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.
- Buffet Sells his Airlines stocks again
- 1 in 6 publicly traded U.S. companies did not earn enough to cover their interest payments going into the COVID-19 crises.
- Warren Buffet's Cash Pile Surges to Record $137 Billion
- "Boeing’s company debt now larger than New Zealand’s after huge bond sale"
- How will GOOG, AMZN, MSFT, AAPL and FB ever lose value?
- Shouldn't investors be more worried about Q2 results considering the U.S. didn't shut things down til latter half of March?
- Thoughts on the reliability of an analysts opinion?
- "Investors should always hold only stocks they think are the best stocks to hold at all times"
- Read this interesting op-Ed by a journalist who got into the hotel business. It really shined a light on how difficult hospitality is and how entrepreneurs fail to take risks and other factors accordingly in line with their projections for the future
- Conflicting data from different sources
- What do you think about 'business model arbitrage' (i.e. taking existing business models from somewhere like Silicon Valley and implementing them in other markets like emerging markets before the original company expands there)?
- Lean Hogs Rising. Why?
- Better options than default Vanguard 401k option?
- Which company is today's Berkshire Hathaway?
- The theory behind CapEx, Buybacks, and Dividends
- What do you guys think? ETF Fund Flows leading indicator for a sell-off?
- Saudi stock market has crashed. What are the consequences for the US market?
- tax
- Can someone explain how Credit Default Swaps work?
- New Here: How are people trading over the weekends and on what platforms?
- UK Guide to US Options
- Why does Buffet urge investors to use EBIT and not Net Income as metric for valuating companies?
- Warren Buffett's BRK is bearish on bonds not stocks
- Did Warren Buffett say anything about the rally seen in April?
| Daily Advice Thread - All basic help or advice questions must be posted here. Posted: 02 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]  |
| Buffet Sells his Airlines stocks again Posted: 02 May 2020 04:04 PM PDT |
| Posted: 02 May 2020 12:11 PM PDT I think a big assumption in the V-shaped recovery theory is that the U.S. economy was relatively healthy going into the crises. And that once demand returns to normal, businesses will continue to post record high profits. This idea couldn't be farther from the truth. Data published in the WSJ on March 10, 2020 showed that:
I find it very odd that stories like these were EVERYWHERE in March, 2020. Then as stocks began to skyrocket and firms started making back losses, they practically vanished from the media. If you are comfortable with these debt levels and believe we can keep increasing debt without a market contraction, then by all means continue to invest. Just wanted to get the information out since I haven't see much of this lately. [link] [comments]  |
| Warren Buffet's Cash Pile Surges to Record $137 Billion Posted: 02 May 2020 05:41 AM PDT Warren Buffett's Berkshire Hathaway Inc. spent the first quarter building up cash as the coronavirus slowdown started to grip the U.S.
Key Insights
[link] [comments]  |
| "Boeing’s company debt now larger than New Zealand’s after huge bond sale" Posted: 02 May 2020 09:05 AM PDT |
| How will GOOG, AMZN, MSFT, AAPL and FB ever lose value? Posted: 02 May 2020 06:33 PM PDT I really don't get it. Every period had its well-running stocks like in the nifty fifty. [link] [comments]  |
| Posted: 02 May 2020 02:52 PM PDT Just find it weird how investors expected awful results for Q1 and then bought back in after results weren't as bad as they feared, but it was really only about 2 weeks of results from the pandemic. Shouldn't everyone be more worried about Q2 results considering we are 1/3 of the way in and no where near returning back to normal economically, on top of that panic shopping has slowed considerably. I just have hard time seeing the positives that investors are seeing, even with things slowly opening up, I don't see things as business as usual from the consumer end as they will likely continue to try to remain cautious. If states open up too soon we likely see a flare up that will likely just set things back. So what am I missing? And before anyone says don't time the market, I left my 401k/IRA untouched, only thing I play around with is my taxable account which I'm up greatly on year to date. [link] [comments]  |
| Thoughts on the reliability of an analysts opinion? Posted: 02 May 2020 09:31 PM PDT I have been working on a program that will evaluate each of the s&p500 constituents and rank them by most buy and buy-equivalent analyst rating. I'll then make a mock portfolio of the top 50 and see how they performed under major downturns. I think it brings on a good discussion about these analysts and some trends that may be noticed. I've read numerous theories and case studies about analyst incentives, upper management pressure, etc... I'm not done the program yet, but I feel that although analysts may sometimes have other motives, I think when it comes to the blue chips, the "best" are usually largely agreed on. Would love to hear others thoughts! I'll update this post once I have the results. [link] [comments]  |
| "Investors should always hold only stocks they think are the best stocks to hold at all times" Posted: 02 May 2020 04:58 PM PDT Do you agree with this sentiment? A lot of investors (particularly buy-and-hold ones) believe "selling at a loss" is a sign of defeat and that loss realization is somehow detrimental to their long-term earnings, and that eventually things will go back up to break-even. I see "you haven't lost anything until you sell" posted all the time, as if somehow your unrealized loss is not a real loss, and holding is the best approach by default. This leads investors not to fundamentally reassess the opportunity costs of what they hold, holding and hoping they can break even... someday. Only when things are to a bleak point where they are trying to salvage anything they can do they sell. Whether a loss is realized or unrealized is irrelevant to the fact that the value today is what your value is today. Using that same monetary value, would you buy the same stock at current valuations and future predictions? If not, what the hell are you still holding for? Why not sell now and buy what you would have bought with that money, if it has a better chance of offsetting your losses long-term? [link] [comments]  |
| Posted: 02 May 2020 06:47 PM PDT |
| Conflicting data from different sources Posted: 02 May 2020 05:23 PM PDT I am getting conflicting P/E ratios based on where I look, idk, maybe I'm doing something wrong, but when I look on yahoo finance, I am getting a P/E ratio that's completely different than what I managed to calculate on my own and when I look on macrotrends it confirms my calculation. Why is this? I know yahoo finance has the forward and the trailing P/E ratio, I am looking at the trailing ratio. [link] [comments]  |
| Posted: 02 May 2020 11:42 AM PDT One example I can think of is Grab in Southeast Asia taking Uber's business model, implementing it in Southeast Asia before Uber established itself there, and winning that market. According to this Quora thread, the German VC firm Rocket Internet uses this process along with the global ePlanet Capital and numerous Latin American families. Do you know any other examples of this process? What do you think about it? Although it might sound shady, the end result is people often in developing countries having access to goods and services at fair prices that they would not otherwise be able to obtain. [link] [comments]  |
| Posted: 03 May 2020 02:11 AM PDT Can anyone explain to my why Lean Hogs is rising since Thursday while the meat industries seem to be taking an absolute battering? Packing plants are closing, service industry (2/3s of porks revenue) is basically non existent, prices dropping from lower demand....and yet it rose 6% on Friday alone... Thanks. [link] [comments]  |
| Better options than default Vanguard 401k option? Posted: 02 May 2020 05:31 PM PDT I've been investing in my 401K and have been disappointed in the rate of return. Looks like I've only had 2.4% return, around the rate of inflation. Right now my 401K is defaulted to Target Retirement 2050 Trust Select. Are there better options I can utilize? [link] [comments]  |
| Which company is today's Berkshire Hathaway? Posted: 02 May 2020 12:35 PM PDT "One thousand dollars invested in the S&P 500 in 1965 would be worth nearly $200,000 today, but that same $1,000 invested in Berkshire would be worth 130 times more: $26.4 million." Buffett has stated that BRK investors should not expect those types of insane returns (relative to S&P) to continue, due in part to the size of BH. So do you think any smaller investment firm today has the potential to be the next BH? Something like Pershing Square? Something else? Note I'm not talking about a 'lucky guess' like getting into Amazon or Apple at IPO. [link] [comments]  |
| The theory behind CapEx, Buybacks, and Dividends Posted: 02 May 2020 08:48 PM PDT I've seen a lot of posts recently about buyback and dividends, especially about the discussion of buybacks in the media, so I figured I'd explain some of the theory, or at least how I learned it, behind the signals they are meant to give investors when used by a company. Assume a company has extra cash: they have 3 options with how they can spend it depending on how they view the company, the industry they're in, and how the market is valuing the company (technically 4 with debt repayment, but that doesn't really drive shareholder value). If they think there's a lot of growth potential they'll use that money on CapEx, M&A, R&D, and other things to help the company grow. This signals they think they can grow investors money more than those investors could elsewhere. If they have more cash, or don't see as much growth in their industry they might turn to share buybacks or dividends. Dividends are a signal that they think investors can create a greater return elsewhere than they can in the company (or at least are giving them the option to chose if they can since you can always reinvest) [aside, but this is why you may want to be cautious of investing in companies with high dividend payout ratios since they're literally telling you you have better options]. Buybacks signal the opposite, they are the company telling the market "You aren't seeing our value, so the best thing we can do for our investors is buy ourself since we're so cheap". Theoretically a company would do this only until they though they were getting a good deal. The commentary is then for all these companies doing large scale buybacks, "Did they actually think their best option was to invest in the company, or were they just buying back shares to inflate share prices more?" That's a really hard to answer since the company technically knows better than us how they're valued, but it's also kinda shady when companies are systematically buying back shares every year at peak multiples. This all being said, if a company is buying back shares during a huge down market it's a good sign they're undervalued. Thank you for coming to my TED talk. [link] [comments]  |
| What do you guys think? ETF Fund Flows leading indicator for a sell-off? Posted: 02 May 2020 03:47 PM PDT https://www.forbes.com/sites/qai/2020/05/02/large-cap-etfs-point-to-sell-in-may-sell-off/ Over $5b in fund flows out of leading ETFs SPY, VOO and IVV. Can't be a good thing for the stock market after April's rally. [link] [comments]  |
| Saudi stock market has crashed. What are the consequences for the US market? Posted: 03 May 2020 04:06 AM PDT |
| Posted: 03 May 2020 04:04 AM PDT I live in Australia and am wanting to get into international stock markets.I am looking at a brokerage platform like Interactive Brokers who offer buying stocks from exchanges all across the world. As I understand the tax implications are for Australians is that once you've paid tax on earnings from stocks in a foreign country you can then calculate a tax deduction to receive a partial amount of that foreign tax back in your tax return provided you have earned money while being a resident of australia for tax purposes. So my question is, do my stock earnings get taxed by the country the stock exchange is located or the country which the broker is located? (As a side note, I am aware Interactive Brokers is marketed towards institutional investors but I have found their fees to be very cheap when considering a dollar-cost averaging strategy of investing on a weekly basis long term relative to all other Australian brokers who charge excessive fees on foreign investment) [link] [comments]  |
| Can someone explain how Credit Default Swaps work? Posted: 03 May 2020 03:58 AM PDT My understanding of credit defaults swaps is pretty elementary I would say. I think I understand the very basics, but nothing more than that, here's what I know and please correct me if I'm wrong so I can understand better. Thank you! So if a buyer of a CDS has the "spread" on the CDS tighten that means that they would be paying the seller of the CDS less of a premium, but the CDS asset itself would be depreciate in value since default of the underlying asset is less likely. Then on the flip side if the CDS spread widens then the buyer is paying a higher premium to the seller, but the underlying asset of the CDS is more likely to default and the CDS becomes more valuable to the buyer. In that case the seller would ideally like to redeem (buy back) the CDS so they don't have to pay out in the underlying asset actually defaults. Do I have most or any of that right? [link] [comments]  |
| New Here: How are people trading over the weekends and on what platforms? Posted: 02 May 2020 11:52 PM PDT I'm pretty new to investing and started out with Robinhood. I do my due diligence in reading as much as possible before committing to something, but I can'not for the life of me, find how people trade on the weekends or at 3:00AM CST on weekdays. How are stock prices moving during the weekends and AFTER after hours? If it is a platform related thing, which platforms offer that option? Thanks in advance! [link] [comments]  |
| Posted: 03 May 2020 03:36 AM PDT Options can be used to enhance a wider investment portfolio: at the very least to lower cost basis into buying into a stock position (cash secured puts) and are also frequently used as insurance to hedge against 'black swan' events such as covid (protective puts). I've helped a few people based in the UK in here get started on US options (we tea drinking folk don't have the luxury of an options market!). I decided to write a guide from opening an account to funding it and trading. https://www.reddit.com/r/UKInvesting/comments/gcig6g/uk_guide_to_us_options_trading [link] [comments]  |
| Why does Buffet urge investors to use EBIT and not Net Income as metric for valuating companies? Posted: 03 May 2020 03:20 AM PDT Warren Buffett's annual letter to Berkshire Hathaway shareholders https://fm.cnbc.com/applications/cnbc.com/resources/files/2020/02/22/2019ltr.pdf
My assumption
Why is EBIT a better metric than Net Income for valuating companies? [link] [comments]  |
| Warren Buffett's BRK is bearish on bonds not stocks Posted: 02 May 2020 11:36 AM PDT If you look at Berkshire Hathaways percent allocation over a long range time frame, you will see Buffett & Munger were bullish on stocks until about 1998, bullish on bonds and stocks until 2003, and now are bullish on stocks and cash equivalents. [link] [comments]  |
| Did Warren Buffett say anything about the rally seen in April? Posted: 02 May 2020 07:38 PM PDT From the clips being uploaded, a lot of the topics look into either historical dow movement, long term investing or airlines stocks. Did he share his thoughts on the April rally anywhere and whether we'll be retesting lows?? One thing i found interesting was when he was discussing the 1930s depression. He mentioned a 20% rally from the 1929 low and by 1932, the DOW dived from 240s to 40s. Idk if it'll ever get this bad given the economic damage of COVID, but the Fed's aggressive action seems like they'll help. Nobody knows how effective they'll turn out to be. [link] [comments]  |
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