NVDA is mentioned quite a bit in this thread. Of course it is popular just about everywhere at the moment and has been for sometime. It has blazed a trail to say the least. It is a fine company. I know many posters here hold it. With its smashing returns, it can eventually become very dominant in ones portfolio. This is good, but also can carry some concerns on its own. I wonder from some of you who hold it individually, if you evaluate that from time to time as this thing grows and grows. And no, I don't mean that in a "wag my finger" at you kind of way. When I held a number of individual companies I did not micro-manage them, but I did keep an eye on some that might get a bit heavy in terms of how they might considerably drive the portfolio. Obviously, I mention NVDA because it has been on such a rock star tour.....but there are also other companies that can become dominant over time in ones portfolio. Anyway, I thought it might be interesting to hear different viewpoints. I know some folks just let them run, others may have a limit, or any number of ways they manage that. I was always somewhat careful about it, but I am probably a bit more conservative with that aspect.
Nvidia is up to about 28% of my primary account. I think about that huge gain once in awhile. But I can’t stand the thought of the capital gains tax. I also see the stock as a ten year hold. Minimum from here. But than……
NVDA is doing great, excellent in fact, to think that 700 billion of its profits came from product BUYERS alone is astounding. So yes, it gets a proportionate reaction from the market when you couple that with current trends and leadership. Much like W, it does scare me to think that it is my biggest holding and accounts to 30% of my account. It really shouldn’t, but there definitely is a risk factor there. I also keep thinking about Cisco and how it was a dominant leader in the 90s based on almost the same reasons NVDA is today and it actually did have justified price increase much like NVDA does today. It still is a great company today but the stock price plummeted in 2000 never to return to the same gains ever again
Some good commentary zukodany and WXYZ....as usual. I'm sure some of the others may comment as well at some point. Thank you for sharing. I know I was thinking about it as it has just kept climbing. I wondered if any of you had considered the size it had or may become over time. The fact that I even thought about it in those terms....and I don't even hold it individually....would tell you I would be somewhat nervous about it if I did. LOL I really don't miss those days either. I have always held long term come hell or high water, but as I have gotten older I have simplified and taken things down to a level where I don't have much to manage. I enjoy it. But....I also enjoy watching/reading the posters investments and thought process here in this thread, especially the individual holdings.
Looks like we are hanging on today so far....at least in my little world of index investing that I hold. Let's finish out the week on a good run.
When you think of what we went though just in the past 4-5 years alone, factoring in the MASSIVE covid dip, then MASSIVE stimulus BUBBLE, then the MASSIVE ‘22 correction, throw in between crypto, banking crisis, Russia Ukraine war….. things like an NVDA pop no longer bother you anymore, at least they shouldn’t. I’m far more concerned with what kind of black swan will be headed towards us this election year tbh
YES......the reason I said: "But than……" (Above post about NVDA, I was in the car and had to go before I finished.) What I was going to say is back in the DOT COM CRASH I had a real experience with CISCO. I had bought my shares for $25,000. Over the course of the DOT COM RUN-UP I held those shares up to $250,000. During the crash I figured they might lose some, but since CISCO was a real company with great fundamentals, I did not cash it in. Over the course of the crash that $250,000....went right back to $25,000. AS to NVDA.....I believe it is a rare once in a lifetime company....much like when I bought MSFT in 1990 and sat through the HUGE gains of the next ten years. Although I did periodically.....during that ten years.....take profits and put them into my other BIG CAP CONSUMER companies. I did sell ALL of my MSFT about 2002 when it became painfully clear that their management was a total failure. No one can predict the future for for a single company. But, the management of NVDA is EXCEPTIONAL. I would probably sell a good majority of the stock if there was a management change or if something happened to the founder....retirement, health issue, died, etc, etc. SO.....no I am not going to try to tell anyone else what to do with their NVDA and other gains. Be guided by your personal situation and how important the gains that you have are to you and your family. There is NOTHING WRONG with taking some money off the table.
A medium level loss for me in my stocks today....not bad considering the day. I also got beat by the SP500 today by....1.41%. My loss was held down by my three stocks in the GREEN....COST, HD, and PLTR.
A little market pause the last couple of days. Normal and welcome. If the markets simply went straight up it would mean they were fantasy. In the old days we would call this consolidation of the recent gains. I know without looking that I have a single stock up today so far....NVDA. that one stock being a double position for me has the ability to make my portfolio green by itself.
As to the irrelevant short term......well: January wholesale prices rise more than expected, another sign of persistent inflation https://www.cnbc.com/2024/02/16/january-wholesale-prices-rise-0point3percent-more-than-expected.html (BOLD is my opinion OR what I consider important content) "Key Points Wholesale prices rose more than expected in January, according to a Labor Department report Friday. The report comes just days after the consumer price index showed inflation holding stubbornly higher despite Federal Reserve expectations for moderation through the year. Wholesale prices rose more than expected in January, further complicating the inflation picture, according to a Labor Department report Friday. The producer price index, a measure of prices received by producers of domestic goods and services, rose 0.3% for the month, the biggest move since August. Economists surveyed by Dow Jones had been looking for an increase of just 0.1%. PPI fell 0.2% in December. Excluding food and energy, core PPI increased 0.5%, also against expectations for a 0.1% gain. PPI excluding food, energy and trade services jumped 0.6%, its biggest one-month advance since January 2023. The report comes just days after the consumer price index showed inflation holding stubbornly higher despite Federal Reserve expectations for moderation through the year. The CPI was up 3.1% from a year ago, down from its December level but still well ahead of the Fed’s goal for 2% inflation. On a core basis, which the Fed focuses on more as a longer-term gauge of inflation, the CPI was up 3.9%. CPI differs from PPI in that it measures the prices consumers actually pay in the marketplace. Markets fell sharply after Tuesday’s CPI reading, and there were fears that a hot PPI number also could cause another jolt. Expectations have been rising high that the Fed would use the easing inflation numbers as incentive to cut interest rates aggressively this year, but traders have had to pare back those expectations in recent days as inflation has shown unexpected persistence. Stock market futures moved lower after the PPI report and Treasury yields surged. Just a few weeks ago, markets had been pricing in the first Fed rate cut in March. That since has been pared back to June as policymakers have expressed caution about giving up the inflation fight too quickly while noting that an otherwise stable economy buys them time before having to move. A 0.6% increase in final demand service helped propel the wholesale index higher, which in itself was boosted by a 2.2% rise in hospital outpatient care. Goods prices actually decreased 0.2% on the back of a 1.7% decline in final demand energy as gasoline slid 3.6%. On a 12-month basis, headline PPI increased just 0.9%, slightly lower than the 1% level in December. However, excluding food, energy and trade services, the index rose 2.6%. Along with the troublesome inflation readings, the Commerce Department reported this week that retail sales in January slid by 0.8%, far more than anticipated." MY COMMENT A good day for the speculative traders especially those involved with treasuries. We have had three economic reports this week. Retail sales negative for inflation. CPI and PPI positive for inflation....but driven my very specific categories of the measure. This PPI....driven by hospital costs. What actually counts to the broad economy.....the prices of "goods"....actually significantly decreased. BUT....good or bad.....the market reaction is usually the same....down. that is due to the speculative short term traders. As usual.....no...I do not care. the stocks markets are NOT the economy.
Once again the focus is on all of these little reports on a microscopic level. The revisions often come later, the reasons why they are what they are are speculated about, then they use them to try and justify some prediction they have no way of knowing. The retail sales slid 0.8 I think the other day. Is that surprising after the banner retail sales from the previous holiday sales? Of course not. Yet, its a big deal somehow. All of the continued inflation chatter. Historically we average 3.30% from 1914 to 2024. We are sitting at 3.09% currently. We are running a tick under the historical average. The 2% target has always been a dumb move. It was when they set it. In fact, back then they even admitted it was dumb to set a hard number. Why? Because of the obsession created with that magical number. The last two years is a good example. At this point, it is all noise. The economy here is strumming along. Now, this doesn't mean all things are set in stone, but putting a negative spin on each detail is just being henny penny about it. They worry about the sky falling all the time anymore it seems.
I like this little article.....especially today. Why some investors don’t mind waiting longer for rate cuts https://www.cnn.com/2024/02/15/investing/premarket-stocks-trading-rate-cuts-delay/index.html (BOLD is my opinion OR what I consider important content) "New York CNN — Wall Street struggled this week to accept the cold reality that the Federal Reserve likely won’t cut interest rates any time soon. But higher-for-longer rates are far from a death knell for stocks. Piping-hot inflation data released Tuesday proved a tough pill for traders to swallow. Stocks and bonds both sold off as investors painfully recalibrated their expectations for five to six interest rate cuts this year to align more with the Fed’s projected three cuts. Traders now largely expect the Fed to begin cutting rates in June or July, rather than at its May policy meeting, according to the CME FedWatch Tool. Keeping rates elevated for long enough to tamp down inflation without triggering mass unemployment has been a delicate balancing act for the Fed. Chair Jerome Powell said in January that while inflation data has been encouraging, the central bank wants to see more signs of cooling prices before moving to pare rates. Yet if inflation continues to ebb, the current level of interest rates could be overly restrictive and drag on the economy. At the same time, if officials cut rates too soon, they could inadvertently invite more inflation. While Wall Street was rattled Tuesday by the possibility of delayed rate cuts, some investors say volatility is par for the course and that delayed easing of monetary policy is not a cause for concern. For example, Yardeni Research has pushed back against the idea that immediate rate cuts are necessary to avoid the Fed overshooting on slowing the economy.Rather, it is the Fed’stightening cycles that set off financial crises that turn into credit crunches, which then give way to economic downturns, its researchers argue. Put simply, since the Fed, the Federal Deposit Insurance Corporation and the US Treasury stepped in last year to contain a potential financial crisis — the collapses of Silicon Valley Bank and Signature Bank that set off regional banking turmoil — the Fed’s current level of tightening is not likely to trigger a recession and rock Wall Street, they say. “Our view is that with inflation still on a moderating trend and with economic growth remaining strong, what’s the rush to lower interest rates? Why mess with success?” wrote Ed Yardeni, president of Yardeni Research, in a Tuesday briefing. Stocks wouldn’t crater even if cuts were off the table completely in 2024, according to Bank of America, despite what Tuesday’s losses suggest. The bank’s strategists point out that roughly one-third of the S&P 500’s market cap are companies that have cash on hand. As long as the Fed doesn’t hike rates again (there’s no official indication that the central bank is currently considering such a move), stocks could still see a strong performance this year, they say. “No cuts could stymie a full-fledged recovery in more credit-sensitive areas,” wrote BofA strategists in a note on February 9. “But we remind investors that we expected strong returns this year not because of what the Fed would do in 2024, but because of what the Fed had already accomplished from March 2022 to now.” The central bank has made notable headway in bringing down wayward inflation since starting to raise rates aggressively nearly two years ago. Consumer prices rose 3.1% for the 12 months ended this January. While that’s above FactSet-polled economists’ expectations of a 2.9% gain, it’s still leaps and bounds below the 9.1% annual jump that inflation peaked at in June 2022. Of course, that doesn’t mean investors won’t see more pain ahead. Two of those more credit-sensitive areas are the embattled regional banking and commercial real estate sectors. Some investors are worried that regional lenders are on shaky ground after reporting lackluster quarterly results and that commercial real estate could be the next shoe to fall as office buildings remain vacant. The Fed in January said that it’s pulling the plug on its Bank Term Funding Program, established after regional banking turmoil last year to help lenders meet their liquidity needs. That means regional lenders will no longer have that crutch if they run into trouble after the program’s expiration on March 11. Economists and investors also warn that getting inflation from 3% to the Fed’s elusive 2% target will likely be the toughest leg of its price-stabilizing campaign. That’s because the stickiest inflation components, or areas like services and goods that are most resistant to changing market conditions, now have to come down. “The path to 2% inflation … will not be a straight line. As such, the only thing we can count on is volatility along the way,” wrote Marc Dizard, chief investment strategist at PNC Asset Management Group, in a Tuesday note." MY COMMENT What we are seeing this week is simply NORMAL market action.....in our current OBSESSIVE society. It reflects the HUGE gap between the long term retail investors......and....the short term traders and AI trading programs which are simply a knee jerk reaction to news and headlines. WHATEVER. I really dont care if we get any cuts this year....as long as the hikes are done.
A nice article but too long to post. So click if you wish. January Retail Sales: No, The Sky Isn’t Falling, And Neither Are Consumers. Good Grief. https://assets.realclear.com/files/2024/02/2359_retail.pdf The media loves to hype this economic "stuff".......but....who cares about this stuff anyway. Will any of it be relevant six months from now? NO.
Some good examples above regarding the overblown hype. Then again, what else do they really have left in their little bag of doom and gloom? The reality of it is the pundits, forecasters, and fortune tellers simply got their teeth kicked in over the last couple years. They were not just a little bit off....they were just flat out humiliated in epic fashion.
The poor housing market........but....I dont know how accurate this data is at this time of the year. US new-home construction plunges by most since April 2020 https://finance.yahoo.com/news/us-housing-starts-drop-slowest-134842967.html (BOLD is my opinion OR what I consider important content) "(Bloomberg) — US new-home construction sank at the start of the year by the most since the onset of the pandemic, indicating the recovery in the housing market will be gradual as many buyers await a further decline in mortgage rates. Residential starts decreased 14.8% last month to a 1.3 million annualized rate, after an upward revision to the prior month, government data showed Friday. Multifamily home construction plummeted by more than 35% after surging in the prior month, while single-family groundbreakings also slowed. The headline figure — which was lower than all estimates in a Bloomberg survey of economists — was the slowest pace in five months. “The monthly housing starts numbers are extremely noisy and prone to revisions, but the bigger picture is that single-family starts are trending higher, lagging the drop in mortgage rates towards the end of last year, while multi-family starts are trending lower, lagging the rollover in rent inflation,” Kieran Clancy, senior US economist at Pantheon Macroeconomics, said in a note. Building permits, a proxy for future construction, decreased to a 1.5 million rate. Permits for one-family homes edged higher after rising consistently throughout 2023, and multifamily authorizations fell 7.9%, the most since September. The government’s report showed housing starts fell in all four of the nation’s regions, led by the Midwest and Northeast. The number of single-family homes completed plunged to the lowest level since May 2020. The housing market’s recovery has struggled to maintain momentum as mortgage rates are still elevated near 7%. However, the nation’s builders have been gaining confidence in recent months on expectations that a further decline in borrowing costs will boost demand. What Bloomberg Economics Says... “Upward revisions to the December data and an unseasonably cold January help explain the dramatic decline in housing starts to start the year... We expect January’s decline in activity to prove temporary heading into the spring, and as a clearer picture emerges of the Fed’s rate path.” So far, builders have enjoyed limited competition from existing homes for sale. Homes available on the resale market are well below pre-pandemic levels as most owners remain reluctant to give up mortgages locked in at much cheaper rates. At the same time, the inventory of new houses for sale remains elevated and suggests builders may be cautious about beginning new projects. The National Association of Realtors will give a glimpse of the nation’s resale market Feb. 22, when it releases existing-home sales figures for January. A separate report Friday showed prices paid to US producers rose in January by more than forecast, highlighting the sticky nature of inflation." MY COMMENT If I was a buyer I would not hold my breath for lower mortgage rates. It remains a very difficult situation for house hunters.
My take on real property and rates, etc, etc......based on my little region.....and....some personal anecdotes. First....our little neighborhood of about 84 homes is doing very nicely. We currently have two homes that have popped up for sale in the past week. One at 3300 SqFt is listed at $1.3MILLION......the other at 5000+ SqFt is listed at $2.5MILLION. both are priced correctly. Our home is somewhat similar to the first one above but 400 SqFt larger. I put our value at about $1.4 to $1.5 MILLION. We bought our home for $800,000 four and a half years ago. I did a very detailed market analysis at the time and the price should have been about $730,000. We knowingly overpaid since we wanted this specific floor plan and the particular lot which is on a large preserve area. We figured the market would catch up to us in a few years. AMAZINGLY......the market exploded and the house shot up to 1.5 to 1.7 MILLION within a year or two. One of my kids is under contract right now to purchase the Model Home in an Austin region Master Community. In that area.....this winter......the builders reduced the prices of their homes by about $50,000. The neighborhood is now sold out. They are buying for $785,000, at 3000 SqFt. Four bed, 3.5 bath. We were lucky to be first in line for the Model.......and simply gave a full price offer to get it without it coming on the market. We knew if it came on the active market there would be a bidding war and the price would drive up to $825,000 to $875,000. The builder had a good incentive to sell to us without listing the property since we are an all cash sale and we are allowing them to continue to use the home as a model till June 14. My sibling.......the family bank for mortgage loans.....will make a private loan to my kid at 3.4% over 40 years....to allow them to pay all cash. She wants the income the mortgage will provide to her. She is the current mortgage holder for both my kids. She is willing to make a below market loan since I have made a ton of money for her managing her stock account. She always says....."well you made all this money for me anyway"....."so I am willing to use some of it for the kids". She has no kids or husband of her own. My kid will list their current home after moving into the new home. My sibling will allow them to defer the new loan payment till their old house sells so they will not be making two payments. Of course for a while they will be paying HO insurance on two homes and taxes on two homes. We anticipate their current home will sell within a few months. You can see how the FAMILY FINANCING allows us a lot of flexibility with interest rates, loan terms, etc, etc, etc......a BLESSING. In fact I sold $800,000 of her brokerage account for this loan on Monday of this week. She still will have about $4MILLION......AN ALL TIME HIGH.... in her brokerage account.....so no big deal. She is also set up for life with her pension, Social Security, A couple of annuities, and the income from two mortgage Loans......so....she does not need to dip into her stock account for any reason. Of course....she is a long term investor. In her job as a state government worker.....she never made more than $45,000 per year. As a retired person her current income is 3-4 times her working income. Unfortunately she pays pretty good income taxes compared to when she was working. Now....that low rate loan......has put me in a new situation I have never dealt with before.....GIFT TAXES. The mortgage rate is well below the government rate that is allowed for a family, private loan....so she will in theory.....owe gift tax. We will file a gift tax return in April of 2025.....but there will be no tax due. As a single person she has a lifetime exemption of $13.61MILLION......so....we will apply some of that exemption to avoid paying any tax. I have NEVER done a gift tax return and do not want to mess with calculating the value of the gift.....so we will use a tax prep person or a CPA to do it for us. My kids are lucky......they both have taken advantage of being able to buy homes for cash with private family loans. One kid has done this for 2 homes and the other will now have used it for 3 homes. One kid has also used family financing to do a $175,000 remodel on their house. I have tried to DRILL IT INTO THEM....how lucky they are to have this family resource.....and their obligation to do so for the next generations. On the loans to the kids.....we do prepare and file a note and Deed Of Trust.....for my siblings protection. We also require Title Insurance and do a full closing through escrow. The above is a little part of what I have been dealing with lately.
While typing the epic post above....i see that AMZN is now in the green. So now I have two stocks in the green today....AMZN and NVDA. I will take it.......and.....BE HAPPY.
As to the above on housing.....I am EXPECTING a price EXPLOSION if or when the mortgage rates come down to the 5-6% range.....at least here in our BOOMING area.
AND....I should say.....my siblings brokerage account contains the SAME investments as my Portfolio Model. I have been managing her money for the past 30+ years......since the mid 1990's.
