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    Spotify Files for IPO Investing

    March 01, 2018

    Spotify Files for IPO Investing

    Spotify Files for IPO

    Posted: 28 Feb 2018 11:30 AM PST

    China's housing bubble - a repeat of 2008?

    Posted: 01 Mar 2018 01:08 AM PST

    China is has been experiencing an unprecedented property boom, with people buying multiple bare concrete apartments all over the country, with little hope to actually rent them out in the near future. This is leading to a boom cycle with a very obvious end. What happens to the world economy when this starts falling over? Given China's current capital outflows, will this suddenly dry up? Will it increase? What will happen to overheated housing markets all over the world which is currently being propped up by Chinese investment?

    Something closer to home for me, and something that is perhaps overlooked in all this, is the impact on Australia. Much of Australia's economy is driven by mining for building and construction. While this has taken a big hit in recent years, there is a perception of stability and even some optimism creeping back in. If China's property boom turns to bust, Australia is going to be one of the worst hit.

    Crosspost from /r/bestof: https://www.reddit.com/r/bestof/comments/811li4/user_explains_how_chinas_economy_is_set_up_for_a/

    From this comment: https://www.reddit.com/r/news/comments/80xs1v/china_bans_george_orwells_animal_farm_as_xi/duzfoko/

    Discussing this article: https://www.forbes.com/sites/sarahsu/2018/02/26/chinas-household-debt-a-growing-concern-amid-rising-home-prices/#538a2642180d

    Bonus: Ray Dalio, someone who predicted and profited off the '08 collapse talking about the situation in China today: https://www.bloomberg.com/news/videos/2018-02-27/dalio-excited-by-opening-up-of-china-capital-markets-video

    submitted by /u/Gareth321
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    If you could get 4.5% guaranteed, would you bail out of the stock market?

    Posted: 28 Feb 2018 06:11 AM PST

    They say the market is overheated and overvalued. Get out now! (the experts say)

    My wife and I are in our early 60s and semi-retired and financially independent. We can move all of our 403B money to an investment that pays 4.5%. Not a great return but it is guaranteed, and we would sleep at night not worrying about the next stock market crash.

    Would you sell everything in your IRA, 401K or 403B if you could get a guaranteed 4.5% for the rest of your life? If not, what guaranteed return would you need to move out of stocks?

    submitted by /u/KillingTime56
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    How much cold hard cash do you keep for an emergency fund?

    Posted: 28 Feb 2018 09:51 AM PST

    Also, when do you leave for work and do you have a dog?

    submitted by /u/cheesehaed47
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    Bill Ackman Cedes Herbalife Fight, Ending Five-Year Saga

    Posted: 28 Feb 2018 11:50 AM PST

    https://www.bloomberg.com/news/articles/2018-02-28/ackman-is-said-to-cede-herbalife-fight-ending-five-year-saga

    Bill Ackman has almost entirely exited his position in Herbalife Ltd., ending a short-selling campaign that lasted more than five years, according to a person familiar with the matter. The move follows a steady rise in the shares of a company that he repeatedly called an illegal pyramid scheme and vowed to destroy.

    submitted by /u/COMPUTER1313
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    What happened last time when market was so pessimistic regarding future interests rate?

    Posted: 28 Feb 2018 11:26 PM PST

    i'm pretty new, only a year experience in the equity market. I am actually from Asia and people in the investing forum are panicking like crazy due to the hawkish statement from the FED. On the other hand, I do not get what is there be panicking about.

    submitted by /u/TimLEarn
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    The case for Multifamily as the Best Asset Class to Invest

    Posted: 28 Feb 2018 05:13 PM PST

    Over the past year, I have been on a quest to find the king of all investments. My goal was to find a way to replace my job income so that I would have more time to pursue my passions. I have concluded that multifamily real estate (apartment investing) is the best investment vehicle to accomplish this goal.

    Here are the reasons:

    1. Strong Passive Income - You can find deals that pay on average 8% or more annually in cash flow. Think of this like a dividend payment from a stock. The rate also keeps up with inflation as rents increase. 8% would be a fantastic dividend rate by itself but that is just the beginning.

    2. Equity Buildup - Your renters are paying off the mortgage and increasing your equity as you hold the property. You may be able to cash this equity out either through a refinance or sale of the property, further boosting your returns.

    3. Value Creation - You can add more value by increasing the income of the property. Unlike residential home prices, commercial properties are valued by their income. If you find a property where you can increase rents or operate more efficiently, you have further increased the value when you sell or refinance. The total return (#1-#3) can potentially be 15-20% annually or more.

    4. Potential for Local Appreciation - If you buy in a location that appreciates over time, this will also further your return. This is similar to a stock increasing in price just because other stocks in the same market sector are increasing. This is hard to predict and even harder to control. This is why I don't like investing in single family homes. I prefer multifamily because income is a big component of valuation and you have more control over it. Since local appreciation can be more speculative, any benefit from this would be an added bonus.

    5. Tax Benefits - You can get tax advantages in real estate that you could not get with stocks. First, you get a deduction on the property depreciation. Depreciation is not a real cash expense. However, it can be used to deduct from your tax bill on real income. Thus, you pay taxes on only a portion of the income proceeds that you receive. Compare this to a stock where if you get a dividend, you would have to pay taxes on the entire dividend. Second, when you sell the property, you can do a 1031 exchange and defer paying capital gains indefinitely if you continue to buy other property. Compare this to a stock where you have to pay capital gains tax on the sale regardless of whether or not you use the proceeds to buy another stock. Finally, if your property has built up equity over time and you don't want to sell, you can always refinance the property and pull the proceeds out tax-free since this would be considered a loan and not an income. Since the rental income is paying off the mortgage (#2), you can repeat this strategy over and over again and avoid paying taxes.

    6. Favorable Market Trends - The U.S. market is shifting in favor of renting versus owning a home. Millennials are driving much of this change as they look for affordability, convenience, and freedom. On the other end of the spectrum, Baby Boomers are nearing retirement and will likely look to the rental market for downsizing and convenience. Another major trend is the displacement of various industries by new technology. I believe even certain types of real estate like office buildings, shopping centers, and malls are at risk due to advancements in technology. I like multifamily long term because people will always need a place to live.

    submitted by /u/lukemchung
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    Several years ago, many people recommended buying GE. What was the rationale back then in light of GE's performance today?

    Posted: 28 Feb 2018 08:30 AM PST

    As we all know, GE has lost more than 50% of its value in about the past year.

    Even as recently as over two years ago, many people recommended buying and holding GE. They cited the dividend, GE's specialized goods (aircraft engines, MRI machines), the fact that it's been around for over 100 years, and its blue chip status.

    Obviously GE has issues that are visible today. Did Immelt intentionally hide these issues?

    submitted by /u/booze_allen
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    Does anyone have a free website or App that gives the most recent price targets/slashes

    Posted: 28 Feb 2018 04:07 PM PST

    Similar to bloomberg terminal

    submitted by /u/Hiei155
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    How does SharePost 100 Fund work?

    Posted: 28 Feb 2018 04:35 PM PST

    I'm a sciences grad student and know little about investing. My family's 'financial guy' has a good sum of my money in this SharePost Fund. I know they own a fair amount of Spotify stock so I was wondering what Spotify going public will do to SharePost portfolio? Is it good for these type of funds like SharePost when their holdings go public? I thought someone here would be able to give a little insight, I looked around their site but just don't understand investing much. I just throw a few thousands around in an trade account for fun, not hardcore investing, I leave that to the 'financial guy.' Thanks!

    https://sharespost.com/sharespost-100-fund/

    submitted by /u/Guanine_Cytosine
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    If interest rates rise, which stocks will it affect the most?

    Posted: 01 Mar 2018 02:54 AM PST

    What will happen to bank stocks?

    Also, gun to you head, how would you make the most profit off of the following scenarios-

    1) That interest rates will rise, and that democrats will win the midterm elections and will increase deficits by increasing spending

    2) The FED enacts 2.5% yield cap (like they did in world war 2) before the mid term elections

    3) 30 year yield surges above 5% after mid term elections

    You can talk about buying/selling whatever you want. Be creative. (If non creative suggestions are better then dont be creative).

    submitted by /u/KarmaKingKong
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    Newsletters

    Posted: 28 Feb 2018 10:46 PM PST

    I need some solid newsletters that are sent to your email daily, weekly, monthly. Any suggestions?

    submitted by /u/22oregon22
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    Can anyone explain why Papa John’s ($PZZA) stocks went up ~3% after a subpar ER and cutting ties with one of its biggest partners, NFL?

    Posted: 28 Feb 2018 05:32 PM PST

    How much of my portfolio should I keep in shorts/hedging/etc?

    Posted: 28 Feb 2018 09:37 PM PST

    My taxable accounts have about $150k in them through diversified ETFs. Everything I've read says to hedge your bets with small positions in short funds like SDS. Right now I have about $5k in SDS.

    Here's the question- how much SDS do I need to make hedging worthwhile? I might see small gains in a market downturn but it doesn't come close to making up for the declines in my ETFs. Wouldn't I be better to not have any short positions and put that $5k back into normal funds?

    What is a good ratio to have, if any? I have about $10k cash in my account ready for any investment.

    submitted by /u/secondnameIA
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    Anyone familiar with National Realty? I hear their ads on satellite radio a lot.

    Posted: 28 Feb 2018 04:56 PM PST

    They talk about 20% returns. If the results were that good and the investment was as secure as they imply, they wouldn't be advertising for capital one investor at a time, they would be borrowing it and/or reinvesting all their gains, right?

    submitted by /u/CapeMOGuy
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    UPS?

    Posted: 28 Feb 2018 01:53 PM PST

    What do you all think of the company? Are we at a good entry price?

    submitted by /u/NonrestrictiveBroom
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    why is ray dalio shorting europe?

    Posted: 28 Feb 2018 05:57 AM PST

    Where to start?

    Posted: 28 Feb 2018 11:34 PM PST

    Where could I start to learn about stocks and investing? I guess I'm asking where I'd be able to find a jumping point

    submitted by /u/MyJobIsFake
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    Is anyone considering buying Dr. Pepper Snapple (DPS) for the Arbitrage Opportunity?

    Posted: 28 Feb 2018 11:21 AM PST

    First off, I suppose it's not technically an "arbitrage", as the final value of the deal is uncertain, due to the exchange of DPS shares for KDP shares. That said, I've been looking at the Merger Agreement, and the Investor Presentation, and in a tax advantaged account, I think there's a lot to like at the current share price of $116 for $DPS, if purchased in a tax-advantaged account.

    First of all, while there is risk that the merger will not go through, there's not a lot of reason to think it won't. The deal has already been approved by Dr. Pepper Snapple's board, and it is unlikely that a government body will step in to block this. With that in mind, recovery of $103.75 per share is highly likely.

    Then the question of KDP's value after the merger comes in. In order to break even on a pre-tax basis, shares of KDP would have to trade at $12.25. If the pro-forma estimated EPS of $1.27 is to be believed, that would mean shares of KDP would trade at 9.64x forward earnings, and have a dividend yield of 4.9%. For comparison, DPS shares pre-merger announcement were trading at 18.5x forward earnings and had a dividend yield of 2.42%. The newly merged company will be significantly leveraged, may or may not realize its cost saving synergies and could be subject to execution risk, but the $12.25 seems pessimistic to me. If the company trades in the neighborhood of Dr. Pepper's valuation post merger, then we're looking at a price per share of roughly $22-25. At $22 per share, that's a quick 8.4% gain before summer, as the deal is expected to close in Q2 of 2018.

    Buying in a taxable account, and if you are in a tax bracket that pays capital gains tax, that makes this seem less attractive, but in taxable account, there's limited downside for an easy way to get your hands on the new KDP entity - which is the closest thing you can get to buying into JAB at the moment.

    Anyone else taking a look at this, or seeing something I'm missing?

    Edit: After thinking on it a bit more, it seems the arbitrage is based on taxes. That $103.75 in cash is going to create a tax liability. Assuming a long-term capital gains tax rate of 15% (buy and hold for 60 days before and 60 days after the dividend is paid), which is probably most of the big money, then they would need the new KDP to trade at $27.82 to break even. That price isn't hard to imagine, but it certainly takes the margin of safety out of this thing.

    So, if you can avoid paying taxes, I think the structure of the deal, and mainly the huge dividend payment, is keeping big money from pricing this higher, and there's a margin of safety for small investors.

    Extra Edit: If I'm halfway right that the tax issue is keeping the price down, it's possible we'll see an even wider margin as we get closer to the ex-dividend date for that fat dividend. Paying marginal tax rates on that thing will result in an even bigger tax bill for most folks.

    submitted by /u/dying_to_be_vain
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    Fund merged with another, I want out while minimizing costs/fees/taxes

    Posted: 28 Feb 2018 06:38 PM PST

    I tried to search a little before asking this but didn't find answers related to my situation. My Waddell & Reed account that I've had forever merged into a Mid Cap Growth Fund with a 1.31% expense ratio, and I haven't been thrilled with the results or the companies in its portfolio. (Goes hand in hand I suppose).

    I know the tax avoidance when buying "like" stocks. But would I be able to move to a Vanguard ETF and still dodge taxes? If so, would it have to be a mid Cap ETF? Or do I get hit with capital gains and just have to reinvest wherever I want? If I get hit with taxes, I'd probably move it to my TD Ameritrade and buy individual stocks.

    Keep in mind I'm only talking about $5,000ish.

    submitted by /u/Jalubie
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    What will happen to Deutsche Bank shares after the IPO of DWS, their asset management business?

    Posted: 28 Feb 2018 05:52 PM PST

    Deutsche Bank plans to go ahead with the listing of its asset-management business DWS on the Frankfurt Exchange.

    What would happen to the DB stock on both the Frankfurt and NYSE? what kind of impact would the IPO have on the stocks and the options pricing?

    submitted by /u/MrMaisel
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    Mergers and Acquisitions Question

    Posted: 28 Feb 2018 05:46 PM PST

    Is there any notification platform that I could put a list of companies in to see alerts on merger or acquisition news?

    submitted by /u/llamalad26
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    Confusion about Mutual Fund Returns

    Posted: 28 Feb 2018 09:00 PM PST

    I have a question about mutual fund performance. Vanguard says VGHAX have had a return of 20% but the graph of the mutual fund shows a SLIGHT positive change in price / return over the past year. Why is this?

    https://i.imgur.com/cvRj9m1.png

    https://i.imgur.com/ujP2jsl.png

    submitted by /u/KingReset
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