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.
- BREAKING: Latam Airlines, Latin America’s largest air carrier, files for bankruptcy in New York after the pandemic grounded flights
- We're going to hit SPY 300 tomorrow. What are your plans now?
- Germany officially enters recession - GDP falls by 2.2%
- Does anyone have a legitimate long-term bull case here?
- Why did money printer in Japan not work?
- Are there other hedge funds that publish their portfolio picks through an investor/shareholder letter like Pershing Square does?
- Fidelity total market fund VS splitting into 3 index funds
- Mortgage Credit Tightens
- Why do index fund investors seem less well off than alternative investors?
- American Airlines (AAL): Overstated Bankruptcy Fears
- Which gold ETF is most likely to give you the bullion if you need it?
- Protective Textiles Manufacturers
- IG or CITY INDEX
- How does Bollinger Bands work?
- Why has Canopy Growth stock price increased 30.5% in the last week?
- Do you guys expect any major gym companies to go bankrupt in the near future? Planet fitness, lifetime fitness, 24 hour, etc
- What are your investing goals?
- Long term dividends or growth
- Stock portfolio visualizer recommendations?
- Long term growth fund comparison VOOG vs VGT vs QQQ
- European shares near 11-week high driven by reopenings -
- Anxiety and Volatility Diverge, Sending Warning Sign
- What is driving the pending apocalypse sentiment?
- Investing based on ideas from Peter Lynch
| Daily Advice Thread - All basic help or advice questions must be posted here. Posted: 26 May 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]  |
| Posted: 25 May 2020 09:36 PM PDT
Read more at: https://www.bloombergquint.com/business/latam-airlines-files-chapter-11-bankruptcy-stymied-by-lockdowns [link] [comments]  |
| We're going to hit SPY 300 tomorrow. What are your plans now? Posted: 25 May 2020 07:39 PM PDT Futures are at 2995 for S&P 500, and it's all but certain that SPY will hit 300 tomorrow. What are your plans now? Are you planning to take profits, or hold? For me I have puts since SPY 280 but I think it will not be wise for me to sell at this point; instead I will DCA. EDIT: S&P500 futures have offically hit 3000!!! [link] [comments]  |
| Germany officially enters recession - GDP falls by 2.2% Posted: 25 May 2020 04:36 AM PDT The DAX is up nearly 2%. Germany's GDP drop is the 2nd largest following the recession in 2009 and since the reunification. As a response France and Germany are proposing a fiscal loan stimulus of $545 billion. The EU commission expect a 7.5% contraction for the Eurozone. [link] [comments]  |
| Does anyone have a legitimate long-term bull case here? Posted: 25 May 2020 08:03 PM PDT Since we're trading fairly close to ATHs now, I feel like it's an appropriate time to ask this question. Does anyone here have a legitimate case for why parking my money in equities at these current prices is a good long-term value investment? (no meme answers please) I realize that the Fed, FOMO, and various other factors may cause people to feel obligated to buy into equities, but those factors don't increase the underlying value of the stocks in question. Everywhere I look, I still see companies going bankrupt or projecting depressed earnings for a good period of time. The main reason I see people are buying stocks is that they're looking for returns created by the expectation that other people will pay more down the line. Nowhere do I see people projecting great earnings growth and a favorable environment given the now (more) massive amount of debt we have to service. P/E ratios have expanded. With more debt, the risks of stocks in general have also increased (liquidity =/= solvency). The Fed tried to raise rates last year just a little and markets freaked out. It feels like our economy can no longer handle higher rates of any sort. In my book, that's a HUGE warning sign, particularly given that we're already at 0%. Sitting in cash, I realize I missed out on the returns of the recent FOMO. But I can't help that the whole equities market is just one massive bomb waiting to blow up, if not now then sometime down the line in the near future. So, can any of you convince me that it's a good idea for me to buy in right now and be able to sleep well for the next couple of years? [link] [comments]  |
| Why did money printer in Japan not work? Posted: 25 May 2020 11:26 AM PDT Japan stock market chart https://imgur.com/e4dGc9R 30 years later, still no new highs. They lowered interest rates to 0 by the year1999. They even went negative interest rates. Japan printed tons of money, here is there money supply chart https://imgur.com/ItGF96I Why did it no hit new highs, how did it not create stock&assset inflation? Their housing market is similar to the stock market chart, i believe too. What gives? [link] [comments]  |
| Posted: 25 May 2020 06:40 PM PDT I looked through various hedge funds and I was not able to find monthly shareholder letters like Pershing Square's - it would be interesting if anyone knows of something similar for other companies to get multiple viewpoints on different stocks and markets. To be honest, this is surprising that it even exists publicly. [link] [comments]  |
| Fidelity total market fund VS splitting into 3 index funds Posted: 26 May 2020 01:05 AM PDT Is there any benefit from splitting the total market FSKAX fund into, SP fund (FXAIX), Mid cap index (FSMDX) and small cap index (FSSNX)? This is for a Roth IRA and I have like 40 years until I retire. Of course I'll have some allocation in the international realm, bonds and maybe some inflation protection stuff. I might also have a little money in my years target date fund. I would love any and all suggestions for ETFs and Index funds to look into and general advice. [link] [comments]  |
| Posted: 25 May 2020 02:15 PM PDT We are seeing this in all sectors. Collateral values will be dropping. [link] [comments]  |
| Why do index fund investors seem less well off than alternative investors? Posted: 25 May 2020 08:12 PM PDT I don't mean this in an insulting way but I've never met a wealthy passive index fund investor/someone who primarily invests in index funds. I don't understand why that is because active investors don't beat the market in the long run. On paper, low cost index funds end up ahead. Real estate has a lower return on average than index funds, yet every real estate investor I know has tons of money to invest and spend. I've known of investors who are strictly invest in equities but use private wealth managers or actively manage themselves. Is it that index investors go wrong somewhere in the long term? We should have tons of rich index fund investors yet its so rare if any. [link] [comments]  |
| American Airlines (AAL): Overstated Bankruptcy Fears Posted: 25 May 2020 10:15 AM PDT American Airlines: Overstated Bankruptcy Fears https://seekingalpha.com/article/4349880 American Airlines: Overstated Bankruptcy Fears May 25, 2020 9:25 AM ETAmerican Airlines Group Inc. (AAL)14 Comments7 Likes Summary American Airlines is far closer to cash flow positive despite limited domestic air travel. The market still isn't correctly factoring in the $4.1 billion PSP grant into daily cash burn rates. The airline could approach daily cash flow breakeven at 30% capacity levels of 2019. The stock is a buy below $10 as the airline faces limited bankruptcy risk. Never has a stock had so many bankruptcy questions while trading near $10 per share. Yet, American Airlines Group (AAL) finds the stock in just that situation. At the depths of the virus panic and when financial aid was questionable, some bankruptcy fears were logical. But now, the more logical outcome is a return to a very profitable airline on the verge of substantial free cash flow generation. My previous research that America Airlines has plenty of breathing room is only reinforced by the resurgent passenger demand heading into the Memorial Day weekend. Image Source: American Airlines website Traffic Surge The easiest path to the airline sector avoiding a bankruptcy is for traffic to return to more normal levels. When the Boeing (BA) CEO made the airline bankruptcy comment on May 12, the industry traffic was more in line with this chart from CNBC showing daily passenger levels still scrapping off the bottom down over 90% from 2019 levels. Source: CNBC On May 12, only 163K passengers went through the TSA checkpoint. On May 22, nearly 350K passengers flew on U.S. airlines. In the course of 10 days, the U.S. capacity grew from 7.5% to 12.5% of 2019 levels. The sudden launch in traffic dramatically alters the view of whether airlines end up filing bankruptcy. When looking at the rebound in a closer view of the drop, the passenger counts are making a U-shape rebound. Again, these aren't the types of traffic rebounds suggestive of bankruptcies in the airline sector. In the next few weeks, both Las Vegas and Florida theme parks in Orlando will reopen. The flying public will now have substantially more reasons to actually fly, breaking the mindset that people weren't flying due to fears when the issue is the lack of destinations without travel restrictions. For now, Hawaii still has a 14-day quarantine requirement until at least June 30 for people flying to the islands which naturally restricts any tourists. China air traffic is already above 40% of pre-virus levels. Even Delta Air Lines (DAL) recently targeted a return to 50% of previous traffic levels by the end of September. The market initially ran blindly negative with the airline planning to furlough half of its pilots, but the news was actually a positive indication Delta plans to maintain the other half of its pilots due to a forecasted resurgence in demand. Path To Breakeven As highlighted in numerous of my articles about the airlines, the path to cash flow breakeven isn't as far away as the market thinks. The sector isn't correctly factoring in the PSP grant from the U.S. Treasury, causing an irrational view of daily cash flow burn rates. Not to mention, some of the initial cash burn numbers, including those from American Airlines, were highly inflated by refunds in the short term. My last article provided some key figures for investors to absorb. The airline predicted ending June with a daily cash burn rate of $50 million. The number factors in booking finally catching refunds and didn't factor in the daily PSP grant of $22.5 million to cover some payroll costs. American Airlines obtained a $4.1 billion grant to cover the 183 days from April 1 to September 30. The actual daily cash burn from operations was only forecasted in the $27.5 million range. The $50.0 million is more of a liquidity burn rate with the PSP included in the liquidity amount. The airline will eliminate those related payroll costs after September 30 assuming traffic hasn't returned to normal levels. This amount most notably included no benefit from an improving revenue trend. Crucially, America Airlines provided this forecast back on April 30 along with the Q1 earnings call where CEO Doug Parker made the following statement regarding the revenue portion of the daily cash burn: As a result of all that, we expect to end this quarter with approximately $11 billion of liquidity and a significant amount of unencumbered assets still in place. That forecast assumes little to no increase in demand for air travel throughout the quarter. At the time, daily domestic passengers were only back to 120K or barely 5% of 2019 capacity levels. With reduced fares, the 5% capacity along with loyalty fees and cargo revenues likely generated between 5% and 10% of 2019 revenues. Since April 29, traffic has already been documented as reaching 12.5% of 2019 levels. In essence, traffic levels are up 150% since American Airlines provided the daily cash burn levels which included limited expectations for increased demand. A return to 30% of 2019 traffic levels when combined with loyalty fees and cargo revenues, American Airlines should reach at least 30% of Q2'19 revenues of $12 billion. In such a case, the airline would generate ~$40 million in revenues per day ($3.6 billion for the quarter) or somewhere around $27 million per day above the revenues from when the airline reported numbers at the end of April. The only big question is variable costs from increasing capacity from 20% of 2019 levels to 30%. What we do know is that revenues are large enough to wipe out the cash burn and variable costs such as payroll aren't increasing because the PSP required the airlines to keep those costs elevated. The big variable is fuel which cost the airline $2.5 billion last Q2. Additional costs such as maintenance, landing fees and selling expenses were another $1.5 billion. The $2.6 billion in other expenses are generally variable as well. The big key here is that fuel costs are down 50% so a normalized view of those expenses are $1.25 billion. Combined with these other variable expenses, American Airlines has $5.3 billion of quarterly expenses that dip to $1.06 billion with capacity at 20% and $1.59 billion up at 30%. The $530 million in additional costs is only $5.9 million per day in June. Revenue growth eliminates all but these additional costs from the daily cash burn rate. With these low fuel costs, capacity at 40% would actually lead to positive cash flows. The big wild card is that at 50% capacity and with jet fuel over 50% below last year's costs per gallon, American Airlines saves over $2 billion on fuel coast per quarter. In the end, American Airlines gets really close to cash flow breakeven around 30% of previous capacity levels as long as jet fuel costs remain below half of 2019 prices above $2/gallon. The real key to investors is that the airline reduces cash burn dramatically at these capacity levels and a shareholder can sit back and relax that bankruptcy fears will completely disappear. With bankruptcy off the table, shareholders can fully participate in the eventual rebound to record travel demand that always occurs after previous virus and terrorist fears pass. Takeaway The key investor takeaway is that American Airlines gets rather close to operating cash flow breakeven at 30% capacity. With bookings up, the airline might actually turn the daily cash rate to positive levels by the end of June. In addition, higher capacity rates will help cut the losses by July and August. Even without considering far better cash flow metrics due to surging travel demand, American Airlines forecasted ending June with $11 billion in liquidity. The stock has very low risk of bankruptcy here with the only possible negative outcome coming from another virus related travel shutdown. The stock is a buy here below $10. [link] [comments]  |
| Which gold ETF is most likely to give you the bullion if you need it? Posted: 26 May 2020 02:31 AM PDT I think we all know that most of these ETFs say that they'll give you bullion if you want it but in times of crisis, I doubt most of us here will get any at all. For example, GLD says they have the right to pay you in cash if they wanted. Additionally, from custodians, trustees, governments yada yada, each which could magically go bankrupt or "lose" their gold, the odds of actually getting gold in crisis is very low. Not to mention, most of the times these things are "lent" out or posted as collateral somewhere, which itself may be "lent" out again. But I am sure some ETFs have less webs to navigate through than others. Anyone have a decent idea which ones those are? [link] [comments]  |
| Protective Textiles Manufacturers Posted: 26 May 2020 01:44 AM PDT With the us learning usually after our mistakes e.g. not having enough equipment to deal with the pandemic, surely countries will stock pile if not create deals with manufacturers, to prevent shortages of equipment happening again. However, stockpiling will max out at some point so should you only hold the position for 3 - 5 years rather than decades? Currently invested in Ansell Ltd. (Australia), so was wondering if anyone else had any other thoughts on this industry. [link] [comments]  |
| Posted: 26 May 2020 01:42 AM PDT Which one do you consider that better suits a retail trader? [link] [comments]  |
| How does Bollinger Bands work? Posted: 25 May 2020 11:38 PM PDT |
| Why has Canopy Growth stock price increased 30.5% in the last week? Posted: 25 May 2020 11:11 AM PDT Any reasons? I can't really find a logical reason why. And after this increase will you keep the stock or sell? [link] [comments]  |
| Posted: 25 May 2020 02:17 PM PDT |
| What are your investing goals? Posted: 25 May 2020 03:43 PM PDT Im not sure if this post is relevant to this subreddit but I didn't really know where else to ask. Today I was thinking about my portfolio and came to the realization that I was simply amassing capital just for the sake of it. I really don't have any plans of where I see myself in the future. I strongly agree that investing is better than not investing but surely there is more to life than accumulating piles of money! Im very young and the thought of putting money away for 40 to 50 years is throwing me into existential crisis. [link] [comments]  |
| Posted: 26 May 2020 12:00 AM PDT I'm 18 and I've got about 3 grand to my name. I got money spread around a few stocks and etfs (rh) but I'm weary of a coming market correction to more accurate levels for our current economic reality. I'm curious if looking to buy dividend stocks at a reduced price is a smart long term play or if looking for stocks poised to grow big the next 1-5 years is a better play. If anyone could help explain/numbers or graphs for this concept that'd be yuge. [link] [comments]  |
| Stock portfolio visualizer recommendations? Posted: 25 May 2020 07:50 PM PDT I'm wondering if there is a website or app out there that lets me plug in my portfolio holdings, like $10,000 invested in 33% VTI, 33% VUG and 33% VOO, and will show the holdings of those funds at the stock level. Like it would say based on that portfolio, you have 7% in Apple, 5% in Microsoft, etc. Does anyone know if something like this exists already? [link] [comments]  |
| Long term growth fund comparison VOOG vs VGT vs QQQ Posted: 25 May 2020 03:34 PM PDT Hello, I am looking into these three funds. VOOG has a very similar top 10 to VGT and QQQ. VOOG - 43% is top 10 holdings QQQ - 54.5% is top 10 holdings VGT - 59% is top 10 holdings VOOG is soemthing I don't see discussed here often but it has done fantastic in the years and I feel that it has plenty of room to grow. To be honest, out of these three I am leaning towards VOOG as I like how it is weighted and similar to QQQ. What are your thoughts? [link] [comments]  |
| European shares near 11-week high driven by reopenings - Posted: 26 May 2020 05:19 AM PDT So Europe is reopening very quickly and stocks are at 11 weeks high (read it here) and European stocks did not skyrocket under central banks impulsions at the beginning of the crisis (they are just beginning their recovery). If we look purely to health context, Europe is way safer to reopen than America currently is. However, France just unbanned short selling and hedge funds jumped on it to massively increase their shorts on companies like AirFrance. (see this ) So what do you guys think ? Recovery will be like the US one but this time driven by actual reopening so now is the best opportunity ever for STOXX 600 ? [link] [comments]  |
| Anxiety and Volatility Diverge, Sending Warning Sign Posted: 25 May 2020 08:30 PM PDT https://www.investopedia.com/investor-anxiety-and-volatility-diverge-sending-a-warning-sign-4845854 Still a little new-ish to investing, but what does everyone make of this? Are we likely to see some red this week? [link] [comments]  |
| What is driving the pending apocalypse sentiment? Posted: 25 May 2020 10:40 PM PDT Hi all, it seems to be a growing minority that there is going to be a huge sell off tomorrow. My question is, why tomorrow? Why not next week? Or 2 weeks from now? [link] [comments]  |
| Investing based on ideas from Peter Lynch Posted: 25 May 2020 11:44 AM PDT In his book One up on Wall Street, Peter Lynch mentions many features of an undervalued stock. I want to use the below 3 ideas to scan for stocks: - There is a low percentage of shares held by institutions I am wondering if these ideas are still valid or there are only penny stocks of shady companies with no analyst coverage nowadays. The problematic part is finding information on how many analysts are covering a stock. unfortunately finviz only shows "Analyst Recommendation" but not how many analysts are covering the stock. [link] [comments]  |
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