Markets still falling like whoa

[Cheeseweasel 26438]

Just now, Errestaurants said:

IBIO is a much better buy versus APPL. Better yet sale your entire APPL stake and buy IBIO

Why have money when you can have NO MONEY! Think of the tax savings!

[Incredulity 11631]

I said it up thread, my stock picking account would be dreadful if not for AAPL and MSFT. 

It’s to the point where I have ongoing arguments with myself to lock some of the gains.  Crazy shit.

[Sbbruin 21814]

20 hours ago, Dbeasy said:

How about 6 minute abs?

[Coelenterate Fuccboi 13082]

53 minutes ago, Cheeseweasel said:

And if it doesn't come?

You’re not helping...

[washparkhorn 9939]

AAPL splitting on Monday - correct?  Too lazy to look it up.

Is there an arbitrage play for stocks splitting? 

 

Edited August 21, 2020 by washparkhorn

[Mack Tripper 696]

1 hour ago, woohorn said:

About to set up a Robinhood acct for family member. Anyone care about their code enough to pm me?

PM sent

[BevoSwag 272]

3 minutes ago, washparkhorn said:

AAPL splitting on Monday - correct?  Too lazy to look it up.

Sold my 100 shares April 20th.  About $279.  Sold Tesla in the low $200's.  Two worst trades of my life.

[washparkhorn 9939]

4 minutes ago, BevoSwag said:

Sold my 100 shares April 20th.  About $279.  Sold Tesla in the low $200's.  Two worst trades of my life.

Damn.  Looks like you can pick it back up for $100 (after the split). https://www.fxstreet.com/analysis/apple-stock-analysis-2020-buy-aapl-before-or-after-stock-split-video-202008141557 (note - I have no idea if this analyst makes good picks).

[B00M 6409]

29 minutes ago, Casual Encounter said:

You’re not helping...

I'm with you. Still about 50% in cash waiting for the correction the Fed won't allow. To hedge my bet and resist being emotional, I want to setup automatic weekly trades to gradually move out of cash. Fidelity's basic shit seems to lack this ability. Does Fidelity's Active Trader PRO have it?

[Hmmm 155]

14 minutes ago, washparkhorn said:

Damn.  Looks like you can pick it back up for $100 (after the split). https://www.fxstreet.com/analysis/apple-stock-analysis-2020-buy-aapl-before-or-after-stock-split-video-202008141557 (note - I have no idea if this analyst makes good picks).

Is there any specific reason why Apple would split their shares now?   Just to make it more accessible for the average Joe to buy?  And, why would Amazon not want to split?

[washparkhorn 9939]

4 minutes ago, Hmmm said:

Is there any specific reason why Apple would split their shares now?   Just to make it more accessible for the average Joe to buy?  And, why would Amazon not want to split?

Psychology - agree - would be one reason, but with fractional shares you can buy $100 worth of Apple now. Honestly - do not know. From that link above:

Quote

 

In my opinion, the reason why Apple has done it in the past and did it this time, is purely for marketing purposes. Apple has one of the greatest marketing minds behind it so it kinda makes sense that they extend their talents to their financial department. What the heck does this have to do with marketing, you ask?

Well, for one, it’s a huge PR boost every time they do this, because more media contributors, including myself, will feel necessary to cover the news. But have you heard of the term, “buy the news, sell the rumor”? So the newscame out on July 31st… but when will its impact start to wear out? I’ll get to that in a little bit when I look at AAPL stock price action on the charts. 

Back to stock split advantages, being traded at a lower price could make the Apple stock more approachable. The idea of the Apple stock being super cheap makes it more of a household name which goes hand in hand with Apple’s brand identity as well.

Of course in reality this is absolutely pointless because you can buy ANY stock at a fractional amount on brokers like Robinhood, Webull, and TD Ameritrade. For example, even if you have only $50 to invest, you still can buy $50 worth of Amazon stock which is priced well above $1,000. So this part of it is more about investors’ psychology than a real fundamental change in the company’s valuation.

 

 

[TwiceHorn 31416]

It seems like after splits, even though everyone knows in their head that it's the same stock, just /2, the price crawls back toward the pre-split price a bit faster than any economic or financial information would account for.

Same kind of thing for a reverse split, but in reverse and maybe worsened by the fact that it's often used to put lipstick on a pig.

[Incredulity 11631]

24 minutes ago, TwiceHorn said:

It seems like after splits, even though everyone knows in their head that it's the same stock, just /2, the price crawls back toward the pre-split price a bit faster than any economic or financial information would account for.

Same kind of thing for a reverse split, but in reverse and maybe worsened by the fact that it's often used to put lipstick on a pig.

That would be very nice.

 

although a 4-6 Trillion market cap company is crazy.

20-25% of market cap to GDP in a single company 

[WBT 20553]

42 minutes ago, washparkhorn said:

For example, even if you have only $50 to invest, you still can buy $50 worth of Amazon stock which is priced well above $1,000.

$1,000, $3,000, whatever it takes

[Hmmm 155]

59 minutes ago, washparkhorn said:

Psychology - agree - would be one reason, but with fractional shares you can buy $100 worth of Apple now. Honestly - do not know. From that link above:

 

Thanks for the info.  I heard you could buy fractional shares on Robinhood but don't use that platform.  I'm not seeing it on TDAmeritrade -- doesn't let me enter decimals for the QTY.  I don't trade options so maybe that's where you can do it.  I do have fractional shares from reinvested dividends.

[washparkhorn 9939]

On 8/20/2020 at 5:11 AM, bernorange said:

Thanks Dirty Harry Washparkhorn.

That movie was canceled. DOA. Funny how that happens  https://scrapsfromtheloft.com/2017/12/28/dirty-harry-saint-cop-review-by-pauline-kael/

The Spice must flow. Too much of it gets sucked up like cocaine in a Dyson testing lab. 

TLDR - M2V:

[Trey3216 15338]

14 hours ago, woohorn said:

About to set up a Robinhood acct for family member. Anyone care about their code enough to pm me?

Setup a TD Ameritrade acct instead.  Robin Hood is a dumpster fire 

[BevoSwag 272]

https://www.fidelity.com/trading/fractional-shares?imm_pid=700000001008518&immid=100758&imm_eid=ep51628056878&gclid=EAIaIQobChMI1c2DkI6v6wIVqvfjBx3RugxMEAAYASABEgJYQvD_BwE&gclsrc=aw.ds

[BevoSwag 272]

Here is the part I do not understand and why the market keeps going up while facts indicate otherwise.  I realize the Houston Chronicle is a pay site but I can cut and paste a few paragraphs.  Yes, Houston downtown is a ghost town.  Hotels and restaurants are going under.  It is easy to blame the energy sector but it is the same in NYC.  I'm wondering if things are greener in Dallas, LA. Chicago and other metro areas.

https://www.houstonchronicle.com/business/article/COVID-pandemic-downtown-houston-tx-ghost-town-15498630.php

“You’ve got to understand,” said Tilman Fertitta, who owns Vic & Anthony’s, the high-end steakhouse near Minute Maid Park, “downtown is dead. There’s nobody in the buildings. There’s no business traveler.”

The strides developers, business leaders and city officials have made in transforming the city center from a mostly commercial district into a more vibrant neighborhood with new housing, parks and schools are being threatened by the pandemic, whose economic and societal tolls may take years to undo.

Downtown, where businesses and public agencies employed more than 168,600 full-time workers before COVID-19, is mostly empty, apart from residents walking their dogs, skateboarders taking advantage of the barren sidewalks and the homeless, who cluster under awnings and outside convenience stores.

 

[staboner 4969]

20 minutes ago, BevoSwag said:

Here is the part I do not understand and why the market keeps going up while facts indicate otherwise.  I realize the Houston Chronicle is a pay site but I can cut and paste a few paragraphs.  Yes, Houston downtown is a ghost town.  Hotels and restaurants are going under.  It is easy to blame the energy sector but it is the same in NYC.  I'm wondering if things are greener in Dallas, LA. Chicago and other metro areas.

https://www.houstonchronicle.com/business/article/COVID-pandemic-downtown-houston-tx-ghost-town-15498630.php

 

 

 

the market will tune into reality soon enough

The corporate real estate game is going to be a fun I dunno 5 year bleed or something. probably longer. At least in the US you have a somewhat mature work from home culture - which will lessen the brutality of it. Where I am now is gonna be real bad. eh. shit we know for 1000 Alex

[washparkhorn 9939]

40 minutes ago, BevoSwag said:

Here is the part I do not understand and why the market keeps going up while facts indicate otherwise. 

Deflationary dollar weakening, which translates into more dollars needed to purchase the same financial instrument. 

A lot of trillions have been poured into the financial market bubbles to keep it keep them intact. The financial markets were propped up to keep them functioning until the world rebounds from the economic hit caused by COVID. The rebound is in doubt. The fiscal response has been far less than adequate than the monetary response. Wealth imbalance continues to widen. 

TLDR - we are eating the seed corn and when the fields go fallow - there will be massive pain. 

 

[BLKNSTY 289]

Setup a TD Ameritrade acct instead.  Robin Hood is a dumpster fire 

WeBull is better in my opinion. Great interface and its charting capabilities are pretty nice. Active comments section (think reddit), zero commission trading, level 2 trading data, etc.

Check it out, highly recommend.


Sent from my iPhone using Tapatalk

[Gravy Train 974]

On 8/21/2020 at 4:17 PM, woohorn said:

About to set up a Robinhood acct for family member. Anyone care about their code enough to pm me?

Another +1 for Webull.  I'm not happy with their iOS app, but the platform is powerful, zero commission trades, so many charting and data plots, active discussion and news trading, easy after-hours trading access.

[Fudge Nuggets 19170]

On 8/21/2020 at 4:21 PM, Cheeseweasel said:

And if it doesn't come?

It will eventually.  Might be five years from now, but it will come.

[tokamak 6383]

It will eventually.  Might be five years from now, but it will come.

On a long enough timeline, everyone’s life expectancy drops to zero.

[Rusty Shackelford 414]

On 8/21/2020 at 6:24 PM, TwiceHorn said:

It seems like after splits, even though everyone knows in their head that it's the same stock, just /2, the price crawls back toward the pre-split price a bit faster than any economic or financial information would account for.

My grandfather owned a bit of Dell stock in the late 90s.  The way I remember it, Dell split 7 or 8 times while he held it, and it still went higher than what he originally paid for it.

[CooterBrown 17986]

1 minute ago, Rusty Shackelford said:

My grandfather owned a bit of Dell stock in the late 90s.  The way I remember it, Dell split 7 or 8 times while he held it, and it still went higher than what he originally paid for it.

Yep. That's about the only way you can become one of those legends who became a millionaire off a $10,000 initial investment. 

[ZB'Tejas 593]

Some great ideas above on getting the kids into investing and saving. For those doing this did you just setup additional bank accounts? A Custodial brokerage account? Roth?

[Cheeseweasel 26438]

1 minute ago, ZB'Tejas said:

Some great ideas above on getting the kids into investing and saving. For those doing this did you just setup additional bank accounts? A Custodial brokerage account? Roth?

UTMA. Nice tax savings for you if you need it.

[Blotto 23478]

On 8/21/2020 at 6:24 PM, TwiceHorn said:

It seems like after splits, even though everyone knows in their head that it's the same stock, just /2, the price crawls back toward the pre-split price a bit faster than any economic or financial information would account for.

Same kind of thing for a reverse split, but in reverse and maybe worsened by the fact that it's often used to put lipstick on a pig.

More signs of the insanity in the markets

https://www.forbes.com/sites/lcarrel/2020/08/21/tesla-shares-surge-49-since-announcing-stock-split/#3396395e26e5

 

[Cheeseweasel 26438]

What happens when Tesla faces competition? No way they can support that valuation forever. 

[Sgt Hulk 13711]

Came in to ask about Apple after the split.  See it’s been discussed. Thanks.  I bought after the last split because it was affordable and I know fractional shares now. But I like my fractions to buy more than before lol.  Seeing Tesla makes my stomach turn. There is no rhyme or reason to be that high 

Edited August 24, 2020 by Sgt Hulk

[Nice Guy Eddie 13499]

What are rules and work-arounds to funding a minor's IRA? I don't believe you can just put 6K in a kid's IRA from your own account.

I've read the expected return for a 65 year old for a dollar they put into their retirement at 21 or 25. Can't imagine what that would be for a 16 year old.  I doubt the average teenager would even remotely appreciate the gesture but their future self will thank their parents for starting the ball rolling.

[Errestaurants 2570]

29 minutes ago, CooterBrown said:

Yep. That's about the only way you can become one of those legends who became a millionaire off a $10,000 initial investment. 

200 shares of apple purchased in 2009 would of cost roughly 4k. That 200 shares would be 5600 shares starting tomorrow morning. 

7-1 split in 2014 and today's 4-1 split. 

[Cheeseweasel 26438]

12 minutes ago, Errestaurants said:

200 shares of apple purchased in 2009 would of cost roughly 4k. That 200 shares would be 5600 shares starting tomorrow morning. 

7-1 split in 2014 and today's 4-1 split. 

No Hold. Only Sell. Stonks.

[TwiceHorn 31416]

24 minutes ago, Nice Guy Eddie said:

What are rules and work-arounds to funding a minor's IRA? I don't believe you can just put 6K in a kid's IRA from your own account.

I've read the expected return for a 65 year old for a dollar they put into their retirement at 21 or 25. Can't imagine what that would be for a 16 year old.  I doubt the average teenager would even remotely appreciate the gesture but their future self will thank their parents for starting the ball rolling.

The main problem is that an IRA must be funded from earned income.  Most kids don't earn much.

When I started earning significant income with summer engineering jobs, my Mom put the max allowable into an IRA for me.  It was really their money, I got to "keep" my earnings.  But it was having reportable/reported earnings that made it possible.

And, even though it was gratuitous, it made an impact on me as far as the importance of saving.

Edited August 24, 2020 by TwiceHorn

[Okie State 3801]

Some great ideas above on getting the kids into investing and saving. For those doing this did you just setup additional bank accounts? A Custodial brokerage account? Roth?

I just opened a custodial account through Schwab. Haven't really explored the investment options yet.

[Blotto 23478]

9 minutes ago, Cheeseweasel said:

What happens when Tesla faces competition? No way they can support that valuation forever. 

Well, one thing that will happen is they wont be able to sell nearly as many carbon credits, which is the only way they have ever sniffed a profit. Without that "revenue",  they are a pretty solid money losing company. Making cars is a low margin business. Once Toyota, Ford, VW, etc... are all making EVs their multiples will have to converge. But for now, they can keep up the mirage because they are the only game going. 

[Cheeseweasel 26438]

15 minutes ago, Blotto said:

Well, one thing that will happen is they wont be able to sell nearly as many carbon credits, which is the only way they have ever sniffed a profit. Without that "revenue",  they are a pretty solid money losing company. Making cars is a low margin business. Once Toyota, Ford, VW, etc... are all making EVs their multiples will have to converge. But for now, they can keep up the mirage because they are the only game going. 

Again, I wish I had the balls to short that thing. Imagine if Buffet or someone with major cash shorted a decent % of their stock.

[Blotto 23478]

2 hours ago, Cheeseweasel said:

Again, I wish I had the balls to short that thing. Imagine if Buffet or someone with major cash shorted a decent % of their stock.

That is one area where the stock split helps. I would never short TSLA because I have no fucking clue how high it can go, but I have occasionally entertained long dated puts. Problem is the premiums. Today while trading around~$2000, the premium on a $1500 put for January 2021 strike date is $340.00. I just randomly picked that strike (25% downside) but fuck $34K to purchase one options contract. You can buy fractional shares of TSLA, but not fractional puts. At least the split will significantly lower the entry cost of puts. But even then it seems like another 2 years before they really have the type of competition that drastically alters their financials, so its probably  too early to bet against them. At some point I will, but not now. 

[hornbri 1384]

8 hours ago, Errestaurants said:

200 shares of apple purchased in 2009 would of cost roughly 4k. That 200 shares would be 5600 shares starting tomorrow morning. 

7-1 split in 2014 and today's 4-1 split. 

Next week - split is effective 8/31 

[bluto 4908]

Any guesses? Neg rates?

[hornbri 1384]

20 minutes ago, bluto said:

 

 

Any guesses? Neg rates?

 

The article indicates they are going to let inflation rates go above target for a period of time. 

[T’Boo Ted Marshall 2730]

Some great ideas above on getting the kids into investing and saving. For those doing this did you just setup additional bank accounts? A Custodial brokerage account? Roth?

My kids have accounts with Fidelity and have been in FSMEX since I deposited their $2500 each to start. I showed them the balance the other day and they couldn’t believe it. They are 7 and 5.

They’ve also got savings accounts that any gift money from grandparents goes too. Each are around another $2000.

They have chores on a list and if they do them all they get $1 a day. If they don’t do them all they only get .25 a day.

When church was going they would give weekly and save most of the rest.

[52-80 19137]

6 hours ago, bluto said:

 

 

Any guesses? Neg rates?

 

He's going to securitize the national debt and sell it.  Hamburger backed securities.

[Fudge Nuggets 19170]

Saw a headline that said futures up because of progress on a China trade deal.  Really?  How many times are they going to trot out that same old bullshit?

 

 

[Wally Fairway 5536]

30 minutes ago, Fudge Nuggets said:

Saw a headline that said futures up because of progress on a China trade deal.  Really?  How many times are they going to trot out that same old bullshit?

 

 

Edited August 25, 2020 by Wally Fairway
let's see if this works???

[Cheeseweasel 26438]

11 hours ago, bluto said:

Any guesses? Neg rates?

 

Apple is buying the Fed. Instead of BRRRRRRRRRRRRRRRRRTTTTTTTTTTTTTTT it will be digital currency manipulation. We'll need a new sound. Beeeeeeewuuuuuuop?

[washparkhorn 9939]

Inflation targeting focuses monetary policy at preventing crippling deflation. It is not a new concept. TLDR - it is a tool used to combat deflation. Barrons:

Fed’s Powell Might Talk Up ‘Average Inflation Targeting’—But It’s Not a New Policy Concept - Matthew C. KleinAug. 25, 2020 11:13 am ET

Spoiler

When Federal Reserve Chairman Jerome Powell opens the Kansas City Fed’s annual gathering of global central bankers and economists on Thursday, some observers expect a “historic” and “profoundly consequential” unveiling of new policy thinking on inflation targeting. 

But Powell’s speech—the culmination of a project that began almost two years ago when the Fed pledged to “conduct a broad review of the strategy, tools, and communication practices it uses”—probably won’t deliver much beyond what had already become standard practice before the emergence of the coronavirus. 

Nor will Powell’s speech likely be used to make news with new plans for boosting the economy. So far during the pandemic, the Fed has been perfectly willing to act when necessary without regard for its formal meeting schedule—cutting rates twice between meetings as well as launching a host of crisis-era programs and new facilities to keep markets and businesses functioning. 

Instead, the likeliest refinement to be laid out in the speech is a formal endorsement of “average inflation targeting,” an idea devised a couple of years ago by Thomas Mertens and John Williams of the Federal Reserve Bank of New York. Indeed, according to the minutes of the Fed’s Open Market Committee’s July 28-29 meeting, the policy review review is likely to lead only to refinements of the Fed’s existing “Statement on Longer-Run Goals and Monetary Policy Strategy.”

Currently, the statement says that the Fed wants consumer prices to rise about 2% each year. Temporary misses in either direction are fine as long as the underlying trend is stable, which is why the Fed tries to “look through” one-off events such as a spike in oil prices or the introduction of unlimited mobile-data plans. The theoretical justification is that the overshoots and undershoots are supposed to cancel each other out over time.

But almost all the “transient” forces over the past decade have pushed in the same direction: down. The result is that the Fed’s preferred inflation gauge grew at a yearly average rate of just 1.5% from the start of 2010 until the pandemic. 

The problem is that this experience has led consumers and businesses to lower their long-term inflation expectations. The danger is that every subsequent downturn leads to further slowdowns in trend inflation until the Fed eventually finds itself in a situation where the “neutral” short-term interest rate is below zero, at which point it becomes almost impossible to do monetary policy.

The Mertens-Williams solution is to let the economy run hot whenever possible to offset all the times when prices rise too slowly. In practice, that means an inflation target of something closer to 2.25% when the economy is doing OK. Whether the Fed can succeed in hitting that target, the announcement of the policy would be a small concession to the reality that the Fed can’t keep inflation up when the economy slows.

As it happens, Fed officials spent all of 2018 hoping inflation would be faster than 2% in 2019 and 2020. That forecast failed—in part because Fed officials overestimated the economy’s underlying strength and tightened policy too much—but even by the end of 2019, America’s central bankers were still aiming for inflation to exceed 2% in 2021 and 2022. Their willingness to tolerate slightly faster inflation also explains why they were willing to let the jobless rate drop well below officials’ estimate of its “longer run” level. (The latest projections are for inflation to undershoot severely, which suggests some ambivalence about the new approach.)

Adopting average inflation targeting would be the opposite of the Fed’s approach in the 1980s and early 1990s. Back then, the goal was to bring trend inflation as low as possible by “opportunistically” using economic downturns to push down inflation expectations. By the late 1990s, the Fed was stuck with the opposite problem and has been worried about disinflation almost consistently ever since. 

It would be amusing if Powell takes the Fed full circle and formally reverses the legacy of former Fed chiefs Paul Volcker and Alan Greenspan this week. But it wouldn’t be a big change from what the Fed has been doing for the past couple of years.

https://www.barrons.com/articles/feds-powell-might-talk-up-average-inflation-targetingbut-its-not-a-new-policy-concept-51598368409

 

[Wally Fairway 5536]

Market cap weighting - what does that get you?
Are you getting diverse exposure by getting into an S&P 500 fund?

I've known for quite a while that market cap weighting pushes more and more money into the largest companies, but I didn't realize how drastic it was until doing some quick "research"

Top 5 highest market cap companies -
AAPL, AMZN, MSFT, GOOGL, and FB are worth more than $7 trillion
The S&P 500 is total market cap is about $27 trillion, so the remaining 490+ companies are just under 3x the market cap of the top 5
JNJ is the largest non-tech companies are BRK at $500 billion, VISA at $440 billion, JNJ at $400 billion, etc
Just for comparison - TSLA, which is skyrocketing, has a cap of $375 billion, which has increased about 4X this year

And by comparison the Russell 2000 has a market cap of about $1.9 trillion - makes me realize it is truly like looking for a needle in a haystack.

Investing (not #stonking) has become a TINA/FOMO decision - interest rates are effectively at 0%, weekly/monthly 401k type money has to go somewhere, there is still money on the sidelines but it has to be just waiting for a correction/crash, so most money going into the market is headed to AAMGF