Jobless Claims Increase -- July 23, 2020

Updates

July 27, 2020: there was a bit of a correction in the market last week, but today, all major indices are green, albeit not by much. However, in general, "everyone" is doing well; tech companies are doing particularly well. There's one exception. On a day that AAPL gains $8/share, BRK-B is down over 1.3%; down almost $3/share. Considering that AAPL represents about 40% of his entire equity stake, to be down almost $3/share when AAPL is up over $8/share suggests how badly the rest of  his portfolio must be doing. It has to be fairly concerning to anyone paying attention.

Later, 3:35 p.m. CDT: wow, wow, wow, just hours after posting my note(s) below regarding Warren Buffett and investing, Investor's Business Daily posts this: Warren Buffett's latest stock buy adds to bet on Main Street economic recovery. I hate to say this but it appears Warren Buffett has committed a cardinal sin with regard to investing: it appears he has fallen in love with his holdings; in this case, Bank of America. Not only is BAC one of his biggest holdings, this purchase is one of Buffett's major sectors: banking. From the article, with comments:

• apparently Warren Buffett likes dividends; BAC pays 3%
• paid an average price of $24/share for BAC
• bought 34 million shares this past week ($800 million -- or rounding, close to a billion dollars)
• the trade comes one week after top banks set aside billions more to cover Main Street lending exposure (bearish sign) and a prolonged economic slump (bearish sign)
• BAC was already a huge holding (see below)
• largest holding terms of number of shares
• 2nd largest holding by dollar value after APPL
• BRK now holds 982 million shares or about 11% of the company
• BAC is among the worst-performing stocks in BRK so far this year
• one year target: $28 (17% appreciation, in one year)
• other bank holdings:
• Wells Fargo: BRK's second biggest bank holding, 323 million shares owned
• JPMorgan Chase
• US Bancorp
• Bank of New York Mellon

Later, 3:35 p.m. CDT: is this one of the weirdest investing metrics. I've seen this metric used before and it makes absolutely no sense to me. From Investor's Business Daily:

Bank of America was already the No. 1 stock in Berkshire's stock investment portfolio by number of shares at the end of March, and second largest by dollar value after Apple (AAPL). This week's purchases boosted Berkshire's stake in the banking titan to nearly 982 million shares, or about 11% of the company.

[The only way I see this as relevant, the number of shares one holds, is comparing snapshot-to-snapshot, how many shares in one company an investor holds, but with splits and reverse splits, even then, using this metric makes little sense. I must be missing something.]

Jobless claims:

• forecast: 1.3 million
• actual: 1.416 million

Futures:

• Dow: trending down after the jobless number released; was up 64 points before the jobless claims announcement, but is now down to 25 points in the green. Very likely that the Dow will open in the red based on the trend right now. Two minutes later: yup, the Dow just went red. 

Investing: I've been actively investing since 1984 and consider myself an extremely conservative investor, and not particularly knowledgeable. But there are two tectonic changes:

• huge, huge shift from "legacy" holdings to "millennial" holdings;
• the sky is the limit; huge amounts of money out there; maybe more on this later; record $15.6 trillion in US savings accounts:

Back to Tesla: a lot of folks are concerned that Tesla's profits are from "regulatory credit sales" and not from auto sales. So, who cares? Who cares where their profits are coming from? One thing I have learned: "buy and hold" works until it doesn't, to coin a phrase. In January of this year (2020) TSLA shares were selling for $500/share; now $1,666/share. [Later: why I might be wrong regarding Tesla.]

I was a huge believer in "buy and hold," but my "buy and hold" time frame has gone from Buffett's time frame of one hundred years (think Coca-Cola, Wells Fargo) to a more sensible five years with "quickness" to sell when better opportunities pop up.

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, travel, career, or relationship decisions based on what you read here or think you may have read here.

Buffett: the investing world has passed him by. That will change overnight when he hands the reins over to two younger folks. They are chomping at the bit to take over.

Buy and hold, investing:

• Buffett: one hundred years
• mainstream: five years
• millennials: five months

Prime movers:

• commission-free trades
• brokers required to calculate taxable gains/losses for the IRS
• mobile trading on the iPhone

These three prime movers make it so incredibly easy for millennials to be involved in the stock market. 

Schwab: I assume all on-line trading is as easy as Schwab, but having said that, Schwab is incredible on so many levels.

Taxing unrealized gains: gaining momentum in the US House. Interestingly enough, I think there are some positive things to say about that. I am as anti-tax as anyone -- more than most, I assume -- but if there are going to be taxes, it's interesting to look at some alternatives.

New iPhone SE: incredibly tempting. Have to look at the camera compared to the iPhone 11 Pro and/or newer models in the pipeline.

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The Book Page

I'll probably move on to something else this week or next week but the past few weeks reading and re-reading about classical Greece has been very, very rewarding.

Without question, I have really, really enjoyed Brittany Hughes Helen of Troy. This review(er) over at Amazon.com pretty much sums it up:

I loved this book. It is so well written, scholarly, entertaining, insightful and erudite. I have spent most of my life as a student and have earned two PhDs. Yet I still found myself frequently reaching for my dictionary due to her careful choice of obscure English words, a truly impressive vocabulary. I found this fun and challenging. I was entertained and challenged on almost every page.

This is a book to be studied more than just read. It has comprehensive endnotes and citations. I've chased several of her citations down and found them all correct and cogent.

As a student of ancient Greek I wish she had used the polytonic Greek for her many referenced Greek words rather than English transliterations. But then I'm glad she did not shift to the Linear B script for her many citations on early Bronze Age inscriptions.

I have enjoyed her many documentary programs and hoped that the same joy of discovery would translate to her written works. I was not disappointed!

This is a great book.

The two things this reviewer did not mention:

• the family trees / genealogy diagrams in the book were excellent;
• maps were excellent, and this is a great book for learning the geography of Greece and the eastern Mediterranean. 

In addition, I learned a bit about pharmacology, beauty, precious stones.

Perhaps my favorite new word from the book: décolletée. And I love the pronunciation of that word. Based on Bettany's description of Helen, it may not have been her face that launched a thousand ships. LOL. 

Yes, unfortunately, it may be a bit too racy to recommend to Arianna who loves Greece and mythology. 

If you are all interested in classical Greece and have not read this book, run to your nearest Half-Price Bookstore and/or order it from Amazon, if you can find an inexpensive copy.