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.
- Shell slashes dividend by 66% - First dividend cut since World War II
- Fleet Of 28 Saudi Oil Tankers Could Send U.S. Oil Prices Crashing In May
- Elon Musk says orders to stay home are ‘fascist’ in expletive-laced rant during Tesla earnings call
- /R/Investing has thrown its own advice out the window and is behaving incredibly irrational right now.
- Eurozone GDP contracts by 3.8%, the sharpest drop ever.
- New initial unemployment claims total 3.8 million for last week; seasonally adjusted insured unemployment rate reaches highest point since tracking began
- Why is there a down limit circuit breaker but not an up limit circuit breaker
- FAANG stocks are holding up the market and they all missed on EPS so far
- McDonald's Q1 earnings fall 17%
- Is Tesla making most of earnings money by selling gas emission credits?
- Are there any examples of companies that have been successful over a long term with someone as unstable as Elon musk running the show?
- Possible UPS & AMZN connection
- US Q1 GDP decreases 4.8%
- MSFT revenue 35.02B vs 33.99B forecast !
- MasterCard sees 40% jump in contactless payments
- Not a bear rally but the continuation of a bubble?
- Berkshire Hathaway vs S&P 500
- Microsoft’s stock rises after company reports 15% sales jump and says coronavirus had ‘minimal’ impact on revenue
- Shorting the market at anypoint in the last month on any negative data has not worked - how are you coping with this?
- Can anyone offer insight into what Spotify is doing to differentiate itself as a software?
- What’s your YTD performance?
- Google takes on Zoom, makes Meet video conferencing free to use
- Facebook announces earnings: Revenue beat 17% up YoY, drops in ad sales, shares up 8% in AH
- CLO Engineering Is No Match for Covid-19 as Payments Get Cut Off
- S&P cuts Boeing to BBB-, one notch above junk
| Daily Advice Thread - All basic help or advice questions must be posted here. Posted: 30 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]  |
| Shell slashes dividend by 66% - First dividend cut since World War II Posted: 30 Apr 2020 12:15 AM PDT
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| Fleet Of 28 Saudi Oil Tankers Could Send U.S. Oil Prices Crashing In May Posted: 30 Apr 2020 06:42 AM PDT With the Covid-19 pandemic reducing global oil demand by devastating numbers, oil storages are filling quickly in the US, forcing producers to start shutting output in the country and creating a big tanker congestion on its coasts. A Rystad Energy analysis reveals that 28 tankers with Saudi oil, including 14 VLCCs and carrying a total of 43 million barrels, will arrive on the US Gulf and West coasts between 24 April and 24 May. The Saudi fleet, with oil loaded at Ras Tanura, will join an existing congestion of 76 tankers that are currently waiting to unload in US ports. Most of these tankers are on the West Coast, where 34 tankers are waiting in line to offload about 25 million barrels of crude. In addition, about 31 tankers, carrying a similar load, are waiting for a slot to unload on the US Gulf Coast. [link] [comments]  |
| Elon Musk says orders to stay home are ‘fascist’ in expletive-laced rant during Tesla earnings call Posted: 29 Apr 2020 05:21 PM PDT Tesla CEO Elon Musk lashed out at government stay at home orders as "fascist" in an expletive-laced rant on Tesla's Q1 2020 earnings call. While answering analysts' questions about liquidity amid the coronavirus pandemic, Musk called shelter-in-place orders "forcibly imprisoning people in their homes against all their constitutional rights." Musk said he was concerned about not being able to resume operations at the company's factory in Fremont, California, saying that possibility should be considered "a serious risk" given Tesla produces most of its cars there in addition to its Shanghai-based plant. Tesla had initially said the factory it would remain open despite shelter-in -lace orders until the county where it's located said it could not be considered an essential business. Six counties, including Alameda, where Tesla's factory is located, recently extended their shelter-in-place orders through the end of May. Musk had spoken out about government restrictions on citizens during the coronavirus pandemic earlier on Twitter, but further expressed his opinion on Wednesday's call while encouraging government officials to invest in infrastructure. He praised China for having "much better" infrastructure than the U.S. "This is the time to think about the future, and also to ask, is it right to infringe upon people's rights as what is happening right now?" Musk said. "I think the people are going to be very angry about this and are very angry. It's like somebody should be, if somebody wants to stay in the house that's great, they should be allowed to stay in the house and they should not be compelled to leave. But to say that they cannot leave their house, and they will be arrested if they do, this is fascist. This is not democratic. This is not freedom. Give people back their goddamn freedom." At another point on the call, he said, "So the expansion of the shelter in place or as we call it forcibly imprisoning people in their homes, against all their constitutional rights, is my opinion, and breaking people's freedoms in ways that are horrible and wrong, and not why people came to America or built this country, excuse me. It's outrage, it's an outrage. It will cause loss, great, great harm, but not just to Tesla, but any company. And while people will weather the storm there are many small companies that will not," he said. He continued sounding more and more incensed, at one point asking, "What the f--k?" The Bay Area's orders do not say that people cannot leave their house, but do restrict non-essential businesses from staying open and ban many other activities, such as large public gatherings. Some states, including Michigan and Texas, have seen protests of stay at home orders as fears about economic deterioration grow. But public health officials have cautioned that reopening too quickly could result in cases of Covid-19 re-accelerating and developing new hot spots that could overwhelm health systems. https://www.cnbc.com/2020/04/29/elon-musk-slams-coronavirus-shelter-in-place-orders-as-fascist.html [link] [comments]  |
| Posted: 29 Apr 2020 09:03 AM PDT I have browsed this sub for the better part of the last decade and picked up a lot of useful tips and information. The last few weeks - it seems like it has become the norm to toss best practices of investing out the window. I learned the following on here: You can not time the markets. It is impossible. The market is irrational. Keep your money in and keep investing. Time is your friend. The market will go up over long periods of time. And now in 2020 I am seeing the following advice being pushed: I know better than the markets. The markets will drop. I can surely time this. It's not me that's wrong it's the market. The market is not responding correctly to bad news. I am even seeing people over emphasize negative news stories about the virus or the economy. It seems there is a growing resentment from people holding cash that may have missed catching a falling knife - which we always knew to be incredibly difficult. The fact of the matter is we don't know how the market will behave. For us average investors it is best to keep putting money in and holding or dollar cost averaging. Ignore everything else. [link] [comments]  |
| Eurozone GDP contracts by 3.8%, the sharpest drop ever. Posted: 30 Apr 2020 05:32 AM PDT https://www.cnbc.com/2020/04/30/euro-zone-gdp-q1-2020.html The preliminary GDP numbers indicate the steepest quarterly drop in economic output since the Eurozone was formed. Spain and France both lost more than 5%, while Italy was down around 4.7%. [link] [comments]  |
| Posted: 30 Apr 2020 07:07 AM PDT "In the week ending April 25, the advance figure for seasonally adjusted initial claims was 3,839,000" "The advance seasonally adjusted insured unemployment rate was 12.4 percent for the week ending April 18, an increase of 1.5 percentage points from the previous week's revised rate. This marks the highest level of the seasonally adjusted insured unemployment rate in the history of the seasonally adjusted series" "The total number of people claiming benefits in all programs for the week ending April 11 was 16,339,149 " "The highest insured unemployment rates in the week ending April 11 were in Michigan (21.8), Vermont (21.2), Connecticut (18.5), Pennsylvania (18.5), Nevada (16.8), Rhode Island (16.7), Washington (16.0), Alaska (15.6), New York (14.4), and West Virginia (14.4)" Report can be found here (pdf warning) https://www.dol.gov/ui/data.pdf [link] [comments]  |
| Why is there a down limit circuit breaker but not an up limit circuit breaker Posted: 30 Apr 2020 02:27 AM PDT People say because algo's can keep going down but sure it'll balance itself out anyways. If algo's are wrong that's the problem of whoever wrote them. If a company is worth X then so what if an algo crashes it 40%, they'll be picked up by others and manual trades can benefit. Another thing said is it allows investors to cool down and not allow hysteria to boil over and not make hasty decisions. Again, if it is a hasty decision, the market will bounce back just as big. Finally if there's a down limit breaker, why shouldn't there be an up limit breaker? I'm sure the algo's can go the other way and hysteria can go the other way. Is this not a type of market manipulation? [link] [comments]  |
| FAANG stocks are holding up the market and they all missed on EPS so far Posted: 30 Apr 2020 12:57 AM PDT The Nasdaq is basically flat year to date. All the FAANG stocks are near all time highs. Facebook, Netflix and Google all missed on EPS estimates. Apple is likely to be hit even worse (sales are down and stores are closed) which leaves Amazon as the only member of FAANG that is likely to beat on earnings. Here's the thing... According to earnings calls and the current economic trend, they were only beginning to experience negative effects for the last few weeks of the quarter. GDP declined by 4.8% this quarter, whereas economists are projecting a decline of 30% to 40% next quarter. If we look at tech across the board, we have some winners like Microsoft and Zoom, but chip makers like AMD (which met EPS estimates but didn't beat) and Qualcom both delivered poor guidance for coming quarters. AMD has been rallying back to all time highs. Nvidia is also near all time highs. Yet, despite the relative strength in the tech sector, the current trend of earnings, economic forecasts and guidance (or lack thereof) strongly suggests that tech will take a huge hit in coming quarters. Let's look at how concentrated the S&P is in the very top stocks, all of which are tech... https://i.imgur.com/Gir5SXH.jpg This blows the dot com boom out of the water. Now consider how much of the S&P the rest of the tech stocks account for. All of this is to say, watch these tech stocks closely. If they fall, the indexes will go with them. There is a high probability they will lead the next leg of the drop. Also, here's my take on the long term value of these stocks. The US is moving closer and closer towards adopting basic income. Nothing is guaranteed, but if anything has made the case for increased automation and basic income, it's the current circumstance. Such a policy would likely necessitate a rise in corporate taxes or a VAT. That's a direct hit to the earnings of notorious tax evaders like Amazon. In addition, basic income would give working class people more leverage in holding out for higher pay because they wouldn't be weighing job offers against total destitution. This too would detract heavily from future earnings. After the 2000 crash, the Nasdaq didn't recover to the highs for 15 years. If you look at the S&P chart I posted, among the top five stocks in 2000 were Microsoft, Cisco and Intel. Microsoft took 16 years to recover to its highs and Cisco and Intel never fully recovered to their high points. Therefor, I advise extreme caution in this environment. Do not be shamed out of taking profits near all time highs if that's what you personally feel comfortable with. I won't say it's wrong to hold if you're ready to accept the risk, however, just because these companies are good "blue chips stocks" that doesn't mean that they're low risk or no risk, regardless of your time horizon. That's just my two cents. [link] [comments]  |
| McDonald's Q1 earnings fall 17% Posted: 30 Apr 2020 06:14 AM PDT https://www.cnbc.com/2020/04/30/mcdonalds-mcd-earnings-q1-2020.html
Full earnings report: https://news.mcdonalds.com/news-releases/news-release-details/mcdonalds-reports-first-quarter-2020-results [link] [comments]  |
| Is Tesla making most of earnings money by selling gas emission credits? Posted: 30 Apr 2020 01:55 AM PDT I've found out that Tesla has at least $2b of gas emission credits that can be sold to other companies. Their earnings yesterday were mostly covered with selling those credits from what I understand from this: https://twitter.com/Schuldensuehner/status/1255750733389074442/photo/1 Meaning that even if catastrophic Q2 for everyone, Tesla can still have profitable earnings with selling just gas emission credit and get listed on SP500 for 4 consecutive profitable quarters? Thoughts? [link] [comments]  |
| Posted: 30 Apr 2020 03:56 AM PDT |
| Possible UPS & AMZN connection Posted: 30 Apr 2020 05:24 AM PDT UPS fell short of analysts expectations earlier this week and they deliver a lot of Amazon packages. How big of a factor should this be when considering whether or not to retain AMZN stock for the short term? [link] [comments]  |
| Posted: 29 Apr 2020 05:34 AM PDT |
| MSFT revenue 35.02B vs 33.99B forecast ! Posted: 29 Apr 2020 01:26 PM PDT EPS: 1.4 vs 1.29 forecast Following GOOG, Microsoft will see you all tomorrow for the green happy days... [link] [comments]  |
| MasterCard sees 40% jump in contactless payments Posted: 29 Apr 2020 06:14 PM PDT
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| Not a bear rally but the continuation of a bubble? Posted: 29 Apr 2020 03:08 PM PDT There's been a lot of chatter on here about the rally and whether or not it will remain robust but I'm going to pitch something more radical. This isn't a market that's correcting for being oversold and it isn't just a run of the mill bear rally. This is a full on bubble. For your consideration here are Hyman P. Minsky's five stages of a bubble. I believe we are firmly in the beginning to mid phase of stage 3. 1.Displacement Fed is willing to pump infinite amounts of liquidity into the banking sector Interest rates likely to stay at 0% for months or even years Feds buying junk bonds therefore few if any blue chip corporations will need to worry about liquidity 2.Boom I think the rally speaks for itself but here is a collection of other images from other moments during the rally. 3.Euphoria https://www.marketwatch.com/amp/story/guid/BE958ED2-780E-11EA-8C40-794B76EB1F9C https://www.fool.com/amp/investing/2020/04/28/why-harley-davidsons-stock-rode-higher-on-tuesday.aspx Hearing commenters point out that the stock market is not the economy. Repeatedly. 4.Proft-taking TBD 5.Panic TBD I'm still analyzing this and trying to determine my next moves. But definately not touching this hot mess with a 10 foot pole. What are your thoughts? [link] [comments]  |
| Posted: 30 Apr 2020 10:26 AM PDT BECKY QUICK: All right. Let's jump to Berkshire's overall record versus the S&P. Berkshire has now underperformed the S&P 500 on one-year, three-year, five-year, and 10-year marks. WARREN BUFFETT: Yep. BECKY QUICK: Is that because it's too big? And will it ever be able to outperform the— WARREN BUFFETT: Well, certainly being too big is part of it. And-- but I would say this. During that same time, I mean, last year we achieved-- now, I don't like-- GAAP earnings very well, but we achieved the highest GAAP earnings of any company in the world has ever achieved-- that's investor owned. And we have the highest net worth of any company in the world, investor owned. Any company in the world. So, it-- I would say related to safety of principal over time-- I feel good about it. And I feel good about the fact that 99% of my money's in it and that it will be the source of all the philanthropic contributions that are made for 15 or a dozen years after I die. So-- but I don't think-- I do not think it will be in the top 10% of stocks performing over the next 10 years. I don't think it'll be in the top 15% of stocks performing in the next 10 or 15 years. I also don't think it'll be in the bottom 10% or 20% or 30%. So-- but our ability to have a huge edge over the market generally with a $550 billion market value-- it's just, it'll be minor, but it'll be done in a very, very safe manner. [link] [comments]  |
| Posted: 29 Apr 2020 02:02 PM PDT
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| Posted: 29 Apr 2020 06:02 PM PDT Chipotle, Tesla near all time highs. SPY and DIA 12% off all time highs. I used to think when this first started there would be a V shaped recovery and that the virus's impact on business will not be so bad, but I changed positions in early April when oil crashed and we saw that massive unemployment was coming as well as worsening data from the virus showing the worst case outcome. The unemployment figures will change consumer spending, many people are surviving on debt right now and that debt has to get payed off - instead of buying new cars and going on vacation spending will be much more modest. Yet the market shrugs it off. If everything is going up because of where earnings will be 2-3 years from now my questions are:
Do you think the market is overly optimistic on returning back to normal? If not, what are we missing and failing to understand? Why are we so close to all time highs? US markets exchange $168 billion a day. The fed adding $5 billion to that per day, mostly in treasuries, is a drop in the bucket no? Shorting doesn't work - longing seems irresponsible, but doing nothing makes no returns. Whats the plan? [link] [comments]  |
| Can anyone offer insight into what Spotify is doing to differentiate itself as a software? Posted: 30 Apr 2020 05:36 AM PDT First, I am a Spotify user and I switched from Apple Music. It's radio shuffle function is much better and I like the daily playlists, as well as the layout. I am thinking about buying the stock, I'm amazed it's at 152. Is there any concrete info or articles on the algorithms/developers' approach to their algorithms or how they position and view themselves against competitors? [link] [comments]  |
| Posted: 29 Apr 2020 07:03 PM PDT Just curious to know how everyone is doing this year. I just checked and I'm up 4.04% YTD. My portfolio is pretty boring. VV, VB, BLV, BSV, VBK, VUG, IAU. Made some quick cash off some little trades, but nothing significant. Lost a bunch trying to trade OIL. I'm just a terrible trader/speculator, going to stick with my boring ETFs. [link] [comments]  |
| Google takes on Zoom, makes Meet video conferencing free to use Posted: 29 Apr 2020 05:25 AM PDT
Will Zoom's moat hold ? [link] [comments]  |
| Facebook announces earnings: Revenue beat 17% up YoY, drops in ad sales, shares up 8% in AH Posted: 29 Apr 2020 01:31 PM PDT https://finance.yahoo.com/news/facebook-hits-2-6-billion-201851876.html One of the big reasons for the after hour rally was FB announcing that after the significant drop in ad sales they saw in March, it seems to have stabilized, which further boosts confidence for investors who think the market has bottomed out already. [link] [comments]  |
| CLO Engineering Is No Match for Covid-19 as Payments Get Cut Off Posted: 30 Apr 2020 08:22 AM PDT By Sally Bakewell and Lisa Lee (Bloomberg) -- Wall Street's engineering was supposed to turn loans to junk-rated companies into relatively safe bonds known as collateralized loan obligations. As the new coronavirus slams the economy, some investors are finding that safety to be fleeting. Interest and principal payments are at risk of being cut off for investment-grade CLOs in around a dozen different transactions totaling a few billion dollars, according to people with knowledge of the matter. The notes at risk have ratings as high as the A tier, well within high-grade territory, and were sold by name-brand money managers like Marathon Asset Management and Pretium Partners, the people said. The securities are being battered as the Covid-19 pandemic is bringing an economic downturn far worse than many CLOs were designed to withstand, with some estimates for unemployment in the second quarter reaching 30%. Loans are getting downgraded and their value is dropping, which is triggering protections designed to protect the safest securities issued by CLOs, those rated AAA. It's the first time these safeguards, known as senior overcollateralization tests, have been this widely triggered since the 2008 financial crisis. Many more deals could meet the same fate in the coming months. CLOs, a $700 billion market of securities carrying ratings ranging from junk to AAA, were largely left out of Federal Reserve stimulus programs. "I don't know anybody that modeled a CLO, or any other structured product, around unemployment soaring from about 3% to the levels we could be facing in the next few weeks," said Elen Callahan, head of research at the Structured Finance Association, a trade group. "If you told an analyst to model that, they wouldn't know what to do." The lowest-ranking securities sold by CLOs are most at risk. Of the roughly 900 deals that have posted data over the last month, around 21% have had cash payments cut down or cut off from the riskiest portion of their deals, known as the equity, according to Bank of America. In certain cases, junk- rated notes, which are less risky than the equity, have been affected as well. In mid-April, some analysts were expecting as many as 1 in 3 CLOs to have to limit payouts to holders of their riskiest securities. Prices can end up dropping on securities in a deal where payments have been cut off, because investors worry about the quality of the loans backing the transaction, said Jason Merrill, a CLO specialist at Penn Mutual Asset Management. "It's broadly considered a sign of deal distress," Merrill said. While investors might expect high-yield securities to suffer in a downturn, investment-grade instruments are supposed to be less vulnerable. During the last financial crisis, CLO bonds rated AA or AAA saw no defaults due to downgrades of the underlying loans. The default rates for A and BBB rated notes were infinitesimal, amounting to less than 0.01%, according to the Structured Finance Association's Callahan. Bondholders could face curtailed payments as CLOs fail the senior over-collateralization tests, which require the value of the loans a CLO holds to exceed the value of the bonds it issued by a sufficient amount. Failing that requirement results in interest and principal payments getting deferred on the bonds and cut off to equity. Those are instead diverted to pay down the safest notes issued by the CLO. CLOs issued by firms including Marathon, Pretium and Jefferies Finance have failed these tests. If the portfolio grows in value sufficiently over time relative to the liabilities, the failure is "cured" and payments to investors can resume. With the Jefferies transaction, it used cash built up from loan repayments that couldn't be used to buy new loans, since the CLO's reinvestment period had ended, to remedy the deal's breaches. Representatives at Pretium, Marathon and Jefferies declined to comment. CLO portfolio managers can sometimes cure their shortfalls through skillful trading, but loan downgrades have come so fast that many managers were unable to shed poorly performing loans quickly enough in recent weeks. Even more transactions are failing less stringent tests of whether the deal has enough collateral, known as interest-diversion tests. "We are only at the beginning of the first inning of seeing significant distress in the leveraged loan market," said Michael Barnes, executive chairman at Tiptree Inc., and founding partner of Tricadia Holdings, an investment manager that also issued CLOs. "It may severely impact equity, BBs and possibly BBBs with capital losses in the coming years." The record surge in downgrades has pushed more CLOs to sell loans they own: debt to companies rated CCC can usually only account for about 7.5% of the holdings of a portfolio backing a CLO under the terms of the securities. With recent rating cuts, many portfolios saw these limits exceeded. CLOs have to mark those excess loans at their market trading price, which effectively lowers the value of the collateral. That can spark more overcollateralization-test breaches, potentially creating a downward spiral. There will almost certainly be more CLOs selling loans, depressing the value of their assets further. There's little sign that the businesses paralyzed by the pandemic can soon return to normal levels of revenue generation that would improve their financial standing. Moody's Investors Service placed about $22 billion of CLO securities -- which get rated separately from their underlying loans -- on watch for a downgrade earlier this month, citing the deterioration in corporate credit quality. CLOs have these tests to protect the senior bondholders. Market participants tout them as mechanisms that specifically fortify CLOs against credit shocks, although whether they can outlast a shock of this magnitude remains to be seen. Bank of America said in a report earlier this month that failing overcollateralization tests for investment-grade portions of transactions likely hasn't happened since the 2008 financial crisis. Here are some of the deals that have failed overcollateralization tests for investment-grade securities:
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| S&P cuts Boeing to BBB-, one notch above junk Posted: 29 Apr 2020 03:56 PM PDT
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