Markets & Stocks

Major U.S. stock indicesS&P 500 Index (SPX) | NASDAQ Composite (COMP) | DJIA (Dow).
“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.

Calendars: EarningsEconomic here & hereFED; US House & Senate Hearings; BLS & BEA.
Stimulus Package, Tax Proposal, & Employment Report | Cathie Wood May 7, 2021 video:

2021 May 07 DJIA +0.66%, S&P 500 +0.74%, Nasdaq Comp +0.88%. For the week: DJIA +2.7%, S&P 500 +1.2%, Nasdaq Comp -1.5%:
2021 Apr 30 DJIA -0.54%, S&P 500 -0.72%, Nasdaq Comp -0.85%. Year-to-date (YTD): DJIA +10.68%, S&P 500 +11.32%, Nasdaq Composite +8.34%:

Q1 Earnings LIVE Webcasts Apr 26-30 (all times are EDT):
Q1 Earnings Webcasts Apr 22:  AT&T ($T); Verisign ($VRSN); Intel  ($INTC)

Mar 31: for the first quarter: S&P 500 +5.8%, DJIA +7.8%, NASDAQ Composite +2.8%
ARK Invest CEO Cathie Wood counterpunches skeptics (video), Mar 5, 2021:

Volatility, Skepticism, Retail vs. Institutional Investors | ITK with Cathie Wood -- in this episode XIV of "In the Know" (March 5, 2021), ARK’s CEO/CIO, Cathie Wood, weighs in on ARK’s research and projections, disruptive innovation, skepticism, misunderstandings with the ETF wrapper, volatility, and retail investors vs. institutional investors. As always, she also discusses fiscal policy, monetary policy, market signals, economic indicators, and more. $ARKK ETF

See also Market Liquidity, Inflation, & Financial System | ITK with Cathie Wood (video)On episode XIII of "In the Know" (Feb. 26, 2021), ARK CEO/CIO, Cathie Wood, talks about market worries, including impact of rising rates, Bitcoin, liquidity of the market, inflation vs. deflation, and the financial system. She also weighs in on fiscal policy, monetary policy, market signals, economic indicators, and more, excerpt: "I was surprised to learn that uh one of the most expert journalists and consultants in the space, at Morningstar, was was basically feeding into the fears of the market."

Warren Buffett’s Annual Letter to Berkshire Hathaway (BRK.A and BRK.Bshareholders, Saturday, Feb 27, 2021 via Annual Report posted at, excerpt: 
"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
Editor's note: For 2021 and beyond, I sincerely hope you're positioned to enjoy the ride!
"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" -- 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
Week, Month, Quarter, & Year ending Dec 31, 2020 (Year of the COVID-19 Pandemic):
  • 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.

2020 Dec 31DJIA +0.65%, S&P 500 +0.64%, Nasdaq Composite +0.14%:
Dec 21: Tesla (NASDAQ: TSLA) joins the S&P 500 (at $TSLA closing price Dec 18), and is likely to increase volatility of the index itself, say some strategists. Tesla will be one of the ten most valuable companies in the S&P 500 index with a projected weighting of about 1.6%.

Dec 18 Quad-Witching Friday:Tesla $TSLA closes at all-time high:
BARRON'S Video (Dec 7, 2020): Short Seller Jim Chanos on Navigating the Golden Age of Fraud and Short Sellers: Evil Geniuses or Village Idiots? Chanos discusses current market valuations, the concept of "legal fraud" (everything done legally but with an overall intent to mislead), and increasingly manipulated financial metrics used by corporations in reporting financial results such as 'adjusted EBITDA' and 'Total Addressable Market' or TAM. Money quote: "Tesla ($TSLA) is the biggest debacle since America Online (AOL)."
2020 Dec 04 video: ARK Invest's Cathie WoodEmployment Report, Market Commentary & Bitcoin

Oct 5-9: 2020 NVIDIA GPU Technology ConferenceCEO Jensen Huang Keynote replay (no registration required), on Nvidia's longer-term vision in "all-pervasive AI/accelerated computing." Oct 6-8: Arm DevSummit 2020 Virtual Conference featuring a fireside chat with Arm CEO Simon Segars and NVIDIA CEO Jensen Huang, topics: (1) what the combination of Arm and NVIDIA could mean for the future of AI, (2) more on NVIDIA’s plans for its AI Center of Excellence in the UK and (3) news from NVIDIA on its support for the Arm ecosystem. Shares of $NVDA are up 122% YTD (Oct 2).

Sep 14
LIVE Webcast replayNVIDIA (NASDAQ:NVDA) to Acquire Arm for $40 Billion:
Nvidia $NVDA to acquire Arm
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
Aug 18: The V-Shaped Recovery New Housing Starts Data:
A V-Shaped Recovery in the Making:
Jul 31, 2020 video: Ark Invest's Cathie Wood talks about fiscal policy, monetary policy, market signals, economic indicators, and innovation: [at 19:31] "... on the innovation front, analysts have been shocked at how much stronger the consumer has been. If you look at Amazon's sales, the consensus estimate was eight billion dollars too low for this last quarter ..."

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, AmazonTim Cook, CEO, Apple; Sundar Pichai, CEO, GoogleMark Zuckerberg, CEO, Facebook.

Markets are trading on economic fundamentals, says Goldman Sachs's Mossavar-Rahmani (video)  2020 July 10: Sharmin Mossavar-Rahmani, Goldman Sachs Wealth Management CIO, makes the case for staying invested in equities. She contends that while the Fed's low interest rates support equity markets, they are not overvalued. She joins David Westin with her insight on "Bloomberg Wall Street Week."

2020 June: S&P 500 has its best quarter since Q4 1998S&P 500 UP +18%, the DJIA UP +15.6%, NASDAQ Composite UP +29.4%. 
S&P 500 Index (INDEXSP: .INX)
Jun 26 video: ARK Invest's Cathie Wood gives an update on the V-Shaped Recovery.

For the month of MayS&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 updateChina & 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:
CBO forecast graphic
2020 Mar 15 FOMC lowers fed funds target interest rate: "... the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals ..."--FOMC statement

Feb 20-28: COVID-19 Coronavirus Spooks Stocks. CDC Risk Assessment & WHO UpdatesS&P 500 Index DOWN 13%:
S&P 500 Index DOWN 13% Feb 20-28
2020 Feb 28: Federal Reserve Chair says coronavirus is an "evolving risk to economic activity" and Fed ready to take action if necessary. 

Year 2019's 13 Worst #FAILs in Tech: 13. Samsung Galaxy Fold;12. Facebook privacy & Libra; 11. Apple FaceTime bug & butterfly keyboard; 10. Amazon Ring & local police; 9. Huawei in US; 8. Uber IPO; 7. Amazon HQ2;6. Airbnb bedbugs; 5. Vaping4. Jeff BezosAmazon CEO & Washington Post owner's mid-life crisisdivorce tweetdick picssexts to skanky girlfriend(s);  3. ICANN, Internet Society Ethos Capital re: .ORG2. WeWorkneed we say more? #1. The Worst of the WorstBoeing 737 MAXCongrats to Google, Microsoft, and Elon Musk, for missing this year's list of "13 Worst #FAILs in Tech." See also Boeing CEO Finally Fired.

2019 Best Year for US Stocks Since 2013S&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.
Predictions for 2020: Oil and gas prices will remain range-bound in 2020See also 5 Biggest Threats To Oil & Gas In 2020 and IEA: An Oil Glut Is Inevitable In 2020.

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.
Survivorship Bias: "Most businesses fail. Most people do not become rich or famous. Most leaps of faith go wrong. It does not mean we should not try, just that we should be realistic with our understanding of reality." "A powerful algorithm for happiness is to be wealthy but anonymous"--Scott Galloway.  
Remember: Most 'News' Today is Noise, False Narratives or Disinformation

Inverted Yield Curve T10yr/2yrAug 14, 2019: Former Federal Reserve Chair Janet Yellen said the markets may be wrong this time in trusting the yield curve inversion as a recession indicator. "Historically, it has been a pretty good signal of recession, and I think that's why markets pay attention to it, but I would really urge that on this occasion it may be a less good signal," Yellen said, adding, "The reason for that is there are a number of factors other than market expectations about the future path of interest rates that are pushing down long-term yields."  Aug 15: Mohamed El-Erian agreed with Yellen (CNBC video). See also Goldman Sachs Oct 7, 2019: 'US Is Not Close To Recession' - Economic Run 'Not Over.'
Economic & Earnings Links:
Markets | | Stock Exchange Trading Hours (24 hour format / local time):
  • 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.
Other stock & investor links: | Company Search Page; see also Full Text Search (advanced) | 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 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:
Still following the market at age 71--(he has no plans to abandon the stock market for other leisure pursuits, “It’s a fun exercise, beats the hell out of golf" ... Lynch spends time calling companies, listening to earnings calls and reading transcripts)--investor Peter Lynch explains his philosophy this way: Use your specialized knowledge to home in on stocks you can analyze, study them and then decide if they’re worth owning. The best way to invest is to look at companies competing in the field where you work ... "If you’re in the steel industry and it ever turns around, you’ll see it before I do.” The popular-wisdom version of his ideology is mistakenly often cited as “invest in what you know,” which leaves out the role of serious fundamental stock research. “People buy a stock and they know nothing about it,” he says. “That’s gambling and it’s not good.” Lynch’s advice for small investors: Picking individual stocks is hard even for the professionals--"if you can’t understand the balance sheet, you probably shouldn’t own it.” Source: Peter Lynch, 25 Years Later: It’s Not Just ‘Invest in What You Know’ - WSJ Dec. 6, 2015

Where Markets Fail: Visible Hands | CFA Institute Enterprising Investor

Memos from Howard Marks

Shortcuts to Factor Investing 101 |"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."

See also on Domain Mondo Investing, Jack Bogle, Warren Buffett, S&P 500 Index, US, China

Common TermsInfographic: Here's 40 Stock Market Terms That Every Beginner Should Know |

Operating Profits
"The basis for all sustainable shareholder returns is operating profits, not, repeat NOT revenue. Profit is the source of all future dividends, it is the basis for increased book value via retained earnings. The art of investing involves buying future levels of profitability at a significantly low price to make the whole venture worthwhile. Thus, one of the first things we look at when considering an investment is the level of operating profits the firm manages to generate relative to the capital provided by owners and creditors ..." And The Problem With Growth Investing | Seeking Alpha, Nov 8, 2015.

"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 | "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 |"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."

AddendumGoDaddy | NYSE: GDDY. Also note on May 25, 2018.

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