Author Topic: Stocks  (Read 585936 times)

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Re: Stocks
« Reply #4840 on: August 23, 2020, 09:15:44 PM »
Futures were actually down 5% in premarket trading and it triggered a circuit breaker, but then by the time the day was out it was up 1% so...

By surprise I mean a no-chance candidate vs a strong incumbent, and then an upset. That's not the case here anyway so I'd say the market is factoring in for it go either way.

The nature of US elections being a binary choice I think precludes the possibility of a no-chance candidate winning, and I think both possible outcomes are factored in to the market well before the results come in. Obviously, some people bet heavier on a specific outcome, but not enough to completely shock the market into collapse (IMO).
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Re: Stocks
« Reply #4841 on: August 23, 2020, 10:13:35 PM »
Where's that head scratch GIF?

There aren't better alternatives than paying exorbitant prices for companies with serious questions about their finances (and other issues) such as TSLA?

Let's be clear, a share of stock in a public company is a claim on its future earnings. If I knew that my share of company X would earn Y over whatever time period I would care about, I would then discount that future earnings stream by an safe interest rate and arrive at the price I'm willing to pay for it in cash today. I would then factor in what I would see as potential future earnings growth and allow for that into the equation, I would also discount for risks. That's how one values what a share of a company is worth for them.

Traders don't care much about the value of the company, they care about where they see the market price of the share going within the timeframe they care about. This is a rather unique feature of paper assets which are publicly traded, where the price can change every second (or less) and is publicly available.

Very true tweet

I've been waiting over 5 years with bated breath for someone to say that!
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Offline good sam

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Re: Stocks
« Reply #4842 on: August 23, 2020, 10:36:51 PM »
time to sell apple or its still going to climb?
sold Tesla last week at $1800 >:(
No reason to be sad about that.

I sold about a third of my holdings in the 700s. Happy I was still on for the ride but as CV said up thread, no one got poor from talking profits (or something like that).
If you don't care why would you comment?
HT: DMYD

Offline davidrotts63

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Re: Stocks
« Reply #4843 on: August 23, 2020, 10:38:45 PM »
Do you know how much money can be made (or lost) in 2-3 days, let alone a week? Look as TSLA, AAPL, just to name a few extremes.
Absolutely. But in regards to the question at hand the election should result in some sort of correction if history has told us anything.
(Quit) pulling out the flowers, and watering the weeds. -Peter Lynch

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Re: Stocks
« Reply #4844 on: August 24, 2020, 05:41:37 PM »
I'm not talking about TSLA, but the market in general.

On TSLA:

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In a world where real bond returns are negative and inflation may very well make a comeback perhaps the relatively high valuation of equities don't look so bad.

On Inflation/deflation etc. Read the following thread and discussion:


I've been waiting over 5 years with bated breath for someone to say that!
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Offline Danlover111

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Re: Stocks
« Reply #4845 on: August 25, 2020, 07:54:33 AM »

Offline Joe4007

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Re: Stocks
« Reply #4846 on: August 25, 2020, 05:31:26 PM »
On Inflation/deflation etc. Read the following thread and discussion:

Interesting read. Thanks for sharing. However, his base case is:
Quote
So what is the Fed 'printer' doing - creating dollars, right?  Actually no, not really. The printer only increases the collateral banks have to lend against.  It does not directly 'birth' dollars, only *potential* dollars.

Banks are still the midwives, and the only ones who birth dollars into the system by lending. The Fed can increase collateral by 1000x but unless the banks lend against that collateral, dollars will not enter circulation for you and I to interact with.
That seems to completely ignore the fact that Fed has literally printed money to buy treasuries which in turn was sent out to the general public (via stimulus checks, enhanced UI, PPP, etc.). Am I missing something here?

I actually found this article linked to in his twitter thread to be very informative.

ETA: Just noticed that someone brought up this point. He doesn't seem to have an actual answer to it...
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« Last Edit: August 25, 2020, 05:48:53 PM by Joe4007 »

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Re: Stocks
« Reply #4847 on: August 25, 2020, 08:13:08 PM »
Interesting read. Thanks for sharing. However, his base case is:That seems to completely ignore the fact that Fed has literally printed money to buy treasuries which in turn was sent out to the general public (via stimulus checks, enhanced UI, PPP, etc.). Am I missing something here?

I actually found this article linked to in his twitter thread to be very informative.

ETA: Just noticed that someone brought up this point. He doesn't seem to have an actual answer to it...
Invalid Tweet ID

Can't tell you that I have a full grasp of this yet, but pay attention to what Lacy Hunt is saying. There's obviously a difference in this expert's eyes. (I think I posted a transcript of an interview with him in the Forex and Commodities thread.

Full disclosure: I'm in the deflation camp.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Joe4007

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Re: Stocks
« Reply #4848 on: August 25, 2020, 08:31:41 PM »
Can't tell you that I have a full grasp of this yet, but pay attention to what Lacy Hunt is saying. There's obviously a difference in this expert's eyes. (I think I posted a transcript of an interview with him in the Forex and Commodities thread.

Full disclosure: I'm in the deflation camp.
You did post and I listened to that podcast (and enjoyed it immensely. Thanks!) ... and then I listened to some of the other installments in that podcast series and there are some other experts which make strong arguments to the contrary (inflation).

It is definitely a complex and fascinating subject, but to my non-expert mind, it seems obvious that we're heading for inflation (perhaps not in the next year or two, but at some point in the next few years).

On a very basic level the government is creating more money and putting it in the hands of individuals while economic capacity remains the same. I get that there are currently strong deflationary forces in play, but over time more money chasing the same goods = inflation.

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Re: Stocks
« Reply #4849 on: August 25, 2020, 10:57:23 PM »
You did post and I listened to that podcast (and enjoyed it immensely. Thanks!) ... and then I listened to some of the other installments in that podcast series and there are some other experts which make strong arguments to the contrary (inflation).

It is definitely a complex and fascinating subject, but to my non-expert mind, it seems obvious that we're heading for inflation (perhaps not in the next year or two, but at some point in the next few years).

On a very basic level the government is creating more money and putting it in the hands of individuals while economic capacity remains the same. I get that there are currently strong deflationary forces in play, but over time more money chasing the same goods = inflation.

Are you ignoring the velocity of money? I don't think you can have inflation when falling velocity offsets the supply.

And then there's the shrinking supply:


Remember: we use fractional reserve banking, so in a properly functioning system a dollar in reserves puts a multiple of that in circulation and economic activity. That's not really happening. Look at the private sector debt numbers. They are shrinking. And with globally shrinking and aging populations in advanced economies, there are just too many fundamentally deflationary elements (and let's not forget technology and automation which are also deflationary).

Look at Japan for the past two (or is it more) decades.

Let me throw the following question at you: are ימות המשיח inflationary or deflationary?
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Joe4007

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Re: Stocks
« Reply #4850 on: August 25, 2020, 11:07:20 PM »


Are you ignoring the velocity of money? I don't think you can have inflation when falling velocity offsets the supply.

And then there's the shrinking supply:


Remember: we use fractional reserve banking, so in a properly functioning system a dollar in reserves puts a multiple of that in circulation and economic activity. That's not really happening. Look at the private sector debt numbers. They are shrinking. And with globally shrinking and aging populations in advanced economies, there are just too many fundamentally deflationary elements (and let's not forget technology and automation which are also deflationary).

Look at Japan for the past two (or is it more) decades.

Let me throw the following question at you: are ימות המשיח inflationary or deflationary?
I get that and that's why I can understand the sentiment that inflation is not imminent. However, once the economy starts trending upwards and banks start lending again we'll have the added money supply to deal with.

If I understood him correctly, Lacy Hunt's argument was that money created in the form of debt we'll just slow the velocity and it therefore won't cause inflation. What I don't understand is how one can consider stimulus checks and PPP as debt when virtually no one believes we are ever going to pay that back.

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Re: Stocks
« Reply #4851 on: August 25, 2020, 11:43:41 PM »
I get that and that's why I can understand the sentiment that inflation is not imminent. However, once the economy starts trending upwards and banks start lending again we'll have the added money supply to deal with.

If I understood him correctly, Lacy Hunt's argument was that money created in the form of debt we'll just slow the velocity and it therefore won't cause inflation. What I don't understand is how one can consider stimulus checks and PPP as debt when virtually no one believes we are ever going to pay that back.
But what long-term effects do stimulus payments and PPP have, even if they are not debt?

Those are emergency band-aids to stop the economy from a total collapse.

Also, why are you saying stimulus money isn't debt? Where's it coming from? Did the US strike gold somewhere? It is debt financed by one of the largest debtors in the world (which also happens to be a major contributor to GDP) if future revenue needs to be allocated to debt service, it's not available for investment (or even spending) in the economy.
« Last Edit: August 25, 2020, 11:47:26 PM by ExGingi »
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Offline Joe4007

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Re: Stocks
« Reply #4852 on: August 26, 2020, 12:00:58 AM »


But what long-term effects do stimulus payments and PPP have, even if they are not debt?
More money chasing the same goods and services.
Also, why are you saying stimulus money isn't debt? Where's it coming from? Did the US strike gold somewhere? It is debt financed by one of the largest debtors in the world (which also happens to be a major contributor to GDP) if future revenue needs to be allocated to debt service, it's not available for investment (or even spending) in the economy.
How do you define debt?

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Re: Stocks
« Reply #4853 on: August 26, 2020, 12:12:34 AM »
Treasuries held by the Fed aren't debt
״וזה כלל גדול: שישנא אדם כל דבר שקר. וכל מה שיוסיף שנאה לדרכי השקר – יוסיף אהבה לתורה.״ - אורחות צדיקים

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Re: Stocks
« Reply #4854 on: August 26, 2020, 12:14:37 AM »
More money chasing the same goods and services. How do you define debt?
At last check it hasn't been chasing goods and services. More likely improving private sector balance sheets by reducing debt.

Debt is spending brought forward. The US Treasury regularly auctions debt, and there's plenty of demand for it (occasionally the Fed steps in for stabilization purposes).
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Joe4007

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Re: Stocks
« Reply #4855 on: August 26, 2020, 12:26:51 AM »
At last check it hasn't been chasing goods and services. More likely improving private sector balance sheets by reducing debt.
How so? It gave individuals the opportunity to purchase goods and services they wouldn't otherwise have. Are you saying it was mostly used to pay off debt? Even if that's the case, you're still giving individuals more purchasing power when they are able to take on debt again as their old debt has now been paid off.
Debt is spending brought forward. The US Treasury regularly auctions debt, and there's plenty of demand for it (occasionally the Fed steps in for stabilization purposes).
You're jumping to the second half of the equation which is what the government does with the funds it borrows (spending brought forward).

If no one believes the fed is ever actually going to reduce its balance sheet, than it isn't debt. It's money being printed for all intents and purposes.

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Re: Stocks
« Reply #4856 on: August 28, 2020, 12:43:06 AM »
Always praying for delayed baggage.

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Re: Stocks
« Reply #4857 on: August 28, 2020, 12:52:25 AM »
What’s the easiest way for a n00b who doesn’t have a brokerage account yet to buy puts on Tesla ($1000-1500) with a strike date in 12+ months? And how is there no credit risk that the counter party will go bankrupt if the stock collapses?
״וזה כלל גדול: שישנא אדם כל דבר שקר. וכל מה שיוסיף שנאה לדרכי השקר – יוסיף אהבה לתורה.״ - אורחות צדיקים

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Re: Stocks
« Reply #4858 on: August 28, 2020, 12:56:08 AM »
What’s the easiest way for a n00b who doesn’t have a brokerage account yet to buy puts on Tesla ($1000-1500) with a strike date in 12+ months? And how is there no credit risk that the counter party will go bankrupt if the stock collapses?
https://shop.tesla.com/product/tesla-short-shorts
#TYH

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Re: Stocks
« Reply #4859 on: August 28, 2020, 08:56:56 AM »
What’s the easiest way for a n00b who doesn’t have a brokerage account yet to buy puts on Tesla ($1000-1500) with a strike date in 12+ months? And how is there no credit risk that the counter party will go bankrupt if the stock collapses?

What do you think the stock price will be in 12 months?

TSLA puts are very expensive

The 09/17/2021 $1,000 puts are trading at around $100, the $1,500 puts are trading for about $260

For a breakeven of $1500 you would have to buy the $2,000 puts which are trading for $500