Investing Talk
In the days of pandemics some people think about investing. I freely admit to being happy when the stock market tanks due to the "sale" opportunities. I am sorry to have missed the Thursday implosion but did park cash in my brokerage account yesterday for the next one.
What's everyone doing with this stock volatility? Continuing on their dollar cost 401K averaging or something else?
For all my boomer/Xer bruhs!
Not going to try and catch a falling knife. If I decide to invest it will be once the market has legitimate reasons to recover.
Buy low and sell high is not just a cliche.
The market was up 22% before this.
Even if it doesn't recover in a similar manner, there's still a shitton of money to be made.
It is very unlikely that you or I can predict the ups and downs of the market well enough to buy in at the right time and sell at the right time to make a bunch of money in the short term. The thing that makes a bunch of money is interest and time.
is it a great time to buy? Heck yes! If you have extra money put it in the S&P 500 but then WAIT on it for 20-30 years if you can. If you think you can drop in 10k now and pull it out in a month and make serious money then you are mistaken
Maybe it's that I started a year and a half ago, but in my experience it's been pretty easy to sell high and buy low. There's been a lot of volatility but as long as you can watch the prices during the day you make a lot more when you cash in your earnings.
If I had kept everything I'd be down a lot, instead I made 25% from Oct. 2018 to Dec. 2019 and now I can reinvest that while everything is down.
A 25% gain in that time period is more or less exactly the gain in the S&P and literally no buying and no selling in the intervening period would have yielded the same return. Congratulations.
And yes, you got lucky selling in December before the virus. Luck does not equal savant investing skills or advice, and over time trying to time the market is an almost guaranteed loss compared to an index. There's a reason dollar cost averaging is a thing for long-term investing.
That's not true at all. A lot of people make a lot of money day trading and other short-term trading. I merely dabble in this but make good money doing it. These big drops are where you can make even bigger money. Sure, it's risky. But just the other day I bought a bunch of shares of Pacific Gas and Energy at $9.00 then sold it the next day at $10.30. That's 14% in one day.
You're right that investing in long term companies is a good move (and I agree, nearly my entire retirement fund is in large cap equities and dividend ETFs), but that's not going to make a "bunch" of money unless you put in quite a bit. Short term trading (if you know what you're doing) can turn a little money into a bunch of money.
To answer the OP's question, I don't love the super risky stuff, but banks and oil companies are good buys right now. I bought RDS.A and WFC last week. The banks have really started bouncing back (WFC went up 13.5% on Friday) but the oil stocks are still low. The nice thing about Shell is that a) they make a lot of money on non-drilling stuff and b) their dividend pays over 10% on their current price so even if you keep it for a year and it doesn't go up, you'll make 10% on your money.
Any thoughts on future NIM compression and impacts on ROAA for WFC?
If oil stays in the 30s, how long until that dividend gets cut?
I don't really have answers for the Wells Fargo question, but I agree there are some question marks there but that didn't impact the stock price much before this past week.
As for the Shell dividend, they haven't lowered their dividend in a very, very long time and they are flush with cash (and their payout ratio is low) so I doubt they lower if. Even if they lower it 20% (which would be an enormous drop for a company like that) you're still getting an 8% yield on that money.
March 15th, 2020 at 12:12 AM ^
Oil and gas stocks are OK right now but I think in a couple years they will be dinosaurs on their way to extinction. Alternative energy (not talking about solar) is going to force its way to the mainstream market and dominate oil/gas. Alternative energy will be to the 2020's as computers and internet were to the 1980's and 1990's.
might drop some dough into Disney via etrade or something. Maybe Monday or tuesday
Had pondered something similar...may wanna wait til the end of the week. There may be increased uncertainty in service companies like Disney, cruise lines, airlines etc on when they will resume operations which should make their stock even more attractive.
Disney has a diversified business and people being home alot could help them in some ways but probably not enough to cover the hits to their mass consumer divisions.
Disney didn’t drop nearly as much as less diverse companies like united and carnival. I would go with one of those. Disney also launched Disney plus recently enough that this is probably helping the new subscriber rate.
Disney plus recently enough that this is probably helping
Not entirely. You can count on two fingers the number of streaming services that presently make money.
Would not recommend.
Check out their 10K. Parks are only a small fraction of their balance sheet. The other areas... media, networks, streaming, etc., are hurting and will continue to hurt for a while.
Any investment in Disney will be for very, very long term.
I made a little bit off of AHPI, but now I'm moving away from Coronavirus related stocks and just mostly buying VO which did well for me last year.
Where do you do your trading? I've been with Schwab for years and really like them.
I just started learning last year and I use Vanguard. Right now I read most of the stuff on reddit and by just studying the trends.
Buying bitcoin. And leaving my stocks alone long term. It hurts but time will heal the wounds. If it doesn’t then we have a bigger problem than my portfolio
If I had cash of any sort I'd be doing the 'trading places' routine ala Dan akroyd and Eddie Murphy and about ready to buy
but seeing as how I'm a hundred-aire I am already fully invested with both of my dollars.
I believe you might be richer than most, XM. My dad used to say that children and land were the true benchmarks of a wealthy man. He had twelve children and a nice farm (although his main income came as a college professor). Money is just a tool to use for the things that really matter.
we weren't blessed with 12 children though. that'd have been awesome. no wonder you're the homeschooling mom on the board.
This all day long.
I'm surrounded by fake, phony, people, sycophants shitting all over each other in their quest to make partner (and afford a wife and a GF). I'll put in about 20 hours in front of my computer this weekend to meet another in a long line of untenable deadlines.
My life pretty much sucks... This is what I busted my ass in college for?!?!?!?! I'd give my left one to say peace out and live XM's life and work with my hands again and do something meaningful. Salary is completely overrated as a metric of wealth.
stig, we could have a long talk about this and i'm not kidding. its your choice to do what you're doing. make different choices. i don't say it much, but mrs. XM was the one who was #1 in her law school class and working at one of the ultimate of fancy-pants, world's largest law firms. i was doing okay too, but living in socal. our courtship was based on the fact that we could (kind of had to, for safety reasons) make a go of it back home in the U.P. - she'd never been there before we met. i won't bore you with the long story, but suffice it to say, it has worked out incredibly well.
cast a vision. make it happen. you only get one shot at life. you working for some company that won't remember you 10 seconds after you're gone isn't what life is about.
XM is a wise man. I generally lay in the weeds here on mgoblog. And we all have our favorites....and, from what I observe XM seems to have his head screwed on pretty straight.
A wise man once said...you could take a good look at a butchers ass by sticking your head up there...but wouldn’t you rather take his word for it...
No I mean..you can get a good look at a tbone by sticking your head up a butchers ass by...no wait...it’s got to be your bull...
Nevermind...
March 15th, 2020 at 12:30 AM ^
I heard the wealthiest camel has the biggest hump. ?♂️
XM...whereabouts in da UP?? Family has property in trout Lake, I visit sugar island twice a year...and have snowmobiled all over the eastern end of it. Just curious...don’t have to give me exact town. I won’t show up..I promise ;)
our family roots in da UP go back to the 1850's. somewhere in there:
March 14th, 2020 at 10:24 PM ^
Odds are I’ve been near ya! Probably put some fuel in my sled at a local gas station.
Guess you guys have the “social distancing” down don’t you?
March 14th, 2020 at 10:56 PM ^
Find some Bullocks and Gustafson from Marquette and the Sault and I’m sure we have family or friends.
March 14th, 2020 at 11:31 PM ^
in the UP we're all what are called 'shirt tail relatives'. the degrees of separation, not so much.
March 14th, 2020 at 11:38 PM ^
So we are cousins. Not surprised.
March 15th, 2020 at 10:53 AM ^
double-D, it would seem that news for you should be prefixed by the phrase: we regret to inform you...
Thursday seemed like a day of extreme panic so I started buying. Picked up some Microsoft, Boeing and two others. They're likely to dip lower at some point, but it is impossible to predict the bottom.
Just curious about Boeing... what do you like about them that rated a buy for you?
It looks like a bargain right now but when I think considering:
* 777X integration problems
* DoD overruns on multiple projects (spacelift and 767/tanker especially)
* 737 wiring harness problems which is leading to certification problems/litigation
* And of course an extreme reluctance by EU and US regulators to pencil whip getting the MAX airborne
... do I want to get into BA right now?
Two things scare the shit out of me about BA presently:
1. They continued to build the MAX over the last 12 months or so. There are 400+ planes lined up in the Everett ramp and parking lot, old AF bases, Dallas, Victorville, yada, yada, yada... Check out recent Google Earth images of such places; it's telling.
Boeing assumed the software fix to MCAS and schmoozing regulartors would be a slam dunk so they kept the production line humming. Now, a year later, there's really no end in sight for getting airworthy again and the airlines are cancelling their orders outright. So for those 400+ planes sitting and collecting dust, some of them don't have an owner anymore.
Boeing won't admit it publicly, but they are likely looking at September before a MAX carries paying pax at the earliest.
2. Boeing just had to exercise $12 B of a 17$ B line of credit this quarter to keep the lights on.
What's your take?
My take is that the decision to move Boeing's HQ from engineer-centric Seattle to financial/bean counter-centric Chicago is one of the worst corporate decisions in the last 50 years of American business.
Yeah... absolutely. Plus how the engineers at Boeing let MD managers shit all over them in the merger.
Was just interested to see someone who thinks BA is a buy.
I'm a huge fan of aviation/aerospace in general, and if I had money to risk, I'd buy Boeing stock and sit on it.
Yeah, they've gone negative on orders and until we know the scale of the bailout that the airlines are going to get it's difficult to say what intermediate term capex will be so demand may take several years to recover. 2020 cash flow is going to be brutal.
Bottom line on Boeing is they continue to have weak and yet overconfident senior management which is the common thread across all of their (non-coronavirus) issues. Hope it works out for them and poster above but I can't think of a large cap stock I'd be less inclined to buy and hold for the next few years.
I received my Boeing stock dividend check last week. I can’t believe they are still paying the dividend while hemorrhaging cash. The management is focused on the short term stock price. If they suspended the dividend, the stock price would really tank, but so what? At the end of the day, the long term health of the business is more important than tomorrow’s share price. But instead of investing in the future, they are paying dividends and partaking in a massive share buyback program that does nothing more than prop up the share price that is tied to their bonuses. It’s disgusting.
Sling shot in the upward direction will rule the stock market. Might not be this coming week but sooner vs later. Lots of stimulus going into the economy including more Fed interest rates cuts. Market will take off like a rocket ship once the worst of this virus stuff is over. Consumer confidence will also reach new highs.
And it will happen with positivity like this!!!
You're insane. We're looking at damn near the entire economy grinding to a halt over the next month. Look at Italy and realize we're a couple weeks, maybe a month at best, behind where they are. France just closed their restaurants, cafes, and nightclubs.
As for interest rates, they're almost at zero already. The fed will add more liquidity, but that doesn't matter when demand collapses. And it will.
Everyone is whistling past the graveyard.
You're back!!!!
I was wondering if your Cali vacation turned into another episode of "The Hangover"
Ha! No such luck. That trip is scheduled for the end of May, and I fully expect it to be cancelled. At least Delta isn't being cunty about change fees or anything. Probably because they'll be asking for a bailout this year.
There's going to a massive number of restaurant failures. Seattle's a bit ahead of the curve on the response and in the suburbs revenues are down by at least 25% but in the downtown core revenues are down 90% in many instances so there have been dozens and dozens of closures for financial reasons in like a 2 week span. They can shut down and eat their fixed costs for a few months but many don't have the liquidity to float it and then you have to re-start up again anew.
I'm generally in agreement with your take but the FOMC positioning itself to sharpen the V on the recovery more so than ease the collapse.
Unfortunately .. this is the most likely scenario. Remember the economic shock after 9/11? This will be so much worse. We will ultimately be fine as we are the best/safest bet to invest in the world, but the next 6-12 months could be brutal.
"Market will take off like a rocket ship once the worst of this virus stuff is over. Consumer confidence will also reach new highs."
Just exactly when are you thinking this is going to take place?
May.
2021
May 2021 is a much more realistic scenario than upward slingshots happening any time soon.
I actually had a bit of foresight in Jan: redistributed the college 529 to a much more conservative portfolio.
future contributions are still aggressive but the past 10 years were shielded with that move in Jan.
overall lost about 7-8% this month but it could have been 20-25% as the market lost