Discussion ***Official*** 2020 Stock Market Thread

[FelixDeCat]

The Death Of Fundamentals And The Future Of Low Returns

Stocks Analysis by Lance Roberts covering: S&P 500, Tesla Inc, Shopify Inc, Uber Technologies Inc. Read Lance Roberts's latest article on Investing.com

www.investing.com

Price-To-Sales [ratios] Sends A Warning

Here is something even more alarming.

Just after the “dot.com” bust, I wrote a valuation article quoting Scott McNeely. He was the CEO of Sun Microsystems at the time. At its peak, the stock was trading at 10x its sales. (Price-to-Sales ratio) In a Bloomberg interview, Scott made the following point:

“At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends.

That assumes I can get that by my shareholders.

It also assumes I have zero cost of goods sold, which is very hard for a computer company.

That assumes zero expenses, which is really hard with 39,000 employees.

That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal.

And that assumes with zero R&D for the next 10-years, I can maintain the current revenue run rate.

Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes.

What were you thinking?"

 

[s0me0nesmind1]

The Death Of Fundamentals And The Future Of Low Returns

Stocks Analysis by Lance Roberts covering: S&P 500, Tesla Inc, Shopify Inc, Uber Technologies Inc. Read Lance Roberts's latest article on Investing.com

www.investing.com

Price-To-Sales [ratios] Sends A Warning

Here is something even more alarming.

Just after the “dot.com” bust, I wrote a valuation article quoting Scott McNeely. He was the CEO of Sun Microsystems at the time. At its peak, the stock was trading at 10x its sales. (Price-to-Sales ratio) In a Bloomberg interview, Scott made the following point:

“At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends.

That assumes I can get that by my shareholders.

It also assumes I have zero cost of goods sold, which is very hard for a computer company.

That assumes zero expenses, which is really hard with 39,000 employees.

That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal.

And that assumes with zero R&D for the next 10-years, I can maintain the current revenue run rate.

Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes.

What were you thinking?"

If there is no school next semester in the fall... Shit is going to break reaaaaaaal fast.

Already plenty struggling, but another 5 months of no daycare for kids? Yeah that's going to vote a huge hole in the economy because essentially anyone in a service industry - or anyone required to be on site for a job wont be able to work.

 

[ponyo]

blah, blah, blah. Investing.com article. lol.

 

[ponyo]

https://www.kitco.com/market/

Can gold finally break $1,800? Like every freaking time gold tries to pass $1,800, they beat the crap out of gold and beat it back down.

 

[FelixDeCat]

The forward contract for gold stands at $1806 ATM.


However....if gold started taking preorders for EVs it cant deliver Robinhooder's would pay $8,000 an ounce in this market.

 

[ponyo]

The forward contract for gold stands at $1806 ATM.


However....if gold started taking preorders for EVs it cant deliver Robinhooder's would pay $8,000 an ounce in this market.

View attachment 25146

Ahhh, the poor baby missed the big move in EV and is salty.

 

[thedarkwolf]

I got my pair of short shorts.

well put them on and let us see some pics

 

[FelixDeCat]

Oh.my.god. Altimmune.

I owned the shares and sold them way too early at 11.20.

This morning I shorted 13 July12.5 Puts @ 1.25.....damn thing ran up to $18.....way above target. I can ride them zero now. But it pisses me off I was going to buy 50 Aug $15 calls but thought it was too risky.

More insider buying.

 

[ponyo]

well put them on and let us see some pics

2-4 weeks delivery. But like I said in that thread, if TSLA hits $2,000 next month, I'll model the shorts once I receive it.

 

[s0me0nesmind1]

Another one bites the dust.... Brooks Brothers files for bankruptcy.

 

[Svnla]

43% of Buffet's portfolio is in one single stock -

Diversify? Almost half of Warren Buffett’s Berkshire Hathaway portfolio is now composed of a single stock

Warren Buffett once said that “diversification is protection against ignorance. It makes little sense if you know what you are doing.” The takeaway: Load up...

www.marketwatch.com

Is he losing it or the freaking genius?

 

[ponyo]

43% of Buffet's portfolio is in one single stock -

Diversify? Almost half of Warren Buffett’s Berkshire Hathaway portfolio is now composed of a single stock

Warren Buffett once said that “diversification is protection against ignorance. It makes little sense if you know what you are doing.” The takeaway: Load up...

www.marketwatch.com

Is he losing it or the freaking genius?

Yet BRK.A still can't beat S&P 500 and is under performing the index yet again. How bad are the remaining 57% of the portfolio when Apple can't even lift it up. When is the last time BRK.A outperformed S&P 500 index?

Buffett could've helped Elon Musk take Tesla private if he wanted to. But Buffett and Munger can't and won't ever admit they made a huge mistake and backed the wrong horse in BYD instead of Tesla. BYD is ok investment for Berkshire but can't win against Tesla. Buffett could've helped Musk take Tesla private at $420. I'm so glad Tesla didn't go private at $420. I said at the time that was bad deal for Tesla investors and TSLA would be worth far more in the future. Turns out I was right.

I have mad respect for Buffett and Munger. But they're totally wrong on Tesla and Elon Musk and history will prove that when TSLA becomes the world's most valuable company in the next 20 years. Count on it. Elon Musk will be the richest person on Earth and Mars.

 

[s0me0nesmind1]

43% of Buffet's portfolio is in one single stock -

Diversify? Almost half of Warren Buffett’s Berkshire Hathaway portfolio is now composed of a single stock

Warren Buffett once said that “diversification is protection against ignorance. It makes little sense if you know what you are doing.” The takeaway: Load up...

www.marketwatch.com

Is he losing it or the freaking genius?

He's lost it and is a complete fucking moron at this point.

Kraft, airlines, etc. His bets were just so bad.

Apple has nothing going for it. Brands like Tesla, Amazon, and the other non Apple FAANG stocks have plenty of things to look forward to because they keep innovating.

Apple is just king of a smartphone market that is clearly falling as people no longer feel the need to upgrade their phones every year, 2 years, etc.

 

[FelixDeCat]

Im no big Buffet fan, but I do remember his comments before and after the dot com bubble crash (like the bubble we are in now, that will end just as bad). He said he did not buy what he did not understand. So he did not catch the crazy xxxx% rise in some dot com stocks from 1997-2000. But then, he also did not ride them back down (some to zero, like pets.com).

When the market was flat to lower from 2001-2002, recovering from the internet crash, it was just getting ready for the next 5 year real estate bubble. Starting around 2002, I started buying mortgage stocks since the market was starting to realize the potential of sub prime loans, CMBS, etc. You had winners (at the time) like NovaStar that rocketed xxxx% for years and sported a 20% REIT like yield. There were several others like Thornburg Mortgage, New Century, BKUNA, etc etc etc. Then that bubble popped, subprimes died and so did all those companies.

 

[FelixDeCat]

Todays 20 somethings say the same thing we said in our 20s back in the late 1990s.

"P/E and P/S does not matter now"
"Chase the stock, get rich quick!"
"Momentum investing is the only way to make money"
"Follow the crowd"
"The trend is your friend", etc etc. I was there. Ive seen this before.

Its different this time!~ The FED has our back!~ You will always have crazes, but the entire market is over the top.

The QQQs will likely hit 298.

Another thing I remember from back around '99 was that it was dangerous and stupid to try and short anything thats extremely overpriced....like NIO. If you think something is overpriced does not mean it will automatically go down. The next morning it might start weak and even go down 5-10%, only to turn around intraday and finish UP another 20% on top of the 2000% its already sitting on. You cant trust what you see. When idiots and lemmings are in charge anything is possible.

Either you play along or stay the f away. But dont try to short anything.

 

[s0me0nesmind1]

Todays 20 somethings say the same thing we said in our 20s back in the late 1990s.

"P/E and P/S does not matter now"
"Chase the stock, get rich quick!"
"Momentum investing is the only way to make money"
"Follow the crowd"
"The trend is your friend", etc etc. I was there. Ive seen this before.

Its different this time!~ The FED has our back!~ You will always have crazes, but the entire market is over the top.

The QQQs will likely hit 298.

Another thing I remember from back around '99 was that it was dangerous and stupid to try and short anything thats extremely overpriced....like NIO. If you think something is overpriced does not mean it will automatically go down. The next morning it might start weak and even go down 5-10%, only to turn around intraday and finish UP another 20% on top of the 2000% its already sitting on. You cant trust what you see. When idiots and lemmings are in charge anything is possible.

Either you play along or stay the f away. But try to short anything.

Agreed on your general thoughts of shorting.

Unlike normal picks it's entirely dependent upon 2 things being correct.
1. You are correct that it's overpriced.
2. Everyone else realizing that it's overpriced and this reflecting it in the stock price.


Good luck with that #2 part. Easier said than done.

 

[FelixDeCat]

Woohoo Altimmune! Covered short puts, flipped some shares from 16 to 19 this morning.

Edit: Drats! Had $4 more of upside.
2nd Edit: Shorted Jul 17.50p 2.25 each

 

[Svnla]

United Airlines is saying it could lay off 36,000 employees or 1/3 of its work force soon (after the PPP deadline). Who is going to short it and/or other airlines? Even oversea airlines (Luff, AirAsia, Cathay, etc.) are not doing well either.

 

[IEC]

I bought puts on TSLA. Once.

If Elon himself hadn't saved me with his tweets I would have lost money.

I thanked him by using the profits to indirectly buy some TSLA through ARKK. I wish I had bought more.

Remember: The market can stay irrational longer than you can remain solvent. I'm not going to bother with shorting ANY popular stock, no matter how rational and reasonable it is. Not while sentiment is still irrationally exuberant.

 

[dullard]

Either you play along or stay the f away. But dont try to short anything.

There is an almost infinitesimally small line between shorting something and taking profits then buying back later. Almost everyone hates those who short (sell high and buy low). But almost everyone is willing to take profits at a high and then buy the same stock again when it is lower later (sell high and buy low). Many of us are shorting, we just don't call it that.

 

[FelixDeCat]

United Airlines is saying it could lay off 36,000 employees or 1/3 of its work force soon (after the PPP deadline). Who is going to short it and/or other airlines? Even oversea airlines (Luff, AirAsia, Cathay, etc.) are not doing well either.

Shorting stocks, no matter how obvious the bet is hard to do when the sun keeps shining on Wall Street. And being that the obvious plays like airlines are usually hard to borrow at most brokers, your only option is to buy puts which are usually pricey on volatile names.

 

[FelixDeCat]

There is an almost infinitesimally small line between shorting something and taking profits then buying back later. Almost everyone hates those who short (sell high and buy low). But almost everyone is willing to take profits at a high and then buy the same stock again when it is lower later (sell high and buy low). Many of us are shorting, we just don't call it that.

I sort of agree with you that taking profits on an upswing and hoping to buy back later is akin to being short. But classically speaking, to short a stock is a hope to make more money on the pullback itself. And yes, people do dislike shorts but I see them as necessary in helping to provide some liquidity to stocks.

What I hate are market makers who are the first in line to cram a stock back down the instant it takes off. They can nakedly short a stock by using phantom shares. The same process happens during bad news. They instantly mark a stock down - say 20% and lock in the floor and the ceiling by shorting as many shares as it takes to keep a stock at where THEY think the price should be no matter how many bargain hunters it attracts. They then spend the next few days putting a bid under the stock to cover all the phantom shares they created. They also keep the ceiling on the stock at the much lower price by dumping shares they had in inventory for sale.

This is considered legal since their job is to be the buyers of last resort. They also supply shares to new investors. When they want a stock to go down thats called "providing liquidity". When it they want it to go up (like after good earnings) thats called "providing a better bid price for investors".

Sometimes giant pockets will come in really screw things up for market makers, and move a stock up violently up or down. They have a weapon against this however - the volatility halt. They will halt trading in a stock as many times in a day if they feel like the price is either way to high or low based on what THEY think its worth .. not investors. That seems like cheating in my book. Sometimes they let it ride, other times they stand on the necks of all traders. They do whatever they feel like.

 

[FelixDeCat]

Woohoo Altimmune! Covered short puts, flipped some shares from 16 to 19 this morning.

Edit: Drats! Had $4 more of upside.
2nd Edit: Shorted Jul 17.50p 2.25 each

Covered short puts, long 800 outright.

 

[jpiniero]

Wow, I stop following the market for a bit and tech stocks have gone completely nutty. The rest of the market is still down quite a bit from the peak.

Not making any moves until the election, or once it becomes clear what Biden intends to do.

 

[ponyo]

Tesla, Tesla, Tesla.