Investments Trade Log

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George the original one
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Re: Investments Trade Log

Post by George the original one »

jacob wrote:
Fri Feb 28, 2020 12:13 pm
This, incidentally, is the first day of this week where I've done relatively worse than the market indexes in either of my two [big] portfolios.
Ditto.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

All the historical evidence points to this week/month being so bad and sentiment now being so extremely negative that it is extremely likely next week/month will have a strong rally. Especially since losses have decelerated today.

This potential for some quick gains in the upcoming week(s) is so obvious that it must be wrong.

ertyu
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Re: Investments Trade Log

Post by ertyu »

@Lucky - you're probably not wrong, stocks might rally when the fed delivers on the cuts the bond mkt is pricing in. I hope not for long, I need carnage here because I'm sitting on a pile of cash

ToFI
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Re: Investments Trade Log

Post by ToFI »

@Jacob,
BRK.B is over-rated at current market cap size. It performs very similar to SPY without the dividend. If I am going to buy something when market is down 50%, I'll buy high quality dividend stocks, or a single dividend ETF/ REIT ETF for simplicity. When the market is down, we have living expenses and dividend will help tremendously and we won't have to sell much stocks.
Last edited by ToFI on Fri Feb 28, 2020 1:29 pm, edited 3 times in total.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

Will super Tuesday have an effect on the market if Bernie (whom wants to tax 'wall street speculation') gets the most delegates?

Anyhow....for the the curious. I took heavy loss on MSFT, VISA (managed to sell when it bounced up today) and DIS. ~ $6k invested...salvaged $1.4k. I put the latter on DIS $100 PUT for March 27 @ 2.00 a contract (all on red?). Figured I could make a profit on this at least to recover some of my losses and if I'm wrong again I will probably just retire from the long call & long put game altogether. I don't think this is for me just yet...

In the future, I think I may build up a stake in MSFT over a long period of time in my brokerage account. MSFT is looking much cheaper now. When I get to 100 shares, will look into writing covered calls if I feel the stock is over-valued by then.

jacob
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Re: Investments Trade Log

Post by jacob »

Lemur wrote:
Fri Feb 28, 2020 1:27 pm
Will super Tuesday have an effect on the market if Bernie (whom wants to tax 'wall street speculation') gets the most delegates?
Maybe not Super Tuesday but the election, absolutely. Keep in mind that the US electorate exists in two separate news bubbles with one side being told that shits going great/terrible alternatively depending on who's watching and who's in power. The economy != the financial markets, anymore.

Taxing wall street speculation is a non-starter. If a tax is enacted on trading (e.g. a kind of Tobin tax) ... there'll simply be less trading. Bid-ask spreads will widen and volume (most of which is algo) will decrease. There's no free lunch in the financial markets. The costs will instantly be passed onto consumers/retail "investors".

Dave
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Re: Investments Trade Log

Post by Dave »

@ToFI

Berkshire may only be able to grow its (all-in, meaning operating businesses + look through stock portfolio) earnings power at say 8% for the foreseeable future, but its price relative to its earnings power is meaningfully lower than the S&P500.

Plus, a massive portion (I think it's 1/5 or so without checking) of the market capitalization is in cash, which gives them optionality going into market downturns to either buy stocks cheaply, be that other stocks or their own. Right now Berkshire is now trading below the book value buyback point Buffett has set (this may be slightly of because their stock portfolio would have traded down since the last reporting of book value), so this will serve something as a short-term hold on price, likely. Plus, since it is below the buyback point, it's implied that Buffett thinks it is meaningfully undervalued, which, frankly, I think he is probably the person who knows best.

Finally, its operating businesses and stock holdings tend to be fairly resilient from a fundamental business perspective.

I am guessing @jacob's thought is that BRK.B will hold up better than the overall market - it offers very attractive risk/reward relative to the broader market. So, if we hit your -50% scenario he will be in a much more favorable position to buy other assets because BRK.B will have held up relatively well compared to the broader market.

@jacob

We'll see, but the succession plan has been fully developed and every year the new leadership is brought closer to the front. This year Jain & Abel will be more up front answering questions at the annual meeting. I'm not sure that when Buffett & Munger go if the stock will actually drop, or if business will meaningfully change in the next 5-10 years. I don't really think it will matter given the size of the business and the remaining opportunity set, plus how they have set it up.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

Uncertainty = fear and the resolution of those uncertainties leads to a reduction in fear. Any fear regarding Super Tuesday should be priced in and the resolution of Super Tuesday could help bullishness on Wednesday no matter the outcome. I would think the coronavirus is causing more fear such that elections might not be important this week unless something really surprising happens, but what could that be? After the NH primary, briefly the odds were that Bernie was going to win almost every single state's primary and the market didn't care. Now the polls and predictions are back to pretty much showing Biden winning the Deep South and Bernie winning the rest.

Coronavirus is spreading predictably and is subject to some major surprises either way. For example (I'm not making predictions): good = lower CFR than expected (possible that thousands have been infected in the Washington area for weeks, thought it was the regular flu, and it only resulted in one death so far), or vaccines/treatments making progress ahead of schedule. Bad = unexpectedly high uptick in cases as testing grows exponentially, the Pope dying, Trump getting sick, etc.

Seems like in the short term (1 week to 2 months) there is much bigger upside than further downside barring any bad surprises. I did a little buying of the dip Friday afternoon and although I still have only a small % in equities I plan to gradually sell the rip if there is one.

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Bankai
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Re: Investments Trade Log

Post by Bankai »

Lucky C wrote:
Sun Mar 01, 2020 8:43 am
Any fear regarding Super Tuesday should be priced in and the resolution of Super Tuesday could help bullishness on Wednesday no matter the outcome.
How can you discount all possible outcomes? Is it not just some average case scenario that is priced in? For example, the day before the Brexit referendum it only had c. 10% chance of happening IIRC (according to 'consensus'). Yet, when it actually happened, the stock market crashed. If the market tries to price negativity too much, buyers will flow in and support prices; if the market is too optimistic, sellers and short sellers will flow in and depress prices.

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Re: Investments Trade Log

Post by jacob »

@Bankai - I might be pointing out the obvious. An p% chance of something happening does not exclude it from happening even when p is low. (Whereas there's a natural human tendency to skew one's perspective such that 30%->0%) If there are two prices, say P1 and P2, the market price before the event is P=pP1+(1-p)P2 and afterwards it's P1 or P2 depending on what happened. This kind of thinking is a lot clearer in the bond market where one can literally calculate the market's odds of e.g. a rate cut or hike based on the market interest rate. With stocks people tend to lose their heads for at least 24 hours for big events. However, for a minor event pricing will often happen according to expected earnings which is why surprises move the price according to whatever the multiplier is.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

Bankai wrote:
Sun Mar 01, 2020 9:57 am
when it actually happened, the stock market crashed.
FTSE100 closing prices in the two sessions following 6/23/16 referendum did not fall below the previous low of that month, set on 6/14/16. Fully recovered 6/29 and ended the month higher than before the referendum just a week prior.

I consider the 24 hour over-reaction that Jacob mentions to just be noise and would not call it a crash. I'm thinking week-long to months-long reactions that can wipe out months of gains or get back up to making new highs.

Anyway my main point is that COVID 2019 has a lot more market moving potential in the next few weeks than BERNIE 2020.

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Re: Investments Trade Log

Post by jacob »

It looks like some intra-market rationality has been restored in today's Fed based rally after Friday's clobbering by indexers selling out. Expected sectors are down. Others doing well. Cruise ships, resorts, airlines, railroads, fashion industry, retirement homes all down. Groceries up (as pantries are filled with water and TP) as is anything that enjoys low interest rates and vice versa.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

Go figure as soon as as sell-out and put all my call money on a put option for Disney...oh well. Lesson learned.

OTOH...I did luck out on my brokerage. I sold my BND and VXUS to put $16k on Microsoft right before the 7% bounce so that is something. Also bought into WMT and GE before the short rally too. Getting myself into some long positions and excited to practice this so called 'wheel strategy.'

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Seppia
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Re: Investments Trade Log

Post by Seppia »

Tesla Registrations Plunge in Musk’s Top European Markets
https://www.bloomberg.com/news/articles ... an-markets

Tesla revenue decreased 15% in the USA last year, and it looks like it’s dropping like a rock in Europe as well.
They are opening two factories with, uh, suboptimal timing I would say.

“Explosive growth”

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

International stocks' total return recently peaked in January but were slightly below the January 2018 exuberant peak. Same for emerging markets. Yesterday the big US bounce was nowhere near as strong internationally. See for example VXUS and VWO compared to VOO total return from the 2016 lows:
https://stockcharts.com/freecharts/perf ... 3&O=011000

If you look at the US stock market only then there is a lot of hope that this is just a quick correction and we still have a decent shot of making new highs, especially since we were setting new highs so recently. If last week was an anomaly, the overall trend looks pretty good. However if you ignore US and look internationally it looks like a long topping process has been occurring over the past two years.

As PMIs around the world crash, cash & gold is looking better than ever to me.

ToFI
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Re: Investments Trade Log

Post by ToFI »

The virus in China is under control. The active case is in decline.
The problem is the active cases are increasing outside of China. This is what Mr.Market is worrying about. It's just started outside of China. No end in sight.
No countries will quarantine the whole country like China did.Cough. . Maybe North Korea but they don't have the same technological capability as China.

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Bankai
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Re: Investments Trade Log

Post by Bankai »

Is a worldwide recession now inevitable?

I'd certainly not buy anything anytime soon - the markets are way too volatile and news-driven. Another (possibly massive) leg down seems only a matter of time.

What sectors will get hit the hardest? Anything to do with international travel - airlines, ferry operators, holiday resorts & hotel companies are already suffering. The second wave might be 'local gatherings' types of businesses - cinemas, pubs, restaurants, casinos, gyms, etc. I'm not shorting anything but these seem likely candidates. The death of retail might come even sooner with people even more likely to buy stuff online - retail chains already struggling will go under. Also, 'recrutment freeze' is a default response to any economic slowdown so recruitment companies will be in big trouble.

Who can do well? Any in-house entertainment, streaming services, video games, online gambling, food takeaways possibly? They might be most resistant to falls but not necessarily going up considering overall market sentiment. Insolvency practitioners.

Also, since crisis is just another word for opportunity, I'm sure there will be new businesses offering 'from home' version of services previously dominated by brick and mortar businesses.

It's almost impossible to value anything now since no one has any idea how profits will look like 3-24 months from now. Profits after 2008 took a while to recover. Markets already overpriced (hi US!) could see severe drops with this uncertainty. Selling into strength on a spike up seems like a good idea.

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Seppia
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Re: Investments Trade Log

Post by Seppia »

Bought a bit of Disney today

Dream of Freedom
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Re: Investments Trade Log

Post by Dream of Freedom »

Ray Dalio weighs in on coronavirus and It's economic impact.
Reactions to the virus (e.g., “social distancing”) will probably cause a big short-term economic decline followed by a rebound, which probably will not leave a big sustained economic impact. The fact of the matter is that history has shown that even big death tolls have been much bigger emotional affairs than sustained economic and market affairs. My look into the Spanish flu case, which I’m treating as our worst-case scenario, conveys this view; so do the other cases.
https://www.linkedin.com/pulse/my-thoug ... ticle_view

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@Seppia

Yeah Disney is getting really cheap. I'm still holding a put option @ 100 that I'm trying to break-even off but it is an incredibly good long-term value stock right now.

Sold 1 covered call on MSFT today in my brokerage acct expiring in 2 weeks for $169 premium. Used money to buy more Walmart stock.

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