OT: Stock and Investment Talk

[jtung230]

Red states are outperforming blue states economically
Of the 20 states with the smallest decrease in state GDP, 13 were run by Republican governors, while the bottom 25 states with the highest decrease in state GDP were predominantly Democratic-run states.

Furthermore, the average unemployment rate across Republican states was 6.5% in August, compared to an average of 9% in Democrat states, according to an analysis of unemployment data by the Heritage Foundation, a conservative think tank.

“The GDP data confirms that blue states are severely underperforming red states, even if there are some outliers for sure,” said Stephen Moore, one of President Trump’s top economic advisers.

“It’s pretty clear blue states with the most severe lockdown had the most damage done to their economies,” said Moore, who is also a contributor to the Washington Examiner.

Red states are outperforming blue states economically - Washington Examiner

States run by Republican governors on average have economically outperformed states run by Democratic governors in recent months.The difference in economic growth is likely due to the pathway of the coronavirus pandemic in the first few months and the economic restrictions imposed by Democratic...

www.washingtonexaminer.com

Very happy for red states. I'm fully on board for NJ and NY to be a taker state for once.

 

[BIGRUBIGDBIGredmachine]

Very happy for red states. I'm fully on board for NJ and NY to be a taker state for once.

Nancy overplayed her hand.

 

[Caliknight]

Very happy for red states. I'm fully on board for NJ and NY to be a taker state for once.

Get used to that lol!

 

[jtung230]

Get used to that lol!

easy to get used to. don't tease me.

 

[Caliknight]

Don't worry, if NY/NJ is anything like Ca., the rest of the country is going to have to pay their bills after they declare bankruptcy.

 

[RU-05]

I whiffed on trimming FSLY, or at least I trimmed too much, trying to be smart. Broke right past $95. Currently at $110.

Currently at $114. I trimmed at $95ish. Miss(partial) of a 20% move.

 

[RU-05]

Draftking down 20ish% after news of them issuing new stock.

Any perspective on how stocks react short term after such drops? Ie, do stocks rebound quickly after dropping on stock issuance news?

 

[mdk01]

Draftking down 20ish% after news of them issuing new stock.

Any perspective on how stocks react short term after such drops? Ie, do stocks rebound quickly after dropping on stock issuance news?

No perspective on Draftking, but it reinforces my decision to go ETF rather than single stocks based on a strong expectation that revenue hungry states are going to legalize betting. BETZ

 

[RU-05]

No perspective on Draftking, but it reinforces my decision to go ETF rather than single stocks based on a strong expectation that revenue hungry states are going to legalize betting. BETZ

I hear you, but dkng is up 70% on the month.

 

[RU-05]

Been watching these lithium stocks for a week and a half now, not wanting to chase them, looking for a pullback, but they just keep climbing.

 

[T2Kplus10]

Been watching these lithium stocks for a week and a half now, not wanting to chase them, looking for a pullback, but they just keep climbing.

Any logic for it going up or just a CL dynamic? If they latter, beware and avoid.

 

[RU-05]

Any logic for it going up or just a CL dynamic? If they latter, beware and avoid.

The logic for Lithium stocks going up? Battery powered electric motors, from weed wackers to auto's, replacing internal combustion engines.


It could very well be getting way ahead of itself, but looking around, it's hard not to get poked in the eye by the logic.

 

[T2Kplus10]

The logic for Lithium stocks going up? Battery powered electric motors, from weed wackers to auto's, replacing internal combustion engines.


It could very well be getting way ahead of itself, but looking around, it's hard not to get poked in the eye by the logic.

The spike looks very sudden. May have missed the boat on this (at least for the short term).

 

[RU-05]

The spike looks very sudden. May have missed the boat on this (at least for the short term).

It's why I've stayed out, but I was thinking this after back to back 20% jump days early last week. They just keep climbing though.

 

[RU-05]

So some talk of gov't breaking up big tech.

How would such a move effect the shareholder? If I own google, and they breakoff youtube, do I then own stocks of 2 different comanies?

 

[RU-05]

Price fixing in the chicken industry?

I totally saw that episode on Billions.

 

[mdk01]

So some talk of gov't breaking up big tech.

How would such a move effect the shareholder? If I own google, and they breakoff youtube, do I then own stocks of 2 different comanies?

Yes, you would get stock in 2 companies, and probably after a noticeable haircut. If you go back to the AT&T breakup, those who kept the stock in all the Baby Bells did well, but in a rising market and after waiting a bit. Short term it was a negative.

 

[RU-05]

Yes, you would get stock in 2 companies, and probably after a noticeable haircut. If you go back to the AT&T breakup, those who kept the stock in all the Baby Bells did well, but in a rising market and after waiting a bit. Short term it was a negative.

Did any of the baby bells have the name recognition of Youtube? I feel people would be all over that.

 

[mdk01]

Did any of the baby bells have the name recognition of Youtube? I feel people would be all over that.

Hell yes. They all had regional monopolies but were open to competition from non-Bell companies.

 

[Frida's Boss]

Draftking down 20ish% after news of them issuing new stock.

Any perspective on how stocks react short term after such drops? Ie, do stocks rebound quickly after dropping on stock issuance news?

The answer, as always, is it depends.

start with the obvious. Your percentage ownership of the business, and claim on income and cash flow, has just been reduced from a small percentage to a smaller percentage. Thus, you need to think about what they plan to do with the money they raised from the stock sale. Will they be able to invest it such that your now diluted ownership will at least come out even economically due to the increased earnings coming from their investment? If yes, the stock should rebound. If you are more than compensated with incremental growth, then the stock should increase beyond pre issuance levels.

there is another signaling effect to consider. Ideally, the company should raise capital to meet its intended use that is the lowest cost, I don’t know Draft Kings balance sheet or access to debt, but if they are issuing equity, it may signal that they believe the stock is trading at a premium to its value and, thus, they chooose to sell an expensive stock to raise capital.

Short term moves tend to be noise. The way to evaluate what your shares are now worth is outlined above,

 

[rutgersdave]

Did any of the baby bells have the name recognition of Youtube? I feel people would be all over that.

I think if Facebook was broken up the companies would be worth more than FB and probably true with Google.

My father had EBay and they broke out PayPal which was $30-40 in 2015 and now trades around $200.

 

[RU-05]

there is another signaling effect to consider. Ideally, the company should raise capital to meet its intended use that is the lowest cost, I don’t know Draft Kings balance sheet or access to debt, but if they are issuing equity, it may signal that they believe the stock is trading at a premium to its value and, thus, they chooose to sell an expensive stock to raise capital.

Short term moves tend to be noise. The way to evaluate what your shares are now worth is outlined above,

Which is a smart move right?

The talk I'm hearing is the online gambling companies are battling for market share, so DKing is presumably selling high and will use that money as a land grab so as to better position themselves in a sector that clearly has a ton of upside.

 

[kapyoche]

Market will keep going up for two reasons:
1) Big Biden win expected so the stimulus will get close to $5T in 2021.
2) Bad economy till 2022 so no tax hikes in 2021.
Buy.

 

[BigWill]

The answer, as always, is it depends.

start with the obvious. Your percentage ownership of the business, and claim on income and cash flow, has just been reduced from a small percentage to a smaller percentage. Thus, you need to think about what they plan to do with the money they raised from the stock sale. Will they be able to invest it such that your now diluted ownership will at least come out even economically due to the increased earnings coming from their investment? If yes, the stock should rebound. If you are more than compensated with incremental growth, then the stock should increase beyond pre issuance levels.

there is another signaling effect to consider. Ideally, the company should raise capital to meet its intended use that is the lowest cost, I don’t know Draft Kings balance sheet or access to debt, but if they are issuing equity, it may signal that they believe the stock is trading at a premium to its value and, thus, they chooose to sell an expensive stock to raise capital.

Short term moves tend to be noise. The way to evaluate what your shares are now worth is outlined above,

Excellent synopsis;

Where is the new stock coming from ? Warrant holders exercising their holdings ? 501 C investors getting stock from their initial loans to the company ? Preferred stock converted to common ?

What is the company using the cash generated for ? Daily operations (mostly bad) or buyouts of competing companies/expansion of their core business (mostly good.).

 

[BIGRUBIGDBIGredmachine]

Market will keep going up for two reasons:
1) Big Biden win expected so the stimulus will get close to $5T in 2021.
2) Bad economy till 2022 so no tax hikes in 2021.
Buy.

#1 Any talk of a $5Trill Demo "stimulus" is a screaming sell signal
#2 A bad economy until '22 but no tax hikes will lead to a correction, probably not a crash, but around 10% sell off. Throw tax increases in the mix and see #1.

 

[BigWill]

I am preparing for a No Clue Joe chance of a Win.

Raising my precious metal hedge to above 10 %.
Acquiring more ammo for my firearms.
Waiting to see if new Green stuff raises the tax credit for solar power to above 22 % in 2021.
(But IMO you have to swap out to solar for residential as their Green programs takes the cost of purchasing electric power from the power companies to unaffordable level$.)
Physical medical checkups by my preferred Doctors.

 

[newell138]

I whiffed on trimming FSLY, or at least I trimmed too much, trying to be smart. Broke right past $95. Currently at $110.

Currently at $114. I trimmed at $95ish. Miss(partial) of a 20% move.

LOL, I told my wife to sell at $100, she bought at $20, you would think she would be happy with a return like that in 5-6 months but today its at $120 now. So of course i'm the bad guy

 

[Frida's Boss]

Which is a smart move right?

The talk I'm hearing is the online gambling companies are battling for market share, so DKing is presumably selling high and will use that money as a land grab so as to better position themselves in a sector that clearly has a ton of upside.

Smart for the company, yes., provided they don’t have lower cost alternatives. Not so smart for the buyers of the newly issued shares.

 

[ScarletNut]

I've posted before but I've purchased some bitcoin through a trust GBTC, traded on NASDAQ, which is 100% invested in bitcoin and tracks the price of a coin. Currently it seems to be moving with the market but at some point it will disassociate and be more of a hedge for inflation which is inevitable with all the money being printed. It also has a finite quantity unlike gold. Square just purchased 50 million in bitcoin today as did another company (name escapes me) recently that put 250 million of its assets in bitcoin.

 

[Frida's Boss]

Excellent synopsis;

Where is the new stock coming from ? Warrant holders exercising their holdings ? 501 C investors getting stock from their initial loans to the company ? Preferred stock converted to common ?

What is the company using the cash generated for ? Daily operations (mostly bad) or buyouts of competing companies/expansion of their core business (mostly good.).

You raise a point worth highlighting.

when you see a company “issuing” shares, you need to make sure those shares are not already included in the fully diluted share count. That share count should include all “in the money” options or warrants, or convertible preferred shares I’d the common is trading above the strike price. In fact, these aren’t really new shares being sold by the company. This is a straightforward calc to perform (generally using what’s called the treasury method) but not something casual retail investors or brokers would know about.

If these are primary issued share (not to be confused with an IPO, which is simply the initial primary sale), then they would not be included in a fully diluted share count and would be dilutive at issue.

 

[RU-05]

I've posted before but I've purchased some bitcoin through a trust GBTC, traded on NASDAQ, which is 100% invested in bitcoin and tracks the price of a coin. Currently it seems to be moving with the market but at some point it will disassociate and be more of a hedge for inflation which is inevitable with all the money being printed. It also has a finite quantity unlike gold. Square just purchased 50 million in bitcoin today as did another company (name escapes me) recently that put 250 million of its assets in bitcoin.

Up 8% today.

Still down some 20% from it's high's in August which was just below $15. That $15 is a level it has butted up against a few times going back to 2019.

Pro's do bring it up a fair amount. Seems to be a feeling that it is ready to make a run.

 

[ScarletNut]

Up 8% today.

Still down some 20% from it's high's in August which was just below $15. That $15 is a level it has butted up against a few times going back to 2019.

Pro's do bring it up a fair amount. Seems to be a feeling that it is ready to make a run.

Also, check out the charts on bitcoin every time it “halves” which occurs about every 4 years. Triple digit growth over the next 18 months on each occasion

 

[RU-05]

Trimmed back towards the end of the day, looking for some buying ops in the days ahead.

Thinking about Kohl's as one potential buy. As a non essential it was hit especially hard(while essentials like Target and Walmart were able to take off) but I'm thinking they have figured out the digital sales by now, and the market has loved that. See recent jump by Bed Bath and Beyond.

I see it as a low risk play to hold into earnings given how far it is off precovid levels.

 

[BigWill]

Have they announced Chap 7 or 11 yet, hearing rumors of them going OOB.

 

[jtung230]

this should also be in the CE now.

@Tango Two

 

[mdk01]

this should also be in the CE now.

@Tango Two

Not if it's strictly investments.

 

[jtung230]

Not if it's strictly investments.

I agree but some people can’t help themselves

 

[T2Kplus20]

Not if it's strictly investments.

+1
Let's stick to the subject.

 

[RU-05]

Have they announced Chap 7 or 11 yet, hearing rumors of them going OOB.

Ha, I guess that would be the potential downside. But I'm not seeing anything about bankruptcy, and if they were I think that would be a very quick demise. Unlike say JCP, Kohl's was consistently profitable prior to Covid. They were still paying a dividend the quarter before last. And they've been open. If they needed capital would they not be able to raise it?

Though this article is from August they were sounding pretty aggressive in capturing market share from those companies that did go out of business. https://www.cnbc.com/2020/08/18/koh...rket-share-free-as-retailers-go-bankrupt.html

 

[BigWill]

My Wife likes to shop at their stores. She used to bring me to make sure she got the Senior Old Codger discount on specific weekdays. Especially for low cost stuff for the Grandkids to wear, grow out of and then use for rags.