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Markets still falling like whoa


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3 hours 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? 

2012

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time for me to start putting money somewhere.  my current plan is to just open a vanguard account and buy some ETFs that track the indexes and start my learning that way.  good idea?


Put in money a little at a time for a long time. You are buying in now at historically high levels.
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1 hour ago, SuingToGetAMessageBoard? said:

time for me to start putting money somewhere.  my current plan is to just open a vanguard account and buy some ETFs that track the indexes and start my learning that way.  good idea?

Put most of your money in the Vanguard 500 fund.  Or SPY (the SP500 ETF).  You can play around with the other index ETFs, but that should probably be regarded more as speculation than investment.  

Should probably also find a Vanguard fund that includes small caps and foreign markets.

Edited by TwiceHorn
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14 hours ago, jimmyjazz said:

Shit.  I thought about buying some puts yesterday.  

"Oh well, honey, we could have gone to Hawaii.  Maybe next year."

LOL.  I shorted more than a small position for me on Tuesday.  Got pretty upside down on it as the day played out, and then bailed out big time at the close. I was too pussy to hold that shit overnight, so closed it out near the bell.  Took up another short day trade yesterday, and it worked out ok.

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13 hours ago, TwiceHorn said:

Put most of your money in the Vanguard 500 fund.  Or SPY (the SP500 ETF).  You can play around with the other index ETFs, but that should probably be regarded more as speculation than investment.  

Should probably also find a Vanguard fund that includes small caps and foreign markets.

good advice - I use IJT for a S&P small cap 600, IWM for Russell 2000 and have a split of about 55% SPY, 15% IJT, 15% IWM and the rest is in some higher risk stuff but that 75% is the foundation the Fairway family retirement is being built around.
And I pretty much don't rebalance - but I will adjust where my 401k contributions/match goes if one of the investments has outpaced the field.

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To continue the Coronavirus gamble, I bought some puts at market open on CCL (both expiring today and in 2 months). With this virus popping up all over the world, who the fuck is gonna want to risk getting stuck in quarantine like those poor fuckers in Japan. It's not a huge story yet, but once the media grabs hold of it and does their thing, summer cruises may be hard to fill.

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On 2/5/2020 at 4:35 PM, SuingToGetAMessageBoard? said:

time for me to start putting money somewhere.  my current plan is to just open a vanguard account and buy some ETFs that track the indexes and start my learning that way.  good idea?

 

I would invest half of it in low risk mutual funds and then take the other half over to my friend Asadulah who works in securities...

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On 2/6/2020 at 8:09 AM, Wally Fairway said:

good advice - I use IJT for a S&P small cap 600, IWM for Russell 2000 and have a split of about 55% SPY, 15% IJT, 15% IWM and the rest is in some higher risk stuff but that 75% is the foundation the Fairway family retirement is being built around.
And I pretty much don't rebalance - but I will adjust where my 401k contributions/match goes if one of the investments has outpaced the field.

To elaborate on this a little.  A good Vanguard low/no cost fund, yes a managed fund, that is kind of diverse, may not beat the SP500, but the managers also hedge some of the risk, too.  Meaning it won't go as low in a crisis and will probably come back faster.

Not completely guaranteed, but you can use cheap managed funds and not have to worry much about "getting out" or "buying back in" at the right time.  Index funds aren't ideal for that: they're riskier.

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WSJ article on Tesla stock spike

https://www.wsj.com/articles/investors-bet-against-teslaand-lost-8-4-billion-in-five-weeks-11581284236?mod=hp_lead_pos7

The Agony of the Tesla Bears: $8.4 Billion of Losses in Five Weeks

Short sellers feel pain as the electric-car maker’s stock soars; ‘I got my butt kicked’

Tesla Model 3 vehicles at its factory in Shanghai in January. ALY SONG/REUTERS
 
 
 
 
 
By 
Gunjan Banerji and 
Gregory Zuckerman
Feb. 9, 2020 4:37 pm ET
 

Fred Lande’s heart was pounding as he watched Tesla Inc. shares charge to an all-time high of $968.99 last week. It wasn’t because he was happy.

He’d bet thousands of dollars that the frantic rally that has more than tripled the price of the shares in just a few months was doomed to end, and soon. Concluding his gamble was wrong, he closed the options trade at a loss.

“Someone could go buy a brand new Toyota Camry with the loss that I took,” said Mr. Lande, who frequently trades for his personal account and runs a chat room for retail stock traders.

Tesla’s rocketing stock has meant an astonishing dive for investors who have staked their money on the proposition that Tesla shares were drastically overvalued and bound to fall. Their cost: $8.4 billion since January.

These investors have been mostly losing the battle for years, as Tesla shares remained buoyant even as the electric-car manufacturer racked up billions of dollars in annual losses. Their pain has suddenly gone from chronic to acute as Tesla shares have soared to heights that few of its supporters would have ventured to predict. Last year, they lost $2.9 billion betting against Tesla. In the first week of February alone, they lost $2.4 billion as Tesla shares posted a string of multibillion-dollar daily gains, according to data from S3 Partners.

Tesla reached its highest close on Feb. 4, at $887.06. Though shares slipped since then to close at $748.07 on Friday, the week saw a 15% gain, one of the best weeks for Tesla. Tesla shares have jumped nearly 79% since January.

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How Tesla’s Stock Jumped 200% in Half a Year
How Tesla’s Stock Jumped 200% in Half a Year
WSJ’s Tim Higgins explores how CEO Elon Musk turned Tesla into the most valuable U.S. auto maker of all time. Photo: Philip Pacheco/Getty Images

Many of these investors are short-sellers, who borrow shares and sell them with the hope of profiting by buying the shares back at a lower price later and pocketing the difference.

Tesla CEO Elon Musk has made baiting the short-selling camp a prominent part of his prolific social media presence, which fans and detractors alike agree is a significant part of Tesla’s mystique. This past week, he tweeted three fire emojis as Tesla’s share price skyrocketed, which some speculated was a reference to how shorts were getting burned. One Twitter user responded: “You forgot to say something bullish about #bitcoin.”

In 2018, Mr. Musk tweeted that short sellers were “value destroyers” and that short sales should be illegal.

Tesla didn’t respond to requests for comment.

Adding to the short sellers’ financial toll is a psychic one: Tesla’s gains are driven in part by the short sellers’ pain—a “short squeeze,” in which rising prices force short sellers to purchase shares to close out losing wagers.

“Oh damn, I got my butt kicked,” was the thinking, said Robert Majteles, a private investor who rode Tesla’s swings up and down for years before being forced to close out his bearish position last week. “It’s the biggest set of losses that I’ve ever taken in 20 years.”

Shift in SentimentTesla's short interest fell this year to itslowest level since 2010, when the stock begantrading.Shorted shares as a percentage of sharesavailable for tradingSource: FactSet
%2012’14’16’18’2002550
Tesla's share priceSource: FactSet
Jan. ’19Jan. ’20MaySept.0200400600800$1,000

Those losses have become other traders’ winnings, luring many more into the fray. Tesla has become one of the most popular stocks to trade ever. More than $55 billion worth of shares changed hands Tuesday, the most for a single stock since at least 1999. Options volumes have skyrocketed, as traders big and small look to profit from the car maker’s wild moves.

The stock has been volatile in the past, giving short-sellers windows to declare victory from time to time. Tesla shares slid to a low of $178.97 last June as worries grew about Mr. Musk’s ability to pull off his ambitious plans. They’re up about 320% since then.

The battle between Tesla believers and skeptics has captivated Wall Street. As Tesla shares went parabolic—the rare situation when the price chart of a widely held stock rises almost vertically over a period of days or weeks—traders recalled previous short-squeeze episodes, such as the battle over wireless standards that drove a 2,600% gain in Qualcomm Inc. in 1999.

In one sign of Tesla’s place in the zeitgeist, typing “should I” into a Google search recently prompted an autofill that read “should I buy Tesla stock.”

For almost every bullish investor, there is an equally passionate bearish one. Another popular Google query last week read, “should I short Tesla.”

Bears point to how Tesla has never posted an annual profit and has previously missed numerous financial and production targets. They note Mr. Musk’s penchant for overstatement, including an infamous 2018 episode in which he claimed to have lined up funding for a buyout, leading to a Securities and Exchange Commission settlement that temporarily stripped him of his chairmanship. They say other car companies will likely catch up to Tesla’s strides in electric vehicles—German auto maker Porsche last year rolled out its first ever electric vehicle, a sport sedan that is aimed at the same market Tesla targets—and that the business of making cars is notoriously boom and bust, even for the most storied firms.

“This is a car company, yes a higher-end one, but it’s still a car company, with the same low margins of other auto makers,” said James Chanos, the noted short seller who runs New York hedge fund Kynikos Associates and has been betting against Tesla for more than six years.

im-152322?width=620&size=1.5

James Chanos, who runs New York hedge fund Kynikos Associates, said he would continue to short Tesla’s stock despite big losses recently.

PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS

Mr. Chanos, who said Tesla’s recent profits can be attributed to its sales of tax credits, rather than earnings from car sales, said he won’t end his short positions despite recent deep losses. People close to the matter said his bearish Tesla position amounts to about 2% of his firm’s portfolio.

Other funds burned by Tesla’s rally include Lakewood Capital Management and David Einhorn’s Greenlight Capital, The Wall Street Journal has reported.

Steve Eisman, an investor who was among those who correctly bet against subprime mortgages more than a decade ago, recently told Bloomberg Television that he closed his bearish bet against Tesla. Mr. Eisman declined to be interviewed through a Neuberger Berman spokesman .

Tesla fans believe time is on the company’s side and will bear out Mr. Musk’s vision of bringing electric vehicles to the masses. They have faith profits eventually will flow to the auto company, and tout its plans to create a fleet of robot taxis and sleek in-car tech features.

“Tesla is really a technology company that will have a profound effect on the price of oil and gas…reducing the use of carbon emissions, which is why China has been so accommodating” in providing support for a Shanghai factory built last year, said Douglas Eisenberg, 59, an attorney in West Orange, N.J. He owns a few hundred shares of the stock in his retirement account, though he has also sold call option contracts that raise cash but limit the value of the investment. “Tesla will one day be the largest company in the world,” he said.

In early January, Tesla became the most valuable auto company in U.S. history, passing the peak valuation of Ford Motor Co. in 1999. Tesla’s market value now surpasses that of Ford, General Motors Co. and Fiat Chrysler Automobiles NV combined.

The big swings in the firm’s shares have presented ample opportunity to nimble traders. Bullish options tied to Tesla stock hitting $1,000 would have cost a trader about $6 on Jan. 30, according to data from Trade Alert. Last week, they could be bought or sold for more than 300 times that.

That has led to other unusual trading dynamics. Options activity can further boost the stock as traders buy shares in order to hedge their derivatives positions.

Market valueSource: FactSet
.billionTeslaFiatChrysler,Ford andGeneralMotorscombinedJune ’19Nov.050100$150

The volatility has been a boon to retail investors like Khoa Anh Nguyen, a Montreal-based pharmacist, who has profited from Tesla’s surging stock price. He says he has been scooping up bullish options contracts tied to the stock’s advance over the past month, accumulating more than $100,000 in profits.

SHARE YOUR THOUGHTS

Do you think Tesla’s stock price will continue its climb this year? Join the discussion below.

He has recently been considering buying more contracts, pegged to the shares jumping even higher. “I believe in Tesla,” Mr. Nguyen said.

Amy Wu Silverman, a managing director at RBC Capital Markets who recommends derivatives trades to clients, said she has been fielding calls from clients trying to predict how high the stock might go. “There’s obviously a cult identity around” the company, Ms. Wu Silverman said. “That is all anyone wants to talk about.”

She has personally bought bearish put options on the stock, contracts that have sunk in value as the stock has continued its climb. “Tesla is my widowmaker,” she said.

im-152324?width=620&size=1.5

Elon Musk unveiled Tesla’s Cybertruck in November.

PHOTO: FREDERIC J. BROWN/AGENCE FRANCE-PRESSE/GETTY IMAGES

Some investors believe the market will inevitably move on from the Tesla story, as developments in business and economics potentially lessen the firm’s import. John Goetz, president and co-chief investment officer of Pzena Investment Management, said one reason his firm has built a big stake in Volkswagen AG is a belief that the German auto maker, not Tesla, will become the dominant player in electric vehicles.

“VW is introducing more models over the next three years than Tesla ever will have,” he said.

Each day this year, as Mr. Goetz has watched the moves of the two stocks, he has become more astonished. Volkswagen shares have slipped about 6% so far in 2020.

Mr. Goetz has become concerned Tesla might use its richly priced shares to make an acquisition or expand its business in other ways, creating more competition for Volkswagen. Still, Mr. Goetz remains confident Tesla will stumble and Volkswagen will succeed, at some point.

Dan Ives, an analyst covering the stock at Wedbush Securities, raised his price target on Tesla to $710 after the company’s latest quarterly results, a 92% jump from his prior target in early January. He thinks the shares could hit $1,000.

Other analysts tracking the stock have raised targets even more—at least one sees the shares hitting $7,000. The ever-higher projections have helped lift the stock price and ignite demand among investors who simply buy stocks because they are rapidly rising.

“There’s a fear of missing out on Tesla,” said Mr. Ives. “They don’t want to come to the party at 2 a.m.”

—Elisa Cho and Jim Oberman contributed to this article.

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They must be planning on a longer shutdown

https://www.channelnewsasia.com/news/asia/wuhan-coronavirus-china-economy-xi-jinping-12418398

Quote

BEIJING: Chinese President Xi Jinping said on Monday (Feb 10) the government will prevent large-scale layoffs amid the coronavirus outbreak, Chinese state television reported, as he appeared among the public for the first time since the epidemic started.

 

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6 hours ago, atomheartbevo said:

Beijing and Shanghai are on full lockdown, and factories are being ordered to stay closed.

Everything is fine.  

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I honestly can't believe the market is just sitting at all-time highs when China, the place that makes most of our shit, is on the verge of an extended shutdown. No place else for the money to go I guess, and they keep printing more. Strange times we live in. 

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13 minutes ago, Blotto said:

I honestly can't believe the market is just sitting at all-time highs when China, the place that makes most of our shit, is on the verge of an extended shutdown. No place else for the money to go I guess, and they keep printing more. Strange times we live in. 

Yep.  I'm almost ready to go long VXX for a short period rather than just buying calls on it.  

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I honestly can't believe the market is just sitting at all-time highs when China, the place that makes most of our shit, is on the verge of an extended shutdown. No place else for the money to go I guess, and they keep printing more. Strange times we live in. 

Not always, but the “market” usually already has this figured in.
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30 minutes ago, Blotto said:

I honestly can't believe the market is just sitting at all-time highs when China, the place that makes most of our shit, is on the verge of an extended shutdown. No place else for the money to go I guess, and they keep printing more. Strange times we live in. 

Yep.  Apple alone - iPhone deliveries are way down, and the largest factories have something like less than 10% of their staffing, if they are even open.    Sure, they have some factories in India, but it’s India.  I think the coronavirus would do quite well there.  Plus, Foxconn factories have fucking barracks and dormitories on site in China - that’s a perfect breeding ground for the virus.  

And it’s supposedly affecting shipments of raw materials, shipping companies, etc.

If the Chinese government is willing to prop up companies, they may not be in much of a rush to get back to 100% production   

Let’s not forget that a lot of medical supplies are also imported from China.  

 

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7 minutes ago, HouTex said:


Not always, but the “market” usually already has this figured in.

This thing is not peaking until later in March or April, and production is already shut down in many provinces.   Beijing and Shanghai are shutting down, and they are talking about the death penalty for those found to be spreading it.

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8 minutes ago, hornbri said:

I am in the camp the market has most of this baked in. I think the money on Wall Street has better info, then the rumors and what the sky is falling crowd are saying. 

Perhaps, but AAPL is trading just a few bucks off its all-time high, which seems strange considering how much of its products are manufactured in China, and also China accounting for 15% of Apple revenue. If there is anything to this Coronavirus story, I don't see how Apple is not disproportionately affected. 3 months ago, before we had ever heard of this threat, AAPL was trading at 260. Now it's almost 25% higher.

I won a couple grand playing poker this weekend so I doubled up today on more AAPL puts (expiring April). Sad when I consider poker to be less of a gamble than AAPL stock price.

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25 minutes ago, hornbri said:

I am in the camp the market has most of this baked in. I think the money on Wall Street has better info, then the rumors and what the sky is falling crowd are saying. 

What better info could they possibly have, that hasn’t leaked already?  We know it’s far, far worse than the Chinese are letting on, but we don’t know how much worse.   We had a 100 dead yesterday. At the current rate, we will be hitting hundreds of dead per day within a week or so, and if they are shutting Beijing and Shanghai down now, I imagine the rest of China is not far behind.  
 

And that’s assuming the death stats are at least a little accurate.  The mass burning of bodies in fields has been disproven, but given how full the hospitals are, we are probably missing 15-25 a day in deaths, if not more.  

Edited by atomheartbevo
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6 minutes ago, Blotto said:

Perhaps, but AAPL is trading just a few bucks off its all-time high, which seems strange considering how much of its products are manufactured in China, and also China accounting for 15% of Apple revenue. If there is anything to this Coronavirus story, I don't see how Apple is not disproportionately affected. 3 months ago, before we had ever heard of this threat, AAPL was trading at 260. Now it's almost 25% higher.

I won a couple grand playing poker this weekend so I doubled up today on more AAPL puts (expiring April). Sad when I consider poker to be less of a gamble than AAPL stock price.

Want to teach me how to win a couple Grand in poker?

Edited by workswithseed
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12 minutes ago, workswithseed said:

Want to teach me how to win a couple Grand in poker?

Run hot on a table full of shitty and/or aggressive players who refuse to believe you have the goods. About 6 hours at a 1/2 table....don't expect that to be a common occurrence.

Edited by Blotto
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49 minutes ago, atomheartbevo said:

This thing is not peaking until later in March or April, and production is already shut down in many provinces.   Beijing and Shanghai are shutting down, and they are talking about the death penalty for those found to be spreading it.

I'm pretty sure that it is already a death penalty for some who contract the virus; so are they going to kill them before the virus does?

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7 minutes ago, Wally Fairway said:

I'm pretty sure that it is already a death penalty for some who contract the virus; so are they going to kill them before the virus does?

Less than 2% mortality rate is not a death penalty.   We’ve only got 1,000 dead and 40,000 sick that they’ve officially mentioned, but they aren’t able to test many, either for a lack of tests, hospital beds, or they are locked down. 

I would have figured locking down Beijing would be a bigger deal.  

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51 minutes ago, atomheartbevo said:

What better info could they possibly have, that hasn’t leaked already?  We know it’s far, far worse than the Chinese are letting on, but we don’t know how much worse.   We had a 100 dead yesterday. At the current rate, we will be hitting hundreds of dead per day within a week or so, and if they are shutting Beijing and Shanghai down now, I imagine the rest of China is not far behind.  
 

And that’s assuming the death stats are at least a little accurate.  The mass burning of bodies in fields has been disproven, but given how full the hospitals are, we are probably missing 15-25 a day in deaths, if not more.  

Well they could be looking at the info outside of China where the mortality rate is much much lower. Then you don't care how bad China is under reporting the number, it looks like outside of China very very few people die from this. 

That would mean that yes China has much much more infected then they know, however most of those are going to be just fine.  Even hundreds of dead per day in the country the size of China is going to have no long term impact. 

TLDR As long as the mortality rate outside of China does not rise significantly it does not matter how badly China is reporting numbers. 

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Realistically, if things continue to get worse, and we are two months out from the peak, how long until the factories open back up to full capacity?

Apple and Samsung as an example, seem like they’d have stuff in the pipeline that needs to be hitting production now.  Maybe they can pull it off in Taiwan I suppose.

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23 minutes ago, workswithseed said:

Oh my God, I would laugh so hard if Taiwan got better deals cause China became a shit state.

If the leakers have the iPhone SE 2/iPhone 9 launch date right, it’s supposed to be show off next month.  That means it needs to be in production now, which ain’t happening in China.  So Taiwan or India.   And Samsung has been showing off stuff that needs to be in production right now   

Imagine if India was able to pull some major tech business away from China.  

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2 hours ago, hornbri said:

I am in the camp the market has most of this baked in. I think the money on Wall Street has better info, then the rumors and what the sky is falling crowd are saying. 

I think Wall St will pull the rug when they see fit.  A Monday holiday would be a good time to do so.  Two weeks from tomorrow will be interesting.  

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This ends well

https://www.reuters.com/article/us-china-health-xi-economy-idUSKBN2050JL

Quote

BEIJING (Reuters) - Chinese President Xi Jinping warned top officials last week that efforts to contain the new coronavirus had gone too far, threatening the country’s economy, sources told Reuters, days before Beijing rolled out measures to soften the blow.

Quote

With growth at its slowest in nearly three decades, China’s leaders seem eager to strike a balance between protecting an already-slowing economy and stamping out an epidemic that has killed more than 1,000 people and infected more than 40,000. 

After reviewing reports on the outbreak from the National Development and Reform Commission (NDRC) and other economic departments, Xi told local officials during a Feb 3 meeting of the Politburo’s Standing Committee that some of the actions taken to contain the virus are harming the economy, said two people familiar with the meeting, who declined to be named because of the sensitivity of the matter. 

He urged them to refrain from “more restrictive measures”, the two people said.

The willingness to let things get worse as long as goods are shipped should cause a lot of countries to diversify manufacturing even more outside of China.   India, Africa, maybe South America. 

Edited by atomheartbevo
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