Talking Stocks 2.0

[beshannon]

Originally Posted by m j b

Re: all of the comments relating to BA above.

I shorted it yesterday. I'm hurting right now. But I'm also seeing all of the airline stocks up this morning, and I wonder why. Lots of optimism in this market.

My IRA is doing nicely, it's my trading account (where I do my options and shorts) that's hurtin' a bit. No new Rolex* for Michael. :(


* - assuming that I could buy one, which of course, I can't since there aren't any for sale

Just my .02 traders are looking for improved conditions that will drive the stock higher

Originally Posted by Duey

Good read which is surprising out of cnbc but what I took out of it was the worst is coming and it's going to be bad so hold on tight. And it will come back someday just not sure when.

While CNBC has its issues if you look you can find some actual useful info

Originally Posted by Duey

And airlines, CCL and Boeing are up ...

Again, traders looking on the positive side of the return to business. IMHO, they are not discounting the length of time it will take. I am bullish in a 12-18 month time frame, I do not see any of those companies doing well into next quarter and I believe when these traders throw in the towel that will be the time to buy.

I just saw a headline that "Apparel companies stocks are up on hopes for foot traffic again"

"Hope" is not a viable investment strategy or plan, right now they cannot give their clothing away and that was winter goods, we have already moved one full season, what are their delivers and future deliveries like?

[JParm]

If GOOGL gets closer to $1200, I'm adding today before this afternoon's earnings call. Should it go lower after earnings, I'll add some more - but I could see it shooting up from here (after what we saw from last week's SNAP earnings).

[beshannon]

Originally Posted by jpeezy14@hotmail.com

If GOOGL gets closer to $1200, I'm adding today before this afternoon's earnings call. Should it go lower after earnings, I'll add some more - but I could see it shooting up from here (after what we saw from last week's SNAP earnings).

That is one stock I can never get interested in, they start and end products all the time and the stock has gone nowhere since 2018

https://killedbygoogle.com/

https://www.androidauthority.com/fai...s-list-943812/

[JParm]

Originally Posted by beshannon

That is one stock I can never get interested in, they start and end products all the time and the stock has gone nowhere since 2018

https://killedbygoogle.com/

https://www.androidauthority.com/fai...s-list-943812/

That's fair. I'm on the other side of the trade here; buyers and sellers!

[Tha Baron]

Originally Posted by jpeezy14@hotmail.com

If GOOGL gets closer to $1200, I'm adding today before this afternoon's earnings call. Should it go lower after earnings, I'll add some more - but I could see it shooting up from here (after what we saw from last week's SNAP earnings).

Just imagine the data hoard inside of google that has not been mined yet...

I like GOOGL... sold it 2 years ago never forgave myself

[JParm]

Originally Posted by Tha Baron

Just imagine the data hoard inside of google that has not been mined yet...

I like GOOGL... sold it 2 years ago never forgave myself

We're on the same page. I value the company and own shares, just looking to add more

[kieselguhr]

Originally Posted by Duey

And airlines, CCL and Boeing are up ...

I noticed that! I have a feeling all my positions will get called away in 2 weeks. Oh well

[yoast]

Now with earnings being announced this week, I'm thinking about putting some cash into SPXS since it hovers around the lowest it has ever been. Thoughts?

[beshannon]

Originally Posted by yoast

Now with earnings being announced this week, I'm thinking about putting some cash into SPXS since it hovers around the lowest it has ever been. Thoughts?

Why? Do you know what you are actually buying? There is a very good reason why it is low.


SPXS returns compared to sector and industry

Timeperiod SPXS Returns

5 Day -14.42%
1 Month -37.36%
3 Months -16.25%
YTD -20.10%
1 Year -43.45%

[yoast]

Originally Posted by beshannon

Why? Do you know what you are actually buying? There is a very good reason why it is low.


SPXS returns compared to sector and industry

Timeperiod SPXS Returns

5 Day -14.42%
1 Month -37.36%
3 Months -16.25%
YTD -20.10%
1 Year -43.45%

Yes, I know this is not for longterm and its risky but that is also what makes it interesting. I'm still expecting the market to drop significantly but maybe I'm still premature.

[beshannon]

Originally Posted by yoast

Yes, I know this is not for longterm and its risky but that is also what makes it interesting. I'm still expecting the market to drop significantly but maybe I'm still premature.

Ok well if you think the market is going to drop quite a bit in a very short period of time then that is your call.

Based on everything I read about the product and the fact that it did not have a positive return over the last 1-3 months I would not be a buyer

[JParm]

https://seekingalpha.com/news/356540...ts-remain-open

Another interesting turn of events...

[yoast]

Originally Posted by beshannon

Ok well if you think the market is going to drop quite a bit in a very short period of time then that is your call.

Based on everything I read about the product and the fact that it did not have a positive return over the last 1-3 months I would not be a buyer

Fair enough Thanks for your input - I do ( and I think many others) really appreciate your contribution to this thread

[beshannon]

Market holding 2850 on the S&P, 2924 was a 61% retrace (Fib) and everything feels tired here.

Tech was leading and the open this morning looked like this would be the fifth up day in a row.

I am market neutral at this point, had we held I would have been a seller into more strength as it is I am holding here with the cash I raised yesterday to see which direction we get after more earnings.

The re-open info continues to trickle out and I believe this will be a sell the news event as re-opening and doing business are two very different things.

[beshannon]

Originally Posted by yoast

Fair enough Thanks for your input - I do ( and I think many others) really appreciate your contribution to this thread

My pleasure, sorry if I came across as abrupt I just hate to see people looking at ETF products without completely understanding what they are buying and risking.

[beshannon]

Originally Posted by jpeezy14@hotmail.com

https://seekingalpha.com/news/356540...ts-remain-open

Another interesting turn of events...

Interesting although I am not touching those stocks as there is still too much uncertainty in that area.

[JParm]

Originally Posted by beshannon

Interesting although I am not touching those stocks as there is still too much uncertainty in that area.

Agreed. Sad though, as I do believe they gassed a bunch of chickens earlier.

[CoveWatch]

Originally Posted by yoast

Now with earnings being announced this week, I'm thinking about putting some cash into SPXS since it hovers around the lowest it has ever been. Thoughts?

Personally I'd get some calls on spxs if you really feel the market will turn in that favor.. or puts on spxl depending which has the better delta/gamma numbers.

I want to mention I've also owned spxs and sold it a few times last couple months and always have been uneasy holding onto it

[beshannon]

For those watching BA prior to earnings

https://www.thestreet.com/investing/...ort-april-2020

[m j b]

Originally Posted by beshannon

My pleasure, sorry if I came across as abrupt I just hate to see people looking at ETF products without completely understanding what they are buying and risking.

SPXS is a leverage ETF, designed to be traded during the day. It is not designed to be held overnight or longer, as it decays with time, since it uses futures instead of actually buying positions in the S&P 500.

I learned that the hard way. So, you could buy it now and the market goes sideways, unchanged, and you'd lose money. Heck, the market could drop and you'd still lose money.

The less leverage the ETF, the less the decay. I think. Don't quote me on that. So instead of 3X bear, maybe the 2X or maybe just the 1X. Less return, but less risk.

[CoveWatch]

Originally Posted by beshannon

For those watching BA prior to earnings

https://www.thestreet.com/investing/...ort-april-2020

I have some BA puts that are getting crushed right now!!!

waiting for tomorrow's earnings and hopefully lessen the blow, we shall see

Also, would like to thank you Brian for the daily updates and information you post, always enjoy reading them and appreciate the effort you put into it!

[Uggi]

I've fortunately got nice positions in Tech, Consumer Goods and Housebuilding but it's Banks which I'm most positive about. I think there is still loads of value here (I'm in the UK so most of my positions are in UK banks but I have a position in C too and wish I'd bought MS two weeks ago when I was looking at it).
I am considering adding more at current prices. Its the only sector where I'm keen to plough more in right now. Any views on banks here? Prices still seem far off what they "should" be to me.

[beshannon]

Originally Posted by m j b

SPXS is a leverage ETF, designed to be traded during the day. It is not designed to be held overnight or longer, as it decays with time, since it uses futures instead of actually buying positions in the S&P 500.

I learned that the hard way. So, you could buy it now and the market goes sideways, unchanged, and you'd lose money. Heck, the market could drop and you'd still lose money.

The less leverage the ETF, the less the decay. I think. Don't quote me on that. So instead of 3X bear, maybe the 2X or maybe just the 1X. Less return, but less risk.

You are exactly correct and the "decay with time" is not understood by many people at all

Originally Posted by CoveWatch

I have some BA puts that are getting crushed right now!!!

waiting for tomorrow's earnings and hopefully lessen the blow, we shall see

Also, would like to thank you Brian for the daily updates and information you post, always enjoy reading them and appreciate the effort you put into it!

You are welcome, I just try to add my thoughts, I make mistakes too. Also, this is a side benefit from my teleworking 5 days a week instead of two, I have more resources available to me at home, which I have been very glad to have at this time

Originally Posted by Uggi

I've fortunately got nice positions in Tech, Consumer Goods and Housebuilding but it's Banks which I'm most positive about. I think there is still loads of value here (I'm in the UK so most of my positions are in UK banks but I have a position in C too and wish I'd bought MS two weeks ago when I was looking at it).
I am considering adding more at current prices. Its the only sector where I'm keen to plough more in right now. Any views on banks here? Prices still seem far off what they "should" be to me.

I think the financials are undervalued, the work to uncover the best values is the hard part. Read research, balance sheets etc., FWIW I hold JPM, WFC, BAC and MS at the moment. JPM is my only long term hold, I would sell the rest to either take profits or cut losses depending on the exact time

[m j b]

Originally Posted by CoveWatch

I have some BA puts that are getting crushed right now!!!

You and me both, brother, although I'm short rather than playing the options.

Originally Posted by Uggi

Any views on banks here? Prices still seem far off what they "should" be to me.

I suspect that some of the discounting is because many companies (and people) will likely go bankrupt once this shelter business is over. So banks will need to write-off those loans, which will affect earnings. But I'm just guessing. I'm also long on WFC and JPM.

[austinp]

Edit

[CoveWatch]

Originally Posted by m j b

You and me both, brother, although I'm short rather than playing the options.

.

it hurts! I also tried to play the earnings game and had puts on BP, LUV, JBLU, SIX... all up today I got pretty lucky and also had calls on Enphase which offset them all and then some nicely

[austinp]

Thought it would be interesting to revisit this now. It caught a lot of attention when it was posted.


"Summary for a recent Goldman call:

From Goldman today:

Summary of Goldman Sachs Investor call...

where 1,500 companies dialed in. The key economic takeaways were:

50% of Americans will contract the virus (150m people) as it's very communicable. This is on a par with the common cold (Rhinovirus) of which there are about 200 strains and which the majority of Americans will get 2-4 per year.

70% of Germany will contract it (58M people). This is the next most relevant industrial economy to be affected.

Peak-virus is expected over the next eight weeks, declining thereafter.

The virus appears to be concentrated in a band between 30-50 degrees north latitude, meaning that like the common cold and flu, it prefers cold weather. The coming summer in the northern hemisphere should help. This is to say that the virus is likely seasonal.

Of those impacted 80% will be early-stage, 15% mid-stage and 5% critical-stage. Early-stage symptoms are like the common cold and mid-stage symptoms are like the flu; these are stay at home for two weeks and rest. 5% will be critical and highly weighted towards the elderly.

Mortality rate on average of up to 2%, heavily weight towards the elderly and immunocompromised; meaning up to 3m people (150m*.02). In the US about 3m/yr die mostly due to old age and disease, those two being highly correlated (as a percent very few from accidents). There will be significant overlap, so this does not mean 3m new deaths from the virus, it means elderly people dying sooner due to respiratory issues. This may however stress the healthcare system.

There is a debate as to how to address the virus pre-vaccine. The US is tending towards quarantine. The UK is tending towards allowing it to spread so that the population can develop a natural immunity. Quarantine is likely to be ineffective and result in significant economic damage but will slow the rate of transmission giving the healthcare system more time to deal with the case load.

China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.

Global GDP growth rate will be the lowest in 30 years at around 2%.

S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.

There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.

In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.

Technically the market generally has been looking for a reason to reset after the longest bull market in history.

There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008."

Sent from my SM-G935P using Tapatalk

[Uggi]

Originally Posted by beshannon

I think the financials are undervalued, the work to uncover the best values is the hard part. Read research, balance sheets etc., FWIW I hold JPM, WFC, BAC and MS at the moment. JPM is my only long term hold, I would sell the rest to either take profits or cut losses depending on the exact time

Originally Posted by m j b

I suspect that some of the discounting is because many companies (and people) will likely go bankrupt once this shelter business is over. So banks will need to write-off those loans, which will affect earnings. But I'm just guessing. I'm also long on WFC and JPM.

Agree with you both and thanks for the input. I think there is a fear of bankruptcies creating bad debt write offs for the banks and also fears over bailout loans which governments are forcing them to issue (here at least). I know nothing about WFC but will look at JPM tomorrow.

[beshannon]

Originally Posted by austinp

Thought it would be interesting to revisit this now. It caught a lot of attention when it was posted.


"Summary for a recent Goldman call:

There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.

In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.

Technically the market generally has been looking for a reason to reset after the longest bull market in history.

There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008."

I agree with this view, the markets needed a way to reset (not that anyone wanted this), this is a systemic shock, personally I have written many times, I am in a 12-18 month time window for my investments and I believe we will be higher at the end of that time. I adjust, rebalance and trade accordingly

[logo]

Originally Posted by beshannon

I agree with this view, the markets needed a way to reset (not that anyone wanted this), this is a systemic shock, personally I have written many times, I am in a 12-18 month time window for my investments and I believe we will be higher at the end of that time. I adjust, rebalance and trade accordingly

Also of interest in relation to this point, here’s the Dow J from the early 1900s. Note during the pandemic from 1918-1920 with deaths over 500,000 in the US and multiple waves of infection, the market actually went up (to say nothing of the cliff that came 10 years later). Not that 100 years ago reflects today by any means, but an interesting disconnect between the markets and global health it seems.