Investing Thread

[TSmith34, Inc.]

And the headlines don't even make sense... "The Dow plunges 600 points as jobless claims rise, killing hopes for interest rate cuts" - uhh...

Errrr, yeah, that's some bad headlining there.

I think the retrenching here is healthy. Earnings have come in a bit light as companies finally seem to have hit the point where they can't raise prices indefinitely, and the rotation to names outside of tech is a positive sign imo.

[MU82]

Errrr, yeah, that's some bad headlining there.

I think the retrenching here is healthy. Earnings have come in a bit light as companies finally seem to have hit the point where they can't raise prices indefinitely, and the rotation to names outside of tech is a positive sign imo.

Pretty much agree with this. It wasn't healthy to have a handful of companies responsible for almost all of the market's gains (or losses).

My portfolio is filled with mostly boring, mostly dividend-growing companies - health care, utilities, consumer, etc. And it has been up every day this week, including the two days (Tue, Thu) in which the overall market was way down due to "bad" news for Mag-7 companies. I'm obviously not some genius stock-picker; I just believe in a diversified, less-volatile portfolio - even if my two largest holdings are MSFT and AAPL. That's especially true now that my wife and I are retired 60-somethings.

[TSmith34, Inc.]

Pretty much agree with this. It wasn't healthy to have a handful of companies responsible for almost all of the market's gains (or losses).

My portfolio is filled with mostly boring, mostly dividend-growing companies - health care, utilities, consumer, etc. And it has been up every day this week, including the two days (Tue, Thu) in which the overall market was way down due to "bad" news for Mag-7 companies. I'm obviously not some genius stock-picker; I just believe in a diversified, less-volatile portfolio - even if my two largest holdings are MSFT and AAPL. That's especially true now that my wife and I are retired 60-somethings.

That said, today is an ugly bloodbath

[The Sultan]

Because that jobs report is not great.

[Goose]

TSmith

Serious question, do you think that the past good earnings was due to corporate greed? If so, that does not paint a rosy picture for the overall economy and employment. Once profits fall, cost cutting comes in and it could lead to loss of jobs in upcoming months.

[Hards Alumni]

TSmith

Serious question, do you think that the good earnings was due to corporate greed? If so, that does not paint a rosy picture for the overall economy and employment. Once profits fall, cost cutting comes in and it could lead to loss of jobs in upcoming months.

This would be my analysis.  When the market pullback happens I think it could get pretty bad.  There are a lot of folks on the edge of retirement or who are retired who will see their funds drying up and will want to exit the market which will only exacerbate the problem. 

Much of what I've seen in the last couple of years is greed for the average company to keep earnings on pace with expectations that the line must always go up.  Meanwhile the market has been largely anchored by very few companies adding a ton of value for somewhat dubious reasons.  IMO, people have been gambling that the big tech firms will somehow weather the eventual downturn or they've been trying (rightly) to beat the market since there isn't much inspiring outside of those tech companies.  Look at how much effect any news moves the market.  Intel laying off 15% of its workforce and they get a haircut.  Nvidia ping ponged $800b in value over the last six months.  Tesla is down almost 20% in the last year. 

I have a generally optimistic view of the economy, but I've said for a while now that the stock market is a mess.  I seriously considered buying some Nvidia today (bookmark this for future laughs at my expense) but am going to hold off until after the new year.  I should just be smart and stick to my ETFs.

Rates need to drop next month, IMO, but that will appear political so who knows if it will or not... wait and see as usual.  Luckily, I'm young(ish) and expect to see a downturn at some point in my life if not more... I'd rather it be now than when I'm 60 though, if I get to choose. 

[Goose]

Hards

I appreciate your thought-out reply. I agree with much of your post.

[MU82]

Because that jobs report is not great.

Mr. Market had been celebrating any poor jobs reports because those meant a Fed cut was more likely - the old "bad news is good news, and good news is bad news" deal that is pretty common with Wall Street.

But now it would appear that Mr. Market already has priced in at least 2 cuts for this year, so the jobs report is being viewed as what it really is - not great.

IMHO there isn't enough of a trend to declare anything (and you didn't). We'll have to see how the coming weeks and months develop.

[GOO]

Never stop low cost indexing.

Here is a goood summary of why we do it:

At The Money: Should You Be A Stock Picker:

https://podcasts.apple.com/us/podcast/masters-in-business/id730188152?i=1000654155648

Also worth a listen:
https://podcasts.apple.com/us/podcast/masters-in-business/id730188152?i=1000660296076

[4everwarriors]

Oh, but I've been hearing that we're in a robust economy. Who coulda known, hey?

#bullchit

[TSmith34, Inc.]

Oh, but I've been hearing that we're in a robust economy. Who coulda known, hey?

#bullchit

Indeed, a weak jobs report one month definitely proves that the last three years of job growth, wages growth, corporate profits, and GDP were all made up. Yes indeed.

[4everwarriors]

Fool's gold. I can carry home a $100 bag of groceries in one hand and it takes $60+ to fill up the horseless carriage, hey?

[TSmith34, Inc.]

Fool's gold. I can carry home a $100 bag of groceries in one hand and it takes $60+ to fill up the horseless carriage, hey?

Indeed, even more proof that that the last three years of job growth, wages growth, corporate profits, and GDP were all made up. Yes, indeed.

[4everwarriors]

Well, da Buffoon and Buffoon 2 make up everything else, aina?

[MU Fan in Connecticut]

Well, da Buffoon and Buffoon 2 make up everything else, aina?

Weird.

[Goose]

4ever

I think some are going to learn why we had a "robust" economy. Kicking the can down the street for 20+ years and doubling down the past four years was not a good thing for long term strength in the economy.

I know, I know a lot of people made so much money in real estate and the market the past few years and how can you question it? We just might find out if it was real or because of printing money and ignoring debt.

Going to State Fair today and this day always reminds me of my Mom and Dad. This was a special day for them to share with their family. With those memories always comes wise words from my Dad. He used to tell me to never get too comfortable because you lose money twice as fast as you make it. He was a wise man.

[HutchwasClutch]

Weird.

https://x.com/PGATUOR/status/1817672731367756008

[The Sultan]

https://x.com/PGATUOR/status/1817672731367756008

Weird Boomer Humor.

[HutchwasClutch]

Weird Boomer Humor.

Well, I'm not a boomer, idiot.

[The Sultan]

Well, I'm not a boomer, idiot.

Using boomer humor when you're not actually a boomer?

Yikes.

[Goose]

82

Looks like Warren Buffett is becoming a seller in equities. Thoughts?

I asked you because you have mentioned that you are long time Apple guy and one of your bigger holdings.

[MU82]

82

Looks like Warren Buffett is becoming a seller in equities. Thoughts?

I asked you because you have mentioned that you are long time Apple guy and one of your bigger holdings.

Like Buffett, I also am holding more cash now than I usually am. Unlike Buffett, I don't have quite that much cash!

Buffett sold a bunch of AAPL. He still has a ton of it. Again, more than I do even though it is my second-largest holding.

As to the why he's heavy cash, it's because he thinks the overall market is overvalued and that there will be better opportunities for cash down the road. I certainly wouldn't say he's wrong.

4ever

I think some are going to learn why we had a "robust" economy. Kicking the can down the street for 20+ years and doubling down the past four years was not a good thing for long term strength in the economy.

Except that's not what 4ever is saying at all. He is saying the economy was the greatest ever under the previous president, who did absolutely everything right ... but it has been horrible, the worst ever, under the current president. To 4ever, everything is black and white, and data matters less than his feelings do.

[Goose]

82

I was not talking for 4ever, was talking for myself. So, are selling any Apple or holding? IMO, one of the cardinal sins in investing is being fearful of capital gains.

[TSmith34, Inc.]

Well, da Buffoon and Buffoon 2 make up everything else, aina?

Indeed, when reality doesn't support what you desperately want to be true, just claim reality isn't real. Yes, indeed.

[MU82]

So, are selling any Apple or holding? IMO, one of the cardinal sins in investing is being fearful of capital gains.

I am not "fearful" of capital gains. I do sell sometimes, though I really don't like to sell stock in great companies because, over time, the stocks go up. Always. It's what they do.

And as I already mentioned, I'm pretty heavy cash/equivalents now, so selling would just give me more cash and I am not putting much into the market now. So no, unless I have something else I want to use the $$$ on, I am unlikely to sell AAPL.

Apple has become Buffett's largest holding - BY FAR. He had nearly 800 million shares at the end of Q2. So even if he has sold half, he still has about $90 billion worth of AAPL and it would still be BY FAR his biggest position. It's not as if he's saying, "Apple sucks, I don't want to own it."

I don't know about you, Goose, but if I were afraid a company was gonna go into the tank, I'm pretty sure I wouldn't hang onto $90 billion worth of its stock.

EDIT: We don't have to guess. According the Berkshire's quarterly filings, Buffett did sell nearly half his AAPL stake but still holds $84.2 billion worth of the stock. He also sold off a ton of his #2 holding, Bank of America.