I'm so out of touch. I've been running a business for 45 years and it's actually been profitable. What an idiot.
If I had any brains at all, I would have come up with an idea, raised billions of dollars from investors, and then proceeded to lose money every year, thereby increasing the value tenfold.
More than 40% of the companies in the S&P 500 lost money in the past year. And these are just the public companies with shares sold on the stock exchange. Imagine how many private tech companies, most funded by venture capital firms, are losing money.
It's mind-boggling how they operate. My daughter-in-law worked for one of those private startup tech companies. They found their niche in the CAP Table Management software market, which basically means they'll value your business and tell you who owns what percentage.
Apparently, that's more complicated than it seems. The founders raised $1.2 billion in 2012 and it's now valued at $8.5 billion. They have over 1500 employees and have never been profitable, losing millions and millions every year for 13 years.
They certainly don't seem to care. Like most tech companies, their employee benefits are off the charts. When my daughter-in-law had her first child not long ago, she was given a six-month paid maternity leave. That's par for the course when it comes to the tech industry, but what really blew me away was when she returned to work.
"YOU GOT A 30% RAISE??!!" I remember squealing when she told me it took her by surprise. "YOU WEREN'T EVEN THERE!!"
"Yep, I was shocked," she replied. "Very nice of them."
Six months later, 15% of the employees got laid off in a cost-cutting move. Nothing made sense.
But that's the way it goes in this new startup world. These aren't the businesses I grew up watching, nor are they the businesses I run now. We take excellent care of our employees, but we also like to remain profitable. There's a balance in there somewhere.
The list of deadbeat companies is endless. Uber lost $7.2 billion in 2022, Lyft lost $1.6 billion, Peloton $1.2 billion, WeWork $1.7 billion, Rivian Automotive (Tesla imitator) $6.2 billion. But work at any of those companies and you'll probably get a raise during your maternity or paternity leave.
Enjoy it, because you're likely to get laid off at some point. No company can endure these losses forever. Between January and May of this year, over 200,000 employees in the tech sector were laid off. Perhaps companies are realizing that the objective is to be profitable.
They certainly understand that concept at Google and Facebook. Google laid off 12,000 employees in the last 12 months and Facebook laid off 21,000. Maybe that's why Google had net income of $60 billion in that period and Facebook had net income of $23 billion.
Then there's DoorDash. The food delivery service based in San Francisco lost $468 million in 2021 and a whopping $1.3 billion in 2022. It doesn't take a genius to see it's going in the wrong direction. Someone must have noticed, because DoorDash laid off 1250 employees in November of 2022 in an effort to rein in costs.
The only problem is that the severance package included paying the employees for 13 weeks after parting ways, along with a lump sum of one month's salary. I don't want to sound insensitive, but NO WONDER THEY'RE LOSING MONEY!
To make matters worse, I was absent-mindedly scanning the job postings in Sunday's San Francisco Chronicle last weekend and up pops DoorDash. The ad said they were looking for "Engineers, including but not limited to: Software, DevOps, Backend, Data. Positions include: Junior, Senior & Management Positions. Telecommuting permitted."
I wouldn't be too thrilled if I was one of the 1250 that were laid off. And it wouldn't help to see that the positions advertised would pay between $176,000 to $238,000. What is going on here?
It's all so foreign to me. Investors keep pumping in the money, unconcerned that the losses keep piling up. They keep seeing that light at the end of the tunnel, maybe years or decades ahead. They note that Apple, Google and Facebook all lost money in their early years. But Apple became profitable in two years, Google three years, and Facebook five years. DoorDash has been around for over 10 years.
In other words, if these companies keep running their business with no concern for costs, that light at the end of the tunnel, as they say, might very well be an oncoming freight train.

100 shares more of BHB just bought.

Any particular reason? Are you averaging down? Sorry, I don’t follow this particular stock.
Personally, I’m down to just 2 stocks - both small speculative mid-cap plays. Prefer managed funds for the most part. Less risk.

I’ve been consolidating all year. More committed today to a static hands-off approach and less to f*** around with stuff. Down from 18-20 holdings a year ago to 14 today - counting the core money market. I think it was the big sell-off in 2022 that prompted me to pick up a lot of different things that were temporarily depressed and do some gambling on individual stocks. Gets crazy. (And, I’d prefer not to re-live that year.)

As a retired and conservative investor, and as long as the Fed keeps raising interest rates, I am staying in risk-free MM's and CD's. In the future, I might be looking at bond OEF's like CBLDX, RCTIX and TSIIX, for example.
But, in the meantime, I see no urgency to invest in bond funds, and since I don't need a lot more money, I prefer to err on the side of caution.
Fred

Hey Fred, how far out are you going with your CD selections?

Bank of America, the nation's second largest bank, has been ordered to pay more than $100 million to customers for double charging insufficient fund fees, withholding reward bonuses and opening accounts without customers' knowledge or permission. The bank is also on the hook for an additional $150 million in penalties for the same violations.
The Consumer Financial Protection Bureau announced Tuesday that an investigation found that Bank of America harmed hundreds of thousands of customers across multiple product lines over a period of several years through a series of illegal practices. As a result, Bank of America was ordered to pay over $100 million to customers and another $90 million in penalties. A separate $60 million fine has been ordered by the Office of the Comptroller of the Currency for violating laws around overdraft fees.
CFPB Director Rohit Chopra said in a news release that Bank of America's double-dipping on fees, opening accounts without customer consent and withholding rewards "are illegal and undermine customer trust," practices he said the CFPB will put an end to across the banking system.
Bank of America's "double-dipping scheme"
According to the CFPB, Bank of America utilized a "double-dipping scheme" to "harvest junk fees" from customers. It did so by charging people $35 whenever they didn't have enough funds available, but repeatedly charged customers for the same transaction, which the CFPB said generated "substantial additional revenue".
Chopra told NPR Business Correspondent David Gura, "Building a business model by double dipping on fees is simply not legal, and that's why we've sanctioned Bank of America and ordered them to pay back the customers they cheated."
The OCC said it found that the bank charged "tens of millions of dollars" in fees in resubmitted transactions, in violation of Section 5 of the Federal Trade Commission Act, which prevents financial institutions from using unfair or deceptive acts and practices.
"Overdraft programs should help, not harm, consumers," Acting Comptroller of the Currency Michael J. Hsu said in a news release. "Today's action demonstrates the OCC's commitment to protecting consumers and promoting fairness and trust in banking. We expect banks to conduct their activities in compliance with all applicable laws and standards, and when they don't, we will act accordingly."
Bank of America Senior Vice President of Media Relations Naomi R. Patton told NPR that the bank voluntarily reduced overdraft fees and eliminated "all non-sufficient fund fees" in the first half of 2022. She said the changes have resulted in a drop in revenue from these fees of over 90%. The bank also dropped the overdraft fee from $35 to $10 in May 2022.
Withholding credit card cash and point rewards
The CFPB said Bank of America targeted potential-customers by offering special cash and point rewards if they signed up for a credit card, a common signing bonus used by competing credit card companies. However, according to the CFPB, Bank of America illegally withheld those bonuses from tens of thousands of customers.
Chopra said Bank of America has been ordered to follow through on those promises.
"We know in the U.S. many people are really closely scrutinizing which credit card they sign up for based on rewards, whether it's cash, bonuses at enrollment, or airline points, or other proprietary point systems," Chopra said. "The fact that Bank of America advertised these signup bonuses and then did a bait and switch completely undermines the the fair market and consumer choice."
Bank of America employees opened accounts without consumers' knowledge
As far back as at least 2012, Bank of America employees illegally applied for and enrolled consumers for credit cards without their knowledge or permission to reach sales-based incentive goals and evaluation criteria, according to the CFPB. Employees illegally signed up customers by using or obtaining consumers' credit reports and completed applications without their permission, which resulted in unjust fees and negative impacts to customers' credit scores.
"That's essentially taking over someone's identity and exploiting it financially, and it's totally improper," Chopra told NPR. "It's totally inexcusable. So, whether it is happening to just a handful to thousands or to millions, we find this extremely serious."
Bank of America is a repeat offender
This isn't the first time the bank has been penalized for conducting illegal practices. Bank of America shelled out $727 million to the CFPB in 2014 for illegally deceiving roughly 1.4 million customers through deceptive marketing products. The bank was also ordered to pay a $20 million civil money penalty for charging 1.9 million consumers for a credit monitoring and credit reporting services they never received, according to the CFPB.
The bank was also slapped with two other penalties in 2022 totaling $235 million: a $10 million civil penalty for unlawfully processing out-of-state garnishments--removing customer funds for debts--against customer bank accounts; a $225 million fine for automatically and unlawfully freezing customer accounts with a fraud detection program during the COVID-19 pandemic.
"Bank of America is a repeat offender. Being a household name that has been punished before didn't stop it from allegedly cheating customers out of tens of millions of dollars in fees and credit card rewards and opening up accounts without their authorization," U.S. Public Interest Research Groups Consumer Campaign Director Mike Litt said in a statement Tuesday. "The Consumer Financial Protection Bureau's strong enforcement action shows why it makes a difference to have a federal agency monitoring the financial marketplace day in and day out."

Between 1995 and 2000, the peak of the dot-com bubble, the Nasdaq Composite stock market index rose 400%

[snip]
”The automated essays "analyzing" those funds where the "Q" is used is utterly comical.”
Yes - They sound computer written. There’s an uncomfortable “sameness” to the composition. They seem to rely a lot on total years of experience of a fund’s management team. And, their overall assessment of the firm seems to weigh heavily in their individual fund appraisal.

Morningstar launched their Quantitative Rating for funds in 2017
and later (2021?) added complementary written reports.
Their objective was to greatly

expand the number of funds under coverage.
Machine learning is utilized to mimic how a M* analyst would rate a fund.
I haven't investigated the efficacy of the Quantitative Rating.
However, the corresponding written reports are often nonsensical.
Consequently, I pay scant attention to the "Q" rating.
The quality of the original M* Analyst Ratings varies
and largely depends on which analyst scrutinized the fund.
Link

WABAC: "Looking forward to getting money out of short-term CD's. I tried it. Didn't like it. Will stick to money markets and floating rate T-Bills."
Stillers: "Um, yeah, that's the "given."
• Um, yeah, what's "the given?"

Stillers: Only invest money in CDs that you fully plan to hold there until maturity."
• This, your response to WABAC, obviously suggests that his comment somehow involves holding to maturity.

Your response to WABAC focuses on holding to maturity. Nowhere does he mention that.
Q.E.D.

Royce discusses why his Royce Pennsylvania Mutual Fund has outperformed its benchmark for over half a century and why he believes small-caps are laying the foundation for an extended cycle of above-average returns.

[snip]
”The automated essays "analyzing" those funds where the "Q" is used is utterly comical.”
Yes - They sound computer written. There’s an uncomfortable “sameness” to the composition. They seem to rely a lot on total years of experience of a fund’s management team. And, their overall assessment of the firm seems to weigh heavily in their individual fund appraisal.

Few star managers can make the transition to a team much less assume it will be your kid.
Michael Price is another example of a one man show that became problematic after he left.
Another example is Albert Nicholas who ran the Nicholas Fund.
According to Bloomberg Markets in 2015, "The Nicholas Fund, which he has run since 1969, has topped the Standard & Poor's 500 Index by an average of 2 percentage points a year for the past 40 years and [beat] it every year since 2008 [through 2014]."
His son David was in and out of the family company and finally back in, but a quick look shows that he hasn't done nearly as well as Pops.

Growth rate of 10% or better
Consistent earnings
Return on equity (ROE) of 15% or an improving ROE
Debt to total capitalization of less than 50%
A price to earnings ratio lower than two times the growth rate
An enduring franchise or brand
Honest, capable management
Significant management ownership of stock
Long-term and short-term business momentum