Investments Trade Log

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Lemur
Posts: 556
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Re: Investments Trade Log

Post by Lemur »

Two weeks ago, I sold cash covered puts on GE, KO, WFC, Apple, WMT, and BRK.B. I was assigned on KO ($50 strike, stock closed ~$44) and Walmart ($120 Strike, closed at $109).

The stock chart for WFC was fun. Like the last 10 seconds of a close basketball game or something. My strike was $30 and stock closed at $30.28.

With IV so high, I'm enjoying collecting great premiums and setting strike prices about 10-15% below current price. Next Monday's move are to wheel the above again. For the ones I was assigned, going to set covered calls. I'm still bearish.

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Bankai
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Re: Investments Trade Log

Post by Bankai »

Coronavirus: Six months before UK 'returns to normal' - deputy chief medical officer

https://www.bbc.co.uk/news/uk-52084517

This is the first time the UK government hinted at just how long the lockdown might really be in place. The implications on GDP/economy will be on a scale not seen before. In my opinion, this makes whole sectors of the economy uninvestable - travel/leisure industry, airlines, restaurant sector, cinemas, non-food retailers without a strong online presence, etc. It's highly likely that a large number of companies in these sectors will go bust and although there will obviously be winners benefitting from reduced competition during recovery, it would be extremely difficult to figure out in advance which ones will survive. As for the government bailing out companies - you can't bail out the whole economy. The government had already ruled out an industry-wide bailout for airlines/airports and would only be looking to step in if all other options are exhausted. Now, some airlines sit on billions of £ and are likely to survive with no revenue for several months, maybe over a year. But, those who don't and actually need government help, are likely to see existing shareholders diluted or completely wiped out. The same applies to other sectors. It looks increasingly likely to me that bottom picking stocks in this environment is nothing more than a gamble. Waiting for the recovery to start and only then backing up the ones still standing seems a superior strategy.

wolf
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Re: Investments Trade Log

Post by wolf »

And there are still open trade agreement negotiations between UK and EU. This is another uncertainty factor.

ertyu
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Re: Investments Trade Log

Post by ertyu »

Some doubt there will be an EU by the end of this. There's potential for a lot, a lot of disruption here.

Frugalchicos
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Re: Investments Trade Log

Post by Frugalchicos »

Not really picking individual stocks. But, will slowly deploy 50K into Betterment during the next two years (about $1,000 every two weeks). This month we have already invested 85K we had in cash.

ertyu
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Re: Investments Trade Log

Post by ertyu »

dipping toes very very very slowly. 5% of cash in GDX (200), GDXJ (200), U (100), ASPS (100), EGLN (100).

Very very tempted to take another 2% or so and buy SPX puts. Or sell OTM calls. Very tempted. I'm temperamentally unsuited to buying protection, but it seems to me it would be the smarter way. IV/VIX might still go up. Buying would be better.

SavingWithBabies
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Re: Investments Trade Log

Post by SavingWithBabies »

I'd bought some VTI (10 shares) and BRKB (250 shares) on the way down. I sold the VTI at slight profit and BRKB at slight loss (couple hundred). Decided I'd rather be holding cash for now (still have plenty invested) as this post-tax account is targeted more as a house downpayment or +1 year out living expenses (if no other income).

Seppia
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Re: Investments Trade Log

Post by Seppia »

Latest Howard Marks memo, always a great read.
https://www.oaktreecapital.com/docs/def ... ay-now.pdf

He seems to be bearish, which is in my very humble opinion the most probable short/mid term outcome.
Too many people are still living in a fairy tale where everything goes back to normal fast and things ain’t so bad.
I participate in a watch forum and I had to take a hiatus because people there are so unwilling to accept what’s going on that I was going nuts.
Reality will kick in and there’s a chance many will panic.

As usual I won’t make any drastic changes but will again build a bit more liquidity with my monthly savings by only investing about half of them.

ertyu
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Re: Investments Trade Log

Post by ertyu »

Howard Marks in particular has been edging thinking of this particular crisis since 2017, being into distressed debt and all. But yeah, exactly 0 of the various pundits and hedge fund ppl I follow are, "yay!!! crisis over!!" - mostly they argue about the exact way and extent in which it'll be an absolute shitshow. Professionals agree this is a bear mkt rally and the lows are likely to be retested.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@SavingWithBabies

I was impatient selling puts on BRK.B. $15k underlying capital for only a $40 premium. Though I am picking very far OTM ones right now...I'm predicting some circuit breakers in the next 2 weeks and I don't want to be caught with pants down this time.

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C40
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Re: Investments Trade Log

Post by C40 »

I had already been looking for good REITS to buy in my IRAs this year, so the with the drops in prices I'm going ahead on some...

Bought: SPG, STAG
Have limit orders to buy: O, WPC, LAMR

I feel (more than usual) that I don't know what I'm doing. I suppose that's basically thinking that the stock prices might go down a lot more over the next couple weeks and I'll wish I waited... or that some of the companies I buy will totally collapse. Tomorrow never knows.

I have in total about $50k in my IRAs that I'm wanting to buy with.. And then another $70k in my post-tax account that came from selling stocks in January to set aside cash for buying a home in 2-3 years. I'm thinking, especially if prices go down more, that I will put most of that back into stocks at (hopefully) low prices. I have another $60k or so of pension money that I could claim and get in my Traditional Roth to invest, but getting that now would be more complicated than usual because I'm out of the country.

CS
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Re: Investments Trade Log

Post by CS »

The pain is just starting for REITs.

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C40
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Re: Investments Trade Log

Post by C40 »

When will it be at full pain?

jacob
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Re: Investments Trade Log

Post by jacob »

Today looks like another broad corona selloff with few patterns other than airlines down, chlorox and foods up.
Death counts must have gone up in a newsworthy fashion.

ertyu
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Re: Investments Trade Log

Post by ertyu »

I'll take a stab. First, we still have not retested the 2200 lows - we might still make a lower low (I did not buy puts or sell calls, and I am kicking myself in my chicken ass. I missed the top of this dead cat). So (1) REITs might have further to fall just because the market in general has further to fall.
Second, as far as I understand, one issue with REITs is that they're leveraged at a time when clients are starting to say they won't be paying rent. REITs will thus do worse as credit conditions tighten. Have they tightened enough? So far we've seen some shale oil companies and a couple of retailers file. Many retailers have also been downgraded. But imo we're nowhere close to being done with either downgrades, or bankruptcies. If retailers are being downgraded and households can't pay rent (there was a notice going around media about people doing rent strikes (which, imo, high time, given the disparity between urban rents/property values and urban incomes). So you would expect at least a couple of REITs to get in major trouble, too. When they do, they will drag down the entire asset class. That's when you buy the guys you want (and I agree that you want REITs heading into stagflation).

When this will happen? Idk. I haven't personally researched REITs. I am an INFP and very much a general picture thinker with the general abiity to download a Damodaran valuation sheet and do a dcf but an extremely crap attention to detail, so I have not analyzed any names either. Probably will trust yours and @Dream_of_Freedom's names and hope for the best lol. Also consider REITs outside the US - I bet there are multiple quality European names you might want.

Contra-argument: gvt has been bailing people and companies left and right. Money printer go brrrr. Brrr.money --> risk assets up. It is completely possible for the general economy to be tanking and for risk assets to be rising in nominal terms, you just have to print enough. When is the right time to stop waiting and go long the companies you consider quality to protect yourself from potential stagflation? Idk. Might be now, or as @CS says, the pain might just be starting and there might be a better entry point.

In either case, I'd be curious how your thinking evolves.

CS
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Re: Investments Trade Log

Post by CS »

@c40
I don't know when, but the pain of everything hasn't really had time to hit. Businesses are not making rent-this month, renters are not making rent-this month, a lot of individuals might lose their houses sometime in the near future. Unemployment and bailouts will buoy some, for a while.

Plus all those other leveraged companies like the AirBNB barons. And this mess:
https://www.ccn.com/did-the-fed-just-ac ... ket-crash/
"The Mortgage Bankers Association (MBA) warned of ‘large scale disruption’ to the housing market and accused the Fed of using a ‘sledgehammer.’

This is a collapse of the system.

How The Federal Reserve Almost Broke The Housing Market
Here’s how it works. Mortgage bankers hedge themselves against interest rates going up. If rates go up, the hedge makes sure they don’t lose money from customers who locked in a lower mortgage rate.

It’s a standard practice across the industry and almost never causes any problems.

Until now.

As part of the coronavirus stimulus action, the Fed bought $250 billion worth of mortgage-backed securities in a space of two weeks. For perspective, that dwarfs the amount they bought during the housing crisis by $80 billion.
I don't know how these REITs are structured, but I'd be dang surprised if they picked the perfect allocation that avoided most issues. If we do get inflation, then yes, I guess tangible assets are a good way to good. I don't have the knowledge on how exactly this will unwind, except the observation that the consequences are not really there yet for most of the issues above.

classical_Liberal
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Re: Investments Trade Log

Post by classical_Liberal »

Not all REIT's are created equal and although all rely on leverage many do not dabble in owning the debt themselves. Look at medical REIT's, they are beaten down worse than the index in some cases. These guys are mostly reliant on rents from companies that mostly rely on federal payments, medicare and medicaid. Now is not the time you will see federal cuts in medical spending. As a matter of fact, I think there will likely even be stimulus to medical sector if COVID is cutting into their profit margins to the point they can't afford rent on their facilities, it's in the public's best interest they stay solvent. This is like having insurance on the profits of medical REIT's, who can also take advantage of low rate to restructure any of their debt.

Just my opinion.

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Bankai
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Re: Investments Trade Log

Post by Bankai »

SP500 only gave away the last 14 months' worth of gains, yet the outlook for the economy is quite different than 14 months ago so does the current price make any sense?
The United States economy will shrink 5.5% in 2020, the steepest drop since 1946, with a huge 38% contraction predicted for the second quarter, Morgan Stanley said on Friday in a new batch of forecasts on the economic damage from the coronavirus outbreak.

The U.S. bank said it had cut its first-quarter forecast to an annualised 3.4% contraction from a previous 2.4%, while in the second quarter the economy is predicted to shrink 38%, up from an earlier forecast of a 30% contraction.

U.S. unemployment will also peak at a record 15.7% in the second quarter - that is up from a previous 12.8% forecast by the bank's economists - with cumulative job losses of 21 million in the second quarter, Morgan Stanley said.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

What % of the time do you (or does the typical active investor) think the price does make sense?

Seppia
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Re: Investments Trade Log

Post by Seppia »

I would say most of the time.

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