Daily Advice Thread - All basic help or advice questions must be posted here. Investing |
- Daily Advice Thread - All basic help or advice questions must be posted here.
- Powell says the Fed will start expanding its balance sheet ‘soon’ in response to funding issues
- Stocks rise on reports of the likelihood of a partial trade deal between the US and China.
- Ray Dalio on the similarities between 1935 and now.
- Teens choose YouTube over Netflix for the first time, according to new survey
- Question about investing books. Are books on investing published prior to the 2000s pointless? Does the advent of High Frequency Trading and other automated trading make this books less helpful?
- WOOF, CAKE, BOOM: stocks with catchy tickers beat the market
- Boeing taking $20 million stake in Virgin Galactic, with a vision of commercial hypersonic travel
- Robinhood makes second attempt at launching a high-yield account similar to banks
- Is it legal to switch from stock to stock to get dividends?
- Investment Property
- To keep your shares from being available to shorts, round 2...
- Splunk Financials and Underlying Story
- Global growth drops to lowest level in a decade, IMF’s new chief says
- Are shareholder votes anonymous?
- Buy Time on Bank Stocks?
- US producer prices post the biggest decline in eight months in September
- Swine Fever? Trade War? China Turns to Strategic Pork Reserve
- Dividend funds?
- Why are Commercial Real Estate Loan (CRE) instruments priced close to par for the life of the loan?
- 2 Factor Attribution Analysis Question
- Switching from Robinhood app to Charles Schwab
| Daily Advice Thread - All basic help or advice questions must be posted here. Posted: 09 Oct 2019 05:11 AM PDT If your question is "I have $10,000, what do I do?" or other "advice for my personal situation" questions. If you are going to ask how to invest you should include relevant information, such as the following:
Please consider consulting our FAQ first - https://www.reddit.com/r/investing/wiki/faq 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]  |
| Powell says the Fed will start expanding its balance sheet ‘soon’ in response to funding issues Posted: 08 Oct 2019 12:02 PM PDT |
| Stocks rise on reports of the likelihood of a partial trade deal between the US and China. Posted: 09 Oct 2019 03:18 AM PDT 'Separately, the Financial Times on Wednesday morning reported that officials in China are offering to increase annual purchases of U.S. agricultural products by $10 billion a year, in order to reach a partial deal. ″(Vice Premier) Liu He is coming with real offers, it's not an empty visit," an unnamed source told the FT. "The Chinese are ready to de-escalate."' [link] [comments]  |
| Ray Dalio on the similarities between 1935 and now. Posted: 08 Oct 2019 05:49 PM PDT This is an interesting POV from an accomplished investor. Scary stuff [link] [comments]  |
| Teens choose YouTube over Netflix for the first time, according to new survey Posted: 08 Oct 2019 06:52 PM PDT https://www.cnbc.com/2019/10/08/teens-prefer-youtube-over-netflix-piper-jaffray-survey-finds.html Piper Jaffray found 37% of teens prefer to watch videos on YouTube, narrowly edging out Netflix, which came in at 35%. YouTube's diverse content library appeals to teens, the firm said. However, Netflix ranked far ahead of other streaming platforms like Hulu and Amazon Prime Video. [link] [comments]  |
| Posted: 09 Oct 2019 03:46 AM PDT Just getting my feet into the market so I'm reading some books on investing. I'm reading some Greenblatt, Graham, John Bogle. And all of these books seems pre-HFT and I didn't know if that meant the sort of value investing advice was pointless since computers just do it all now. [link] [comments]  |
| WOOF, CAKE, BOOM: stocks with catchy tickers beat the market Posted: 08 Oct 2019 10:31 AM PDT In a study published in 2009 by Gary Smith, Alex Head and Julia Wilson of Pomona College in California, a group of people were asked to pick American public companies with "clever" tickers. The resulting list of 82 shares included MOO for United Stockyards, a livestock company, GEEK for Internet America, a service provider, and SPUD for 1 Potato 2, a restaurant chain. The authors found that a dollar invested in their portfolio of cleverly named ticker symbols in 1984 would have been worth $104 in 2006, an annual return of 23.5%. [link] [comments]  |
| Boeing taking $20 million stake in Virgin Galactic, with a vision of commercial hypersonic travel Posted: 08 Oct 2019 09:06 AM PDT |
| Robinhood makes second attempt at launching a high-yield account similar to banks Posted: 08 Oct 2019 07:44 AM PDT Ten months after the bungled launch of a checking and savings product, Robinhood announces a high-yield cash management account. "Over the past year, we pressed the reset button and started building this from scratch," CEO Baiju Bhatt says. "We've spent a lot of time and energy growing our business, and hired an all-star cast of people with financial services and risk compliance backgrounds." Robinhood says customer deposits will be FDIC insured at partner banks including Goldman Sachs, HSBC Bank, Wells Fargo and Citibank. The company was valued at $7.6 billion after closing its most recent, late-stage funding round this summer. [link] [comments]  |
| Is it legal to switch from stock to stock to get dividends? Posted: 09 Oct 2019 03:43 AM PDT I heard you just need to have the stocks at a certain point before the dividend is given out, and that after that point you can sell. Could you just hop around with money on those dates? [link] [comments]  |
| Posted: 08 Oct 2019 07:33 PM PDT I'm in my early 30's and have a stable job that brings in 60K/yr. I have about 70K in my savings and 35K in Index Funds. I have been researching investing in property and have been researching the Roundrock, Texas area. I'm targeting a 250K property and renting out 2-3 rooms. I should have no problem making the downpayment and finding a property management company. I was wondering if anyone out their has advice on how to evaluate how good an area is for investing in property? Roundrock is close to Austin as is the headquarters to Dell. It seems like the schools and crime rate are favorable. Any heuristic and tips are appreciated! Thanks! [link] [comments]  |
| To keep your shares from being available to shorts, round 2... Posted: 08 Oct 2019 09:01 PM PDT I got a lot of misdirection the last time I posted this question. People, each with 10 or 20 years in finance couldn't agree with each other. So, I see people say that "To be borrowed, shares have to be held in a Margin Account." Ok fine, but then I also was told that your shares can be lent out anytime, without you knowing about it, and apparently, without you being paid a portion of the borrow fee. Well then, why did I just have to sign bunch of docs with Fidelity before they would loan out my shares and start paying me the juicy 60% of proceeds? [link] [comments]  |
| Splunk Financials and Underlying Story Posted: 08 Oct 2019 11:56 AM PDT Following my last post, I received a request to take a deeper dive into Splunk (SPLK), a rapidly growing company in the IT Operations Management (ITOM) space. One quick note before I kick off, I might reorganize these posts just to give them a bit more structure, which may evolve as time goes on. Industry Splunk fits within an interesting niche of the ITOM space. Their specialization is part of an area focused on machine learning and big data for logging, monitoring, and reporting IT Operations. To quote from Gartner and Forbes, "By 2022, 40% of all large enterprises will combine big data and machine learning functionality to support and partially replace monitoring, service desk and automation processes and tasks." Given the upside, there are a ton of vendors craming into a very crowded market. In Gartner's most recent report, the market size is $5.2B and grew at 12% YoY, also here. Revenue For Splunk, their (reported) revenue is broken down into 3 main categories: Licensing, Maintenance and Services, and Cloud. The License line is a one-time payment for a perpetual license for on-premise deployment of the Splunk Enterprise suite, while the maintenance and service and cloud license pay an annual subscription fee, which is tiered based on the amount of data ingested. Their revenue is rapidly transitioning from the perpetual license to the their annual subscription as they said in their most recent earnings call "We expect the elimination of perpetual license sales will accelerate renewable mix to 99% in Q4 and high 90s for the full-year." seen here. This transition has a bit of uncertainty around it. Exabeam, one of Splunk's competitors in the SIEM space, recently mentioned that customers are unable to predict their expenditure since Splunk prices based on data ingested, which can be a varying target. Additionally, the cloud transition provides a more sticky cash flow for the company, but will provide short-term pain since the amounts are billed annually vs. entirely upfront. While this might help customers from an initial expenditure outlay (potentially removing one of the roadblocks), it is the reason that Splunk recently revised their cash flow forecast from a positive $250mm inflow to a negative $300mm outflow (despite raising annual guidance from $2.25B to $2.3B). The critical KPI for the company here is their Remaining Performance Obligations, which is non-cancellable (future) contracted revenue. In 2Q20, the RPO was $1.235B, with 61% of that to be recognized over the next twelve months ($753mm). The average contract duration for the contracts signed have hovered just shy of 3 years (33 months). One concerning metric in their most recent quarter was that the contract bookings slowed dramatically in the most recent quarter, $554mm, which is only a 19% growth rate. Finally, Splunk just closed on their acquisition of SignalFX on October 1st, so guidance and RPO will likely look dramatically different in Q3 and Q4 as the company represents a combined platform. Costs From a cost perspective, the company's costs have stayed broadly consistent with topline growth. On an LTM basis, the company has ~$1.8B of expenses, excluding stock-based compensation and amortization of acquired intangibles. The number of employees has grown from 2,700, to 3,200, to 4,400, to 4,700 from Jan-2017, Jan-2018, to Jan-2019, and today respectively. Assuming an average total compensation of $261,231, accounts for ~$1.15B of those expenses or ~72% for FY19. This has remained relatively constant for 2015 to current. As a result, cloud margins are improving, as 2Q20 reached a 50% margin, nearing their 70% gross margin target. Research and Development has remained relatively constant at 15 - 17.5% of sales, sales and marketing at 45% - 50% of sales, and G&A at ~10% of sales. These percentages strip out stock-based compensation, but since there is no breakdown, still include D&A. Capitalization Splunk is well funded with 2 convertible senior notes (convertible at $148.30) for a total debt of $2.1B, but has $2.7B in cash and investments. This gives the company a great war-chest to continue to acquire companies in the space. The company has acquired 7 companies in the past 2 years, with the most notable being SignalFX, augmenting their suite of products in the monitoring segment. Returns Over the last 4 - 5 quarters, Splunk's return on capital has settled into the 5 - 10% range. Given their reinvestment rate of ~150% (math from here on p 26), this implies a sustainable EBIT growth rate of 7 - 10%. To me, this passes the smell test since it's broadly consistent with the industry growth predicted by IDC and Gartner, implying that Splunk's organic revenue growth will continue and acquisitions should provide further juice to the topline growth rate. Outlook Splunk issued guidance of $2.3B for FY2020, with $600mm in Q3 (implying ~$760mm in Q4). Wall street is right in line with guidance for 2020, and showing $2.8B for 2021 (or a 22% growth rate). The challenge for the company will be to weather the transition from the upfront payment to the cloud subscriptions, since that will depress cash flow for the next year or two. The company even noted on their last earnings call that their target cash flow yield won't be realized until after 2021. TL;DR Splunk is a rapidly growing player in the IT Operations Management space that is growing dramatically and starting the shift into turning their revenue stream into longer-term contracts. As the company transitions, it will depress cash flow in the near-term, but could accelerate onboarding as it manages the initial expense outlay for customers. Images here. As per usual excel available if requested. [link] [comments]  |
| Global growth drops to lowest level in a decade, IMF’s new chief says Posted: 08 Oct 2019 10:00 AM PDT
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| Are shareholder votes anonymous? Posted: 08 Oct 2019 02:37 PM PDT As a shareholder in my company's stock, I received instructions for voting following our Annual Meeting of Stockholders. The vote itself can be done through proxy via our financial services company where our stock is held. Should I expect my identity to be kept anonymous or is it possible that the executives would be able to see how shareholders (including employees) are voting? [link] [comments]  |
| Posted: 08 Oct 2019 08:35 PM PDT Year over Year Return (No Div): JPM: -2.10% C: -7.43% COF: -11.85% MS: -14.38% BAC: -8.12% STI: -1.62% WFC: -9.74% GS: -12.07% All these banks are down over the last year and with interest rates low and potentially going lower, is now a great time to begin a position in any of these stocks? Very low PE on all of them and very high dividends. 5-10 year window seems to be a potentially great move. Thoughts on these individual stocks vs an ETF of similar holdings? [link] [comments]  |
| US producer prices post the biggest decline in eight months in September Posted: 08 Oct 2019 05:45 AM PDT https://www.cnbc.com/2019/10/08/us-producer-price-index---september-2019.html
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| Swine Fever? Trade War? China Turns to Strategic Pork Reserve Posted: 08 Oct 2019 07:14 AM PDT We have emergency oil. They have emergency pork reserves. https://www.nytimes.com/2019/10/07/business/china-strategic-pork-reserve.html [link] [comments]  |
| Posted: 08 Oct 2019 03:42 PM PDT Currently 33 years old. Stable income. No 401k. Maxed Roth IRA with VTSAX. Taxable account are also in VTSAX. 2 years emergency fund. Don't want bonds anytime soon. Will add international fund later. Currently have extra 10k to invest. Are there any good dividend funds/stocks I can add for long term hold? Or do you guys suggest just dump it into VTSAX. Already have 6k aside for 2020 Roth contribution. My brokerage is with Vanguard [link] [comments]  |
| Why are Commercial Real Estate Loan (CRE) instruments priced close to par for the life of the loan? Posted: 08 Oct 2019 08:18 PM PDT I'm trying to understand the monthly pricing sheets for a commercial real estate (CRE) loans. Looking at the purchase the asset manager has made, I can't figure out why the loan is being priced close to par each month. For 4 months the value of the instrument has been $100, and only recently did the price change to $99.9999999. The loan is for 5 years @ a 7% coupon, and shows the amortization schedule during the life of the investment. Not sure why the investor would expect the price to remain close to ~$100 each month [link] [comments]  |
| 2 Factor Attribution Analysis Question Posted: 08 Oct 2019 07:42 PM PDT Hey guys, if I'm a fund that only trades/rebalances once in early January and has no trading for the remainder of the year...(eg. IT sector was at 5% weight on 1/1, but becomes 15% on 1/2) When I'm running a performance attribution for the first half of the year, which weight should I use as my portfolio sector weight for calculation? Knowing how the formula work for selection and allocation effects, it seems using a weighted average of sort for sector weights would make more sense than just the beginning weight, right? My IT sector was only at 5% for a day, it seems incorrect to judge my performance based on a 'wrong' sector weight. Let me know what you all think, and thanks for your help. [link] [comments]  |
| Switching from Robinhood app to Charles Schwab Posted: 08 Oct 2019 11:25 AM PDT After Charles a Schwab revealed that they are doing 0% commission fee trade, I was thinking about transferring all my stocks from Robinhood to Charles Schwab ( I would like to keep all my investments in one place). Is there any losses I would take from switching, or anything I have to be concerned about? Thanks in advance! [link] [comments]  |
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