Talking Stocks 2.0

[RBradleigh]

Took some patience but very glad I didn’t panic sell NFLX a year and half ago.
Quite the swing;
Nov 2021, 650
Jun 2022, 180
Jan 2024, 525


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[904VT]

Originally Posted by huncho

most people are not tech savvy enough to send btc back and forth into wallets and don't know how to safely store them. i've been in crypto for like 6 years and i still get paranoid every time i send crypto and it takes some time to get there lol. there's no way someone like my mom for example would buy actual btc, but she'll easily buy microstrategy or these etfs. also you need to move money into coinbase and stuff, so yeah it's just added layers of complexity for people that aren't used to it

Originally Posted by enjoythemusic

Smart investors should take time for modern financial education, which in turn helps to provide market confidence in BTC / ETH / etc, agreed. You may have hit the nail on the head.

Reminds me of Geek Squad 'invoice refund' and other payment scams that prey on using Gift Cards, which are very risky and may include total loss if lost or stolen, should be taught in school. Agreed there is market risk, and beware of extra fees. Education brings knowledge and can help to achieve smarter investment strategies while also minimizing unnecessary fees that reduce your investment advantage. By you holding the actual BTC / ETH / etc, you eliminate certain risks we've all seen at Wall Street including stocks, currencies, and yes commodities.

Once Blackrock, for example, has your BTC, can they financialize it in other ways? Is it wholly owned by you 100%, or can Blackrock use your BTC as collateral to increase their risky holdings elsewhere (for example, as USA banks do with Dollar deposits)?

Most investors should never touch anything crypto related because of the lack of transparency in the trading market/exchanges. That’s one of the major tenets of a fair market. If not a fair market while the investment may have merit the market doesn’t afford fair trading/regulation. I’m sure you can say the same about bank deposits and equities but at the end of the day SBF isn’t getting away with what he did in those markets. You don’t need to worry about whereabouts of your equity holding as the trade settles. Crypto exchange good luck. The added hassle of monitoring the wallet is an embedded fee/expense drag that isn’t seen as a line item. The closest I can think of is running a customized swap. And no retail investor should go anywhere near taking a side in one those regardless of the diversification benefits.

I’ve been making plenty of money on my Intel and NVIDIA positions, which imo are much better technology and secular growth stories. NVIDIA is generations beyond competitors with their Tensor cores. Intel has unlocked growth opportunities with CHIPS act money coming in to help fund foundry growth plus a fast growing discrete GPU lineup that if AI advancements continue will be very attractive to the Prosumer market. NVIDIA only had the 4090 for the Prosumer market, so Intel can fill this gap on the lower to mid that AMD has failed to.

[7sins]

This unbridled enthusiasm is wild, hard to fathom how much longer this can last. Getting killed on my QQQ puts, DCA more this week, must be a masochist. Expiry isn't until 2025, plenty of time for normalcy to return.

[Dr Process]

Friends,

Thank you for your ongoing posts in this thread. As a relatively inexperienced investor, I greatly appreciate your insight. The topics broached here continue to spur additional reading and learning.

Thanks again!

[INC]

Originally Posted by 7sins

This unbridled enthusiasm is wild, hard to fathom how much longer this can last. Getting killed on my QQQ puts, DCA more this week, must be a masochist. Expiry isn't until 2025, plenty of time for normalcy to return.

Wow, that doesn't sound like a friendly forecast. Do you have any advice for the near future, or this chart simply means to sell sell and sell as long as you can?

[SDGT3]

Originally Posted by 7sins

This unbridled enthusiasm is wild, hard to fathom how much longer this can last. Getting killed on my QQQ puts, DCA more this week, must be a masochist. Expiry isn't until 2025, plenty of time for normalcy to return.

B, that is a worrying sign but would the mountain of cash on the sidelines make you pause. Further, with the eventual Fed rate cuts imminent, a lot of that reported $8.8T on the sidelines earning a decent rate in MM, CDs or equivalent would find a new home in equities wouldn't it?

[7sins]

Originally Posted by INC

Wow, that doesn't sound like a friendly forecast. Do you have any advice for the near future, or this chart simply means to sell sell and sell as long as you can?

My crystal ball has been broken my entire career, that is a very difficult question to answer as I do not know anything about your risk profile, portfolio, investments etc. When markets get this sense of euphoria, it is often retail that gets in last, this is the largest long book in market history, again too many investors on one side of the trade. Look at any market period, anytime there have been massive and quick runups like this, it was almost always met with violent reversion back to the mean. My .02, take advantage of the momentum and write covered calls, take the free premium from them and buy index puts to hedge should we see market volatility this year. Then when the index eventually slides, take the money from your puts and add to existing/new positions. You can see below, every year there is a trough in the market, it doesn't go up in a straight line, when markets get expensive, insurance for protection becomes very cheap. I've made the most money in my career trading the opposite of market trends. Just my .02, not financial advice and certainly not from a bond trader.

Originally Posted by SDGT3

B, that is a worrying sign but would the mountain of cash on the sidelines make you pause. Further, with the eventual Fed rate cuts imminent, a lot of that reported $8.8T on the sidelines earning a decent rate in MM, CDs or equivalent would find a new home in equities wouldn't it?

Nice to hear from you Phillip. That is the main bull thesis for why investors believe the market will further rally, personally I don't buy it. The majority of that money, once the FED begins cutting, will go into longer maturity bonds. Investors will start seeing their MM yields drop quickly and realize they need to secure higher yields for longer and also increase total return by extending duration and maturity. Investors who park money in cash equivalent investments are typically very conservative, I never met someone who went from wanting a MM or CD which are ultra conservative then go you know what, I want to go two feet into QQQs and equities - at ALL time highs none the less.

Not to say some of that cash won't be earmarked for equities but the majority will be for fixed income, again, the conduit going from conservative MM to conservative bonds. You can see the importance below of having a bond allocation BEFORE the first rate cut, 12 months returns are almost doubled compared to waiting after the fed cuts.

[INC]

Originally Posted by 7sins

My crystal ball has been broken my entire career, that is a very difficult question to answer as I do not know anything about your risk profile, portfolio, investments etc.

Thanks for the reply!

Yes, I know that fortune tellers are not always right, except when they work in a team and always say the opposite of their other. This is the secret of sure success, because one of them will always be right. This is exactly what they play nowadays in the media, to make you a believer. They are going to be sure, so it is not even a problem if you became disappointed, because then they will allow to choose another one from them. The show must go on.

That's why I'm mostly not interested in these opinions, because according to my experience, these things don't inform for some time, but only want to influence people to do exactly what they are quasi-instructed to do.

And that's exactly why I value these honest opinions, because for me the point is not if these are right or wrong, but makes me think about it. And for me that is the real profit

[SDGT3]

So good to hear from you B. Always look forward to your insight. Have a great weekend

[BraveBold]

My strategy after the big tech sell-off was simple -load up with the babies thrown out with the bathwater…

Added Meta after its big drop. MSFT, Snowflake, Nu, Stoneco, Intel, AMD and Amazon. The rest was kept liquid in low duration FI. Once rates were up into the 4s, made it a risk barbell - held the tech plays but started shifting short duration into long dated bonds (10Y primary).

Thesis was / is simple. If economy slows, rates will come down. Positive for some tech (neutral / neg for others) and positive for bonds. If economy strong, tech will continue to gain, especially quality tech.

I could have made out with more $ by going all-in on my tech choices (which are doing about 2-3x better than market returns overall). But cannot see the future - and I’m a firm believer in intelligent hedge strategies. I simply don’t have the risk appetite to be too brave or bold with my finances.

Also have the benefit of having worked closely with some of the biggest names on WS and know how limited their capabilities are. Once you’ve seen the limitations of some of the “best and brightest “ you learn to block out that noise. Many are just one trick ponies. Most in fact. One clear exception is Mr. Buffett. He makes mistakes but they are well informed ones :-)

Edit: none of the above should be construed as financial advice lol

[atomicfear]

Petrobras is my next play. South america is going to lose their appetite for oil and that DIV is so juicy.

[7sins]

Originally Posted by BraveBold

I simply don’t have the risk appetite to be too brave or bold with my finances.

Except your forum name is BraveBold lol only kidding

[SDGT3]

Both core and headline inflation came in higher than expected. Super core, minus housing, came in at a whopping 6% year over year!! Market tanking and 10 year T approaching 4.3 again.

Less than 2 months ago the odds were a Fed cut by March. Clearly that is out the window. Likely odds now are July.

[superdog]

Originally Posted by SDGT3

Both core and headline inflation came in higher than expected. Super core, minus housing, came in at a whopping 6% year over year!! Market tanking and 10 year T approaching 4.3 again.

Less than 2 months ago the odds were a Fed cut by March. Clearly that is out the window. Likely odds now are July.

Or way longer. Hard to guess at all.

They made the announcement, markets took off. Once again artificially. A lot of what we have seen the last two years is completely artificial.

So the markets take off on anncouncement of future rate cuts. But inflation remains hot. So cuts are priced in, and everyone is celebrating, but for no reason. Nothing actually happened.

Truly, it is as if we don't have the capacity to learn. And the same mistakes are repeated over and over again.

On top of all that, reported corporate numbers are good. But how are they getting there with rising costs and a slow down in spending? They are cutting the one thing they can to really effect change in costs. Human capital.

So we see the rich get richer, and the poor lose their jobs. Again. But the middle class itself is at risk here.

Yeah, I get it...I am a permabear. But I see a radical storm making brewing here.

[superdog]

^^^

Don't forget the largest ever national debt and personal debt. Not to mention that some crazy number of Americans don't an emergency fund. I think it is about 40%.

Home prices are going to drop and you will find massive amounts of people underwater with no job and no savings. Oh, and forget about how many people are underwater on their vehicles.

Yeah...I am depressing myself even. I will stop.

[austinp]

It’s all gone up a lot lately. Isn’t it pretty normal to retreat after a big run? Hasn’t earnings been mostly pretty good for Q1?


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[SDGT3]

About 80% of earnings have beat but estimated earnings are highly conservative given the penalty if you miss.

This is quite healthy as the market was going up in a linear fashion. The markets were not listening to the Fed as they said higher for longer. Markets also priced in 6-7 cuts in 2024 where the Fed said the R Star indicated only 3 cuts. Looking forward, 3 may be high.

There’s no longer talk of a recession and wage growth is higher than inflation which means the consumer (70% of the economy) is still in really good shape.

Dow is down over 700 pts now and that last hour of trading is going to be interesting:

[superdog]

Originally Posted by austinp

It’s all gone up a lot lately. Isn’t it pretty normal to retreat after a big run? Hasn’t earnings been mostly pretty good for Q1?


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It has, and it is. But why has it gone up?

Much of it was based on news from the fed.

What is underlying?

I am seeing large amounts of layoffs. Corporations are making money. But how? And at what cost to the consumer?

[austinp]

Originally Posted by superdog

It has, and it is. But why has it gone up?

Much of it was based on news from the fed.

What is underlying?

I am seeing large amounts of layoffs. Corporations are making money. But how? And at what cost to the consumer?

I certainly don’t know any of this well enough to answer any of your questions. I have heard the talking heads on TV mention many times a lot of money has been on the sidelines for a couple years now. Maybe some of that has been put in play? The average gain the last 3 years has been pretty modest even with the run up the last few months. Unemployment remains super low even with the layoffs recently. Again I’m no expert in any of this. Just a little guy putting money in every 2 weeks.


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[superdog]

Originally Posted by austinp

I certainly don’t know any of this well enough to answer any of your questions. I have heard the talking heads on TV mention many times a lot of money has been on the sidelines for a couple years now. Maybe some of that has been put in play? The average gain the last 3 years has been pretty modest even with the run up the last few months. Unemployment remains super low even with the layoffs recently. Again I’m no expert in any of this. Just a little guy putting money in every 2 weeks.


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I am no expert either. I think that is clear.

And all I can state is from my own anecdotal experience.

Unemployment might be low, but what types of jobs are they? And what are they paying? Are costs keeping up with inflation?

Personally, I build distribution centers. Everyone in my industry is down. Literally everyone. Customers, vendors and competitors. Product is not moving.

And all the big companies in my industry are doing mass layoffs.

I think you are doing right thing. Always input funds. Always be investing. That is the right strategy.

My feeling only is that we have a rough few months or years ahead. But again, permabear. So take that with a grain of salt.


just read this. figured it is relevant to add:

https://www.yahoo.com/finance/news/f...161426919.html

[austinp]

All good my man. I’ll check out the article you sent. All the best.


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[austinp]

I wish Bshannon was still around. He was always a voice of reason regarding investing. I hope he’s doing well.


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[superdog]

Originally Posted by austinp

I wish Bshannon was still around. He was always a voice of reason regarding investing. I hope he’s doing well.


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I really liked him too. But I can tell you exactly what he would say:

"There is nothing wrong. The economy is strong. I am still investing".

He and I often disagreed on it. He was typically right. I eventually will be.

[huncho]

it's become a market of like 10 stocks - the mag 6 (tesla sucks) and whatever chip company mentions AI on their calls (SMCI, ARM). honorable mention can go to crypto stocks since bitcoin is having a good few months, but everything else is still in the same range as the last 2 years and pretty much defeats the purpose of holding long term

cpi report sucked today so i guess the small/mid caps will take even more beatings

[austinp]

Originally Posted by superdog

I really liked him too. But I can tell you exactly what he would say:

"There is nothing wrong. The economy is strong. I am still investing".

He and I often disagreed on it. He was typically right. I eventually will be.

lol. Probably right. I think he had the benefit of many many years of investing having been through so many ups and downs. He often would mention he wasn’t buying but putting a shopping list together for the right moment. Wise indeed.


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[BraveBold]

Originally Posted by superdog

I am no expert either. I think that is clear.

And all I can state is from my own anecdotal experience.

Unemployment might be low, but what types of jobs are they? And what are they paying? Are costs keeping up with inflation?

Personally, I build distribution centers. Everyone in my industry is down. Literally everyone. Customers, vendors and competitors. Product is not moving.

And all the big companies in my industry are doing mass layoffs.

I think you are doing right thing. Always input funds. Always be investing. That is the right strategy.

My feeling only is that we have a rough few months or years ahead. But again, permabear. So take that with a grain of salt.


just read this. figured it is relevant to add:

https://www.yahoo.com/finance/news/f...161426919.html

Permabear?

Is that how you invest? I hope not. :-)

The market correction today was expected but inflation is under control. I am more concerned that demand will fall… faster than expected. Of course that will further unwind inflation but the market is not positioned for anything but goldilocks today.

[BraveBold]

Originally Posted by austinp

I certainly don’t know any of this well enough to answer any of your questions. I have heard the talking heads on TV mention many times a lot of money has been on the sidelines for a couple years now. Maybe some of that has been put in play? The average gain the last 3 years has been pretty modest even with the run up the last few months. Unemployment remains super low even with the layoffs recently. Again I’m no expert in any of this. Just a little guy putting money in every 2 weeks.


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The real surprise is simple - people keep spending and the depleted savings cliff has not (yet!) materialized. Corp earnings and/or guidance are far stronger than doomsayers were predicting 12 months ago. Far stronger…

Do I expect that to continue? I believe the consumer will slow and we will see some acceleration (down) if that slowing prompts meaningful layoffs.

Layoffs recently are more about BS mixed headlines. Laying off people to then hire is not denting confidence for obvious reasons (and so far this is exactly what’s happening in MOST sectors).

[superdog]

Originally Posted by BraveBold

Permabear?

Is that how you invest? I hope not. :-)

The market correction today was expected but inflation is under control. I am more concerned that demand will fall… faster than expected. Of course that will further unwind inflation but the market is not positioned for anything but goldilocks today.

I appreciate your concern. Thank you.

But yes, that’s how I invest. I’m very conservative. I’m very comfortable in my financial situation based on building and selling two businesses.

I’m more in capital conservation mode rather than trying to make money. And I just don’t trust the markets.

I’m very happy with my current 12% gain over the last 12 months. I could retire today very comfortable and I’ll be 50 in 3 weeks. No need to chase big gains and take bigger risks. Especially as I’ll not be retiring until at least 55.

Sure, I’d like more money. But I have a low risk tolerance.

Fun fact though, you think it’s a Goldilocks set up. I think otherwise. Neither of us had any ideas. Neither does, Cramer or woods or Dimon or Cuban or any of the other experts on TV.

[SDGT3]

Originally Posted by huncho

it's become a market of like 10 stocks - the mag 6 (tesla sucks) and whatever chip company mentions AI on their calls (SMCI, ARM). honorable mention can go to crypto stocks since bitcoin is having a good few months, but everything else is still in the same range as the last 2 years and pretty much defeats the purpose of holding long term

cpi report sucked today so i guess the small/mid caps will take even more beatings

It was nearly 3 years since the peak of January 2021 since we hit a fresh new high so I get your point.

The market rally was supposed to broaden out, but the Russell 2000 was down as much as 5% today and finished at -4%.

[BraveBold]

Originally Posted by superdog

I appreciate your concern. Thank you.

But yes, that’s how I invest. I’m very conservative. I’m very comfortable in my financial situation based on building and selling two businesses.

I’m more in capital conservation mode rather than trying to make money. And I just don’t trust the markets.

I’m very happy with my current 12% gain over the last 12 months. I could retire today very comfortable and I’ll be 50 in 3 weeks. No need to chase big gains and take bigger risks. Especially as I’ll not be retiring until at least 55.

Sure, I’d like more money. But I have a low risk tolerance.

Fun fact though, you think it’s a Goldilocks set up. I think otherwise. Neither of us had any ideas. Neither does, Cramer or woods or Dimon or Cuban or any of the other experts on TV.

I think there was a misunderstanding.

I am risk averse and expect a correction. Will leave it at that.

(Edited out cranky reply)