Tag Archive: Fidelity Investments


Pass the Maalox!

The Dow lost 651 points on Xmas Eve.

The Dow gained a record 1,066 points the day after Christmas.

The Dow lost 611 points Thursday morning only to finish up 260 points in the very same afternoon.

What’s the lesson for retail investors competing in an unfair market?

Don’t go all wobbly over the Dow Jones.

More to the point: Never panic.

And let’s not forget: Don’t morph into Gloomy Gus or Negative Nancy when the market gyrates downward.

Just as important, never become a Pollyanna when the markets surge. Stay grounded.

Since October 3, the ever-downward market psychology has resulted in traders selling the rallies as opposed to buying the dips.

Buy Low, Sell High has been redefined … at least for now.

Algos Giveth; Algos Taketh Away

Almost DailyBrett clearly recognizes the Wall Street playing field is not level; it tilts downward to the “institutions,” the Buy-Side and the Sell-Side traders.

Similar to Oakland Athletics general manager Billy Beane (played by Brad Pitt) in “Money Ball,” the Charles Schwab retail investor (e.g., me) is competing in an unfair game.

Isn’t the easy solution to simple not invest in Wall Street, stick your money in a bank with pathetic interest rates or maybe even under the mattress?

Having said all of the above, the markets remain the choice investment vehicle for the 54 percent of Americans who constitute the Investor Class. These optimists about America’s future devote discretionary revenues in stocks and stock based mutual funds to pay for retirement, health care, children’s education or that dream vacation.

There is a ton of advice out there about taming the markets – some counsel is sound, other “advice” is dubious.

What is the humble advice from Almost DailyBrett, who has invested in markets for 25 years and who taught Corporate Communications and Investor Relations at two major universities?

There are Bulls. There are Bears. And Pigs Get Slaughtered

 “Know what you own, and know why you own it.” – Investor Peter Lynch

  • Your author believes in building your own mutual fund, instead of always paying a fee for someone else (e.g., Fidelity) to manage your money. And when you do structure your very own mutual fund make sure you know why you own each stock (thank you Peter), and make sure you diversify these holdings (everything can’t be tech).

For example, Almost DailyBrett presently owns Apple, McDonald’s, Nike and Salesforce; just sold Boeing. Two are differing tech stocks, one feeds 1 percent of the world each day, and the swoosh just does it as the leader in athletic apparel.

  • Passive investing is a loser. Building wealth is work. Far too many just purchase mutual funds at work through pensions and 401Ks or IRAs at home and literally forget about them. Really? This is your money. What is being done with your money? What are your returns? Forget passive. Be active.
  • Use or consume the product/service of the companies you own (i.e., Apple iPhones, McDonald’s Big Macs, Nike running shoes …). Understand very clearly how a company makes money. If you can’t comprehend why shares are increasing (e.g., Bitcoin), don’t invest. There is a world of difference between investing and gambling.
  • The harder mental gymnastics is not when to buy, but when to sell. Think of it this way: On Wall Street, there are bulls, there are bears … and pigs get slaughtered. Set upside-and-downside sell targets for your stocks. When they reach these points, ring the register. Sure wish your author always followed his own advice.
  • Accept the algorithms. The big institutions (not you) have pre-programmed servers with instruction algorithms that automatically to the nanosecond buy or sell large blocks of stocks whenever certain market price points are triggered. The game is not fair. Accept it.
  • For the longest time the bulls have been running (e.g., November 2016 – October 2018), and corresponding market psychology has been optimistic (bad news discounted). Since the start of the bear market on October 3, the psychology has dramatically shifted to the negative (good news is irrelevant). If you invest, you will experience both moods.
  • Most of all: Don’t panic. Stay active. Remain calm. Sometimes strategic retreat is necessary. Sell underperformers and convert to liquid. Cash is always king. There will be a bottom. There will be a day to buy low with the hopes of selling high.
  • Know your level of risk. If you can’t accept gaining $10,000 one day, and giving $9,000 back in the next day (a $1,000 gain for those scoring at home), you shouldn’t be investing in markets. Pathetic bank interest rates or under the mattress is right for you.

Yes there will be a day when it is time to buy the dip, while those who try to sell the rally end up losing their … fill in the blank.

“When are we going to realize in this country that our wealth is work?” – Comedy Central Jon Stewart assertion to CNBC’s Jim Cramer

Heard one of the talking heads of the chattering class last week on CNBC extol the virtues of “passive investing” in the face of massive volatility and the long-awaited arrival of a Wall Street correction.

Isn’t “passive investing” an oxymoron or a contradiction in terms, if not just plain dumb?

The basic premise is the 54 percent of Americans investing in stocks and stock-based mutual funds should put all of their investments on auto pilot, automatically “investing” a fixed percentage of their pay checks into company 401Ks or brokerage managed IRAs (Individual Retirement Accounts).

On more than one occasion, Almost DailyBrett has been critiqued for surfing Charles Schwab, Fidelity, Zillow and Wells Fargo each on a daily basis.

Is your author an unreformed capitalist? Please allow me to plead, guilty.

What’s curious is no one seems to raise an eyebrow to those constantly burying their noses into their smart phones, spending an inordinate amount of time on Facebook or Snapchat or bingeing on video games or streaming video.

As Jon Stewart correctly surmised in his 2009 televised pants-zing of Jim Cramer, far too many times retail investors have been sold this notion that markets inevitably go up, so don’t mind volatility and fluctuations. Forget about it!

And if that is indeed the case, panicking only leads to losses. No argument.

The question that Almost DailyBrett is raising and arguing is very simple: Do we want to manage your wealth accumulation or be managed by others who may not have our best interest at heart?

The Day, The Music Died

“I went down to the sacred store; Where I’d heard the music years before; But the man there said the music wouldn’t play.” – Don McLean, American Pie

Your author contends that portfolio management is not the same as day trading. At the same time, the notion of long-term investing makes absolutely no sense. Back in the 1990s, one would have been advised to invest in IBM, Cisco, Intel and Microsoft and walk away.

With the exception of Microsoft, the music stopped playing for these “DinoTech” stocks.

Worse, the 1990s investor would have missed the massive upsides of newly minted 21st Century rock stars, the likes of Facebook, Amazon, Netflix and Google (FANG).

Since the days of the three Gees – Andy Grove, Bill Gates and Lou Gerstner (all retired or in one case, deceased), a new trove of corporate rock stars has ensued – Mark Zuckerberg (Facebook), Tim Cook (Apple), Jeff Bezos (Amazon) and Elon Musk (Tesla).

Don’t you know, these shooting stars will eventually flame out? And as Don McLean wrote and sang, their music will eventually die.

Who will be the rock stars of the next decade? Should we keep some money on the sidelines, ready to buy low and sell high. If we become “passive investors,” we will blindly throw our hard-earned, discretionary dollars at Wall Street regardless of bull market or bear market.

Shouldn’t we be selling near or at the height of the market and buying near or at the low of the market? Or should we just designate portions or our IRAs or 401Ks to this mutual fund manager or that mutual fund manager because they are the “experts”?

Where Do You Shop? What Products/Services Do You Buy?

“I don’t care about a stock’s past, only its future.” – Jim Cramer of CNBC’s “Mad Money”

Almost DailyBrett has his fair share of mutual funds – domestic/foreign; large cap/mid-cap/small cap – and cash under management. Your author also manages four individual stocks, carefully avoiding the perils associated with all eggs coming from one chicken.

Apple: Let’s see, in the morning your author reaches for his Apple Smart Phone, runs to classic rock sounds on his antiquated iPod, and turns on his Mac at work. You bet ya, Apple is part of the portfolio.

Boeing: Considering that Donald Trump is president and more federal dollars are headed for defense and the economy is strong, regardless of market gyrations, Boeing has been a solid buy. The company sold 700 commercial airliners this year and plans to deliver 800 next year. Has your author been transported by Boeing Aircraft? Is the Pope, Catholic?

Nike: Uncle Phil is the founder of athletic apparel market leader and the über-benefactor of University of Oregon Athletics. Nike shoes/gear are worn for morning runs to complement the Nike+ software program on the Apple iPod.

Salesforce.com. Marc Benioff hails from my undergraduate alma mater, the University of Southern California (May The Horse Be With You). Mark is the founder, chairman and CEO of business software innovator, Salesforce.com. Let’s face it, many may claim a cloud legacy, but Salesforce.com was first to SaaS or Software as a Service.

Apple, Boeing, Nike and Salesforce are the four present individual securities in the portfolio of Almost DailyBrett. Are they examined and managed on a daily basis? You bet ya. Will they be there forever? Forget it.

Should an investor, who rejects passivity, consider these individual stocks?

Only your investment advisor knows for sure.

https://www.nytimes.com/2015/08/08/opinion/joe-nocera-on-the-cramer-takedown.html

http://www.cc.com/video-clips/iinzrx/the-daily-show-with-jon-stewart-jim-cramer-pt–2

https://don-mclean.com/

 

 

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