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    Home Unlabelled Dow dives 400 points, heads for worst week in 10 years Investing

    Dow dives 400 points, heads for worst week in 10 years Investing

    December 22, 2018

    Dow dives 400 points, heads for worst week in 10 years Investing

    Dow dives 400 points, heads for worst week in 10 years

    Posted: 21 Dec 2018 12:31 PM PST

    Trump Discusses Firing Fed's Powell After Latest Rate Hike

    Posted: 21 Dec 2018 09:14 PM PST

    https://www.bloomberg.com/news/articles/2018-12-22/trump-said-to-discuss-firing-fed-s-powell-after-latest-rate-hike?srnd=premium

    President Donald Trump has discussed firing Federal Reserve Chairman Jerome Powell as his frustration with the central bank chief intensified following this week's interest-rate increase and months of stock-market losses, according to four people familiar with the matter.

    Advisers close to Trump aren't convinced he would move against Powell and are hoping that the president's latest bout of anger will dissipate over the holidays, the people said on condition of anonymity. Some of Trump's advisers have warned him that firing Powell would be a disastrous move.

    Yet the president has talked privately about firing Powell many times in the past few days, said two of the people.

    It's unclear how much legal authority the president has to fire Powell. The Federal Reserve Act says governors may be "removed for cause by the President." Since the chairman is also a governor, that presumably extends to him or her, but the rules around firing the leader are legally ambiguous, as Peter Conti-Brown of the University of Pennsylvania notes in his book on Fed independence.

    submitted by /u/COMPUTER1313
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    I Read The News So You Don't Have To - Market News (Dec. 21, 2018)

    Posted: 21 Dec 2018 04:31 AM PST

    UNITED STATES

    • Futures are down this morning in the US and global stocks are falling as well
    • Budget discussions took a sharp turn and it now looks like the government will indeed shutdown tomorrow unless $5bn are allocated to build a border wall
    • Data from the Philly Fed shows regional manufacturing activity slowing and "hours worked" reversing course to 2016 levels
      • New Orders and Expected Investments are holding steady though

    OTHER

    • The Bank of England reduced Q4 growth forecasts from 0.3% to 0.2% for the British economy
    • UK Retail Sales came in strong (Expected 2.3% | Actual 3.8%)
    • A court in Germany is making Apple stop selling certain iPhones after finding that they infringed on Qualcomm patents
    • Oil continues to get battered with the price of Brent Crude falling below $55/barrel
    • The Malaysian government wants $7.2bn from Goldman Sachs for their involvment in the 1MDB corruption scandal
    • Carlos Ghosn was rearrested amid suspicion that he shifted $16 million in personal losses to Nissan

    CHINA

    • The gap between Chinese stock underperformance and US stocks is narrowing
      • US stocks have underperformed Chinese shares since the end of October
    • The South China Morning Post is bullish on American stocks
    • Charges have been filed by the US against two Chinese citizens for their role in a campaign to steal information from US businesses and the government

    \This will be my last time reading the news for you until Dec. 27 - Happy Holidays* 🎅

    submitted by /u/ogordained
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    Jim Cramer is acting like he predicted the 2008 meltdown, so time to remind people just how hard Jon Stewart kicked his ass for missing it back then. Roll 212!

    Posted: 21 Dec 2018 08:05 AM PST

    The fact that "Roll 212" has entered the lexicon is all that really needs to be said. Sadly, most of the video has been scrubbed from the web. (tinfoil hat time)

    https://www.npr.org/templates/story/story.php?storyId=101888064

    Edit: Really investor dudes/dudettes? Can't remember what happened? Think that Cramer didn't recommend Bear Stearns?

    To be fair, a lot of the Jon Stewart video was removed. I assume that's because CNBC has pull with the rest of Viacom. But some of us remember Cramer and the Bear Stearns recommendation just a couple of weeks before BS melted down completely:

    https://www.youtube.com/watch?v=Qa50zFAdpto&t=0m46s

    Does anyone else remember the picture of the $2 bill on the revolving door on the day when BS was purchased?

    submitted by /u/jpdoctor
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    You are only allowed to be concerned about the markets right now if you are

    Posted: 22 Dec 2018 12:51 AM PST

    • Retired
    • Spending from your portfolio
    • Have a financial plan that assumes zero bear markets during your lifetime.

    (credits: https://twitter.com/BasonAsset/status/1076237378455363584)

    I have seen a rise of young investors on this sub starting to panic so let that be a good reminder. Things can go worst from here or better. No one knows. Think long term folks.

    submitted by /u/finca3eo
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    AMZN trading 15x 2019E EBITDA - value buy for a growth company?

    Posted: 21 Dec 2018 10:46 PM PST

    I am still not confident I can properly value a growth company. As the title says, they are right now at 15x 2019E EBITDA which seems reasonabl'ish to me but again I would like to read what you folks think of that? still too expensive?

    submitted by /u/crosmaxal
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    My Google shares turned 10 years old this month!

    Posted: 21 Dec 2018 12:57 PM PST

    Truthfully, this doesn't mean anything, but it feels like a big accomplishment. I try to keep my portfolio turnover as low as I possibly can, and it feels good to continue keeping that theme.

    In December 2008, I bought Google. Since then, I have only sold one share, earlier this year, as part of a portfolio adjustment.

    It's not my best performing investment, or my longest holding, but it's the one I've traded the least.

    Let's hope the ongoing market meltdown produces another investment idea that's worth 10 more years!

    submitted by /u/MartholomewMind
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    Will big tech companies be impacted by recent "Scandals"?

    Posted: 21 Dec 2018 02:58 PM PST

    Do you think there will be a consequence (with regards to earnings/rev) for all of the recent data privacy concerns? People are obviously upset but will it affect the profitability of the affected tech companies?

    I just read this https://www.equities.com/news/does-public-trust-in-tech-companies-matter-in-the-near-future

    submitted by /u/GlendaDominguez38
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    I got to get it out...

    Posted: 21 Dec 2018 05:14 PM PST

    The last year has been a roller coaster of emotion.

    Situation

    • 27 years old
    • $38 000 salary (net)
    • $40 000 total contribution in various ETFs (75% equity / 25% bonds)
    • $2 000 losses

    ​

    I'm trying really hard to maintain the passive investor philosophy everyone is sharing. I'm repeating myself over and over:

    • It's not a loss until you sell
    • Time in the market, beats timing the market
    • Keep buying, never sell
    • etc.

    What bothers me is: I feel like I entered the market precisely at the wrong time (end of 2017) and I never had a chance to make a "profit"... It's easier to remain stoic when you're losing some of your capital gains VS losing your hard-earned savings.

    ​

    I keep hearing: "you're much better off then others". Well, when 30-40% of my savings are gone, I'm gonna wishing I was like "the others" who did not invest. They are the ones who will enjoy the discounts. Right now, it feels like any more contributions I make is pointless and would be wiped by the next correction anyway.

    ​

    My question is: wouldn't it be better to sell and hold it in a saving account (2.25% annual) until a correction? $2 000 sounds like a reasonable cost to cut my losses.

    ​

    I want to hear your thoughts Reddit. What would you guys do?

    ​

    I'll probably get shit on for this post, but the mere act of getting it all out relieves me a bit...

    submitted by /u/fiuebvreosidsjf
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    Stocks are now very cheap

    Posted: 22 Dec 2018 02:37 AM PST

    At the close of trading on Friday, December 21st, the S&P 500 is trading at just 14.5 times next year's expected earnings. That's far lower than the historical average of 16 times earnings. Stocks are now cheap? Or are they?

    Those of you who have been saying the stock market is overvalued, do you think it is still that way, or cheap?

    SHOULD I BUY?

    "I am not talking about individual stocks but a total stock market fund, like VTI)

    submitted by /u/KillingTime56
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    bad news: shiller PE still at 26.75

    Posted: 21 Dec 2018 02:22 PM PST

    According to http://www.multpl.com/shiller-pe/ we're at

    Current: 26.75 -0.55 (-2.03%)

    4:00 PM EST, Fri Dec 21

    So if we go to the 8-10 area (which is historically low but possible) we have another 63-70% to drop

    submitted by /u/crowdyplanet
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    Tsk, tsk. Wealthfront caught red-handed by SEC for making false statements!!

    Posted: 21 Dec 2018 12:42 PM PST

    https://www.sec.gov/news/press-release/2018-300

    I wonder if they will pay for their clients to fix their taxes??

    submitted by /u/cb_hanson_III
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    Confusion with how REITs pay out dividends.

    Posted: 21 Dec 2018 10:26 PM PST

    So I am in planning to invest in REITs. I've done my research and all, but I am still confused on one part. So I know for stocks, you buy at let's say $12 and it goes up to $20. You sell can you get a profit of $8. More or less that's how it works. For REITs I know they are for long term and you get dividends while you hold on to it. How can I calculate how much would be getting back in dividend if I invest a specific amount? For example, I am planning to start with investing $300 and buying a couple of different REITs. So let's say I buy a REIT for $15.45. Sorry, if sound like a total noob.

    submitted by /u/SquidInkness
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    In today's market, would you take a guaranteed 5% (from an overseas term deposit denominated in USD)?

    Posted: 22 Dec 2018 03:58 AM PST

    Title pretty much says it.

    In this bear market, is it a safer bet to put more money into a guaranteed 5%?

    The catch is it's for a minimum of 5 years.

    submitted by /u/YAbdelaal
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    I have only lost money since I started, need advice

    Posted: 21 Dec 2018 09:18 AM PST

    Really only started investing in September about $3200. I know in the grand scheme of things it's hardly much but I'm only 22 now and I don't have much yet lol. Well it's December and I'm down to like $2600. I know that things take time but shit I've never been up, not once since I started. I make okay money so it's not detrimental to my livelihood but for a first investing experience losing $600 in 3 months does not inspire confidence. If anyone's got any advice for me I'll take it! I invested in some ETFs and Stocks btw. 75% VTI, 25% V

    submitted by /u/nerfglobe
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    To people that say hold more CASH to buy stuff when the market is low, how is that different from timing the market?

    Posted: 21 Dec 2018 11:10 AM PST

    What's the point? Market is at it's lowest now. Is it gonna pick up again? Is it gonna tumble much lower? There are arguments for both sides.

    ​

    I get the argument of keeping more cash to safeguard against unemployment etc., but the investment part of it seems very hand wavy.

    ​

    What are your opinions on the matter?

    submitted by /u/Nosferax
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    The U.S. government partially shutdown early Saturday after lawmakers failed to reach a spending deal that centered on whether to fund construction of a wall along the U.S.-Mexico border.

    Posted: 22 Dec 2018 03:13 AM PST

    U.S. Government Shutdown Over Border Wall Funding. The discussions focused on the package of seven spending bills that would fund the government through September, including a bipartisan Senate measure funding the Department of Homeland Security, which oversees the border wall. Mr. Trump, for his part, on Friday tried to shift blame to Democrats for a potential shutdown, even as he said last week that he would shoulder responsibility... https://stockmarketnews.today/2018/12/22/the-u-s-government-partially-shutdown-early-saturday-after-lawmakers-failed-to-reach-a-spending-deal-that-centered-on-whether-to-fund-construction-of-a-wall-along-the-u-s-mexico-border/

    submitted by /u/AALERa
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    Hedge fund manager Mark Yusko talks about the market on CNBC

    Posted: 21 Dec 2018 06:00 PM PST

    https://www.youtube.com/watch?v=lVCVuf27Ea0

    Summary: His opinion is that the market will repeat the 3-year bear market in the early 2000s.

    submitted by /u/Catfurst
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    The Illusion of Active Fixed Income Alpha

    Posted: 21 Dec 2018 05:19 PM PST

    The Illusion of Active Fixed Income Alpha

    Do fixed income managers (FI) generate alpha? In this Alternative Thinking, we take a deep dive into the determinants of excess of benchmark returns for a broad set of popular active FI categories (Global Aggregate, U.S. Aggregate, and Global Unconstrained Bond). Our analysis finds that passive exposures to traditional risk premia—primarily term risk, corporate credit risk, emerging markets risk, and volatility risk—explain a majority of FI manager active returns. There is largely no outperformance at the category level after controlling for exposures to well-known traditional risk premia. The implication for asset owners is clear: traditional discretionary active FI strategies offer little in the way of true alpha.

    Fresh research out of AQR. I've had a discussion on this in the past here and I finally get some proper research on the subject. A few minor things could be explored further like whether the individual manager skill test conclusion is robust to the use of e.g. deciles vs quintiles, to varying the period chosen for the creation of the quintiles, etc.

    This doesn't mean that active FI funds are not worth it, since, for example, virtually no retail investor will be rolling delta-hedged straddles on 10y Treasury futures. More generally, active FI funds may still be a good way to capture some of these risk premia.

    submitted by /u/StockLowSyndrome
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    The benchmark S&P 500 index ended a brutal week down 7 percent Friday, led by big drops in former market favorites like Facebook and Amazon.

    Posted: 21 Dec 2018 01:24 PM PST

    Some Ideas for Long Puts!

    Posted: 21 Dec 2018 07:38 PM PST

    Wsb is shorting all the big names. I just found these with parameters of one billion market cap or more and no profits, barely profitable, or No P/E. If anyone has any DD on any of these or has been following them, it would be much appreciated to add your thoughts. These companies do not have the capital to buy back stocks ect. Feel free to add suggestions. These are just suggesstions, Id recomended doing some hw before making a decision. Personally I am just setting long expiration puts, so I can just play the trend without the pressure of Theta.

    NIO

    TWILIO

    DROPBOX- 8 Billion market cap. Competition from Microsoft, Google, BOX ect.

    DOCUSIGN- 6 billion market cap. Might not have much Moat.

    TELADOC- Recent insider trading, COO and CFO resigned.

    SURVEYMONKEY- 20 years and No profit. Imagine it would have been bought out by now if it was going to happen.

    SQUARE could be one but I'm afraid to short it long term.

    SUNRUN just got a lawsuit going I believe. Earning trending down.

    UPWORK- 2.2 billion market cap-possible acquisition by Microsoft.

    SONOS- Could be bought out.

    Blue apron( damn missed that)

    Groupon

    IQ - this looks good

    GLUU

    Amarin

    EVERBRIDGE

    LENDING CLUB- they got in trouble recently I believe

    CHEGG

    ETSY

    ROKU

    MINDBODY

    TANDEM- this one is crazy. Up 1,200% this year. Barely dropped.

    YETI

    Zillow

    Redfin

    submitted by /u/HunterRountree
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    J&J's Tainted-Talc Lawsuits in 2019

    Posted: 21 Dec 2018 09:24 PM PST

    https://www.bloomberg.com/news/articles/2018-12-21/j-j-s-tainted-talc-risk-expands-as-cancer-trials-triple-in-2019?srnd=premium

    SHARE THIS ARTICLE Share Tweet Post Email In this article JNJ JOHNSON&JOHNSON 128.09 USD -0.18-0.14%

    Johnson & Johnson paid a steep price this year for claims that its celebrated baby powder was contaminated with asbestos. Problem is, 2019 could be even worse.

    A jury ordered the company in July to pay $4.69 billion to 22 women who blamed the talc-based product for causing their ovarian cancer. The prospect of similar judgments helped erase $45 billion in J&J's market value, with the shares headed for their biggest annual loss in a decade.

    Next year, the world's largest maker of health-care products is scheduled to face almost three times as many baby-powder trials. Four will be in St. Louis, the same state court where the company lost the July verdict. Several of the trials involve multiple alleged victims, including one with 38 women set to start in August, according to court filings.

    "The increased number of trials, especially in what is considered a plaintiff-friendly venue like St. Louis, doesn't augur well for J&J,'' said Elizabeth Burch, a University of Georgia professor who teaches about mass-tort law. "The more they lose, the more cases will be filed. I just don't see how they are going to get a handle on this litigation.''

    Still, the risk for the company is significant, according to Bloomberg Intelligence litigation analyst Holly Froum. To resolve almost 12,000 talc cases, J&J may have to cough up as much as $20 billion in settlements, Froum estimates. That would provide an average per-case payout of $1.67 million.

    In 2019, there are at least 21 trials on court calendars targeting J&J over tainted talc, according to data compiled by Bloomberg, including more than 15 in California's courts and one in Georgia set to start in March. In 2018, J&J defended itself in eight talc trials. While the company's lawyers will be busier next year, scheduling delays and pre-trial maneuvering could result in cases being thrown out or trial dates pushed back.

    Most of the California cases are in Los Angeles state court, where talc cases are consolidated. The first is scheduled for Jan. 4. Kirk Von Salzen, a retired computer salesman, said his asbestos-related cancer was linked to his 30-year use of baby powder. Von Salzen, who died recently, sought more than $12 million in damages. His family is continuing his case. In October, a jury deadlocked on Von Salzen's claims in his first trial.

    The real fireworks start in St. Louis on Jan. 22, when 13 claims by women who contracted ovarian cancer go before a jury. Five have died, and their cases are being pursued by family members. Each plaintiff, including St. Louis resident Vickie Forrest, used baby powder for decades before her illness was diagnosed. Their attorneys, who won the first four talc cases, will cite asbestos as a contributing factor, though the trial won't be solely focused on it.

    In that article, there is a list of lawsuits and their outcomes since 2016.

    submitted by /u/COMPUTER1313
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    What would Yellen do?

    Posted: 22 Dec 2018 12:58 AM PST

    Hypothetical question, what do you think Yellen would do if she's still fed chair? Do you think she'd raise interest rates? How would her actions differ from Powell?

    submitted by /u/neocoff
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    ELI5. How does one invest in the stock market?

    Posted: 22 Dec 2018 12:56 AM PST

    Sorry if this isn't the right sub for such a request...

    I just saw a headline that read "Dow drops 470 points to 14-month low in second day of big losses following Fed rate hike" and it made me think hmm, now would probably be a good time to jump in there?

    The problem is, I have no idea how to begin this process.

    Any advice for a newbie? Ideally in simple, digestible terms?

    Thank you!

    Edit: Just read the link on the sidebar. That helped a bit. But my main question is how does one go about this? Do I need to speak to a financial advisor? Do I need to hire someone to manage things for me? Or maybe it's as simple as downloading an app?

    My only (somewhat relative) experience in this was buying Bitcoin via the Coinbase app. It all seemed so simple! That is, until that wave crashed. Hahaha.

    submitted by /u/brandonhardyy
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