The Long Term Investor

You are talking......ANCIENT HISTORY.....old man. Two and a half market years.....is like dog years. One human year equals about TEN YEARS in market terms now. So in those terms you have been investing for......25 years....Zukodany.

 

I was floating along with a nice day till about an hour ago when the markets started going red.

No doubt profit taking and lingering fear from the last Friday sell off. In addition the upcoming BIG TECH earnings today and tomorrow are probably creating some negative volatility.

At this moment I have only a single stock in the GREEN. It is APPLE.....who would figure that.

 

The first of the BIG TECH GIANTS reports after the bell today....META. Tomorrow MSFT and GOOGL will follow. Definitely a short term market event that will determine some of the short term direction.

Of course the BIG ONE will be NVDA which reports on May 22....according to what I am seeing online.

 

How IRONIC.....TSLA is way up today......and the rest of the markets are down. Love it. The markets will always fool you. CLASSIC.

 

Probably a big factor in his being a GREAT MANAGER and business founder.

'I've cleaned more toilets than all of you combined': Nvidia founder Jensen Huang says he wishes ‘pain and suffering’ on Stanford students. Here’s why and what to learn from his rise

https://moneywise.com/investing/investing-basics/nvidia-founder-on-pain-and-success

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

"Thanks to investors' insatiable appetite for artificial intelligence, Nvidia (NVDA) — a key player in powering AI advancements — has become a market darling. The stock has skyrocketed, showing a 70% increase year to date and a staggering 1,749% return over the past five years.

The surge in Nvidia’s share price has significantly increased the wealth of its founder and CEO, Jensen Huang. According to Forbes, Huang now ranks as the 20th richest person in the world, with a net worth of $72.2 billion.

However, he didn’t begin his career in the billionaire club — far from it.

During a recent “View From The Top” interview at Stanford Graduate School of Business, Huang was asked why he created a flat organizational structure for his company. In his response, he reflected on his humble beginnings.

“To me, no task is beneath me because remember, I used to be a dishwasher, and I mean that, and I used to clean toilets. I mean, I cleaned a lot of toilets, I've cleaned more toilets than all of you combined, and some of them, you just can't unsee,” he said.

Huang’s light-hearted remark elicited laughter from the audience.

He continued, “I don't know what to tell you, that's life, and so you can't show me a task that's beneath me.”

Huang emphasizes his willingness to help others by sharing his approach to problem-solving. He states that his assistance is not about whether a task is beneath him but about being of service: by demonstrating his reasoning process on various challenges — whether they're ambiguous, incalculable, or seemingly daunting — he empowers others.

Resilience matters

Huang doesn’t hesitate to make bold statements. During another Stanford event, he made some intriguing remarks about expectations, pain and suffering.

Speaking at the Stanford Institute for Economic Policy Research last month, Huang was asked what advice he’d give to students to enhance their chances of success.

Rather than prescribing specific actions, he shared this insight: "One of my great advantages is that I have very low expectations."

Huang went on to note that low expectations aren’t typical among Stanford graduates — even though he himself is an alumnus.

“Most Stanford graduates have very high expectations, and you deserve to have high expectations because you came from a great school. You were very successful. You were top of your class. Obviously, you were able to pay for tuition. And then you’re graduating from one of the finest institutions on the planet. You’re surrounded by other kids that are just incredible,” he elaborated.

However, Huang highlighted a significant drawback to this mindset, stating, “People with very high expectations have very low resilience. And unfortunately, resilience matters in success.”

‘I hope suffering happens to you’

Huang believes that the ability to endure setbacks and suffering is crucial for success. However, he’s unsure how to effectively teach this resilience to students — it may be something they need to experience firsthand.

“I don’t know how to teach it to you except that I hope suffering happens to you,” he said.

He shared that, although he grew up in an environment that fostered success, he also faced many challenges. Within his company, he uses the term "pain and suffering" with glee, seeing such challenges as opportunities to strengthen and refine the character of the organization.

For Huang, true greatness in individuals comes from character, not intelligence, and character is shaped by experiences of adversity.

“And so if I could wish upon you — I don’t know how to do it — but for all of you Stanford students, I’d wish upon you ample doses of pain and suffering,” he said.

Put simply: no pain, no gain."

MY COMMENT

I could not agree more. I completely agree with his view.

Of course I am a person that worked in many jobs while in High School and College.

In order from first to last:

Dishwasher
Bus Boy
Car Wash Towel Crew
Garden Center warehouse labor
Gas station attendant
Bus Boy
College dining Hall Sculley worker
Chicken Farm

The towel crew job was interesting.....three or four of us hung out all day at the car wash. The front end man would try to up-sell us doing the exterior and interior of the car following the wash for an extra 50cents. he was good at selling and we made better money than minimum wage. Of course minimum wage was $1.60 per hour back than.

In my two earliest jobs....dishwasher and bus-boy the minimum wage that I made was $1.15 per hour.

The gas station attendant job and the chicken farm job were.....men's wages......$2 per hour.

Of course like all kids back in the 1950's and early 1960's we spent many hours on our bikes looking for bottles to return for the deposit. We would also scour the neighborhood looking for people that wanted their lawn mowed or their car washed.

When I was a successful business owner......I still emptied all the trash, vacuumed and cleaned the building.....every Sunday when I went in to work. On Sundays when I was the only one there.......I could usually get a weeks worth of work done.....all the paper work, dictation, bills, etc, etc. Enough to keep two secretaries busy over the next week. I worked nearly every Sunday for 22 years.....plus....the five traditional work days.

 

Well, well.....the SP500 and NASDAQ are making a last minute run into the GREEN.

Probably not going to help me much with NVDA down by over 3% today.

 

Four stocks UP for me today......AAPL, MSFT, GOOGL, and COST. I ended the day with a medium loss mostly due to NVDA. A also lost out to the eSP500 today by 1.31%.

 

META.....BEATS on earnings....but plunges over 18% on guidance. Typical.

Meta shares plunge on weak revenue guidance even as first-quarter results top estimates

https://www.cnbc.com/2024/04/24/meta-meta-q1-2024-earnings-.html

Meta’s Reality Labs posts $3.85 billion loss in first quarter

https://www.cnbc.com/2024/04/24/metas-reality-labs-posts-3point85-billion-loss-in-first-quarter.html

Meta stock plummets 10% after second quarter outlook disappoints

https://finance.yahoo.com/news/meta-q1-earnings-135049624.html

MY COMMENT

Make that....plunges....16.80%. This guidance "stuff" is ridiculous.

Makes me happy to NOT be a META owner.

Also makes me wonder why these companies even bother to give guidance.....it is just an excuse to trash the stock, ignore clear earnings BEATS.....and.....nit-pick earnings.

 

The markets today.....one of the DUMBEST market overreactions I have ever seen in my 50+ years of investing.

If there is any company.....any BIG TECH company....that is NOT a good indicator of the tech industry in general or the markets in general it is META. I dont see ANY of the other BIG TECH companies as being remotely similar to META in their business.

If this is an indicator of the thinking and actions of the modern investor, the modern trader, the modern markets......we have sunk to a new low.

I dont really care much about what is happening today.....for the very reasons I have stated above.....this is simply an unsupported and realistic massive OVERREACTION......to NOTHING...in terms of the general markets and even the rest of BIG TECH. SO....this too shall quickly pass.

What might concern me......IF I CARED.....which I dont....is what this says about the state and mindset of the market professionals and many investors today. This tells me that we have reached a new low in terms of my lifetime....in investor behavior. VERY SAD.

 

What makes the above even worse is that the GDP today should be a HUGE market driver. It was NOT good....but perversely....that is good news for the FED and inflation....in my view contrary to this article.

GDP growth slowed to a 1.6% rate in the first quarter, well below expectations

https://www.cnbc.com/2024/04/25/gdp-q1-2024-increased-at-a-1point6percent-rate.html

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

"Key Points

• Gross domestic product, a broad measure of goods and services produced in the January-through-March period, increased at a 1.6% annualized pace, below the 2.4% estimate.
• The personal consumption expenditures price index, a key inflation variable for the Federal Reserve, rose at a 3.4% annualized pace for the quarter, its biggest gain in a year.
• Consumer spending increased 2.5% in the period, down from a 3.3% gain in the fourth quarter and below the 3% Wall Street estimate.

U.S. economic growth was much weaker than expected to start the year, and prices rose at a faster pace, the Commerce Department reported Thursday.

Gross domestic product, a broad measure of goods and services produced in the January-through-March period, increased at a 1.6% annualized pace when adjusted for seasonality and inflation, according to the department’s Bureau of Economic Analysis.

Economists surveyed by Dow Jones had been looking for an increase of 2.4% following a 3.4% gain in the fourth quarter of 2023 and 4.9% in the previous period.

Consumer spending increased 2.5% in the period, down from a 3.3% gain in the fourth quarter and below the 3% Wall Street estimate. Fixed investment and government spending at the state and local level helped keep GDP positive on the quarter, while a decline in private inventory investment and an increase in imports subtracted. Net exports subtracted 0.86 percentage points from the growth rate while consumer spending contributed 1.68 percentage points.

There was some bad news on the inflation front as well.

The personal consumption expenditures price index, a key inflation variable for the Federal Reserve, rose at a 3.4% annualized pace for the quarter, its biggest gain in a year and up from 1.8% in the fourth quarter. Excluding food and energy, core PCE prices rose at a 3.7% rate, both well above the Fed’s 2% target. Central bank officials tend to focus on core inflation as a stronger indicator of long-term trends.

The price index for GDP, sometimes called the “chain-weighted” level, increased at a 3.1% rate, compared to the Dow Jones estimate for a 3% increase.

Markets slumped following the news, with futures tied to the Dow Jones Industrial Average off more than 400 points. Treasury yields moved higher, with the benchmark 10-year note most recently at 4.69%.

“This was a worst of both worlds report – slower than expected growth, higher than expected inflation,” said David Donabedian, chief investment officer of CIBC Private Wealth US. “We are not far from all rate cuts being backed out of investor expectations. It forces [Fed Chair Jerome] Powell into a hawkish tone for next week’s [Federal Open Market Committee] meeting.”

The report comes with markets on edge about the state of monetary policy and when the Federal Reserve will start cutting its benchmark interest rate. The federal funds rate, which sets what banks charge each other for overnight lending, is in a targeted range between 5.25% to 5.5%, the highest in some 23 years though the central bank has not hiked since July 2023.

Investors have had to adjust their view of when the Fed will start easing as inflation has remained elevated. The view as expressed through futures trading is that rate reductions will begin in September, with the Fed likely to cut just one or two times this year. Futures pricing also shifted after the GDP release, with traders now pointing to just one cut in 2024, according to CME Group calculations.

“The economy will likely decelerate further in the following quarters as consumers are likely near the end of their spending splurge,” said Jeffrey Roach, chief economist at LPL Financial. “Savings rates are falling as sticky inflation puts greater pressure on the consumer. We should expect inflation will ease throughout this year as aggregate demand slows, although the path to the Fed’s 2% target still looks a long ways off.”

Consumers generally have kept up with inflation since it began spiking, though rising inflation has eaten into pay increases. The personal savings rate decelerated in the first quarter to 3.6% from 4% in the fourth quarter. Income adjusted for taxes and inflation rose 1.1% for the period, down from 2%.

Spending patterns also shifted in the quarter. Spending on goods declined 0.4%, in large part to a 1.2% slide in bigger-ticket purchases for long-lasting items classified as durable goods. Services spending increased 4%, its highest quarterly level since the third quarter of 2021.

A buoyant labor market has helped underpin the economy. The Labor Department reported Thursday that initial jobless claims totaled 207,000 for the week of April 20, down 5,000 and below the 215,000 estimate.

In a possible positive sign for the housing market, residential investment surged 13.9%, its largest increase since the fourth quarter of 2020.

Thursday’s release was the first of three tabulations the BEA does for GDP. First-quarter readings can be subject to substantial revisions — in 2023, the initial Q1 reading was an increase of just 1.1%, which ultimately was taken up to 2.2%."

MY COMMENT

A slowing economy? Well.....DUH.

I put much of the blame for this and the general turmoil in the stock markets and the consumer markets on the.....FED. Their ridiculous attempts to tank the markets and impact the economy with their constant commentary in the media is paying off. Unfortunately it is paying off with creating skittishness and worry in people and business.

I....very much....do not see this as a negative indicator for inflation. if the economy slows it is going to force business to cut prices to attract consumers and business for their products. My view is that we reached PEAK inflation about a month or two ago.

NOW.....economic data like this that....."might"....reflect a slowing economy is an early indicator of a poor business environment which will FORCE business to cut prices of products to maintain some level of revenue and sales.

The FED needs to be very careful what they are creating with their IDIOCY.

 

Here is the market today.

US stocks tumble after Meta's reality check, soft GDP print

https://finance.yahoo.com/news/stoc...s-reality-check-soft-gdp-print-133116573.html

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

"Stocks opened sharply lower Thursday after a sharply lower-than-expected reading on US GDP for the first quarter ratcheted up questions about the health of the US economy in the face of persistently high interest rates. Tech stocks led the way down as Meta's (META) revenue forecast rattled investors eyeing the next high-stakes megacap earnings.

The Nasdaq Composite (^IXIC) fell more than 2%. The S&P 500 (^GSPC) lost 1.3%, while those on the Dow Jones Industrial Average (^DJI) slipped 1.5%, or over 500 points.

US GDP growth came in at a 1.6% annualized pace in the first quarter, falling well short of expectations of 2.5%. The reading comes amid ongoing debate about the path of the Federal Reserve's interest rate campaign.

Treasury yields rose after the GDP print, with the benchmark 10-year yield (^TNX) surging to its highest levels of the year. At last check, it was sitting around 4.73%.

Meanwhile, Meta shares sank as much as 15% as the market balked at rising costs at the Facebook and Instagram owner, which plans to spend up to $10 billion on AI infrastructure investments. Concerns grew about how long it will take for that spending to feed into revenue, pulling down tech stocks more broadly. Microsoft (MSFT), Alphabet (GOOGL, GOOG), and Amazon (AMZN) were all down more than 3%.

The Meta miss miss put a dent in hopes that results from the "Magnificent Seven" might juice a comeback in stocks, whose rally has lost momentum recently. It's also a reality check for Microsoft and Google, also burdened with high earnings growth and AI expectations, when they report after the bell Thursday.

On the macroeconomic front, the spotlight will turn to the March reading of the Personal Consumption Expenditures index, the Fed's favored inflation gauge, set for release on Friday."

MY COMMENT

A....TRIPLE BLAST......hits the market today.....META earnings, which were actually a BEAT......the GDP.........and....Treasury yields. At least two of the three are compliments of.....you got it.....the FED.

We are NOW at maximum confusion and turmoil in the economy in my view. I am seeing MANY small businesses in my area that are closing their doors. A number of our regular restaurants are now recently gone. Small business.....the guts of the economy is now in grave danger.

The problem.....the FED. They are now lurching around based on daily and weekly news. You can see it in their constant comments in the media. They are reacting to short term events with NO reason behind what they are doing.

This is the absolute worst approach to trying to run an economy. NOT TO MENTION......it is actually IMPOSSIBLE for the FED or anyone else to manage or run the economy. Through their IDIOCY and out of control EGO....they are driving and unleashing market forces that they have no way of anticipating or appreciating how it will actually impact the economy.

 

As an investor what can you do? NOTHING

There is nothing you can do in the face of any of the above. It has nothing to do with what you own, why you own it, or if you should own it. It is outside the markets.

ALL you can do it sit tight and do nothing. What will be, will be. Flailing around with what you own and/or trying to avoid the pain will only lead to greater pain down the road.

 

The best course of action......just LAUGH....at the insanity of it all. TRUST the management of the companies that you own to deal with business.

It actually is pretty funny if you can stand back from it all and look at what is happening and why rationally. BUT....I have a twisted sense of humor about this stuff.

 

THIS.....is not helping....although I also find it extremely funny. Right on schedule earlier today.

Yellen says economy performing well, inflation will ebb

https://finance.yahoo.com/news/yellen-says-economy-performing-well-142211129.html

I am not going to post this short little article....it is just too DUMB. What is really dumb is that someone thinks this sort of PR attempt is actually going to help in some way. I mostly just go right to the comments......to see reality.

 

At this point it is a waste of time to bother with the markets today. ALL I care about is the earnings after the bell today. What happens before that in the markets today is simply a waste of time to follow or think about.

That is the benefit of being a long term investor. I dont have to participate in the short term insanity. I can just go out and do other things.....which I will do right now.