***Official*** 2017 Stock Market Thread

[FIVR]

FB is a good stock. I thought about purchasing some shares when it was around 120, but AAPL was cheaper at 112 at the time and I couldn't justify the premium over shares of greatest most profitable company on earth .


SNAP is too hard to predict. I don't know anything about their platform, so I won't touch it. There are too many institutions heavily invested in SNAP that could easily upgrade the crap out of it to pump it up before their shares get unlocked. TSLA is sort of similar in that it should go down, but might go up based on Musk tweets.

 

[s0me0nesmind1]

Can someone explain to me how the fuck the US stock market works with days like today?

Could have sworn a year or two ago if Janet Yellen said "Economy is looking good, *hints at rate hike*" the markets be down 1%. Now Yellen says this and it goes up 1% to new highs? Da Fuq?

 

[s0me0nesmind1]

Also, I've been really watching the markets lately, and I'm pretty much ready to make my first ever moves. I've just been prioritizing everything else much more - and I'm at a point where I'm cofortably maxing out my 2x 401ks, 2x IRAs, and HSA yearly - while having enough of a safety cushion to finally invest in taxable accounts.

Just seems like a horrible time to buy though, I'm planning to just hold out for the first major correction/downfall and am

 

[FIVR]

Horrible time to buy indeed. Go short on AAPL and make your first move your best move!

 

[Charmonium]

Can someone explain to me how the fuck the US stock market works with days like today?

Could have sworn a year or two ago if Janet Yellen said "Economy is looking good, *hints at rate hike*" the markets be down 1%. Now Yellen says this and it goes up 1% to new highs? Da Fuq?

I can give you my interpretation. When Yellen would threaten a rate hike, that meant a probably reduction in the amount of bonds the fed would continue to buy.

Now that quantitative easing is well in the rear view and the fed has begun the process of winding down their balance sheet of over $4T, a rate hike implies that the economy is doing well enough it won't be affected by higher rates. So it's a sort of Fed thumbs up to the economy.

 

[KB]

"
Can someone explain to me how the *** the US stock market works with days like today?

Could have sworn a year or two ago if Janet Yellen said "Economy is looking good, *hints at rate hike*" the markets be down 1%. Now Yellen says this and it goes up 1% to new highs? Da Fuq?"

Yellon actually hinted at slower rate hikes because inflation targets are still not met. Wages aren't rising, gas is cheaper, corn and grain are cheaper. This means interest rates will remain low for longer and stocks look better, especially higher yielding ones.

 

[SaltyNuts]

I think I understand them, but want to make sure so I can implement my grand strategy to make me a millionaire. So lets look at this link:

http://www.marketwatch.com/investing/index/vix/options

Let's look at the August calls, the one with a strike price of $15. The bid is 5 cents and the ask is 15 cents. So let's just say I put in a bit for one call for 10 cents and it goes through.

I think what I pay is 10 cents times 100, because all options I believe are based on lots of 100. So I pay $10.

If VIX expires at or below $15 before the August expiration, I am out the $10. But, let's say, the price of VIX on expiration is $19. So I believe I get a payout of $4 ($19 minus the $15 strike price) time 100 or $400. This leaves me with a profit of $390 (the $400 payout less the $10 I initially paid).

Does that sound right?

Thanks!

 

[SaltyNuts]

C'mon guys, I know the intellect on this place is lacking, but someone has to know about this complex stuff!

 

[SaltyNuts]

Heck, now I'm wondering about VIX futures too! Look at this page:

http://www.cboe.com/delayedquote/futures-quotes

Look at the 3/21/18 future. As of right not its priced at $16.63.

The VIX right now is at 9.70.

Does this mean I can buy a share of VIX (I know there is nothing like this per say, but let's say a very deep in the money VIX option so its like a VIX share almost) today at $9.70, sell a 3/21/18 future today for $16.63. Hold the VIX share until 3/213/18, and sell it for $16.63, for a profit of $6.93? That's a 71% profit in well under a year. Is that right?

 

[SaltyNuts]

No way that is right...

 

[SaltyNuts]

bump!

 

[brianmanahan]

No way that is right...

 

[dullard]

If VIX expires at or below $15 before the August expiration, I am out the $10. But, let's say, the price of VIX on expiration is $19. So I believe I get a payout of $4 ($19 minus the $15 strike price) time 100 or $400. This leaves me with a profit of $390 (the $400 payout less the $10 I initially paid).

Does that sound right?

I don't do options, but I think what you posted is correct. Options give you the chance to lose small amounts over and over and over again and occasionally make a big profit (very similar to betting on a single number in roulette).

Think of it this way, in the last 100 trading days, VIX ended over $15 only 4 times. Lets pretend that pattern happens again (history isn't a great predictor but this is just an example). Thus, there is roughly a 4% chance that VIX will be over $15 when your options expire. You might make a similar VIX option call 24 times, losing $10 each time, for a total of $240 lost.

Then you might make one VIX option call that is in the money (1 out of 25 times is the 4% chance that the $15 strike price will be in the money). VIX highest point in the last 100 days was $15.96. Lets pretend that is the price on the expiration date. So, you earn 100*0.96 = $96.

Summary, if history repeated itself, you would lose $10 over and over again for 24 times and gain $96 once.

 

[ImpulsE69]

Man, I decided to play earnings for MSFT and MXIM. What a joke. hmmph.

 

[FelixDeCat]

Sell. Now.

Everything.

 

[Ken g6]

Sell. Now.

Everything.

What makes you say that?

 

[dullard]

What makes you say that?

http://money.cnn.com/2017/07/21/inv...x-reform-stocks/index.html?iid=hp-toplead-dom

Stocks are due for a correction. This latest buildup since the Trump election was bigger than most would have expected. But it was hinged on the concept that Trump would get things done. Trump can't even get repeal and replace done which is something that every single Republican campaigned on. So what are the chances that he'll get any of his economic agenda through (something that is far more controversial)?

Why sell now? Things are starting to crumble in the agenda. Health care failed last week. Spicer quit this week. Signs are pointing towards more disarray next week as health care comes back and tax plans try to be accomplished in that frenzy.

I don't ever advocate selling out everything. But you should be cautious buying anything right now.

 

[s0me0nesmind1]

http://money.cnn.com/2017/07/21/inv...x-reform-stocks/index.html?iid=hp-toplead-dom

Stocks are due for a correction. This latest buildup since the Trump election was bigger than most would have expected. But it was hinged on the concept that Trump would get things done. Trump can't even get repeal and replace done which is something that every single Republican campaigned on. So what are the chances that he'll get any of his economic agenda through (something that is far more controversial)?

Why sell now? Things are starting to crumble in the agenda. Health care failed last week. Spicer quit this week. Signs are pointing towards more disarray next week as health care comes back and tax plans try to be accomplished in that frenzy.

I don't ever advocate selling out everything. But you should be cautious buying anything right now.

I get that, but what does healthcare reform have to do with the markets (which are entirely dependent upon how the consumer acts). Consumers are still spending like mad men- though timing wise I do agree a correction has got to be on the way at this point. What the pin-point cause is, I'm not sure.

I do have extra cash on hand right now, and I haven't made my IRA investments for the year yet so I'm just holding out for that inevitable correction sometime within this year.

 

[zinfamous]

I haven't made my IRA investments for the year yet so I'm just holding out for that inevitable correction sometime within this year.

yep, me too. I probably won't be waiting that long, because I don't believe in timing this thing, but I don't have to make any contributions right now, anyway.

 

[dullard]

I get that, but what does healthcare reform have to do with the markets (which are entirely dependent upon how the consumer acts). Consumers are still spending like mad men- though timing wise I do agree a correction has got to be on the way at this point. What the pin-point cause is, I'm not sure.

I do have extra cash on hand right now, and I haven't made my IRA investments for the year yet so I'm just holding out for that inevitable correction sometime within this year.

It isn't just healthcare reform. It is the entire agenda that led to the build up in the last year that is looking to be on shaky grounds. Consumer spending is a big part of the stock market value. But so is governmental spending. The huge infrastructure spending promise has gone no where. The proposed tax plan includes massive government spending cuts instead.

I'm in the same boat as you. I stopped investing for the year and have cash ready for a correction.

 

[Ken g6]

You might even want to sell out of cash. http://www.marketwatch.com/story/where-to-put-your-money-now-that-the-dollar-is-sinking-2017-07-20

Anybody know a good place to buy gold online?

 

[dullard]

You might even want to sell out of cash. http://www.marketwatch.com/story/where-to-put-your-money-now-that-the-dollar-is-sinking-2017-07-20

Anybody know a good place to buy gold online?

I did get a lot of Mexican Pesos (stocked up as much as the ATM would let me each day in Mexico City) this year and a few Euros (My wife picked up a few on a business trip). I wanted to get a whole lot more Euros but I really don't dabble in foreign currencies and just kept putting it off.

I just looked, the Pesos are up 22% since the vacation in January. Not bad. Not that I'm rich either.

As for gold, I would be wary of that. Precious metals don't do well when interest rates rise. Note: I am short silver, so I am very biased on this topic.

 

[s0me0nesmind1]

yep, me too. I probably won't be waiting that long, because I don't believe in timing this thing, but I don't have to make any contributions right now, anyway.

I think it's perfectly fine to time index buys on the low - especially if you're just going to hold it for life anyways. It's pretty rare that there isn't some type of correction of sorts (last year was the oil correction). We aren't talking timing the market for sells or anything, which is a whole different ball game that I would never choose to play.

With my 401k I tend to play it more safe and spread the $18k equally all over the year by default - if a correction happens I immediately crank up my contribution to the max %.

The ROTH IRA on the other hand I tend to just hold out for the inevitable annual drop at some point.

 

[KB]

It isn't just healthcare reform. It is the entire agenda that led to the build up in the last year that is looking to be on shaky grounds. Consumer spending is a big part of the stock market value. But so is governmental spending. The huge infrastructure spending promise has gone no where. The proposed tax plan includes massive government spending cuts instead.

I'm in the same boat as you. I stopped investing for the year and have cash ready for a correction.

Policy failure is nothing new. It happens every election is rarely a good sign to sell.

"That’s one reason why, paradoxically, investment returns tend to be better when there is gridlock in Washington."
https://www.spectator.co.uk/2012/11/markets-love-lame-ducks/

I like that everyone is ready for a correction. The big drops happen during market euphoria when nobody is predicting drops.
There are a bunch of stocks that have already corrected to pre-trump levels. Just to name a few: GE, T, VZ, QCOM, GIS, WSM, TGT, BBBY

 

[dullard]

Policy failure is nothing new. It happens every election is rarely a good sign to sell.

"That’s one reason why, paradoxically, investment returns tend to be better when there is gridlock in Washington."
https://www.spectator.co.uk/2012/11/markets-love-lame-ducks/

I like that everyone is ready for a correction. The big drops happen during market euphoria when nobody is predicting drops.
There are a bunch of stocks that have already corrected to pre-trump levels. Just to name a few: GE, T, VZ, QCOM, GIS, WSM, TGT, BBBY

Yes, lame ducks and gridlock is usually good for the economy (I post about that in P&N all the time). But, the market built up for specific proposals (tax cuts, especially capital gains tax cuts that were in the proposed repeal and replace bills, and infrastructure spending). These specific proposals seem to be dying. So, the market buildup based on them should also go away.

We'll be left with still strong consumer spending, so the market won't completely tank. But there are very good reasons that the gains since November might vanish.