TCCoA Forums banner

321 - 340 of 744 Posts

·
Registered
Joined
·
3,191 Posts
Discussion Starter #321
CDB:
ACB is at $16ish today (up 70%) after saying that they are entering the US CBD market.
Yeah, I saw that.

This is another, "should I buy ACB or AMD shares" moment for me. :cautious:

Just gotta chalk it up to not being able to predict the market.
 

·
Registered
Joined
·
3,606 Posts
Here's another idea I just discussed with a friend that could use some more research if you folks are so inclined.
1) Some markets, like commercial REITs, are getting totally pounded. I think this market is due for a shakeup as I'm skeptical some struggling stores/business types, like Gamestop and movie theaters, will go the way of BlockBuster. I'm not enough of a gambler to speculate on these.

2) One market a friend of mine suggested that merits further evaluation is gambling: not necessarily the ones with traditional casinos but the ones which focus on online gambling. While they may not be worth it now (almost everything bounced back), their revenues are down b/c of no sports to bet on SO they could be good buys in a future dip (or by selling puts)
DKNG - DraftKings aka 60% of the US fantasy mkt
PDYPF - owns 50ish% of FanDuel, big betting house in the UK so has both retail and online exposure.
MGM
ERI

I'll do more research later but what do you guys think? Historically, some gambling (lotto) is recession proof while others (traditional casinos) get hammered in recessions. however, they always bounce back.
 

·
Registered
Joined
·
3,606 Posts
I did a little more homework on DraftKings (DKNG)

Recent IPO @ $10.64/share
Pandemic Dip Price @ $11.17/share
Currently @ $35.24/share (IMO a little crazy considering there's very few sports to bet on)

FWIW, DKNG claimed little/no impact on FY2021 revenues expected from Covid19.

Aug 21, 2020 options
Strike Price $22.50 - puts can be sold @ $1.25/ea ($125 premium for locking up $2250 = ROI 5.56% or APY if you hold until expiration 24.14%
Strike Price $30 - puts can be sold @ $3.90/ea ($390 in your pocket for locking up $3K = ROI 13% or APY 56.49%.

Now clearly, selling a put at $22.50 might make sense if you think the stock is worth that price.
I need to research the fundamentals more but I wouldn't object to owning the stock @ $22.50 long term. I'm less excited about owning them @ $30 or $35 (market price) though.

---
I'm not sure I want to invest in PDYPF but ERI and MGM are bets on Vegas casinos.
Both are trading ~50% of their highs.

Vegas is planning to open up on 6/4/2020. Considering summer is historically a slower season for Vegas (it's damned hot in the desert), I wonder if they will see a significant boost.
 

·
Registered
Joined
·
3,606 Posts
Anyone's opinion of the market change in the past week? If anything, I'm MORE skeptical that the current price levels (S&P500 is ~9% off its peak) are sustainable by anything other than hopes/dreams.

Even though I'll be working long enough to weather ~2 more downturns, I'm considering for my tax deferred accounts (where no taxable events will incur), locking in my profits for now and moving some more positions into cash. I suspect my small and medium cap stocks are the most "at risk". I'm also wondering if my mutual fund of CA bonds is worth the added risk if CA is going into deficit for only a little more gain (VCITX yields 2.9% APY tax free whereas my HYS acct will pay me 1% before taxes. That's probably a delta of 2.4% after tax to after tax)

Q: How about you folks?
 

·
Super Moderator
Joined
·
13,191 Posts
Sorry Gunn, I've been dropping the ball as of late and not paying a bit of attention to the market. Yeah, it seems so manipulated and artificial at this point. I'm with you, very skeptical about these levels given all the uncertainty about the state of politics, the virus and all the disruptions caused by COVID. As Warren Buffett says it's scary at the bottom and be fearful when people are greedy and greedy when people are fearful. It's an amazing balancing act that's nearly impossible to master.

I'll get back to you in detail tomorrow or the next day.
 

·
Registered
Joined
·
3,606 Posts
Sorry Gunn, I've been dropping the ball as of late and not paying a bit of attention to the market. Yeah, it seems so manipulated and artificial at this point. I'm with you, very skeptical about these levels given all the uncertainty about the state of politics, the virus and all the disruptions caused by COVID. As Warren Buffett says it's scary at the bottom and be fearful when people are greedy and greedy when people are fearful. It's an amazing balancing act that's nearly impossible to master.

I'll get back to you in detail tomorrow or the next day.
No worries man. Writing this stuff helps me put my thoughts together.
Any thoughts you have would be appreciated though.
PS. I decided to put any small caps/med funds which are total gain % positive AND in tax deferred accounts into either a TBILL fund (401K) or just cash (IRAs).

I haven't decided if I will lock up more of this cash by selling puts just yet.
 

·
Registered
Joined
·
3,606 Posts
This is an interesting article. Shows which sectors of retail have been the most hit.
Also, notice that as of April 15, revenue certain retail sectors (like electronics) has dropped by just over 60%.


I think Cramer's declaration of "we're back" may be premature. While the job gains are explainable in certain parts of the world (Amazon warehouses, delivery people, etc), I suspect enough people are on the sidelines that consumer spending will be depressed through Q2.
 

·
Registered
Joined
·
3,191 Posts
Discussion Starter #328
Any thoughts on tech sector ETF, ARKW? It seems to be on the up and up, and had a pretty good tracking up until the market crash back in March. It seems to have recovered and beat it's pre-crash highs this week.
 

·
Registered
Joined
·
3,606 Posts
Any thoughts on tech sector ETF, ARKW? It seems to be on the up and up, and had a pretty good tracking up until the market crash back in March. It seems to have recovered and beat it's pre-crash highs this week.
ARKW:
- I like tech because it's the market I work in and understand best. FWIW, this may also cloud my reasoning though (as seen in how tech heavy my "individual picks" are compared to someone who is outside of this industry.

- Q: As far as the whole sector is concerned, questions you should ask yourself are
How much of this business is tied to consumer market/demand?
How do you think that will look over the next year?
I've made my concerns/feelings clear here.

  • As a fund, they charge .78% which is pretty high these days but justify it because they actively manage it.
  • You can buy anything they own (they don't invest in pre IPO stuff near as I can see) so look at there holdings and ask yourself is there something I'd rather own more than a piece of all of this stuff?
Looking under the hood:

1 Tesla - well that's gambling. If their future battery tech is truly revolutionary, they could be a bigger company than everyone else. RIght now though, how many people are willing to buy a $35/50/100K+ car with a supply chain worse than Fiat Chrysler. Investing in a stock is all about growth. Is this company worth more than 1x Ford+GM combined? How much further will it grow?

2 square - payment processor tied to consumer spending

4 Roku - top OTT media player. Biggest platform for ads which are specified at the end device (vs one commercial going to all viewers). Heavily consumer focused but if they start making more on ads vs device sales, they could do well even in a down market. Even though their devices are relatively cheap and you would think their purchase would be somewhat recession proof (more than a luxury electric car), they say consumer spending has hit them in the pandemic

4 Zillow how do they make money and will people be transacting houses during this next downturn? Apparently supply is down and millennials are shopping for their starter homes which is keeping prices up

5 2U: I never heard of this. They are some kind of educational portal website -- they either supply the online infrastructure OR they actually supply the content in partnership with some legit universities. This business makes sense longterm but I've never heard of it so I don't know about their competition. It's not a branding play (Harvard has the brand, not 2U, so who's to say that the company with an incrementally better SW infrastructure doesn't replace them - e.g. Myspace -> FB and WEBEX -> Zoom).

6 lending tree? Lending marketplace. Fair enough

7 splunk: big data, search, UI. All sounds good but do you really know what they do and how they make money?

8 Pintrist? How do they make money?

9 Xilinx makes expensive FPGAs. These are typically too expensive for consumer end products so you find them more industrial, aviation, and infrastructure markets. Some of these are hit in the downturn more than others.

10 Facebook. Meh. I don't like the billionaire in charge of this company. They make money but i wonder if the backlash will continue as these guys contribute to the balkanization of news/propaganda dissemination (aka different groups of people only see the data they want to see)

Finally, the disclosures mention they invest in crypto through GBTC.
- That in of itself is something I view with a bit of skepticism. If you are interested in crypto, it's much cheaper (~15% actually) to buy BTC yourself through a legit source like coinbase for a much smaller premium. It's not that hard.
  • GBTC also charges a 2% fee. So you are paying fees on fees for any money you give ARKW which they decide to put in GBTC.
  • Sure, GBTC lets you buy BTC with your IRA but IMO, that's not something you should necessarily be gambling your retirement on.
TLDR: instead of giving $/$$/$$$ to ARKW, is there something they own that you'd rather buy directly?
Maybe with a small investment you could justify owning a piece of a bunch of different pies but for any decent amount of money (where your alternative is buying tens or hundreds of a given share), personally, I'd rather own fewer of the underlying stock themselves and forgo the fees.
 

·
Registered
Joined
·
3,606 Posts
Saw this on reddit.
Wanna visualize market volatility?
Check out this animation
 

·
Registered
Joined
·
3,606 Posts
Q: Who's adding market volatility?
A: Damn millenials :) FWIW, I think the woman in the video is much more similar to the friends I know who went to wall street after engineering school (one finished an MS in Financial Engineering @ Cornell before heading to wallstreet pre 9/11) than the kids who are using borrowed money to place crazy bets on robinhood using their iphones.

 

·
Registered
Joined
·
3,191 Posts
Discussion Starter #333
Hey, I resemble that statement!

Thanks to apps like Robinhood and trading fees being super cheap (or non-existent!) is a likely contributor to Millennials such as myself trading more frequently.
 

·
Registered
Joined
·
3,606 Posts
Hey, I resemble that statement!

Thanks to apps like Robinhood and trading fees being super cheap (or non-existent!) is a likely contributor to Millennials such as myself trading more frequently.
Prosecution rests :)
To be fair, the whole lockdown in SF and me cashing out a lot of my funds while they are still positive while i wait for the fall has made me (a gen-Xer) look at a few more opportunities to deploy this cash. The cash doing nothing has me thinking more about ROI than I would normally.

I recognize that I'm like a kid with a shiny new toy (selling puts). If someone is willing to pay me a decent/good APY to commit to buying a few stocks at a discount I deem to be fair from a price that I currently believe to be overpriced (DKNG), I'll do it. If the market continues to go up, I still make a decent ROI with the premiums received. If the market tanks, I'll end up owning the stock at a price i think is fair.

On these individual puts, my exposure is less than what I would feel comfortable with owning outright in any one ticker symbol (<3-5% net worth).
 

·
Registered
Joined
·
3,606 Posts
One more thought tonight. I read this throwaway article (mostly fluff) but one comment struck a chord


With the USA printing money like it's going out of style, it's logical to suspect tax rates will climb in the future -- Specifically 20-30 years from now when i will start drawing money out of my retirement accts.


1) If you agree, is it worth considering to move your 401k contributions to the Roth very (most plans have this option). You lose the tax benefit but could save in the future.

2) more radically, is it worth consideringo A conversion of existing traditional IRAs and rollover accts? Tax bill could be huge but if you know your 2020 income will be lower than in other years, this might be the time to do it.
 

·
Super Moderator
Joined
·
13,191 Posts
In regards to the excessive money printing I see inflation becoming a serious concern in the future as a result, not increased taxes.

In regards to tax rates; tax rates need to get back to where they were before the Bush era and now Trump tax cuts. We shouldn't see an increase, but more likely a "return to normal" on tax rates. Unfortunately, the tax increases that are likely to be implemented will be on the middle class exempting large corporations and the wealthy. Few paid attention, but the Trump token (small) tax cuts for the working class expire in 10 years while the corporate (very generous) tax cuts are permanent.

Don't get me started on taxes.

Anyway, back on topic, moving to a ROTH is almost always a good ideal regardless of the current (or future) tax situation.
 

·
Registered
Joined
·
3,606 Posts
In regards to the excessive money printing I see inflation becoming a serious concern in the future as a result, not increased taxes.

In regards to tax rates; tax rates need to get back to where they were before the Bush era and now Trump tax cuts. We shouldn't see an increase, but more likely a "return to normal" on tax rates. Unfortunately, the tax increases that are likely to be implemented will be on the middle class exempting large corporations and the wealthy. Few paid attention, but the Trump token (small) tax cuts for the working class expire in 10 years while the corporate (very generous) tax cuts are permanent.

Don't get me started on taxes.

Anyway, back on topic, moving to a ROTH is almost always a good ideal regardless of the current (or future) tax situation.
Classically, the argument is that if you expect to make less money in retirement than now, and therefore be in a lower tax bracket, putting your 401k into a Roth version or your IRA in a Roth version makes sense. I would tend to believe that my income will go down in retirement vs now. The problem I see is that I suspect everyone's tax burden will go up in the 20yr future. So giving up the tax benefit now might make sense bc the growth and withdrawals will be tax free.

I don't think at my income it makes sense to convert the rollover accts to Roth's just yet. If either my wife or I lost our jobs, the calculations might change. I should have pushed my wife to convert hers 12 years ago when she was in grad school but honestly, I didn't think about it at the time. She was just my GF and we maintained separate finances back then.

I bring this up in case any of you folks sre in a different situation.
 

·
Registered
Joined
·
3,191 Posts
Discussion Starter #338
My fear about all the money we're printing and the debt we're in...$26T?...is that in 20yrs time we could easily be in a situation similar to that of Venezuela is now in regards to the economy (politically, that's a different story, and one for a different thread).
 

·
Registered
Joined
·
3,606 Posts
My fear about all the money we're printing and the debt we're in...$26T?...is that in 20yrs time we could easily be in a situation similar to that of Venezuela is now in regards to the economy (politically, that's a different story, and one for a different thread).
Well, other govts using us as a reserve currency (and holding our USD) is one thing preventing us from becoming Venuezuela. If you really think thats coming, that's one reason to consider investing in more solid vs speculative investments (real estate, essential businesses with assets instead of financial shenangigans/etc).

I'm not so sure yet.
Over lunch today I took a look at what options I had for total market ownership. In case you weren't aware, tech makes up the largest chunk of the S&P500 (just over 26%). If you are looking for broader market exposure, there are other ETFs that invest in the entire US stock market.

I went through the list and basically, the one ETF that has both a) low fees (0.03%) and b) an active options chain is VTI. I wouldn't buy it now but I've put it on my radar as a future point of investment if the price drops sufficiently (just like VOO and IVV).
-g
 

·
Registered
Joined
·
3,606 Posts

Poor guy. I hope noone here considers suicide no matter how bad things might get economically. It will be interesting though to see how much volatility dies down if RH turns off options trading for noobs in their app.
 
321 - 340 of 744 Posts
Top