OT: Stock and Investment Talk

[RUDead]

Knock On Wood: Blackstone, Balyasny And About Ten Other Managers Bought ARKK Puts In Q1​

If you had a sneaking suspicion that Wall Street was starting to bet against the "untouchable" Cathie Wood, as we did over the last couple months, you were right.

Today it was revealed that "about two dozen investment advisers" that included Balyasny Asset Management and a unit of Blackstone bought put options on ARK's Innovation ETF during the first quarter. Blackstone bought puts on 1.3 million ARKK shares and Balyasny acquired puts on 436,500 shares.

The managers saw Wood's fund as a "alternative to buffer against a slump in stocks that surged during the pandemic," that buying puts on an index, the report said. In other words, the asset managers were so confident in Wood's ability to handpick stocks that would lose value during a pull back, they took the inverse of her "expertise" instead of just getting short a tech or small cap index (or both).

And so far, that strategy likely provided outsized returns as a hedge: ARKK is down about 30% from its highs, while the QQQ ETF is down just about 0.7% from its February peak.

Zerohedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

 

[RU-05]

A house divided against itself cannot stand.

If you think the midwest won't go EV, while there also being a clear and growing market for EV's then why can't F do both in the short and medium term?

I actually think F hedging that bet and only going 40% EV by 2030 was a better call then GM saying they will be full EV by 2035. Why box your self in like that? Keep your options open.

 

[rurahrah000]

I rarely utilize options but have had some shares called away when the price jumped more than I expected. Remember, the premium you get paid to sell an option to someone else is based on the strike price and the length of time that the option is effective. I sold them at price well above the current stock price, good for 6 months, and rec'd the premium. But, shares outperformed my expectations, and I gave away the upside. As always, no free lunch.

Good point. Writing covered call options can be used as a form of dividend but the risk is losing your stock

 

[T2Kplus20]

If you think the midwest won't go EV, while there also being a clear and growing market for EV's then why can't F do both in the short and medium term?

I actually think F hedging that bet and only going 40% EV by 2030 was a better call then GM saying they will be full EV by 2035. Why box your self in like that? Keep your options open.

I'm just saying that it will be very difficult for a company to do both well. EV and ICE are vastly different productions and challenges to deal with. Trying to do both will hurt financially.

 

[RU-05]

Knock On Wood: Blackstone, Balyasny And About Ten Other Managers Bought ARKK Puts In Q1​

The managers saw Wood's fund as a "alternative to buffer against a slump in stocks that surged during the pandemic," that buying puts on an index, the report said. In other words, the asset managers were so confident in Wood's ability to handpick stocks that would lose value during a pull back, they took the inverse of her "expertise" instead of just getting short a tech or small cap index (or both).

Zerohedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

That's a poor take imo. What they did was put a bet against the type of stocks Wood picks, IE hyper growth tech, not against her expertise.

Perhaps Wood should change philosophies given the type of stocks she picked needed a serious correction, but right or wrong she is sticking to her guns.

 

[RU-05]

I'm just saying that it will be very difficult for a company to do both well. EV and ICE are vastly different productions and challenges to deal with. Trying to do both will hurt financially.

meh, the auto industry has long built different models in different factories. So that will continue, just certain factories will be EV while others will be ICE. And cars have become more and more electronic over the years, this is a more drastic change for sure, but they are pretty competent in terms of car electronics.

Ford is also benefitting from what looks like finally hiring a competent CEO in Farley.

 

[RU-05]

Good point. Writing covered call options can be used as a form of dividend but the risk is losing your stock

I asked above, but uncovered would be if you don't own the stock, and if the option is picked up, you would have to buy at market in order to cover?

And uncovered is the same as naked?

 

[RU-05]

I did go to youtube and there were some 3 hr long options tutorials which I wasn't ready to invest time in.

I instead watched a 20 minute version, and didn't come away with much, so still not partaking.

 

[phs73rc77gsm83]

As I said earlier Schwab wouldn't let me. But again tell me if I'm wrong. Sell the option and get $700. As unlikely as it seems, between now and June 11 GME goes from 240 to 360. The option at 350 gets called. I have to essentially buy 100 shares at 360 to meet the call. I receive 350 in proceeds, $1000 less than I paid for the stock . I received $700 when I sold the option, so I'm down net $300. And if it had gone to to 370 I'd have been down $1,300.

Am I right?

Yes, but don’t forget you may not be able to buy the shares in the market at 360 (think of RUrara’s example of it going to 1000. Is that likely, probably not; but is it worth the risk, not for me.

 

[phs73rc77gsm83]

I rarely utilize options but have had some shares called away when the price jumped more than I expected. Remember, the premium you get paid to sell an option to someone else is based on the strike price and the length of time that the option is effective. I sold them at price well above the current stock price, good for 6 months, and rec'd the premium. But, shares outperformed my expectations, and I gave away the upside. As always, no free lunch.

Absolutely. I’ve been DIY for decades but back in the late ‘80s or early ‘90s I had very small positions in Microsoft and Amgen. My broker at the time was trying to convince me to sell covered calls with the thinking that I could make a few bucks and I could just sell my shares to cover if need be. I didn’t, thankfully, because I was very bullish on both and made significant profits over the decades. Could I have sold to cover then take a new position? Sure but if I like the company I don’t want to sell. I am a very infrequent trader, more buy and hold investor unless I see something fundamentally changes. That’s just me, though. To each his own.

 

[phs73rc77gsm83]

I asked above, but uncovered would be if you don't own the stock, and if the option is picked up, you would have to buy at market in order to cover?

And uncovered is the same as naked?

Correct, and yes.

 

[mdk01]

Yes, but don’t forget you may not be able to buy the shares in the market at 360 (think of RUrara’s example of it going to 1000. Is that likely, probably not; but is it worth the risk, not for me.

In 15 days? Remember, the exposure ends in 15 days. Probably not? I'd say the chances of 1000 would have been equal to my chances of winning the top prize in MegaMillions. This isn't RUJohnny99s example what I called a pig getting slaughtered.

 

[phs73rc77gsm83]

In 15 days? Remember, the exposure ends in 15 days. Probably not? I'd say the chances of 1000 would have been equal to my chances of winning the top prize in MegaMillions. This isn't RUJohnny99s example what I called a pig getting slaughtered.

I’m talking about the concept and structure of naked calls more than about any specific situation. There are many relatively new investors on this thread (and other investment forums for that matter) and my intent in posting was to help convey the risks if someone is unaware. There are many instances of what I would call inappropriate risk taking (at least for some individuals) such as not understanding options, margin requirements, etc. I’m not trying to talk anyone into doing or not doing anything.

 

[RUJohnny99]

In 15 days? Remember, the exposure ends in 15 days. Probably not? I'd say the chances of 1000 would have been equal to my chances of winning the top prize in MegaMillions. This isn't RUJohnny99s example what I called a pig getting slaughtered.

You keep bringing up the 15 days as if it makes you immune from loss. The risk of loss is greater than zero, and significantly greater than the risk of getting all numbers in the Megamillions jackpot.

naked options work verrrry well. Until they don't.

 

[RUDead]

That's a poor take imo. What they did was put a bet against the type of stocks Wood picks, IE hyper growth tech, not against her expertise.

Perhaps Wood should change philosophies given the type of stocks she picked needed a serious correction, but right or wrong she is sticking to her guns.

They could have just as easily shorted the stocks, so I think they probably just thought the fund would go down more than the stocks themselves because of they way it had been trading.

Zerohedge has some great info, but their analysis can sometimes be lacking or too dramatic imo.

 

[T2Kplus20]

CRM crushes it, as expected:

Salesforce growth accelerates as company offers strong guidance for coming fiscal year

Salesforce's revenue growth accelerated as the enterprise software company lapped the quarter when the coronavirus began circulating in the U.S.

www.cnbc.com

 

[RU-05]

Correct, and yes.

And you would need to hold 100 shares for each contract for it to be covered? At least partially?

 

[RU-05]

Heavy call options on F, which may suggest WSB looking to push F higher?

I'm willing to ride that wave.

 

[WhichReligionIsRight]

Good point. Writing covered call options can be used as a form of dividend but the risk is losing your stock

This is why I own QYLD. Bonds are crap right now, so I treat QYLD as a bond replacement strategy.

 

[WhichReligionIsRight]

CRM crushes it, as expected:

Salesforce growth accelerates as company offers strong guidance for coming fiscal year

Salesforce's revenue growth accelerated as the enterprise software company lapped the quarter when the coronavirus began circulating in the U.S.

www.cnbc.com

History has shown there has never been a bad time to buy CRM. As long as your outlook is focused on the long term.

 

[phs73rc77gsm83]

And you would need to hold 100 shares for each contract for it to be covered? At least partially?

Yes a contract covers 100 shares.

 

[patk89]

And you would need to hold 100 shares for each contract for it to be covered? At least partially?

I was doing this to generate some yield, in addition to any dividend, while still owning the stock so never went naked, always covered. If the underlying stock went up slow and steady, I keep the upside, get paid a premium to sell the call option, and continued to receive the dividend. Problem was positive news, stock jumped above the strike price, and my shares were called away. The buyer of the call options loss was limited to the price he paid for it. And he gets the upside if things spike within the defined time period. I've hit on a couple of Apple call options over the years and the total return given the relatively small option premium paid was outstanding. But hitting requires a good bit of luck. You can be right that a stock is undervalued, but be wrong about the time frame and end up out of the money.

 

[jtung230]

Production should start late this year or early next. Factory still under construction + lots of other variables (new battery cells, supply chain issues, new manufacturing tech). So, we'll see about that timeline.

They just recently crossed over 1 million pre-orders. Apparently, there was a big surge of orders following the Ford Lightning reveal.

You already conceding that they can’t deliver in 2021? Just another over promise by Musk. GM can have 1mm orders for the hummer if they keep taking reservations. But unlike Tesla, they don’t over promise and just say the reservation is full.

 

[WhichReligionIsRight]

You already conceding that they can’t deliver in 2021? Just another over promise by Musk. GM can have 1mm orders for the hummer if they keep taking reservations. But unlike Tesla, they don’t over promise and just say the reservation is full.

Telsa has sold 200,000 powerwalls already and has a multiquarter backlog. They also have new car plants opening in Austin and Berlin this year. Tesla will be fine.

Tesla has installed over 200,000 Powerwall home batteries | Engadget

Despite issues with its Solar Roof, Tesla's Powerwall has apparently been a hot-selling item over the last year..

www.engadget.com

 

[jtung230]

Telsa has sold 200,000 powerwalls already and has a multiquarter backlog. They also have new car plants opening in Austin and Berlin this year. Tesla will be fine.

Tesla has installed over 200,000 Powerwall home batteries | Engadget

Despite issues with its Solar Roof, Tesla's Powerwall has apparently been a hot-selling item over the last year..

www.engadget.com

Tesla will be fine. Tesla stock will be a different story. Love to hear how much money they are making on these powerwalls.

 

[T2Kplus20]

Telsa has sold 200,000 powerwalls already and has a multiquarter backlog. They also have new car plants opening in Austin and Berlin this year. Tesla will be fine.

Tesla has installed over 200,000 Powerwall home batteries | Engadget

Despite issues with its Solar Roof, Tesla's Powerwall has apparently been a hot-selling item over the last year..

www.engadget.com

Agreed. He is either dumb regarding TSLA or pretending to be so.

 

[jtung230]

Agreed. He is either dumb regarding TSLA or pretending to be so.

I am dumb because I don’t understand why Tesla needs to rely on selling regulatory credits and BTC to be profitable.

 

[jtung230]

CW is predicting deflation. To the moon.

 

[RU-05]

CW is predicting deflation. To the moon.

Dude you've gone deep into boring territory.

 

[jtung230]

Dude you've gone deep into boring territory.

Cathie Wood sees deflation returning, boosting innovation stocks and bitcoin

Cathie Wood expects deflation amid a breakdown in commodity prices, gridlock on tax policy in Washington and innovation trends taking off.

www.cnbc.com

Can’t believe you think this is boring. If she is right, she will be a legend in the business. But if she is wrong, the emperor has no clothes.

 

[RU-05]

Cathie Wood sees deflation returning, boosting innovation stocks and bitcoin

Cathie Wood expects deflation amid a breakdown in commodity prices, gridlock on tax policy in Washington and innovation trends taking off.

www.cnbc.com

Can’t believe you think this is boring. If she is right, she will be a legend in the business. But if she is wrong, the emperor has no clothes.

She's saying exactly what Powell has been saying for months.

 

[T2Kplus20]

She's saying exactly what Powell has been saying for months.

Bingo! She is echoing Powell and also saying that deflation is coming due to productivity gains via innovation. Both have been saying the same thing for a long time.

 

[BellyFullOfWhiteDogCrap]

You already conceding that they can’t deliver in 2021? Just another over promise by Musk. GM can have 1mm orders for the hummer if they keep taking reservations. But unlike Tesla, they don’t over promise and just say the reservation is full.

I'm not conceding that at all. Just saying there's a bunch of "never before" stuff going on.
5 years from now, will I care that Cybertruck was delayed a few months?
Your GM hypothesis is cute. GM promised 30 EV models by 2025. How's that for over promising? Maybe they really have 50 models in the pipeline.

 

[BellyFullOfWhiteDogCrap]

I am dumb because I don’t understand why Tesla needs to rely on selling regulatory credits and BTC to be profitable.

What would Elon do if all regulatory credits disappeared tomorrow?

 

[jtung230]

What would Elon do if all regulatory credits disappeared tomorrow?

That’s the $600 billion dollar question. He also committed to not selling anymore BTC. Let’s see if he can pull another rabbit out of the hat.

GM had 10k reservations in 10 min for the EV Hummer. If they just keep taking the reservations, I’m sure they can get to 1mm much faster than Cybertruck.

 

[T2Kplus20]

That’s the $600 billion dollar question. He also committed to not selling anymore BTC. Let’s see if he can pull another rabbit out of the hat.

GM had 10k reservations in 10 min for the EV Hummer. If they just keep taking the reservations, I’m sure they can get to 1mm much faster than Cybertruck.

^^^ LOL! Funny stuff.

 

[rutgersguy1]

F still climbing.

And GE right there with it.

Cramer had a little bit last year when these guys were around $7 or $8, F vs GE with a finish line at $10. And they have traded very closely ever since. F up 6.87% today, GE up 6,53%. Ford currently at $14.85, GE at $14.27.

News out yesterday on Airbus increasing production, so that probably kind of buoyed both Boeing and GE yesterday. I mentioned awhile back when it was single digits that low double digits was fairly possible with the moves Culp was making but to really break out from that low double digits would take a recovery of aviation. It's been meandering for a bit in that low double digit area but any news like yesterday with regards to a normalcy in air travel will help boost the stock over time to the upper teens and eventually beyond barring any exogenous shock. News like the construction of wind farms off the coast of the UK and the west coast of the US doesn't hurt with regards to the long term health of the company either.

 

[RUAldo]

^^^ LOL! Funny stuff.

Jtung230: Like I’ve said before "bees don't waste their time explaining to flies that honey is better than shit." You and I are wasting our time. Let T2kplus20 piss away his money. These Tesla homers don’t understand this isn’t a debate about Tesla the company. It’s a debate about Tesla the investment. I’m sure there is an entry point that you would start a position. If the stock came back to reality I’d jump all over it. When the stock was at $900 p/sh the usual suspects were screaming “buy, buy, buy” - we’ll anyone that listened got crushed. The stock may reach $900 again one day but any idiot knows you don’t buy at all time highs. It won’t be long before Musk proves whether he is a genius or a fraud.

 

[BellyFullOfWhiteDogCrap]

That’s the $600 billion dollar question. He also committed to not selling anymore BTC. Let’s see if he can pull another rabbit out of the hat.

GM had 10k reservations in 10 min for the EV Hummer. If they just keep taking the reservations, I’m sure they can get to 1mm much faster than Cybertruck.

Don't dodge the question. There's a fairly obvious answer. Give it a shot.

And your off about the pre-order #s. CT was still way ahead of the Lightning after a 2 day comparison. And as I stated before, there was a surge in CT orders after the Lightning was revealed. I guess there was a bunch of people waiting on the Lightning reveal before making a decision. When you compare specs and value there's an obvious winner. That said, I'm sure Ford will sell every Lightning they make. They're just not going to be able to make that many compared to Tesla's CT.

 

[T2Kplus20]

Don't dodge the question. There's a fairly obvious answer. Give it a shot.

And your off about the pre-order #s. CT was still way ahead of the Lightning after a 2 day comparison. And as I stated before, there was a surge in CT orders after the Lightning was revealed. I guess there was a bunch of people waiting on the Lightning reveal before making a decision. When you compare specs and value there's an obvious winner. That said, I'm sure Ford will sell every Lightning they make. They're just not going to be able to make that many compared to Tesla's CT.

And Ford will likely lose a ton of money on each Lightning sold.