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Markets still falling like whoa

Llano Estacado

By Llano Estacado
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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

Rusty Shackelford
Rusty Shackelford
Eastwood
Eastwood

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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atomheartbevo

atomheartbevo 89759

Posted
Posted

https://www.bbc.com/news/business-51441344

“Nissan is the latest car maker to temporarily shut one of its factories as it can't get parts from China.

The firm will halt production for two days at a plant in Japan which makes the Serena and X-Trail models.

Global car brands are facing similar disruptions as much of China's manufacturing sector remains locked down due to the deadly coronavirus.

Hyundai temporarily closed its factories in South Korea last week due to a shortage of Chinese parts.

In fact, many of the world's biggest car makers are dealing with dwindling supplies as factories across China remain closed.

China is the world's manufacturing powerhouse and a major part of the global supply chain for the automotive industry, making key parts and components. Hubei, where the coronavirus outbreak first started, is a major car manufacturing hub.”

———-

Another week and things get really interesting.   

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atomheartbevo

atomheartbevo 89759

Posted
Posted
1 hour ago, WBT said:

So China shutting down their economy...no biggie?  I don't get it.

Yeah, kinda big.  And Foxconn just shot down a Reuter’s report about them restarting everything this month.  

https://www.reuters.com/article/us-china-health-foxconn/foxconn-says-recent-reuters-reports-on-factory-resumption-in-china-were-not-factual-idUSKBN20704F

Quote

Taiwan’s Foxconn said on Thursday that recent Reuters reports on its plant resumption plans in China were not factual.

Quote

“Recently, Reuters reports on the group’s overall resumption schedule for the mainland China plants are not factual, and Hon Hai hereby clarifies it,” Foxconn said in the statement. 

“In the past, the aforementioned media’s reports related to the group’s mainland China plants resumption are mostly not factual,” it said, adding that the reports have caused “misunderstandings and difficulties for employees, investors and the general public.”

Even if they got the workers into the barracks/dorms/whatever, they have to go through a 14-day quarantine process before they can be on the production line.    March sounds like the earliest they can be up and running.  And that’s assuming more cities don’t go under martial law, and folks aren’t restricted to their homes.  

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Dbeasy

Dbeasy 15075

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A financial advisory firm of a relative has a hedge in place to protect downside movement of the market when it is greater than a 20% drop. I think they said they are buying out of the money puts?

I asked them to send me details on how the hedge is constructed and how it starts working only after 20% down. Anyone have any idea?

If I wanted to hedge, is the simplest way just to buy out of the money puts on the S&P 500? I understand options but have never actually traded them except for some long term calls I’ve bought in the past.

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atomheartbevo

atomheartbevo 89759

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Posted (edited)

They are starting to completely lock down entire cities in China - no more “one family member can visit stores every other day”. You will be arrested if you leave your home, etc. and now companies that rely on China are starting to say “yeah, going forward to March and beyond, things might be bad for us.”

And the new rules going into effect last night and this morning are going to prevent a shitload of people from even making it to the factories.  

Edited by atomheartbevo
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Fudge Nuggets

Fudge Nuggets 19209

Posted
Posted
24 minutes ago, Wally Fairway said:

Tesla, taking advantage of share run up, announces stock issuance of up to $2 billion

https://www.marketwatch.com/story/tesla-stock-slammed-as-company-announces-plan-to-issue-up-to-2-billion-in-new-shares-2020-02-13?mod=home-page

Elon running TSLA like a dodgy pharmaceutical company.

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Aqua Buddha

Aqua Buddha 14599

Posted
Posted
3 hours ago, atomheartbevo said:

They are starting to completely lock down entire cities in China - no more “one family member can visit stores every other day”. You will be arrested if you leave your home, etc. and now companies that rely on China are starting to say “yeah, going forward to March and beyond, things might be bad for us.”

And the new rules going into effect last night and this morning are going to prevent a shitload of people from even making it to the factories.  

The supply chain risk hasn't been priced in.  Chinese imports have long lead times.  They're producing toys for the Christmas season right now.  If that shuts down, Q4 risk is YUGE.

Isaac Larian is a toy guy and he's been screaming about this all over the Twitter machine:

 

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atomheartbevo

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Posted
Posted
4 hours ago, Aqua Buddha said:

The supply chain risk hasn't been priced in.  Chinese imports have long lead times.  They're producing toys for the Christmas season right now.  If that shuts down, Q4 risk is YUGE.

Apple has supposedly been shuffling the March/April launches to Taiwan and India, but those are on a smaller scale, and the engineering prep work is done, and the production has started.

Apple  hasn’t been able to send design and engineering people to China to prep for the iPhone 11 successor launching in September, as well as Macs, iPads, etc..  Another month or two of delays, not even talking about actual production ramping up, and Apple’s fall launches get pushed into 2021.  

But wait, there’s more!   The auto production problems are apparently really about to kick in, and that could shut down autos coming into the US, as well as domestic.    It won’t just be Nissan either   

It’s easy to focus on phones and computers, but it doesn’t take many imported auto parts drying up to shut down a lot of production lines around the world.   

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jimmyjazz

jimmyjazz 46001

Posted
Posted
10 hours ago, Dbeasy said:

A financial advisory firm of a relative has a hedge in place to protect downside movement of the market when it is greater than a 20% drop. I think they said they are buying out of the money puts?

I asked them to send me details on how the hedge is constructed and how it starts working only after 20% down. Anyone have any idea?

Pretty simple -- buy puts with a strike price 20% below current market/stock price.  Puts will expire worthless if the underlying instrument hasn't dropped 20% or more at expiry.  (Technically, 20% plus the price of the put.)  In the meantime, the value of the puts will probably ebb and flow, climbing on down days, dropping on up days.  The overall trend will be towards zero unless the underlying tanks.

My experience with hedging has always been difficult at best.  You're trying to protect an investment, so even when the hedge starts to pay off, it's difficult to decide when to take profit (on the hedge).  Obviously, once you sell those puts, your long investment is no longer protected.  Some would suggest taking profits and buying new puts another X% below current market price.

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Nice Guy Eddie

Nice Guy Eddie 13515

Posted
Posted
1 hour ago, HRSchenker said:

Oil stocks getting crushed lately. BP and RDS.A both down but that dividend looks sweet

BP's dividend is fairly certain as many UK pensioners rely on it so they have immense govt pressure to get it steady. They still haven't grown it back to the level pre-spill but it was probably close to unsustainable at that point anyway.

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TwiceHorn

TwiceHorn 31513

Posted
Posted
On 2/13/2020 at 1:11 PM, workswithseed said:

Well your answer did clear something up.

The "greater fool theory" is that there is always someone with less information than you to whom you can sell a shitty stock or security.  That person is the greater fool.

When things get priced so high that it seems there is nowhere to go but down, a rational person begins to wonder where is the greater fool to whom I can sell out of this market on the way down.

It's kind of like, meet one asshole, you met an asshole; meet assholes all day, you're the asshole.

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workswithseed

workswithseed 2109

Posted
Posted
5 hours ago, Tailgate said:

SPCE FTW

Up 21% today.

 

49 minutes ago, TwiceHorn said:

The "greater fool theory" is that there is always someone with less information than you to whom you can sell a shitty stock or security.  That person is the greater fool.

When things get priced so high that it seems there is nowhere to go but down, a rational person begins to wonder where is the greater fool to whom I can sell out of this market on the way down.

It's kind of like, meet one asshole, you met an asshole; meet assholes all day, you're the asshole.

Thank you.

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jimmyjazz

jimmyjazz 46001

Posted
Posted (edited)
21 hours ago, Dbeasy said:

This advisor said the hedge reduces annual returns 2-3% in exchange for the protection over a 20% drop. Worth it if you are in retirement?

Sounds like a low cost, but I may have numbers in mind related to hedging a 10% drop, not a 20% drop.

It's absolutely true that hedging costs money most of the time.  If you implement a straddle (long call plus long put, both at the money), which pays a profit if the underlying moves EITHER way greater than a certain amount, then you can generate a net profit.  Hedging a long stock/ETF position to generate a pseudo-straddle would presumably require 2 puts per 100 shares, purchased at the money.  Such a position will typically lose money in a sideways or churning market, but if it's put in place before a rocketship move one way or the other, then yay, profit.  If that rocketship is "up", you would have been better off not purchasing the puts.  If it's "down", then good for you, your hedge worked out well.

Edited by jimmyjazz
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atomheartbevo

atomheartbevo 89759

Posted
Posted (edited)
7 hours ago, Colonel Sanders said:

Also the site of Tesla's gigafactory, but the stock still over $800 because of paradigm shifts and whatnot. 

Couple of more cities in Hubei province just went on lockdown.   Things ain’t getting better.    Will be interesting to see how the auto and electronics stocks do next week.   

Edited by atomheartbevo
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Anastasis

Anastasis 23481

Posted
Posted
1 hour ago, atomheartbevo said:

Couple of more cities in Hubei province just went on lockdown.   Things ain’t getting better.    Will be interesting to see how the auto and electronics stocks do next week.   

Long weekend makes me nervous. Tried to move some stuff but couldn’t connect during trading hours. 

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veritas aequitas

veritas aequitas 443

Posted
Posted

Anyone here using Webull? I had been using Robinhood for several years but just got on Webull a couple of weeks ago and it makes a nice companion to Robinhood and allows margin trading but not options at this time. It seems to have more analytical information available quickly but not as quick to submit a trade. It also seems to be a bit ahead of Robinhood on pricing most of the time, when I have them both open looking at same the stock the price is most always closer to real time on webull.

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atomheartbevo

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Posted
Posted
2 hours ago, Parliament said:

So how long until it's deployed?

Microsoft, Sony, and Apple are all probably sweating a little bit over it.  Surprised they aren’t dumping a shitload of money into any company that could potentially produce a vaccine/treatment.   Apple has the iPhone 12 and a bunch of other devices launching this fall, and Sony and Microsoft are launching new versions of the PlayStation and XBox later this year.   I imagine that if those slipped a few months into 2021, a few people might lose some money.  

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Bevo

Bevo 13590

Posted
Posted (edited)
29 minutes ago, troph said:

I think I read already in human trials but I would expect weeks.  And then it’s needed in the hundreds of thousands of dosages count. 

If a vaccine is developed, it will take a year to be released. NIH Dir. of Allergy and Infectious Disease says a vaccine against the coronavirus would be the fastest approval ever but they do not want to cut corners. From what I recall about the development of a SARS and MERS vaccine, the choices would be live attenuated, dead, and peptide. I assume there would be a recombinant vaccine as well. Safety of a live attenuated virus is a concern as is the efficacy of dead virus, peptide and recombinant vaccine.

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troph

troph 24895

Posted
Posted
If a vaccine is developed, it will take a year to be released. NIH Dir. of Allergy and Infectious Disease says a vaccine against the coronavirus would be the fastest approval ever but they do not want to cut corners. From what I recall about the development of a SARS and MERS vaccine, the choices would be live attenuated, dead, and peptide. I assume there would be a recombinant vaccine as well. Safety of a live attenuated virus is a concern as is the efficacy of dead virus, peptide and recombinant vaccine.

Yeah I wouldn’t know. I just guessed as if I didn’t know anything.
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Bevo

Bevo 13590

Posted
Posted
2 minutes ago, troph said:


Yeah I wouldn’t know. I just guessed as if I didn’t know anything.

The following is a transcript of an interview with Dr. Anthony Fauci that aired Sunday, February 16, 2020, on "Face the Nation."

MARGARET BRENNAN: Joining us now is Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases at NIH. Dr. Fauci, it's good to have you here. 

DR. ANTHONY FAUCI: Good to be with you. 

MARGARET BRENNAN: We were just hearing about the State Department sending planes to help evacuate some of these Americans who were on that cruise ship. Debora said more than 40 now. What can you tell us in terms of the Americans have been exposed and infected?

DR. FAUCI: Well, 40 of them have gotten infected. They are not going to go anywhere. They're going to be in hospitals in Japan. People who have symptoms will not be able to get on the evacuation plane. Others are going to be evacuated starting imminently to Air Force bases in the United States. If people on the plane start to develop symptoms, they'll be segregated within the plane. So there's a very firm plan with this 747 that is going to take these passengers now who have been there. If you want to stay in Japan, your last chance would be to get on the plane and leave or you stay there. When you come back to the United States, importantly, they're still subjected to a 14 day quarantine. And the reason for that is that the degree of transmissibility on that cruise ship is essentially akin to being in a hot spot. A lot of transmissibility on that cruise ship.

MARGARET BRENNAN: So for the Americans who are infected, what does that actually mean? What is the state of their health?

DR. FAUCI: Yeah, well, it varies. I mean, you could be infected and have minimal symptoms, but you still have the possibility of transmitting it to someone else. 

MARGARET BRENNAN: OK. 

DR. FAUCI: Or you could be infected and have some significant lung disease that would require hospitalization and perhaps even some serious intervention.

MARGARET BRENNAN: Now, Malaysian health authorities have also said there was an 83 year old American woman who had been on a different cruise ship which ended up docking in Cambodia. She landed in Malaysia and then tested positive. This kind of spread, does this indicate this is becoming a pandemic?

DR. FAUCI: Well, a pandemic is when you have multiple countries throughout the world that have what's called sustained transmission from person to person to person, multiple generations. Right now, there are 24 countries in which there were over five hundred cases. Several of them are starting to get to the second and third transmission. So technically speaking, the WHO wouldn't be calling this a global pandemic, but it certainly is on the verge of that happening reasonably soon unless containment is more successful than it is right now.

MARGARET BRENNAN: As Debora said, there are experts landing in China this week. 

DR. FAUCI: Right.

MARGARET BRENNAN: Americans will be among them. 

DR. FAUCI: Right. 

MARGARET BRENNAN: Is there anyone from your team and- and what is the difference--

DR. FAUCI: Yeah. 

MARGARET BRENNAN: --if, say, the CDC had been allowed in--

DR. FAUCI: Right. 

MARGARET BRENNAN: --versus the WHO?

DR. FAUCI: You know, MARGARET, to be honest with you, we really should not be talking about that because the sensitivity of coming out ahead of the Chinese of making any kind of announcement. But you're correct, there certainly-- 

MARGARET BRENNAN: But the Chinese ambassador was on this program last week and he indicated Americans were on that list. 

DR. FAUCI: Well, then if he says it, then they're on that list. Yes.

MARGARET BRENNAN: But- but what is the difference there? Why would it be more beneficial to have-- 

DR. FAUCI: Well, for two reasons--

MARGARET BRENNAN: --your agency be able to send people, have CDC officials there?

DR. FAUCI: Well, the reason is because first of all, this- our CDC are the best epidemiologists in the world. They can be helpful to the Chinese as well as get information firsthand, eyes, ears and boots on the ground. So it really is to be helpful as part of the WHO group.

MARGARET BRENNAN: Because the WHO has been criticized, perhaps being too careful around the Chinese government in their part of the U.N. agency. They receive international funding. China has tremendous power over them. Is that criticism fair?

DR. FAUCI: You know, I don't know if it's fair or not, but certainly it's been spoken about. I mean, clearly, the director of WHO, Dr. Tedros, is really an outstanding person. And under very difficult circumstances, I think he's doing a very good job.

MARGARET BRENNAN: The president has said at least twice so far that the virus could tick down in these warmer months ahead. He indicated--

DR. FAUCI: Right.

MARGARET BRENNAN: --President Xi told him that.

DR. FAUCI: Right.

MARGARET BRENNAN: Is that how the virus actually works?

DR. FAUCI: This virus, we don't know. But it is not unreasonable to say that influenza, for example, which peaks in the winter, you would certainly expect it by March, April and May to taper down, as well as typical common cold coronaviruses. That's not an unreasonable statement. However, we do not know what this particular virus is gonna do so. So we would think it would be a stretch to assume that it's going to disappear with the warm weather. We don't know that. It's completely unknown.

MARGARET BRENNAN: You said recently that you could have some kind of vaccine within a year or so. 

DR. FAUCI: Right, right.

MARGARET BRENNAN: How do you speed up that timeline and how do you fix the problem you said you have, which is finding a manufacturer?

DR. FAUCI: Right. Well, first of all, MARGARET, that one year timeline would be the world's indoor record of ever getting a vaccine out, at least to be able to early deploy. You can't do any better than that. If you go any faster, you'll be cutting dangerous corners.

MARGARET BRENNAN: And no manufacturer, yet?

DR. FAUCI: Oh yeah manufacturers. Once you get a vaccine that, you know works, the difficulty is having companies take that risk of hundreds and hundreds of millions of dollars to scale up to make it available.

MARGARET BRENNAN: All right. So you're still looking for a partner on that?

DR. FAUCI: I think we're gonna get them--

MARGARET BRENNAN: OK. 

DR. FAUCI: --because I'm seeing interest on the part of pharmaceutical companies that we did not see with SARS and other outbreaks.

MARGARET BRENNAN: Dr. Fauci, thank you for this update. I appreciate it.

 

https://www.cbsnews.com/news/transcript-dr-anthony-fauci-on-face-the-nation-february-16-2020/

 

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