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Tuesday, September 13, 2022
Today’s newsletter is by Sam Ro, the author of TKer.co. Follow him on Twitter at @SamRo.
When uncertainty in the world spikes, it’s easy to let fear take over and allow doubt to poison your investment decisions.
This year, high inflation and geopolitical tensions have been among the fear factors that have sent stock prices lower.
But the stock market has an impressive track record of overcoming almost insurmountable odds.
Barry Ritholtz, co-founder and CIO of Ritholtz Wealth Management, recently shared an insight he attributed to David Booth, co-founder of Dimensional Fund Advisors:
“25 years ago, your crystal ball reveals: Russian debt default, LTCM fail, DotCom implosion, 9/11 attacks, Financial Crisis+Great Recession, Pandemic killing millions, 3 market crashes. Would you put your money into stocks? No? You missed a 10X return.”
At Monday’s close of 4,110, the S&P 500 is down significantly from its January high of 4,818. But the index is still way above 481, which it last saw in 1995.
The quote reminded me of something Warren Buffett said in a New York Times op-ed during the depths of the Global Financial Crisis:
“Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”
Earlier this year, BlackRock’s Daniel Prince shared what’s effectively an illustrated version of these quotes in this annotated, long-term chart of the S&P 500.
”When times are tough, we want to limit our losses,” Prince wrote. “Even when things are going well, we wish we had invested more. We all fear missing out.”
“But when you’re investing, giving in to fear is often a losing strategy,” he added. “More often than not, investors with this mindset tend to buy high and sell low as they invest more in a rising market and pull money out in a falling market.”
Investing means understanding that there will be unexpected bumps along the way to achieving longer-term financial goals. And those bumps can be substantial. But it’s part of the deal. In fact, this risk is exactly why returns in the stock market can be relatively high.
It’s almost impossible to ignore the barrage of headlines that’ll have you second guessing your investment decisions. So, if you do find yourself getting preoccupied with short-term worries, make sure to also remember the stock market’s long-term history of triumphs.
7:00 a.m. ET: NFIB Small Business Optimism, August (90.1 expected, 89.9 during prior month)
8:30 a.m. ET: Consumer Price Index, month-over-month, August (-0.1% expected, 1.3% during prior month)
8:30 a.m. ET: CPI excluding food and energy, month-over-month, August (0.3% expected, 0.3% during prior month)
8:30 a.m. ET: CPI, year-over-year, August (8.1% expected, 8.5% during prior month)
8:30 a.m. ET: CPI excluding food and energy, year-over-year, August (6.1% expected, 5.9% during prior month)
Core & Main (CNM)
Inflation: Consumer prices likely moderated for a second-straight month in August
Twitter whistleblower; Nikola founder; and ex-Uber exec trial: legal stories to watch
Energy stocks ‘look extremely attractive,’ says portfolio manager
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Here are the markets that will be open on Columbus Day, also recognized as Indigenous Peoples' Day, on Monday, Oct. 10.
The year 2022 has been a painful journey for semiconductor manufacturers. Following the example of AMD , Nvidia and Intel , which are the three main players in the sector, 2022 is a year to forget .Their valuations are in recession. Advanced Micro Devices (AMD) currently has a market value of $94.4 billion, which is a decrease of at least $83 billion compared to December 31, 2021.
Everyone knows that you should buy low and sell high if you want to turn a profit in the markets. The trick is finding the bottom, to know when to buy. Jim Cramer, the well-known host of CNBC’s ‘Mad Money’ program, sees the market bottom hitting in the next couple of weeks, making the end of October the right time for investors to buy in. Referring to some recent predictions by market technician Larry Williams, Cramer says, “The bear market is more or less… toast and, even if the current rally s
Tesla stock is forming a bearish head-and-shoulders pattern. And with CEO Elon Musk likely selling more stock to fund his Twitter purchase, shares of the electric-vehicle giant might have further to fall.
PayPal is in trouble. "You are independently responsible for complying with all applicable laws in all of your actions related to your use of PayPal's services, regardless of the purpose of the use," the document, called "Acceptable Use of Policy," said.
A market rally attempt is reeling as the indexes plunged on Friday's jobs report. Tesla, AMD and On Semi sold off.
For the retail investor, the only certainty of our current market environment is uncertainty. Volatility is up, and the main indexes are showing deepening losses. As if that wasn't enough, at least one market bull is turning a bit more pessimistic. JPMorgan strategist Marko Kolanovic has been one of the more bullish voices on Wall Street in recent months, but current conditions have him pushing the timeline back. While he still believes that the S&P 500 can hit 4,800, or a 32% gain from current
The veteran telecom company is having a stellar year in many respects, but reason for concern has emerged.
If you buy one between now and the end of October, you’ll earn a composite interest rate of 9.62%.
In Musk v. Twitter, a part of the business life of the richest man in the world is revealed. Private messages exchanged with his inner circle immerse us into his process when he conceives an idea. The messages were released by the Delaware Chancery Court as part of the proceedings between the two parties.
The right answer likely hinges on whether or not the Federal Reserve follows through with plans to raise its benchmark interest rate to 4.5% or higher, as market-based indicators and the Fed’s latest batch of projections anticipate. Global markets are on edge about the possibility of an emerging-markets crisis resulting from higher interest rates and a U.S. dollar at a 20 year high, or a slump in the housing market due to rising mortgage rates, or the collapse of a financial institution due to the worst bond market chaos in a generation. Fears that the Fed could cause something in the global economy or financial system to “break” have inspired some to question whether the Fed can successfully whip inflation by hiking interest rates by the most aggressive pace in decades without causing collateral damage.
Most S&P 500 investors consider Tesla stock to be the ultimate investment. But it turns out you could do better — much better.
Even if the economy falls into a deep recession, these cash-generating companies are going to be fine.
You would think this would be TIPS’ time to shine. Instead, the prices of Treasury inflation-protected securities—government bonds that are adjusted to keep up with inflation—have declined this year, even as inflation has soared. The comparable loss for ICE’s index of regular Treasury bonds was 13.5%.
Back in July, electric vehicle maker Polestar made a bold promise. The Gothenburg, Sweden-based company reported that it delivered 21,200 cars during the first six months of 2022, more than double the year-earlier figure.
Gary Black, a Tesla bull who has been critical of the Twitter deal since the very beginning, warned of selling pressure ahead.
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These surefire stocks are ripe for the picking following a 34% peak decline in the Nasdaq Composite.
Formerly one of the top pandemic-era stocks, Shopify (NYSE: SHOP) has fallen from its pedestal. As a result, I think Shopify has plenty of potential for investors, although it may be years before it can reclaim its all-time high. Shopify's drop was caused by its evaporating growth and profitability.
Investing in stocks comes with the risk that the share price will fall. Anyone who held Intel Corporation ( NASDAQ:INTC…