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.
- Uber CTO resigns as company reportedly considers 5,400 job cuts, 20% of workforce.
- Harley-Davidson mises earning, cuts dividend; stock +9%
- 5 Simple Do’s and 5 Don’ts of Investing
- Amazon, Walmart, FedEx workers plan walkout on Friday.
- Alphabet EPS misses by $0.89, beats on revenue
- Robot Analysts Outwit Humans on Investment Picks, Study Shows
- Investing during a severe recession
- What stocks are way overvalued right now?
- AMC says it will no longer play Universal Studios films
- Famous Trades?
- Ford reports $2B loss for 2020Q1. Adjusted EPS of negative $0.23
- A visualization of how sentiment of headlines with respect to Covid-19 has influenced the SP500
- [Bloomberg] Sources: TripAdvisor will cut ~300 global and ~600 US positions, shutting San Francisco and downtown Boston offices; most remaining employees to take 20% cut
- Do you think we'll have to wait until Q3 earnings to really see if the current rally holds?
- Reuters: Boeing eyes major bond issue to raise funds
- Pfizer Coronavirus Vaccine Could Be Ready for Emergency Use by Fall
- Trolls World Tour = Direct to Streaming Success; Could Signal a Long-Term Decline of Theaters
- Were you more optimistic about the future of the American economy and stock market on June 4, 2019 or April 28, 2020?
- ETF portfolio for stable growth?
- When isn't a good time.
- Is it worth going to college/university to learn about investing?
- PE investor perch: Help me make sense of the s-storm we're seeing in real-time
- How has learning to invest changed you as a person?
- In The Big Short, what exactly does Michael Burry buy from the banks?
| Daily Advice Thread - All basic help or advice questions must be posted here. Posted: 28 Apr 2020 05:10 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]  |
| Uber CTO resigns as company reportedly considers 5,400 job cuts, 20% of workforce. Posted: 28 Apr 2020 03:14 PM PDT https://www.theinformation.com/articles/uber-discusses-plan-to-lay-off-about-20-of-employees The Information's Amir Efrati reported Tuesday that the company was considering further layoffs of up to 5,400 people, citing a person familiar with the matter who said the plan was not yet confirmed. The layoffs could represent up to 20% of Uber's 27,000-person workforce and save the company up to $1 billion in expenses, according to The Information. [link] [comments]  |
| Harley-Davidson mises earning, cuts dividend; stock +9% Posted: 28 Apr 2020 07:58 AM PDT |
| 5 Simple Do’s and 5 Don’ts of Investing Posted: 28 Apr 2020 10:14 PM PDT 5 DO's of Investing About a year ago, I wrote an open letter to my fellow millennials about their financial wins and financial fails. The post got pretty good traction and I wanted to follow it up with a list of 5 Simple Do's and Don'ts of Investing that I've acquired over the years. Also, I wanted to share some of the great (and mostly free) financial products that I love and steer people who don't have a financial services background away from some of the more common pitfalls of investing. If you can follow these simple rules, you'll be in great shape for retirement and achieving your goals. If you neglect them, your financial health will suffer.
One of the challenges that most people face is simply tracking their spending and saving. With hundreds of transactions per month across (often) dozens of accounts, you can't do it on your own! Fortunately, there is a great tool that let's you connect your checking, savings, investment accounts + credit cards to see them all in one place. Better yet, it automatically creates budgets for you to help you achieve your short and long-term goals. The (free) product to use: Mint
One of the best things you can do for your financial well-being is fortunately also one of the simplest: Save enough money to cover your expenses for 6 months. Now that you know how much you spend per month (see #1), you know how much you need for a half year with no income. No one ever expects to be out of a job, have a major medical expense, or some other emergency, which is exactly why you need to start preparing and saving today.
Don't waste your money on high-fee Mutual Funds Once you've started tracking your spending and earnings with Mint and built your emergency fund with Ally, you're ready to start investing. Invest early, invest regularly, and invest in low-cost investments. First, from your Mint account, determine how much left over money you have each month. Set up an automatic transfer to your investment account. With investment accounts, pick a diversified or index-tracking ETF with low costs (<.2%). My personal favorite is Vanguard, who has built their massive business on being a low-cost leader and low-cost innovator. The best products to use: Vanguard ETFs Acorns (invest your spare change automatically)
If your employer provides a match to your 401k contributions, that's FREE MONEY! At the very least, you should contribute enough to take advantage of this benefit. However, I'd recommend that you contribute at least 10% of your salary to your 401k or your Roth IRA. The sooner you start contributing the better. Even if you feel your salary is low in your 20's or 30's, the power of compounding interest means that your money will often grow faster than higher income individuals who don't start contributing until their 40's.
The future of healthcare is employee-driven. Chances are, your employer already offers a "self-directed" or "high deductible" plan. If you don't visit the doctor too often or have a complicated medical history, this type of plan can be a great option for you. These plans come with either a FSA or an HSA. If you have an HSA, you're in luck. In an HSA, your account balance rolls over each year, you can contribute pre-tax, and you can withdraw for medical expenses without paying taxes (free money!) Better yet, you can actually invest in the same low-cost funds I mentioned in #3 above in your HSA. A 65-year-old, healthy couple can expect to spend $266,600 over the course of their retirement on Medicare premiums alone, according to HealthView Services. With that amount of medical expense, opening an HSA today is a great decision. You can find a list of 20 top HSA providers here. 5 DON'Ts of Investing
Churning. Good for butter. Not for investing. This couldn't be more untrue. You can't "time" the market and you're much more likely to hurt your returns than help them by trading on a weekly (or more frequent) basis. The likelihood that you'll be able to pick individual stocks that beat the overall market is incredibly low (read: 0, unless your last name is Buffet). Plus, with this strategy, you won't be diversified (see #2)
If these are your investments, you're in serious trouble. One of the quickest ways to get yourself into financial trouble is to focus a significant portion of your net worth in only one investment. Whether it's a speculative fixer-upper, a friend's business, or a too-good-to-be-true, once-in-a-lifetime opportunity, avoid trouble by diversifying. A safe rule of thumb is to never put more than 20% of your net worth in any one investment. Diversifying not only mitigates (some) risk, but if done right, can also increase your net returns in the long-run. As one sector or type of investment declines, another in your portfolio will thrive.
She just checked her portfolio. Finances are very emotional. If you're following the stock market and your account balances on a daily basis, you'll be riding a roller coaster of ups-and-downs that not many people can handle. Even worse, you're increasing the likelihood you make a spur-of-a-moment decision to sell everything or double-down that will more than likely cost you in the future. Find a cadence of checking your investment performance that works for you. I recommend every 2–4 weeks as a good place to start. 4. DON'T Live Beyond (or even at) Your Means So you just got a promotion or a raise, great news! But, instead of upgrading your car or your rental apartment, put it towards a longer term financial goal. In my Open Letter to Millennials, the main reason Millennials aren't saving is because they are spending every last dollar they earned. Do an inventory of your spending and budgets with Mint. What can you live without? What can you buy less frequently? Where can you downgrade? Don't spend more than you earn. It's harder than it sounds. 5. DON'T Take on Debt You Don't Have To In a good economy, debt is very easy to acquire. Take a minute to think of the debt you have today: Student Loans, Credit Cards, Car Payment, Mortgage. The list goes on and on and on. Do you have an iPhone? If you're on their "upgrade plan", congratulations, you've taken on another loan! (P.S. Don't worry, I am too) One of the best things you can do for your financial health is to avoid taking on this debt at all costs. Instead of trading in your older car for a new lease, fix it up and stretch it for a few more years. Instead of buying a new wardrobe, pay more towards your credit card bills. Create a plan for getting rid of the debt that you have today and avoid new debt in the future. Also, not all debt is bad (like a house mortgage), it just creates more risk when the economy falters or an unexpected life event occurs. [link] [comments]  |
| Amazon, Walmart, FedEx workers plan walkout on Friday. Posted: 28 Apr 2020 04:43 PM PDT |
| Alphabet EPS misses by $0.89, beats on revenue Posted: 28 Apr 2020 01:08 PM PDT Non-GAAP EPS of $9.87 misses by $0.89 GAAP EPS of $9.87 misses by $0.34 Revenue of $41.16B (+13.3% Y/Y) beats by $990M edit this is pretty good actually, lets wait for the guidance [link] [comments]  |
| Robot Analysts Outwit Humans on Investment Picks, Study Shows Posted: 28 Apr 2020 07:19 PM PDT Machine buy recommendations can generate 'substantial returns'. Study looks at 76,000 robot recommendations made over 15 years [link] [comments]  |
| Investing during a severe recession Posted: 28 Apr 2020 07:58 PM PDT Who remembers the scene from The Big Short where the older more experienced trader (Brad Pitt) reminds the younger investors that they've bet against the American economy and all of the terrible things that happen to people during recessions? It's been over a decade since since we've had a harsh recession and any significant stock market decline until this past March. Investors panicked sending markets down 30-40% and have since had a change in sentiment sending values back up. I'm not old enough to remember much from 2000 and was still in university with no money to invest in 2008. There is a huge cohort of investors out there who haven't invested through a recession. Forget timing the market based on future earnings expectations and what a company is "worth" for a moment. What is it going to be like if a significant amount of people cash out some or all of their investments because they need the money for their own living expenses and have no ability to buy back in causing a bounce back? A hypothetical S&P 500 at 2,000 looks like a no-brainer buy right now, but what if you've lost a job or are concerned because your company is laying people off. Are you going to throw your investment dollars in the stock market? I'd like to hear from some investors who have lived and invested through previous recessions about how they handled the situation. What would you do differently with your investments if the re-opening of the economy fails and we find ourselves in a pro-longed recession? [link] [comments]  |
| What stocks are way overvalued right now? Posted: 28 Apr 2020 08:47 PM PDT |
| AMC says it will no longer play Universal Studios films Posted: 28 Apr 2020 11:09 PM PDT https://www.cnbc.com/2020/04/28/amc-says-it-will-no-longer-play-universal-studios-films.html The Journal quoted NBC Universal Chief Executive Officer Jeff Shell as saying he expects to release movies simultaneously in theaters and direct-to-home formats. Universal Studios is owned by NBCUniversal, a subsidiary of Comcast. AMC has 1,000 theaters across the globe. "AMC believes that with this proposed action to go to the home and theaters simultaneously, Universal is breaking the business model and dealings between our two companies," AMC Chief Executive Officer Adam Aron said in a letter addressed to Universal Studios Chairman Donna Langley. With movie theaters worldwide shuttered since mid-March due to the coronavirus pandemic, AMC said the action was effective from Tuesday and would apply as and when its theaters reopen. [link] [comments]  |
| Posted: 29 Apr 2020 04:02 AM PDT So recently someone mentioned Michael Burry and the great foresight he had on the financial & housing markets before the crash. Are there any amazing trades and or picks you have seen that are both famous or obscure that you always think about? Also for any of the crowd that remember "Trading Places" if you can list cool things you have seen accomplished or done in the commodity market like Frozen Orange Juice or Pork Bellies bonus points ;) [link] [comments]  |
| Ford reports $2B loss for 2020Q1. Adjusted EPS of negative $0.23 Posted: 28 Apr 2020 07:49 PM PDT Second quarter EBIT is expected to be a loss of at least $5B and the company recently did a bond raise of $8B to raise cash for the downturn and pulled $15B from its credit lines. Cash balance as of April 24th was $35B. Revenue also dropped by 15% YoY and wholesale sales by by 21%. ER Available on Ford's IR site here: https://shareholder.ford.com/investors/overview/default.aspx Not a ton to say here, it was a pretty ugly quarter without the shutdown really kicking into high gear, the oil crash or unemployment spiking. Ford is also projecting a loss of >$5B in full year earnings and capital spending around $6.5B for the year. On the plus side they did raise a good amount of cash, albeit on much worse terms than their last comparable bond offering several years ago. Losing their IG rating hurt and the automotive segment wasn't exactly going into this recession on the best footing either. On the credit side they've also done some lease and payment deferrals already with around 10% of contracts being extended according to their slide deck. They added a loss provision for $554M as well which was a big hit to earnings on the credit side. The credit segment is going to be one of the big things to keep on eye on going forward. [link] [comments]  |
| A visualization of how sentiment of headlines with respect to Covid-19 has influenced the SP500 Posted: 28 Apr 2020 09:03 AM PDT I have a dataset with financial headlines. Next to that I have written an algo that determines sentiment of a headline (scoring it from -1 to +1, being negative to positive). I have the algo also keeping track of Covid-19 related headlines and running it daily vs the SP500. Plotting the results of the past months gives some interesting insight in how sentiment of headlines has evolved over time vs movements of the SP500. Thought it would be interesting to share. The plot shows corona related sentiment (red) vs SP500 (black). Image can be found on: Edit: I got some requests for updates. I share some frequent updates on twitter (@AlternativeAna2) [link] [comments]  |
| Posted: 28 Apr 2020 03:12 PM PDT |
| Do you think we'll have to wait until Q3 earnings to really see if the current rally holds? Posted: 28 Apr 2020 10:21 PM PDT Barring a second wave of shutdowns if the virus flares up again, it's starting to look like the rubber won't meet the road until Q3 earnings season. Everyone is expecting poor Q1 and abysmal Q2 earnings reports, but it seems like there is optimism that Q3 will show a path to normalcy. If Q3 disappoints that would trigger a crash. For those who are bearish, what news do you anticipate economically (i.e., not another wave of shutdowns) before October to set off a massive sell-off? [link] [comments]  |
| Reuters: Boeing eyes major bond issue to raise funds Posted: 29 Apr 2020 12:19 AM PDT
[link] [comments]  |
| Pfizer Coronavirus Vaccine Could Be Ready for Emergency Use by Fall Posted: 28 Apr 2020 11:50 AM PDT The experimental vaccine could begin clinical testing in the U.S. as early as next week, and Pfizer could have results from the study next month [link] [comments]  |
| Trolls World Tour = Direct to Streaming Success; Could Signal a Long-Term Decline of Theaters Posted: 28 Apr 2020 08:17 PM PDT Trolls world tour was originally suppose to be a theatrical release but theaters closed before it could be released. So DreamWorks rolled the dice on doing a direct to streaming instead and turns out it was a huge success. It could possibly show a long-term trend where theaters fall out of fashion as consumers might prefer streaming media instead for everything. Article: https://dnyuz.com/2020/04/28/amc-theaters-and-universal-brawl-after-trolls-world-tour-is-online-hit/ My prediction: buy streaming providers, content creators; sell theater chains and companies that sell to theaters (Dolby?) [link] [comments]  |
| Posted: 28 Apr 2020 07:39 PM PDT Because the markets are currently higher today than they were on June 4, 2019 when unemployment was at 3.5% and no one could imagine anything short of WWIII would shut down/slow the WORLD economy for 6-18 months. Normally a bull, but not when everyone is being irrational. [link] [comments]  |
| ETF portfolio for stable growth? Posted: 28 Apr 2020 08:50 PM PDT First off let me say thank you for everyone in this sub(s), I've learned so much from it. I'm planning on making a shift from purely stocks/options portfolio to 80/20 mix of ETFs and growth stocks. Maybe like a second account altogether. I'm 31 so my thinking is mostly to buy/hold, not to actively trade. Here are my possible ETF selections.
There are so many other categories like emerging markets(VWO,EEM etc., developed markets(EFA,VEA etc.), sector wise like XLF(finance) and specialized ones like GLD (Gold),BND (Bond market) and so many categories ( and sub categories through a bunch of providers. What I haven't nailed down is what percentages is like a safe bet and of course for DCA'ing going forward. There are couple sectors I think are good but not sure if I'd want them on my long term portfolio: Defense (ITA), manufacturing (FIDU for example). Want to hear your opinions on these. I guess we can replace REITs with either one of these if the returns/growth is good. I have no idea how 3X leveraged ETFs/indexes like SOXL, SQQQ etc. work. But I want to see what do you think of having a balance ETF to these (like VIIX for example) in case of market downs. Is SQQQ a good one to hang on to or no? What I'm planning to do is to have about 6-8 of these ETFs and maybe 3-4 blue-chip stocks like AAPL, GOOGL, AMZN etc. What I'm conflicted is this seems redundant as these 4 stocks usually makeup couple (or more) of the above mentioned ETFs. I'm hoping for some suggestions here. I think it's hard to keep track of stocks if you own too many. I mean there's so many debates on how many is too many. I want to see what you guys think. Thanks in advance for reading and for any responses. P.S. Posting this to r/stocks and r/etfs as well for wider audience, so please don't get mad [link] [comments]  |
| Posted: 29 Apr 2020 04:17 AM PDT One would think with the current global economic crisis at hand, investing in stocks would be a not so swell idea, however, the answer always remains the same - "Time in the market beats Timing the market". Nevertheless, being a long time lurker here, the answer has always been the same. Whether the market is thriving or failing, it is always 'a good time to get in'. I just want to know when wouldn't be a good time ? Or at least, the reasoning behind this never changing answer. [link] [comments]  |
| Is it worth going to college/university to learn about investing? Posted: 29 Apr 2020 04:12 AM PDT I graduate in a few months and have been interested in learning about this subject. Is it worth going to college to learn about economics/investing/marketing or is this stuff better learned self taught? [link] [comments]  |
| PE investor perch: Help me make sense of the s-storm we're seeing in real-time Posted: 28 Apr 2020 09:34 AM PDT Long-time lurker, first-time poster. Here are my two-cents as a middle-market private equity investor; it's an interesting perch to watch things unfolding real-time... and which frankly makes me wonder WTH is going on in the public markets. I'm not going to edit this for typos. Earnings: Our investments are relatively resilient (think trains, pharmacies, food supply chain stuff). But our earnings are getting absolutely smoked; I'm talking (20%) to (30%) territory. Our Q1 valuations won't really reflect this as March will have some China noise and 2 weeks of lockdown (the majority of American businesses will feel this on the margin), but Q2 and Q3 will be a mess... for us, we mark-to-market and carry on; but the hit on earnings poses a big covenant and liquidity issue. In the public sphere, mark-to-market is the market. I can only interpret the market as saying your NTM earnings, however risky and unknown (this is without precedent, after all), are irrelevant because the long-term story holds water. Since when did the public markets move from being so short-term and hung up on quarterly earnings to so long-term? I'm lost. Refi wall: Private companies went into Covid-19 with historically levered balance sheets. Granted, a lot of issuances were cov light at higher leverage levels, some are HY and are trading like shit, but even the best private loan terms have fixed charge covenants which will bite borrowers in the ass. There's about $1.5tn of corporate loans maturing over the next 12 months (what we call a refi wall). When that wall hits, companies will be refinancing off of significantly lower earnings (best case) or will be trying to find debt in a market that's seized (which is what we saw in 2009). Imagine you earned $100mm of EBITDA and you were 4x levered heading into Covid. Now it's time to refinance, and your EBITDA is $75mm; you'd be looking to fill a 5x of hole on your balance sheet, and no one is lending at those levels any time soon. Sure, some businesses won't be down (25%), but a lot of industrial, old-world, cyclical businesses will be - and then some. If you're a PE-backed company, you call in your best lending relationships and add some equity to fill the hole (or you say F it). If you're a SMB, I have to imagine you just throw in the towel. What other option do you have? Government stimulus has been a huge boost on this front, but marginal credit heading into Covid-19 will be unfinanceable and businesses will go under en masse, whether it's a liquidity crunch today or an inability to refi tomorrow. Farm crisis: I don't know why it doesn't get more media attention, but there's a storm brewing in the food supply chain. Granted, these points are hearsay, but we have it on pretty good authority that commercial farms will soon be forced to euthanize entire herds of livestock and poultry. The reality is that cows, chickens, and pigs get too old and too fat quickly, and when processors are shut down, there isn't a lot of time to spare. That's the protein story. Produce could also face issues. Again, hearsay, but we've heard that some crops aren't going in during prime planting season. You might already be seeing the food supply chain - particularly truck - screwing things up (noticed any fresh produce missing from the menu of your grocery store or current take-out spot?), but if there's a fundamental supply issue it would spell serious trouble. You thought fighting over the last roll of toilet paper was bad? I would love to be fact-checked on this front. Again, it's coming from sources in the thick of things, but it's quite ominous when food security in North America is a topic of discussion. O&G: The fracking boom has been a massive driver of employment over the last decade or so. As wells shut off, people will be sent home. I don't think I need to go into this more, but too much or too little oil are both huge issues for America. Credit cards & other consumer debt: This one has been getting a bit more traction as the value investor blogs have been all over it. Let's say we are back to normal in a few weeks or months time. And people are now able to go out and start spending again. Notwithstanding the fact that unemployment is insane (26mm?!) and it will take time for those people to re-enter the workforce, there will be a mountain of backdated credit card, mortgage, car, rent, and other loan payments they'll need to service before they buy that BBQ, renovate their house, or take a trip. What card do you guys think the government has up its sleeve to gloss over that? I'm a family of four and I don't want the banks to foreclose on my house (obviously) or my car (to get to work); do we honestly think there's much left over after all that debt service? Maybe mass consumer loan forgiveness or refinancing (i.e., tack missed payments onto the end of the loan). I just haven't seen it. Someone tell me everything above is wrong and I'm just seeing problems where solutions are in the works. I just can't make sense of everything I'm seeing - earnings getting smashed, lenders getting picky, fundamental supply and demand issues - next to a market that's modestly down (relatively) from record-highs. Am I missing something? [link] [comments]  |
| How has learning to invest changed you as a person? Posted: 28 Apr 2020 12:28 PM PDT Like the title says, how do you think you have changed as a person since you first began learning to invest? [link] [comments]  |
| In The Big Short, what exactly does Michael Burry buy from the banks? Posted: 29 Apr 2020 02:47 AM PDT He goes to Goldman Sachs and eventually negotiates a deal to buy $100M Credit Default Swaps. Is he buying Mortgage Backed Securities and CDS? And why is he buying? Isn't 'shorting' effectively borrowing and returning at a later date for a profit? Normally I'm good with this stuff, but this time I can't get my head around the process of what he did and what he bought. [link] [comments]  |
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