Talking Stocks 2.0

[Kowaco]

Originally Posted by HHIslander

Covered shorts today and went all cash. Not long yet, but this market is hugely oversold short term and is begging for a reason to bounce. It’ll be another bear market rally, ultimate bottom not near but this downward thrust can’t go on much longer. Every indicator I follow is flashing buy. Thoughts?

Definitely much lower. I wouldn’t be looking for a bottom I’d be looking at what’s going on in the world. I have 1/2 my money in one stock and the other half in a 50/50 portfolio., but I think we have tremendous problems that are going to get worse. I of course hope I’m wrong but I don’t think I am


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[HHIslander]

Originally Posted by Kowaco

Definitely much lower. I wouldn’t be looking for a bottom I’d be looking at what’s going on in the world. I have 1/2 my money in one stock and the other half in a 50/50 portfolio., but I think we have tremendous problems that are going to get worse. I of course hope I’m wrong but I don’t think I am


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We’re ultimately going much lower, I agree. I’m just talking about a short term tradable bounce. Ultimate bottom unlikely to happen until Q1 next year, if not later.

[huncho]

well bloomberg just published an article about iphone demand and futures immediately tanked. despite the market being so oversold it feels like apple is holding the entire house of cards up so if it's finally red more pain will come fast. it's up 18% from june lows while we just closed below the lows. imagine if it revisits 130s

of course breaking news must always happen when the market is closed lol

[Kowaco]

Originally Posted by HHIslander

We’re ultimately going much lower, I agree. I’m just talking about a short term tradable bounce. Ultimate bottom unlikely to happen until Q1 next year, if not later.

I’ve been selling covered calls on my one stock, but only short term. I posted 2 weeks ago that the Dow would go below 30k, because it looks like people are selling into the rallies. Even today when we had a pop I sold some covered calls and sure enough the market fell again. I’m no trading genius I’m only trying to make a little income.

Mortgage rates popped today and I think that is going to kill the housing market. I think mortgage rates will be 9% by December.

This is just my guess I’m looking at diesel fuel prices and I think that is going to keep inflation up. I absolutely think the situation in Europe is going to get worse.

These are just my opinions based on what I see.

I’m not ready to short anything but I am trying to collect some premiums on my only stock every time it pops. I’ll just have to ride out the 50/50 portfolio it’s done and is doing terrible.

I believe you can make some money shorting this market because I think the trend is going down.

I tend to agree with you on not seeing a bottom until next year. I’m going out on a limb but I wonder if the EU will crack over inflation and fuel.. The November elections may make a difference but I don’t think it’s going to change the situation in Europe either way.


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[Turbo Racer]

Originally Posted by huncho

well bloomberg just published an article about iphone demand and futures immediately tanked. despite the market being so oversold it feels like apple is holding the entire house of cards up so if it's finally red more pain will come fast. it's up 18% from june lows while we just closed below the lows. imagine if it revisits 130s

of course breaking news must always happen when the market is closed lol

That is interesting and makes sense. Fundamental macro is bad. I don’t believe that FAANGs will be the safe haven they’ve been. Who knows. Looks like less and less places to hide. Fixed income is looking better by the day.

[904VT]

Originally Posted by macrowatch

Lol, nice, first time I heard of the phrase 'tax alpha'. Love it. So true. All those lobbying dollars to preserve carried interest in the US also probably a good ROI.

In other news, forget stocks, holy moly on the USD. If you told me pound/dollar was going to be approaching parity, I would have spit my coffee all over you.

[904VT]

Originally Posted by huncho

well bloomberg just published an article about iphone demand and futures immediately tanked. despite the market being so oversold it feels like apple is holding the entire house of cards up so if it's finally red more pain will come fast. it's up 18% from june lows while we just closed below the lows. imagine if it revisits 130s

of course breaking news must always happen when the market is closed lol

Have to love inefficient cap weight methodology driving the indices that we use as a barometer nowadays. The index buys when high and sells when low. Strange we use it in so many basket products today.

[SDGT3]

Originally Posted by huncho

well bloomberg just published an article about iphone demand and futures immediately tanked. despite the market being so oversold it feels like apple is holding the entire house of cards up so if it's finally red more pain will come fast. it's up 18% from june lows while we just closed below the lows. imagine if it revisits 130s

of course breaking news must always happen when the market is closed lol

Apple had revised their estimates higher with the introduction of the iPhone 14. When initial response wasn't what they thought it would be, they revised back down to initial levels, not lower levels. Given the certainty of global recession, sales at pre-recession levels isn't really all that bad. Should the stock fall to the 130's, that is a great buy level given how well the company is run, the vast amounts of cash it generates each quarter, and solid balance sheet.

[superdog]

All I’m looking at right now is trading multiples and an indication we are near a bottom.

My guess now is that it will between 3,000 and 3,200. Just a guess obviously. But it would be inline with averages and data.

Clearly it’ll be determined by marco events and geopolitical happenings. So it’s hard to predict.

But hopeful that’s the worst we will see.

[scarlet knight]

The stock timers’ Hall of Fame is an empty room. -Warren Buffett
I am wrong more often than not. I just try to be diversified and hang in there.

[superdog]

Originally Posted by scarlet knight

The stock timers’ Hall of Fame is an empty room. -Warren Buffett
I am wrong more often than not. I just try to be diversified and hang in there.

Ironically, I agree with this.

At the same time, I pulled out of a lot in April. And I’m thrilled that I did. Absolutely thrilled.

Now I’m just trying to be smart and strategic as I reinvest it. My big fear is I out a lot in, we have a big drop, and I have minimal dry powder to take advantage of the buying opportunity.

I think what we are seeing is somewhat unprecedented given how technology has effected communication. And I think strategies will differ for everyone.

[huncho]

Originally Posted by superdog

Ironically, I agree with this.

At the same time, I pulled out of a lot in April. And I’m thrilled that I did. Absolutely thrilled.

Now I’m just trying to be smart and strategic as I reinvest it. My big fear is I out a lot in, we have a big drop, and I have minimal dry powder to take advantage of the buying opportunity.

I think what we are seeing is somewhat unprecedented given how technology has effected communication. And I think strategies will differ for everyone.

i guess it comes down to what you're looking to buy. i've started to buy extremely beat down tech stocks every few weeks. these are already down 90% so the value is already there and timing the exact bottom doesn't matter. for the big ones or blue chips it makes a difference, but i'm not looking to buy apple at 140 or microsoft at 230 for example

[NYG1121]

Originally Posted by huncho

i guess it comes down to what you're looking to buy. i've started to buy extremely beat down tech stocks every few weeks. these are already down 90% so the value is already there and timing the exact bottom doesn't matter. for the big ones or blue chips it makes a difference, but i'm not looking to buy apple at 140 or microsoft at 230 for example

This is why it is called a market! Because to me those big ones being down 40% are way more attractive buys than the speculative growth ones even if they are down 90%. Google is looking very attractive sub $100.

[logo]

Originally Posted by huncho

i guess it comes down to what you're looking to buy. i've started to buy extremely beat down tech stocks every few weeks. these are already down 90% so the value is already there and timing the exact bottom doesn't matter. for the big ones or blue chips it makes a difference, but i'm not looking to buy apple at 140 or microsoft at 230 for example

Very dependent on environment though, need to be careful - a beaten down stock doesn't necessarily mean it can't get beaten further, as 7sins would probably say, need to identify where the market has disconnected from reality. Just 18 months ago you could walk into any VC office with a wild idea and they'd hand you a few million dollars. Money was cheap, spending and growth was high. Today, startups are finding it harder and harder to raise money - VCs have tightened significantly. Cost of borrowing has risen dramatically, which crushes young businesses without steady positive cash flow the most. Similarly, there are signs that free cash flow even for big companies may stall or decline from earlier projections (e.g. Apple's adjustment). In addition, with inflation at 8% and bonds offering decent returns, you might have a higher discount rate than previous. Plug it all into a DCF model and you will find we could still drop more - how long does inflation stay elevated? At what point does all this trickle down to reduced consumer and business spending with resultant affects on earnings (e.g. further reduced cash flow)? What economic/global event could happen that impacts the uncertainty of all this further?

[huncho]

Originally Posted by logo

Very dependent on environment though, need to be careful - a beaten down stock doesn't necessarily mean it can't get beaten further, as 7sins would probably say, need to identify where the market has disconnected from reality. Just 18 months ago you could walk into any VC office with a wild idea and they'd hand you a few million dollars. Money was cheap, spending and growth was high. Today, startups are finding it harder and harder to raise money - VCs have tightened significantly. Cost of borrowing has risen dramatically, which crushes young businesses without steady positive cash flow the most. Similarly, there are signs that free cash flow even for big companies may stall or decline from earlier projections (e.g. Apple's adjustment). In addition, with inflation at 8% and bonds offering decent returns, you might have a higher discount rate than previous. Plug it all into a DCF model and you will find we could still drop more - how long does inflation stay elevated? At what point does all this trickle down to reduced consumer and business spending with resultant affects on earnings (e.g. further reduced cash flow)? What economic/global event could happen that impacts the uncertainty of all this further?

yeah very true, i'm trying to be selective instead of just blindly buying stocks down 90% because like you said, there's a reason for it. for example stocks like affirm and upstart are down 90% but have flawed business models for todays environment, or nvidia down 65% but still can be considered ridiculously overvalued. i'm trying to find ones that have value relative to the industry and companies that should stay afloat and continue to grow once this is over. obviously no one knows which those are so it's still a big gamble lol

i'm not looking for them to 10-20x back to all time highs but i think a 2-3x is pretty conservative if you're looking at a medium to long term time frame (5-10 years)

[superdog]

Originally Posted by huncho

i guess it comes down to what you're looking to buy. i've started to buy extremely beat down tech stocks every few weeks. these are already down 90% so the value is already there and timing the exact bottom doesn't matter. for the big ones or blue chips it makes a difference, but i'm not looking to buy apple at 140 or microsoft at 230 for example

Beat down tech stocks make me way nervous.

A lot of them are down 90% for a good reason. I recall a bit of 2008 and 09 in that many companies simply didn’t survive.

But as you say, it depends on what they are looking for. I only want blue chips. I’m not looking for huge returns. I want a slow and steady incline to get back where I was. Minimal risk, less return is okay by me. I’m good with that.

[logo]

Nike Q1 2023 - revenue growth ~1/3 what was projected a year ago, reduced gross margin (vs projected increase one year ago), reduced EPS. Based on current EBIT, traded at 20x at the closing bell.

[SDGT3]

Originally Posted by superdog

Beat down tech stocks make me way nervous.

A lot of them are down 90% for a good reason. I recall a bit of 2008 and 09 in that many companies simply didn’t survive.

But as you say, it depends on what they are looking for. I only want blue chips. I’m not looking for huge returns. I want a slow and steady incline to get back where I was. Minimal risk, less return is okay by me. I’m good with that.

Agree with the above although concentrated positions in certain aforementioned tech companies with strong fundamentals have been extremely rewarding.

[huncho]

Originally Posted by superdog

Beat down tech stocks make me way nervous.

A lot of them are down 90% for a good reason. I recall a bit of 2008 and 09 in that many companies simply didn’t survive.

But as you say, it depends on what they are looking for. I only want blue chips. I’m not looking for huge returns. I want a slow and steady incline to get back where I was. Minimal risk, less return is okay by me. I’m good with that.

yeah i totally get it, it's all about risk vs reward. if you already have a large portfolio then there's no point risking a big % of it on companies that could theoretically go bankrupt. at a certain point it just makes much more sense to stick money in blue chips, sleep well at night and enjoy the mostly guaranteed slow and steady gains

that will eventually be my plan if i live to see the end of this bear market lol

[7sins]

Originally Posted by logo

Very dependent on environment though, need to be careful - a beaten down stock doesn't necessarily mean it can't get beaten further, as 7sins would probably say, need to identify where the market has disconnected from reality. Just 18 months ago you could walk into any VC office with a wild idea and they'd hand you a few million dollars. Money was cheap, spending and growth was high. Today, startups are finding it harder and harder to raise money - VCs have tightened significantly. Cost of borrowing has risen dramatically, which crushes young businesses without steady positive cash flow the most. Similarly, there are signs that free cash flow even for big companies may stall or decline from earlier projections (e.g. Apple's adjustment). In addition, with inflation at 8% and bonds offering decent returns, you might have a higher discount rate than previous. Plug it all into a DCF model and you will find we could still drop more - how long does inflation stay elevated? At what point does all this trickle down to reduced consumer and business spending with resultant affects on earnings (e.g. further reduced cash flow)? What economic/global event could happen that impacts the uncertainty of all this further?

I feel like I have rubbed off WAY too much in this thread haha

[superdog]

More justification to simply start now, and invest regularly.

https://www.marketwatch.com/story/ma...?siteid=yhoof2

[Doc Savage]

Originally Posted by superdog

More justification to simply start now, and invest regularly.

https://www.marketwatch.com/story/ma...?siteid=yhoof2

I agree that for most people, it's more important to have time in the market rather than to try timing the market. As long as your goal is medium to long term, dollar cost averaging or holding will work as a strategy, imo.

For the past year, I have cringed as I heard "experts" say (1) how quickly inflation would go away, and (2) inflation - and the Fed's response - would not lead to a recession or market capitulation. This was either shilling to the public so they could unload their personal holdings, wishful thinking, or complete ignorance. I'm not sure how much of the first 2 there was, but many investment analysts are woefully ignorant of things that happened more than 30 years ago.

This high inflation was obvious when it began happening seriously last year. We had a pretty good example of how it would play out based on the late 70s/early 80s. The Fed has made its goal and plan quite clear, and yet dozens of experts (often parroted by others in this thread), have made terrible and avoidable financial mistakes by not being able to forecast what would happen in 2022.

Often, the hardest thing to admit is when we don't understand something. Of all the "experts" listed in the linked article, I'm most confident in Ray Dalio's opinion. The research he did for his book, The Changing World Order, really helped him understand these cycles better than any other investor/analyst in the financial world, imo. I recommend his book to everyone (I have no connection to Dalio in any way - just a satisfied reader).

I wish everyone good fortune in the (financial) wars to come.

[superdog]

Interesting day so far. Hope it holds.

[superdog]

I hope he’s wrong.

https://www.yahoo.com/finance/news/b...143249291.html

[huncho]

so looks like we're rallying on hopes the fed will pivot. this will end well...

[m j b]

Originally Posted by huncho

so looks like we're rallying on hopes the fed will pivot. this will end well...

I'm sensing sarcasm.

I am notoriously bad at picking tops, bottoms, middles and everything else in the market. Basically, do the opposite of what I do.

But I have no idea what's going on right now. We're up, what, 5% in two days for no reason that I'm aware of?

Sure, you could buy Twitter on the hopes that the news is correct and EM will pay $54/share for a loser, but otherwise, I don't know what's driving the market up. It sure isn't the economy...

[SDGT3]

RBA raised by .25 instead of the anticipated.5. Yields lower on the 2 & 10. Dollar weaker and Sterling higher. So the financial media goes back to the "looks like the Fed 'could' pivot" mantra. Meanwhile the Fed hasn't said anything of the sort. Rinse and repeat.

[330ci]

Can't believe I dumped all my Twitter at 38 about a month ago... did not not see Elon going through

[macrowatch]

Originally Posted by 330ci

Can't believe I dumped all my Twitter at 38 about a month ago... did not not see Elon going through

I don't have a crystal ball, but for those that have the money, sometimes the only pain point is discovery and depositions airing presumably previously private information.

Interesting text messages to say the least!

[Baco Noir]

I retired in March with a 60/40 mix and about 10% in cash. The cash was to live on while the market corrected if needed, but more I’m thinking of moving to a 70/30 or event 80/20 mix since bonds have not performed in inverse to the stock market. Thoughts for someone who just retired during this show?