Investments Trade Log

[Lemur]

@zbigi

I was just thinking that if the indexes are market-cap weighted, then FAANG can definitely take over. Maybe doesn't need to be the amount of companies but how powerful just the few of them are relative to the other industries.

If Oku is right, and this is the future, then I will be ObeseFIRE in the next decade(s) from index funds. This will be like getting dividends from the British East India Company. Except this time its just a conglomerate of FAANG companies with high margins. Maybe revenue doesn't need to keep increasing on a year to year basis but just be sustainable. Though I can nitpick at the idea of fewer products being required (computer parts will need to start getting strategically recycled at some point at a mass scale). I think this question deserves its own thread tbh. It is investment related for sure but can also tie in a lot of other topics.

[okumurahata]

Why would that happen though? FAANGs are monopolies or almost-monopolies, due to how Internet and software in general works.

It’s happening organically. People prefer to stay at home and watch Netflix rather than take the car and go to Walmart to buy a film. This action boosts Netflix and lowers Walmart’s position. For most companies listed in the S&P 500, there are potential software substitutes with higher margins. Following your example of airlines, we travel on planes because it’s the best way we know how to travel, but think about the impact Apple Vision Pro could have if those glasses could recreate a perfect travel experience to another part of the world. It’s difficult to imagine it now, but the potential is there.

[Seppia]

Sort of yes. A simple model is price = price/earnings * earnings. Inflation tends to increase earnings, but the market tends to decrease the p/e multiple due to uncertainty about how much of the increased revenue translates into increased earnings since the cost of running the business also goes up.

I should definitely have prefaced that I tend to think in income terms and not valuation.
I see my stocks as “a thing that reasonably provides me $X per year which will auto adjust for inflation” (I may have mentioned something like this across my past posts).
I think this kinda sorta makes me a “dividend investor”, even if I am not sure about that (I do own a lot of BAT and SHEL but also Google ASML FICO V…)

Whether my stocks are worth X today, or 0.6X tomorrow, is not as relevant as “how likely is the income to be sustained over the long term”.
From this POV, the "inflation resilience" of stocks over the longer term probably makes more sense

[thedollar]

Random thoughts on Reddit (the stock/company):

- It might be overbought atm since it just IPO’d
- It’s “only” 9 billion in market cap while Meta is at over 1,000 billion
- The financials are pretty grim (but so was Facebook’s at ipo), only good thing is its growth rate (which could be engineered by mngmnt due to ipo coming up
- they have more than enough cash to continue operations for years
- Social media key metrics are number of users times revenue per user. It’s a lot easier for Reddit to double its 200m user base than for Meta to double its 3b user
- There’s only one Reddit
- Loooot’s of different people use it in all age groups and demographics
- I believe AI and compensation for content creators is a huge oppurtunity for both Reddit and Meta
- X showed last year that social medias are able to cut 80% of staff/expenses and still operate - huge oppurtunity
- It’s 5am and I should go to bed

Already have a position in Meta which I see as an extremely promising company/stock and bought some stocks in RDDT at ipo

[zbigi]

- X showed last year that social medias are able to cut 80% of staff/expenses and still operate - huge oppurtunity

Twitter at its peak had 7500 employees, whereas reddit currently has 2000. This coincides with Twitter having a reputation of being a "tech employer" (meaning: super-inflated compensations, global offices in search of "talent", teams working on far-fetched ideas that don't neccessarily contribute to the business), whereas Reddit never had such reputation in the industry.

[Henry]

we travel on planes because it’s the best way we know how to travel, but think about the impact Apple Vision Pro could have if those glasses could recreate a perfect travel experience to another part of the world. It’s difficult to imagine it now, but the potential is there.

.

For the sake of our AAPL positions, let's all pray for more Boeing doors to blow open mid-flight. It's A Brave New World after all.

[thedollar]

Twitter at its peak had 7500 employees, whereas reddit currently has 2000. This coincides with Twitter having a reputation of being a "tech employer" (meaning: super-inflated compensations, global offices in search of "talent", teams working on far-fetched ideas that don't neccessarily contribute to the business), whereas Reddit never had such reputation in the industry.

Guess they can cut 80% then, but they're still 100% more than they are at Twitter. Not saying they would ever try to become as efficient but the potential is there for a lot of these companies (like Meta, Linkedin, Reddit).

[giskard]

Random thoughts on Reddit (the stock/company):

- Social media key metrics are number of users times revenue per user. It’s a lot easier for Reddit to double its 200m user base than for Meta to double its 3b user
- There’s only one Reddit
- Loooot’s of different people use it in all age groups and demographics
- I believe AI and compensation for content creators is a huge oppurtunity for both Reddit and Meta
- X showed last year that social medias are able to cut 80% of staff/expenses and still operate - huge oppurtunity

I'm skeptical on this one. If Twitter is hard to monetize and reddit is kind of like the closest thing to twitter, what is going to make it work? They have been trying for years to nail down a working business model.

Reddit has also become heavily censored / moderated to the point where a lot of subs are unusable. Personally I quit using reddit a couple years ago and I pretty much only use twitter now.

Idk I would rather throw money somewhere else.

[Jethrofisher]

The markets are currently euphoric without any apparent reason.

The global government bond market is quite deep. Moving out of public debt into "tangibles" like equities could support the stock market far higher long term. Confidence in government is trending lower won't reverse anytime soon. Hence, major institutions all over the world are diversifying by moving assets outside of their country. US has the deepest and most liquid markets at the moment, so some of it ends up here. Even in the states, major institutions are moving from government or public sector to the private sector. For large funds, this means the stock market.

Point being, US market performance is affected by INTERNATIONAL trends and policies as much as DOMESTIC ones.

The bank of Japan, the first one to really experiment on the wild side of monetary policy, reversed course and delivered its first rate hike in 17 years. Moreover, the Bank of Japan is ending its extraordinarily free money regime by removing formal bond yield caps and purchases of stock funds. The confusion for why Nikkei is then near record highs is because people do not comprehend that assets with INTERNATIONAL value rise as the DOMESTIC currency declines.

[giskard]

Let me preface this by saying I am not trading this stock (yet), and I will make this as apolitical and simply objective and market oriented as possible.

Anyway, Trump just launched a stock called "$DJT" on Monday which is ostensibly a stock for the business whose main asset is "Truth Social".

The last estimate I saw was that Truth Social has 1/100th of the DAUs of Twitter, so if DJT is worth 8.39 billion as of close today this must be hilariously overvalued by traditional metrics. Now, according to wikipedia:

A November 2023 DWAC financial disclosure indicated TMTG had generated losses such that management had "substantial doubt" about its ability to pay its bills, and the company's accounting firm had "substantial doubt" about the company's ability to remain in business.

So what we have here is a meme stock. DJT is obviously Trump's initials, and I'm going to guess the play here is that he can pump this thing and sell shares to raise money.

Given that the value of the underlying company is minimal and it's already very inflated I would expect that this thing trades wildly related to any news involving Trump, and I'm sure there will be a lot over the next 8 months or so.

Anyone have ideas on trades here?

[Jethrofisher]

My trade strategy has been to sell volatility on DOGS OF THE DOW. Assignment means good dividends. IBM volatility spiked pretty hard the last few days, so there's still time to get in on that one.

As far as trading Trump and the recent rulings... I heard someone say recently "stay out of anything headquartered in New York."

[Lemur]

@giskard

Yeah, I’ve been following this one with some interest.

DJT - Valued at approximately $12,000 per user.
Twitter - Valued at approximately $38 per user.

One or two well-run McDonalds chains makes more revenue…DJT has a lock-up period of 6 months to sell his shares unless the board creates an exception which I’m guessing they will.

Foreign money and a rabid retail base can probably keep this thing pumped for quite a while.

The valuation of DJT is obviously laughable…seems like an obvious choice to short. But the borrowing rate is probably extremely expensive, hard to borrow, and the IV for put options is high.

Due to these reasons, I’d be very cautious. The obvious plays are priced in as everyone is thinking the same thing.

[giskard]

@giskard

The valuation of DJT is obviously laughable…seems like an obvious choice to short. But the borrowing rate is probably extremely expensive, hard to borrow, and the IV for put options is high.

Due to these reasons, I’d be very cautious. The obvious plays are priced in as everyone is thinking the same thing.

Right idk, seems like options could be good but the IV is def going to be too high. I'm not sure what to do with it. Meme stocks don't follow any fundamentals & he has a lot of followers so if he tells 100 million people to buy it... many will.

I feel like you could do some kind of straddle strategy? it will be expensive to put that trade on unfortunately.

[jacob]

https://www.marketwatch.com/livecoverag ... UiPvtp3L1O

Hopefully that holds. Good riddance to ZIRP.

It's interesting that we've now tried two ways to make cash free. First, it was by reducing interest rates to zero which caused a general inflation in asset prices, aka a 10+ year bull market in everything. This benefited asset owners who were able to save or obtain a loan. Last, following the financial response to the lockdown during 2020--2021, was simply to give money away to everybody regardless, there being no sorting system as to whether the money was needed. As a result some of these "stimmies" were turned into speculation and resulting "tendies" in a way that became detached from reality. In some sense, after ten years asset inflation that resulting in broad inflation of all assets, stock picking is once again becoming more popular. Although this time in the shape of uncovering trends and finding cigarette butts in social media rather than trends in the 10Ks. In some sense, financial engineering has reintroduced the functionality of past bucket shops with its market timing and crowd behavior. In that regard, I'd recommend reading https://www.amazon.com/Reminiscences-St ... 471770884/ to get a feel of what might be coming. It's a classic.

[Slevin]

https://www.marketwatch.com/livecoverag ... UiPvtp3L1O

Hopefully that holds. Good riddance to ZIRP.

This also means that housing held at 2.X% mortgages will be drastically incentivized to never move or trade up housing unless forced to. I wonder if this means more bodging / house additions / adus, which won’t force refinancing the existing mortgages.

[Seppia]

How much of these statements is a genuine opinion and how much is part of “playing the part”?

Supposedly, the last bit of inflation is the hardest to kill - we seem to be there.
Powell has all the incentives to sound tough. To his credit, so far he’s mostly walked the talk (hence why LT bonds got destroyed in the last couple years)

[comandante]

I'd recommend reading https://www.amazon.com/Reminiscences-St ... 471770884/ to get a feel of what might be coming. It's a classic.

It was an old trading theory of mine that when a stock crosses 100 or 200 or 300 for the first time the price does not stop at the even figure but goes a good deal higher, so that if you buy it as soon as it crosses the line it is almost certain to show you a profit.

I read that book years ago, and this sentence stayed with me. It hasn't been always true in my experience, but still true enough to describe some of the bubbly behavior now and then.

[giskard]

So normally I don't buy NFTs which are essentially Jpegs on a blockchain, but I'm getting tempted.

But can I justify paying 0.42 BTC for one of these? That's 29k. But I have this strong feeling that:
- these will probably be worth 1 BTC soon
- BTC will probably be worth 150k soon
- You will get more airdrops of BRC-20 tokens that are probably going to be worth at least 0.25 BTC
- so it's like a triple leveraged bet on BTC price...

They look pretty bad though, I have to say.
https://magiceden.io/ordinals/marketplace/nodemonkes

Here is the other one getting a lot of hype, they also look terrible:
https://magiceden.io/ordinals/marketpla ... in-puppets

I will admit I do own an NFT on Ethereum that is worth about 12k and it recently got me an airdrop of an unrelated token worth 10k. So there is some definitely a precedent for these being worthwhile as long as the bull market is going on.

Thoughts?

[fiby41]

Brokers provide an option to create a public URL with your account's P&L statement but this does not include the ETF transactions for some reason.

It looks like a git contribution graph where the higher/lower your profit/loss for the day, the greener/redder that day's square will be coloured.

Purpose of having this feature is up for debate but I think it is:
1 putting the money where the mouth is
2 influencer (wannabe) to maintain a public track record without requiring a CA to audit their returns
3 showing off

The ETF I bought two years ago when it started was MIDCAPETF containing 150 midcaps which I bought for ₹10.44/unit and sold for ₹18.18/unit.

[thedollar]

@giskard

From where I'm standing (and with my limited knowledge of NFTs) I'd much rather have a fun night at a casino (and I don't even gamble). It's such a high risk bet that it makes RDDT look like cash

Buying a piece of a blockchain that resembles a JPEG of an ugly monkey for 30k+? As with all currencies and investments you have to have someone once you sell to whom it is more valuable than when you bought, and in this case I just don't see it.