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    Friday, January 31, 2020

    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. Investing


    Daily Advice Thread - All basic help or advice questions must be posted here.

    Posted: 31 Jan 2020 04:12 AM PST

    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:

    • 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 significant other?
    • 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.

    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!

    submitted by /u/AutoModerator
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    Amazon soars after huge earnings beat

    Posted: 30 Jan 2020 01:07 PM PST

    The U.S. economy grew 2.1% in the fourth quarter, matching estimates.

    Posted: 30 Jan 2020 06:09 AM PST

    IBM Board elects new CEO

    Posted: 30 Jan 2020 02:16 PM PST

    The IBM (NYSE: IBM) Board of Directors has elected Arvind Krishna as Chief Executive Officer of the company and a member of the Board of Directors, effective April 6, 2020. Krishna is currently IBM Senior Vice President for Cloud and Cognitive Software, and was a principal architect of the company's acquisition of Red Hat. James Whitehurst, IBM Senior Vice President and CEO of Red Hat, was also elected by the Board as IBM President, effective April 6, 2020. Virginia Rometty, IBM Chairman, President and Chief Executive Officer, will continue as Executive Chairman of the Board and serve through the end of the year, when she will retire after almost 40 years with the company.

    https://www.prnewswire.com/news-releases/arvind-krishna-elected-ibm-chief-executive-officer-300996553.html

    submitted by /u/Darvocet
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    What's the deal with leveraged ETFs (e.g., TQQQ)? Should you hold onto the long-term?

    Posted: 30 Jan 2020 07:31 PM PST

    It really all depends on luck and timing. If you invest right before a market decline, you're screwed. But if you invest otherwise you make a shit ton of money. I ran some numbers based on actual NASDAQ data to confirm.

    For example...

    If I invested $100 on 2/5/71 in QQQ I'd have $9,275 today. If I invested that in TQQQ I'd have $291,178. (a 10% CAGR vs. an 18% CAGR).

    I modeled it again right before the dot com bubble burst.

    If I invested $100 on 1/3/00 in QQQ I'd have $224 today. If I invested that in TQQQ I'd have $27. (a 4% CAGR vs. a -6% CAGR).

    submitted by /u/Gordon445
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    Selling Visa because Earnings Meet Estimates

    Posted: 30 Jan 2020 04:07 PM PST

    https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/6495E494-4399-11EA-A5F1-DB44B8198A98

    People are selling their Visa shares just because earnings didn't exceed expectations? I don't get it. A great company just reported another solid quarter. But what am I missing?

    submitted by /u/rascally1980
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    Anyone use Fidelity as their brokerage?

    Posted: 30 Jan 2020 07:47 PM PST

    They're my 401k and IRA provider, so I transferred about $90k of my personal investment to have it all be managed at one place and it seems that any short trade using their platform just flat-out suck.. or am I'm using it incorrectly maybe?

    Their mobile app is slow and clunky to navigate. I feel like any sort of swing trading is so slow on their "active trader pro" platform, not very intuitive. If I want to trade something and I put the quantity, it doesn't give me a market price estimate? just an error if it exceeds available cash. Have to pull out an external calculator if you want to know how many shares you're able to buy.

    I can't find the value of my portfolio for extended hours even using their active trader pro platform, or on their site. I'm literally using a $0 robinhood app to view trends and after hour price. I'm not even going to go into options. I've used E-Trade Pro before and never had this issue

    How are you using it, what's your experience? or is anyone even using it?

    submitted by /u/aupperk24
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    Aswath Damodaran: TSLA re-evaluation

    Posted: 30 Jan 2020 11:02 PM PST

    Is LVMH or Hermes a better buy?

    Posted: 30 Jan 2020 10:53 PM PST

    With the luxury brands bound to be affected by the Chinese trapped in their homes, which brand do you think is a better buy?

    And they both seem to be only listed on the French stock exchange? Am I correct?

    Thanks!

    submitted by /u/Manticorea
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    WWE Plunges After Earnings Slump and Company Sacks Management

    Posted: 30 Jan 2020 05:17 PM PST

    (Bloomberg) -- World Wrestling Entertainment Inc. replaced two top executives after 2019 earnings came in at the low end of estimates, a shake-up that rattled investor confidence in the pro-wrestling giant.

    Shares of WWE plunged as much as 14% to $53.50 in extended trading after the company announced that it's replacing Co-Presidents George Barrios and Michelle Wilson, effective immediately.

    Frank Riddick, a board member for more than 11 years, has been named interim chief financial officer, WWE said Thursday. He'll report to Chairman and Chief Executive Officer Vince McMahon.

    "The board and I decided a change was necessary," McMahon said. "We have different views on how best to achieve our strategic priorities."

    The company now expects to report 2019 adjusted earnings of $180 million, down from as much as $190 million forecast previously. WWE is scheduled to release results on Feb. 6.

    WWE's shares also tumbled in October after the company said revenue fell short of expectations and analysts reduced their forecast. TV ratings of WWE programming have been challenged and the company has struggled to add subscribers to its online service.

    https://www.bnnbloomberg.ca/wwe-plunges-after-earnings-slump-and-company-sacks-management-1.1382503

    submitted by /u/n0tfakenews
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    Letter from PROSHARES - SEC proposing restrictions and qualification on leveraged and inverse funds Stocks

    Posted: 30 Jan 2020 06:37 PM PST

    Dear ProShares Shareholder,

    I am writing to let you know about an unprecedented proposal from the Securities and Exchange Commission ("SEC") that would make it more burdensome to buy, or even prevent you from buying, leveraged and inverse funds, such as the ones offered by ProShares. You have the right to offer your view on these proposed regulations, which you can do by submitting comments to the SEC through www.fundcomments.com.

    The Proposed Regulations

    Under the proposed regulations, you would be required to provide extensive personal financial and other information and be evaluated to determine if you will be allowed to buy leveraged and inverse funds. This would be the case even if you make your own investment decisions or you have engaged a financial professional to make those decisions for you.

    We strongly believe the proposed regulations are:

    1. Bad for Investors. If the proposal is adopted, some investors who could benefit from the enhanced return and portfolio protection potential of leveraged and inverse funds could be prevented from buying them by an overly burdensome qualification process. Brokerage firms could even stop offering these funds altogether due to the difficulty of implementing the regulations.
    2. Unnecessary. The SEC has not shown there is a problem that needs to be solved with respect to leveraged and inverse funds. They fail to show why these funds should be treated differently than tens of thousands of other public securities, each with their own characteristics and risks.
    3. A Dangerous Precedent. Requiring you to qualify to purchase a security in the public markets would be an unjustified break with how the SEC's regulation of the sale of securities in the public markets has worked for nearly 90 years. The proposal would be at odds with our long-standing system that gives investors and their advisors the freedom to make their own investment decisions.

    What You Can Do

    You have the right to voice your view by submitting comments on this proposal. The SEC is required to take your comments into consideration in deciding whether to go forward with the rule as proposed.

    If you would like to let your views be known, you can submit comments to the SEC through www.fundcomments.com. The deadline to make comments is March 24, 2020, so consider acting now.

    (continued on reverse)

    We encourage you to submit your views on the proposed regulations, including, if you agree, that:

    • Leveraged and inverse funds are important to you, and they allow you to seek enhanced returns or help you protect your portfolio.

    • You are capable of understanding leveraged and inverse funds and their performance characteristics, and you don't want a third party evaluating your capability to do so and potentially preventing you from buying them.

    • You want to preserve the long-standing free public markets where investors and their advisors have the freedom to buy public securities without additional government-imposed limitations on investor choice.

    ***

    Having spoken with ProShares shareholders over the last 13 years, I believe it is likely you value leveraged and inverse funds. I hope you will join me in telling the SEC you want to maintain your current access to these funds.

    For more information about the proposal, visit www.sec.gov/rules/proposed.shtml and go to Release No. 34-87607, dated November 25, 2019. If you have questions for us regarding this matter or how to submit comments, please contact our investor line at 888-776-3898, or email us at secproposalatproshares.com.

    As always, thank you for having made the decision to be a ProShares shareholder. We look forward to continuing to provide exchange-traded funds that empower you to pursue your financial objectives.

    Sincerely,

    Michael L. Sapir Chairman.

    (This was originally posted on another sub, but it wouldn't let me crosspost. Credit goes to u/Saucepodtrash)

    submitted by /u/zdrmju321
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    Compound Interest in Europe?

    Posted: 31 Jan 2020 02:42 AM PST

    I am fairly new to investing and have been reading a lot around compound interest. As an European investor what are the best ways to invest my money so I can use the advantages of compounding?

    And, is there any way that investing in stocks can return compounding?

    submitted by /u/neothecat86
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    Online Valuation Calculators

    Posted: 31 Jan 2020 04:50 AM PST

    What are the best online intrinsic valuation calculators? I've come across DiscoverCI which seems to offer much more than just simply an input calculator, are sites such as these worth the cost? Are there better ones out there that I should look at before deciding?

    Also, DiscoverCI seems to only work for American trades. Is there a Canadian equivalent out there"?

    submitted by /u/workbenny
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    Aswath Damodoran, known as "The Professor" shared his Tesla shares.

    Posted: 30 Jan 2020 10:35 PM PST

    https://www.youtube.com/watch?v=3YkUN7_Uj0w

    If you don't know who this guy is you should check him out. He teaches corporate finance and valuation at the Stern School of Business at New York University. He does company valuations, he describes his process and all his courses are free.

    He evaluated tesla last year at 186$. He did buy tesla in June when it was at 180. He now sold, yesterday at 640$ as the company just doesn't reflect their current price.

    He did say he is not giving up on tesla, the price might even go up for a while. He does believe it if over valuated and he sill re-buy the stock once it meets his new valuation price.

    submitted by /u/DrixGod
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    Tesla Bulls; how are you evaluating future growth?

    Posted: 30 Jan 2020 06:22 AM PST

    Are you valuing the future of the company on expected auto sale growth in both domestic and foreign markets mainly?

    Are you valuing it based on an expectation that Tesla will not just be a major player in the auto industry, but also become a major player in energy production and battery storage?

    I'm just interested in hearing the thought process behind why people are presently buying into the company at this valuation. If it only stays within the auto industry, then can the current valuation be reasonable given the current valuations of the presently dominant companies in that sector? Based on that, it seems people must believe that Tesla will come to be dominant in multiple sectors or will be overwhelmingly dominant in the auto industry.

    Relatively new to investing, but I find I learn best when others explain to me the thought process that drives these decisions and then analyzing their merits myself.

    submitted by /u/billbobby21
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    What stops a broker from selling a call whenever a client asks for a limit sale?

    Posted: 31 Jan 2020 02:42 AM PST

    What stops a broker from selling a call whenever a client asks for a limit sale? E.g., suppose someone a stock is trading at $100, and the client puts a limit sale at $110. What stops the broker from instead selling a call with strike price $110. If the price is hit, the option is exercised and the broker is paid $110, which they can give to the client. If the price is never reached, the broker makes some money from the sold call. If the client changes their mind about the sale the next day, the broker would have to repurchase the call, but that doesn't seem too bad?

    My question is: is this not free money for brokers?

    submitted by /u/energybased
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    How to investing against the Corona virus?

    Posted: 30 Jan 2020 08:40 PM PST

    As it is said, in every tragedy there's opportunity. It's believed that bitcoin went up because of recent fear that stocks would crash.

    That being said, what would be the best stock to buy right now, if I don't believe that the Corona virus is gonna destroy our world? Maybe companies in Wuhan?

    submitted by /u/Federal3
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    Fidelity is missing the Limit parameter for Trailing Stop Limit orders?

    Posted: 30 Jan 2020 08:32 PM PST

    I am trying to place some long-lived Trailing Stop LIMIT orders in my Fidelity account to set up an exit strategy for some positions.

    I expect to see input fields for at least 3 values: (1) number of shares to sell, (2) trigger price expressed as a trailing amount in $$ or %%, and (3) a limit price, also as a relative amount. However, (3) is entirely missing.

    Am I stupidly missing something in their UI, or are they a bunch of morons and there is a bug? In my other brokerage account I get all of the above expected fields.

    Thanks, Friends!

    submitted by /u/gragus_
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    Help understanding capital gains taxes on investment returns vs total assets

    Posted: 30 Jan 2020 10:25 PM PST

    Let's say I have a balance in my post-tax brokerage account of $1,000,000, and $100,000 is in investment returns (and 900k my initial investment).

    I understand that only my investment returns are taxed upon selling my shares.

    1. If I sell 100k worth of shares, does it come out of the portion of my brokerage account that is not taxable first (the first 900k), or is that 100k worth of shares considered my investment return and thus taxed?

    Thank you for your time! This subreddit has changed my life this year.

    submitted by /u/Adviceforthewilling
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    How do people like Jeff Bezos get access to their billions?

    Posted: 30 Jan 2020 09:44 PM PST

    Whenever a post about Amazon lands on the front page of Reddit, the topic becomes about hitting him with a wealth tax. This is followed by people explaining that net worth doesn't mean he has that much to spend.

    I don't know enough about billionaires and how investments at that level work, but why couldn't Jeff Bezos liquidate a billion dollars or at the very least borrow against it like real estate investors? How do other billionaires spend big and why can't Jeff Bezos do that?

    submitted by /u/SimonDayton
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    Factor premiums? How about having a Twitter account? ~30-60bps observed premium from social media according to new study.

    Posted: 30 Jan 2020 10:25 AM PST

    First of all, no jokes. This is real shit.

    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3514826

    we find that firms on Twitter tend to have lower idiosyncratic volatility, better S&P credit rating, lower failure probability, lower dispersion in analysts' EPS forecasts, higher earnings surprises, higher gross profitability, higher return on assets, and are overall less overpriced based on Stambaugh, Yu, and Yuan's (2012) composite overpricing measure, based on 11 popular asset pricing anomalies.14 These return-enhancing characteristics could partially explain why Twitter firms earn higher returns. However, Twitter firms also have characteristics that have traditionally been associated with lower returns—Twitter firms tend to be bigger, with higher book-to-market ratios, and higher short interest ratios. Controlling for differences in firm characteristics when estimating the Twitter premium in the cross-section of returns, we find that part of the 53 bpm size- BM-momentum-adjusted Twitter premium is explained by differences in other firm characteristics. Apart from different characteristics, Twitter firms may have different exposure to risk factors which could justify their higher returns. Indeed, nonTwitter firms have lower exposure to Fama and French's (2015) RMW profitability factor, Hou, Xue, and Zhang's (2015) ROE profitability factor, and Stambaugh and Yuan's (2017) MGMT and PERF mispricing factors. As a result, compared to the 59 bpm raw Twitter premium, the risk-adjusted Twitter premium is 47 bpm relative to Fama and French (2015) factors, 52 bpm with respect to the Hou, Xue, and Zhang (2015) factors, and 39 bpm relative to the Stambaugh and Yuan (2017) factors. Finally, controlling for differences in both characteristics and risk exposures, Twitter firms still outperform nonTwitter firms by 42/46/36 bpm based on the above three factor models, respectively.

    submitted by /u/MasterCookSwag
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    A lot of finance articles are auto generated.

    Posted: 30 Jan 2020 08:35 AM PST

    I saw this when checking JD on yahoo finance.

    https://imgur.com/a/VpJlojN

    submitted by /u/Aboly
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    Opinions on the SEC proposal that would "make it more burdensome to buy, or even prevent you from buying, leveraged and inverse funds"?

    Posted: 30 Jan 2020 07:22 AM PST

    As a shareholder of a ProShares leveraged ETF, I got a notice from them via email urging me to tell the SEC I'm not happy with their proposal. The quotes in the title are from their notice.

    The proposal in question is 34-87607 (scroll down and find that one to open the pdf).

    1. ProShares argues that the qualification process could be "overly burdensome" and that some "brokerage firms could even stop offering these funds altogether due to the difficulty of implementing the regulations."
      • This sounds pretty bad, but I don't have the experience necessary to judge whether or not their scenario is plausible. Anyone want to weigh in here?
    2. They argue that "the SEC has not shown there is a problem that needs to be solved with respect to leveraged and inverse funds."
      • What is the precedent here? Does the SEC usually feel compelled to wait until after a problem arises before addressing it? Or are they wont to make attempts at addressing problems before they arise? If the latter, how often have they issued mea culpas and repealed their regulations, on the grounds that they were actually unnecessary to begin with?
    3. They argue that "requiring you to qualify to purchase a security in the public markets would be an unjustified break with how the SEC's regulation of the sale of securities ... has worked for nearly 90 years."
      • Again, I don't feel qualified to judge this statement. How different would this be from precedent? In particular, how different is this from the questionnaire you have to answer in order to buy and sell options? Is the difference that that questionnaire is a requirement set purely by your brokerage, and not by the SEC?

    Thanks in advance.

    submitted by /u/rybicki
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    Indian ETF down 20% in one day

    Posted: 30 Jan 2020 07:36 PM PST

    Hi guys, relatively new to investing here. I invested a small amount of money in an Indian ETF, Invesco PIN, that was doing really well until it absolutely well off a cliff one day in December. Closed at $25.61 on Dec 20 and then next day's close after the weekend was $19.98. There is a graph if you scroll down in this link.

    Anyways, has anyone ever experience this much volatility in an ETF? I thought their purpose was to be more stable than individual equities. Could it be a massive sell-off from an institutional investor? Any insights/advice would be greatly appreciated.

    Thanks!

    submitted by /u/getsumshramp
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    What’s a good site to learn option trading?

    Posted: 30 Jan 2020 07:35 PM PST

    I've been investing in just individual stocks and all reddit people talk about is option trading. What's a good place to start? Thanks 🙏🏽

    submitted by /u/behumble96
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