***Official*** 2016 Stock Market Thread

[Balt]

Anyone brave or crazy enough to touch Valeant (VRX)? I see that stock and I keep thinking back to Worldcom and Enron. Some of the same analysts who had previously pumped Valeant are now lowering the price targets by much as $100 and jumping away like rats on a sinking ship.

I'm staying far, far away from that one. Some of the big pharma companies who actually develop wonder drugs may be able to protect their margins, but companies like Valeant who just buy old drugs and then jack up the prices are much riskier IMO. They are seen as predatory and the politicians have them in the crosshairs.

Yeah.. I hope no one jumped in. It was down another 50% today. It's donezo.

Happy to see the hedge funds lose their money, but I hope none of you guys did.

 

[Imp]

^^^Lulz on Valeant. Hope no one got screwed here, but lol on the stuff people have dug up on them.

Fed announcement is tomorrow, I think. Small chance of rate hike, but whatever happens, markets will probably be moving big.

 

[Charmonium]

It's getting ugly. Valeant is down another $31 and change today to $37.46. This might be the trade that buries Bill Ackman.

It couldn't happen to a nicer company. It sort of makes sense though. Any company that has no sense of social responsibility is likely to play fast and loose when it comes to other things. Once the only reason for not doing something is fear of being caught, we're in some deep shit.

I echo the sentiment that I hope no one here lost any significant amount of money.

 

[Imp]

P.S. Valeant is headquartered in Canada, specifically Quebec. Another Canadian success story!

 

[Balt]

No rate hikes. Woo.

 

[Imp]

Woohoo, no rate hike and it's now expected that there will only be two hikes this year to get the rate to 1%.

Rally time!

Because for some fucked up reason, a shitty world economy that deters rate hikes means stocks and commodities should go up in price with demand exploding...

 

[Charmonium]

Easy money means more demand for other assets. I think it's more supply and demand than market fundamentals.

Also remember that companies are still on a binge of buying their own stock. That's a lot easier to do with low rates.

 

[Imp]

Ah, yes, that easy money the banks lent out willy-nilly to frackers and other oil companies that is now being defaulted on... And propping up various bubbles around the world. Japan and some EU companies are doing so shitty that they're using negative interest rates, China continues to manipulate their economy/markets, but all is well.

 

[Charmonium]

I don't remember the stats but I think likely energy bankruptcies this year will only be $50-75B. That's a lot of money on it's own but it's not that significant in terms of the financial markets. Also a lot of that pain is already priced in. That much hitting the market like a bomb would probably have an effect but this a slow, drawn out process where the pain is going to get spread around.

Also, as of now, very few of those defaults have actually happened and many may not depending on how oil does.

 

[sm625]

Back on post #24 I said that mid February was a likely bottom for oil. That technical view has only been reinforced since then. But forget the ETF. Why not go for the jugular with $9 USO March calls? Could be a 20 bagger.

Well, it wasnt a 20 bagger but it was a 4 bagger. One takes the paltry gains where one can find them I guess...

 

[Imp]

Congratulations, Fed. You've done your one and only job of managing to prop up the stock markets for another day.

 

[KB]

Who likes a little risk taking?
Exelon, a large utility, wants to buy Pepco for $27.25/share. Pepco is currently trading only at 21.80 because there is some big concern that DC officials will block the deal, (this is the risk) despite the fact that MD, PA, NY officials have OK'ed it.

If you buy POM and the deal is made you can make ~$5.40/share, a nice 25% gain in a short time. If the deal is rejected I think the stock falls to $17, but then returns to around $19, a loss of 22 - 12%, but you still get a utility paying > 5%.

I put the deal odds of success at 55 - 60%. There is some support for it.
http://www.businesswire.com/news/ho...o-Holdings-Exelon-Merger-Grows-D.C.-Community

Doing the value analysis assuming odds of only 50/50 and you still get a better deal going for it (.50 * 5.40(gain) > 0.50 * 4.8(loss)) I think the risk is worth it so I put a little money into it. If only odds at craps were this good.

 

[sm625]

VIX closed below the lower bollinger today. This is a very bearish signal that has high accuracy in predicting a market drop within 60 days.

 

[Imp]

VIX closed below the lower bollinger today. This is a very bearish signal that has high accuracy in predicting a market drop within 60 days.

That's crazy talk... As long as the Fed doesn't raise interest rates beyond emergency levels for 7 or 8 years straight, the sunshine will continue.

Even better, the oil boom will carry us to prosperity. OPEC meeting to agree to freeze production at record highs without Iran is around April 20. If they do that and everyone cheats, as expected, supply and demand will balance itself out by 2018.

https://www.eia.gov/forecasts/steo/report/global_oil.cfm

Then they can start working through the 500 million barrels in U.S. storage and the other three billion barrels around the world... Oh wait, 3 billion is just OECD countries.

 

[Charmonium]

USD has dropped a full 4 points since the beginning of March and that pushes dollar denominated commodities like oil higher. It's also good for stocks especially companies that export.

 

[Imp]

Forget the 4 point drop, it's down about 6 from 100.51 to 94.66 since November according to DXY.

http://www.marketwatch.com/investing/index/dxy

Oil's up from $25 to $40, CAD is up from $0.68 to $0.77 since January/February.

 

[ponyo]

I thought about picking up some Canadian Solar after last week's drop but got busy and forgot. Now it's recovered most of the drop. I don't know much about the company but ATOT member Michael is the CFO there so that's a plus. I have to think Justin Trudeau will be good for solar and other green industries in Canada. If only if I wasn't so bearish about the overall market.

 

[FelixDeCat]

I like Silver. I have six Silver Eagles. Back in 2011 we saw $50 silver. I sold all my old silver coins before it got that high back in 2010. We are now at wholesale silver @ $16, from a low of $13.80.

The price per retail is $23-$25.

 

[FelixDeCat]

Also REITS will be good for the rest of the year, especially MORL. Now $12.50, might hit $20 this year with a 20% yield?

 

[FelixDeCat]

I thought about picking up some Canadian Solar after last week's drop but got busy and forgot. Now it's recovered most of the drop. I don't know much about the company but ATOT member Michael is the CFO there so that's a plus. I have to think Justin Trudeau will be good for solar and other green industries in Canada. If only if I wasn't so bearish about the overall market.

I like CSIQ, might hit $30 this year, but guidance was soft at the last earnings announcement and the stock price fell hard. Buy cautiously.

 

[Charmonium]

Have you seen the five ounce silver "quarters" from the US Mint? They're the same design as each of the 50 state quarters but with 5 oz of silver.

For example:

 

[JEDI]

Have you seen the five ounce silver "quarters" from the US Mint? They're the same design as each of the 50 state quarters but with 5 oz of silver.

For example:

I'd buy it!
(for a quarter)

 

[Charmonium]

I'd buy it!
(for a quarter)

The mint does charge a steep premium over spot but the mintages are usually pretty low. Most are in the 30-40k range although some issues have gone over 100k

http://www.usmint.gov/about_the_mint/index.cfm?action=PreciousMetals&type=bullion

 

[Nograts]

I was only able to max my wife's roth this year, I accidentally put the funds in her account (damnit!).

So right now I've got 3 funds: VFINX, NAEX, and VGTSX. The VFINX is in my account (where I didn't put the money). I really don't want the same fund in two accounts so I am tempted to jump all in on an REIT, but I don't know much about those.

Should I index that? Should I just go with the S&P? What do? I want to remain aggressive for 5-7 more years.

 

[dullard]

I was only able to max my wife's roth this year, I accidentally put the funds in her account (damnit!).

So right now I've got 3 funds: VFINX, NAEX, and VGTSX. The VFINX is in my account (where I didn't put the money). I really don't want the same fund in two accounts so I am tempted to jump all in on an REIT, but I don't know much about those.

Should I index that? Should I just go with the S&P? What do? I want to remain aggressive for 5-7 more years.

You can probably pull it out of your wife's account and put it into yours, but it would be a lot of paperwork and as long as you stay married, it makes no real difference. Max out yours next year and put none in hers to balance it out.

There really isn't a problem to have the same fund in two accounts as long as that doesn't throw off your balance.

The REIT may certainly do well, but you might be way over emphasizing real estate. For example, if you already own a home, then in most cases you already have the vast majority of your investments in real estate (that house). Thus, the REIT might not make you as diversified as you would like. Although, yes, you might be comparing commercial vs residential real estate. Plus, VGSLX has been outperforming VFINX in the last couple of years. So, you'll be buying the more expensive of the two funds.