Talking Stocks 2.0

[beshannon]

Current Stock Market Rally
According to IBD's The Big Picture, the stock market uptrend remains solid after hitting lows more than two months ago on March 23. The major stock indexes confirmed a new uptrend on April 2.

https://www.investors.com/market-tre...ideo-earnings/

I am happy to grind higher and take some profits. I am not buying anything at this point.

[JParm]

Originally Posted by beshannon

https://www.investors.com/market-tre...ideo-earnings/

I am happy to grind higher and take some profits. I am not buying anything at this point.

Agree. We moved around some other funds to have more cash at the ready, but I am not buying until we see some red. The green days have been nice, though...

As we have seen, many (most?) experts still question the market today.

https://www.marketwatch.com/story/th...S%3D1591184037

https://www.marketwatch.com/story/th...S%3D1591184065

[beshannon]

Originally Posted by jpeezy14@hotmail.com

Agree. We moved around some other funds to have more cash at the ready, but I am not buying until we see some red. The green days have been nice, though...

As we have seen, many (most?) experts still question the market today.

https://www.marketwatch.com/story/th...S%3D1591184037

https://www.marketwatch.com/story/th...S%3D1591184065

When everyone is on board with the rally then it will be a massive sell signal.

Until then, I have raised cash as I said for a planned purchase and I am not chasing anything higher. In fact, I have two positions that are close to doubles that I will take out my cost basis and let the profits run.

[JParm]

Originally Posted by beshannon

When everyone is on board with the rally then it will be a massive sell signal.

Until then, I have raised cash as I said for a planned purchase and I am not chasing anything higher. In fact, I have two positions that are close to doubles that I will take out my cost basis and let the profits run.

I did the exact same with VIAC and MGM, which were bought at the dip.

[RyanO]

It seems nothing can stop this rally. Regretting taking profits last week, as I'm beginning to think a dip is less and less likely.

[beshannon]

Originally Posted by RyanO

It seems nothing can stop this rally. Regretting taking profits last week, as I'm beginning to think a dip is less and less likely.

Be patient and do your research during this time, when we get a buying opportunity your cash will be ready.

No one is ever in sync with every move. I find it helps me to take a step back when I feel disconnected from the flow and reevaluate my positions.

[Bearxj86]

My jaw is still on the floor with Zoom's topline growth. I expected big stuff but this was they took the bear outside, kicked it around, killed it, tenderized the meat, and served it 10 ways (bear stew, bear claw, bear steak, bear fried rice, bear noodles...you get the picture) and then you had bear brain jelly for dessert, and they made bear jerky for the next month of food.

https://finance.yahoo.com/quote/ZM?p=ZM&.tsrc=fin-srch

Disclosure: I have a position in ZM but am figuring the next move here.

[RyanO]

Originally Posted by beshannon

Be patient and do your research during this time, when we get a buying opportunity your cash will be ready.

No one is ever in sync with every move. I find it helps me to take a step back when I feel disconnected from the flow and reevaluate my positions.

Thanks, Brian. Do you think we see 3,400 or 2,800 next?

[beshannon]

Originally Posted by RyanO

Thanks, Brian. Do you think we see 3,400 or 2,800 next?

IMHO 3400 is way too high, I get increasingly nervous the closer we get to 3150 as 2950 was fair value

I know the rally is being fueled by improving business conditions related to reopening but I believe this is now getting far ahead of itself. I am being cautious while being happy that this continues.

Having said all of that, the markets could break higher as they did in February when the shorts really get squeezed and late money flows in from the sidelines.

https://seekingalpha.com/article/435...iquidity-slows

[supernova]

I took profits for LYFT a couple days after I bought for $27 as I thought it was bound to be more affected by prolonged protests etc. but now looking at today's massive rally and crying T_T

Although I'm glad I still holding my financials and airlines, I still betting on fast recovery stocks. No tech holdings which I'll get back into after taking profits from recovery...

[JParm]

https://www.cnbc.com/2020/06/03/the-...as-feared.html

And then you've got articles like this saying the COVID recession is essentially done for...

Definitely a difficult time to make investment decisions, but all we can do is research and try and put the best foot possible. For us, that means being a bit more defensive and at the very least not chasing on green days.

[bryan13]

Originally Posted by jpeezy14@hotmail.com

https://www.cnbc.com/2020/06/03/the-...as-feared.html

And then you've got articles like this saying the COVID recession is essentially done for...

Definitely a difficult time to make investment decisions, but all we can do is research and try and put the best foot possible. For us, that means being a bit more defensive and at the very least not chasing on green days.

I love the quote "Companies cut nearly 2.8 million jobs in May, but that was far less than Wall Street estimates." They present it like its really bad but wall street overestimated so now lets push back higher, ignoring the fact that it presents a poor outlook on the economy. We might see the same thing with the GDP numbers. "GDP drops 35%, 3% less than estimated! Buy now!"

The real interesting situation will be to see if the fed ever attempts to wind down its balance sheet. I firmly believe they are the reason for most of this rally. If they wind down the balance sheet we will see institutions sell equities to repay said loans and that's when we might have a repeat of March. Also, keeping interest rates at nearly 0% led most people with money in a savings account chasing higher returns. I personally did not do that, I took money out and have actually added to my savings accounts despite the poor 1.3% it makes, but I am holding off for later this year before buying into any more large long term positions.

[RyanO]

Originally Posted by beshannon

IMHO 3400 is way too high, I get increasingly nervous the closer we get to 3150 as 2950 was fair value

I know the rally is being fueled by improving business conditions related to reopening but I believe this is now getting far ahead of itself. I am being cautious while being happy that this continues.

Having said all of that, the markets could break higher as they did in February when the shorts really get squeezed and late money flows in from the sidelines.

https://seekingalpha.com/article/435...iquidity-slows

Informative article with a lot in interesting points.

I’m going to try to be patient and wait for a more attractive entry point. I think things are certainly looking frothy, but it’s hard to argue with this momentum. I do think a lot of this continued upside has to do with shorts bailing.


Sent from my iPhone using Tapatalk

[NKflyer]

Originally Posted by bryan13

The real interesting situation will be to see if the fed ever attempts to wind down its balance sheet. I firmly believe they are the reason for most of this rally.

The Fed will NEVER be able to reduce their balance sheet or normalize interest rates. Heck, they weren't able to do it within the last 10 years of the "greatest economy ever". Fed's balance sheet was <$1 trillion in 2008, then ballooned up to 4.5 trillion during the financial crisis. Yet they were only able to reduce it to $3.9 trillion by late-2018 when the stock market had a temper tantrum and sold off a quick 20%, spooking the Fed against going further. Now it's >$7 trillion. Not to mention the very public political pressure on Powell to keep interest rates artifically low.

[RyanO]

Originally Posted by jpeezy14@hotmail.com

https://www.cnbc.com/2020/06/03/the-...as-feared.html

And then you've got articles like this saying the COVID recession is essentially done for...

Definitely a difficult time to make investment decisions, but all we can do is research and try and put the best foot possible. For us, that means being a bit more defensive and at the very least not chasing on green days.

I agree. I feel that this environment is very challenging for investors, and it's not helping me that most of the pundits seem to be completely divided on how things develop from here.

I think it's a bit optimistic to declare the recession over personally. I heard today that 40% of small business will not be reopening, that alone is a staggering statistic. We will recover, but I just can't imagine it will be as quickly and smoothly as some may be predicting.

[beshannon]

Originally Posted by RyanO

I agree. I feel that this environment is very challenging for investors, and it's not helping me that most of the pundits seem to be completely divided on how things develop from here.

I think it's a bit optimistic to declare the recession over personally. I heard today that 40% of small business will not be reopening, that alone is a staggering statistic. We will recover, but I just can't imagine it will be as quickly and smoothly as some may be predicting.

I stay focused on the longer term picture

If you do not need your money in the next 12 months try not to obsess over day to day movements.

I believe we are higher 12-18 months from now

[JParm]

Originally Posted by beshannon

I stay focused on the longer term picture

If you do not need your money in the next 12 months try not to obsess over day to day movements.

I believe we are higher 12-18 months from now

Agree here. Whether you bought BUD yesterday at $49 or today at $54, you should be fine either way in 1 year.

The 9-10% change between the price there can seem jarring, but ultimately, it's a drop in the bucket with where the stock could be in a year.

[beshannon]

Originally Posted by jpeezy14@hotmail.com

Agree here. Whether you bought BUD yesterday at $49 or today at $54, you should be fine either way in 1 year.

The 9-10% change between the price there can seem jarring, but ultimately, it's a drop in the bucket with where the stock could be in a year.

Financials, Materials, Consumer Discretionary and Industrials all doing well, rotation into sectors that will benefit from economic activity picking up.

A/D line 3/1 on the upside and the new highs are broadening, transports are having a good day.

This is encouraging after two days of rally that this is gaining strength and not fading.

Will need to keep watching closely.

[logo]

Originally Posted by jpeezy14@hotmail.com

Agree here. Whether you bought BUD yesterday at $49 or today at $54, you should be fine either way in 1 year.

The 9-10% change between the price there can seem jarring, but ultimately, it's a drop in the bucket with where the stock could be in a year.

I think this is a huge factor that so many are quick to dismiss or forget (including myself). Seeing things like UAL, MGM, FSLY, BA have a huge day, in a normal trading environment it would be normal to say “ah that was too big a jump, I’ll wait for a pull back,” but we must remember these are not normal times. In reality these prices are all low and that 10% change or $2-$10 difference in share price doesn’t mean much when we start talking about where the share prices of these companies could be in 2-3 years.

[RyanO]

Very valid points. I admit I struggle with keeping the long term picture in focus at times. I was concerned about giving back a good portion of the profits I had made, and wanted to lock those in.

I need to decide if I should just re enter here, though I admit I hate buying after huge rallies, but that could just be doing myself a disservice in the long run.

I'd prefer to buy back in if things cool off, though there's a possibility that never materializes and then I just miss out on the rest of the recovery...

Appreciate the advice fellas.

[beshannon]

Originally Posted by logo

I think this is a huge factor that so many are quick to dismiss or forget (including myself). Seeing things like UAL, MGM, FSLY, BA have a huge day, in a normal trading environment it would be normal to say “ah that was too big a jump, I’ll wait for a pull back,” but we must remember these are not normal times. In reality these prices are all low and that 10% change or $2-$10 difference in share price doesn’t mean much when we start talking about where the share prices of these companies could be in 2-3 years.

Take the stats for what they are and do your own homework. shorts are covering and there is FOMO and TINA (there is no alternative) regarding stocks. Over 1 trillion in cash is sitting on the sidelines doing nothing

https://www.cnbc.com/2020/06/03/this...he-sp-500.html

We are breaking out above all kinds of resistance on the S&P, above the 200 MA, the RSI is positive (69) and we have crossed the top of the uppermost Bollinger Band.

If we get follow through tomorrow, this could run for a few more days.

[scarlet knight]

As a stock market investor since 1987, my only two lessons are these: 1. Whatever I think is going to happen does not happen, 2. If I put a large part of my assets in diversified stocks, with some bonds and cash, and go to a desert island for 20 or 30 years, I will have a lot more money than I started with. Usually.

[supernova]

Originally Posted by scarlet knight

As a stock market investor since 1987, my only two lessons are these: 1. Whatever I think is going to happen does not happen, 2. If I put a large part of my assets in diversified stocks, with some bonds and cash, and go to a desert island for 20 or 30 years, I will have a lot more money than I started with. Usually.

Pretty sure that cash is only going one way in 20-30 years, and it's not up!

[cornerstore]

Originally Posted by cornerstore

Only question now is, when will the market transition from the surprised phase to the emperor has no clothes embarrassing phase. The more money an overhyped massive or no p/e company is losing the more it is valued in this market. The more it is overvalued the more it is shorted and then it becomes easier to manipulate using current monetary juicing tactics. Shorts should just retreat and let the market fold like a cheap suit.

After reading an article on CNN business it appears the market is entering the embarrassing phase.

Joe Brusuelas, chief economist at RSM International, said he can't recall a time when the disconnect between Wall Street and the real economy was this great. He blamed in part the sharp decline in the number of public companies in the United States.

"The market is broken. It no longer reflects a forward outlook that is truly aligned in the real economy," he said. "That's a problem because at some point, the public will say these markets are rigged.“

[kaiserphoenix]

Originally Posted by scarlet knight

As a stock market investor since 1987, my only two lessons are these: 1. Whatever I think is going to happen does not happen, 2. If I put a large part of my assets in diversified stocks, with some bonds and cash, and go to a desert island for 20 or 30 years, I will have a lot more money than I started with. Usually.

Man so true. Every time I try to analyse and predict anything, the opposite happens.

[beshannon]

https://www.thestreet.com/markets/5-...hursday-060420

A bit of risk off this morning so far, futures down -120 at 7 am and not surprising, now at 8 am the futures have swung positive +22

Stay focused, protect your gains

QUOTE OF THE DAY
"The riskiest moment is when you are right. That's when you're in the most trouble, because you tend to overstay the good decisions."
Peter L. Bernstein, economist

Do not underestimate this rally simply stay disciplined

S&P has had strongest 50-day move for index since 1952 when US stock market went to 5-day trading week
@bespokeinvest

[Past performance is no guarantee of future results]

[JParm]

Originally Posted by beshannon

S&P has had strongest 50-day move for index since 1952 when US stock market went to 5-day trading week
@bespokeinvest

[Past performance is no guarantee of future results]

https://www.cnbc.com/2020/06/03/this...he-sp-500.html

"Looking at the other largest 50-day rallies, the firm found that stocks were higher 100% of the time six and 12 months later. The average 6-month return was 10.2%, while the average 1-year return was 17.3%"

It's been a great 50 days, and yet there could be more to come. I'm drowning out the day-to-day noise (the market's broken, don't trust the rally, etc.) and continue to look for value, with the belief that a year from now, we'll be just fine.

[beshannon]

Originally Posted by jpeezy14@hotmail.com

https://www.cnbc.com/2020/06/03/this...he-sp-500.html

"Looking at the other largest 50-day rallies, the firm found that stocks were higher 100% of the time six and 12 months later. The average 6-month return was 10.2%, while the average 1-year return was 17.3%"

It's been a great 50 days, and yet there could be more to come. I'm drowning out the day-to-day noise (the market's broken, don't trust the rally, etc.) and continue to look for value, with the belief that a year from now, we'll be just fine.

I agree and this is the plan I am sticking with

[beshannon]

Back to flat at 10, strength is evident even as we become more over valued. I am not sure if the rotation can be enough to keep levels here, NASDAQ hits record high

[Uggi]

After a lot of watching and reading I've gone in on Aston Martin (AML) this morning. One year ago they were trading at over 1000 and today you can pick up shares for around 60. They have had a terrible time since the IPO in 2008 but ..... a new angel investor came in early this year and bought 25% of the stock, they have successfully headhunted the Mercedes-AMG boss who starts with them on 1st August, they have already taken some tough margin protection steps, it remains one of the most famous brands in the world, a new Bond film is out later this year and they will rejoin Formula 1 in next year for the first time since the 1960s.
Well worth a shot.