourself is more important than worrying about what other investors are up to.

17. I believe a long time horizon is the ultimate equalizer in the markets. A long enough time horizon is the best hedge against most market risks.

18. I believe useful investment advice is nearly impossible to accept during booms and busts. No one wants to hear about being responsible during a rip-roaring bull market just like no one wants to hear about the virtues of buy and hold during a soul-crushing bear market.

19. I believe long-term returns are the only ones that matter but you have to survive the short-term. As Daniel Kahneman once said, “The long-term is not where life is lived.”

20. I believe most disagreements about markets come down to differences in time horizon and risk tolerance. Markets are full of people with different goals, opinions, time horizons and appetite for risk. That’s what makes a market. It’s also what causes arguments and why there is always a buyer for every seller.

21. I believe nothing about investing is ever easy, but we still make it harder than it has to be. There are no points awarded for the degree of difficulty when it comes to making money in the markets.

22. I believe optimists are better investors than pessimists. They say hope is not an investment strategy, but it kind of is in a way. If you don’t think things will be better in the future than they are today, what’s the point of investing in the first place?

23. I believe doing nothing is the best investment decision most of the time. As long as you have a plan in place, doing nothing is perfectly rational investment behavior.

24. I believe it’s OK to build wealth slowly. Someone once asked Jeff Bezos the best advice he ever received from Warren Buffett. Bezos asked Buffett if his investment ideas are so simple and he’s so rich why doesn’t everyone copy him?

To which Buffett replied, “Because nobody wants to get rich slow.”

None of us are going to be the next Buffett but this idea is more realistic than assuming you can get rich overnight."

MY COMMENT

I like everything in this entire list.

This would make a good check list for any investor. How many of these do you agree with and actually practice in your investing and life?

The more of these items you practice and live in your day to day investing life.....the higher the odds you will be successful.

 

As to today......same issues as the last week or two.....strikes, shutdowns, interest rates, FED fear and fear mongering. Do any of these topics strike you as......really.....the basis for long term gains or losses in any particular company of fund?

As said above at the top of the list.....it really is simple.

It is all about buying ICONIC stocks and funds that outperform due to fundamentals and earnings. It is NOT about jumping in and out of the markets or jumping on the latest, greatest market FAD.

A big part of my definition of an ICONIC company to invest in is staying power. Is the company so dominant that it is going to have world wide ability to be seen as the greatest company in its category for decades.

Having observed many, many, investors and people around me over the past 55+ years.....I find this little comment above critical:

"you have to understand the difference between discipline and delusion if your process isn’t working."