Talking Stocks 2.0

[cornerstore]

Originally Posted by jpeezy14@hotmail.com

I don't know that I necessarily agree. The general sentiment has been that the huge immediate fall came from COVID being priced into the market. Now, I think we're seeing the recovery being priced in.

There is some good news to be had (outside of this week's earnings, which were expected to be low), so I think we could possibly be heading in the right direction. This is coming from someone that's been bearish and still could fathom another big dip, though I'm not as dead set on it as I once was.

Good points but here is some thoughts in link provided, it’s worth the read. Also something virtually no one is discussing is the potential fallout from Protectionist economic measures going forward. France is fed up with Amazon and many countries are taking steps to take over and or redirect essential goods pipelines. So will there be a great uncoupling of just in time inventory models. If so all bets are off as companies will have to fundamentally change and maybe lose market share by newly created Nationalistic businesses. Lots of variables.
The days of global economic imperialism might be numbered for some companies.

https://www.marketwatch.com/articles...more_headlines

[77T]

Originally Posted by scarlet knight

Market will be unchanged tomorrow.

Only for the retail investor who doesn’t know what will be happening for the next 48 hours. Billions of shares are traded on ATS’s.

ATS’s don’t stop for the weekend.


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[mg18]

Very interesting thread with lots of insight. Glad I stumbled upon it.. Need some people to vent to. Sold my SHOP long hold position at 605 (TSX of course) last week after holding from the early days of $54 only to watch it break 820 today :(.

Must focus on the gains not what could have been right? lol.

I'm finding it difficult to buy in now as it seems this rally has gotten away from me. I'll stay tuned for this discussion!

[lukajur]

I remember some guys here being in the cannabis stocks around 2018 during the peaks. After recent APHA earnings, I am thinking of stocking up on the position. Any ideas? Any insights? Any holders? Regards, Luka

[lukajur]

Originally Posted by bearxj86

So... I liked the bottom at -37% and I have pocketed the upside since then. This chart concerns me.

What do you think?




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I recently read a theory, which I am in favour of. "We will rally on believes we can beat the virus with science; and then return to the lows on the realisation we destroyed our economy doing so"

To me personally the stock market is currently disconnected from the economy, which is being inflated by the US Gov, and I do not see the consumer returning to strength soon.

[JParm]

Originally Posted by lukajur

I remember some guys here being in the cannabis stocks around 2018 during the peaks. After recent APHA earnings, I am thinking of stocking up on the position. Any ideas? Any insights? Any holders? Regards, Luka

I just posted to this thread about APHA as a great opportunity the other day. I've turned 77% gains since buying the dip, and ultimately added a lot more to the position after the strong 1st Q earnings.

Great balance sheet, has turned a profit in a notoriously difficult industry to do that in and mainly sells / operates in it's home country (Canada), where it is legal for both medicinal and recreational use.

While there is a lot of unknown in the US, it's clear to me that at least in Canada, there will be a market across the board and APHA is well positioned to take advantage, as it's already becoming a well-known manufacturer in the industry.

As usual - do your research / hw first.

[lukajur]

Originally Posted by jpeezy14@hotmail.com

I just posted to this thread about APHA as a great opportunity the other day. I've turned 77% gains since buying the dip, and ultimately added a lot more to the position after the strong 1st Q earnings.

Great balance sheet, has turned a profit in a notoriously difficult industry to do that in and mainly sells / operates in it's home country (Canada), where it is legal for both medicinal and recreational use.

While there is a lot of unknown in the US, it's clear to me that at least in Canada, there will be a market across the board and APHA is well positioned to take advantage, as it's already becoming a well-known manufacturer in the industry.

As usual - do your research / he first.

I like your disclaimer. Yes, I’ve been doing my research - just wanted to hear some opinions. I made very successful trades on APHA during the run, exciting completely at 14.00.

Haven’t traded since then - had some LEAPS on it just to keep exposure - and the results two days ago just turned me on it again.

Considering opening a stock position again.

Thanks for the answer.


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[jltait]

Originally Posted by lukajur

To me personally the stock market is currently disconnected from the economy, which is being inflated by the US Gov

This has been true since at least 2008. Now is definitely no time to fight the Fed. When we exit this thing it will be with the lowest interest rates in history, to say nothing of the additional trillions in stimulus sloshing around. We are on the brink of the largest bull market in history.

[lukajur]

Originally Posted by jltait

This has been true since at least 2008. Now is definitely no time to fight the Fed. When we exit this thing it will be with the lowest interest rates in history, to say nothing of the additional trillions in stimulus sloshing around. We are on the brink of the largest bull market in history.

I am still 30% exposed in my play portfolio and fully exposed in my real account. Consider I am still young so can afford higher risks.


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[Bearxj86]

Originally Posted by jltait

This has been true since at least 2008. Now is definitely no time to fight the Fed. When we exit this thing it will be with the lowest interest rates in history, to say nothing of the additional trillions in stimulus sloshing around. We are on the brink of the largest bull market in history.

Perhaps our view gets colored by our personal experience and jobs. I work in Corporate Finance (MBA/CPA/CFA) and our earnings for 2020 are forecasted to be down almost 80% for the year followed by a 1 year recessionary tail in our best case scenario.

We are laying off a very large number of people and scaling DOWN production to meet that recessionary tail. We sure as hell aren't collecting money from our customers today that they owe and and we sure as hell aren't paying our suppliers unless absolutely necessary. Executives like me and others do not take our responsibilities lightly, we would not doing this if we do not have strong conviction that this positions us in the best possible way given the current environment. To be honest, managing a personal portfolio of stocks is pretty light compared to the crap we have to deal with. I personally have worked every waking hour for the past 3 weeks figuring out scenarios.

So let me ask you a question - how is the Fed going to help my Fortune 1000 company or the thousands of employees that are let go today when the 4 month of stimulus ends? We sure as hell aren't hiring them back -even in a V shape recovery maybe 25%. How is that Fed going to help the Chinese/APAC/LATAM suppliers when the US companies don't buy their goods?

All public S&P 500 companies are playing coy and have suspended or withdrawn guidance. I would say without disclosing my company that we are well capitalized and do not have a large debt. Yet the impact to 2020 earnings are -80% in a return to work in May/June scenario. Any finance person will tell you that even if you project back to normal by the end of the year, the impact of lower earnings and cash flow on the debt you will incur in 3-4 months can hamstring or bankrupt even the best companies and yes, its worth 20% less on the stock price (at least).

The psychology regarding depressions and recessions is interesting. It is almost the expectation of lower demand itself that causes the lower demand. I believe a recession is inevitable because the damage is already done but the question is how long will it last. Hopefully just through 2021. Folks here would say "don't bet against the fed". People in Corporate jobs don't bet, they have tens of finance people breaking down EVERY scenario and then they do a Monte Carlo or bi-nominal (probability weighted distribution) to come up with the most likely scenario. We don't bet, we make risk adjusted decisions.

Think about it, if you own a company of any size, and faced with this threat. Would you plan for a V shaped recovery? Or do you plan for a U or L and right-size first? You can always hire people back - yes it may cripple your long-term growth but the risk and downside of being wrong (if you plan the V) is the life of your company versus living to fight another day. Try making this decision when you're shut down hemorrhaging cash. Trust me, the Fed ain't there folks (at least not for us)... I'll be even darker. If you plan the V and you are right - you are a hero. However what if you are wrong? You are really really screwed. If you plan the U or L and it's a V, trust me you come out ok.

Anyway sorry to be a downer. The stock market could very well ignore this, but when actual guidance and Q2 earnings in July come out, there will be no room left to hide. Cannot play coy any longer Mr. Fortune 500 CEO/CFO.

[cornerstore]

Here is a partial explanation of the honey pot money churning the markets higher.

https://finance.yahoo.com/news/stimu...145127109.html

[lukajur]

Originally Posted by bearxj86

Perhaps our view gets colored by our personal experience and jobs. I work in Corporate Finance (MBA/CPA/CFA) and our earnings for 2020 are forecasted to be down almost 80% for the year followed by a 1 year recessionary tail in our best case scenario.

We are laying off a very large number of people and scaling DOWN production to meet that recessionary tail. We sure as hell aren't collecting money from our customers today that they owe and and we sure as hell aren't paying our suppliers unless absolutely necessary. Executives like me and others do not take our responsibilities lightly, we would not doing this if we do not have strong conviction that this positions us in the best possible way given the current environment. To be honest, managing a personal portfolio of stocks is pretty light compared to the crap we have to deal with. I personally have worked every waking hour for the past 3 weeks figuring out scenarios.

So let me ask you a question - how is the Fed going to help my Fortune 1000 company or the thousands of employees that are let go today when the 4 month of stimulus ends? We sure as hell aren't hiring them back -even in a V shape recovery maybe 25%. How is that Fed going to help the Chinese/APAC/LATAM suppliers when the US companies don't buy their goods?

All public S&P 500 companies are playing coy and have suspended or withdrawn guidance. I would say without disclosing my company that we are well capitalized and do not have a large debt. Yet the impact to 2020 earnings are -80% in a return to work in May/June scenario. Any finance person will tell you that even if you project back to normal by the end of the year, the impact of lower earnings and cash flow on the debt you will incur in 3-4 months can hamstring or bankrupt even the best companies and yes, its worth 20% less on the stock price (at least).

The psychology regarding depressions and recessions is interesting. It is almost the expectation of lower demand itself that causes the lower demand. I believe a recession is inevitable because the damage is already done but the question is how long will it last. Hopefully just through 2021. Folks here would say "don't bet against the fed". People in Corporate jobs don't bet, they have tens of finance people breaking down EVERY scenario and then they do a Monte Carlo or bi-nominal (probability weighted distribution) to come up with the most likely scenario. We don't bet, we make risk adjusted decisions.

Think about it, if you own a company of any size, and faced with this threat. Would you plan for a V shaped recovery? Or do you plan for a U or L and right-size first? You can always hire people back - yes it may cripple your long-term growth but the risk and downside of being wrong (if you plan the V) is the life of your company versus living to fight another day. Try making this decision when you're shut down hemorrhaging cash. Trust me, the Fed ain't there folks (at least not for us)... I'll be even darker. If you plan the V and you are right - you are a hero. However what if you are wrong? You are really really screwed. If you plan the U or L and it's a V, trust me you come out ok.

Anyway sorry to be a downer. The stock market could very well ignore this, but when actual guidance and Q2 earnings in July come out, there will be no room left to hide. Cannot play coy any longer Mr. Fortune 500 CEO/CFO.

Thank you for your insight. Q2 earnings where I expect the market to catch up to reality. I am not confident enough to go short in that period, but I am collecting powder to start buying then in fall. I agree with you regarding the stress in a job completely different to personal portfolio. I recently started a position in wealth management and can feel the pressure.

Regards, Luka

[jltait]

Originally Posted by cornerstore

Here is a partial explanation of the honey pot money churning the markets higher.

https://finance.yahoo.com/news/stimu...145127109.html

This is a good article. Helps to show that this time is no different. Stocks will also continue to churn higher, decoupled from the real economy as ever, particularly on bad news which will further raise expectations of additional stimulus.

[Doc Savage]

Originally Posted by cornerstore

Here is a partial explanation of the honey pot money churning the markets higher.

https://finance.yahoo.com/news/stimu...145127109.html

Great article. You see very little of this kind of reporting because we all want to believe that great strides are being made to help out the businesses hurt in this crisis. Instead, it's business as usual in legislation with massive loopholes purposely written into the Small Business relief loans, so they can be exploited by people who don't need the money.

[SBR]

Originally Posted by bearxj86

Perhaps our view gets colored by our personal experience and jobs. I work in Corporate Finance (MBA/CPA/CFA) and our earnings for 2020 are forecasted to be down almost 80% for the year followed by a 1 year recessionary tail in our best case scenario.

We are laying off a very large number of people and scaling DOWN production to meet that recessionary tail. We sure as hell aren't collecting money from our customers today that they owe and and we sure as hell aren't paying our suppliers unless absolutely necessary. Executives like me and others do not take our responsibilities lightly, we would not doing this if we do not have strong conviction that this positions us in the best possible way given the current environment. To be honest, managing a personal portfolio of stocks is pretty light compared to the crap we have to deal with. I personally have worked every waking hour for the past 3 weeks figuring out scenarios.

So let me ask you a question - how is the Fed going to help my Fortune 1000 company or the thousands of employees that are let go today when the 4 month of stimulus ends? We sure as hell aren't hiring them back -even in a V shape recovery maybe 25%. How is that Fed going to help the Chinese/APAC/LATAM suppliers when the US companies don't buy their goods?

All public S&P 500 companies are playing coy and have suspended or withdrawn guidance. I would say without disclosing my company that we are well capitalized and do not have a large debt. Yet the impact to 2020 earnings are -80% in a return to work in May/June scenario. Any finance person will tell you that even if you project back to normal by the end of the year, the impact of lower earnings and cash flow on the debt you will incur in 3-4 months can hamstring or bankrupt even the best companies and yes, its worth 20% less on the stock price (at least).

The psychology regarding depressions and recessions is interesting. It is almost the expectation of lower demand itself that causes the lower demand. I believe a recession is inevitable because the damage is already done but the question is how long will it last. Hopefully just through 2021. Folks here would say "don't bet against the fed". People in Corporate jobs don't bet, they have tens of finance people breaking down EVERY scenario and then they do a Monte Carlo or bi-nominal (probability weighted distribution) to come up with the most likely scenario. We don't bet, we make risk adjusted decisions.

Think about it, if you own a company of any size, and faced with this threat. Would you plan for a V shaped recovery? Or do you plan for a U or L and right-size first? You can always hire people back - yes it may cripple your long-term growth but the risk and downside of being wrong (if you plan the V) is the life of your company versus living to fight another day. Try making this decision when you're shut down hemorrhaging cash. Trust me, the Fed ain't there folks (at least not for us)... I'll be even darker. If you plan the V and you are right - you are a hero. However what if you are wrong? You are really really screwed. If you plan the U or L and it's a V, trust me you come out ok.

Anyway sorry to be a downer. The stock market could very well ignore this, but when actual guidance and Q2 earnings in July come out, there will be no room left to hide. Cannot play coy any longer Mr. Fortune 500 CEO/CFO.

Great post, thank you. I am the definition of a buy and hold investor and until now have subscribed to the don't fight the Fed philosophy.

That said, I did sell out of a decent sized portion of my equities with this recent pop in the market. As you said, I made a risk adjusted decision. I just don't see a scenario where earning will meet expectations for a good year or two. If it goes on to make new highs, I am fine with that as I still have equity exposure but if it goes much lower, I will be able to sleep at night and will have the opportunity to pick up some bargains. Good luck to all.

[Bearxj86]

Originally Posted by SBR

Great post, thank you. I am the definition of a buy and hold investor and until now have subscribed to the don't fight the Fed philosophy.

That said, I did sell out of a decent sized portion of my equities with this recent pop in the market. As you said, I made a risk adjusted decision. I just don't see a scenario where earning will meet expectations for a good year or two. If it goes on to make new highs, I am fine with that as I still have equity exposure but if it goes much lower, I will be able to sleep at night and will have the opportunity to pick up some bargains. Good luck to all.

I think buying is still a good thing if you can find value. I won't buy anything that is over 20% below peak value, but there are bargains to have. Slowly buy a little here and there and dollar cost average up/down through the volatility. I think its going to be a volatile summer...

[m j b]

Thanks @bearxj86 for that excellent post, very interesting.

I'm thinking that we will continue to see more up days, as more states relax the shelter rules.

I think later, and I hope I'm wrong, we'll get a second wave of virus victims, and the Market may stumble.

Third quarter, we'll see some bad earnings, stubborn high unemployment, and with the election coming up, a Market correction.

As always, do the opposite of what I recommend.

[watchmework]

I’m curious to see what the market does this week...I’m bullish with the states starting to reopen and hopefully a new SBA legislation being signed but who really knows, this market has been anything but predictable.

[cdubg21]

Anybody buying RDS-A?

[beshannon]

Oil is the story this morning, no other real news either very good of very bad so we are seeing early futures down ~400 DOW points

Not surprised to see profit taking after last week

[Dusko.Popov]

Originally Posted by cdubg21

Anybody buying RDS-A?

Nope. But I did rds-b on the dip to $31.

That dividend ...

Not sure where you’re located but the premium for “a” shares is not worth the price of admission for those in the United States.

[beshannon]

Originally Posted by cdubg21

Anybody buying RDS-A?

Originally Posted by Dusko.Popov

Nope. But I did rds-b on the dip to $31.

That dividend ...

Not sure where you’re located but the premium for “a” shares is not worth the price of admission for those in the United States.

Not touching Energy at this point, prices at this level are going to start causing bankruptcies. Many of these dividends are not safe

[Dusko.Popov]

Originally Posted by beshannon

Not touching Energy at this point, prices at this level are going to start causing bankruptcies. Many of these dividends are not safe

Good call. Oil at $16 a barrel. I’m selling out of energy positions this morning at a little bit of a profit. mro, cvx, and rds. I’ll watch for re-entry.

[beshannon]

Originally Posted by Dusko.Popov

Good call. Oil at $16 a barrel. I’m selling out of energy positions this morning at a little bit of a profit. mro, cvx, and rds. I’ll watch for re-entry.

I would like to buy CVX but with oil below 15 this morning there is simply no money being made by anyone in the space.

[JParm]

Originally Posted by beshannon

Not touching Energy at this point, prices at this level are going to start causing bankruptcies. Many of these dividends are not safe

I'm still adding to PSX at below $50. BoA just upgraded them to a buy (just another data point, among others) and I think they'll be in great shape in a year.

[beshannon]

Originally Posted by jpeezy14@hotmail.com

I'm still adding to PSX at below $50. BoA just upgraded them to a buy (just another data point, among others) and I think they'll be in great shape in a year.

Possibly

My biggest concern is which companies will survive and if you choose good companies with strong balance sheets, even if they maintain the dividend, actually making money is going to be very tough. If oil rises 100% from here it is still only $30 and most companies need $40 just to break even.

At 8 am oil has now hit $11 a barrel, 21 year low, storage is full, everyone is scrambling to get out of the front month contracts as no one wants to take delivery of a product that can't be sold or stored

[77T]

Originally Posted by beshannon

At 8 am oil has now hit $11 a barrel, 21 year low, storage is full, everyone is scrambling to get out of the front month contracts as no one wants to take delivery of a product that can't be sold or stored

Let’s not forget the SPR as a buyer of last resort.

$11 is May delivery contract closing pressure.

June and beyond are a different story.




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[beshannon]

Originally Posted by 77T

Let’s not forget the SPR as a buyer of last resort.

$11 is May delivery contract closing pressure.

June and beyond are a different story.




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US suspends plans to buy oil after funding is left out of $2 trillion stimulus package
PUBLISHED THU, MAR 26 202012:02 PM EDT

The original request for proposal, filed on March 19, outlined plans to purchase the first 30 million barrels of American-made crude oil for the SPR out of a total of 77 million barrels.

Drop in the bucket literally and it wont happen

Yes the out month contracts are higher, we need to see if they stay there and I think that unlikely

[beshannon]

450 mm to sell on the open, UAL 2.1 billion pretax loss, DIS furloughs 100K, Oil at 11 a barrel with 30 mm barrels wiped off demand worldwide

[SBR]

Originally Posted by bearxj86

I think buying is still a good thing if you can find value. I won't buy anything that is over 20% below peak value, but there are bargains to have. Slowly buy a little here and there and dollar cost average up/down through the volatility. I think its going to be a volatile summer...

Agreed, I think there will be some great opportunities over the next several months. Good luck to all.