The Long Term Investor

I like your thinking TireSmoke.

In my family.....we never backed off from taking profits......for needs and wants.....when it was the right time to do so. In the past I was willing to sell shares to buy a house for cash. We buy our cars for cash....that comes from investments. We are able to live DEBT FREE by using funds from investment accounts.....when necessary. My view is that investing and saving is a very good thing. BUT....part of the reason for all the hard work of saving and investing....is be able to take some profit or cash an investment in....to fund a necessary item for your family.....a new house, a new car, etc, etc.

What has allowed us to save and invest a lot of money is our debt free lifestyle. Once in a while that requires that you bite the bullet and take out some cash for a major purchase.

I have EXTREME DISCIPLINE as an investor for the long term....but.....there are times that some of that money has to be used. That is what it is for. As with everything it is a balancing act.....it is all about.....being reasonable and rational.

A big part of my focus on being debt free.....comes from my former business ownership. With monthly overhead and funding the business from personal assets.....it was important to me to not have other debt. So......we have not financed a house or a car for decades.

Although, now being at an older age and not having employment or business income anymore....being on a fixed retirement income....we are more careful about dipping into investment funds. I try to budget everything out of our retirement income......including ART purchases.

Investing is a vehicle for making and growing money. Money is a tool to be used.....intelligently.....at key times in life. It is all about balance and family needs.

 

For the first time in 2024.....ALL the big averages are now GREEN......at least for a moment.

 

Smart move oldmanram. If I had some free cash I would do the same.

I am projecting that over 2024 I will be able to add about $15,000 into my account from our budget. But....it will probably not happen till about the March to June time period. We have BIG expenses in January of each year with property taxes, forth quarter tax estimate, HOA dues, Medicare supp policy, horse shots, etc, etc, etc. About $33,000 in the month of January. Our cash flow takes a big hit. For me the second half of the year is our GOOD time period for cash flow.

 

On the topic tiresmoke raised above.

I have two brokerage accounts. Both are basically the same investments. One I never touch. The other one is where I might take some money out if we had an extraordinary need. The key words being.....EXTRAORDINARY and NEED....not wants.

Although.....we try to not be too extreme with our definition of...."need". There is a point in life.....which for us started about age 38 due to business and investing success...... where you DESERVE to have a good life. I am sure many people looking at our lifestyle over the decades would think we were spending too much money on a house, or a car (in the 1990's we went through about 4 Range Rovers and a Defender 90), or ART or lifestyle. BUT....we had the money and knew how to manage it. And we were very educated buyers on expensive things.

The Land Rover Defender 90 is a good example. We bought it in the mid 1990's when they were re-released in the USA....on a very limited basis. I think we paid about $25,000 to $28,000....somewhere in that neighborhood. It was simply a toy. BUT......we held onto it for 15 years and enjoyed it. We than passed it on to one of our kids. They kept it for about 8 years. At that time it was one of the cleanest Defender 90's around, original paint, all original, always garaged with about 15,000 miles. They sold it......through a broker.....for somewhere in the neighborhood of $85,000. About six months later I saw it for sale from a high end dealer in California for $125,000.

We do not have any emergency fund or savings outside those two accounts. I see no need to keep some big chunk of cash out of the markets. I consider the brokerage accounts as our emergency fund........but.....I rarely use any of it. Once about every 6-7 years I need to dip into the one account for a car purchase.....since I will wear out a car every 6-7 years with about 250,000 miles.

 

Same for us with antiques, ART, etc, etc. They may not be an investment....but....we know the market and.....do not lose money. We might not have a gain on the "stuff" that we own....but....we dont lose money.

And....actually in reality....we do have a good gain on most of our...."stuff". But not as much as the markets would have given us.

 

A good little article....rational.

Why stocks are falling to start the new year

https://finance.yahoo.com/news/why-stocks-are-falling-to-start-the-new-year-164859217.html

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

"It's early 2024 and stocks are already down.

The Nasdaq Composite (^IXIC) had its fourth-worst first day of a new year ever. The Russell 2000 (^RUT), a darling of the recent market rally, just had its third-worst two-day start to a year ever.

The famed Santa Claus Rally, simply put, didn't arrive.

"It's fair to say that financial markets have started 2024 with something of a mild hangover," Capital Economics deputy chief markets economist Jonas Goltermann wrote in a research note Wednesday.

Goltermann pointed out that after a roaring rally that saw stocks close 2023 near record highs, some version of a correction isn't abnormal. Other key areas that could be weighing on stocks: uneasiness around Federal Reserve policy and growing concerns about how unrest on the Red Sea could disrupt supply chains and, potentially, be an issue for inflation's path downward.

Invesco chief global market strategist Kristina Hooper points out that while the market has excitedly priced in a Fed pivot to easing monetary policy, the central bank hasn't actually made that call.

"We're going to naturally have jitters, as we wait for the true policy pivot," Hooper told Yahoo Finance Live. "To me, this is a pretty short-term blip."

Fundstrat head of global research Tom Lee, known as one of the most bullish strategists on Wall Street, flagged last Friday that a pullback early in the year wouldn't be a surprise. A key part of his reasoning was also that the Fed pivot hasn't fully occurred yet.

He believes that at some point leading into the March Fed meeting, markets could get “itchy” waiting for the first Fed cut, while the Fed itself remains "uncertain" when that will come.

This has played out in fed funds futures markets in the first few trading days of the new year. After the latest minutes from the December Fed meeting didn't reveal discussion of when interest cuts might start, bets on a March rate cut have scaled back.

Markets are now pricing in a 64% chance of a Fed rate cut in March, per the CME FedWatch Tool. A week ago, a roughly 87% chance of a cut had been priced in.

This has been a key sticking point for Wall Street bulls who see positive earnings as the key driver for stocks next year — not macro trends like speculation about Fed policy.

"Quite frankly, I don't care about the fed funds futures because they've been wrong, wrong, wrong," BMO capital markets chief investment strategist Brian Belski, who sees the S&P 500 finishing 2024 up almost 10% from current levels, told Yahoo Finance Live in December. "People have been so macro and quantitatively driven the last, let's say, three, four years. And they've been wrong."

And, to the bulls' credit, the current projections for earnings in 2024 are quite good. Recent data from FactSet shows analysts expect S&P 500 companies to report earnings growth of 11.7% for the full year, which would be above the 10-year average annual earnings growth rate of 8.4%.

That's one reason why Bank of America predicts nearly a 10% rise for the S&P 500 from current levels. "Earnings season, starting next week, is gonna be key to the market," said BofA equity strategist Ohsung Kwon.

With companies officially exiting the earnings recession in the third quarter, Kwon believes that momentum continuing is crucial to the bullish thesis.

"Companies have cut costs throughout the earnings recession," Kwon said. "They have managed margins. Margins went up for the second straight quarter. So I think the momentum is to the upside and if companies talk more positively this earning season, given that the rate pressure and the macro uncertainty has eased somewhat. Now, that's going to be bullish for equities."

MY COMMENT

The FED and rate cuts are the.....icing on the cake.....the BLING.

BUT....what really will count this year is EARNINGS. It is....all about EARNINGS....stupid. And there is no reason to doubt that they will be good.

 

WOW....I am improving. today I ended with three stocks in the green.....NVDA, COST and HD. AND....amazingly.....I beat the SP500 today.....by.....0.02%.

My best win of the new year. At least it is progress.

We need to clean all the profit takers and fearful people out so we can have a green day. At this point the short term traders and AI trading platforms are having a field day with selling and trading down the big cap tech companies. Basically they are trading the news headlines which are constantly negative this week.

SO....it is a little bit of a self-fulfilling prophesy.

 

Good comments....Zukodany and Tirsesmoke.

Bottom line....are we in control or is it all an illusion.....that we mentally adopt so we "feel" comfortable.

 

The story of the day.

December jobs report: US economy adds 216,000 jobs, shocking Wall Street

https://finance.yahoo.com/news/dece...6000-jobs-shocking-wall-street-133957707.html

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


"The US economy ended 2023 on a high note.

The labor market added 216,000 jobs in the month of December, up from 173,000 the previous month,surprising Wall Street once again to close out 2023. Economists surveyed by Bloomberg had expected 175,000.

Data from the Bureau of Labor Statistics released on Friday showed the unemployment rate was 3.7% for the month, flat from the rate seen in November. Economists had expected the unemployment rate to tick higher to 3.8%.

Investors were closely watching the report for signs of whether the Federal Reserve can achieve a so-called soft landing, where inflation retreats to the Fed's 2% goal without a recession. That could impact the Fed's timeline for cutting rates this year.

Key to the soft-landing goal is a normalization of a red-hot, pandemic era labor market. Nela Richardson, ADP chief economist, told Yahoo Finance Live that the Fed will likely take notice of the bump-up in job additions in December. “What we're seeing with companies is insistent hiring, especially small businesses," Richardson said.

Investor bets on an interest cut in March dialed back after the release of the jobs report. Investors are now pricing in a 56% chance of a rate cut after the March meeting, down from a 88% chance a month ago, per the CME FedWatch Tool.

The surprise strength in the labor market helped consumer wallets, too.

Wages, a closely watched indicator for inflation and a gauge of how much leverage workers have in the labor market, increased 0.4% on a monthly basis and 4.1% over last year; economists had expected wages to rise 0.3% over last month and 3.9% over last year.

Some key metrics did decline, though. The labor force participation rate ticked lower to 62.5%, down from 62.8% the month prior, while average weekly hours worked moved down slightly from 34.4 to 34.3.

"There is a lot of noise in the data, but we continue to expect that there will be enough evidence of a further loosening in labor market conditions and a decline in inflation more broadly to allow the Fed to begin cutting rates in May," Nancy Vanden Houten, lead US economist at Oxford Economics, said in a note.

The largest jobs increases in Friday's report were seen in government, where 52,000 jobs were added. Meanwhile, healthcare added 38,000 jobs.

On the other end, the biggest losses were seen transportation and warehousing, which lost 23,000 jobs, while social assistance, lost 21,000.

Data released earlier this week showed signs the labor market is coming into a better balance between worker supply and demand. On Wednesday, the latest Job Openings and Labor Turnover Survey revealed job openings in November hit their lowest level since March 2021."

MY COMMENT

Government jobs driving the jobs report. Not a sign of a booming economy. BUT.....the markets seem to like it. It is also not a good sign the the labor participation rate is down. All in all....not a bad report. I will be interested to see the future revisions.

The BULL MARKET continues.....ignore the noise.

 

Here is a rational and honest view of the data:

"The U.S. labor market beat expectations again in December, adding 216,000 jobs to close out the year while the unemployment rate held steady at 3.7%.

Yet the job gains were slower than the same period a year ago, with the three-month average gain dropping to 165,000 a month compared to an average of 284,000 in December 2022, according to Nick Bunker, director of economic research for North America at Indeed Hiring Lab.

“After entering 2023 with a sonic boom, the US job market is headed into 2024 at a comfortable cruising speed,” Bunker said. “The pace of job creation is strong but not overwhelming, unemployment is low and stable, and job openings are plentiful.”"



https://www.cnbc.com/2024/01/05/heres-where-the-jobs-are-for-december-2023-in-one-chart.html

 

It is the primary job of an entire family and the parents to educate the new generation. That education MUST include money, finance, and investing. These are topics that MUST be talked about in front of kids.....at an age appropriate level. We did that with our kids and our parents did that with us. Kids learn from observing and hearing their parents on a daily basis.

Family values and family culture MUST be established and reinforced every day.....by example. That is the only way it will survive later peer pressure and become part of a kids basic personality.

 

I had my FIRST green day today. I had a nice medium gain. I also beat the SP500 by 0.79%.

Nice to be done with the first week and moving on.