The Long Term Investor

Way to go Zukodany........you tanked the markets today....by JINXING us.

Weill....actually it is not too bad since the SP500 and NASDAQ are now green after opening red.

Today is a RARE DAY.....after doing all my regular reading.....not a single article stood out. NOTHING.....is going on or happening. In other words......a perfectly normal market day.

Dow opens lower Wednesday, heads for first decline in 10 days: Live updates

https://www.cnbc.com/2023/12/19/stock-market-today-live-updates.html

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

"Stocks opened lower Wednesday as investors cashed in some profits following the market’s recent hot streak. Shares of FedEx, seen as a barometer for the economy, cratered following poor results.

The Dow Jones Industrial average, lost 92 points, or 0.2%, which would be its first decline in 10 days. The S&P 500 fell 0.2% after approaching a record high Tuesday. The Nasdaq Composite shed 0.1%.

FedEx lost 11% after the package delivery giant posted a disappointing revenue outlook for the fiscal year. Results for its fiscal second quarter also fell short of Wall Street’s expectations on the top and bottom lines. The Dow Jones Transportation Average lost more than 1.5%.

Stocks rose broadly during regular trading Tuesday, with the S&P 500 gaining 0.59% and edging closer to its record close and intraday high hit in January 2022. At current levels, the benchmark is about 1% from a record.

The Nasdaq Composite jumped 0.66% to close above the 15,000 level for the first time since January 2022, while the 30-stock Dow advanced 251.90 points, or 0.68%. Both indexes notched a ninth consecutive winning day, and the Dow closed at a fresh record high.

All three major averages are headed for a winning December and 2023 as stocks build on the recent rally and investors look forward to proposed rate cuts from the Federal Reserve in the new year.

The S&P 500 has risen 4.4% this month and 24.2% year to date, while the Dow has added 4.5% and 13.3%, respectively. The Nasdaq is up 5.5% for December and 43.4% for 2023, putting it on pace for its best year since 2020.

While the recent market may appear “strong under the hood” and helpful in fueling broader confidence on Wall Street, Charles Schwab’s Kevin Gordon cautions investors against getting overexuberant.

“This stealthy rotation under the surface can likely continue as we head into 2024, but given the almost (and oddly) euphoric reaction to the Fed’s December decision, it wouldn’t be surprising to see a short-term pullback given sentiment has gotten quite frothy,” the senior investment strategist said."

MY COMMENT

LOL.....I love the "over-exuberant" comment. I dont see it at all. There is still tons of money siting on the sidelines. And....this argument is contrary to all the commentary about the rally being only a few stocks and too shallow.

Basically I call.....BS.

 

Some relevant news for those that are working ans saving for retirement.

Higher contribution limits are coming for 401(k)s and IRAs next year
Americans can save more for retirement next year thanks to higher 401(k), IRA contribution limits

https://www.foxbusiness.com/personal-finance/higher-contribution-limits-coming-401ks-iras-next-year

"Beginning in 2024, workers will be allowed to contribute up to $23,000 to their 401(k), an increase of $500 from this year. The increase applies to other retirement savings accounts, including the 403(b) plan, most 457 plans and the federal government's Thrift Savings Plan.

Catch-up contributions for savers age 50 and older will remain unchanged at $7,500.

The IRS also boosted the contribution maximums for IRAs and lifted the limit to $7,000 for 2024, up from $6,500 in 2022. The catch-up contribution amount for IRAs will stay at $1,000."

 

Yeah I agree Zukodany.....I am ALSO UP today....so far.

It just takes a while.....these days.....to get the opening profit taking and sales out of the way and than the markets revert to their current BIAS....which is strongly positive.

I think my only down stock at the moment is COST.....they are being hammered by profit takers.....due to the recent HUGE move up. Other than short term trading and profit taking....I cant imagine anyone wanting to sell COSTCO.

 

I know......I have been cheer-leading this rally for about 18 months now and especially the SANTA RALLY. I am also hitting a new all time high so far today. I would not bet against this market....although....I dont bet against any market since I am fully invested all the time.

The only thing we are missing is....EMMETT. He needs to screw work....and get back on here.

 

I can not imagine anything more INSANELY DELUSIONAL than economic or investing content on.......you guessed it.....TikTok.

Is the U.S. in a ‘silent depression?’ Economists weigh in on the viral TikTok theory

https://www.cnbc.com/2023/12/20/is-the-us-in-a-silent-depression-the-tiktok-theory-explained.html

For that matter....being old.....and more importantly being informed.....I cant imagine doing anything on TikTok....the Chinese communist vehicle for collecting data, spying, and ruining the future, culture, and society of the USA and the "free" world.

 

And.....as to the lack of breadth to the markets.....I am as usual....TRIPLED UP on the big cap tech stocks.

I own MSFT, GOOGL, AMZN, MSFT, and APPLE.....as individual stocks, as a big part of my SP500 Index fund and as a big part of my Fidelity Contra Fund. I am also in the same boat with my non tech holdings....COST and HD.

I am not a fan of diversification as it is often practiced today by investors.....obviously.

 

I have only one thing to say about the markets right now.

 

A market FREAK OUT in the last hour to hour and a half today. Something triggered the AI trading programs to sell en-mass....obviously.

I was in the RED today with only one stock up....GOOGL. I also got beat by the SP500 by 0.17% today.

We move on to the final two days of the week and the final six market days for 2023.

 

Tax loss selling....profit taking....WHATEVER...there is no good reason for the late sell-off in the markets today.

Dow closes more than 470 points lower Wednesday to snap 9-day win streak: Live updates

https://www.cnbc.com/2023/12/19/stock-market-today-live-updates.html

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

"Stocks tumbled on Wednesday as investors cashed in some profits following the market’s recent hot streak, and FedEx dragged the S&P 500 lower.

The Dow Jones Industrial Average slid 475.92 points, or 1.27%, to 37,082.00. The Nasdaq Composite
was lower by 1.50% to 14,777.94. Both indexes ended a nine-day advance, and they had their worst session since October.

The S&P 500 declined 1.47% to 4,698.35, marking its worst day since September.

“Markets were becoming overbought, and a pullback like this is natural given those conditions,” said Keith Buchanan, senior portfolio manager at Globalt Investments. “So it was more technical than fundamental.”

FedEx was the biggest laggard in the S&P 500, losing 12%. The package delivery giant issued a disappointing revenue outlook for the fiscal year, and reported fiscal second-quarter results that fell short of expectations on the top and bottom lines. The Dow Jones Transportation Average, a price-weighted index of 20 stocks that includes FedEx, fell more than 2%

Google-parent Alphabet was among the best performers in the S&P 500, reaching a new 52-week high during the session; it gained 1.2%.

The pullback comes after a robust session Tuesday when the Dow and the Nasdaq Composite both registered nine straight days of gains. Since the Oct. 27 closing low and through Tuesday, the Dow Industrials climbed 15.9%, and the S&P 500 jumped 15.8%. The Nasdaq Composite had gained 19.1%.

All three major averages remain on pace for a winning December and 2023 as investors look forward to proposed rate cuts from the Federal Reserve in the new year.

The S&P 500 has risen 2.9% this month and 22% year to date. The Dow has added 3.2% in December and 11.9% in 2023. The Nasdaq is up by 3.9% on the month and 41% on the year, putting it on pace for its best year since 2020."

MY COMMENT

OK....shake it off. Nothing to see here.....move on. No doubt the "professionals" and their AI trading systems that always act in concert to move the markets rather than trade the markets. Also some year end profit taking and tax loss selling going on.

Fed Ex.....a disaster today. I have not liked this company for a long time....over 20 years. Their pricing is outrageous since they switched to dimensional rate schedules from simple weight over 20 years ago. Up till than I used them all the time to ship and had a commercial account....after that.....I never use them even though I HATE......UPS..... WITH A PASSION.

 

This should SCARE THE SH$T out of investors, the markets, the tech industry, and the Semi-conductor industry. I see that the timing of when this story was released.....as an NBC exclusive.... matches up PERFECTLY with the late day market drop today. In my opinion.....THIS....is why the market fell today.

Xi told Biden at summit that China plans to reunify with Taiwan
2h

https://www.msn.com/en-us/news/worl...sn&cvid=a0154766f2ca4024959bf371fb071bdb&ei=5

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

Chinese President Xi Jinping told President Joe Biden directly at their recent summit that China will reunify with Taiwan, sources confirmed to ABC News.

NBC News was the first to report the conversation.

It was unclear whether Beijing plans to use force in its effort to reunify with Taiwan, but Xi indicated they will try at first to do so peacefully, the sources said.

Xi has said as much publicly but what is noteworthy is that he said this so bluntly to the president at a summit intended to thaw their relations.

U.S. officials stress it wasn't surprising given what they've heard and seen.

"I'm not gonna get into the specifics of the discussion between the two leaders. I think you can understand I'm not gonna read out that private conversation," National Security Council spokesman John Kirby told reporters Wednesday aboard Air Force One.

"President Xi has been public and clear about his desires for reunification, that's not, that's not something different, or new. We have been clear, and the president was clear with you guys and with President Xi that we still adhere to the One China policy, we don't support independence for Taiwan. We also don't support a change in the status quo unilaterally and certainly not one by force and as the president has said, there's no reason for this to come to blows," he added.

Asked about whether U.S involvement in two other global conflicts -- Ukraine and in Gaza -- alters his previous commitment to defend Taiwan from any Chinese military action, Biden reiterated in November the U.S. position in favor of the One China policy, which amounts to a delicate balance between respecting China's claim to the territory and maintaining close ties to Taiwan.

"Look, I reiterate what I’ve said since I’ve become president and what every previous president of late has said -- that we -- we maintain an agreement that there is a One China policy and that -- and I’m not going to change that. That’s not going to change," Biden said. "And so, that’s about the extent to which we discussed it."

Reunification with Taiwan has been a publicly stated goal of China's for some time. China confirmed this in its readout of the summit.

"Xi Jinping elaborated on his principled position on the Taiwan issue and pointed out that the Taiwan issue has always been the most important and sensitive issue in Sino-US relations. China attaches importance to the relevant positive statements made by the United States at the Bali meeting. The United States should reflect its statement that it does not support 'Taiwan independence' in specific actions, stop arming Taiwan and support China's peaceful reunification. China will eventually be unified and will inevitably be unified," the Chinese readout said.

Xi has been instructing his military to "be ready by 2027" to invade Taiwan, according to U.S. intelligence"

MY COMMENT

This is not a question of...."if".....it is simply a question of when. AND....when it happens we will simply do nothing....since there is nothing we can do.

When it happens the Chinese government will own any and all technology that we continue to put into Taiwan.

When they have the guts to BLUNTLY put this out there in public....it is going to happen.

We and American companies.....need to as quickly as possible.....get all manufacturing and technology out of Taiwan.

 

The above when it happens.....will the the greatest theft of technology and tech manufacturing facilities....in history. The communist Chinese will simply walk in and take over the ability to manufacture all the latest and greatest chips as well as all the designs.

 

I dont do or believe in...Technical Analysis....but I do like the bottom line in this little story.

Another Sign That Enormous Profits Are Coming in ‘24
Likely up next? A brief pullback in January, followed by a huge rally throughout the rest of 2024

https://investorplace.com/hypergrow...-sign-that-enormous-profits-are-coming-in-24/

 

I have discussed the FED's BS 2% inflation number a few times on here. Here is more confirmation that there is really no factual or economic basis for the made up 2% number. As usual....I will say....the normal range for inflation in a healthy economy is 3-4%.

The Fed’s 2% Inflation Target Is a Made Up Number

https://time.com/6548908/inflation-target-federal-reserve-essay/

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

As the year wraps up, several things are clear in an otherwise confusing economic picture: the U.S. economy is slowing, the stock market is surging, most people according to polls believe that inflation remains a severe issue, and the mandarins at the Fed who are responsible for containing inflation are still concerned about inflation. But what is far from clear is whether in its dedication to bringing inflation back to its 2% target the Fed is following a rigid script rather than honoring their overall mandate to ensure economic stability. Or to put it bluntly, in cleaving slavishly to a specific number, is the Fed sacrificing a stable economy on the altar of abstract theory?

At its last meeting of 2023, the Federal Reserve board held interest rates steady and affirmed its commitment to be diligent in its fight against inflation. While financial markets are pricing in a strong likelihood that the Fed will begin to cut interest rate target by the late spring of 2024, the actual language of the Fed and its governors tells a different story: they will hold to their stance that reaching that 2% target is non-negotiable and that until inflation is unambiguously heading back to that, rates will remain high.

In fact, one Fed governor, Michelle Bowman, thinks that rather than cutting rates or holding them at 5.5%, it may be necessary to increase rates again. "My baseline economic outlook continues to expect that we will need to increase the federal funds rate further to keep policy sufficiently restrictive to bring inflation down to our 2% target in a timely way," she said in November. Given that there’s already evidence in the cooling job market and slowing wage growth that economic activity is decelerating in the wake of the most aggressive Fed interest rate policy in decades, further rate increases could well be enough to tip a finely balanced economy into both a recession and a deflationary spiral.

You would think that the repeated invocations of the 2% target for inflation is based on careful economic theory developed over many years of research. You would think that anchoring the entire framework of setting short-term interest rates and monitoring the supply of money would rest on solid foundations meticulously designed. But you would be wrong. Targeting inflation, let alone setting that target at 2%, goes all the way back to…2012.

That’s not a typo: targeting inflation at 2% and then orienting monetary policy to achieve that rate has existed for barely more than a decade.

Before 2012, there was no stated inflation target, and indeed, it was an open and hotly debated question whether setting specific targets was even a good thing. In the late 1980s, the New Zealand central bank like most central banks worldwide had worked assiduously to bring down the double-digit inflation that afflicted many developed countries from the mid-1970s until the early 1980s. When asked in a television interview what he thought should be a sustainable, healthy level of inflation, the New Zealand finance minister stumbled for a moment and said that it should be around 1%. That was then refined by the bank staffers to 2%, which was officially adopted as a target in the 1990s by other central banks and then made its way into the Federal Reserve staff. But not until 2012 did the U.S. Fed led by then-Chairman Ben Bernanke set 2% as a stated target.


Before he was appointed to the Fed, Bernanke as an academic was a proponent of inflation targeting both as a way to make policy more transparent and as a communications strategy to signal to markets what inflation expectations should be. Bernanke himself was sensitive to the risks that by setting a specific number, banks might become unduly beholden to that number at the expense of adjusting to fluid and often complicated circumstances that might require more nuanced approaches. But as is so often the case, as the 2% number has become set, nuance has quickly disappeared, and the number has instead become sacrosanct as if it were handed down by some economic god giving tablets to appointed Fed prophets.

There are at least two problems with the current number. One is that it rests on an assumption that people’s inflation expectations are a key factor in inflation. The thinking goes that if a person assumes that something will cost more tomorrow than today, they might either demand higher wages or buy more now, which pushes up the cost of goods by elevating demand. Or companies might try to raise prices now in anticipation of higher costs later. Yet while the belief that inflation expectations are integral to inflation rates has become near orthodoxy in central banks, even some in the Fed itself question whether there is any empirical evidence. As one paper published by the Fed staff in 2021 began, “a review of the relevant theoretical and empirical literature suggests that this belief rests on extremely shaky foundations, and a case is made that adhering to it uncritically could easily lead to serious policy errors.” There is no indication that any of the current Federal governors share such concerns.


More troubling still is the danger that Bernanke warned of, namely that the arbitrary nature of the number and the need to remain flexible would be subsumed by the easy tendency of institutions to become rigid and dogmatic because that is easier than grappling with new and complicated scenarios.

As a result, there is no public indication that the Fed and its staff are seriously asking questions that it should. For instance, why not allow for wages to grow when all evidence over the past decade points to the continuing deflation of goods and services, first from the information technologies since 2000 and now and in the years ahead from artificial intelligence? Why not let inflation fluctuate in a wider band, not a much wider bad for sure but more than 2%, to allow for some organic settling of what is supposed to be a free market? Instead, the Fed seems so determined to achieve 2% that it is willing to hobble the labor market and crush wage growth to get there. To the surprise of many observers, both employment and wages have been resilient, but it’s not clear how much longer that can last in the face of such restrictive policies.

Today, there is little evidence that anyone at the Fed sees 2% as one possible target rather than the only possible target. There is little evidence that they would be willing to re-evaluate whether it remains the right target in a world that has changed since 2012, just as 2030 will look different than today. In reality, rather than in theory, there is no absolute right target, though presumably we could rule out double-digit inflation on one extreme and deflation on the other. But rather than treating 2% (or presumably any set number) as a moving target in a fluid world, the number appears to have become set in stone, an icon rather than a guide, an inflexible indifferent deity. When policy becomes dogma, watch out. Mistakes can be made based on faulty analysis and too little information, but nothing compares to the harm done in the name of dogma."

MY COMMENT

This is simply delusional idiocy. This is lazy and dumb bureaucratic thinking and reasoning. Latch onto some made up number and use that to justify whatever you want to do. In other words.....HIDE behind that number.

Fortunately the markets are ready to move on from the FED. BUT....there are still a lot of....."yes men"....in the markets that dont have the guts to simply tell the FED to sit down and shut up with the made up BS.