Kicking butt today....a rare early in the day clean sweep at this moment for me with all eight stocks UP for the day. With the sort of market strength and momentum we are seeing right now......I have high hopes for a good close today. Who knows....we might even pull out a positive close for the week. The short term markets are so obscure, opaque, volatile, and erratic.....you never know when some nice gains are going to come out of nowhere. BUT....you do know based on the academic data that the odds are in your favor if you simply invest for the long term and avoid market timing.
Everyone is the smartest in the room. A poor performing year for them is when they double their money. Last place I worked was staffed by the best investors I've ever met. Several of them doubling their money weekly. They continue to work because they enjoy it. I've never met so many multi-millionaires. I respect them for driving old cars and eating sack lunches to remain in touch with poor people like myself.
A good day today....even though the markets obviously backed off in the afternoon some. I had a nice medium level gain today. Only one stock was negative....HON. The rest were UP except for AMZN which ended at 0.00% today. I have not done the math....but....I think I might now be positive for the week.
My former holding.....NIKE. Nike beats fiscal Q1 profit estimates, but China sales weaker than expected https://finance.yahoo.com/news/nike-first-quarter-earnings-175008321.html (BOLD is my opinion OR what I consider important content) "Nike (NKE) reported fiscal first quarter results after the bell on Thursday that topped Wall Street's estimates for gross margins and earnings per share while showing less of a slowdown than expected in the wholesale division of its business. Here's how Nike's results stacked up against Wall Street analyst expectations, according to Bloomberg consensus estimates: Revenue: $12.94 billion vs.$12.99 billion (est.) and $12.69 billion (same period year prior) Adj. earnings per share (EPS): $0.94 vs.$0.75 (est.) and $0.93 (same period year prior) Gross margin estimate: 44.2%vs.43.7% (est.) and 44.3% (same period year prior) Nike's inventories fell in the quarter to $8.7 billion down 10% compared to the year prior. Analysts had anticipated inventories of $8.84 billion. The metric has been closely tracked since an inventory glut plagued the retailer through out 2022. Meanwhile, direct-to-consumer sales, a closely watched growth metric for the shoe giant, increased. to $5.4 billion, up 6% from the same period a year ago. Nike's stock had stumbled into the report. Shares are down 9% over the last month, and Wall Street analysts are warning of a subdued report from the athletic apparel behemoth. Shares were up about 1% in after hours trading after the report. Revenue in greater China had been a key concern for investors headed into the report. The Chinese economy has produced slower economic growth than expected this year. Wall Street analysts fear that could also weigh on companies like Nike, who have significant exposure to China. In the most recent quarter, Nike saw revenue in Greater China at $1.74 billion. Analysts had expected the segment to show $1.83 billion in sales, according to Bloomberg consensus data. "The China story is probably the biggest one here for Nike," Forrester Research analyst Sucharita Kodali told Yahoo Finance Live on Tuesday. "The challenge is that Nike has been very dependent on the Asian market, certainly on the Chinese consumer. Not only do you have issues with the softening of the Chinese consumer and their spending ability but also just a lot of geopolitical risk that is there." Nike's report also comes about a month after Foot Locker warned of a slowdown in its footwear business due to "price sensitive" consumers. About 64% of sales at Foot Locker (FL) are the Nike brand, according to Jefferies. If Foot Locker struggles to offload Nike inventory that could impact the shoe giant's wholesale market, Wall Street analysts noted. For the quarter, Nike reported wholesale revenues growth that came in flat compared to the same period a year prior. The Street had been expecting a decline of 4% from the same period a year prior." MY COMMENT A mild BEAT. Not a big game changer....but at least a step in the right direction. They are still in trouble in China. That is what happens when you tie the future of your business to China. Their little experiment in direct sales and skipping out on the retailers......an unmitigated disaster.
Last market day of September. Looks like the markets like judging by the open. All the big averages are up with good gains.....less than ten minutes into the day.......LOL.
This is probably the reason for the markets today....not the end of September. The Fed’s favorite inflation indicator rose less than expected in August https://www.cnbc.com/2023/09/29/pce-inflation-august-2023-good-news-for-inflation-hawks.html (BOLD is my opinion OR what I consider important content) "Key Points The personal consumption expenditures price index excluding food and energy increased 0.1% for the month, lower than the expected 0.2%. On a 12-month basis, the index was up 3.9%, as expected. Consumer spending rose 0.4% on a current-dollar basis. That was down sharply from 0.9% in July. An economic indicator the Federal Reserve favors as an inflation gauge rose less than expected in August, showing that the central bank’s fight against higher prices is making progress The personal consumption expenditures price index excluding food and energy increased 0.1% for the month, lower than the expected 0.2% gain from the Dow Jones consensus of economists, the Commerce Department reported Friday. On a 12-month basis, the annual increase for core PCE was 3.9%, matching the forecast. That was the smallest monthly increase since November 2020. Along with the modest inflation gain, consumer spending rose 0.4% on a current-dollar basis. That was down sharply from 0.9% in July. In real terms, spending was up just 0.1% after rising 0.6% in July. Including food and energy, headline PCE increased 0.4% on the month and 3.5% from a year ago. Headline inflation has been creeping higher in recent months after hitting 3.2% in June. Though it’s one of many inputs the Fed uses to measure inflation, the PCE index is considered particularly valuable because it accounts for shifts in consumer behavior, such as substituting lower-priced goods for more expensive items. In that way, it provides a better cost-of-living snapshot than the more widely followed consumer price index, which measures costs without regard to substitution. The core PCE was the first sub-4% year-over-year reading in nearly two years and a decrease from the 4.3% July reading. Inflation on the month was largely driven by energy costs, which accelerated 6.1%, according to Friday’s reading. Food prices increased 0.2%. On an annual basis, energy was down 3.6% while food increased 3.1%. The Fed targets inflation at 2% as indicative of a healthy growth rate for the economy. Core PCE was last at that level in February 2021. The central bank has been raising interest rates aggressively since March 2022, though it elected to skip the September meeting as it weighs the impact of a dozen hikes totaling 5.25 percentage points. Markets largely expect that the Fed is done raising rates, though officials at last week’s meeting indicated that one more quarter-point increase is likely before the end of the year. Since the meeting, several Fed officials have said that they expect interest rates to stay elevated for an extended period of time." MY COMMENT A good......Goldilocks report.....not too cold and not too hot. A slight dip in the core.......but not enough to put the recession fear back into the markets. Obviously the FED is probably done with hikes.......hopefully for good. BUT....I dont put it past them to try to squeeze in one final hike at some point. I would actually like to see the rates held where they are right now for at least a year or more. We are finally back to relatively normal rates....although not anywhere near the high end of the curve on a historic basis. by holding where we are it would give us a nice cushion for when the next recession happens. It would also give consumers and regular people a chance to lock in and make some money on CD's and other interest paying investments for a while.
The market right now is in a good spot to enter the next earnings reporting period......in a few weeks. It would be nice to see a good strong year end rally......and conditions are ripe for one to actually happen this year.
We now have all the info that is needed to see what the Social Security cost of living increase will be for 2024. The government number should be out about the second week of October. BUT......various groups will be putting out their estimates for the increase immediately. Those private estimates are usually very accurate.
With the focus today on the short term gains in the markets....lets keep what is important in mind. The Curse of Short-Termism https://behaviouralinvestment.com/2023/09/28/the-curse-of-short-termism/ (BOLD is my opinion OR what I consider important content) "In Chapter 12 of ‘The General Theory of Employment, Interest and Money’, John Maynard Keynes writes of the increasing short-term focus of investors, lamenting: “Investment based on genuine long-term expectation is so difficult day to-day as to be scarcely practicable”. Keynes’ seminal work was first published in 1936, so although it is easy to consider investor myopia as a modern phenomenon, it is not. Rather it is an ingrained feature of how humans engage with financial markets. That is not to say that the most pernicious problem faced by investors has not been exacerbated – the temptations are greater than ever – but simply that it is our default state. Unless we make a conscious effort to mitigate it, we will likely bear the heavy costs of short-termism. The idea that adopting a long-term approach to investing can have a profound positive impact on our results can seem perverse. How can something so easy – doing less / paying less attention – lead to better outcomes? The critical misunderstanding here is the idea of simplicity. Long-termism is simple in theory but fiendishly difficult in practice. Everything from our psychological wiring to the broad environment in which we exist is dragging us toward making short-term choices. It takes considerable effort to extend our horizons. Far from being easy, taking a long-term perspective is the most severe behavioural challenge that investors face. Investing in the moment Many of the decisions we make are a response to how we are feeling right now. Even when we think we are making a long-term choice, it is often a response to profound emotional stimulus. When we sell all of our risky assets in the teeth of a bear market we are relieving anxiety and fear – it feels good to do it at that moment. The cogent rationale we make for finally capitulating and buying stocks in the midst of a euphoric bubble is just a charade, what we are really doing is removing the stress and pressure of missing out. These types of feelings are smart from an evolutionary perspective – they helped us survive – they just make us terrible long-term investors. It is not only our emotions and feelings that make us inveterate short-termists, but our inability to appropriately value long-term rewards. We are very poor at discounting and tend to give far more weight to near-term pay-offs than those that are stretched out far into the distance. We might be fully aware that staying invested is the best route to meeting our retirement goals thirty years hence, but the illusory lure of getting out of the market before the next crash might just prove too powerful. Investing with a long-term mindset also requires us to ignore huge swathes of (potential) information. This is incredibly hard to do. We are being incessantly told that everything is changing, and we must respond to this by doing very little, which feels antithetical. A challenge exacerbated by the fact that what is happening in front of our eyes always feels like the most important thing. As Daniel Kahneman said: “Nothing in life is as important as you think it is, while you are thinking of it”. Taking a long-term approach means frequently ignoring issues that we and everyone believes – at that moment – are absolutely critical. No wonder so few investors can do it. Short-term is the norm As if our own psychological foibles are not enough, there is another factor that makes it worse. Much worse. The environment in which we make investment decisions. Most people are wired in the same way we are. We all want short-term gratification, so the investment industry is set-up to provide it. It is incredibly difficult to build a business or a career by saying: “Just wait thirty years and you will be okay”. If we want to get a promotion or sell an investment, then we need to be seen to be doing something. That almost always means taking a short-term view. We are incentivised to survive, and waiting for the long-term to play out is akin to a death wish. Short-termism is not some elaborate profiteering plot, although it can feel like it, it is just the prevailing and powerful norm in investing. Everyone cares about it and lives by it, so everyone has to adopt that approach and play the game. Try saying we didn’t trade this quarter or last month’s performance was irrelevant and see how far that gets us. Nothing can stop us If the Keynes quote at the beginning of this piece suggested that short-termism was nothing new, that is only partially true. There is a difference between our willingness and ability to be myopic. We were always willing but are now more able than ever. There are two key elements that facilitate our short-termism. The amount of information available and the ease at which we can react to it. We are not inherently more short-term in our thinking than we used to be, but we are now faced with inescapable and overwhelming exposure to financial market noise – “7 seconds until the European market opens” – and can trade whenever we like. It is hard to think of a more toxic combination for provoking our worst investing behaviours. Technological innovations have been wonderful for investors, and also a behavioural disaster, inflaming our ingrained short-term predilections. Say a lot, do a little Are there any solutions? There are some. Not checking our portfolios or switching off financial news are likely positive steps toward better investment outcomes. But perhaps they are unrealistic. A more powerful approach might be an attempt to separate words from action. Financial markets are incredibly diverting; they capture our attention and we cannot reasonably ignore them. Discussing them, however, should be entirely separate from taking active investment decisions. One of the reasons that there is so much unnecessary and costly trading on portfolios is because investors feel like they must have something to talk about with clients. Trading creates narratives which creates comfort. This plays to the notion that although tactical asset allocation doesn’t add value, it does help keep clients invested – because they feel happier that things are being looked after and it placates their desire to see short-term action. Maybe this is inescapable, but if we want to enjoy the benefits of long-term investing, we need to find more ways of discussing financial markets without feeling compelled to constantly act. A long-term approach is (almost) always better There is no greater advantage available to any investor than taking a longer-term approach. There is one important caveat, however. Long-termism is a great idea on the proviso that we make sensible decisions at the start. They don’t have to be heroic, they needn’t be optimal and there is no requirement for genius. Just some sensible choices and a long horizon will leave us better placed than most. That’s far easier said than done." MY COMMENT Fortunately we have a good group of long term investors active on this thread. That helps everyone to keep focus on the distant future and not get too caught up in the short term. BUT.....we can always use more active posters.....so come on....join us. I try to do what is mentioned above in this thread: "discussing financial markets without feeling compelled to constantly act." I totally agree with the discussion in this little article and often say.....what is so simple is extremely difficult for humans. YES....most of the investment industry is in on the push to keep people focused on and "trading" the short term. The most simple example.......the now universal description of "investors" as "traders" and thee universal description of the purchase of an investment.....even a long term investment.....as a "trade".
For those that are not regular posters.....yet.....please join us. One good thing about this thread.....and the entire board....which is VERY RARE in the world of message boards.....is the lack of harassment, pointless argument, bullying, cliques, etc, etc, etc. It is so nice to be able to hang out with......"adults".....that can discuss investing without personal attacks. Thank you and well done to all posters on this board.
Of course.....I see this as a front page article today on CNBC. Stagflation is ‘the big bogeyman out there’ — and many increasingly fear its return https://www.cnbc.com/2023/09/29/stagflation-surging-oil-prices-fuel-fears-of-dreaded-phenomenon.html MY COMMENT How many is....."many". I dont know, and I doubt that anyone knows. One day of early market gains does not mean we are in for a massive or even a small rally. BUT.....come on man....let us be happy for a few hours before you dump cold water on everyone.
Funny, I was just typing up a post about the irrational short term when you put up the above post. So, I'll revise mine a bit. Just a short time ago, the nasty little red day we had. On that day, the media was full tilt. It was one of the most negative headline days I had seen since probably deep in the bear market sometime ago. It was a litany of everything they could gin up. We see this pretty regular now it seems. Even some of the often endorsed pundits are constantly changing positions if you look closely over a period of time. It is, for the most part, entertainment. Do not get pulled into the nonsense of the short term....especially if you are investing over the long term. We can be aware of the issues, but always maintain a balanced, reasonable thought process about it. Giving yourself time to evaluate things often means doing nothing for a period of time.
This above. A great little quote. This is why it is so important to know YOURSELF as an investor. We all have to figure that out at some point. Factors such as tolerance and risk, your own financial goals, and a plan to get there.
It appears that the government shutdown chatter may be pulling us down into the close. First off, if it occurs, I am obviously not changing anything with regard to my investment plan. However, a certain part of it just irks me to the core. The military service people and the regular employees getting stiffed by this is just flat out wrong. Guess who still gets paid? Congress. I noticed a little article a day or so ago where a "source" had leaked out some of the temperament in one of the negotiating sessions. Those involved were basically hurling profanity towards each other and fighting over disparaging social media posts made about each other.
With the afternoon weakness in the markets.....I still have a gain for the day....but it is a small one at this moment. My UP stocks right now are NVDA, AMZN, MSFT, and AAPL.
You are so right Smokie...the financial media negativity and insanity is way out of control. Most of us simply ignore it. BUT....imagine all the people under about age 40 that are seeing this stuff daily during their young adult life. Also imagine the people that get ALL of their news from social media sites and have extreme instant gratification syndrome. Over the longer term this type of coverage by the financial media....on a daily basis....has the potential to significantly change the markets and significantly change the majority of investor behavior. And....definately not for the better.
Yes. I work with many younger people. What is odd for me...is that a lot of the things that I think are abnormal....is actually "normal" for them. In other words, they came up around all of this "instant" access and it is not foreign to them. I know when I discuss some of the "old ways", sometimes they just look at me in disbelief. LOL. I will say....I enjoy being around the majority of them. They are fairly grounded and do not fit the stereotyped narrative pushed on some of the younger folks.
I noticed the NKE earnings mentioned above. Looks like it has a nice bounce going today around 7%. Of course since we kind of picked at it a bit over the past few months....it has decided to flip us the bird in response. LOL.
