The Long Term Investor

I am siting at the Dr office. Waiting as usual. I have CKD. But it has been stable for the past 15 years. And……I don’t have to do anything special for it other than watch protein, watch hydration, and keep blood pressure low. This is one reason why I am not doing much at this time to get out there playing music again other than a few jams each week to maintain some basic level of competence. Playing all those outdoor shows in the extreme heat worried me mildly.

 

Great market today. I do not look at my account on my phone. But I can see my list of stocks and all are green.

 

LOL. I never got a Christmas bonus. I was always the one writing the checks.

 

That is a pretty cool system.....rg. I like that you get an extra pay check for vacation and one at Christmas.

I was not aware of that before...thanks for the good info.

 

A GREAT market day today.......I am looking for more of the same tomorrow.

I ended the day with a perfect seven for seven......to the green. I also got in a strong beat on the SP500 by 0.79%.

LETS END THE WEEK IN STYLE TOMORROW.

 

Well I finalized our order of a really nice bronze sculpture today. It is at the foundry and should be ready to ship in 2-3 weeks.

This is actually our first art purchase of 2024. I finalized it today since our credit card statement closes on December 16 and they will not be putting the charge on our card till after that date. So the pay off will happen in 2024. This will come out of our 2024 art budget.

It is a great iconic piece that is being produced in a larger size by the artist who is still living but in his 80's. I dont know if people are unaware of this larger edition....but....I see smaller versions of the same sculpture selling at auction for as much or more than the price of this larger edition.

This tells me that we will probably have a gain on this piece as soon as we receive it. But....I will still not call it an investment.

 

As an....actual investor.....I really dont care about this tomorrow. But for those that do...here you go.

Here’s what the market will be looking for in Friday’s key jobs report

https://www.cnbc.com/2023/12/07/her...e-looking-for-in-fridays-key-jobs-report.html

"Key Points

• Economists expect the Labor Department to report Friday morning that nonfarm payrolls expanded by 190,000 last month, up from 150,000 in October.
• A hot jobs report could undermine that confidence, and put a damper on what has been a buoyant mood on Wall Street.
• Probably the most important data point outside the headline numbers will be wages."

This sort of stuff has absolutely NOTHING to do with investing.....but....I do hope it powers a good market rally tomorrow so we have some good momentum going into FED week.

 

LOL.....corrected.

And....... I will be on the phone with Alcor tomorrow to reserve a place in one of those cryonic tanks for my brain. I dont think they will need the whole body when the technology is there to revive anyone.

Now I just need to figure out some way to set up about a 500 to 800 year trust with a tiny investment in the SP500......for the very long term till I come back. Five to eight hundred years of compounding....should do the trick.

 

Well my stocks that I am willing to hold right now for the long term are the ones that I own:

AAPL
GOOGL
NVDA
COST
HD
AMZN
MSFT

That is about it for me at this moment. I sold NKE within the past six months. I also recently sold my HON stock.

I dont like to get into politics in this thread....but....NIKE is a company that to me is squandering their future with social statements and very foolish management decisions. I wish they could simply focus on business and not social causes. My view is that they need a major management shake up and a total focus on business, marketing, and fundamentals. They are a great company but I am not happy with their current management and the path the company has been on for the past few years. Put management in place at NIKE that operates like the COSTCO management and you would have a totally awesome company.

I do agree that PG is a great business. There are many old school companies that pay a great dividend and are still great investments. I......of course....own all the companies like PG as part of my SP500 Index. If I was putting together a more conservative portfolio than my aggressive portfolio....PG would definately be in it.

What are you invested in right now Mizugori?

 

The news of the day.....not that it matters to long term investors.

U.S. payrolls rose 199,000 in November, unemployment rate falls to 3.7%

https://www.cnbc.com/2023/12/08/job...nemployment-rate-falls-to-3point7percent.html

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


"Key Points

• Nonfarm payrolls rose by a seasonally adjusted 199,000 in November, slightly better than the 190,000 Dow Jones estimate and ahead of the October gain of 150,000.
• The unemployment rate declined to 3.7%, compared with the forecast for 3.9%, as the labor force participation rate edged higher.
• Average hourly earnings, a key inflation indicator, increased by 0.4% for the month and 4% from a year ago, close to expectations.
• Health care was the biggest growth industry, adding 77,000. Other big gainers included government (49,000),

U.S. payrolls rose 199,000 in November, unemployment rate falls to 3.7%

Job creation showed little signs of a letup in November, as payrolls grew even faster than expected and the unemployment rate fell despite signs of a weakening economy.

Nonfarm payrolls rose by a seasonally adjusted 199,000 for the month, slightly better than the 190,000 Dow Jones estimate and ahead of the unrevised October gain of 150,000, the Labor Department reported Friday.

The unemployment rate declined to 3.7%, compared with the forecast for 3.9%, as the labor force participation rate edged higher to 62.8%. A more encompassing unemployment rate that includes discouraged workers and those holding part-time positions for economic reasons fell to 7%, a decline of 0.2 percentage point.

The department’s survey of households, used to calculate the unemployment rate, showed much more robust job growth of 747,000 and an addition of 532,000 workers to the labor force.

Average hourly earnings, a key inflation indicator, increased by 0.4% for the month and 4% from a year ago. The monthly increase was slightly ahead of the 0.3% estimate, but the yearly rate was in line.

Markets showed mixed reaction to the report, with stock market futures modestly negative while Treasury yields surged.

“What we wanted was a strong but moderating labor market, and that’s what we saw in the November report,” said Robert Frick, corporate economist with Navy Federal Credit Union, noting “healthy job growth, lower unemployment, and decent wage increases. All this points to the labor market reaching a natural equilibrium around 150,000 jobs [per month] next year, which is plenty to continue the expansion, and not enough to trigger a Fed rate hike.”

Health care was the biggest growth industry, adding 77,000 jobs. Other big gainers included government (49,000), manufacturing (28,000), and leisure and hospitality (40,000).

Heading into the holiday season, retail lost 38,000 jobs, half of which came from department stores. Transportation and warehousing also showed a decline of 5,000.

Duration of unemployment fell sharply, dropping to an average 19.4 weeks, the lowest level since February.

The report comes at a critical time for the U.S. economy.

Though growth defied widespread expectations for a recession this year, most economists expect a sharp slowdown in the fourth quarter and tepid gains in 2024.

Federal Reserve officials are watching the jobs numbers closely as they continue to try to bring down inflation that had been running at a four-decade high but has shown signs of easing.

Futures markets pricing strongly points to the Fed halting its rate-hiking campaign and beginning to cut next year, though central bank officials have been more circumspect about what lies ahead. Pricing had been pointing to the first reduction happening in March, though that swung following the jobs report, pushing a higher probability for the first expected cut now to May.

The Fed will hold its two-day policy meeting next week, its last of the year, and investors will be looking for clues about how officials view the economy.

Policymakers have been aiming to bring the economy in for a soft landing that likely would feature modest growth, a sustainable pace of wage increases and inflation at least receding back to the Fed’s 2% target.

Consumers hold the key to the U.S. economy, and by most measures they’ve held up fairly well.

Retail sales fell 0.1% in October but were still up 2.5% from the previous year. The numbers are not adjusted for inflation, so they indicate that consumers at least have nearly kept pace with higher prices. A gauge the Fed uses showed inflation running at a 3.5% annual rate in October, excluding food and energy prices.

However, there is some worry that the end of Covid-era stimulus payments and the continued pressure from higher interest rates could eat into spending.

Net household wealth fell by about $1.3 trillion in the third quarter to about $151 trillion, owing largely to declines in the stock market, according to Fed data released this week. Household debt rose 2.5%, close to the pace where it has been for the past several quarters.

Fed officials have been watching wage data closely. Rising prices tend to feed into wages, potentially creating a spiral that can be difficult to control."

MY COMMENT

Mostly about as expected......so I would say about a push in terms of expectations. I am sure the markets today do not like the Ten Year Treasury being up to a yield of 4.224%.

Looks to me like we had a small amount of red at the open and now that people and investors and traders are having more time to digest this data the markets are turning green. I would say that today will mostly turn on the strength of the markets and market direction bias......the employment data will not be a big factor one way or another.

I dont see this as creating any danger of a FED hike next week.

 

I like this little article....in theory.

What Happens After a 20% Up Year in the Stock Market?

https://awealthofcommonsense.com/2023/12/what-happens-after-a-20-up-year-in-the-stock-market/

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

"A reader asks:

Sure it’s great the S&P 500 is up 20% this year but aren’t we just pricing in the inevitable Fed rate cuts in 2024? Should we really expect the market to go up again next year after surprising to the upside this year? Color me skeptical. Full disclosure: I’m naturally bearish and take a bit of an anti-Ben stance about the markets.

See this is what makes a market!

It’s fair for anti-Ben to ask if the current run-up in the stock market is pricing in rate cuts for next year. The stock market is forward looking after all.

I love studying historical market returns. Looking at market history is never going to help you predict the future but it can help you better understand the way the stock market generally functions.

For instance, looking at annual returns in the stock market won’t tell you what happens next year but it can help you prepare for a range of outcomes to set something of a baseline.

One of my all-time favorite market stats is the fact that the U.S. stock market has more 20% up years than negative years since the 1920s. It’s true.

Since 1928, there have been 34 calendar years1 where the S&P 500 has finished up 20% or more against 26 total down years.2

This means the stock market has been up 20% or more 36% of the time and down 27% of all years. That’s a pretty good trade-off, especially when you consider the average down year is a loss of ~13%.

The question anti-Ben seems to be asking here is: What happens after a 20% gain?

Here are all of the 20% up years along with the following year returns:


Not too bad. More green than red for sure. Here are the summary statistics:

• The stock market was up 22 out of the 34 years following a 20% gain (65% of the time).
• The stock market was down 12 out of the 34 years following a 20% gain (35% of the time).
• The average return following a 20% up year was 8.9%.
• The average gain was +18.8% in up years.
• The average loss was -9.1% in down years.
• There were 19 double-digit up years.
• There were just two double-digit down years (1936 and 2022).

This year is teetering on the edge of another 20% up year. We’ll see if Santa comes through for us by the end of the year or not but so far so good.

It’s also important to ask how much returns in one year actually impact returns in the following year. Here’s a look at average returns following a big up year, an up year, a down year and a big down year:




So maybe the 20% starting point matters less than one would assume.

I’m sure you could slice and dice the data to offer up some more signal but there doesn’t appear to be much correlation from one year to the next.

Most of the time stocks go up but sometimes they go down is about as good as you’re going to get.

It’s certainly possible the stock market has been pricing in Fed rate cuts for early next year. The S&P 500 isn’t going to wait around for Jerome Powell to spell it out. The inflation rate is falling, interest rates are falling, and wage growth is falling so it makes sense for the Fed to start cutting sometime in the first half of 2024.

But I can’t pretend to be smart enough to know how much of that is priced into the stock market or what comes next.

Historical return numbers can help set expectations but it’s also true that things happen in the markets all the time that have never happened before.

I don’t know if we’re setting up for a new bull market or a flat market or a new bear market.

Successful investors understand it’s impossible to predict the type of market environment that’s coming. The best thing you can do is prepare for a wide range of outcomes to avoid allowing short-term movements in the market to affect your behavior."

MY COMMENT

Some FUN data here. It is interesting to look at this sort of market historical information. BUT....not really predictive. There are just too many variables that come into play year to year. About the best i would take from this data is that the markets tend to be UP more often then they are DOWN over the longer term. Which we already know anyway.

Here is the real key for most investors:

"Successful investors understand it’s impossible to predict the type of market environment that’s coming. The best thing you can do is prepare for a wide range of outcomes to avoid allowing short-term movements in the market to affect your behavior."

 

I was just looking at the NASDAQ at about (-0.17%) and thinking that it would take a little while for the NASDAQ to settle in and get over the Ten Year yield being up a little bit today. Than....BOOM....the NASDAQ instantly turned green and joined the DOW and SP500. It happened mush faster than I expected.

So we start out from here in a nice position in the markets. Time will tell if we can build from here. I am thinking that as the day goes on investors will either accept the Jobs numbers as being good enough.....or....will simply not care about them.

At least we now have this report out of the way and are left with just the FED meeting next week as the big news item. Seems to me that the past one or two....perhaps more....FED weeks have been pretty good for investors. Although.....I did not go back and look....I am just going from memory.

 

Not much to do now....other than wait for the close and see how we did for the day and for the week.

I say......LETS MAKE SOME MONEY TODAY.

 

Me too Tom......I have a good gain so far....about moderate to medium. I am happy to have it considering the flat averages today. I have two stocks down today at this moment....COST and GOOGL.

I am looking forward to the COSTCO warnings next Wednesday.

So with the gain I have so far......now.....I just have to survive the afternoon and the dreaded late day.......week before FED meeting..... FRIDAY FADE.

 

I was just looking at one of my kids accounts that I manage. It is now approaching $450,000. It had previously been all in the SP500. A few months back I decided the account was big enough....it was time to move some of the money into individual stocks.

So I decided with the money that I wanted to use......to go into six of the seven stocks that I focus on. So I bought the following on the following dates:

NVDA - June 21.
MSFT - July 13, July 25, and September 26.
COST - July 13, and September 29.
AAPL - July 13, August 8, and September 26.
HD - July 13, July 25, and September 26.
GOOGL - July 13, August 8, and September 29.

I plan to add AMZN some time in the future in the account.

So far it is all working out very nicely...here are the gains as of today.

NVDA - +12.15%
MSFT - +10.25%
COST - +13.16%
AAPL - +5.28%
HD - +2.82%
GOOGL - +6.38%

I will slowly over the next few years move a bit more of the account into the individual stocks including AMZN. This is a taxable brokerage account.

The multiple dates above reflect the fact that I wanted to ease them into some stocks. I was not sure how they would react considering that I had emphasized the SP500 for them up till now. BUT....they are fine with it and the gains have been very nice to date. This is very long term money.

So....once again I am....putting my money where my mouth is.....well make that my kids money..... where my mouth is. What I constantly talk about on here.....I am doing with my own families money.