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    Thursday, November 8, 2018

    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. 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.

    Posted: 07 Nov 2018 04:04 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

    • How old are you?
    • Are you employed/making income? How much?
    • What are your objectives with this money? (buy a house? Retirement savings?)
    • What is your risk tolerance? (Do you mind risking it at blackjack or do you need to know its 100% safe?)
    • What are you current holdings? (Do you already have exposure to specific funds and sectors?)
    • Any other assets? House paid off? Cars? Expensive girlfriend? (not really an asset)
    • What is your time horizon? Do you need this money next month? Next 20yrs?
    • Any big debts?
    • Any other relevant financial information will be useful to give you a proper 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!

    submitted by /u/AutoModerator
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    US now pumping more oil than Russia and Saudi Arabia

    Posted: 07 Nov 2018 03:16 PM PST

    U.S. oil production jumped to 11.6 million barrels a day last week, a fact that will not be lost on OPEC and its partner Russia when they meet over the weekend.

    An OPEC and non OPEC committee meets in Abu Dhabi and while ministers will not take action they could recommend a cut in production.

    U.S. production now surpasses that of both Russia and Saudi Arabia, which ramped up ahead of expected U.S. sanction on Iranian crude which took effect this week.

    https://www.cnbc.com/2018/11/07/us-pumps-more-oil-than-russia-and-saudi-arabia-opec-could-strike-back.html

    submitted by /u/NineteenEighty9
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    I Read The News So You Don't Have To - Market News (Nov. 07, 2018)

    Posted: 07 Nov 2018 04:36 AM PST

    UNITED STATES

    • Job openings missed expectations but remain near record highs (Actual 7,009 | Expected 7,085)
      • High demand for health care workers is a big cause for this
    • Inventory of unsold homes is at its highest rate since 2011
    • Democrats took control of the House while Republicans gained a few seats in the Senate to keep their majority
    • Futures point to a triple-digit gain for the DOW
      • historically stocks have performed well during periods of political gridlock
    • The Fed starts a two-day meeting with a decision on interest rates due by Thursday

    OTHER

    • German investigators raided the Munich office of BlackRock. Authorities are believed to be looking into a tax-avoidance scheme known as cum-ex
    • German manufacturing orders are down but not as much as expected (Actual -2.2% | Expected -2.8%)
    • Rising oil prices helped two controversial state-run oil giants.
      • Russia's Rosneft nearly tripled their profits while Brazil's Petrobras saw a 25-fold rise in net profits
        • However, crude oil and gasoline have been down sharply as of late
    • The Russian stock market is recovering after a sharp sell off
    • Unmployment rates in New Zealand were a nice surprise (Actual 3.9% | Expected 4.4%)
      • Wage growth was also better than expected (Actual 1.4% | Expected 0.8%)
    • Australian construction activity has seen a steep slowdown
    • Global business activity PMI points to a global slowdown in GDP growth

    CHINA

    submitted by /u/ogordained
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    I Copy-Pasted 'The Daily Shot' Newsletter So That Other Guy Didn't Have To - Market News (Nov. 8, 2018)

    Posted: 08 Nov 2018 12:18 AM PST

    UNITED STATES

    Equities

    • Health-insurer stocks rally as Democrats taking the House was seen as reducing the risk of Republicans being able to further weaken, or repeal Obamacare.
    • Bank shares are lagging amid concerns that Democrats will increase scrutiny on the sector.
    • Defense stocks underperformed.
    • Cannabis sector rallied thanks to legalization expansion and Jeff Sessions being forced from AG post.

    Rates

    • The yield curve flattened in response to a divided Congress.
    • Fixed-income markets may be complacent about inflation risks.
    • Rising mortgage rates are becoming a significant headwind for the housing market.

    Misc

    • There is $7.6k of student debt outstanding per each working-age person in the US.

    EMERGING MARKETS

    • Strong headwinds for EM capital flows due to Fed's quantitative tightening and higher rates.

    EUROPE & UK

    • Retail sales growth has been slowing.
    • UK housing market continues to cool.

    Newsletter by Lev Borodovsky for WSJ

    submitted by /u/ThugEntrancer
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    Robyn Denholm will replace Elon Musk as Tesla’s board chair

    Posted: 07 Nov 2018 10:28 PM PST

    On Wednesday, Tesla said Robyn Denholm will replace Elon Musk as Tesla's board chair.

    Tesla delivered its largest quarterly profit in the company's history in the third quarter of 2018, reporting about $6.8 billion in revenue and $312 million in profit for the period.

    Denholm, who has served on Tesla's board since 2014, will be leaving her role as CFO of Telstra to focus on Tesla full time.

    Thoughts?

    https://www.cnbc.com/2018/11/08/robyn-denholm-will-replace-elon-musk-as-teslas-board-chair.html

    submitted by /u/SteadyOperative
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    Can I ask my employer to pay some of my salary as a 401k match instead of cash?

    Posted: 07 Nov 2018 06:55 PM PST

    The maximum amount I can contribute to 401k individually is $18,500. However, my employer can contribute another $36,500.

    I maxed out my individual contribution for the year, and I'm at a high tax bracket. Can I ask my employer to pay me $36,500 as a 401k match instead of cash?

    submitted by /u/CautiousInvestor
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    Has anyone read Ray Dalio's Big Debt Crises?

    Posted: 08 Nov 2018 02:48 AM PST

    Is it worth reading? I don't want to read it in PDF or Kindle format, but the paperback is so expensive.

    submitted by /u/Manticorea
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    Is it fine to invest heavily into VOO/VTI?

    Posted: 07 Nov 2018 09:43 PM PST

    I am finally learning about investing, seems ETFs are highly recommended, especially the SP500 from Vanguard. I have read that VTI/VOO has similar growth rates, but it seems like VOO has grown faster in a shorter period of time. Perhaps I calculated it wrong, but it looks like they both grew around 250%, but VOO did it in 8 years, while VTI did that in 17 years. And some also recommend international stock ETFs, but it looks like they haven't grown that much since inception. For example VXUS started at $49 and is now only $51. If I just look at those two values, it looks almost like very minor growth for the past 7 years, while VOO has increased by around $150 in a similar time period. Is there more factors to consider?

    I'm looking at whether to choose VOO or VTI for the bulk of the ETFs. And then maybe a little of international. Would going 100% into VOO or VTI be fine? The goal is to hold the ETFs and continuing to add to them for the next 20-30 years.

    submitted by /u/zackz69
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    CTL earnings

    Posted: 07 Nov 2018 07:41 PM PST

    What do you guys think? A common company selling fiber just got hammered ZAYO. Idk I might sell.

    submitted by /u/ElonMuskIsAnAlien
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    Apple WANTED some investors to be mad with the end of Unit sales.

    Posted: 07 Nov 2018 08:23 AM PST

    Sounds crazy at first but think about it. The #1 goal with no longer reporting unit sales is so Apple investors no longer view Apple as a 100% hardware company. Apple wants to be know as a Software/Services company that also sells great hardware.

    1. Apple announces the end of Unit sales reporting. And do a real bad job at explaining it.

    2. This would anger investors who view Apple as a 100% hardware play. Causing this class of investors to sell their shares.

    3. Those who view Apple as an ecosystem/services play are not disturbed by the end of unit reporting. Because to these investors install base and services revenue per user is much more important.

    4. Stock takes a hit. This allows those who believe in the Services narrative to buy shares at a discount. Also allows Apple to buy more shares.

    5. Once all the 'hardware' investors are out of Apple the stock can form a strong base.

    6. In a couple years services revenue should be about 25-30% of revenues. That will easily justify a PE ratio of 25 versus 18 currently. That alone with buybacks could move the stock price to $400 in a couple of years.

    This was a really smart move by Apple.

    And this has been in the works for YEARS. Apple Watch was released over 3 years ago. And Apple has never released quarterly unit sales on Watch. My guess is they knew they were going to stop report unit sales for all product lines in the near future.

    Apple wants investors to focus on the Razor/Razor blade narrative. Apple sells Razors (iPhones) to a customer once every 2 or 3 years. But sells Razor blades (services) dozens of times a year. So even if Razor sells are down, the more important thing is Razor blade sales are growing. But this narrative would never gain ground if the majority of Apple investors view Apple primarily as a hardware company. Thus Apple is pulling the band-aid off. Current Apple investors can either change their investment thesis (Apple is now a services company) or sell their shares.

    submitted by /u/streetsofrageTWO
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    What are your hidden gem companies?

    Posted: 07 Nov 2018 07:32 PM PST

    Been looking over my watchlist over the past month and realized that even despite the small correction, I never found a price point attractive enough to enter in.

    Thus, I think I need to re-examine my watchlist. I had traditionally kept mostly SP500 companies on there because of the plethora of news and data that a retail investor has access to.

    But what small/mid-cap companies have you guys been following and would recommend a look at? I just need a fresh list to start looking through as I seem to be beating a dead horse currently.

    submitted by /u/teletwang99
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    Over the past month, there was an 80% chance the Dems would take the House. So why the big rally today?

    Posted: 07 Nov 2018 09:08 PM PST

    A top response from my thread on Sunday about the election results being priced in was, "if the chance of something happening is 80%, then it's only 80% priced in, and there's still the possibility of market movement as odds go from 80% to 100%."

    Ok, point taken. So let's apply that logic to today's rally.

    The market was up 2% today. That implies that the total market rally due to Dem victory was 10%, right? The market on Nov 1 was 8% higher than it would otherwise be, and then when a Dem victory got fully priced in, we got that 2% rally. Is that right?

    submitted by /u/Power80770M
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    Knowing when to hold or fold (Single Stock Question)

    Posted: 07 Nov 2018 07:43 PM PST

    This seems like a dumb question to ask so my apologies ahead of time, but what is r/investing's take on Ford right now? I'm holding a few shares at the moment, though I suspect I'm letting hope interfere with the obvious fate of it. Any folks holding out for a rebound, or am I holding onto a dead fish I need to toss over here?

    submitted by /u/DarkestDunge0n
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    "Gridlock is good" ?

    Posted: 07 Nov 2018 11:33 AM PST

    Read an article on MarketWatch that said the market will do well because "the likely inability of lawmakers and the president to accomplish much means politicians won't be able to do much harm nor to undo market-lifting measures already in place".

    Has anyone experienced this previously? I'm a new investor only 20 years old so I want to see if this actually plays out in practice, no just in theory.

    submitted by /u/seventhandgreen
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    Help me understand Iqiyi's financials

    Posted: 07 Nov 2018 12:25 PM PST

    I would like to know why Netflix has $0 in accounts receivable when IQ has nearly half a billion? What products are they delivering that haven't been paid for...? Or did they overstate earnings or understate liabilities and throw the difference in AR?

    submitted by /u/missedthecue
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    Are there any solid, legitimate peer-to-peer lending platforms out there?

    Posted: 07 Nov 2018 03:24 PM PST

    Looking to explore this avenue and lend some cash, but I'm worried about possible downsides and legalities that might allow someone to just walk away with the cash.

    submitted by /u/EbonixCo
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    difficulty understanding the spread and limit order

    Posted: 07 Nov 2018 10:44 PM PST

    I have difficulty understanding the spread and limit order in investment platform I've began to use, FxPro. Let's say the bid price of X is 20 and ask price of X is 30. If I place a buy limit order at price of 25, shouldn't the new bid price be 25? I've been trading in cryptocurrency exchanges for months and it worked that way the whole time, but in FxPro platform if I place a limit order at price of 25, the bid price posted is still 20, and my limit order never get filled. I wonder if this happens in other trading platforms as well. What is it about??? I have no idea!

    submitted by /u/eugenedo1206
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    Best day of profits so far - Post Election Stock Options

    Posted: 07 Nov 2018 10:31 PM PST

    I had 2 Twilio call options for the ER... thought they would do well because its all about expansion and it seems they still had room to grow. I was absolutely right. I sold when they were up 13 points in the morning... but it ended up 30 points by the end of the day.

    I took that money and bought an Amazon Call for 1,100 dollars about 30 min after the market opened. It was up maybe 25 or 26 points then. Wasn't expecting much... Shot up 115 points by the end of the day. Still have it... so I will probably see a slight sell off in the morning.

    I knew marijuana was going to spike due to the recent elections which voted in 2 states to legalize marijuana. So I bought several calls on Tilray TLRY. A Canadian marijuana company with only 9 million shares so it has volatility. What was a surprise was Jeff Sessions turning in his resignation. Signaling a buy for everyone on Marijuana stocks. TLRY spiked near the end of the day up 32 points.

    All in all... I made 340% from yesterdays market close to todays market close.

    I did buy a ROKU call for ER after market close... for fun. Looks like I lost that one for sure. Beat earnings but a weak forecast for this coming holiday sent it tanking. Also thought I lost on a TTWO call... but they had really bad numbers and tried to fix it by saying RDR2 sales are 18% above what they had predicted. So far... shot up 8 points but with the volatility loss... I would be lucky to turn out even on that one.

    submitted by /u/medicbtom
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    Short Harley Davidson Inc. (DD Inside)

    Posted: 07 Nov 2018 10:26 PM PST

    Ok, so this is my first time actually considering a long-term short on a stock and here is my argument:

    "Harley-Davidson international retail motorcycle sales were up 2.6 percent in the third quarter of 2018 compared to 2017 and U.S. retail sales were down 13.3 percent. Worldwide retail sales decreased by 7.8 percent."

    I believe there are multiple reasons for these declining sales (ofc this is represented in a significant downtrend in HOG):

    1: A Luxury Item

    Motorcycles have always been a luxury item, not a necessity such as a car. What I mean by this is that Motorcycles are not that practical when used as a primary mode of transport, causing them to be seen as a discretionary purchase, which is one of the first things cut from a budget during an economic downturn. Such as the one anticipated by economists within the next few years.

    2: A Loyal Consumer

    Their core group of consumers is getting older. What do you see when you picture a Harley Davidson owner? A 50-60-year-old white male with a leather jacket and an obnoxious beard, right? The younger generation is just not interested in Motorcycles like they used to be... or at least not in the monstrously fuel-inefficient models offered by HOG. They would be more interested in a faster, environmentally friendlier, sleeker and lighter Yamaha or Honda.

    Without capturing a younger generation of customers a company cannot survive, and currently, HOG has no real way of doing this. The barrier to entry is just too high: Think about it, to get into motorcycles you have to either rent or buy. Both of which are not an option to a broke millennial. The cost of renting a Harley for a day is $100 - $200, whereas the cheapest model you can currently buy is the Street 500 for $6,849 (MSRP)

    3: The Caucasian male

    HOG always has had issues capturing any demographic outside of the middle-aged Caucasian male group, which used to be a good thing, because of it promoting extreme brand-loyalty. Basically, their entire customer base is middle-aged white men who got into Harleys when they were 25, there are no real new customers flocking to HOG.

    HOG has 2 options here: One, they tailor their product to meet the demands of the younger generations, by designing more modern Motorcycles, doing ad-campaigns focused more on a younger mindset rather than the current corporate identity of "ALL FOR FREEDOM. FREEDOM FOR ALL." But this may cause disarray among their loyal fanbase, forcing them to lose that share of the market. Or two, they do nothing and continue slowly dying, thanks to their customer base retiring from riding.

    TL;DR Motorcycles are a luxury item that young people no longer want or can afford, with a loyal fanbase which is slowly retiring their Harleys.

    Discuss...

    (I'd be open to anyone to change my view. )

    submitted by /u/Versart
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    Am I just digging my heels into a poor decision by wanting to buy more GE stock?

    Posted: 07 Nov 2018 04:05 PM PST

    I bought GE stock when it was €12 now it's about €9. I'll be honest, even though I've read the Intelligent Investor, the temptation to pick a pet stock was too much and instead of putting everything in the index like a passive investor should, I placed a minority but decent chunk in AT&T and GE.

    Both have "lost" me money in that their price has fallen (the index has kept me even or slightly up though). However I see GE at 9 and I see their graph, imagining the gains if it bounced back. Is GE likely to just go bankrupt? How would I go about acquiring information about this sort of thing? What are your guys opinions on this company and if possible, could you show how you arrived at that conclusion?

    I think I have too much faith in bounce backs and see every dip as a buying opportunity. This was made worse when I saw Tesla drop like 6% when Elon Musk smoked a tiny bit of weed (I know two major board members stepped down too though) and go right back up. I feel the same way about Activision, this Diablo thing is an overreaction and it'll bounce. That quote about buying when others are fearful and selling when others are optimistic stuck hard, probably to the point of neglecting the actual financials.

    Maybe I'm more suited to short term things because I do enjoy browsing WSB but that's a dark path that will lead me to ruin.

    submitted by /u/LitrallyTitler
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    How would you look for a job as a value investor?

    Posted: 07 Nov 2018 11:04 AM PST

    If you wanted to do value investing as a career, how and where would you look for jobs?

    I'm betting there are tons of job listings for brokers and traders, but I don't imagine value investor comes up in the searches too often.

    submitted by /u/mastermascovich
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    Stock splits - mechanics question

    Posted: 07 Nov 2018 05:51 PM PST

    TJX just split and said investors would receive an additional share of stock if they held it on/before October 30th (record date). The split was effective November 6th.

    I see that the shares were traded between October 30 and now at the old share price. What happens to the people who bought shares between October 31 and November 6?

    submitted by /u/karakarafade
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    Etsy stock rallies on earnings beat. Third-quarter net income of $19.9 million

    Posted: 07 Nov 2018 07:21 AM PST

    Are market corrections always buying opportunities?

    Posted: 07 Nov 2018 02:25 PM PST

    Is a dip a true correction if the stock is still trading at a high valuation?

    As it is historically proven that buying low locks better returns long term, buying opportunities in periods of correction should only occur when the dip takes the price of a stock below its intrinsic value (or a reasonable P/E). That's at least my basic understanding.

    In today's high valuation market, is the average investor forced to rethink the definition of a dip and adapt a buying strategy accordingly? If so, are the recent corrections in the market indicative of a change in what 'buying low, selling high' used to mean?

    submitted by /u/yebidepoj
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