Investments Trade Log

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giskard
Posts: 226
Joined: Sat Apr 30, 2016 12:07 pm

Re: Investments Trade Log

Post by giskard »

Lucky C wrote:
Thu Feb 25, 2021 1:48 pm
Why not Kroger?
Kroger has a big debt issue, unionized employees, and they have a bunch of bolt on grocery chains they acquired that are not fully integrated leading to extra overhead. Walmart is a much more efficient grocery operator imo.

giskard
Posts: 226
Joined: Sat Apr 30, 2016 12:07 pm

Re: Investments Trade Log

Post by giskard »

Holy crap the 10 year yield today! I did not see the 10 yr hitting 1.5% this week... just wow.

Wonder what it will do tomorrow, next week, next month? Will they do YCC? This is going to keep crushing markets if it continues.

Trades: nothing but I will probably start nibbling at things soon depending on how Friday's close goes / Sunday's open. Expecting a lot of red.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@Lucky C

That is a good point. The further we go back historically the more those trends don't matter too much.
Some people use technical analysis for this stuff like MACD lines.

Key I see is being forward-looking but this takes some diving into the financial statements, risk disclosures, and the like. I've done this before but never tried to value any business like KR or COST. Will have to read up more...

Or do the easier thing... see what the sentiment is through social media trends....

@giskard

Inflation? Because who has bonds to sell anymore...
Inflation erodes the purchasing power of a bond's future cash flows. Put simply, the higher the current rate of inflation and the higher the (expected) future rates of inflation, the higher the yields will rise across the yield curve, as investors will demand this higher yield to compensate for inflation risk.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

Bonds are extremely oversold with the spike yesterday seeming to be a clue of an inflection point or simply overreaction. Bought a tiny amount of bonds a couple days ago (had 0% in bonds previously) and maybe more today. 10Y back down below 1.5% now. Even if this is now a long term bond bear market, the odds seem favorable for a short term rally after the extreme spike yesterday.

giskard
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Re: Investments Trade Log

Post by giskard »

Lucky C wrote:
Fri Feb 26, 2021 3:51 am
Bonds are extremely oversold with the spike yesterday seeming to be a clue of an inflection point or simply overreaction. Bought a tiny amount of bonds a couple days ago (had 0% in bonds previously) and maybe more today. 10Y back down below 1.5% now. Even if this is now a long term bond bear market, the odds seem favorable for a short term rally after the extreme spike yesterday.
You are probably right, and this might turn out to be a good trade. But do you want to risk the 10 yr going to 2% before it goes back down to 1%?

I did see some people talking about the Australian central bank started buying their 10yrs (today) and it really pushed down yields quickly.

On US 10 years, here is a question: are you betting on a mean reversion or are you betting on Fed intervention? I think short term we are maybe just going to see inflation expectations increase so a mean reversion bet here scares me.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

Eh it's just for a week or two, since that's how long it takes a deeply oversold situation to go back to normal, with under 3% of my net worth. I don't have any other bonds so my bond allocation is well below what most financial advisors would recommend. Good chance it will stay in a +/-5% range over such a short amount of time. The impact to my net worth will be one or two tenths of a percent so you could say it's just for fun!

giskard
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Re: Investments Trade Log

Post by giskard »

Lucky C wrote:
Mon Mar 01, 2021 7:23 pm
Eh it's just for a week or two, since that's how long it takes a deeply oversold situation to go back to normal, with under 3% of my net worth. I don't have any other bonds so my bond allocation is well below what most financial advisors would recommend. Good chance it will stay in a +/-5% range over such a short amount of time. The impact to my net worth will be one or two tenths of a percent so you could say it's just for fun!
That's fair, hope it works. I'm holding off on making trades until tomorrow to see how the treasury auction goes. If it goes badly I think gold could go well below 1700, and I'll prob sell some puts on the miners. If it goes well and rates fall I'll prob sell calls.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

Past month I've been continuously adding to my AMD position as the stock falls from the chip shortage and overall decrease in tech. I've watched most of my unrealized gains evaporate. My LEAPS are not looking good but I'm actually near breakeven on that due to rolling covered calls.

MAC has been increasing the past few weeks. NOK is still bleeding.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

Wrong about bonds having a short term bounce back up / yields bouncing back down, so I sold that little stake.
Today I'm glad I'm not holding much in bonds, or stocks for that matter.

ertyu
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Re: Investments Trade Log

Post by ertyu »

Is anyone looking to get into gold at some point angling for a bounce or do you guys wager that was that with gold. I'm contemplating gdx

giskard
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Re: Investments Trade Log

Post by giskard »

ertyu wrote:
Thu Mar 04, 2021 3:58 pm
Is anyone looking to get into gold at some point angling for a bounce or do you guys wager that was that with gold. I'm contemplating gdx
Continuing to average but wow is it painful. Imagine where gold will be if the 10 year gets to 2%. That close below 1700 today was catastrophic.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

Barrick Gold (GOLD) is back at pre-pandemic prices. In Q4 2020:
- Dalio bought GOLD (has traded it several times but is long term bullish on gold / bearish on USD, see his public posts)
- Druckenmiller sold GOLD (has traded it several times over the years, trying to get the most out of trends)
- Buffett sold GOLD (I believe it was his first time holding it at the start of the pandemic)

There is a delay when learning about these trades from the pros' public 13Fs so we won't know if Druck or Buffett bought back in due to recent events for a while. However based on these recent sales and the fact that Buffett only eked out a small profit out of the trade over a few months, before selling uncharacteristically quickly, makes me think that the old pros probably won't be jumping back in any time soon. Buffett probably wouldn't take a stab at it again after last year's episode unless it was an amazing value, and Druck certainly won't jump back in unless this downward trend clearly reverses.

So if you think Dalio is right then that may be good enough, but these Q4 sales from both value and trend based legends look like big warning signs against getting into the miners right now.

As for gold itself, well it's still positive over the past year and sentiment is very negative now, so it's not all bad. Also in past bear markets, gold has declined along with stocks at the first part of the downturn, but during the worst of the bear market gold recovers and does well. So if you think this is the start of another bear market, it's likely gold will do better than stocks at least.

white belt
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Re: Investments Trade Log

Post by white belt »

I think gold is likely to go lower, especially with real yields rising. It’s hard to time the bottom, but today’s discussion on Macrovoices said $1688 is a key support level, and if we get daily closes below that then we might be in for another $100-200 down. I’m only interested in physical bullion and a physically backed ETF like GLD, not miners.

I’m still long term bullish on gold because I think all this fiscal stimulus is going to lead to inflation and further fiat currency debasement once the US economy re-opens this summer. The real yields are going up right now, but by the end of 2021 it may turn out that what is actually going up is only nominal yields. Secular inflation is the only way that indebted Western countries can escape the current predicament (think ~5% annual inflation for a decade). That’s also why I think we’re seeing an upward trend in commodities.

white belt
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Re: Investments Trade Log

Post by white belt »

Has anyone looked into putting a position on for any of the commodities/miners/producers that will benefit from a "green revolution"? Things like nickel, cobalt, lithium, rare earth, copper, etc. I suspect that in the next few months things politically in the USA will shift from COVID relief to a huge infrastructure bill.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

Hasn't that already been extremely priced in?

Copper futures are near all time highs, having doubled in price in the past year. Also down 7% in the past week. The metals and agriculture futures that surged in past months before mainstream media inflation talk have now slowed down or rolled over since everyone is talking about inflation. Oil is the exception, making new highs currently.

Also, in the short term USD is highly oversold and mining could be the worst hit sector if USD bounces back.

Futures already priced in the future because they're futures. You have to figure out what the future will look like in the future. I know you're thinking more about mining stocks than commodity futures but the same applies. The mining stocks would beat the other industries if it turns out there is more demand / less supply than everyone anticipates (already anticipating future renewable energy use) and if USD does even worse in the future than anticipated (already at very high short interest levels currently).

white belt
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Re: Investments Trade Log

Post by white belt »

@Lucky C

Maybe. I think Copper might already be baked in, but I was listening to Howard Klein on Wednesday’s RealVision Daily Briefing and it still sounds like Lithium has a lot of upside.

In my opinion, markets are so short sighted and growth stocks have outperformed anything else for so long that money is slow to flow into some of these things. Maybe that trend is shifting with rising interest rates. I expect a spike whenever the Biden administration announces its green spending bill. You would think all the green energy prospects would be priced in, but I bought URNM after Biden was elected in November and it’s still almost doubled in price since then.

ZAFCorrection
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Re: Investments Trade Log

Post by ZAFCorrection »

I haven't eyeballed it any detail, but my gut tells me copper can scale up a lot more than lithium before costs and availability push industry toward other materials/chemistries. Copper has been a go-to material since electricity was a thing. Lithium batteries have been around for a few decades, have spent a lot of that time being niche, and have coexisted with a few other viable chemistries that often use less exotic materials.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

- Rolled out another CC on Bank of America. My LEAPS are doing very well - mainly due to a media article on how BAC is "getting into" bitcoin last week.
- Sold CC on NOKIA for $4.50 expiring March 19 and used premium to buy more shares. It wasn't much ...but whatever it takes to keep reducing cost basis. I'm holding these bags for a long time so I might as well make a synthetic dividend out of it.
- Sold CCs on Apple, Walmart as well. Used premiums to buy AMD. AMD is low right now and I view the global chip shortage problem as relatively short-term (from a long-term perspective) so to me AMD is at a nice discount.

A choppy market that is slowly trending downward ... makes it a good time to CC.

Redo
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Re: Investments Trade Log

Post by Redo »

^ I'm trying to figure out whether the chip shortage is short/long term. Even before the pandemic, miners were driving the prices up. With institutional players getting into bitcoin, this will only get worse. Scalpers are driving the prices up. Running out of sand, material costs increasing. IDK.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@Redo.

Short-term. Semiconductors have always been cyclical in nature.

Growth occurs when there are advances in the chip technology (essentially fitting more circuits onto ever smaller pieces of chip made of silicon) which causes high demand and short-supply. This is further exacerbated because fabricating new chip technology takes time as well so not as simple as setting up a new production line and adding some workers. On the other hand, when there is too much supply this causes increased inventory costs, this results in falling chip prices and a downswing. In the former case, we're seeing really fast growth in this industry due to the pandemic and everyone needing computers and technology plus all the crypto miners and 5G growth. So it is a really bad supply problem but not due to materials - silicon is a finite resource but it is essentially unlimited and as chip technology advances, less material is required. The trade war with China did not help either - we get a lot of chips from them.

In short, from long scale timelines; the supply problem won't last forever (but it will last longer than the industry normally deals with it) but I am more than happy to buy AMD while its down.

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