Talking Stocks 2.0

[chadwick4eva]

Originally Posted by scarlet knight

When does Fang and tech reverse and go back up?

Depends on the fang.

Facebook is the most reasonably priced of all of them at the moment and would be the first one I expect to take off again following a good quarterly beat.

Google just had a nice earnings beat and the stock spiked because of it. Still, valuation isn't too rich- they will continue to do well going forward.

Amazon is still pretty richly valued and microsoft and apple also have had some serious multiple expansion this past year- my bet is that they will continue to trade sideways for a while, perhaps consolidate a little bit, and then eventually go up as they continue to have solid quarters of earnings. I still would have all of them as a portion of your portfolio. I think MSFT and AAPL are likely to be two of the best dividend growth companies for the coming decades. Apple's share buybacks are phenomenal and put them in a league of their own.

Netflix is an interesting one- it has traded sideways for some time, and it's valuation is quite rich. However, netflix is now cash flow positive and has weaned itself off of needing to use debt financing to fund production of new content. Last quarter they announced that they have strong enough positive cash flows to continuously fund operations. This is a big deal as all of the debt they have is dragging on the potential profits for equity holders. Because of this I think netflix's best days are ahead of them. Netflix and disney are clearly the two streaming heavyweights to beat at the moment in terms of volume of content and production of new, high quality content. I own both and will be holding for years.

In terms of other tech and high price/sale ratio companies (many companies in the ark funds, weed stocks, EVs, clean energy, many SPACs, many of the hot IPOs, many fintechs like SQ, enterprise software, etc.), I personally believe we are at the beginning of a long, multi month (perhaps years) bear market for these stocks. At the end of the day, fundamentals matter, and unprofitable company's stock prices will continue to fall. A few pages back I went over how I see many similarities between the hype stocks of today and the company groupon, one of the biggest tech losers of the past decade. For some reason many companies never solve the issue of getting to a reasonable operating margin even though they have solid business models with very good gross margins.

Love that Ben Graham quote that says "In the short term the stock market is a voting machine, but in the long run, it is a weighing machine." Personally, I think many people have voted in the past year, and now time will weigh those "investments." In a similar vain, "being too far ahead of your time is indistinguishable from being wrong." Many of the companies in these categories simply don't make money. Many of them will continue to be unprofitable, and many of them will see shrinking stock prices over the years. Of course there will be a few winners that make it.

Remember as a shareholder you are buying a piece of a business's future profits/cash flows. Common shareholders are the lowest position on the capital structure totem pole. There has been too much money chasing too few deals in these aforementioned spaces and they are overbought. Many people who have bought in don't actually understand anything about investing or valuation. This- coupled with lenient monetary policy, low interest rates, and record high margin stock trading spells a recipe for disaster.

I used to be the person who liked to buy the flavor of the month of tech and while I have gotten lucky in that endeavor, I could have easily just been burned by it. The past year I have diversified a lot out of tech and been rewarded heavily for it as I taught myself relative and discounted cash flow valuation through reading, watching instructional videos, and practice. Financial companies trading at P/B values equal to or less than 1 have done very well for me. JPM and GS have been two of my biggest winners the past year. I also added BK recently as they are trading around a 1.0 P/B value which is reasonable compared to other high quality banks at the moment. I also mentioned a few pages back (post from a few months ago) that I thought most insurance companies were cheap given how hard it is to find deals in the market- around that time I bought UNH, ANTM, and HUM for health insurance exposure. I also bought ALL, PGR, and BRK.B for exposure to auto + home and other insurance products. They are doing quite well since that time while many other sectors have done poorly.

High quality specialty consumer companies with solid top and bottom line trends, low(ish) price to free cash flow ratios and strong balance sheets have also been some of my biggest winners of the past year --> WSM, which I bought last year, popped 21% today on a big top and bottom line beat. Other companies that I believe fit that same profile include BBY, LOW, HD, TGT, JOUT and others.

So, sorry for the lengthy answer, but I think overall the Fangs will do fine in the future. Valuations are a little stretched on a few of them, but deservedly so! Overpaying for a phenomenal business can oftentimes be better than paying fair value or underpaying for a mediocre one. My most recent add is BK, but I have also added COST and FB in the past 2 weeks and bought into LMT last month as I believe it was oversold. I will add more to my AMAT and TSM positions if the tech sector continues to sell off. May start a AVGO position as well.

[7sins]

Originally Posted by huncho

it's weird how cheap coty options still are even with IV sitting around 70%. i'm looking to add to it if it stays flat a bit or goes down more

I was thinking that too, vol is high for swing trading. I keep building positions on these pullbacks, hoping we retreat back to sub $8 so I can load the boat more.

Originally Posted by chadwick4eva

So, sorry for the lengthy answer, but I think overall the Fangs will do fine in the future. Valuations are a little stretched on a few of them, but deservedly so! Overpaying for a phenomenal business can oftentimes be better than paying fair value or underpaying for a mediocre one. My most recent add is BK, but I have also added COST and FB in the past 2 weeks and bought into LMT last month as I believe it was oversold. I will add more to my AMAT and TSM positions if the tech sector continues to sell off. May start a AVGO position as well.

Agree with you here on AMAT and TSM. You should also look into ASML, they manufacturer the machines that make the semiconductor chips. Multi-year backlog and a wide economic moat. Priced more attractive after the last pullback, great long-term winner.

[Romeojk]

I think I set my stop losses to close. I got sold out of COP yesterday. I’ve been super happy with progress over the last 5-6 months, got nervous last week about protecting profits so I put stops in for everything. What do you guys generally put in for for these? Is it 10% or 20% less than what it is?
I started using 20% but got nervous if my whole portfolio sank that much I would not be happy, so then I went to about 10%. And it wasn’t a hard rule I tried to be flexible and bend on the side of letting it go a little lower.

So here I am out of COP. It treated me well. Do I say heck with it and jump back in, maybe just the profit and a little more and ride it out? Or jump all the way back in. Or do I look elsewhere. Is there something much more solid and better.

It’s in my IRA so I don’t have to worry about capital gains and such (at least I hope I don’t). I do have to wait a few days for funds to settle. I am looking to grow my money, have some growth and value stocks, about 20 in total. Hopefully retire in 10yrs, but time will tell. Thanks for your thoughts.


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[MechMovement]

Originally Posted by Romeojk

I think I set my stop losses to close. I got sold out of COP yesterday. I’ve been super happy with progress over the last 5-6 months, got nervous last week about protecting profits so I put stops in for everything. What do you guys generally put in for for these? Is it 10% or 20% less than what it is?
I started using 20% but got nervous if my whole portfolio sank that much I would not be happy, so then I went to about 10%. And it wasn’t a hard rule I tried to be flexible and bend on the side of letting it go a little lower.

So here I am out of COP. It treated me well. Do I say heck with it and jump back in, maybe just the profit and a little more and ride it out? Or jump all the way back in. Or do I look elsewhere. Is there something much more solid and better.

It’s in my IRA so I don’t have to worry about capital gains and such (at least I hope I don’t). I do have to wait a few days for funds to settle. I am looking to grow my money, have some growth and value stocks, about 20 in total. Hopefully retire in 10yrs, but time will tell. Thanks for your thoughts.


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I'm sure some of the more versed members will swing by with some more sage advice but during volatile times i always ask myself this before setting stop losses:

If this stock hits my stop loss price, would i buy the stock at that price?

In your case it sounds as though your COP stop was set too tight:
1) Was this worth the opportunity cost if the stock only dropped a % or 2 below your stop?
- If your general attitude is that you want to be invested then what was your plan if/when this stop was hit? Are you buying ___ instead?

2) If you are thinking about buying back in, maybe your stop was too tight.

[logo]

Looks like there’s a huge drop-off in option pricing around $290 strike for FDX June calls. Hoping the higher strikes catch up!

[7sins]

Originally Posted by logo

Looks like there’s a huge drop-off in option pricing around $290 strike for FDX June calls. Hoping the higher strikes catch up!

Should soon, need momentum and to sustain above $280 levels. Obvious today MMs trying to keep under $280 to collect on all those options expiring today from $280-$300. Hopefully momentum builds into next week, close above $280 and then you should see your $290 strike price readjust more appropriately.

[logo]

Originally Posted by 7sins

Should soon, need momentum and to sustain above $280 levels. Obvious today MMs trying to keep under $280 to collect on all those options expiring today from $280-$300. Hopefully momentum builds into next week, close above $280 and then you should see your $290 strike price readjust more appropriately.

Yes that was my thinking as well. So many things got pinned today - AAPL 119.99 haha.

I’m watching NKE closely next week. Sold off today with great earnings and a revenue miss based on factors external to their product. Fantastic online sales growth and growth overseas. Usually I try not to buy on the first red day unless it’s too good to refuse, but if they remain below 138 next week I’ll add to my July $140 calls.

Have a good weekend all!

[Romeojk]

Originally Posted by MechMovement

I'm sure some of the more versed members will swing by with some more sage advice but during volatile times i always ask myself this before setting stop losses:

If this stock hits my stop loss price, would i buy the stock at that price?

In your case it sounds as though your COP stop was set too tight:
1) Was this worth the opportunity cost if the stock only dropped a % or 2 below your stop?
- If your general attitude is that you want to be invested then what was your plan if/when this stop was hit? Are you buying ___ instead?

2) If you are thinking about buying back in, maybe your stop was too tight.

Thanks. I think it was too tight. I think I'll buy back in on it. I'll keep most of the profit and buy enough to sort of balance the size with the rest of my stocks.

It also made me feel better when gas prices went up, it usually meant COP went up too. Therefore even though I'm paying more at the pump, I'm getting a little something on the end of it, perhaps a twisted logic.


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[bimmer nerd]

https://www.npr.org/sections/coronav...tends-lockdown

Just in time for a 1 year anniversary.

[Daryl]

NFT stocks today. DLPN and HOFV went crazy


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[Romeojk]

I bought back into COP.

What do you guys thinks about long term for AMZN, V, and TSLA?

I got stopped out of those recently as well. Not sure about them. I know TSLA is a strange one, but it's always treated me well. I'm kindof a sentimental guy and I am guessing I shouldn't be.


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[beshannon]

Originally Posted by Romeojk

I bought back into COP.

What do you guys thinks about long term for AMZN, V, and TSLA?

I got stopped out of those recently as well. Not sure about them. I know TSLA is a strange one, but it's always treated me well. I'm kindof a sentimental guy and I am guessing I shouldn't be.


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Not sure what your "long-term" definition is.

AMZN and V will do well as they are tied directly to commerce and the overall economy.

TSLA is a stock I cannot value and cannot understand the hype driven price. I like the cars and the technology, I simply do not want to risk capital in a stock this volatile.

I am long AMZN and V

[7sins]

Originally Posted by Romeojk

I bought back into COP.

What do you guys thinks about long term for AMZN, V, and TSLA?

I got stopped out of those recently as well. Not sure about them. I know TSLA is a strange one, but it's always treated me well. I'm kindof a sentimental guy and I am guessing I shouldn't be.


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I would be weary of V for the moment, they are under investigation from the DOJ for anticompetitive practices. That should lead to further volatility, if/when they are cleared you should see a nice bounce back to $225 - perhaps make strategic buys if it dips below $200. IMO there are better plays out there, V is still a bit pricey when looking at their P/S, PEG and Debt/Eq.

TSM selling off on intel day yesterday, complete over-reaction, worth looking into at these $110 levels, the jan 2022 $120c is down 67% in one month. Market is not clearly digesting Intel's CEO comments below indicating they are going to increase their outsourcing of third-party foundries. Not to mention a new fab is going to take 3 years for them to build in AZ (which btw TSM is already planning to build a new fab in AZ). Building position here and will add if it trends down on TSM whom, IMO, is the world leader in fab.

"At the event, Intel provided a positive update on its 7nm process and reiterated a plan to build the majority of its products in-house, while also INCREASING its use of third-party foundries, the analyst said. Intel is INCREASING its engagement with Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), Samsung, GlobalFoundries and United Microelectronics Corporation (NYSE: UMC), he said."

[jltait]

Bought some LMT today. Good yield, seems fairly valued, and it’s only a matter of time before more saber rattling starts anew. Plus the F-35 is a sweet machine; likely more reliable than the leaky bmws being mentioned in the other thread.

[FLGatorM5]

Originally Posted by jltait

Bought some LMT today. Good yield, seems fairly valued, and it’s only a matter of time before more saber rattling starts anew. Plus the F-35 is a sweet machine; likely more reliable than the leaky bmws being mentioned in the other thread.

That’s fantastic.

[Romeojk]

Originally Posted by beshannon

Not sure what your "long-term" definition is.

AMZN and V will do well as they are tied directly to commerce and the overall economy.

TSLA is a stock I cannot value and cannot understand the hype driven price. I like the cars and the technology, I simply do not want to risk capital in a stock this volatile.

I am long AMZN and V

As for long term, 10-15 years of leaving it alone is okay with me. I just want to protect the gains against some really crazy drop.

I'll probably buy back into both.

As for the legal trouble, it seems every company that tries to hold onto their somewhat monopoly will also be in this kind of trouble, or at least close to the fire. It doesn't worry me too much, but then again I have looked much into it.

Thanks.


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[Romeojk]

Originally Posted by 7sins

I would be weary of V for the moment, they are under investigation from the DOJ for anticompetitive practices. That should lead to further volatility, if/when they are cleared you should see a nice bounce back to $225 - perhaps make strategic buys if it dips below $200. IMO there are better plays out there, V is still a bit pricey when looking at their P/S, PEG and Debt/Eq.

TSM selling off on intel day yesterday, complete over-reaction, worth looking into at these $110 levels, the jan 2022 $120c is down 67% in one month. Market is not clearly digesting Intel's CEO comments below indicating they are going to increase their outsourcing of third-party foundries. Not to mention a new fab is going to take 3 years for them to build in AZ (which btw TSM is already planning to build a new fab in AZ). Building position here and will add if it trends down on TSM whom, IMO, is the world leader in fab.

"At the event, Intel provided a positive update on its 7nm process and reiterated a plan to build the majority of its products in-house, while also INCREASING its use of third-party foundries, the analyst said. Intel is INCREASING its engagement with Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), Samsung, GlobalFoundries and United Microelectronics Corporation (NYSE: UMC), he said."

Thanks. I'll keep that in mind. Appreciate it.


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[strettyend]

Another fun day

[bimmer nerd]

What layer of the dip are we in? I'm starting to run out of chips.

[JParm]

I've been on the sidelines (mainly due to being 100% invested) not heavily watching as much and my bi-monthly direct deposit hit today, so I put it all in NVDA.

Everything else is allocated appropriately for me, so just letting the market do its thing.

It's nice being a long-term investor and not having to worry about daily / weekly swings, especially in this choppy market. All long, no options for me right now.

[tudorbaja27]

Originally Posted by jpeezy14@hotmail.com

I've been on the sidelines (mainly due to being 100% invested) not heavily watching as much and my bi-monthly direct deposit hit today, so I put it all in NVDA.

Everything else is allocated appropriately for me, so just letting the market do its thing.

It's nice being a long-term investor and not having to worry about daily / weekly swings, especially in this choppy market. All long, no options for me right now.

Same. I'm looking at a year horizon, or so. A lot of innovaiton & tech.

I've had my behind kicked over the last few weeks. But holding - since my long-term views haven't changed one bit.

[gnuyork]

Originally Posted by tudorbaja27

Same. I'm looking at a year horizon, or so. A lot of innovaiton & tech.

I've had my behind kicked over the last few weeks. But holding - since my long-term views haven't changed one bit.

Same here. I have a lot of Tesla, and I regret it. But holding.

[huncho]

Originally Posted by tudorbaja27

Same. I'm looking at a year horizon, or so. A lot of innovaiton & tech.

I've had my behind kicked over the last few weeks. But holding - since my long-term views haven't changed one bit.

in the same boat too, been buying the tech dips with leaps for jan 22. it's been a bloodbath in my portfolio

[tudorbaja27]

Originally Posted by huncho

in the same boat too, been buying the tech dips with leaps for jan 22. it's been a bloodbath in my portfolio

I've stopped checking. The main is too much to bear

[beshannon]

Just some observations

Originally Posted by bimmer nerd

What layer of the dip are we in? I'm starting to run out of chips.

As long as markets move, someone is making money. You always need cash for opportunities.

Originally Posted by jpeezy14@hotmail.com

I've been on the sidelines (mainly due to being 100% invested) not heavily watching as much and my bi-monthly direct deposit hit today, so I put it all in NVDA.

Everything else is allocated appropriately for me, so just letting the market do its thing.

It's nice being a long-term investor and not having to worry about daily / weekly swings, especially in this choppy market. All long, no options for me right now.

This is the difference between trading for yourself and using a managed mutual fund. If people are worried perhaps they should consider letting someone else do the worrying? If you are confident in your analysis then ignore days like this.

Originally Posted by tudorbaja27

Same. I'm looking at a year horizon, or so. A lot of innovaiton & tech.

I've had my behind kicked over the last few weeks. But holding - since my long-term views haven't changed one bit.

And that is a valid view. Be mindful that there are still times to take profits. And there are times to average down too.

Originally Posted by gnuyork

Same here. I have a lot of Tesla, and I regret it. But holding.

Why? Either the company is going to go where you think it will or it wont. If you are changing your views then perhaps it is time to sell?

Originally Posted by huncho

in the same boat too, been buying the tech dips with leaps for jan 22. it's been a bloodbath in my portfolio

This is when you need to watch the beta and decide how you want to be allocated. Thje tech trade is still too hot and too narrow, this is going to continue until the nervous sellers are shaken out.

Originally Posted by tudorbaja27

I've stopped checking. The main is too much to bear

Ended up being a great day for me as my value and cyclical postions far outweigh my tech holding as of now. Tech has run, rates creeping higher will continue to hurt tech. Is tech dead? No of course not but I expect to be able to buy in lower in the coming 6-9 months.

Stay calm, do your research, tomorrow is another day

[huncho]

Originally Posted by beshannon

Just some observations



As long as markets move, someone is making money. You always need cash for opportunities.



This is the difference between trading for yourself and using a managed mutual fund. If people are worried perhaps they should consider letting someone else do the worrying? If you are confident in your analysis then ignore days like this.



And that is a valid view. Be mindful that there are still times to take profits. And there are times to average down too.



Why? Either the company is going to go where you think it will or it wont. If you are changing your views then perhaps it is time to sell?



This is when you need to watch the beta and decide how you want to be allocated. Thje tech trade is still too hot and too narrow, this is going to continue until the nervous sellers are shaken out.



Ended up being a great day for me as my value and cyclical postions far outweigh my tech holding as of now. Tech has run, rates creeping higher will continue to hurt tech. Is tech dead? No of course not but I expect to be able to buy in lower in the coming 6-9 months.

Stay calm, do your research, tomorrow is another day

i agree that a lot of tech is still overvalued and i've just slowly started to buy the dips on a few of them. in the long run it really shouldn't matter since i feel they'll recover but it's still a bit painful to watch it continue to go

on the other hand though, i have cash waiting in the case that it gets way worse, but the way i see it is i'd rather buy a few of these dips in case it doesn't go farther down and that way i know i took advantage of it while also not being too committed and if it does get way worse i can properly enter positions. i'm hoping tech gets better or stabilizes a bit but will be waiting now in case nasdaq drops below 12k

[austinp]

B. Do you have price targets for mega cap tech to buy?


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[beshannon]

Originally Posted by austinp

B. Do you have price targets for mega cap tech to buy?


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Not at this time, I am long AAPL, MSFT, AMZN and they are all range bound. I might be adding but probably 10-15% below where they are and I am not waiting for them to get there. There are other opportunities in value and cyclical names for me.

[austinp]

Originally Posted by beshannon

Not at this time, I am long AAPL, MSFT, AMZN and they are all range bound. I might be adding but probably 10-15% below where they are and I am not waiting for them to get there. There are other opportunities in value and cyclical names for me.

Thanks B. Do you like HD, Walmart and Costco at these levels?


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[beshannon]

Originally Posted by austinp

Thanks B. Do you like HD, Walmart and Costco at these levels?


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I am long HD, COST and WMT

HD is at a new 52 week high, I like the stock, P/E is 23 but I believe that much of the reopen trade is priced in. I am not adding here, this is a core holding for me. I would need to see blowout numbers to consider adding and I am not sure we will see that

COST is off its high but the P/E is 35. I might be inclined to add here if I wanted to hold long term, I am staying long my position but not adding

WMT is frustrating, P/E is 24 and again it has dipped with the other two names. It is likely fairly valued here, I am not adding and may sell my position today.