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I think you answered your own question.

I'd have to agree with you: "I can't imagine their share price going back up after all this is over."
What are your guys' thoughts on insurance giant, AIG? I / We all know they were hit hard in the Great Recession of 2008 - 2009 and required a massive bailout back then followed with a massive restructure. Up until the March crash, their share price seemed pretty steady at ~$55 +/- a few dollars. Now with everything going on now, their share price is half of that. I can't imagine their share price going back up after all this is over.
1) A lot of auto insurance companies are returning some premiums b/c they are NOT having to pay out as much b/c of the significant drop in driving during the pandemic.
One argument is that post pandemic, driving will go up b/c noone will take public transport unless they have to. That will be good for the insurance business as a whole but I don't think that automotive insurance underwriting specifically contributes a significant amount to AIG as a whole.

4) On the insurance market in general, it seems that there is pressure to get insurers to pay out to people impacted by the pandemic/lockdown. That won't be good for their bottom line.

I've also read that some companies insurers are pushing non-renewals because they don't want to be on the hook with dwindling cash reserves. I haven't found that article again but I see that several states have imposed a moratorium on policy cancellations (CA, WV, etc).

All of this can't be good for a business that prides themselves on more certainty (aka we collect $1M in insurance premiums, pay out 60% in claims, and keep the rest for their operating expenses/profit).

3) Finally, Look at what AIG owns. I don't know enough to judge their business but they are in the british mortgage market and own the worlds larger aircraft leasing company (that won't be a booming business for a while). You should read their financial reports and see what they say about future risks.


Bottom line: no opinion just yet on AIG specifically
 

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Let's bet: would we see a bump up or down? I predict up (but am certainly not betting on it)
TSLA went up 5% today. I can't tell if this is a typical fluctuation OR if Musk said something to cause his stock to swing. I suspect this is a typical daily swing. Funny how everyone's favorite digital tulip, BTC, swung less than 1% during the same period (its at $10K now).
 

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I watched about halfway into the vid but checked out. Most of what they talked about up to then were AI implants in people and other Darwinian technologist fantasies he’s talked about before(maybe investors want that, which is terrifying to me), nothing eventful like the last time he was on as far as I saw or heard about.
 

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All:
This weekend, I had some discussions with friends about the current state of the market.
Using SPY as an indicator for the market as a whole, today's price is $291 is almost back to where it was pre-pandemic (Oct 1st, 2019).

I'm sure there are some new millionaires or deci-millionaires who rode up from mid March to today.
However, if you still have long term holdings that you are holding onto and expect (like i do) that the market to fall as the pandemic news continues AND the US decides to open up even before the testing in place, now might not be a bad time to move some of your investments into cash. Obviously, certain holdings didn't bounce back (oil, cruise ships, whatever) but you might want to revisit your assets this week.

-g
 

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Discussion Starter #308
I finally cut my losses with ACB today. I lost 91% on that one and should have sold long ago when my losses were "only" 50%.

I guess I missed the 12:1 reverse stock split memo and that happened today. It was their only viable move to stay listed on the NYSE. For me though, that was the "straw that broke the camel's back" on that hold.

Anyway, I'm going to move some things around and build up my MPC shares further as MPC is still relatively cheap for the time being.

However, my wife introduced me to VectoIQ (VTIQ) over the weekend. She showed me a TikTok video of some, apparently, self-investor (like us, I'd say) and the VTIQ buy from Nikola. Doing a little bit of my own reading, this seems like a good risk backing the video. And if it plays out, it may work out for a quick buck here in a few weeks. FWIW, the share price is already up over $5 since the video was posted, likely sometime Thursday based on share value. It was $14.87 on the video and today closed at $20.38.

 

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I'll read up on Nikola motors. Clearly there is hype but I'm wondering how much underlying tech they have actually developed.

While this news source is not the most credible (for financial news), TMZ is reporting that bookings for cruise ships is going crazy on AMEX travel. I'm not their target market but this story is like reading about people flocking to chipotle... Even before the food poisoning was root caused.

 

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I'm in the same boat as you were with ABC with my UA stock - currently down an average of 80% I'm going to sit on it. The general analyst consensus is to hold. The worst that could happen is it goes to zero. In which case, at this point it's "only" another 20% loss. I'd be happy to cash out at at 50% loss.
 

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1) This TikTok video smells like a classic pump scheme. It brought your attention to something that sounds plausible BUT clearly, he has a financial stake (at last for now) in talking the stock up
2) VTIQ is a holding company. You are buying a holding company (which you don't care about) that is merging with something that you might care about.

Q: How much of the company are you buying?
- Prior to VTIQ stepping in, Nikola raised $460M in 4 funding rounds. That a lot of money raised but not nearly enough to make a new vehicle (see below)

- Nikola management was kind of dirtbaggy and took $4.1M of PPP money despite having a valuation of $3B. They could have sold off a couple of more shares instead of taking money from the pot that was MEANT for hairdressers, mom and pop retail, etc. FWIW, the CEO had cash to buy $32M ranch in Utah in 2019... but not enough to tide this company over.

- The VTIQ deal will inject $525M unto the company from privately sold stock (at $10/share I might ad so they have effectively 1.5x their money on day zero) AND $230M from VTIQ's vank accounts. The new "value" of the company will be $3.3B.

- From what I have read, this is NOT enough to build a new vehicle (commonly quoted as $1-6B). That's not including the factory. More cash (probably by issuing more shares aka dillution) WILL be necessary.

  • They did get an order from Anheiser Bush for $800M worth of trucks. but obviously, they haven't sold any.
  • 300 employees. That's not much to make a vehicle. Expect their payroll to balloon
  • CNH Industrial from London brings their FCV technology and the truck chassis from their subsidiary IVECO

- Late in 2019, they claimed some new breakthrough battery tech. Something something L-Sulfer (vs L-ION) and elimination of binders (which would increase density). The big concern is that this could be HYPE and be years from maturity (kind of like how Tesla touted autonomous driving for YEARS while they were just selling fancy cruise control.

- More on their credibility
2016: announced TWO products simultaneously - the truck and a 520HP SxS. NEITHER has seen production. Both slated for 2021
2020: THIRD product announced (F150 ish truck called the Badger). Production TBD

In comparison, TSLA was founded in 2003 and had their first production vehicle, the Roadster (based on a Lotus Elise chassis and drivetrain from AC Propulsion) in 2008.
They then announced the Model S in 2008, proto demo in 2009 and released it in June 2012. Now, I think TSLA is a hype machine but what does that make Nikola?


Bottom line:
  • I think it's a good idea to NOT make everything yourself (unlike TSLA which pushes to make most/all of their vehicle in house).
  • Nikola still seems to own the key tech (battery tech). Fair enough.
  • There are a LOT of people already feeding on this carcass. Will the carcass grow enough to feed everyone jumping on board? Not so sure.
  • It totally makes sense for trucking to go electric/FCV. FCV tech, esp in transit buses, has been tested since 2008 globally (including in SF). Still NOT in production worldwide though so even if its the more "mature" powertrain tech for Nikola, it's not like they cut and paste something thats production proven in another market and dropped it into their truck chassis.
  • Even with all the preorders, 2021 for revenue is optimistic (if not fanciful).
  • Think of all the other "next Teslas" which have been found:
Faraday Future’s still haunted by the past of its billionaire founder - "Billionare" from china planned a $1B factory in Nevada. I actually saw their vehicles at CES twice.
Rivian - Electrek - was going to be Ford's supplier. Now delayed until 2021.
Tesla rival Lucid Motors teases a glimpse of a fleet of its EVs in its Bay Area headquarters - Silicon Valley Business Journal - Lucid Motors. Another CES proto. Have 1K employees (compared to 300 @ Nikola).


Now, I've seen prototypes from others like Seres (formerly SF Motors) but that one is bankrolled by "real companies" like Chongqing Sokon Industry (chinese mfg which makes something like 1M internal combustion engines annually and sell the chinese equivalent - in popularity - of the toyota highlander). THAT is a "real" car company whereas the others are ???


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For my money, I'll wait and see how the world goes before jumping in with my own money.
  • I could imagine a ton of lemmings jumping on these trucks and driving the price "to the moon" like BTC.
  • However, there are plenty of companies with a HISTORY of making money, who have been beaten down in the market for NOT making money now, and WILL make money again before Nikola motors makes a dime. These are surer bets than finding "the next TSLA" that over a $1B dollars worth of investments have ALREADY found.
Bottom line: be wary of pump and dump schemes. Esp those pitched on a platform like Tikfuckingtock. I do believe this market -- FCV/electric class 8 heavy trucks -- will arrive (like Cannabis). I'm not as sold that Nikola is the platform (like Aurora) which will arrive in 2020/2021. Even longer term, you have to wonder about their ability to last. Just because others threw billions of dollars in doesn't mean its a great idea: look at WeWork's implosion.
 

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Discussion Starter #312
VTIQ is at $25 now since yesterday's closing. It was $21 at open this morning. Even if it were a lump and dump, for my particular situation, I think I should have jumped with the lemmings and set a stop loss. It would have only been about $150-ish or so worth of shares. Had I bought this morning, I'd be up a fair amount already on the day.

Something like this, I'd only do for a quick cash grab rather than a long term investment. In my particular situation, I'd also adjust my stop loss upwards (trailing stop loss, IIRC is the term I'm looking for here), so that way I have nothing but gains when it finally does collapse. And if it doesn't collapse, then it doesn't.
 

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So jump in. I hope you are using a broker without commission fees as even $10 on a $150 transaction is a lot.
 

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Discussion Starter #314
I didn't get a chance to. I've been swamped at work with a huge project I'm a part of. Everytime I remember I don't have the opportunity to (like right now).

My broker doesn't have any fees as of October-ish of last year. Even then, they were just $4.95/transaction and felt they were fair.
 

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I didn't get a chance to. I've been swamped at work with a huge project I'm a part of. Everytime I remember I don't have the opportunity to (like right now).

My broker doesn't have any fees as of October-ish of last year. Even then, they were just $4.95/transaction and felt they were fair.
Good.
FWIW, I personally think $5-10 is fair. However, if you are only buying $150 worth of stock, $4.95 represents a 6.6% hit on your ROI (because you will have 2x transaction fees to get in/out of a stock). That means that for something like VTIQ @ $27.10, each of your 5 shares must climb nearly $2 just to pay yourself back for getting in/out of it. That's IMO too much.

You can always setup a limit order that hit the market when it opens.
-g
 

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Discussion Starter #316
I'm just going to put it on my watch list and see what (good or bad) I missed out on with VTIQ. IMO it's too high a price now to get a decent ROI from $150-ish initial investment on a pump and dump.
 

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I just got an email from my auto insurance - SAFECO - saying they will rebate me $53 out of $2100 I pay for 2 cars annually (Audi + Prius). That's not much (2.5%) and its certainly not life changing but hey, I'll take it. Be on the lookout for checks like this.

-g
 

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Discussion Starter #318
Just my luck. I sold my ACB shares a little too early.

ACB shares rose nearly 70% after their earnings call. I sold at $7.02/share and they closed today at $10.80 share. I expect their share price to start crawling upwards somewhat further in the near future.
 

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So i did some homework and decided to get into selling cash covered puts.

The basic idea is that I'm selling insurance to an existing holder in the underlying security. I agree that until a certain date, I will grant them the right to force me to buy a stock at a certain price we agree upon. They pay me up front for this right.
Three scenarios:
  • If the stock never gets down to the strike price, I keep the premium. That's my profit
  • If it does drop to that price, they'll execute it and I'll end up owning that stock/ETF. Buying at a discount isn't bad.
  • If it gets close or below that price and the guy never executes, I can decide to buy the put back and then buy the underlying stock.
The "catch" is that for every contract, you need to have enough money put aside (just sitting in your acct) to cover 100 shares of whatever the underyling stock is.
Example:
  • I believe in the economy long term. I also believe things will dip again as things in the US open up prematurely AND covid cases rise. Finally, I think that the market will drop 35% from its high (currently its only down ~13%) and potentially more as there will be less people wanting/able to jump back in at 35% again. However, I don't know for sure. All this money I want to put back into the market, specifically in large cap stocks, its just a question of timing. This isn't gambling money.
  • I took a look at three S&P 500 trackers: SPY, IVV, VOO. IVV and VOO are slightly more desirable for me to own long term b/c a) expense ratio is 0.04% for IVV/VOO vs 0.095% (both are micenuts) and b) IVV/VOO allow for allow for dividend reinvestment vs SPY which just holds onto dividends from the underlying stocks before paying out. SPY is more popular though so popularity = contract availability.
  • All three hold the same securities so the underlying idea is the same. Market dropped 35% from highest to lowest point.
I need to balance the premium/risk vs my desire to actually buy at a discount. If I aim too low, I get to small a premium and will never get the stock (without closing out the contract buy buying to close and taking the money to go and buy the stock).

First contract executed:
VOO - Oct 16, 2020 expiration @ $200 price (approx 35% down from high).
  • Paid $3.80 (per share) which means I got ~$380 for the contract
  • Requires you to put $200 x 100 = $20K aside in your acct
  • $380 / $20K = 1.9% ROI. In terms of APY (from today's date until 10/16/2020), that's 4.71% before taxes (not bad since the alternative is 0% if I'm just waiting for the market to drop)
Now, I still want to BUY some of these S&P ETFs so I may adjust my targets up.
1) I can move the date up (perhaps to Sept 16)
2) I can move my strike price up so it is more likely to be triggered.
One I'm looking at is IVV, 9/16/2020 expiration, -28% from high = $245 strike price.
Bid/Ask range is $5.70-$6.10
ROI/APY @ $5.70 is 2.33% / 7.26% give its "riskier"

Now the worry if i set the strike price too high is that once I own the ETF for the long haul, the price drops below my target. However, while I don't think the ETFs are a good deal at 13% off their high, getting 28% off is IMO pretty good for the long term.
 

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Just my luck. I sold my ACB shares a little too early.

ACB shares rose nearly 70% after their earnings call. I sold at $7.02/share and they closed today at $10.80 share. I expect their share price to start crawling upwards somewhat further in the near future.
CDB:
ACB is at $16ish today (up 70%) after saying that they are entering the US CBD market.

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One side project I'm looking at:

I have a few individual stocks I want to track plus BTC and somehow, it just took me until today to realize I could create a google sheet that tracks these individual "bets" vs my acquisition price.

Key example formulas to access the google finance API to help you craft your own with stuff you care about
Code:
=GOOGLEFINANCE("EADSY")
=GOOGLEFINANCE("CURRENCY:BTCUSD")
Gets you the current price

=GOOGLEFINANCE("EADSY","high52")
Gets you the 52 week high

=index(importhtml("https://finance.yahoo.com/quote/IVV200918P00245000","table",0),3,2)
This one pulls the current options price.
IVV200918P00245000 is the ticker symbol for the put option I sold
(you can find it on yahoo's website or by looking at your portfolio/asset.
Since I've been maintaining an asset portfolio spreadsheet for a few years now that has to be updated manually (happens once a quarter so I can see my family's overall financial picture), I'm now looking to automate this process.

Ideally, I figure out how to access eTrades API to get my actual holdings. Backup plan will be to just maintain a column for holdings and update that (which will still need to be updated every quarter b/c of dividend reinvestment).
I dunno why it took me until today to realize this was possible AND easy.
 
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