The Long Term Investor

One last thing that I just noticed that seems pretty funny to me today.....yes....TSLA is in the GREEN again. LOVE IT. I am pulling for ELON and love to see all those that are trying to tear him down get made into fools with their predictions and negativity.

 

Before I bail on the markets till the close.....I will mention that I am close to FLAT for the day.

Thank you....NVDA and SMCI. My only two stocks in the GREEN today. They are keeping me close to flat....so far.

 

WELL....today was good for me. I was in the green with a medium gain thanks to....NVDA, AAPL, PLTR, and SMCI.

I also got a good beat on the SP500 today by 1.30%.

ONWARD AND UPWARD.

 

A good BEAT by MSFT and GOOGL. BUT....MSFT is being nit-picked on guidance.

Microsoft cloud growth accelerates on back of AI push

https://www.cnbc.com/2024/04/25/microsoft-msft-q3-earnings-2024.html

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

"Key Points

• Microsoft’s fiscal third-quarter results exceeded estimates on the top and bottom lines, but revenue guidance was weaker than expected.
• Microsoft’s finance chief, Amy Hood, called for $64 billion in revenue for the fiscal fourth quarter, below the $64.5 billion LSEG consensus.
• Microsoft has been increasing its capital expenditures to secure Nvidia graphics processing units for training and running artificial intelligence models.

Microsoft shares rose as much as 5% in extended trading on Thursday after the software maker issued fiscal third-quarter results that outdid Wall Street’s expectations.

Here’s how the company did in comparison with the consensus from LSEG:

• Earnings per share: $2.94 vs. $2.82 expected
• Revenue: $61.86 vs. $60.80 billion expected

Microsoft’s total revenue grew 17% year over year in the quarter, which ended on March 31, according to a statement. Net income, at $21.94 billion, or $2.94 per share, was up from $18.30 billion, or $2.45 per share in the year-ago quarter.

With respect to guidance, Microsoft’s finance chief, Amy Hood, called for $64 billion in revenue for the fiscal fourth quarter, below the $64.5 billion LSEG consensus. Hood’s forecast implies an operating margin of 42.3%, ahead of the StreetAccount consensus of 41.5%.

“Currently, near-term AI demand is a bit higher than our available capacity,” Hood said. Microsoft has been increasing its capital expenditures to secure Nvidia graphics processing units for training and running artificial intelligence models.

During the fiscal third quarter, Microsoft’s Intelligent Cloud segment, including the Azure public cloud, Windows Server, Nuance and GitHub, generated $26.71 billion in revenue. That’s up about 21% and more than the $26.26 billion consensus among analysts surveyed by StreetAccount.

Revenue from Azure and other cloud services grew 31%, compared with 30% in the previous quarter. Analysts polled by CNBC had expected 28.8%, while the StreetAccount consensus was 28.6%.

Inside of the Azure growth, 7 percentage points were related to AI, up from 6 points of impact in the previous quarter. Microsoft provides cloud services for the ChatGPT chatbot from startup OpenAI, and companies have been increasingly adopting Azure AI services to develop their own capabilities for summarizing information and writing documents.

The capacity bottleneck cut into the AI portion of Azure growth, Hood said.

Microsoft’s GitHub Copilot code-generation tool now has 1.8 million paid subscribers, CEO Satya Nadella said on a conference call with analysts.

The Productivity and Business Processes unit containing Office productivity software, LinkedIn, Dynamics customer-relationship management software generated $19.57 billion in revenue, up around 12%. The StreetAccount consensus was $19.54 billion. This marks the first full quarter of sales of the Copilot add-on for commercial Microsoft 365 subscriptions. Copilot draws on AI models from OpenAI, in which Microsoft has invested billions.

Amgen is among the customers that have signed up for 10,000 seats for the Copilot, Nadella said.

Microsoft’s More Personal Computing revenue totaled $15.58 billion. Revenue from the segment, which includes the Windows operating system, Surface PCs, video games and search, increased approximately 18% and was above the StreetAccount consensus of $15.08 billion. Revenue from Xbox content and services was up 62%, thanks to a bump from the $75 billion acquisition in October of game publisher Activision Blizzard, including its popular Call of Duty titles.

Sales of Windows licenses to device makers popped 11%. Technology industry researcher Gartner estimated that PC shipments increased 0.9% in the quarter. Demand for PCs was “slightly better than expected,” Hood said.

During the quarter, Microsoft introduced Surface PCs with a key for quickly accessing the Copilot chatbot. The company started selling access to the Copilot for small businesses with Microsoft 365 productivity software subscriptions and hired Mustafa Suleyman, co-founder of artificial intelligence lab DeepMind, to run a new Microsoft AI group. Suleyman had been co-founder and CEO of startup Inflection, and many of its employees also joined Microsoft.

“We have been operating with speed and intensity and this infusion of new talent will enable us to accelerate our pace yet again,” Nadella wrote in a memo about the Inflection deal, which was reportedly worth $650 million.

Excluding the after-hours move, Microsoft stock is up 6% this year, in line with the S&P 500 index."

MY COMMENT

This was pure and simple a.....BIG BEAT. Every single category was above expectations. You cant do much better than these numbers for a long time BIG CAP tech company.

As for guidance.....a NOTHING issue.....guidance of $64BILLION in revenue is not any sort of miss when expectations are $64.5BILLION. A meaningless difference......and probably low anyway.

We will see tomorrow if the ......."guidance Nazis"....are out in force. if so they are MORONS.....that are only looking for clicks and to sensationalize earnings......for short day trading profits.

 

As to GOOGLE....another CLEAR BEAT.

Alphabet shares jump 14% on earnings beat, first-ever dividend

https://www.cnbc.com/2024/04/25/alphabet-set-to-report-first-quarter-results-after-market-close.html

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

"Key Points

• Alphabet beat on earnings and revenue in its first-quarter results.
• Revenue increased 15% from a year earlier, the fastest rate of growth since early 2022.
• The company also announced its first dividend and a $70 billion buyback.

Alphabet shares rallied in extended trading on Thursday after the company reported results that topped analysts’ estimates, showed soaring profits in its cloud division and announced its first dividend.

The after-hours jump lifted Alphabet’s market cap past $2 trillion.

Here are the results.

• Earnings per share: $1.89 vs. $1.51 per share expected by LSEG
• Revenue: $80.54 billion vs. $78.59 billion expected by LSEG

Wall Street is also watching several other numbers in the report:

• YouTube advertising revenue: $8.09 billion vs. $7.72 billion expected, according to StreetAccount.
• Google Cloud revenue: $9.57 billion vs. $9.35 billion expected, according to StreetAccount.
• Traffic acquisition costs (TAC): $12.95 billion $12.74 billion expected, according to StreetAccount.

Alphabet’s revenue increased 15% from $69.79 billion a year earlier, the fastest rate of growth since early 2022.

Alphabet said its board approved a cash dividend of 20 cents per share to be paid on June 17, to stockholders of record as of June 10. The company said it “intends to pay quarterly cash dividends in the future.”

Alphabet’s dividend follows Meta, which announced its first dividend in February.

The company also said its board authorized the repurchase of an additional $70 billion in shares “in a manner deemed in the best interest of the company and its stockholders.” Alphabet closed the quarter with cash, equivalents and marketable securities of $108 billion, down slightly from $110.9 billion a year earlier.

Net income jumped 57% to $23.66 billion, or $1.89 a share, from $15.05 billion, or $1.17 a share, a year earlier.

The company also beat Wall Street’s expectations for YouTube advertising revenue and cloud revenue.

Google reported total ad sales of $61.66 billion — up from $54.55 billion a year ago. Google’s core advertising business is reaccelerating after a difficult 2022 and 2023, when rising interest rates and inflationary concerns forced brands to pull back their spending.

Operating income in Google’s cloud business more than quadrupled to $900 million, showing that the company is finally generating substantial profits after pouring money into the business for years to keep up with Amazon Web Services and Microsoft Azure.

The company has been investing heavily in artificial intelligence, adding generative AI features to search and other services to ensure that consumers continue using Google tools even as the way they seek information online changes.

“Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation,” CEO Sundar Pichai said in the earnings release."

MY COMMENT

This is such a HUGE BEAT that.....it looks like I simply bolded the entire article.

The dividend is the icing on the cake.

With GOOGLE and MICROSOFT today we are now on a BIG TECH earnings roll.

 

Even the GDP data was a positive for the economy since it slowed significantly. As to the inflation component....if they would not use a made up goal of 2%.......it is perfectly in the normal 3-4% range.

In addition if the economy is actually slowing.......many businesses are going to have to stop raising prices and even cut prices to maintain market share and demand for their.....now....overpriced products.

SO.......who cares.

The futures are showing the TRUTH right now....up substantially. BUT BEWARE......the nit-picking will start up tomorrow when the markets open and the traders and AI trading programs try to control the markets in their favor.

 

Here is more if you wish to dig into this a bit more.

Microsoft beats Q3 top and bottom lines on cloud strength

https://finance.yahoo.com/news/microsoft-earnings-182643613.html

AND
Alphabet stock surges on earnings beat, dividend announcement


https://finance.yahoo.com/news/alph...ngs-beat-dividend-announcement-142011040.html

MY COMMENT

NOW....moving on to the really important event of the day......the NFL draft.

 

WOW....so far today we are living and investing in the world of REALITY. Lets see how long it lasts. It has certainly been a.....wild and crazy....week. I have not done any calculations but I suspect if we have a good day today....I will end the week with a net gain in my entire account.

 

The economic news today.....that no one will care about.

Fed's favored inflation gauge shows price increases remained sticky in March

https://finance.yahoo.com/news/feds...eases-remained-sticky-in-march-123321592.html

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

"The latest reading of the Fed's preferred inflation showed prices increased more than Wall Street expected in March.

The core Personal Consumption Expenditures (PCE) index, which strips out the cost of food and energy and is closely watched by the Federal Reserve, rose 2.8% over the prior year in March, above estimates for 2.7% and unchanged from the annual increase seen in February.

Compared to the prior month, core PCE rose 0.3%, in line with Wall Street's expectations.

Through the first three months of the year core PCE rose at an annualized pace of 4.4%, a "concerning" trend, per Nationwide senior economist Ben Ayers.

“The hot inflation readings through March should write off any rate cuts in the first half of 2024,” Ayers wrote in a note on Friday.

The reading comes as recent hot inflation reports have dampened investors' expectations for interest rate cuts by the Federal Reserve this year. Fed chair Jerome Powell has consistently reiterated that the Fed won't be cutting rates until it has "greater confidence" in inflation's decline.

"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," Powell said on April 16

Friday's reading of March PCE follows a look at the metric for the quarter that surprised the market Thursday. Data from the Bureau of Economic Analysis showed "core" inflation grew by 3.7% year over year in the first quarter, above estimates for 3.4% and significantly higher than 2% gain seen in the prior quarter.

This spooked investors. Treasury yields hit their highest levels since November 2023, stocks headed lower and investors priced lower their bets that the Federal Reserve will cut rates at all this year.

Friday's release did offer some relief to investors: It included a revision for January inflation that showed prices rose more than initially thought in the first month of the year. Core PCE rose 2.9% in January, up from a prior reporting of 2.8%. That indicates that the higher than expected inflation reading for the first three months of the year was largely driven by inflation levels earlier on in the quarter as opposed to later."

MY COMMENT

Somewhat of a misleading headline.....since....

"Compared to the prior month, core PCE rose 0.3%, in line with Wall Street's expectations."

Not much relevance to this story or this data anyway. This month to month......incessant focus on microscopic data......is mostly irrelevant......the difference between 2.8% and 2.7% expectations is basically.....nothing. AND.....as usual "expectations" are usually totally incorrect as we see time after time after time. Economists have ZERO ability to predict anything.

As to basic inflation....I will say it.....there is ZERO chance for us to get to 2%. The ONLY way we will get there is if the economy goes into a severe recession and severe DEFLATION. At that point DEFLATION will be a much bigger issue and problem than the current......."NORMAL".....inflation levels. We will be praying for inflation to come back.

 

Compare this little article to the one above..... DRASTICALLY.......different take on the PCE data. It is amazing how this "stuff" changes from article to article depending on the context. Well.....actually, no.....it is not amazing.....it is the state of modern opinion based media.

Treasuries gain as traders find relief in key inflation readings

https://finance.yahoo.com/news/treasury-yields-fall-pce-inflation-124138612.html

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

"(Bloomberg) — US government bond yields extended their retreat from the highest levels since November after an in-line reading of the Federal Reserve’s preferred gauge of inflation.

Treasury yields declined by at least two basis points as the data were viewed as supporting the case for at least one interest-rate cut this year. The two-year rate, more sensitive than longer-maturity tenors to changes by the Fed, retreated back below 5%. The 10-year yield fell about 4 basis points to 4.66%.

The data allayed concerns that were stoked Thursday by hotter-than-anticipated inflation data in the initial estimates of US GDP the first quarter. In response, traders scrapped some of their remaining wagers on Fed rate cuts this year, no longer pricing one in before December.

Friday’s March personal income and spending data included price deflators that rose in line with expectations from February levels, while the 2.7% year-on-year rate continued to exceed the central bank’s 2% target.

“The moderation in rates in our view — and I think in the Fed’s view — doesn’t require inflation being at target by the end of the year by any means, as long as we can see some progress,” Andrew Sheets, global head of corporate credit research at Morgan Stanley, said on Bloomberg Television.

The personal consumption expenditures price index increased 0.3% in March, both overall and excluding the volatile food and energy components.

Thursday’s GDP report had stoked expectations for bigger increases, according to Omair Sharif, president of Inflation Insights LLC.

“The concern was that March would also be strong,” Sharif wrote in a note. “So the fact that it came in closer to consensus could be viewed with a sigh of relief.”

Also, futures open-interest data suggest that Thursday’s data motivated traders to set new short positions — wagers on higher yields — that increased the potential for a market rally in response to favorable data."

MY COMMENT

LOL......yes, LOL.....are the two articles above talking about the same data? YEP. A TOTALLY different take on the same data. I tend to believe that the second article is the one that reflects REALITY.

 

On the same topic.....I see many FEAR MONGERING headlines regarding the PCE data today. Fortunately the markets....what really counts....are simply not buying it.

 

Some simple good advice here for young workers.

Walmart CEO started his career unloading trailers at the warehouse—he says he got promotion after promotion by raising his hand when his boss was out of town

https://finance.yahoo.com/news/walmart-ceo-started-career-unloading-101402403.html

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

"Doug McMillon was just 17 years old when he started working in Walmart’s warehouses in the summer of 1984.

Since then, he’s scaled the retail giant’s ranks from unloading trailers for $6.50 an hour to becoming the company’s youngest CEO since its founder Sam Walton—with a $25 million salary to show for it.

In the 30 years between starting out and taking the reins in 2014, McMillon went from promotion to promotion, holding a store assistant role in Tulsa before getting his foot in the door of HQ in January 1991 as the fishing tackle buyer and working his way up in management.

Now, he says many of Walmart’s 2.1 million workers email him asking how to emulate his success at the company. His response? Volunteer to cover your boss more.

“One of the reasons that I got the opportunities that I got was that I would raise my hand when my boss was out of town and he or she was visiting stores or something,” he recently revealed in an interview with Stratechery.

The CEO added that he would even offer to step in for his boss in meetings—whether or not he was prepared to answer all the questions that came up.

Plus, instead of brushing off queries above his pay grade and waiting for his manager’s return, he would proactively respond: “I don’t know, but I’ll find out fast and get back to you.”

“I then put myself in an environment where I became a low risk promotion because people had already seen me do the job,” McMillon concluded.

Do your job well and be a team player

McMillon gave two more tips for rising through a company's ranks from the bottom to the top like he did: Do your job well and be a team player

"Don't take your current job for granted," the 57-year-old chief exec said. "The next job doesn't come if you don't do the one you've got well."

"Be a great teammate—you learn how to lead, you learn how to influence by the way you interact with your peers," he added. "Treat them well, help them, help them do a better job."

The simple advice rings similar to that of Pret A Manger’s CEO Pano Christou. Just like McMillon, Christou is one of few leaders to work his way to the top from the shop floor.

Now, Christou is CEO of Britain’s biggest sandwich chains—and he echoed that he got to where he is today by working hard while being kind to his peers.

“I’ve watched people that have been so fixated on the next role that they really take their eye off the current job they’re doing,” Christou told Fortune. “My philosophy has always been if you do a great job, people will notice you.”

By focusing on excelling in his current job and being the best within his cohort—without “shortcutting” his peers or “stabbing them in the back”—the promotions swiftly followed.

“I was generally the youngest person or the shortest in a role within my peer group when I got promoted, most of the time throughout my career,” he said. “If you work hard and put your head down, things can happen.”"

MY COMMENT

You have to treat your job and career like everything else. You have to do all the simple things that have always lead to success....like the little advice above. You have to have a PLAN for what you want to do in your career andd how you want to advance.

Just like investing.....it is simple....if you have common sense, work ethic, and the ability to see reality around you and create a long term plan for success. I also STRONGLY recommend the use of visualization techniques. If you dont know what I am talking about....do some reading.

 

When I started out, somewhere along the way, I discovered some little subscription pamphlets named....."Bits & Pieces".

Each copy contains good motivational content that is customer, business, and service focused. I used those little books and their stories to motivate myself along with much other information.

When my son graduated from college and had to start in a basic....low level college grad..... job, I gave him a subscription to the same publication. He took the lessons to heart....along with all the traits and ethics and business lessons that we instilled in him as he grew up and he has now....through hard work and good planing of his career....moved through three companies....and......become a National Senior Director at his current career employer. He was able to move much faster and much higher at a young age than those around him. The PRIMARY key.....FOCUS, and having a PLAN.

BITS & PIECES
Motivation. Inspiration. Achievement.

https://www.ragan.com/bitsandpieces/

Sample content:

https://bitsandpieces.biz/bits-pieces-a-sampler/

 

This week is the perfect lesson for long term investors. In one week....many investors.....have gone from feeling ok....to a feeling of the market collapsing.....and now.......back to feelings of elation and good hope for the future.

Long term investing is the same. As you sit through many different market events and situations over the long term......you will no doubt go from total depression, to total elation, to everything in-between. That is just how it is as an investor. BUT.....over the long term....slowly....the rewards will come. There is ALWAYS a light at the end of the tunnel. YOU have to believe, YOU have to take the simple steps for investing success......and.......YOU have to be in the markets to get the long term market gains.

The past few years are a perfect example.....we have gone from the DISMAL DEPTHS of the 2022 BEAR MARKET.....to the elation of the 2023 BULL MARKET....to the current SKITTISH 2024 market. As it has all unfolded....most investors are ahead of the game. All it took was a long term focus, rational investing picks, and remaining in the markets for the long term.

RIGHT NOW we are in a market that "FEELS" like something is wrong. The "feelings" have probably driven many people out of the markets. BUT.....the reality is.....the bull market is alive and well. In spite of the NEGATIVITY and current "FEEL"......the returns of 2024 have been very nice.

It is hard when you are a young or new investor....but....the best thing you can do is......simply learn to enjoy the ride. REVEL in the craziness of it all.....and....keep your long term focus. What counts is why we invest......to provide for our own and our families long term future.

 

YES.....SHOW US THE MONEY!!!!!!!!

The markets are BOOMING today. POW.....stocks are exploding and on fire.

A tale of....TWO FRIDAYS....last week and this week.

From one Friday to the next....the markets have gone from.....totally geek to totally chic.

 

OK....now that I have totally JINXED the markets with the above.....I am moving on.

 

The market today....for anyone that has been living under a rock.....and just crawled out a few minutes ago.

Nasdaq surges 2% on strong tech earnings, heads for best day since February: Live updates

https://www.cnbc.com/2024/04/25/stock-market-today-live-update.html

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

"Stocks jumped Friday as Big Tech names Alphabet and Microsoft rallied on strong earnings and traders pored through fresh U.S. inflation data.

The broad market index advanced 1.1%, while the tech-heavy Nasdaq climbed 2.1%. The Dow Jones Industrial Average rose 110 points, or 0.3%.

Shares of Alphabet jumped more than 10% following better-than-expected first-quarter earnings and headed for their best day since July 2015. The company also authorized its first-ever dividend and a $70 billion buyback. Microsoft
added 3% on strong fiscal third-quarter results.

Stocks also appeared to get a boost from March’s core personal consumption expenditures reading. The gauge, excluding food and energy, rose 2.8% from a year ago and came in ahead of the 2.7% expected by Dow Jones. Personal spending rose 0.8% and ahead of a 0.7% estimate.

Those moves are helping Wall Street regain some of its footing after a down day. The blue-chip Dow slid 375 points Thursday after new U.S. economic data showed a sharp slowdown in growth and pointed to persistent inflation. Gross domestic product expanded by 1.6% in the first quarter, compared to a Dow Jones forecast of 2.4%.

“We’re still optimistic on the market, however, as we believe that rate cuts aren’t necessary for the bull market to continue,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “Instead, continued economic expansion and growth in corporate profits – which are already seeing from the largest companies in the market – are what will propel stock prices to new highs.”

The major averages are on track for a winning week. The S&P 500 is up 2.8% week to date, on pace to break a three-week losing streak. The Nasdaq has gained more than 4%, headed for its first positive week in five. The Dow is up by a more modest 0.6% this week."

MY COMMENT

HERE is the....patently..... obvious statement of the year:

......."we believe that rate cuts aren’t necessary for the bull market to continue,”.........“Instead, continued economic expansion and growth in corporate profits – which are already seeing from the largest companies in the market – are what will propel stock prices to new highs.”

DUH......we had nothing but rate hike after rate hike in 2023 and at the same time we had a MASSIVE BOOMING market. The FED now doing nothing.....is nothing but a market positive. A rate cut or two...icing on the cake....but not necessary. It is ALL about business success, and earnings,.....fundamentals.....as always.