“I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.” ― Warren Buffett
FAAMG Stocks: Facebook $FB, Amazon $AMZN, Apple $AAPL, Microsoft $MSFT, Alphabet’s Google $GOOGL $GOOG, collectively known as FAAMG (FAANG minus Netflix plus Microsoft), now have a total of more than $7 trillion in market cap as of Aug 28, 2020, almost 25% of the S&P 500, with "index concentration" now the highest in over 20 years.
See also: Israel, Widely Vaccinated, Suffers Another Covid-19 Surge (WSJ.com Aug 12, 2021)
"If I was Darth Vader and I wanted to destroy the US economy, I would do aggressive spending in the middle of an already hot economy. You usually get a bubble out of that, and you get inflation out of that. Frankly, we now have both. This is the biggest bubble I've seen in my career"--Stanley Druckenmiller, July 23, 2021--adding, "What are we going to get out of this? You're going to get a sugar high, then higher inflation, then an economic bust."Jeffrey Gundlach on Bitcoin and the U.S. dollar (July 15, 2021): “I think it’s [Bitcoin] only a trading vehicle. I’ve never been long Bitcoin personally. I’ve never been short Bitcoin. It’s just not for me. I don’t have that kind of risk tolerance in my DNA where I have to get worried to pull up the quote every day to see if it’s down 20%. But I would not own Bitcoin presently ... In the near term, the dollar seems firm. In the longer term, the dollar is doomed."
|S&P 500 YTD (Jun 30, 2021)|
Bitcoin's "death-cross" (cross of the 50-day moving average below the 200-day moving average) this past week has some traders worried.
The Stock Market Enters Late-Stage Fanaticism: The fervor surrounding even tiny stocks seems unhealthy and largely unsustainable. -- Michelle Leder | Bloomberg.com
Jun 24-25 Fraud Fest 2021: The Fourth Annual Berkeley Forum on Financial Fraud streamed LIVE online.
Jun 10, 8:30am EDT: U.S. Bureau of Labor Statistics May 2021 CPI data release: consumer-price index (CPI) UP 5% from a year ago, highest annual inflation rate in nearly 13 years.
"Investing illusions can continue for a surprisingly long time. Wall Street loves the fees that deal-making generates, and the press loves the stories that colorful promoters provide. At a point, also, the soaring price of a promoted stock can itself become the “proof” that an illusion is reality."--Warren Buffett
"the fact that the Fed now explicitly caters to idiots, CNBC talking heads and clueless BTFDers, means that it is completely unclear who the winner of this clash will be. To be sure, judging by the 14x outperformance of retail traders vs hedge funds, one can argue that the Robinhood juggernaut can continue indefinitely until such time as the Fed realizes the catastrophic consequences of what it has unleashed ... which may well be never" -- ZeroHedge.com Dec 30, 2020
“Risk on” is not without risk and the market corrects almost 20% in the first half, but the S&P 500 trades at 4,500 later in the year." -- Byron Wien and Joe Zidle Announce the Ten Surprises of 2021
- DJIA +1.4% this week, +3.3% in December, +10.2% in Q4, and +7.3% in 2020.
- S&P 500 +1.4% this week, +3.7% in December, +11.7% in Q4, and +16.3% in 2020.
- NASDAQ Composite +0.7% this week, +5.7% in December, +15.7% in Q4, and +43.6% in 2020, its best annual performance since 2009.
Sep 14 LIVE Webcast replay: NVIDIA (NASDAQ:NVDA) to Acquire Arm for $40 Billion:
Creating World’s Premier Computing Company for the Age of AI. See also presentation materials.
S&P 500 has its best August since 1986. Aug 31: S&P 500 -0.22%, DJIA -0.78%, NASDAQ Composite +0.68%. August 2020: S&P 500 +7%, DJIA +7.6%, NASDAQ Comp +9.6%.
Jackson Hole Symposium 2020 Aug 27-28 LIVE Stream: The Federal Reserve Bank of Kansas City announced its 44th annual Economic Policy Symposium, “Navigating the Decade Ahead: Implications for Monetary Policy,” due to the pandemic, as an online and streamed LIVE event this year (the full agenda), beginning Thursday, Aug. 27 at 8 a.m. CDT. View the symposium on the Kansas City Fed’s YouTube channel. Papers and other materials are posted on the Kansas City Fed’s website.
Aug 18: S&P 500 +0.23%, DJIA -0.24%, NASDAQ Composite +0.73% S&P 500 hits All-Time Record High Close, marking the fastest recovery in history.
|Aug 18: The V-Shaped Recovery New Housing Starts Data|
A V-Shaped Recovery in the Making:
Google searches for “buy a house” are at an all-time high back to 2004. The #COVID19 Crisis has pulled forward housing demand. This is a classic early cycle setup to kickstart the economy. Read our full analysis here: https://t.co/jKJynF5jlC $SPY $IVV $QQQ pic.twitter.com/j6LMSnq3ec— DataTrek Research (@DataTrekMB) August 14, 2020
Wednesday, July 29, 2020: hearing before the US House of Representatives' Subcommittee on Antitrust, Commercial, and Administrative Law: Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Apple, Facebook, and Google. Witnesses: Jeff Bezos, CEO, Amazon; Tim Cook, CEO, Apple; Sundar Pichai, CEO, Google; Mark Zuckerberg, CEO, Facebook.
|S&P 500 Index (INDEXSP: .INX)|
For the month of May: S&P 500 +4.5%, DJIA +4.3%, NASDAQ Composite +6.8%. At the Berkshire Hathaway Annual Meeting May 2, 2020, Warren Buffett announced he dumped Berkshire's airline stocks, adding, "the world has changed" but "never, ever, bet against America." See also Wall of Worry update: China & Hong Kong, The Tragedy of HSBC; and COVID-19 archive.
A V-Shaped Recovery: Cathie Wood, ARK Invest video (May 29, 2020) at 9:04: "I've been through a lot of recessions and by definition a v-shaped recovery is caused because inventories are liquidating and not keeping up with consumption. We think that's what's going to be happening during the next few months." CBO forecasts Q3 GDP growth UP +21.5% (annual rate). CBO forecast graphic:
Feb 20-28: COVID-19 Coronavirus Spooks Stocks. CDC Risk Assessment & WHO Updates, S&P 500 Index DOWN 13%:
|S&P 500 Index DOWN 13% Feb 20-28|
2019 Best Year for US Stocks Since 2013, S&P 500 UP 28.9%, Dow (DJIA) UP 22.3%, NASDAQ UP 35.2%. The S&P 500 Index tends to produce an annual return of 11.2% after a year in which it climbs at least 20%. Why the S&P 500 Has Beaten Other Indices over the Past Decade:
Three 'experts' who got the 2019 Stock Market Totally Wrong.3/3 ...The lesson: innovative disruption at scale in conjunction with profitability drives equity returns. The S&P 500 has beaten the Russell, EAFE & EM equities handily over the last decade because it houses more global disruptors than those other indices. $SPY $XLK $EEM $EFA— DataTrek Research (@DataTrekMB) December 30, 2019
Predictions for 2020: Oil and gas prices will remain range-bound in 2020. See also 5 Biggest Threats To Oil & Gas In 2020 and IEA: An Oil Glut Is Inevitable In 2020.Remember how everyone was worried about an inverted yield curve forecasting a global economic contraction over the summer? Fun fact: the US has NEVER seen a recession (back to 1970) w/out oil prices 1st rising by +90% over a year. Full analysis here: https://t.co/V2MKAhpB8b $SPY— DataTrek Research (@DataTrekMB) December 23, 2019
US 2020: ‘Bond King’ Jeffrey Gundlach says a recession is ‘very unlikely’ in 2020.
Brexit 2020: This Time is Different, Global Elite Show No Signs Of Wanting To Stop Brexit.
EU 2020: 'The Bottom Is Not In' For Europe's Struggling Economy says El-Erian.
- TSE (Tokyo Stock Exchange) 09:00-11:30 | 12:30-15:00
- HKE (Hong Kong Stock Exchange) 09:30-16:00
- LSE (London Stock Exchange) 08:00-16:30
- NASDAQ and NYSE (New York Stock Exchange) 09:30-16:00
- The stock market is designed to transfer money from the active to the patient -- Warren Buffett.
- 40 Stock Market Terms That Every Beginner Should Know--visualcapitalist.com.
- SZSE Component Index (Google)
- NYSE: BRK.B Berkshire Hathaway Inc. Class B
SEC.gov | How Investigations Work - The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. Here the SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud. Crucial to the SEC's effectiveness in each of these areas is its enforcement authority. Each year the SEC brings hundreds of civil enforcement actions against individuals and companies for violation of the securities laws. Typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them. One of the major sources of information on which the SEC relies to bring enforcement action is investors themselves — another reason that educated and careful investors are so critical to the functioning of efficient markets. To help support investor education, the SEC offers the public a wealth of educational information on this Internet website, which also includes the EDGAR database of disclosure documents that public companies are required to file with the Commission.
Profits explained | Finance Decoded FT.com video: Jonathan Guthrie explains how companies calculate their profit, what investors should be wary of and the different measures used to gauge how a company is really performing (video published Feb 17, 2016).
Peter Lynch on investing:
Where Markets Fail: Visible Hands | CFA Institute Enterprising Investor
Memos from Howard Marks
Shortcuts to Factor Investing 101 | blogs.cfainstitute.org: "Smart beta and factor investing are just fashionable marketing labels for a wide range of risk-based approaches that sit somewhere beyond active and passive investment management but possess attributes of both. In essence, smart beta and factor investing combine the disciplined rules-based approach of market-cap weighted passive funds with the discretionary selection of whichever chosen factors or index series those who use them hope to replicate."
Common Terms: Infographic: Here's 40 Stock Market Terms That Every Beginner Should Know | visualcapitalist.com
"Accounting games are also making the profits reported by companies much less trustworthy which, in turn, means P/E ratios are even more out of whack. Ciesielski, who writes The Analyst’s Accounting Observer ... [says] accounting manipulation has become very widespread and companies are using gimmicks to make profits look better. Company executives ...“all have a huge incentive to puff their numbers”... much of their compensation [is] tied to their stock’s performance. ... companies used to report profits according to Generally Accepted Accounting Principles — called GAAP for short. That meant all companies had to follow certain rules so that investors were able to compare apples to apples ... companies are now using creative accounting. GAAP has fallen between the cracks. The use of so-called “extraordinary items” and “non-cash charges” has made corporate earnings reports incomprehensible. “Non-GAAP earnings are more akin to anarchy,” says Ciesielski. ... How many companies are pulling these accounting tricks? Ciesielski says that, in 2009, 232 of the 500 companies in the S&P index were using tricks — thus straying from GAAP. Last year, 334 companies were doing so. Hundreds of billions in extra corporate profits were being reported simply by razzle-dazzle. It’s not that profits were actually higher — they were just made to look so." source: The secret stock market accounting trick | New York Post
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization - essentially net income with interest, taxes, depreciation, and amortization added. Often used to analyze and compare profitability between companies and industries, minimizing effects of financing and accounting decisions.
Revenue is the income (before deducting expenses) that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Profits or net income generally imply total revenue minus total expenses in a given period. Source: Wikipedia
Risk Assets generally refer to assets that have a significant degree of price volatility, such as equities, commodities, high-yield bonds, real estate and currencies.
Market liquidity | Wikipedia.org: "In business, economics or investment, market liquidity is a market's ability to purchase or sell an asset without causing drastic change in the asset's price. Equivalently, an asset's market liquidity (or simply "an asset's liquidity") describes the asset's ability to sell quickly without having to reduce its price to a significant degree. Liquidity is about how big the trade-off is between the speed of the sale and the price it can be sold for. In a liquid market, the trade-off is mild: selling quickly will not reduce the price much. In a relatively illiquid market, selling it quickly will require cutting its price by some amount. Money, or cash, is the most liquid asset, because it can be "sold" for goods and services instantly with no loss of value. There is no wait for a suitable buyer of the cash. There is no trade-off between speed and value. It can be used immediately to perform economic actions like buying, selling, or paying debt, meeting immediate wants and needs."
Fungibility | Wikipedia.org: "Fungibility is different from liquidity. A good is liquid if it can be easily exchanged for money or another different good. A good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place."
- Prior entries in archive: Markets & Stocks Archive (pdf).