***Official*** 2014 Stock Market Thread

[dank69]

90-91 now

 

[MomentsofSanity]

AND we're off

92.70 on the open and a volume of 67M in the first 30 seconds.

First official trade 48,085,051 shares @ 92.70.

$4.5B

 

[Imp]

Might throw some money into that for fun...

Just hoping for the FB IPO pattern: big initial jump, huge sell-off, slow rise to more than the IPO.

 

[Michael]

I now own 1,000 shares @ $90.

Will wait and see before buying more.

Michael

 

[s0me0nesmind1]

http://finance.yahoo.com/news/3-big-shortcomings-target-date-140726626.html

3 Big Shortcomings of Target Date Funds

What's everyones take on this? Basically an editorial of some random fgt trying to diss Target date mutual funds because of their obvious growth in popularity.

I won't lie, my ROTH IRA is currently set to the Vanguard 2050. I simply don't have enough in my IRA to even deem it worthy enough to invest time to get to know things better anyhow. That is something I can learn more in due time. What is everyone else's take on target date funds?

Newbie's only? Or a smart man's game that doesn't have the time?

There is a bunch of bullshit in the article too. "2) TDF fees are still too high. The average annual cost for TDFs are in the vicinity of 1%" - BULLSHIT. Tdfs are some of the cheapest ways to go, HANDSDOWN.

 

[JEDI]

http://finance.yahoo.com/news/3-big-shortcomings-target-date-140726626.html

3 Big Shortcomings of Target Date Funds

What's everyones take on this? Basically an editorial of some random fgt trying to diss Target date mutual funds because of their obvious growth in popularity.

I won't lie, my ROTH IRA is currently set to the Vanguard 2050. I simply don't have enough in my IRA to even deem it worthy enough to invest time to get to know things better anyhow. That is something I can learn more in due time. What is everyone else's take on target date funds?

Newbie's only? Or a smart man's game that doesn't have the time?

There is a bunch of bullshit in the article too. "2) TDF fees are still too high. The average annual cost for TDFs are in the vicinity of 1%" - BULLSHIT. Tdfs are some of the cheapest ways to go, HANDSDOWN.

wtf is he talking about?
he mentions Vanguard TDF then says fees are too high?!
vanguard's expense ratio is like .15%?

and not diversified enuf? and mentions Vanguard TDF in the same article?

vanguard tdf is 4 funds:
total US stock market
total intl stock market
total US bonds
total intl bonds

wtf is he smoking when he wrote that article?

 

[s0me0nesmind1]

wtf is he talking about?
he mentions Vanguard TDF then says fees are too high?!
vanguard's expense ratio is like .15%?

and not diversified enuf? and mentions Vanguard TDF in the same article?

vanguard tdf is 4 funds:
total US stock market
total intl stock market
total US bonds
total intl bonds

wtf is he smoking when he wrote that article?

Pretty much my thoughts. Something like 6k different stocks/bonds in the vanguard tdf.

 

[brianmanahan]

i dont use TDFs because i have 401k, Roth IRA and taxable accounts and want to distribute things tax efficiently in each account.

plus if you buy ETFs or admiral shares, the cost is lower than buying the combined TDF.

plus i dont like the asset allocation they use, i have my own.

but for people that don't know or don't care about their asset allocation, i tell em to just use that. my parents are %100 in a TDF.

 

[SketchMaster]

i dont use TDFs because i have 401k, Roth IRA and taxable accounts and want to distribute things tax efficiently in each account.

plus if you buy ETFs or admiral shares, the cost is lower than buying the combined TDF.

plus i dont like the asset allocation they use, i have my own.

but for people that don't know or don't care about their asset allocation, i tell em to just use that. my parents are %100 in a TDF.

EFTs have been treating me pretty well, in the sort term anyway. I'm just now getting proactive with managing my retirement funds, and so I'm letting the majority of it sit in an account with a TDF while I play around with a small amount of it (about 34%) in another account. On average my self managed account has been beating my TDF by a decent margin, but I try not to get too cockey since that can change any time.

Still have a lot to learn, but I'm in my late 20's; so better now than later.

 

[Hacp]

EFTs have been treating me pretty well, in the sort term anyway. I'm just now getting proactive with managing my retirement funds, and so I'm letting the majority of it sit in an account with a TDF while I play around with a small amount of it (about 34%) in another account. On average my self managed account has been beating my TDF by a decent margin, but I try not to get too cockey since that can change any time.

Still have a lot to learn, but I'm in my late 20's; so better now than later.

That's a horrible way to do things. Its either all TDF and set it/forget it or choose your allocations.

 

[SketchMaster]

I'm not sure why that is so horrible. In all seriousness, can you explain why?

My funds got split into two accounts when I moved my roth from my old employer's firm to Fidelity, and for some reason they had to separate the company matching into a IRA while the rest went into a roth to keep it from getting taxed. I decided to use a TDF for the roth just because I didn't want burn all my money playing around, but the IRA seems like a good place to try out what I've learned about investing.

So far, its worked out.

But really, if I'm doing something horribly wrong here I'd love to get some pointers.

 

[Hacp]

I'm not sure why that is so horrible. In all seriousness, can you explain why?

My funds got split into two accounts when I moved my roth from my old employer's firm to Fidelity, and for some reason they had to separate the company matching into a IRA while the rest went into a roth to keep it from getting taxed. I decided to use a TDF for the roth just because I didn't want burn all my money playing around, but the IRA seems like a good place to try out what I've learned about investing.

So far, its worked out.

But really, if I'm doing something horribly wrong here I'd love to get some pointers.

Target Date Funds are a set it and forget it type of thing. It makes certain assumptions about your risk tolerance based on your age and allocates your assets accordingly. If you split your money between Target Date Funds and Non Target Date Funds, then you have dramatically shifted the risk profile and the whole point of the Target Date Fund has been rendered useless.

The best approach is to figure out what percent of stocks and bonds you should have based some risk tolerance. You can look at target date funds to see what % they have for bonds and use that as a starting point. Then from that stock portion, if you really want to have extra risk, take a portion and invest it however you want.

Here is a tool that can help you.
https://investor.vanguard.com/mutual-funds/target-retirement/#/mini/overview/1487

From the vanguard tool, it says you should be 10% bonds, 27% international and 63% US. So if you wanted to invest 34% of that money in US Stocks, your final allocation should be 10% Total Bond Fund, 27% Total International Fund, 26% Total US Stock Market Fund, and 34% of do-it-yourself money.

 

[FelixDeCat]

Oh man, seriously? Who in their right mind would buy BABA at these prices? $75 tops in 6 months or less.

I could call longs sheep and say "BAAA BAAA", but Im not going to .

If you think there is still value here please explain why.

 

[ponyo]

Oh man, seriously? Who in their right mind would buy BABA at these prices? $75 tops in 6 months or less.

I could call longs sheep and say "BAAA BAAA", but Im not going to .

If you think there is still value here please explain why.

I bet $125 before $75. I've placed my bet. Why don't you explain why there's no value at these prices.

 

[FelixDeCat]

I bet $125 before $75. I've placed my bet. Why don't you explain why there's no value at these prices.

Well I think everyone who wanted in IS in. And at nearly $100 all near term value is fully priced in. Either it will be dead money or people will move on causing a dip.

Either way I dont see it going up until the next earnings report and at these lofty valuations .... it better deliver ... or $75 here we come!

 

[ponyo]

Well I think everyone who wanted in IS in. And at nearly $100 all near term value is fully priced in. Either it will be dead money or people will move on causing a dip.

Either way I dont see it going up until the next earnings report and at these lofty valuations .... it better deliver ... or $75 here we come!

Everyone who wanted in IS in? Really? I think the opposite. I think lot of institutional investors wanted in but didn't/couldn't get in. From what I've read, the rumor is 50% of the IPO shares were allocated to just 25 funds. That leaves out lot of funds and people who wanted in. Second, I don't know any retail investors who got allocated. If big funds were locked out, do you think retail even had a chance for IPO shares? Third, the big insiders were allowed to sell their shares at the open without waiting for the end of the lockup period. Those share volume was easily absorbed by the market which showed the demand was strong even at $92+/share. Since the big insiders sold their shares at the open, there should be less sell pressure than a typical IPO company once the big lockup ends 6 months from now. Unlike the Facebook IPO, the underwriters conservatively priced the shares of BABA at $68 given the $92.75 open. Alibaba left lot of money on the table.

There was no single lead underwriter but a group. This group of investment firms are all going to push and protect BABA shares from falling too much. If you think Alibaba is going to miss their first earnings report, you don't have any idea how IPOs work. The first earnings report is a gimme. It's wink-wink and the earning is already in the bag. The only question is how big of a blowout it will be. The underwriters and the IPO company intentionally set the bar really low to blow it away.

You missed your chance at free money on Friday when BABA shares again dropped down to $91 in the late afternoon. That was your cue the MM had taken enough shares from weak hands for their final push higher into the close. Like clockwork, around 3:30, the MM moved the bids up and pushed the stock to higher close than the open. That was free money if you're a trader.

 

[SketchMaster]

If you split your money between Target Date Funds and Non Target Date Funds, then you have dramatically shifted the risk profile and the whole point of the Target Date Fund has been rendered useless.

Hmm.... You're right. I didn't think about it like that. I'll have to figure out how to get a better balance between all my accounts. Right now I have the IRA and Roth, plus a new 401k with my new job (found out matching is pretty much a joke, 15% up to $1000/yr).

 

[Michael]

I just waited and watched the trading. My order went in for $90 and the first bout of trading brought the shares to $90.04 before going back up again. I just waited and later in the day it traded below $90 very briefly and my trade went through.

I do not think that everyone that wanted shares have got them. I also am not sure if the trading will go below $90 in the short term. Options are not yet available. So I picked up 1,000 shares and I would like at least another 1,500 shares but I can wait.

I am in Asia all the time (mainly China but in other places as well) and I can see Taobao and the other Alibaba sites being sused all the time. I have an Alipay account and a Taobao account (all in RMB). I think people outside China underestimate how strong Alibaba is in China.

Michael

 

[Michael]

Since I mentioned Invensense recently, here us the first paragraph from the latest Baird report where they downgraded them :

"Downgrading to Neutral on leading smartphone OEM potentially switching to a dual-sourcing strategy, and potential share gains for competitor STMicroelectronics at other smartphone OEMs. InvenSense remains well positioned to benefit from the secular growth trend of sensors into ultra-mobile and wearable devices. Incremental revenue opportunities for InvenSense include OIS (Optical Image Stabilization), which we expect will find mainstream adoption in flagship smartphones in 2015, along with pressure sensors and MEMS microphones."

Their new target price is $23 and rating went from buy to hold.

Michael

 

[FelixDeCat]

Well I think everyone who wanted in IS in. And at nearly $100 all near term value is fully priced in. Either it will be dead money or people will move on causing a dip.

Either way I dont see it going up until the next earnings report and at these lofty valuations .... it better deliver ... or $75 here we come!

Muzhi Li at Arete Research initiated its coverage of Alibaba Group (BABA), with a Neutral rating and $75 per share. Li had been a Citi analyst in Hong Kong before he jumped ship to the boutique research firm earlier this year.

Based on this, anything above $83 is above fair value

 

[Imp]

Sweet... My new trading account allows me to buy stocks on either the US or CAD markets and sell on the other to avoid foreign exchange charges! Not to say there's no risk considering a stock can tank in the few minutes that I buy and sell and there are two trade fees, but way cheaper than the ~1% rate I was paying to between CAD and US.

 

[Michael]

Felix - I am amazed that you consider a small, niche boutique in London the final say on Alibaba. I usually work with Emily Liu there, so I know who they are, but they certainly are not the "axe" in most companies they cover. They don't have a big sales force to kept fed, so they have less noise around their research, but I take all research with a big grain of salt.

Michael

 

[FelixDeCat]

Felix - I am amazed that you consider a small, niche boutique in London the final say on Alibaba. I usually work with Emily Liu there, so I know who they are, but they certainly are not the "axe" in most companies they cover. They don't have a big sales force to kept fed, so they have less noise around their research, but I take all research with a big grain of salt.

Michael

Well, you know what they say about opinions Mike.

A stock is worth what people feel its worth. Some people like to postulate about price but the bottom line is "what are people willing to risk?"

Look at Elon's silly little car company, whats it called? Anyway the stock has no basis in reality but people pay up anyway. Even Elon thinks the stock is overpriced:

http://www.huffingtonpost.com/2014/09/05/elon-musk-tesla-stock_n_5771826.html

So although I think BABA is already priced for perfection and the website did not impress *me*, it may go to $125 in 90 days. Who knows?

I still say $75 though.

 

[Michael]

The taobao website is a little bit of a mess to look at, but it works and makes Alibaba a ton of money.

Michael

 

[JEDI]

let me see if I understand stock dilution:

you buy 100 shares at $10/sh = $1000.
there's 1M shares outstanding.

the next week the company floods the market by releasing another 1M shares.
Shares are now worth $5/sh?

You just lost $500 of value?!