It's moronic Monday, the Wednesday edition, your chance to ask any of those questions that you're embarrassed to ask in real life. Investing |
- It's moronic Monday, the Wednesday edition, your chance to ask any of those questions that you're embarrassed to ask in real life.
- Amazon acquires Ring, the smart doorbell maker start-up
- REITS and their ridiculous yields...
- US Consumer Debt Levels Downplay Monthly Burdens on Consumers - Here is Why
- Daily advice thread. All questions about your personal situation should be asked here
- Is Google Travel going to destroy Expedia and Booking Holdings?
- Why is GOOG worth more than GOOGL now?
- ELI5 Powell's Testimony
- What do banks use Certificates of Deposit for?
- Cronos Group (CRON) is the first marijuana company to list in US markets.
- Inherited 200 shares in chevron (CVX) what should I do?
- Which is the best investing app for Europe?
- Effect of intra-day volume and next day's stock price ?
- Help, am I screwed? (taxes)
- Good time to buy US 30Y bonds?
- Vanguard Information and Technology ETF
- Insider buying at Hannon Armstrong Sustainable Infrastructure as CEO Jeffrey Eckel buys $284,100 of stock
- Sites that update company earnings relatively soon?
- What are the benefits of buying BRK.A opposed to BRK.B?
- Should I cut the loss, whats your opinion?
- Serious question for people with lots of money to invest
- ETF question
- Compared to the fears of regulation against FB or Goog, isn't it far more likely that NFLX will start facing fair usage charges from major internet providers?
- What do you consider a "good" dividend yield?
| Posted: 28 Feb 2018 04:05 AM PST We encourage all our visitors to ask those investing related questions they were always too afraid to ask. The members of /r/investing are here to answer and educate! NOTE If your question is "I have $10,000, what do I do?" or anything similar. There is no single answer to this question, but we will also need A LOT MORE information if we are to give some sort of answer
Be aware that these answers are just opinions of Redditors and should be used as a starting point for your research. You should strongly consider seeing a registered financial rep before making any financial decisions! [link] [comments]  |
| Amazon acquires Ring, the smart doorbell maker start-up Posted: 27 Feb 2018 01:46 PM PST |
| REITS and their ridiculous yields... Posted: 27 Feb 2018 11:51 AM PST There are REITS out there that do not perform too bad. They do not do great, but they're not very volatile and they are paying out ridiculous annual yields (they have to by law). What is the downside I am missing from owning some REITS that pay 15%+ annual dividends? You might do better from other stocks that appreciate in value, but that is only with the bull market we've had in the last few years. In the long term, are REITS as great of an investment as they seem, or are you better off putting your money somewhere else? Another question, how close are REITS to actual Real Estate investing as far as "Equity invested to payout" ratio? Thanks to anyone who takes the time to indulge my possibly dumb question. [link] [comments]  |
| US Consumer Debt Levels Downplay Monthly Burdens on Consumers - Here is Why Posted: 27 Feb 2018 03:58 PM PST Warning, this is a long post, but it's segmented and sourced at least So a little while back, I created a post discussing aggregate consumer debt, and how it might be something we should be worried about. There were some good discussions and good points brought up. The discussion was largely predicated on this graph seen here, which aggregates total consumer debt - https://www.newyorkfed.org/microeconomics/hhdc.html The Basic Issue With Our Current Debt... Debts Rising > Wages Rising = Bad, especially if that debt is higher than the time we went into a worldwide financial crisis due to debt. In 2008, the financial crisis was largely caused by a massive mortgage debt bubble. As a result of this, many people have been looking out for debt bubbles that hit across a singular sector. But my general thought is it doesn't really matter that much where the debt is coming from, it's a simple matter of the cumulative debt burden that is placed on each household that will cause issues in the economy. People have been trying to pin debt problems down to one sector, such as the auto loan bubble, or student loan bubble. But very few have mentioned that it's the aggregate debt that matters most, and small credit bubbles that occur across sectors can become very large when grouped together and added to other debts. I noticed that current consumer debt levels are past where they were pre-financial crisis and the pace is steepening. The real kicker is that this has been happening at a time where household wage growth has been relatively small, and only in the past 1-2 years rose past the average per-household level we saw in 2007-2008. The lack of wage growth is evident in the fact that the fed has been unsuccessfully trying to spur wage growth for years, since it would validate their inflation targets that they have had a very difficult time of meeting. The General Question at Hand... Basic logic would dictate that if wages have only grown minimally while consumer debts have grown substantially, isn't this going down a path that doesn't end well? Also, while mortgage debts haven't grown past where they were in 2008, other types of consumer credit (student loan debt, credit card debt, and auto loan debt) have shot total consumer credit past the aggregate debt levels seen pre-crisis. The other issue here is that mortgage debt tends to be the easiest to service, since mortgages tend to feature the longest term structure on average along with generally low interest rates. So if we are increasing shorter term debt that generally has a higher interest rate, this would probably put even more strain on the consumer, wouldn't it? Was There any Data That Validated These Issues? Beyond the basic theory crafting here, it seems like there have been some real issues showing up in consumer reports in the past year or so. Auto Loan defaults are beyond where they were before the financial crisis. Student loan defaults are above 11% and have been rising for a while. Credit card delinquencies have been rising. This all has taken place at a time where the consumer savings rate has been dropping near an all time low, and consumer credit card debt hit an all time high after a huge spike in November. But corporate earnings are great, so the economy must be good, right? ¯\_(ツ)_/¯ . The counter-argument to this of course could be that credit expansion has caused corporate earnings to look great. Who knows, this may not be the case, and that's somewhat of a separate discussion altogether so I don't want to side track the point of this post. Now, there are some reasonable arguments to be made that credit growth is due to consumers being more confident in the future of the economy, but consumer confidence frequently been a contrarian indicator that leads recessions, so I'm not sure this would make me feel better. Also, if this were consumers simply being more confident, why are we seeing the credit issues with student loans and auto loans? The Debt Servicing Problem So all the information that was previously mentioned looks like it checks out... The theory makes sense, the debt levels are real, and there are some issues showing up in consumers' ability to meet their debt obligations, so what is the problem? So in the previous post, there was a very interesting statistic brought up in that discussion by u/enginerd03 and a few others that seemed to refute everything that I brought up above. That stat was FED data on debt servicing, which basically shows consumers' ability to meet their debt payment obligations, which if you look at the data, looks quite rosy. You can see some fed data on debt servicing here: This threw me through a loop. Something in the logic completely doesn't add up here. How could debt servicing be so good here, while credit was expanding, some issues meeting obligations are starting to show up, all in a rising rate environment? My initial reaction was to literally say wtf... I assumed the data was right and there was something I was either missing completely, or I was simply wrong. The Missing Piece, and Why I think We May Be Underestimating Consumer Strain Recently, I think I found the missing piece. The devil is in the details here. If you look at the two above links, you'll notice that the top home payment debt servicing exclusively shows servicing for mortgages. The consumer debt servicing looks a good bit worse as it has been rising since 2012, possibly due to rising non-mortgage credit. With that said, neither of these look like they tell that great of a story considering that according to the second link, consumer debt servicing was worse before the 2001 tech crash than during and after the great recession. Regardless, it's relevant to understand how consumer debt is accounted by the fed. The fed charts here account for consumer debt by adding up mortgage debt, credit card debt, auto loan debt, and other small loans and revolving credit issued to consumers. Together, all of these debts account for a large majority of the fixed expenses that people pay on a monthly basis. With that said, they do not include one really important expense.... RENT. A Brief Rundown on How Rent Has Changed Things Rent as we all know, is a major fixed expense. In this regard, it's not all that different from a mortgage payment, with the exception that in the event of non-payment, the renter is not liable for the rest of the money owed, and will instead get evicted. I'll touch back on this in a short bit. So as everyone knows, the housing bubble busted, many people lost their homes, many speculators lost a ton of money, and the real estate market went bottom up. This resulted in the Dodd-Frank act passing, and much tighter lending conditions being enacted on people. The aforementioned factors led to a significant shift in how Americans pay for their housing. Instead of burdening themselves with excess liabilities, especially in the face of tighter lending conditions, Americans increasingly have decided to rent. There are other factors at play as well. Young Americans have had more and more difficulty mustering up the 20% downpayment that is generally needed to make a mortgage significantly more affordable. This can be attributed to many factors, but student loan debt and lack of wage growth in the middle class likely play in here (see how this is related?). Average rental price has grown significantly, going from around $1050 in 2007 to $1359 in 2017 (according to RentCafe ). This represents a 30% increase in monthly costs for rent. More importantly, the volume of renters has increased greatly since the financial crisis as a result of the factors mentioned above. Rentals as a percentage of households increased from 31% in 2006 to over 36% currently - see pew research article for more info. So while we have not seen the huge growth in debt in the housing sector of consumer debt, this is because it's being offset by enormous growth in renters. And the reason renters are renting more and buying less may be partially due to being squeezed in other areas of consumer debt, which makes it extremely tough to save enough $ for a home down payment. Rent vs. Mortgage Payments, not Apples to Oranges Yes, I know, rent is not the same as paying for a mortgage. You can't go bankrupt if you don't pay rent. With that said, rent is essentially a fixed cost for the majority of consumers that is essentially a basic requirement of living, so you can't just count it out of the equation of consumer cost burdens. Also, while rent is accounted for in consumer debt measurements by the FED or many other data researchers, it's highly relevant to state that the rent being paid by rentees goes to a landlord, who DOES pay a mortgage. This means that the debt burden is simply being passed from consumer debt to commercial debt in the statistics, which tends to skew things. And make no mistake, renters not being able to pay their rent will lead to landlords defaulting on their mortgages (although there is likely a bit more cushion here). I have seen mentions of a commercial debt bubble in the United States before, which could be related, but I haven't done much reading or delving into this topic to be able to comment on it. Revising the Data So what we really want to see is how consumers are being squeezed from a fixed cost perspective, which results in increased credit growth and increased inability to make payments. So what I did was take the data provided by the fed (total mortgage debt outstanding) and divided that by the amount of households in the United States. This provides us with an average of how much outstanding debt on average each household owes. I calculated households by taking US population and dividing it by the average person per household (generally around 2.6, but it has decreased a little bit since 2007). Naturally, average mortgage payment includes households that do not pay for mortgages at all, so it will look a little bit low in the chart below. Since I couldn't find data on this, I had to go with a very rough estimate on average monthly mortgage payment. So I took the average outstanding mortgage debt per household and put it into an amortization table estimating an average of 20 years left and a 4.5% interest rate. Clearly this isn't going to be perfect from a data perspective, but it is at least uniform throughout each year, and should provide a good snapshot comparison of the REAL costs of paying for a home are from 2007 to 2017. I then took the average rent payment (which I mentioned above) and averaged that out on a per-household basis, so that similar to mortgages, it accounted for the entire population of households and not just people who are renting. From there, I added the two together to get more of a REAL look into the average cost of paying for housing. It turns out that housing costs didn't drop nearly as much as we thought after the financial crisis, the costs just shifted more from mortgage expenses to rental expenses. edit: See the link below for the data I crunched. (anyone know how to format something as a table? would be nice to show it in the post) https://docs.google.com/spreadsheets/d/12CcrXh28zjfORDl5ENKIlVQXX-R1oid7Ak3JM4O1pxs/edit?usp=sharing Re-evaluating earlier data with new information So with the knowledge that more Americans are renting, and rental costs are increasing, if consumers are being squeezed, we should see more evictions, right? Well this turns out to be true and the obvious reasons why are also backed up with stats. Also, lets revisit that debt servicing chart from earlier (https://fred.stlouisfed.org/series/CDSP). It turns out that it's not so strange after all, we are getting pretty close to the range that we were in right before the markets crashed in both 2000/2001 as well as 2007/2008. And notice the dip in that chart after the great recession from around 2011 to 2015? That correlates strongly with the data in the table above, where housing payments were down slightly in that time frame. And similarly, the time frame from 2011 to 2015 which featured the lowest housing payment costs correlates well with an increase in personal savings rate, which is as of 2017/2018 near an all time low. Given, correlations do not = causation, but none of this is "good" in any manner. [link] [comments]  |
| Daily advice thread. All questions about your personal situation should be asked here Posted: 28 Feb 2018 04:05 AM PST If your question is "I have $10,000, what do I do?" or anything similar. There is no single answer to this question, but we will also need A LOT MORE information if we are to give some sort of answer
Be aware that these answers are just opinions of Redditors and should be used as a starting point for your research. You should strongly consider seeing a registered financial rep before making any financial decisions! [link] [comments]  |
| Is Google Travel going to destroy Expedia and Booking Holdings? Posted: 28 Feb 2018 03:35 AM PST Recent articles in Forbes (link below) and elsewhere about Google Flights Hotels and Maps sound worrying for other travel aggregators. This post is not a recommendation to buy or sell any security or derivative. Stocks are not suitable for all investors. Please do your own research. [link] [comments]  |
| Why is GOOG worth more than GOOGL now? Posted: 27 Feb 2018 11:28 AM PST The premium has been shrinking rapidly over the past few months but this is the first time I've seen it invert. Do voting rights just not matter anymore? [link] [comments]  |
| Posted: 27 Feb 2018 10:29 AM PST What were the key takeaways and opinions on rising interests rates? [link] [comments]  |
| What do banks use Certificates of Deposit for? Posted: 27 Feb 2018 11:45 AM PST |
| Cronos Group (CRON) is the first marijuana company to list in US markets. Posted: 27 Feb 2018 02:10 PM PST |
| Inherited 200 shares in chevron (CVX) what should I do? Posted: 27 Feb 2018 06:22 PM PST Recently inherited 200 shares of chevron (CVX) what should I do with it? Not active in the market. [link] [comments]  |
| Which is the best investing app for Europe? Posted: 28 Feb 2018 04:06 AM PST Which is the best investing app for Europe?is there anything like Robinhood but for Europe? [link] [comments]  |
| Effect of intra-day volume and next day's stock price ? Posted: 28 Feb 2018 03:54 AM PST |
| Posted: 27 Feb 2018 07:37 PM PST I use Robinhood for my buying and selling of stocks. Let's just say I own 4700 of xyz shares. Last year, I wanted to limited my exposure of that many shares and decided to sell 1700 but instead of selling I accidentally bought 1700 shares. I realized my mistake immediately and turned around and sold 3400 shares at the same price (the 1700 I intended of selling and the 1700 I accidentally bought). Robinhood uses First in and First Out method with stocks, it basically sold my 3400 of my oldest shares, and now IRS wants to tax the capital gains I made on it. Is there any way I can fight/repeal at least 1700 of my shares or am I screwed? [link] [comments]  |
| Good time to buy US 30Y bonds? Posted: 28 Feb 2018 02:26 AM PST It's at 143 right now. Can someone tell me how low it can go? (I expect yields to go up more than 5% if democrats take control and push the agenda away from tax reform to spending stimulus) [link] [comments]  |
| Vanguard Information and Technology ETF Posted: 27 Feb 2018 07:09 AM PST I've been watching this for a few days and I'm trying to decide if it is worth investing more into it or not? Aka, is this a hype bubble? None of their other funds are even remotely matching the growth. Am I missing something on it? [link] [comments]  |
| Posted: 28 Feb 2018 01:21 AM PST The stock is down over 10% since company reported a flat dividend and soft guidance last week. But medium term outlook is better for this clean energy REIT that has many partnerships with Federal govt and has many opportunities to benefit from increasing infrastructure budget. Yield of 7% looks attractive. CEO thinks so. This post is not a recommendation to buy or sell any security or derivative. Stocks are not suitable for all investors. Please do your own research. https://www.nasdaq.com/article/tuesday-227-insider-buying-report-hasi-lc-cm927576 Good article by Brad Thomas on Seeking Alpha. [link] [comments]  |
| Sites that update company earnings relatively soon? Posted: 28 Feb 2018 01:08 AM PST For example, WMT released earnings results on 20-02 but both Morningstar and Wall Street Journal haven't updated past the October quarter. I know I can just see the results for each individual company at their site, but is there some site you use that updates regularly and in a predictable fashion? PS I'm asking about GAAP earnings, what their income statement would show. Many sites just report the adjusted number. [link] [comments]  |
| What are the benefits of buying BRK.A opposed to BRK.B? Posted: 27 Feb 2018 05:26 PM PST BRK.A is significantly more expensive than BRK.B though both stocks experience very similar performance. What are the benefits to this? [link] [comments]  |
| Should I cut the loss, whats your opinion? Posted: 27 Feb 2018 05:59 PM PST
I recently read that when purchasing LEAPS I should consider LEAPS thats at 20% or less of the stock price "in-the-money".. I've always though that when purchasing LEAPS the strike price would be higher than the stock price? I currently own 30 contracts of BABA Jun 15 2018 $220 calls and down about 51%. Towards the end of January I was up around 40% but since I was so far from my expiration I decided to hold thinking I could make more gains. Should I just cut the loss on the 50%? From my understanding the closer I get to expiration the more I can lose? [link] [comments]  |
| Serious question for people with lots of money to invest Posted: 27 Feb 2018 12:57 PM PST How do you go about investing your money knowing that most brokers only cover you for fairly low amounts? Here in the UK most brokers only cover up to 50K under Financial Services Compensation Scheme, but that is not very much. I've seen someone here a while ago with a portfolio of 1 million USD. How can you keep all that money with one broker? Wouldn't you lose a lot in case they go bust? [link] [comments]  |
| Posted: 27 Feb 2018 11:19 PM PST Is there any ETF that are priced below their underlying securities value in the stock market? if so, why is it? [link] [comments]  |
| Posted: 27 Feb 2018 11:16 PM PST Those guys account for nearly half of all peak internet traffic in the US. The telecom companies (Some of whom dabble in content distribution of their own) aren't going to continue to subsidise their growth at the cost of increased load on their infrastructure. [link] [comments]  |
| What do you consider a "good" dividend yield? Posted: 27 Feb 2018 12:16 PM PST Never really focused in on companies into that provide dividends but what do y'all think is a good dividend yield %? This is something I want to start accumulating more of in my portfolio over time (currently holding MSFT as my only dividend yielding stock). [link] [comments]  |
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