The market giveth. And the market taketh away.
We may be in for an extended rough patch or patches.
We may be in for an extended rough patch or patches.
OT: Stock and Investment Talk
- Thread starter RU-05
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as a long term investor this does not phase me. I want the market to correct itself for a bit (not crash- which could happen pending the default) but I want to DCA or buy into positions I haven't owned previously. If the Biden infrastructure plan passes I want to be ahead of the game on CAT. I also been looking into dividend positions but the prices seem to high but the model of these companies hasn't changed, so buying in wouldn't be a horrible idea regardless of price
What do people think about Datchat (DATS)? It's nice to root for a local New Brunswick company and they seem like they might have the right technology at the right time to take take off.
Don't know too much about the company but I'd say be careful, they are being pumped heavy by the Twitter pump and dump clubs right now.
The Fed has put itself into quite the pickle. The whole "inflation is transitory" is a load of BS in an attempt to stave off panic. If the Fed raises rates even 0.25% the country likely plunges into a recession overnight. If they raise by 1% the country plunges into a depression overnight, taking much of the global economy with it. If they raise in tiers, the economy takes a dump albeit at a somewhat slower pace. If they do nothing, inflation takes over and eventually drives drags the market down anyway. Will be an interesting 12-24 months, not sure how the Fed is going to thread the needle to prevent the aforementioned scenarios from taking hold.
As for me, it doesn't really matter market-wise. I've moved out of all my short term positions over the past 6 months and have put those gains into longer term investments. So the market can go tits up for all I care, it's not going to affect my horizon.
I'll be on the market for a new house starting next month so whose roll do I have to butter at the Fed to make sure they don't raise rates in the next 4 months lol
As for me, it doesn't really matter market-wise. I've moved out of all my short term positions over the past 6 months and have put those gains into longer term investments. So the market can go tits up for all I care, it's not going to affect my horizon.
I'll be on the market for a new house starting next month so whose roll do I have to butter at the Fed to make sure they don't raise rates in the next 4 months lol
Not until the Feds raise rates by a lot, which likely won't even happen next year.
From the story.$3000 PT and she sells the dip:
Cathie Wood Sells $270 Million in Tesla as Bond Rout Hurts Ark
(Bloomberg) -- Cathie Wood sold a near $270 million stake in Tesla Inc. as the bond selloff hit rate-sensitive technology stocks to spur outflows from her growth-focused funds. Most Read from BloombergThe Country That Makes Breakfast for the World Is Plagued by Fire, Frost and DroughtHSBC Bets...finance.yahoo.com
"Some 11% of the famous ARK Innovation ETF (ticker ARKK) is still betting on Elon Musk’s company, according to data compiled by Bloomberg. The firm tends to trim the stake when it rises above 10%."
It's called fund mgmt.
Good luck finding a new house. I’ve been looking for a while. Prices are still astronomical and inventory incredibly low. I even looked at buying a piece of land but aside from land prices sky high the supply chain issues likely turn a 8-12 month build to 12-16 months with no way of capping material prices. Builders won’t sign traditional construction contracts with a fixed number penciled in. The risk is 100% on the buyer not the builder and material prices are increasing weekly. Very frustrating.
It's been choppy, it continues to be choppy. It's expensive, but too much money lying around to let it truly correct.
There are cheap stocks out there though, some significantly off their highs. MU, down 25% off it's highs, and down again off it's earning call last night is trading below 7x's next years expected earnings.
Raising .25% should not, in and of itself, cause a recession. However, that raise could well trigger a correction of 10-15% (temper tantrum) in the markets, the consequences of which would cause a recession. Go figure.
Even the mere whisper of a rate increase generates volatility. Way moreso than in years past.
The global economy is stretched to its limits virtually everywhere, carrying with it higher systemic risk. Just look how crazy supply chains have gotten, something like 90% of BP stations in the UK are out of fuel. If that unfolded in the states you'd be looking at a legit crisis. The global economy is extremely vulnerable and can't really absorb too many more body shots.
The talk for months has been for rates to increase late 2022.
As per the global economy being stretched, the world is getting vaccinated, which should help alleviate the major supply chain issue.
Depends where you're looking. Where we're looking things have cooled off considerably from last year and are continuing the downward trend.
disagree. If TSLA drops to 500, who really gets hurt, but the pigs? Next time they'll learn to take profits along the way.
It would be perfectly healthy for MSFT to drop to 225, AAPL to 100, AMZN to 2500. The ripple effects across the market would wipe out the gains since the Reddit mania and create a nice foundation for solid companies to build on going into November/December.
I believe you might be correct. After a great run, the ARKK fund is preforming poorly this year…. It is down 11.5%, while the S&P is up 16.1% and NASDAQ composite up 12.89%.
If the pigs bought on margin and get a call then the hurt starts to spread.
The Bloomberg article says $297 million withdrawn on Monday and $660 million over the last 4 days.
We can only hope. When these recent SPAC s & IPOs start trading below the cash on the books, the real gains come.
And based on yesterday’s big drop, with more downside today, redemptions most likely continued.
As I mentioned with DATS above, CEI is another huge Twitter pump. At 2:30 both dropped simultaneously- CEI from 4.81 to 3.66 and DATS from 17.35 to 15.88. CEI currently halted down. Definitely some funny business with them.
Jumping today while Oil and NG are both down to boot.
I'm not even seeing a quarterly report since last Sept.
Saw it as low as 3.20 after the halt, back up near $4 now though.
you're focused on one aspect of the mkt. There are mkts and then there are mkts. I've moved out of tech already and into companies that will benefit from rising yields, inflation, and consolidation. Tech is overvalued imho and a pullback, while necessary and probable, does not mean the market correction is at hand. Prior to next year, we still have a tremendous amount of tailwind for the mkts (which is evident in those inflated tech prices more so than other areas). Over the next 4 mos, we'll the speed of cash (transferbility) at it's highest annual rate, still have growing consumer debt, hot housing mkt, friendly fed, opening up of travel and mkts projections, over 4 trillion on the sidelines that need to make gains for yr end calcs, housing mobility that stil is elevated et cetc etc. I think q1 2022 the tone will change to Fed watch, rates watch, focus on post holiday consumer debt and global issues. None of this even addressed the impending energy crutch so keep that eye on Europe there.
It's coming, not just yet imho
would agree
I simply don't see how these people come up with their valuations so her fall is deserved not withstanding her asset allocation models
This could also go on the ICE EV thread but it's different aspect of autos. Linked is a graph showing the monthly auto miles driven. You'll be able to see that it, unsurprisingly plunged in 2020. What it also shows is that demand has not fully returned, and the question arises as whether WFH etc. will cause a permanent reduction. While the demand for both used and new cars is currently high, after the backlog is filled it may get very slow. For those who have a time frame longer than 18 months this might be something to consider.
https://fred.stlouisfed.org/series/M12MTVUSM227NFWA
https://fred.stlouisfed.org/series/M12MTVUSM227NFWA
technically, tsla's chart looks great. primed for another run to 900. it has been consolidating the last 6 months. short sellers are bound to get tired soon especially as earnings season approaches.
It also broke above the $780 resistance level and closed above it 2 of the last 3 days. That's bullish. The next resistance level above that is $900. Historically it also doesn't really head south of the 200 DMA so it's very unlikely to fall below $700 anytime soon.
TTM squeeze and money flow also look good in the near term.
Yeah the $406 P/E is ridiculously high. But people buy Tesla on a dream and branding. Its AI moat is also pretty formidable compared with any other auto manufacturer. So it doesn't really have any scalable competition as far as electrified smart cars go.
Just an in general question. If you look up TSLA's P/E it says $406. If you look at the last 4 qtr's, it's combined eps is about $4 per share, which would make it's p/e under $200. The E-Trade p/e trend line puts TSLA under $200x as well. Similar goes for other stocks as well. What's the deal?
I'm focused on the S&P 500 index, since that's the arbitrary measuring stick all the fund managers are put to. 25% of the SPX is composed of MSFT, AAPL, GOOGL, AMZN, & FB. All of which are solid companies that can take a 20% dive in a month, and still have at least a 200% gain since November 1, 2019. I've owned all of them for a while, so I'm not taking gains. I actually used my Chevron dividend to pick up some SPY Nov puts as term insurance.
just different ways to calculate earnings. I'd personally stick with the $406 as that's what most people go by when analyzing P/E. That way it's also an apple to apples comparison say if you want to compare TSLA with AAPL which as a P/E of 28.
Higher P/E equities will suffer more as interest rates rise. So keep that in mind also.
ultimately price is just an advertising mechanism for supply and demand of an equity. Price doesn't really mean anything by itself which is why I don't really understand people that just invest based on fundamentals as that's just a small part of the equation.
Best way to get an idea of supply and demand is look at price and volume profiles over time (monkey bars on TD Ameritrade ThinkOrSwim platform can be useful for this as a stand in for market profile) and in relation to momentum, news and events surrounding the equity (scandals, earnings, stock splits, dividends etc). They all add to the narrative and in aggregate lead to value price discovery.
Just a clarification for new investors: I know you know but not all funds (or fund managers) have the S&P 500 as their benchmark.
For those that don't know
The Wheel Strategy and buy and write strategies are great conservative strategies to use with options for those starting out with options.
www.thewheelstrategy.com
www.investopedia.com
Also debit spreads are safer than credit spread (you don't have to deal with issues with one leg expiring ITM and one expiring OTM) and spreads are safer than single calls and puts.
Generally you make more roi on spreads than on single puts and calls, provided there isn't a huge move (in which case single calls and puts win out), due to theta decay working for you and the smaller cost basis needed to put on a spread than a single put or a call.
Also when rolling spreads (for beginners) ALWAYS close out all legs before opening the new position otherwise if you're not careful with matching greeks from spread to spread, you can screw yourself. For example, the short leg can increase in value quicker than the long leg. Leading to a loss even if your strategy works out.
I had this happen to me when I started out with options (cuz I was stupid, this mistake cost me $50K) so just putting it out there so no one else that reads this makes the same mistake.
The Wheel Strategy and buy and write strategies are great conservative strategies to use with options for those starting out with options.
The Wheel Strategy – Options Trading Made Simple
www.thewheelstrategy.com
Buy-Write Definition, Strategy, How It Works, Examples
Buy-write is an options trading strategy where an investor buys an asset and simultaneously writes (sells) a call option on that asset.
Also debit spreads are safer than credit spread (you don't have to deal with issues with one leg expiring ITM and one expiring OTM) and spreads are safer than single calls and puts.
Generally you make more roi on spreads than on single puts and calls, provided there isn't a huge move (in which case single calls and puts win out), due to theta decay working for you and the smaller cost basis needed to put on a spread than a single put or a call.
Also when rolling spreads (for beginners) ALWAYS close out all legs before opening the new position otherwise if you're not careful with matching greeks from spread to spread, you can screw yourself. For example, the short leg can increase in value quicker than the long leg. Leading to a loss even if your strategy works out.
I had this happen to me when I started out with options (cuz I was stupid, this mistake cost me $50K) so just putting it out there so no one else that reads this makes the same mistake.
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The chart shows a bottom in March of 2021 and it spikes considerably off of that. Only tracks to July, and still off the precovid levels by about 8% at that point, but I imagine it continues to trend upward.
Meanwhile Ford's 2020 rev's were down 15ish% from the year prior. GM's were down 10%, and that is with both companies focusing on higher priced cars, thus units were down even more. Plus the shortage's which limited rev's in 2020 continue into 2021.
F and GM are my two largest holdings, banking on that pent up demand to get those rev's back over precovid levels, and transitioning to EV to grant them some multiple expansion.
Thanks. Just started options trading myself, and have been buying and writing(short term) with some high beta stocks.For those that don't know
The Wheel Strategy and buy and write strategies are great conservative strategies to use with options for those starting out with options.
The Wheel Strategy – Options Trading Made Simple
Buy-Write Definition, Strategy, How It Works, Examples
Buy-write is an options trading strategy where an investor buys an asset and simultaneously writes (sells) a call option on that asset.
Also debit spreads are safer than credit spread (you don't have to deal with issues with one leg expiring ITM and one expiring OTM) and spreads are safer than single calls and puts.
Generally you make more roi on spreads than on single puts and calls, provided there isn't a huge move (in which case single calls and puts win out), due to theta decay working for you and the smaller cost basis needed to put on a spread than a single put or a call.
Also when rolling spreads (for beginners) ALWAYS close out all legs before opening the new position otherwise if you're not careful with matching greeks from spread to spread, you can screw yourself. For example, the short leg can increase in value quicker than the long leg. Leading to a loss even if your strategy works out.
I had this happen to me when I started out with options (cuz I was stupid, this mistake cost me $50K) so just putting it out there so no one else that reads this makes the same mistake.
Have also been buying some longer term calls on some low beta long term plays, such as F, in order to tack some beta onto my longer holdings.
Interesting turn of events….
www.cnbc.com
Onetime big Tesla bull Chamath Palihapitiya says he sold his position
Chamath Palihapitiya revealed that he has sold his Tesla position for capital to invest in other investment ideas.
I generally attack support and resistance levels using options.
for example for Ford I put on a risk reversal play by selling long dated naked puts at $10 and buying long dated calls at $12. The puts help fund the calls.
And long dated calls means that theta decay is not an issue (usually only the last couple months before expiry). Its like buying stock for maybe a 10th of the actual cost of 100 equity.
when I want to exit the position I can either close each leg separately or together.
