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Markets still falling like whoa

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Blotto

Blotto 23560

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FXI (ETF tracking chinese large caps) puts have been killing it this week. It's a fairly liquid market right now, so easy to get in and out. Rolled all my profits over to more puts next week. If the situation in China seems to continue deteriorating over the weekend, coupled with the media hysterics, I could see a large drop pre-market. For reference, the last two mondays, FXI closed down about 4% and 4.7%.

I'm gambling with house money now, so to be honest, I'd prefer I'm wrong and the markets are up. But the options premiums aren't that bad, so it's a decent hedge that has been working so far. Also, China has kept their markets closed after the New Year, but they are supposed to open Monday. Could be a large reset when they open, or further spook investors if they keep them closed. Gamble gamble gamble.....

Also bought some APPL puts yesterday (300 strike) that expire at end of Feb. I'm gambling they are gonna have some IPhone supply issues, and the stock will pull back a bit.

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Eastwood
Eastwood

That's why I'm out. There is no end game, IMO. This has to be fixed outside of the market and I got too nervous about what that entails for retail investors. They will always be last on the list, if o

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Eastwood
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I'm not a financial advisor. This is not financial advise. I don't work in finance. I do not have a degree in finance. Actually, I have a BA and I'm bad at math past Cal I. I won't apologize for the l

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GrayFox

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58 minutes ago, Blotto said:

FXI (ETF tracking chinese large caps) puts have been killing it this week. It's a fairly liquid market right now, so easy to get in and out. Rolled all my profits over to more puts next week. If the situation in China seems to continue deteriorating over the weekend, coupled with the media hysterics, I could see a large drop pre-market. For reference, the last two mondays, FXI closed down about 4% and 4.7%.

I'm gambling with house money now, so to be honest, I'd prefer I'm wrong and the markets are up. But the options premiums aren't that bad, so it's a decent hedge that has been working so far. Also, China has kept their markets closed after the New Year, but they are supposed to open Monday. Could be a large reset when they open, or further spook investors if they keep them closed. Gamble gamble gamble.....

Also bought some APPL puts yesterday (300 strike) that expire at end of Feb. I'm gambling they are gonna have some IPhone supply issues, and the stock will pull back a bit.

If you are long on a short position against China, look at $YANG. It's a 3x leveraged ETF.

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Fudge Nuggets

Fudge Nuggets 19211

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I knew a guy that was fully invested in our company 401k plan pretty much since the mid 1990's.  He went to all cash twice before being laid off in 2009.  The first time was soon after 9/11 and the other time was damn near the bottom of the financial crisis.  Don't be that guy because there is no telling how much money he left on the table with those two moves.

I've posted it several times, but I'll post it again.  The best move I made during the financial crisis was putting my Vanguard statements in the drawer during the crisis.  I never opened them until things were back to normal.  Thank goodness because I know damn well I would have panicked and sold out at the absolute worst time.

One of the few other good moves I ever made was during the oil / gas massacre of 2014 - 2016.  When I was tempted to move all my funds allocated to company stock to an S&P 500 index fund, I stopped myself and actually went all in on company stock.  It was more luck than anything else, but I made that decision within a couple of bucks of the final low for the stock price before it went up 60% in six months.  I didn't top tick getting out at the top, but I did make a very quick 40% and my remaining shares are collecting a little over 7% per year in dividends.

My suggestion is if you think things are heading to hell in a hand basket, take a little bit of money and buy stock in a mega-cap company that pays a dividend and has paid a dividend for decades.  If the market goes lower, buy a little bit more.  Be careful that you don't chase the biggest dividend available because it's more than likely a trap - i.e. you need to check the balance sheet to see how  much debt they are carrying and how much a year they pay in interest. 

My rule of thumb... if my stomach is doing cartwheels, I'm breaking out in a sweat and my hand quivers over the mouse before hitting the buy button; it usually turns out to be a damn good decision.

Diatribe almost over, but if you do sell now and markets continue to tank you will feel vindicated - as you should.  Good job.  Now what will be the signal for you to jump back in?  Because I guarantee you before the virus news dies down, political shit calms down, etc, the market is going to be higher than it is today.  Unless you have a very well thought out plan on when to get back in you should stick it out for sure.

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Fudge Nuggets

Fudge Nuggets 19211

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33 minutes ago, Okie State said:

You don't lose it unless you panic and sell.

This is true if you are investing in good solid companies or index funds.  When dealing with dodgy fly-by-night shit stocks, your first loss is usually your smallest loss.

I paid a lot of tuition learning that lesson and it's why I try to focus on the mega-caps and index funds / ETFs.  Oh, I keep a bit of gambling money on the side for shits and giggles but they get kicked to the curb real quick.  Some people go to Vegas to gamble, I play micro crap stocks.

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Fudge Nuggets

Fudge Nuggets 19211

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5 minutes ago, Goofyboy said:

I played the micro stocks... made some money... gave it all back. It’s fun while it lasts.

To the youngster... if you’re in mutual funds / index funds, buy more. Blood in the streets and all.

Thing is, we're not even close to blood in the streets levels.  We're overdue to get there and it's going to be bad when it happens, but this ain't it... today.

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Fudge Nuggets

Fudge Nuggets 19211

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9 minutes ago, Goofyboy said:

I played the micro stocks... made some money... gave it all back. It’s fun while it lasts.

To the youngster... if you’re in mutual funds / index funds, buy more. Blood in the streets and all.

My favorite was back in 2009... auto parts supplier that was trading at $1.  It would drop to $1, bounce to $1.10 - $1.15 and repeat.  Thing is, it had $13 / share cash on its balance sheet and all its competitors were going bankrupt so I bought in and bought pretty large for me back in those days (about 10,000 shares).  As expected it went up to about $1.08 and I was about to sell when it shot up to $1.30 after its earnings release.  Yeah for me, cashed out took my 30% and ran. 

Problem is it never dropped back down to $1 again.  Fucker went straight up to $10, retreated to about $7 then wound up hitting $30 a couple of years later.  Oh what could have been.

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Fudge Nuggets

Fudge Nuggets 19211

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1 hour ago, Tailgate said:

 "Time is your friend; impulse is your enemy." - John Bogle

 

It's not what you buy, it's what you pay for it.

I lost money on some of the greatest names in the world that everyone loved because I bought too high.  I made my biggest profits on solid companies that were down in the dumps and everyone hated them.

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GrayFox

GrayFox 1

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20 hours ago, Fudge Nuggets said:

You say you are 27 years old. Ride it out.  Why even ask such a silly question?

 

Quote

“Be fearful when others are greedy and greedy when others are fearful.”

- Warren Buffett

What he asked isn't a silly question. The stock market has been parabolic since the last market crash. We've seen extreme levels of greed and it's finally starting to reverse to fear with numerous catalysts to cause a big move up/down. Telling people to go long in this market when there's catalysts like this is some pretty bad and irresponsible advice.

I'm not saying to avoid investing now or to sell everything. But I think everyone should be aware that many stock prices are currently overvalued (even after this week) and there will better entry-points in the near future. Personally I like to find undervalued stocks to long, and overvalued stocks to short. I don't just go long just because stonks always go up. They are certainly times stonks go down too, which allows opportunists like me to trade trends in both directions.

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dad

dad 557

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I'm 33. I have almost all of my retirement investments going into Vanguard Institutional 500 Index Trust since I was told to just follow S&P 500 and set it and forget it. I get the gambling itch to take some of it out into Fidelity's Brokeragelink where I can invest some in any stock just to learn more investing. I see companies returning much more than the 29% my current portfolio returned last year and I wonder... what if I took 20% of my portfolio and hopped on a band wagon of one of these companies and rode them for a year.. TO THE MOON! 

But then I get scared because I have no idea what i'm doing.

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Tailgate

Tailgate 3022

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What is causing this TSLA craze? Their stock is on a tear. As a guy who doesn’t time the market...I keep thinking it may go down and I’ll jump in (stupid)...but damn...this shits on a tear and I will be joining the party just want to make sure with every other car company about to jump head first in this space...there’s something I’m not missing. 
 

 

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Colonel Sanders

Colonel Sanders 1360

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47 minutes ago, Tailgate said:

What is causing this TSLA craze? Their stock is on a tear. As a guy who doesn’t time the market...I keep thinking it may go down and I’ll jump in (stupid)...but damn...this shits on a tear and I will be joining the party just want to make sure with every other car company about to jump head first in this space...there’s something I’m not missing. 
 

 

Yeah I don't get it.  I thought people would be bearish due to their recent investments in China and being somewhat of a luxury brand if the global economy is turning south.   But they now have a bigger market cap than Ford,  GM and Chrysler combined,  so what the fuck do I know.

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Wally Fairway

Wally Fairway 5571

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4 hours ago, Tailgate said:

What is causing this TSLA craze? Their stock is on a tear. As a guy who doesn’t time the market...I keep thinking it may go down and I’ll jump in (stupid)...but damn...this shits on a tear and I will be joining the party just want to make sure with every other car company about to jump head first in this space...there’s something I’m not missing. 
 

TSLA is a combination of finally reporting financial profits with a huge dose of FOMO, and shorts being squeezed

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52-80

52-80 19218

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4 hours ago, Tailgate said:

What is causing this TSLA craze? Their stock is on a tear. As a guy who doesn’t time the market...I keep thinking it may go down and I’ll jump in (stupid)...but damn...this shits on a tear and I will be joining the party just want to make sure with every other car company about to jump head first in this space...there’s something I’m not missing. 
 

 

Pure lunacy

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Incredulity

Incredulity 11681

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On 12/13/2019 at 7:09 AM, Parliament said:

I wanna short Tesla stock, and to that end, I set up a brokerage account with Vanguard.  Looks like no i gotta "borrow" Tesla stock from them and pay 9% interest to do so?  That sounds wrong.  What am I missing here?

You need to calculate what you would have lost.  Just for the LULZ.

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Wally Fairway

Wally Fairway 5571

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On 1/15/2020 at 11:57 AM, Wally Fairway said:

So I was thinking about throwing a few dollars into the Tesla earning release that happens in the next 10 days or so. My plan was to buy $1,000 in out of the money put and call options, with the idea that TSLA moves in big steps and this way I really wouldn't care if it is up or down as long as it moves a lot. 
Then I looked at their option prices and let me just say WOW, the spreads on this is astounding.

TSLA is around $535 today (open)
$515 puts are $25 (1/31 expire) and $31 (2/7 expire)
$555 calls are $26 (1/31 expire) and $32 (2/7 expire)

to get to a $10 price you get
- puts priced at $470 (1/31) or $450 (2/7) 
- calls priced at $620 (1/31) or $650 (2/7)

and to get a $10 option that is 6 months out (7/17 expire) the strike prices are $850 call or a $330 put....a $500 spread on a $10 option. 

 

tl;dr - just go to Vegas to gamble, it is too expensive to gamble on TSLA
 

What a pussy - that $1,000 could have been, lose the $500 on the put side and make $5,000 - $15,000 on the call side {I need to look at reddit/wallstreetbets to see what they have to say)

Those 555 TSLA calls that expire on 2/7 are worth $350 today, and the $620 calls are worth $280 (btw - the puts are worth $0.00)

oh yeah and that $10 7/17 850 call option is now worth $200

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NotActuallyALonghorn

NotActuallyALonghorn 4976

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On 1/30/2020 at 11:50 AM, BabaYaga said:

He's a marketing guy.  Always has been.  I see his endgame as a market disrupter, looking to shift the paradigm of the industry, then getting bought out and moving on to the next big challenge.  

I also question those that see lithium battaries as the natural evolution to the internal conbustion engine.  The extraction/mining process absolutely wrecks everything near it.  A mineral crisis replaces a fossil fuel crisis.  As the the world scrambles to replace fossil fuels with clean energy, the environmental impact of finding all the lithium required to enable that transformation could becomes a serious issue in its own right.  Starting with water.  Not only do you destroy much of the available resources around you, you also consume vast quantities needed for extraction.  500,000 gallons per tonne of lithium.  Chile’s Salar de Atacama, mining activities consumed 65 per cent of the region’s total water supply.  Then you have to also contend with toxic chemicals to leak from the evaporation pools into the water supply.  

Asteroid mining might be a solution, but that would require massive investment and a very long time before any return is realized. Plus it would probably still be pretty resource intensive to refine any more back on earth. Refineing in space could be an option, but that would only increase the already massive amount of investment and time it would take to see a return.

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BabaYaga

BabaYaga 15304

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4 minutes ago, NotActuallyALonghorn said:

Asteroid mining might be a solution, but that would require massive investment and a very long time before any return is realized. Plus it would probably still be pretty resource intensive to refine any more back on earth. Refineing in space could be an option, but that would only increase the already massive amount of investment and time it would take to see a return.

Possibly, but we did lose the best mining guy out there many years back.

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Blotto

Blotto 23560

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2 hours ago, 52-80 said:

Has any big-cap security ever moved like this has? In history?  I'm stupefied

 In 2008 Volkswagen went from  210 to a peak of 1258 in a couple of days, briefly becoming the worlds most valuable company - https://www.nytimes.com/2008/10/29/business/worldbusiness/29volkswagen.html

Quote

The auto industry is struggling, but for a few minutes on Tuesday, Volkswagen became the most valuable company in the world, one with a market value greater than Apple, Philip Morris and Intel combined.

That soaring value reflected engineering of a financial, rather than automotive, sort. It came as stock traders scrambled when Porsche, a rival seeking to build one of Europe’s great car dynasties, revealed it had increased its holdings in VW, giving it an economic stake equal to about 75 percent of the company’s voting shares.

Volkswagen’s stock soared to as high as 1,005 euros a share, about $1,258, on Tuesday before closing at 918 euros. The shares ended last week at 210 euros.

The wild ride continued Wednesday morning as the price fell to 510 euros in German trading, after Porsche said it would take steps to increase the supply of stock, Bloomberg Newsreported.

 

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4thgenhorn

4thgenhorn 38

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Good gracious on TSLA. Was fortunate to buy some a couple years back. Thought it was a bad idea so only made a small bet. It immediately was under water and stayed that way until last month or so...guess just lucky that I didn’t harvest losses last year like I was thinking. I should prob sell at least 1/3 tomorrow. 
 

problem is what to do with excess cash once sold. Was Friday the market bottom?  No equities seem to be in good bases at the moment. 

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Incredulity

Incredulity 11681

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1 minute ago, 4thgenhorn said:

Good gracious on TSLA. Was fortunate to buy some a couple years back. Thought it was a bad idea so only made a small bet. It immediately was under water and stayed that way until last month or so...guess just lucky that I didn’t harvest losses last year like I was thinking. I should prob sell at least 1/3 tomorrow. 
 

problem is what to do with excess cash once sold. Was Friday the market bottom?  No equities seem to be in good bases at the moment. 

Its easy to spend someone elses money, but I think your absolutely right to clip some of that coupon.  

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dad

dad 557

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When would be a good time to buy some Microsoft stock? I feel like they will do well with their focus on the cloud. I am thinking that it being too close to earning report time I would be buying too high right now. Should I wait a while, if so how much? 

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Wally Fairway

Wally Fairway 5571

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Posted (edited)
4 minutes ago, dad said:

When would be a good time to buy some Microsoft stock? I feel like they will do well with their focus on the cloud. I am thinking that it being too close to earning report time I would be buying too high right now. Should I wait a while, if so how much?  

 You should average in, don't try to guess the market. If they report good numbers then you'll wish you were already in, and if it drops then you'll but more at the loser price.

tldr - buy some now, and more later

Edited by Wally Fairway
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