All things STOCKS

[tbh]

I don't want to spend too much time on it, but it appears very boring. They just want to split, period. That's what it looks like.

I'll take boring over exciting any day. Thanks!

 

[Thunder Good-Oil]

AI is certainly a thing. There is a lot of spending coming as it will cut down on payroll expense for just about every business that implements it. The internet is also a thing. They hysteria just created ridiculous valuations. Similar to housing 15 years ago (because of the access to sub prime mortgages for everybody regardless of their ability to repay them) and crypto 5 years ago. NVDA is probably the best positioned business to profit from the trend. Picks and shovels.

 

[Firebirdparts]

wow, today pretty much sucked.

 

[Thunder Good-Oil]

wow, today pretty much sucked.

It’s August. Wall Street is on vacation.

Sell in May and go away.

After every rally in stock prices, the algorithms kick in with the programmed selling to grab quick gains. Retail investors just come along for the ride. Ultimately, earnings and multiples rule the day and many multiples are still extremely high. Earnings aren’t falling off of the cliff.

Health care in the long haul with the demographics. Industrials, transportation, materials, manufacturing as even if Republicans win they would be foolish to shut down the Inflation Reduction Act stimulus. And defense because the world is going crazy.

 

[Thunder Good-Oil]

It is important to have a lot of tech exposure for the long haul. But most names aren’t cheap right now, so it’s hard to have the mentality to take positions. But be like Buffett. If you buy really good companies the price that you pay to participate is secondary to the quality of the business and industry and having good management.

 

[Go aeiou]

It is important to have a lot of tech exposure for the long haul. But most names aren’t cheap right now, so it’s hard to have the mentality to take positions. But be like Buffett. If you buy really good companies the price that you pay to participate is secondary to the quality of the business and industry and having good management.

Or buy BRKb
Most people don't have the training to determine what is a good stock. At least no where close to Buffett.

 

[Jax_Vol]

AI is certainly a thing. There is a lot of spending coming as it will cut down on payroll expense for just about every business that implements it. The internet is also a thing. They hysteria just created ridiculous valuations. Similar to housing 15 years ago (because of the access to sub prime mortgages for everybody regardless of their ability to repay them) and crypto 5 years ago. NVDA is probably the best positioned business to profit from the trend. Picks and shovels.

Is the metaverse a thing?

 

[Thunder Good-Oil]

Is the metaverse a thing?

It’s a thing. Other than gaming it might not be easy to monetize. Just about EVERY company is looking to expand AI. But IMO AI is just the buzz word for something that has been developing over a long time. Now the economic benefits of investing a lot into that infrastructure are becoming reality. To me it’s kind of merging data and devices with connectivity into useful stuff.

 

[Thunder Good-Oil]

When UPS drivers are winning $170,000 average compensation packages it isn’t a reach to expect to see companies work to automate everything possible. A couple of years ago I thought that it was crazy to consider Amazon making deliveries with drone aircraft. Now it’s making a lot of sense.

 

[Thunder Good-Oil]

Or buy BRKb
Most people don't have the training to determine what is a good stock. At least no where close to Buffett.

The downside of owning BRK is that they are so large it is becoming a huge challenge for them to deploy investment capital and achieve above average returns. Half of their value is their portfolio of publicly traded equities and half of that is in AAPL. So BRK is 25% Apple stock.

The other downside is that Buffett is well into his 90s and Charlie Munger is 99. The shares will certainly take hits as each of them step away (buying opportunities?). Their replacements are going to be managing an entirely different company because of the enormous size. They were very good at growing much smaller portfolios. Will that translate to BRK?

 

[Velo Vol]

 

[tbh]

The downside of owning BRK is that they are so large it is becoming a huge challenge for them to deploy investment capital and achieve above average returns. Half of their value is their portfolio of publicly traded equities and half of that is in AAPL. So BRK is 25% Apple stock.

The other downside is that Buffett is well into his 90s and Charlie Munger is 99. The shares will certainly take hits as each of them step away (buying opportunities?). Their replacements are going to be managing an entirely different company because of the enormous size. They were very good at growing much smaller portfolios. Will that translate to BRK?

Sort of kidding but sort of serious here: is it outside the realm of possibility that Berkshire is or could employ AI to replicate the principles and strategies that served Buffett and Munger well over the years, and ensure some degree of continuity? E-Warren, and E-Charlie, etc...

 

[Thunder Good-Oil]

Sort of kidding but sort of serious here: is it outside the realm of possibility that Berkshire is or could employ AI to replicate the principles and strategies that served Buffett and Munger well over the years, and ensure some degree of continuity? E-Warren, and E-Charlie, etc...

Anything is possible. But while Buffett is in charge they won’t. He runs a very basic operation at their HQ. A very small staff, modest office space, and the website looks like it hasn’t been enhanced for the last 20 years.

 

[Thunder Good-Oil]

Powell said tgat the inflation target will remain at 2% and 3% won’t become the new target. So don’t look for rate cuts.

 

[Milehigh_Vol]

Powell said tgat the inflation target will remain at 2% and 3% won’t become the new target. So don’t look for rate cuts.

Yeah stocks are reacting to the news. Blood bath month

 

[Jax_Vol]

Sort of kidding but sort of serious here: is it outside the realm of possibility that Berkshire is or could employ AI to replicate the principles and strategies that served Buffett and Munger well over the years, and ensure some degree of continuity? E-Warren, and E-Charlie, etc...

May be wrong, but think several companies offer mutual funds that let a computer program buy and sell the stocks based off algorithm.

As I recall, so far, a chimpanzee throwing darts at a random board of stocks is still beating the computer program.

After studying all the data, the best fund managers still thrive using their gut

 

[tbh]

May be wrong, but think several companies offer mutual funds that let a computer program buy and sell the stocks based off algorithm.

As I recall, so far, a chimpanzee throwing darts at a random board of stocks is still beating the computer program.

After studying all the data, the best fund managers still thrive using their gut

Yep, there are several (maybe more) brokerages that have incorporated AI into portfolio management offerings, I believe. I see what you're saying; there are nuances that (at this point, at least) an AI can't capture until it has "learned" enough through trial and error, if that is even feasible right now to the extent I'd be willing to entrust my pennies with a thinkin' 'puter.

That being said...maybe I need to acquire a pair of chimpanzees, name them Charlie and Warren, and provide them with a set of darts. What could go wrong?

 

[Thunder Good-Oil]

Charlie Munger only owns 3 public company stocks. BRK, COST, and DJCO. He also owns real estate and a Chinese fund managed by Li Lu. Charlie picks stocks for DJCO to hold. 3 banks and Ali Baba.

 

[@1RBFjr]

I once used Rather & Kittrell as advisors here in Knoxville. I still get their weekly emails. Here's the one from Friday:


A 2,000+ acre ranch near Telluride, Colorado, was listed for sale this week for the astounding price of $67.75 million. This property has all the features of a piece of real estate worthy of that price. Vast acreage, multiple beautiful homes, and privacy, all conveniently located next to one of the country's most desirable ski vacation areas.

This ranch is still owned by the original family that purchased the land in the 1940s for $130,000. If it sells for the full asking price, it will generate a return of 521 times its initial cost. Talk about being in the right place at the right time.

Is this one of the greatest investments of all-time? The answer is actually no. When examined, the return may be fairly ordinary.

A $130,000 investment growing to nearly $70 million may sound otherworldly, but over almost 80 years, the math comes out to a compounded return of just 7.8% per year.

Not bad, but factor in decades worth of building costs, upkeep, and property taxes (which, according to Zillow, are $161,000 per year), and that annual return starts to look smaller and smaller.

By contrast, that starting amount invested into the S&P 500 in 1945 would have averaged 11.2% and grown to over $700 million. No wealthy cowboy buyer needed.

That is not to say this wasn't a terrific investment. This family likely enjoyed owning the ranch while earning a solid return that outpaced inflation.

The amazing aspect of the story is they held onto this asset as long as they did. Multiple generations refused to sell during decades of wars, recessions, and dozens of election cycles that all seemed frighteningly uncertain for our country and economy. That should be commended.

Holding for that amount of time may seem like doing nothing, but this is true expert investor behavior. Warren Buffett's partner Charlie Munger says, "The big money is not in the buying and the selling but in the waiting."

The combination of patience and time can turn even ordinary investments extraordinary.

Likely, many of the assets and investments being accrued today by ordinary people will provide enormously for future generations if they are allowed a long enough time horizon. Patience and discipline can look like doing nothing in the short term but are often rewarded in the end.

​

 

[Thunder Good-Oil]

Thoughts on Service Now (NOW)? Supposed to be a beneficiary of AI as a user of AI.

Goldman Sachs has an opinion listing LT beneficiaries of AI. They highlight 11 early adopters.

Enablers:
NVDA
MRVL
CRWD

Hyperscalers:
MSFT
GOOGL
AMZN

Empowered Users:
META
CRM
ADBE
NOW
INTU

 

[Milehigh_Vol]

Thoughts on Goldman possibly getting punished by Congress?

Goldman Sachs bought UK and US companies using Chinese state funds

 

[Firebirdparts]

I guess my thought is that nobody cares. The investment banks all break laws all the time, and get fined all the time. Once in a while a rogue trader with a terminal will put one out of business. Once in a while they'll cause a global financial crisis.

 

[Velo Vol]

 

[Thunder Good-Oil]

Morgan Stanley:

“Real,” or inflation-adjusted, Treasury rates have surged, which could pressure stock valuations.

Notably, the real rate on 10-year Treasury bonds rose above 2.0% last week, its highest since the 2008 financial crisis. Why does that matter? The 10-year yield on Treasuries is the fundamental “risk-free” benchmark rate that underpins the way investors value most asset classes. If investors can get higher yields from a low-risk investment such as Treasuries, they have less incentive to take on greater risk from investments such as equities. In addition, higher yields lower the value of stocks’ future earnings in widely used pricing models. This means the average S&P 500 company’s lofty price/earnings multiple of about 20 may not be sustainable, given that real rates of 1.5%-2.0% have historically been correlated with ratios closer to 17.

Investors may be hoping the recent rise in rates is temporary, but it could reflect durable factors. These include structurally higher U.S. deficits, which could increase government borrowing costs, as well as policy uncertainty as the Federal Reserve may keep rates higher for longer than previously expected.

 

[Thunder Good-Oil]

Also Morgan Stanley:

U.S. economic data continue to be mixed.

July delivered some better-than-expected results, including data on industrial production and retail sales. These developments helped drive the Atlanta Fed to forecast an eye-popping 5.9% GDP growth for the third quarter. But those positive surprises don’t tell the whole story. Both manufacturing and services data look to be weakening, while leading indicators and yield curves continue to signal caution. Consumer credit data is worsening, and the October resumption of student loan payments looms as households continue to draw down their excess savings.

All told, we are not out of the woods yet. For investors, this is a time for active risk management, not complacency. With stock indices likely to stay close to their current range over the next few quarters, investors should ensure their portfolios are not too heavily weighted in any particular sector, and balance equity exposure between offense and defense, with a focus on quality. Use any losses in municipal bonds, preferred securities and Treasuries to offset taxes on gains from other asset classes, and rebalance toward intermediate duration in fixed income.