Investments Trade Log

Ask your investment, budget, and other money related questions here
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Seppia
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Re: Investments Trade Log

Post by Seppia »

Aren't you concerned about SoFi?
I mean I haven't dug into the company, but if even Softbank (who has a great tolerance for shitty business models that incinerate capital - see WeWork) is throwing in the towel...

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Mister Imperceptible
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Re: Investments Trade Log

Post by Mister Imperceptible »

i borrowed money from sofi to buy gold mining stocks that pay dividends that are used to pay interest to sofi but the money has not found lemur’s pocket

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@Seppia

Not too concerned. I think they're trading at a fair value (at close to book value in line with other banks) and growing revenues, EBITDA, and continuing to grow membership in an inflationary / potentially recessionary environment and rising interest rates are a good sign of resilience. They're also projected to turn a profit in 2023. Once certain conditions are met, such as trading 4 quarters of positive net profit in a row, then usually you will start seeing some big institutional money flow in. MBBboy posted a longer bull case in my journal for SOFI's future potential. viewtopic.php?p=257795#p257795

SoftBank had other reasons to sell. Like a $34 Billion Q2 loss....Even the CEO of a large conglomerate can buy too high and get caught up in mania...

@MI

I thought SOFI wouldn't approve your loans? :lol: They must've changed their minds. I'll have you know SOFI usually targets higher than average income customers with good credit ratings.

Anyway... believe me I'm not blind to the bear case - negative free cash flows, competition from other FinTechs (Like Ally which is leveraging Social Media and has Buffett Money) and Big Banks getting in on the action, stock-based compensation out of control, the SPAC association, etc..

I said years ago AMD would be bigger than INTC by Market Cap. I was right, but my mistake was selling too early feeling pretty happy with a 3x bagger. I would've had an 8 bagger today had I held on. Anyway...I have a similar conviction with SOFI being a major bank one day. If all else fails, SOFI makes up less than 5% of my portfolio anyway so not exactly betting the house on this so I can hold through the bad times. I'm treating it as my lotto pick. If I'm wrong...no big deal, I guess I'll be writing off tax losses for a while should I fold. If I'm right though, I could be up significantly 8-) .

Maybe now that I'm in my early 30s and with some experience though, I'll have the patience to hold this one out even through the bad times. :lol: Who knows - Disclaimer that Lemur's post are not financial advice.

avalok
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Re: Investments Trade Log

Post by avalok »

With a recession in the UK likely already under way, I have opened a new position in PETS: I am hoping people will still be able to afford to feed their dogs, and the companies financials look pretty solid for a rough period ahead.

theanimal
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Re: Investments Trade Log

Post by theanimal »

I learned the other day that someone at B of A coined FAANG 2.0 earlier this year as the replacement and their best estimate of area of future high returns given current macroeconomic conditions and geopolitical activity.

Fuels
Aerospace and Defense
Agriculture
Nuclear and Renewables
Gold, Metals and Minerals

I have heard all of them expressed frequently, especially among those touting commodities, with the exception of Aerospace and Defense. I understand defense, presuming you are betting on increased geopolitical volatility but I'm not as sure what the bull case is for aerospace?

avalok
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Re: Investments Trade Log

Post by avalok »

theanimal wrote:
Tue Sep 06, 2022 3:27 pm
I understand defense, presuming you are betting on increased geopolitical volatility but I'm not as sure what the bull case is for aerospace?
The supposed post-COVID boom in air travel? I'm as lost as you tbh. They've desperately tried to fit to the acronym. I don't think it works that well; I can think of cases where renewables soar and nuclear tanks. I don't think they are well grouped in that way.

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Slevin
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Re: Investments Trade Log

Post by Slevin »

I think you will see the aerospace and defense lopped in together due to the fact that almost all of the large scale defense contractors in the US are also aerospace companies. Ball, Boeing, Lockheed, Raytheon, Northop Grumman, etc. And on the other half of the sector, demand for satellites, etc is as high as ever, and funding for a lot of the large scale aerospace projects are coming from NASA and the US government, where there is no insane "competition" in terms of pricing (all bidding for aerospace contracts happens up front, and then inevitably the person who bids the lowest on the contract will end up bloating it far past the highest bid in the next 30 years or whatever before all things are said and done). So its a pretty "safe" bet as far as profit goes, since on one hand you get the war profiteering for during the times when there is fighting (and there is always fighting), and on the other hand you get ultrastable demand coming in from the government n case of the peace times.

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Seppia
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Re: Investments Trade Log

Post by Seppia »

^^^^
The above.
Aerospace and defense are done by the same companies so they’re “one sector”.

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Slevin
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Re: Investments Trade Log

Post by Slevin »

theanimal wrote:
Tue Sep 06, 2022 3:27 pm
I learned the other day that someone at B of A coined FAANG 2.0 earlier this year as the replacement and their best estimate of area of future high returns given current macroeconomic conditions and geopolitical activity.

Fuels
Aerospace and Defense
Agriculture
Nuclear and Renewables
Gold, Metals and Minerals

I have heard all of them expressed frequently, especially among those touting commodities, with the exception of Aerospace and Defense. I understand defense, presuming you are betting on increased geopolitical volatility but I'm not as sure what the bull case is for aerospace?
By the way, calling them FAANG 2.0 has to be erroneous, just due to a single simple factor. Scalability. These are commodities, physical products. The magic of FAANG and tech companies in general is that they are inherently software companies, that can grow magically, and you can gain new users across the world doing very little physical work (just expand your AWS server size in the region). We found out via Facebook that this does have a cap around 30% of the actual living population (maybe it would have 50%+ if China allowed it), but an actual physical thing just doesn't have the ability to scale quickly, and will quickly hit limits of physical production, shipping infrastructure, and global variation in needs / wants.

Fuel amount will be capped as we already know how much fuel we can find in the short term, and average consumers have an upper bound in what they can pay in fuel before they seek alternate means of getting around. Agriculture as well is gonna be capped in terms of output in relationship to fuels and water availability, and past that, hamstrung by the increase of extreme weather events hurting crop yields as time progresses. Renewables are hilariously handicapped by fuels, but theoretically we need to exponentially increase their production to curb emissions, so there will be plenty of subsidies added to them which means a good bet for profitability IMO. And metals / minerals run into the same issue as fuels, can only sell as many as you can mine, and where you can find places to mine without causing a revolt. This isn't to say these things can't be profitable (though I have yet to meet a wealthy farmer), just that there are real hard limits to what each of these companies are doing. This is unlike tech companies which can x100 in value in around a decade or so, just by growing the user base and feeding them ads or whatever.

white belt
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Re: Investments Trade Log

Post by white belt »

Slevin wrote:
Tue Sep 06, 2022 7:17 pm
By the way, calling them FAANG 2.0 has to be erroneous, just due to a single simple factor. Scalability. These are commodities, physical products. The magic of FAANG and tech companies in general is that they are inherently software companies, that can grow magically, and you can gain new users across the world doing very little physical work (just expand your AWS server size in the region). We found out via Facebook that this does have a cap around 30% of the actual living population (maybe it would have 50%+ if China allowed it), but an actual physical thing just doesn't have the ability to scale quickly, and will quickly hit limits of physical production, shipping infrastructure, and global variation in needs / wants.
How much of this "magic" growth was due to ZIRP?

zbigi
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Re: Investments Trade Log

Post by zbigi »

white belt wrote:
Wed Sep 07, 2022 2:59 pm
How much of this "magic" growth was due to ZIRP?
The actual FAANGs have OK-ish P/E ratio (barring Amazon). I'd say they might not be inflated more than the rest of the market. The ZIRP money went mostly into post-FAANG unicorns wannabees, the myriad of Ubers, various food delivery apps etc. A lot of them were/are basically XXI century tulips.

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Slevin
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Re: Investments Trade Log

Post by Slevin »

Yeah look at the second tier adtech platforms to see the ZIRP inflation of stocks. Pubmatic, the Trade desk, Magnite, all are down pretty drastically since the year started. Then compare to the first tier (meta, google) and look at the p/e differences.

WFJ
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Re: Investments Trade Log

Post by WFJ »

Be careful on the long side. ZIRP and QT were experiments without a control sample.

ertyu
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Re: Investments Trade Log

Post by ertyu »

WFJ wrote:
Thu Sep 08, 2022 2:32 pm
Be careful on the long side. ZIRP and QT were experiments without a control sample.
you consider zirp over, then? bc most of the podcasts i listen to seem to be of the opinion the market at large assumes jpow will cave in and do another round of old-style easing once this round of tightening gets bad enough (which according to them it will, people seem to anticipate a major crash even more than they usually do)

theanimal
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Re: Investments Trade Log

Post by theanimal »

It appears the die is cast and J Powell's hands are bound. Rising rates curbs inflation, but backing off too early at the first sign of crashing markets and dropping rates again severely risks continuing inflationary trends. The fed has used up their ammo and, unlike previous recent recessions, has to combat high inflation. Thus, they are in no position to quell any coming crash by cutting rates or with QE.

sky
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Re: Investments Trade Log

Post by sky »

One component of inflation is labor inflation. This is mainly controlled by demographics and immigration, and is not directly affected by monetary policy. Labor inflation will make it difficult for the fed to declare victory and reduce rates.

M
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Re: Investments Trade Log

Post by M »

I bought another 25 shares of realty income today. I have been buying a little more whenever the price dips.

I have a little over 100k worth of this stock now, so it has become my largest individual stock holding. This is my "hopefully this survives a recession" stock. I don't expect it to make much money - I just expect it to not lose much money. It is one step above my I bonds on the risk scale. It is like 8% of my portfolio though, I do wonder if I should have that much in a single stock.

WFJ
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Re: Investments Trade Log

Post by WFJ »

ertyu wrote:
Fri Sep 09, 2022 1:42 am
you consider zirp over, then? bc most of the podcasts i listen to seem to be of the opinion the market at large assumes jpow will cave in and do another round of old-style easing once this round of tightening gets bad enough (which according to them it will, people seem to anticipate a major crash even more than they usually do)
Society won't survive a 5% inflation rate. Powell is in a box and the only way out is to raise rates. The choice is 1. Let inflation rip, causing a collapse of Western society complex supply chains and products are impossible to produce at 5% inflation) or 2. Raise rates and deal with a painful recession/depression. There is no world where inflation rips and any asset retains value as very few products and services will be produced. One may have paper wealth but will have to fight for clean water.

Most podcast that are pumping pivot are gold/crypto bugs and should be ignored unless they reveal their holdings and compensations.

ertyu
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Re: Investments Trade Log

Post by ertyu »

WFJ wrote:
Tue Sep 13, 2022 2:09 pm
Society won't survive a 5% inflation rate.
According to bassman, it won't survive 4.5% rates either, so things should be interesting (his most recent note is about the negative correlation between stocks and bonds breaking at rates of he estimates 3.5 - 5%, say 4.5% for a good number in the middle).

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Mister Imperceptible
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Re: Investments Trade Log

Post by Mister Imperceptible »

Bassman said to buy mortgage bonds at 6%. Gundlach said more recently to buy long term treasuries. I think they need to unload. It is the bondholders that do not survive compounding higher rates of inflation. Society not surviving is debatable but what do you expect the bondholders to say?

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