The Long Term Investor

Good news for today.

TSMC bullish on AI demand, forecasts 20% revenue growth this year

https://finance.yahoo.com/news/tsmc-q4-profit-falls-19-053842204.html

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

"TAIPEI (Reuters) -Taiwanese chipmaker TSMC projected on Thursday more than 20% growth in 2024 revenue on booming demand for high-end chips used in artificial intelligence (AI) applications even as the broader industry deals with weak smartphone and electric vehicle sales.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's largest contract chipmaker and a major Apple Inc and Nvidia supplier, said at an earnings conference that AI represented a major opportunity

"We are a key enabler for AI applications. So far today, everything you saw for AI comes from TSMC," CEO C.C. Wei said at the conference, after the company reported a fourth quarter net profit that beat market expectations.

For advanced packaging, demand was very strong and TSMC can't offer enough capacity to support customers, which will continue to next year, he added.

But Wei said that for the industry overall, he was worried about over-capacity for mature nodes.

"There might be too much capacity being built right now for mature nodes. So the concern on over-capacity is valid," he said, though he added that it was not a concern for TSMC due to strong customer demand for its speciality technologies.

Looking ahead, TSMC said it plans to expand its global manufacturing footprint, with construction at its fab plant in Germany expected to begin in the fourth quarter of this year, while TSMC is still deciding on what technology node to build at a second fab in Arizona.

A first fab in Japan will open next month with volume production in the fourth quarter, while the company was also exploring building a second factory in the country.

It forecast capital spending at $28-$32 billion for this year, in line with 2023, and said it will also expand production at home in Taiwan.

TSMC said it is evaluating building a third fab in the southern Taiwanese city of Kaohsiung, and if it goes ahead all three fabs there will be for advanced 2 nanometre chips, due to strong demand driven by high performance computing and smartphones.

TSMC posted a 19% drop in net profit for the October-December quarter to T$238.7 billion ($7.6 billion) from a particularly strong year-earlier quarter.

The profit, though, beat a T$226.4 billion LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate.

"Our fourth quarter business was supported by the continued strong ramp of our industry-leading 3-nanometer technology," said Wendell Huang, TSMC's chief financial officer.

He said the current quarter would be impacted by seasonality of the smartphone business, which would be partially offset by strength in its high-performance computing segment that includes AI chips.

While the company said 2023 was challenging, it forecast solid growth for this year, adding that it expects inventories to return to a healthy level.

Revenue for 2024 should increase in the low to mid-20% range in U.S. dollar terms, it said.

TSMC's Taipei-listed shares surged 32% last year. The stock rose 1.2% on Thursday ahead of the results versus a 0.4% gain for the benchmark index, giving the company a market value of $478.3 billion."

ALSO SEE:

TSMC beats profit and revenue expectations in the fourth quarter

https://www.cnbc.com/2024/01/18/tsmc-q4-2023-earnings-report.html

MY COMMENT

A nice earnings BEAT.......although the comparison numbers will be fear-mongered. But......a CLEAR BEAT.

 

The daily economic news.

US applications for jobless benefits fall to lowest level since September 2022

https://finance.yahoo.com/news/us-applications-jobless-benefits-fall-134019774.html

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

"The number of Americans applying for unemployment benefits last week fell to its lowest level in more than a year, underscoring the resilience of the labor market despite elevated interest rates that are intended to cool the economy.

Jobless claim applications fell to 187,000 for the week ending Jan. 13, a decrease of 16,000 from the previous week, the Labor Department reported Thursday. That's the fewest since September of 2022.

The four-week average of claims, a less volatile reading, fell by 4,750 to 203,250. That's the lowest four-week average in almost a year.

Overall, 1.81 million Americans were collecting jobless benefits during the week that ended Jan. 6, a decline of 26,000 from the previous week.

Weekly unemployment claims are viewed as representative for the number of U.S. layoffs in a given week. They have remained at extraordinarily low levels despite high interest rates and elevated inflation.

In an effort to stomp out the four-decade high inflation that took hold after an unusually strong economic rebound from the COVID-19 recession of 2020, the Federal Reserve raised its benchmark rate 11 times since March of 2022.

Though inflation has eased considerably in the past year, the Labor Department reported last week that overall prices rose 0.3% from November and 3.4% from 12 months earlier, a sign that the Fed’s drive to slow inflation to its 2% target will likely remain a bumpy one.

The Fed has left rates alone at its last three meetings and most economists are forecasting multiple rate cuts this year.

As the Fed rapidly jacked up rates in 2022, most analysts predicted that the U.S. economy would tip into recession. But the economy and the job market remained surprisingly resilient, with the unemployment rate staying below 4% for 23 straight months, the longest such streak since the 1960s.

The combination of decelerating inflation and low unemployment has raised hopes that the Fed is managing a so-called soft landing: raising rates just enough to bring down prices without causing a recession."

MY COMMENT

YES.......there will be no recession. I think we already know this.....but....whatever.

 

Today is a mirror image of yesterday for me......yesterday......everything down except for COST. Today....everything UP except for COST.

A very nice open today as the media continues to totally IGNORE earnings.

 

Twenty years ago when I was posting the same as now.....long term investors were routinely DERIDED. Now.....it is the norm.

Passive investing rules Wall Street now, topping actively managed assets in stock, bond and other funds

https://www.cnbc.com/2024/01/18/pas...ged-assets-in-stock-bond-and-other-funds.html

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

"Key Points

• The total on hand for exchange-traded funds and notes, along with passively managed mutual funds, totaled $13.29 trillion at the end of December, nudging higher than the $13.23 trillion held in actively managed funds, according to Morningstar.
• That movement in money accompanied a rough year for stock pickers. Just 38% of large-cap active funds outperformed their Russell index benchmarks.

Passive investment products have long been pulling in the lion’s share of money from investors, but as 2023 came to a close they achieved a milestone: holding more assets than their actively managed counterparts.

The total assets under management in exchange-traded funds and notes along with passively managed mutual funds reached a combined $13.29 trillion at the end of December, nudging above the $13.23 trillion held in active assets, according to Morningstar.

While passively managed stock funds long ago took the lead, this was the first time that passively managed products surpassed active across all asset classes combined.

“It’s been a long time coming,” said Nicholas Colas, co-founder of DataTrek Research and one of Wall Street’s closest trackers of the ETF industry since it first started drawing investor attention. “Last year with equities it was a very difficult year for active outperformance ... It was a year when you had an initial burst of enthusiasm for a few months, then a pullback and then a rush at the the end. Kind of a nightmare scenario for an active manager.”

Indeed, just in large-cap blended funds alone, passive funds raked in a net $192.8 billion for the year while active funds lost $48.6 billion, Morningstar reported. Large-cap growth funds saw a net $38.3 billion move to passive funds while active lost $91.2 billion.

That movement in money accompanied a rough year for stock pickers. Just 38% of large-cap active funds outperformed their Russell index benchmarks, down from 47% in 2022 although around the long-term average, according to Bank of America.

In contrast, passive funds, which primarily track market indexes such as the S&P 500, Dow Jones Industrial Average and Nasdaq Composite, had a strong year thanks to a big performance from the broader market. The S&P 500
alone had a 24% return for the year.

“You had to be right there when the liftoff happened going into November and December,” Colas said. “In many ways, it was the hardest possible environment for active managers to keep their cool, stay focused and not get overly optimistic or pessimistic.”

Adding to the challenges was the performance of the “Magnificent 7” tech-centric stocks — Alphabet, Microsoft, Apple, Tesla, Nvidia, Meta and Amazon— which carried most of the weight for the market. The Nasdaq-100, which is weighted towards technology, exploded 55% higher last year.

“You had this remarkable market leadership in Big Tech and some managers can’t own it because of mandates or a reluctance to have 25%-plus of their portfolio in a handful of names,” Colas said.

Still, there could be hope ahead for active management if market conditions change in 2024.

“As far as what a stock-pickers market looks like, it’s basically a low-volatility, low-correlation market without a lot of drawdowns that instill fear into money managers and force them to sell at the bottom,” Colas said. “This could be that kind of year.”"

MY COMMENT

Passive investing tends strongly to be long term investing. It is the haven for the retail investor and retirement funds.

Much of the daily media coverage is based on the traders and big banks. That is why it is irrelevant to the average person.

In addition......of course....the vast majority of professional managers can not beat the passive products.

 

Next week is a HUGE earnings week.

TESLA, VISA, J&J, Proctor & Gamble, Colgate, Netflix, IBM, CAT, Blackstone, 3M, Samsung, tons of banks.

We start the GUTS of earnings next week.

 

KILLER day today....another all time high for me. I had every stock UP today. I also beat the SP500 by 0.63% today. It has been a really good week for me....la BIG gain on Tuesday........a loss but a beat on the SP500 yesterday.....and another big gain, beat the SP500 day today.

We need to end the week in style tomorrow.

 

THIS....is why you buy the best you can afford.....if you are a collector.

Whiskey, Rolexes, and trading cards are in a spiraling crash as "the bubbles have popped" in collectibles

https://markets.businessinsider.com...tock-market-outlook-2024-1#4-luxury-watches-4

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

"Stocks and cryptocurrencies had a banner year in 2023, staging rallies that defied market gurus' gloomy outlooks – but it was a much rougher year for collectibles.

Following the pandemic, collectibles surged in popularity, with luxury watches and fine wines comfortably outperforming equities. In September 2022, Swiss bank Credit Suisse even said that Chanel handbags, Rolexes, and traditional Chinese art would offer better inflation protection than so-called safe havens like gold and long-duration bonds.

But indexes tracking the price of non-traditional assets like whiskey and trading cards and luxury watches tumbled in 2023 as consumers responded to high inflation and rising interest rates by cutting back their spending on big-ticket items.

Meanwhile, the AI investing craze powered the benchmark S&P 500 stock index to 24% gains – and cryptocurrencies like bitcoin shook off a dismal 2022 to rack up triple-digit returns. When those assets are performing better, there's less incentive for investors to try to diversify their portfolios by piling into collectibles.

"In 2023, traditional markets experienced a resounding recovery, while collectible markets suffered a continued decline that spread across nearly every sector," Altan Insights, which provides data and analytics on the market for collectibles, said in a recent research report.

"Yes, the bubbles have popped. The frothy markets of 2020 to 2022 are no more."

Here are four collectibles markets that slumped in 2023.


1. Sports and trading cards


Trading cards are now on a two-year skid, per data from Altan Insights.

CardLadder's CL50 index, which tracks the price of rookie cards for 49 sports stars and a first-edition card of the Pokémon Charizard, soared 337% between 2019 and March 2021 – but then tumbled 23% in 2022, and another 9% last year.

To add insult to injury, the market for non-fungible tokens (NFTs) has also tanked over the past two years, with 95% of the digital collectibles now trading at near-worthless valuations.


2. Whiskey


Prices for rare bottles of whiskey have also tanked over the past year-and-a-half, after peaking in May 2022.

The Rare Whiskey Icon 100 index, which tracks the price of 100 celebrated bottles of Scotch, tumbled 22% between then and November 2023.

Cheaper brands are also struggling, with Jack Daniel's maker Brown-Forman posting disappointing sales numbers in December that dragged its stock down 10% in a single trading session.


3. Fine wine


Other alcohol-based collectibles also suffered last year. Liv-ex's Fine Wine 1000 Index tumbled 14%, while its Champagne 50 gauge fell 18% after doubling between the start of 2020 and the end of 2022.

Trendy regions haven't been immune from the sell-off, with Liv-ex's Burgundy 150 Index sliding 18% last year – in a correction that the wine marketplace's chairman and CEO James Miles described as "long overdue".


4. Luxury watches

Watches haven't managed to avoid the sell-off either, with the Fed's aggressive rate hikes sparking a great Rolex recession.

WatchCharts' Overall Market index, which tracks the price of 60 luxury timepieces, has dropped 13% over the past year, with models from each of the Big Three of Rolex, Patek Phillipe, and Audemars Piguet slumping in price.

It's a far cry from the state of the market 20 months ago – when secondhand Rolex Daytonas were selling for $30,000 and waiting-list times were measured in years rather than months, according to Altan Insights."

MY COMMENT

I have not seen this in the art world that I am part of. Prices are still very strong for major and great examples. This is why when you are a collector you have to know the market and buy the very best that you can afford. From what I see Rolex watches and high end sports cards.....have NOT gone down significantly. BUT....I dont collect either...but I do get price information from Heritage Auctions....on the cream of the crop.

 

The market at the close today.

Stock market today: Nasdaq surges as chipmakers shine, Apple pops

https://finance.yahoo.com/news/stoc...as-chipmakers-shine-apple-pops-210312922.html

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

"Big tech led a stock market rally on Tuesday as Apple (AAPL) had its best day since May 2023.

The S&P 500 (^GSPC) popped 0.9%, while the tech-heavy Nasdaq Composite (^IXIC) led gains, rising more than 1.3%. The Dow Jones Industrial Average (^DJI) rose about 0.5%. The S&P 500 is now nearing its record closing high of 4,796.56.

Big tech stocks led the market higher after a bullish AI-fueled revenue outlook from TSMC (TSM), a key supplier to Apple and Nvidia (NVDA). The Taiwanese contract chipmaker's profit fell but beat Wall Street estimates. Shares of AMD (AMD) and other chipmakers stepped higher as TSMC put on more than 9%.

Meanwhile, an upgrade from to Buy from Neutral by Bank of America sent Apple stock more than 3% higher on hopes the tech giant's new Vision Pro headset could drive increased hardware sales.

Also on Thursday, Atlanta Fed President Raphael Bostic said he doesn't see the Federal Reserve cutting interest rates until the third quarter, later than the market's current projection for March, unless there is "convincing" evidence of inflation's decline.

The odds of a rate cut in March as seen by traders have dropped more than 10 percentage points from a week ago, per the CME FedWatch Tool."

MY COMMENT

I absolutely do not care when the first rate cut happens. It is not relevant to what I do and how I do it as an investor. Today is a perfect example of the requirement that long term investors ignore all the BS and be in the markets to capture the unexpected explosive gains.

 

This has got to be good news for owners of NVIDIA.

Mark Zuckerberg indicates Meta is spending billions of dollars on Nvidia AI chips

https://www.cnbc.com/2024/01/18/mar...-is-spending-billions-on-nvidia-ai-chips.html

"Key Points

• Mark Zuckerberg said on Thursday that by the end of 2024, the company’s computing infrastructure will include 350,000 H100 graphics cards.
• That suggests the company is spending billions of dollars on Nvidia’s leading chips that can cost over $40,000 on eBay due to heavy demand.
• Zuckerberg said in October that “AI will be our biggest investment area in 2024, both in engineering and computer resources.”"

MY COMMENT

That is a huge amount of money going to NVDA and indirectly the shareholders.

AND.....extrapolate this across the tech universe and all the other business areas that are using these chips.

 

Smokie....I believe this "stuff" reflects the HUGE gap between the short term trader mentality and the long term investor mentality. It is like everything in media these days.....they are simply looking for clicks.

 

Well we got the open today that I expected. Now the question is can we end the day with gains. This is a classic day for a.....GASP.....late day fade. That is my......."feel"....for the market today.

For some reason....probably.....the constant 24/7 fear mongering and drama that is pushed all day long....investors are still very skittish. There is a real feeling of discomfort out there in the world and in society.......and....not just in the investing world.

I attribute most of this to computers and cell phones and the constant and instantaneous media culture that we now live in. The human nervous system is not designed to be under constant attack.

 

As to the above.

Where Have the Bulls Gone?

https://www.bespokepremium.com/interactive/posts/think-big-blog/where-have-the-bulls-gone

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

"The S&P 500 has continued its listless drift sideways this year, and sentiment has begun to take notice. Bullish sentiment exited 2023 at elevated readings with close to half of all respondents to the weekly AAII survey reporting as bullish, but since then, that reading has dropped down to 40.4% this week. That marks the lowest reading on optimism since the first week of November when it was a much more muted reading below 25%.



In turn, bearish sentiment has begun to pick up. 26.8% of respondents reported as bearish this week. That is only the highest reading since the first week of December and would need to climb another 4.25 percentage points to reach its historical average.



With the inverse moves in bulls and bears, the bull-bear spread has fallen to 13.6. While bulls have outnumbered bears for 11 weeks in a row now, this week's reading marks the smallest margin during that span.



Not only is the AAII survey showing the least bullish sentiment in about two months, but so too are the Investors Intelligence survey and the NAAIM Exposure index. Plugging each reading into our sentiment composite shows that aggregate sentiment has quickly gone from sitting over a full standard deviation more bullish than the historical norm down to barely bullish readings in less than a month.




MY COMMENT

I am not surprised by this. AND....actually.....it is a great indicator for the current BULL MARKET. But....see my comment in the post above this one. We are seeing the discomfort of the screen era as 250,000 years of human genetic and brain based behavior SMASHES INTO the modern computer era which has been hammering us for the past 20-25 years.

This "stuff" is basically the impact of STRESS on humans and their behavior. There have been thousands of experiments on the impact of stress on biological organisms. What we are seeing now in many aspects of culture and society is right in line with what you would expect. NOT a pretty picture......especially the future.

 

To continue......at the same time we see this sort of schism.

Consumers haven't felt this good about the economy since 2021: 'December was no fluke'

https://finance.yahoo.com/news/cons...nce-2021-december-was-no-fluke-153749011.html

VERSUS

Here is the biggest immediate risk to the stock market

https://finance.yahoo.com/news/here-is-the-biggest-immediate-risk-to-the-stock-market-110051836.html

MY COMMENT

The big risk......we might not get the number of rate cuts as soon as the.....TRADERS....want. At the same time....the consumer data.....reflects the REGULAR people.

I have no doubt that anyone reading this stuff daily is very confused. We are constantly BOMBARDED with the negative and the positive all day long.......with no way to know what is real or not real. Welcome to the modern world of........OPINION JOURNALISM. In the modern era there is no such thing as a.....FACT.

Now.....as to investing....FACT is king. No matter the opinion.....a business must make money and can not operate on fantasy. It is all about FUNDAMENTALS. It is all about success......real world success. Fantasy thinking or opinion can not trump reality in business.

This reality is reflected in the top 25-50 companies in the SP500. Those companies are the largest in the world. They have achieved the market cap that puts them in the top 25-50 businesses in the world. People have voted them into that category.....with their money. Want to see what someone really thinks....look at how and where they invest THEIR OWN money.....not client money or fantasy money.

 

Good mid to late morning market strength right now. I looked.....and....I now have all seven stocks in the green. Of course.....a long way to go to the close.

Even my kids AMAZON that I bought just a couple of days ago is now in the green......by one third of a percent. LIFE IS GOOD.....well for at least the next five to ten minutes.

I say........SHOW "ME" THE MONEY.......SHOW "US" THE MONEY.

I dont pay much attention to stocks that I dont own other than in general and as to earnings. I live in my little day to day BUBBLE of seven stocks. BUT....with the averages ALL in the green I assume that this rally is broad based.

 

IT IS TIME.....PAST TIME....FOR NVDA TO DO A STOCK SPLIT. Sorry.....did not know I had the caps locked.

It is time for the company to allow shareholders to consolidate all the recent gains into additional shares. With earnings coming up it is the perfect time for an announcement.

Sorry just random GREED and wishful thinking.