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    Thursday, May 7, 2020

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

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


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

    Posted: 06 May 2020 05:14 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:

    • How old are you?
    • Are you employed/making income? How much?
    • What are your objectives with this money? (buy a house? Retirement savings?)
    • What is your risk tolerance? (Do you mind risking it at blackjack or do you need to know its 100% safe?)
    • What are you current holdings? (Do you already have exposure to specific funds and sectors?)
    • Any other assets? House paid off? Cars? Expensive significant other?
    • What is your time horizon? Do you need this money next month? Next 20yrs?
    • Any big debts?
    • Any other relevant financial information will be useful to give you a proper answer.

    Please consider consulting our FAQ first - https://www.reddit.com/r/investing/wiki/faq

    Be aware that these answers are just opinions of Redditors and should be used as a starting point for your research. You should strongly consider seeing a registered financial rep before making any financial decisions!

    submitted by /u/AutoModerator
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    What Buffett actually said about Berkshire's Cash Position

    Posted: 06 May 2020 03:30 PM PDT

    Getting tired of reading posts from people who clearly didn't watch or read this earnings report or probably any earnings report so here we go. Tldr: His cash position (actually t-bills) is not large compared to the entirety of Berk's assets. Now can you all stop with the "But Buffett's holding cash" meme?

    "I show our net, our cash and Treasury bill position on March 31st. And you might look at that and say, "Well, you've got $125 billion or so in cash and Treasury bills. And you've got…" At least at that point, we had about, I don't know, $180 billion or so in equities. And you can say, "Well, that's a huge position to have in Treasury bills versus just $180 billion in equities."

    But we really have far more than that in equities because we own a lot of businesses. We own 100% of the stock of a great many businesses, which to us are very similar to the marketable stocks we own. We just don't own them all. They don't have a quote on them. But we have hundreds of billions of wholly owned businesses. So our $124 billion is not some 40% or so cash positions, it's far less than that.

    And we will always keep plenty of cash on hand, and for any circumstances, with a 9/11 comes along, if the stock market is closed, as it was in World War I—it's not going to be, but I didn't think we were going to be having a pandemic when I watched that Creighton-Villanova game in January either."

    Full Transcript

    submitted by /u/GromGrommeta
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    A wave of bankruptcies, surging taxes, and Americans harboring lasting scars from coronavirus lockdowns — the head of world’s largest asset manager warns of grim outlook

    Posted: 06 May 2020 11:18 PM PDT

    BlackRock Inc. Chief Executive Officer Larry Fink had a stark message for a private audience: As bad as things have been for corporate America in recent weeks, they're likely to get worse.

    Mass bankruptcies, empty planes, cautious consumers and an increase in the corporate tax rate to as high as 29% were part of a vision Fink sketched out on a call this week. The message from the leader of the world's biggest asset manager contrasts with the ebullient tones of a stock market that has snapped back from recent lows.

    Even among Wall Street luminaries, Fink speaks with particular clout. He has been advising President Donald Trump on how to navigate the effects of the coronavirus pandemic. And BlackRock is playing a key role in the Federal Reserve's efforts to stabilize markets, helping the central bank buy billions of dollars in assets.

    Fink said on the call with clients of a wealth advisory firm that bankers have told him they expect a cascade of bankruptcies to hit the American economy, and he wondered if the Fed needed to do more to provide support, according to a person with knowledge of the remarks.

    A BlackRock spokesman declined to comment.

    Even as the U.S. is plunged into deepening economic gloom, it will have to raise taxes to pay for emergency efforts to rescue sectors grappling with a difficult recovery, he warned on the call.

    Among his predictions: lifting the 21% corporate rate signed into law as part of 2017's tax overhaul to about 28% or 29% next year, according to the person. Fink also said he sees tax rates for individuals going up.

    Read more: BlackRock Takes Center Stage With Trump Seeking Calm Markets

    ​Raising taxes would water down the biggest legislative achievement of Trump's time in office, when he and a Republican-controlled Congress drove through the most significant changes to the tax code in decades.

    Lower corporate rates juiced profits and showered cash on shareholders through increased dividends and stock buybacks. Now, at a time when many taxpayers are less able to bear the burden of higher taxes, the government may be forced to extract a larger share of companies' and individuals' income.

    The spread of the coronavirus, and measures taken to mitigate it, slammed the brakes on the economy. While Trump pushes to reopen commerce and his officials predict a rapid rebound, public health experts and some economists are skeptical the crisis will soon be over.

    Politicians, business leaders and economists are beginning to confront the risks of a limited federal response that might speed up the demise of smaller companies and wreck state and municipal finances that pay for schools, law enforcement and infrastructure.

    Read more: From Houston to New York, America's muni finances are in tatters

    That won't be the only strain on companies. Many may have to operate with only about half their staff in the office for more than a year, according to Fink. Across white-collar industries, millions are working remotely from home. It would be hard to see a complete return without mass availability of rapid testing, he said.

    There's a risk that the U.S. outbreak will be severe enough to leave a long-lasting impact on the American psyche, undermining Americans' willingness to take public transport or fly, according to Fink. He said he's not aware of any of his CEO peers planning international travel this year.

    Underscoring the point, this week home-sharing leader Airbnb Inc. and ride-hailing firm Uber Technologies Inc. announced plans for mass layoffs as they wrestle with falling demand and dimmed prospects for the rest of the year.

    Read more: Gig Economy Companies Are Facing Twin Crises

    Many of the U.S.'s 30 million small businesses have struggled to get the relief they need. If the crisis continues, about 25% of those companies could close permanently before year-end, according to an April report released by Main Street America, a network comprising approximately 300,000 small businesses.

    Restaurants that typically operate with thin margins will struggle to survive as they plot out ways to lure back customers with social-distancing measures in place, Fink said.

    Fink also said he was concerned the worsening economic duress could further fan the flames of nationalism. The devastating impact from the coronavirus could make it a bigger threat to the global order, he said.

    https://www.bloomberg.com/news/articles/2020-05-06/fink-delivers-grim-outlook-with-tax-hikes-for-corporate-america?sref=s0L1qQ1H

    submitted by /u/HugeCanoe
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    A good reminder for novice and seasoned investors alike

    Posted: 06 May 2020 08:06 PM PDT

    I know we see this sentiment posted all the time, but this video really drives home things to keep in mind during this pandemic

    https://www.youtube.com/watch?v=59im9CtR9YI

    submitted by /u/Bl2hbl2hbl2h
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    what's going on with the S&P500 at the end of the day?

    Posted: 06 May 2020 03:37 PM PDT

    there have been these massive sell-offs on the S&P 500 index around 3:30 pm for the past 2 days now. These huge red bars.. are these institutional investors selling? These sell-off happen in a 5 minute time span.

    submitted by /u/karbass
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    Who Cares About Profits Anyways?

    Posted: 07 May 2020 02:40 AM PDT

    Who Cares About Profits Anyways?

    It's fascinating that when someone enters into business themselves on a small scale that they are expected to make a profit very quickly. One a small scale if a company can't generate profits they can't stay in business. A landscape company might not be wildly profitable, but if they expect to stay in business for more than a season they need to be slightly better than break even.

    At scale the market doesn't care about profits or dividends anymore. Shareholders don't care about receiving a portion of the profit themselves as long as shares appreciate, or management announces they will repurchase shares. As long as things are up and to the right the system continues to work.

    submitted by /u/bitflag
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    Uber cuts 3,700 jobs; CEO waives salary for the year

    Posted: 06 May 2020 06:37 AM PDT

    Are Auto Theaters the next Comeback?

    Posted: 06 May 2020 06:52 PM PDT

    I have been thinking about how this pandemic will change the world for several days and from a business perspective. I think one of the biggest changes will be in theaters, to survive they will have to change their business model. I think the perfect solution would be the return of the Auto Cinemas.

    • It is nostalgic
    • Cleaner *Economic
    • With technology today they can create apps that synchronize sound directly in your car.
    • More Privacy

    What do you think?

    submitted by /u/TMMAG
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    Companies that won’t survive the coronavirus crisis

    Posted: 06 May 2020 03:47 PM PDT

    I'd like to gather a list of publicly traded companies that might not survive the current coronavirus crisis.

    I'll start by listing a few obvious choices:

    • JC Penney
    • Bed Bath & Beyond

    What other companies do you expect to go under?

    Let's gather a comprehensive list......

    submitted by /u/MrEcon
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    Lyft is soaring after-hours, up by 12% and beating expectations by 50% for Q1 Earnings

    Posted: 06 May 2020 01:29 PM PDT

    Not sure if this is great news for investors, but yes wall st seems to be happy.

    Edit: thanks for my first 'gold' Stranger

    submitted by /u/slowdefensive
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    SEC approves Members Exchange - a new stock exchange to compete with NYSE and NASDAQ

    Posted: 06 May 2020 12:51 PM PDT

    Members Exchange, backed by equities heavyweights including Citadel Securities, Virtu Financial and Morgan Stanley, won approval from the Securities and Exchange Commission to open the new venue, MEMX said in a statement on Tuesday (US time).

    submitted by /u/newleafkratom
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    Cautious Words from a Respected Wall Street CEO

    Posted: 06 May 2020 11:32 AM PDT

    Should I walk away with -50% loss or hold?

    Posted: 07 May 2020 03:32 AM PDT

    I bought a decent amount of HTZ shares and I am 52% down. One week ago it went to only 15% loss so I thought I should wait but now it is down again. What would you do? I am afraid they're going bankrupt. Should I sell now?

    submitted by /u/dayv_p
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    From a traditional investment perspective, what is your thoughts on the bitcoin halvening and its price effect?

    Posted: 06 May 2020 10:52 PM PDT

    I am wondering what you all think about the bitcoin halvening event and its effect on the BTC market?

    Users that are invested in traditional market, I am curious about your opinion on that topic.

    submitted by /u/Newcoolguyhere
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    If all of this horrific economic news is supposedly "priced in" then shouldn't all good news (vaccines, etc) be as well?

    Posted: 06 May 2020 12:11 PM PDT

    Result: Market goes sideways? Discuss.

    submitted by /u/civic19s
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    For the people investing in China, what are some Chinese hidden gem stocks?

    Posted: 06 May 2020 10:34 PM PDT

    I've noticed lot of anti-chinese sentiment spreading around the world. So if you're going to comment don't invest in China, or comparing Luckin Coffee to every Chinese company, etc. Please, don't bother.

    I'd love to hear from those investors with their eyes wide-open searching for opportunities all over the world. Intelligent unbiased investors such as Charlie Munger, who recently said:

    I think the strongest companies are not in America. I think the Chinese companies are stronger than ours and they're growing faster. I have investments in them and you don't. And I'm right and you're wrong. Well, you can laugh but I just spoke a simple truth.

    Would you be willing to share your favorite Chinese stocks for the long-term?

    In my case, my top 3 under the radar investments are: Netease, AK medical, and China Yangtze Power.

    What about you? Hidden gems in other emerging countries are also very welcomed!

    submitted by /u/Dagoru95
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    EU predicts region will contract 7.4% this year in worst economic shock since 1930s

    Posted: 06 May 2020 05:00 AM PDT

    https://www.cnbc.com/2020/05/06/coronavirus-european-union-to-contract-7point5percent-due-to-the-pandemic.html

    The executive arm of the EU has released its latest economic forecasts — the first estimates since European countries introduced lockdown measures to stop the spread of the virus.

    In February, the European Commission estimated a 1.4% rise in GDP for the EU this year.

    Italy, which has been one of the hardest-hit nations worldwide by the pandemic, is seen contracting 9.5% this year.

    That is the second-worst performance in the euro zone, after Greece, which is seen contracting by 9.7%.

    submitted by /u/WhoIsJohnSnow
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    I have 30 shares of American Airlines. Should I sell?

    Posted: 06 May 2020 05:59 PM PDT

    Hello everyone,

    My dilemma is in the title. Seeing how much the company is struggling now (with COVID, its debt burden, etc), would it be a good idea to just cut my losses and sell it off, or continue to hold in the hopes that they recover? I bought the shares recently for about $14 per share. Please let me know what you think. Thanks.

    submitted by /u/Throwaway_50293
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    Why report index performance in terms of points first

    Posted: 06 May 2020 04:35 PM PDT

    Pardon the ignorance, I'm just wondering why when you see daily S&P or Dow performance reported on the news for example, you'll see "it lost 70 points today" instead of the percentage fluctuation getting more spotlight. 70 points today is different than 70 points last week or 70 points last year relative to the actual index that it's comprised of as opposed to a percentage change being more universally understood. Am I missing something?

    submitted by /u/caltheham
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    Which is your favorite company from each sector?

    Posted: 06 May 2020 11:26 PM PDT

    Let's start using this subreddit to actually learn from each other.

    As you know, sector breakdown look like this:

    Energy

    Materials

    Industrials

    Consumer Discretionary

    Consumer Staples

    Health Care

    Financials

    Information Technology

    Telecommunication Services

    Utilities

    Real Estate

    The goal of this post is for you to share your favorite stock from each sector. Let's see if we can pick some winners from all your answers.

    If you don't know any stock for a particular sector, don't worry. In fact, most of us are comfortable investing in a few things we understand, and usually lack the ability to pick stocks in every sector.

    This exercise will make us leave behind companies we love, but it's important to choose just ONE from each sector!

    Wait are you waiting for! It will be fun and difficult at the same time.

    PS I'll also post mine in the comments, but need some time to chose since I just thought of the question.

    submitted by /u/Dagoru95
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    Why do people listen to Raoul Pal?

    Posted: 06 May 2020 09:29 PM PDT

    I just found out about this guy. And when I found out about him, I had to keep digging. His theories sounded too stupid to actually be held by a respected investor—but they are.

    He's the definition of the broken clock. For years—decades—he's been making incredibly bad predictions. He called crashes in 2011 (this article, 2015 (2015 crash, and several other calls that were totally wrong. Articles refer to him as they man who predicted the dollar rally' or something complete bull badge of honor.

    He's also adamant that bonds are better than equities (how?) and just today said that bitcoin will be worth $1 million by next year. He says we're going into a depression now and suggested that the market won't recover for at least a decade. He's once again calling a crash of 1929 proportions.

    I keep seeing him as a guest or featured on prominent podcasts and articles, and yet what he's saying makes absolutely no sense and he's constantly wrong to the point of lunacy.

    Can someone please help me understand why this person is respected at all? What am I missing here?

    submitted by /u/Pizza_Bagel_
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    How did i and everyone in investing subs miss the ecommerce boom from early April?

    Posted: 07 May 2020 02:36 AM PDT

    Just saw ecommerce names like Wayfair and Shopify and others have risen like 100-800% in one month? This is absolutely insane. How can nobody was talking about it? I didnt even threads about them on WSB.

    Feels like missed such an oppotunity. And here i am, wasted April betting on airline revivals which dont seem to gonna occur any time soon and still holding the super heavy bags, while missing the skyrocketing ecommerce stocks. FML.

    submitted by /u/vntoknto
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    If ERI is acquiring CZR, what happens to CZR stock?

    Posted: 07 May 2020 12:43 AM PDT

    Eldorado Resorts Inc is acquiring Ceasers.

    I was just curious to what affect that would have on either of their stock prices? Are they going to remain separate, or are they coming to one?

    submitted by /u/Yossi25
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    What would happen if all the big airline companies went bankrupt?

    Posted: 06 May 2020 09:34 PM PDT

    Hey all, with this pandemic going on, what do you think would happen to the airline industry if all the big companies went bankrupt? Surely in the future there HAS to be a recovery right? Even Five years from now, I imagine that people will definitely want to fly. They'll definitely still want to go see their families, go on vacations, or they'll need to go on business trips no matter what. So my question is, do you think new companies would dominate the industry, or will these larger companies like delta airlines make a come-back?

    submitted by /u/MaxWithHacks
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    Portfolio with all tech funds too risky?

    Posted: 06 May 2020 08:48 PM PDT

    I am 19 and for just over a year I've had 4 or 5 mutual funds usually tech oriented and have been outperforming the market consistently. I now have 4 and want to narrow it down to my US tech and my global tech funds because one is up 10% and the other 18%. I am usually overexposed in tech so I may as well chose the best ones right? Is this too risky and is being solely in tech in general too risky? I am up 10% rn and i haven't fell any downside yet

    submitted by /u/si-lyo
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    If small cap growth stocks are so bad, why has VBK outperformed?

    Posted: 06 May 2020 11:25 PM PDT

    Small cap growth stocks seem to be the black sheep of the investing world, especially to firms like AQR and DFA.

    Small cap growth stocks have been accused of dragging down the effects of the size premium with their historical low returns, high volatility and frequent delistings.

    Why then has Vanguard's small cap growth ETF, VBK, has such good performance over the last 15 years, beating out both the S&P 500 and Vanguard's small cap value ETF, VBR, which would be supposed to deliver better long term returns according to the Fama-French five factor model.

    What conditions, if any, in the US caused this anomaly, or is this just the case of the factor premiums being negative over a given timeframe, as they sometimes are? Is the Fama-French model dead? Should investors looking to maximize long term returns still be overweight on small cap value stocks? Is this kind of underperformance expected? Is this where the value premium is "earned", so to say?

    submitted by /u/throwaway474673637
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