The Long Term Investor

Somewhat.....rg. One probably more than the other......but they are both young....late 30's early 40's. So they have plenty of time. It often takes time to develop an appreciation of art and other collectables. Younger people are too busy with careers and family and trying to get established.

Most of the collectors that I know are ....."old". And most are in a quandary over what will happen with the next generation and art and collectables.

Yes the Monet garden in Giverny is world famous.

My kids grew up with art and collectables.......so they tend to take them for granted. I know they appreciate and know more than they let on.

 

Of course this was the big news of the day.

Fed Chair Powell says there has been a ‘lack of further progress’ this year on inflation

https://www.cnbc.com/2024/04/16/pow...his-year-in-reaching-feds-inflation-goal.html

"Key Points

• Fed Chair Jerome Powell said the U.S. economy has not seen inflation come back to the central bank’s goal, pointing to the further unlikelihood that interest rate cuts are in the offing anytime soon.
• “The recent data have clearly not given us greater confidence, and instead indicate that it’s likely to take longer than expected to achieve that confidence,” he said during a central banking forum."

MY COMMENT

My view is that Powell and others on the FED are basically talking up the yield on the Ten Year Treasury so they dont have to do anything. The Ten Year is higher now....I believe without looking.....than it has been since they started hiking rates.

Unfortunately with how the Ten Year is used as a benchmark with mortgages and other types of loans and credit.....they are really creating a hardship for people that want to buy a home or need to use credit.

 

One little story about art.....rg.

My little 7 year old granddaughter visited recently. She and I were in my study looking around at some of the "stuff"......and...I mentioned to her that two of the large paintings in the room...... both by the same artist.....were painted by a very important artist.

She looked at me and totally seriously said......"I thought you painted them". I guess she thought that all the paintings hanging in our house were painted by my wife and I and we put them up on the wall.......like her mom puts her art work on the refrigerator.

In reality I have ZERO art talent......but......I have a really good eye. My wife on the other hand has much art talent but does not use it.

 

Speaking of collecting.....no doubt Zukodany already knows this little story:

It’s a Bird! It’s a Plane! It’s the World’s Most Valuable Comic Book!

SUPERMAN’S DEBUT SELLS FOR $6 MILLION, LEADS HERITAGE’S RECORD-SETTING COMICS AUCTION TO MORE THAN $28 MILLION

https://www.npr.org/2024/04/10/1243...-no-1-has-sold-for-a-record-setting-6-million

 

Markets are siting now and trying to figure out.......what to do now.

 

Lets hope so. They need to RAMP UP this effort.

Tim Cook Says Apple Considers Making Gadgets in Indonesia in Pivot From China

https://finance.yahoo.com/news/apple-cook-weighs-indonesia-production-060027615.html

 

AMEN....as usual.

Invest for the Decades, Not the Years

https://ofdollarsanddata.com/invest-for-the-decades-not-the-years/

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

"A little over two years ago, I published Just Keep Buying: Proven ways to save money and build your wealth. Back then, it looked like my timing couldn’t have been worse. The S&P 500 was 8% off its highs and sentiment was deteriorating by the day. When the market reached its lows in October 2022, U.S. stocks were down nearly 25% and all of my haters made sure to remind me of it. They said things like:

“I’ve just kept buying and gotten poorer following this book’s advice.”

“Of course he published a book called ‘Just Keep Buying’ after a 10 year bull market.”

“Now do Japan.”

The last comment is a standard in the stock market bear’s playbook. Anytime someone argues that stocks will eventually recover from a decline, the most prominent counterexample is Japan, a country whose equity market crashed and then went sideways for over three decades. When I published Just Keep Buying, Japan’s Nikkei index had been below its 1989 highs for over 30 years:




Looking at this you can see why “Now do Japan” became such a meme for stock market permabears. Every time someone claimed that stocks usually recover, Japan was staring us right in the face. The bears were right to point this out. They were right to demonstrate that markets can take longer to recover than we initially imagine.

However, they were wrong to focus so much on Japan. Why? Because Japan had arguably the greatest asset bubble in history. And you shouldn’t make generalized arguments based on outlier performance.

But guess what? None of that matters anymore. If you’ve been following markets lately, you already know that the permabulls have gotten the last laugh. As the chart below illustrates, about two months ago, Japan’s Nikkei index surpassed its 1989 high after 34 years:




Don’t get me wrong, this is a dreadful equity market performance overall. As much as I love celebrating new highs, I don’t want to gloss over how rough this period was for Japanese equity investors.

On the other hand, it’s also true that investing in Japanese equities would have been far less painful for someone who was buying over time. While we like to imagine a hypothetical investor who bought at the 1989 peak and is still holding today, it’s far more likely that someone would have been buying throughout their life.

For example, imagine someone who invested $1 per day into Japanese stocks starting in 1980 (in the run up to the 1989 bubble). If they had done so, their portfolio wouldn’t have been underwater following the crash in the early 1990s. In fact, it wasn’t until the year 2000 that their portfolio value would dip below its contributions (aka cost basis):




This demonstrates that, when investing over time, a Japanese investor would have only been underwater from 2000 to 2017, a 17-year period. The rest of the time, it would have (more or less) been in the green. While this outcome isn’t ideal, it’s arguably 2x better than someone who invested at the 1989 peak and had to wait 34 years before seeing a positive return.


This demonstrates the hidden beauty underlying a strategy like Just Keep Buying. Even in one of the worst equity markets in history, someone who bought over time would’ve done okay if they had just stuck with it.

Thankfully, Japanese investors have started to take notice. I recently found out that Just Keep Buying has sold over 80,000 copies in Japan, or roughly 33% more than what it sold in the United States. Yes, I am big in Japan as they say. I remember hearing about metal bands in the 1980s that failed to gain popularity in the U.S., but were “big in Japan” and now I have some idea of what that feels like.

Either way, I’m honored that the idea of Just Keep Buying has taken hold in the one equity market that everyone gave up on long ago. There is a bit of poetic justice in it. Because I remember all the people who called me an idiot or naive or “intellectually undemanding” when I first said Just Keep Buying back in 2017. I heard the same things when the market crashed in 2020 and once again in 2022.

But, somehow, here we are. Stocks are near all time highs (even on an inflation-adjusted basis) and we have record economic activity in the U.S. The strategy works. Buying over time works. It’s not just backtests. It’s not just the Fed. It’s real.

Of course, there will be some future period where we aren’t so fortunate. There will be many years where Just Keep Buying seems to have failed you. I guarantee it. But in those moments you have to remember this one.


Because there will be no shortage of skeptics in the future. There will be no shortage of people telling you that stocks are a bad investment, that they’re too expensive, or that they’re a scam. They’ve been saying stuff like this since the Great Recession in 2008, since Businessweek’s Death of Equities cover in 1979, and far before that.

And guess what? They are saying the same things today. And maybe they’re right. Maybe the conflict in the Middle East will bring about World War III. Maybe AI will take all of our jobs. Maybe the U.S. will collapse under the weight of its financial obligations. Maybe, maybe, maybe.

I don’t know if the naysayers will be right. But, if they are right, they will only be right for a moment. Then their moment will fade and our forward march of progress will continue.

So, you have a choice—do you want to bet on the years where things fail or do you want to bet on the decades where they succeed? I’ve made my decision and have my entire career riding on it. Thankfully, the markets are answering back."

MY COMMENT

I would say dont invest for decades.....invest for your lifetime. Start early and stay for the long term. The earlier you start and the more years you have the better off you will be and the better your odds. The earlier you invest the longer you have to compound your money. YES.....it really is that simple.

 

Well, well.......SHAZAM.....the markets are now ALL RED.

 

Yes.....it is all about PATIENCE and COURAGE. The CRESHENDO of the fear mongers right now is EPIC. The bad news......compared to how crazy the media will be in the future....what we see now is nothing. Investors have to have nerves of steel......or....simply refuse to watch or read all the "daily stuff".

Why the 2024 stock market still looks like 2023: Morning Brief

https://finance.yahoo.com/news/why-...-looks-like-2023-morning-brief-100041089.html

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

"With roughly one-third of the year gone by, investors may notice something strange about 2024: It looks a lot like 2023.

"The rotation trade has just gotten a lot more complicated," wrote RBC strategists led by Lori Calvasina in a note to clients this week.

"One of the best questions we got [last] week was what the hot inflation data means for the leadership rotation in the US equity market that seemed like it was finally getting underway. Our answer: generally we think higher inflation and fears over higher interest rates are good for the mega cap growth stocks."

One of the biggest narratives for investors entering 2024 is that last year's rally would broaden.

And this hasn't been entirely untrue.

Energy was the best-performing S&P 500 sector in March and the second-best sector in the first quarter.

Moreover, the S&P 500's roughly 10% gain in the first quarter was outpaced by five of the 11 sectors in the index, illustrating a broader base of leadership than one focused on Technology (XLK) and Communications Services (XLC).

But, like 2023, concentration in a handful of megacap tech companies has played a big part in pushing markets higher.

Even as the "Magnificent" group of market leaders dwindled from seven to four and new superstar stocks rose, the percentage of the S&P 500 comprised by just 10 stocks reached new highs.

As data from RBC Capital Markets shows, the top 10 stocks in the S&P 500 today now comprise an even higher percentage of the index's market cap than the peak reached back in 2021 and during the early part of last year's rally.


The 10 biggest names in the S&P 500 now account for more than a third of the index's value. (Source: RBC Capital Markets)
Going forward, RBC notes, "crosscurrents for the old leadership, much like the broader market itself, are simply complicated."

Better economic growth expectations would likely continue to bolster a rotation away from high-growth tech stocks and toward more value-oriented plays. Higher rates, however, can be more challenging for companies with balance sheets that are less clean (i.e., more leveraged) than those of megacap tech names.

And the Federal Reserve pushing back its timeline for interest rate cuts makes both of the above — stronger growth and higher rates — simultaneously true.

A confounding dynamic that reminds us of another way 2024 is imitating 2023: Investors are still chasing the market."

MY COMMENT

In general the top ten or twenty of the SP500 are going to be leaders in any market.....good or bad. These are the companies that are the leaders of the world economy. The greatest businesses in the world.

Now that it is likely that we will only see one or two rate cuts this year.....or even none......we are left with a year similar to 2023....but if you think about it....ACTUALLY BETTER. We had rate hikes all the way through 2023. Assuming that we are now done with rate hikes......even if we get no rate cuts.....we are far better off in 2024.

 

Having just skimmed all the sources that I normally read in a typical day....I can say there actually is very little market news today. There is actually NOTHING going on.

BUT....investors are on edge.

I think there is an underlying layer of fear that does not take much to ignite. Some of this is simply a remnant of the pandemic and the horrible market of 2022.....some of it is driven by the constant negative media....and some of it is the actual economy and the impact of rising prices on basics like insurance, food, gas, etc, etc on the typical family. Of course the constant headlines and predictions about the FED are also a factor.

All in all.....investor and market EXHAUSTION.

Short term...this is normal. Investors climb a WALL of personal and investing WORRY over a lifetime. All you can do is......JUST KEEP CLIMBING.

 

I just did a down and dirty quick little calculation of where we are right now from the most recent high in the SP500. That high was in March.....actually March 28.

So we are now in a little market weak spot that has lasted for about 2.5 weeks. That is it.

I also see that at the level of the SP500....right now....we have now seen a drop in the SP500 from the prior high a few weeks ago of.......GASP.......(-4.3%).

That is it. That is what all the current NOISE is about. We are......at this level.....NOT anywhere close to even being in a normal correction. AND......a correction is NOTHING to fear.....simply a normal part of just about every annual investing time span.

 

WELL....a hefty loss today. I was in the RED....with....a single stock UP today....GOOGL. I also lost out to the SP500 today by 1.17%.

Moving on from here.

 

Ok....the LONGEST SLIDE....since January. Wait a minute isn't that only two and a half months ago?

S&P 500 Suffers Its Longest Slide Since January: Markets Wrap

https://finance.yahoo.com/news/asia-open-looks-mixed-treasuries-223159706.html

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

"(Bloomberg) -- The stock market saw its longest losing streak since January as a handful of big techs sold off — despite a slide in bond yields.

Equities fell for a fourth straight day, with the S&P 500 extending a drop from its all-time high to more than 4%. Chipmakers bore the brunt of the selling after ASML Holding NV’s orders tumbled. Nvidia Corp. led losses in megacaps. A tug of war between bulls and bears unfolded amid the expiration of VIX options — with Wall Street’s favorite volatility gauge whipsawing.

After a 10% stock rally in the first quarter — the strongest start to a year since 2019 — investors have been increasingly skeptical about how much further the market could go over the near term, even accounting for the continued strength in the economy.

“The combination of geopolitical uncertainty, rising interest rates, Fed hawkishness, and inflation frustration have combined to put bears temporarily in charge,” said Mark Hackett at Nationwide.

The S&P 500 slid to around 5,020. The Nasdaq 100 dropped over 1%. Just a day after Jerome Powell threw cold water on rate-cut bets, dip buyers emerged in the Treasury market, with two-year yields dropping further below 5% and a $13 billion sale of 20-year bonds drawing solid demand.

The US economy has “expanded slightly” since late February and firms reported greater difficulty in passing on higher costs, the Federal Reserve said in its Beige Book survey of regional business contacts.

Powell signaled this week that policymakers will wait longer than previously anticipated to cut rates following a series of surprisingly high inflation readings. Fed officials narrowly penciled in three cuts in forecasts published last month — but investors are now betting on just one to two this year, futures markets show.

“Fed Chair Powell was downright hawkish,” said Win Thin and Elias Haddad at Brown Brothers Harriman. “The Fed wants the market to do the tightening for them. Financial conditions remain too loose — and so some combination of higher yields, wider spreads, stronger dollar, and lower equities is needed to tighten conditions.”

While global equities are facing tactical headwinds, this is just a consolidation phase and stocks are expected to keep rising this year, according to UBS strategists led by Andrew Garthwaite.

They noted positive developments including artificial intelligence pushing productivity and earnings higher, lower warranted equity risk premium, likely falling labor costs and less worries on margin pressures.

The equity risk premium for US equities — a measure of the differential between stocks and bonds’ expected returns — is now deep in negative territory, something that hasn’t happened since the early 2000s.

While this is not necessarily a negative indicator for the stock market, it all depends on the economic cycle. The lower ERP can be seen as a promise of a future boost in corporate profits, but also that a bubble is in the making.

Fundamentals and technical trends for equity markets still appear supportive, suggesting the recent pullback should prove temporary, according to HSBC strategists led by Max Kettner, who are using the decline to add to their bullish stance.

“Sentiment and positioning are not flashing a warning signal, though real money investors have started to extend their constructive stance on equities lately, they wrote.

US corporate earnings are set for a “healthier runway” through 2024 and investors are growing more confident that companies can meet expectations, according to Morgan Stanley strategists.

The market is watching for profits to bottom in the first quarter before sequentially recovering in the second quarter and eventually expanding in the back half of the year, a team including Michelle Weaver and Michael Wilson wrote."

MY COMMENT

So now we are comparing a four day drop.....to a little drop about two and a half months ago. Simply insanity......to be looking at such insignificant market drops over such an insignificant time period.

I do agree that we are simply seeing market consolidation.....for now. We are also seeing a very jumpy and nervous market.

 

Not a bad market right now. I seem to be doing ok with my stocks.

I have not done a lot of reading yet....but I dont see much different from yesterday....other than being another day down the road.

 

I dont really care about this data at all....weekly stuff is simply NOT relevant in my view....but here it is for anyone that wishes to read it.

US weekly jobless claims stall in sign of labor market strength

https://finance.yahoo.com/news/us-weekly-jobless-claims-unchanged-123829920.html