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

    June 07, 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.

    Posted: 06 Jun 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:

    • 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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    Noobs beware: Stocks like genius brands create more bagholders than winners

    Posted: 06 Jun 2020 08:13 PM PDT

    The major issue here is chasing. The internet is full of pumpers and dumpers. If you haven't taken a position in a ticker before a run (by dint of careful information digging and due diligence) it is almost not worth investing in a stock that is running up like crazy.

    You might get lucky and see your money swell, but the more it gets into overbought territory the bigger the chances profit takers take money off the table

    Other things to consider are that a company like genius with no healthy revenue - their only way of funding themselves is via dilution - secondary offerings, warrants, shelf offerings, Gypsy swaps - full of tricks to arrive at the same outcome - depreciate shareholder value.

    This has bitcoin written all over it. 20 people make a ton of money, 200 people caught a falling knife. Don't buy a stock because someone pumped it - at least pull up the financials and pretend to read it or go to fintel site and look up things like filings, insiders, institutional ownership etc

    submitted by /u/beyondmeatdick
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    A ‘misclassification error’ made the May unemployment rate look better than it is. Here’s what happened.

    Posted: 06 Jun 2020 05:20 AM PDT

    A 'misclassification error' made the May unemployment rate look better than it is. Here's what happened.

    When the U.S. government's official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major "error" indicating that the unemployment rate likely should be higher than the widely reported 13.3 percent rate.

    The special note said that if this "misclassification error" had not occurred, the "overall unemployment rate would have been about 3 percentage points higher than reported," meaning the unemployment rate would be about 16.3 percent for May.

    submitted by /u/kim82351
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    Small retail trading call option volumes on SPY is at insane levels.

    Posted: 06 Jun 2020 09:35 PM PDT

    https://twitter.com/sentimentrader/status/1269256793445859328?s=20

    Before Covid hit, option call volumes by retail traders hit an astounding 7+ million contracts. It just blew up to 12.1 million contracts. With nearly every valuation metric on the S&P 500 at near record level highs, I'm really worried. I'm 46 y.o., and this is starting to really remind me of the heady tech bubble days.

    submitted by /u/mililani
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    DGLY - new bill in house requires ALL police officers to wear body cameras (NYtimes)

    Posted: 06 Jun 2020 10:28 AM PDT

    DGLY (Digital Ally) manufactures law enforcement equipment like body cameras. They pumped 100% a week ago on the riots before falling.

    • Yesterday, the KC police department ordered $2.5million worth of body cameras for their 1,400 police officers, which pumped DGLY 30% this weekend.
    • The United States has 800,000 police officers in total, so the price action on this is about to get hot.
    • The Bill threatens to withhold state funding to ensure criteria is met.

    DGLY pumped to $30 during the Ferguson riots. There was no federal action taken then. Right now, it's at $2.75 and there's a Bill on the way.

    Have fun with this one.

    submitted by /u/dramaticdan
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    Why I am frequently so good at predicting the market , but in opposite direction? When I buy in bulk, the next day the market fall, when I sell, the market rally.

    Posted: 06 Jun 2020 07:09 PM PDT

    Why I am frequently so good at predicting the market , but in opposite direction? When I buy in bulk, the next day the market fall, when I sell, the market rally.Why I am frequently so good at predicting the market , but in opposite direction? When I buy in bulk, the next day the market fall, when I sell, the market rally.

    submitted by /u/dynamic87
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    Warren Buffett might still be right about the airlines

    Posted: 06 Jun 2020 08:54 AM PDT

    "In the short run, the market is a voting machine, but, in the long run, it is a weighing machine" -Benjamin Graham

    Warren Buffett has taken some heat recently over his decision to sell all of his airline stocks near their lowest point. Amid investor optimism for the return of "normal" travel behavior, airline stock prices took flight, so to speak, as a primary beneficiary of this exuberance. This has every investor with a Robinhood account sitting on his couch thinking he is smarter than perhaps the greatest investor of our time. But is he?

    • Warren Buffett is not a short-term swing trader, he is a long-term, buy-and-hold investor. He looks at the prospects of a company 20 to 30 years down the road, not 2-3 months
    • Airlines represented a significant, but relatively small portion of Berkshire Hathaway's portfolio. Taking a loss on an industry that is in turmoil for the chance to redeploy in another industry with clearer skies ahead is more in line with the investing philosophy that made him a success
    • Armchair investors think to themselves, "Well, people won't stop flying", I'll buy AAL, UAL, and DAL. While that is certainly true in the broad sense, think about the practical sense. Airlines need to squeeze every dollar out of every flight to remain profitable. Under the "new normal", not only might the incredibly important Middle Seat be in jeopardy, but the ridiculously profitable Business Class seat is also going to see massive declines as more and more business is conducted remotely.
    • With cash burn rates in the double-digit millions of dollars PER DAY, many major U.S. airlines are only in business due to federal government bailout money -- one of the conditions of which was that they keep paying their employees that are not doing much flying (or revenue generation) these days.
    • While it is a near certainty that "people won't stop flying", there is no certainty about who will be doing the flying. When the bailout money is gone, the cash is depleted, and the revenues are a fraction of where they need to be, a company goes bankrupt. It is entirely possible that one or even two of the major U.S. airline carriers never get their head above water again. Which ones? (*Casually glances at American and United*) I'm not sure, BUT, what I am sure about, is that Warren Buffett has access to way more information about the companies he invests in than you or me.
    • Last Thursday, while AAL stock was almost doubling, 14 of its top officers VOLUNTARILY took buyouts to leave the company. Now, ask yourself -- why would anyone in their right mind in a leadership role at a prominent U.S. company with a huge salary and comfy corner office voluntarily leave that company and deny themselves the personal glory of being part of a turnaround story?

    My advice: Take your profits now and buy yourself something nice -- like stock in a company that actually has massive future growth and profit potential. And do not think that you are smarter than Warren Buffett.

    ​

    Finally, they are a few years old, but these nifty infographics offer a fun insight into what makes the Oracle of Omaha tick:

    Part One: The Early Years

    Part Two: Inside Buffett's Brain

    Part Three: The Warren Buffett Empire

    Part Four: Buffett's Biggest Wins and Fails

    Part Five: Wisdom from The Oracle

    submitted by /u/bestrongbelieve
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    Is the international ETF fund really necessary in a portfolio?

    Posted: 06 Jun 2020 09:38 PM PDT

    I've been told by some (plus had it rammed down my throat from youtube gurus) that, as a rule of thumb, I should have 10-20% of my portfolio in VXUS or another international fund. Is this fundamentally important/do you follow it? I feel like I'd be better off putting more into SPY or Microsoft. Any advice is appreciated, thanks!

    submitted by /u/PhilTony
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    Troll Posts

    Posted: 06 Jun 2020 09:23 PM PDT

    Anyone else noticing an influx of obvious troll posts asking for advice in the last few days? It's starting to remind me of r/relationships where every scenario is clearly silly and fake.

    "My parents want to put their life savings into cruise stocks, is this a good idea?"

    "I stole money from my wife and invested it all in _________. I'm now down 30,000%, what do I do?"

    "A LESSON in how to time the market from a guy who has been investing for one month".

    It seems like it's getting a bit ridiculous in here.

    submitted by /u/B3LYP2
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    How do you rebalance your equity portfolio?

    Posted: 06 Jun 2020 10:03 PM PDT

    Suppose I have a portfolio of 10 stocks, each allocated a 10% share of the portfolio. Over the course of a few months, I notice that some of my stocks have grown, while others have de-grown. Therefore, for some of the stocks, the portfolio share hypothetically becomes 15%, and for a few others, it reduces to 5%. Now, business fundamentals and investment thesis for all 10 stocks has not changed. In such a scenario, do you

    Deploy extra cash into the stocks with 5% portfolio weight so that their weightage increases? - increase your portfolio size

    In case you don't have much cash, do you sell a part of the stocks that have increased their portfolio weightage to 15%, and then use the proceeds to increase the share of the de-grown stocks? - keep portfolio size the same, but change the mix of stocks

    Do nothing, and follow a coffee-can approach when all the stocks are secular compounders?

    Be it Graham or Lynch, one of their tenets is to not keep reshuffling the portfolio - one because I would incur short term capital gains taxes, and two because of brokerage charges. Also, if there is a multibagger in the stocks that have already advanced, then offloading a part stake in such stocks in just a couple of months ruins the opportunity for outsized returns.

    Another way of looking at the question is - how rigid are you in sticking to a particular portfolio allocation over the cycle of an investment. Do you ever decide to sell off a part of your stake in solid companies like Amazon when the valuation becomes very expensive and Amazon starts capturing a good chunk of your portfolio? Or do you stick to a rigid portfolio allocation of say 15% for Amazon and whenever it advances beyond that, you sell off the extra shares?

    Thank you!

    submitted by /u/Ford_Prefect_Junior
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    How the U.S. dollar’s ‘almost silent slide’ is juicing the stock-market rally

    Posted: 06 Jun 2020 08:08 AM PDT

    Is it plausible to invest from an average salary, or bite the bullet and school longer, or take a job you don’t enjoy, for more money?

    Posted: 06 Jun 2020 10:11 PM PDT

    Say a person really enjoys their job but only gets around 40-50 grand a year. Is it plausible to save well, and consistently put more into investments enough to the point where they can live comfortably (meaning not paycheck to paycheck)?

    Many people talking about how important it is to love your job, but if that job doesn't provide what the average American makes (Around 45-50 grand, which isn't even that much) could investing be a good option? Compared to choosing a job they may dislike but receive more in their salary, it seems like a hard choice that a lot of people may find themselves trying to make these days. With the growth of technology and the economy growing bigger each year, what are your thoughts on this broadly experienced (by most average wage Americans) dilemma?

    submitted by /u/RemarkableNebula
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    Real-Time quotes with Think or Swim (ToS) without actually depositing any money??

    Posted: 06 Jun 2020 10:32 PM PDT

    Does anyone know if it's possible to get real-time quotes on "Think or Swim" by signing up with TD Ameritrade but without depositing any money??

    I currently trade with Schwab and I plan on staying here, but Think or Swim (ToS) would be a great compliment for my charting.

    Thank you in advance.

    submitted by /u/Broke2Lambo
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    Do you think the S&P 500 Is overvalued?

    Posted: 06 Jun 2020 01:16 PM PDT

    Despite the global economy, riots/protests, COVID-19 scared and political uncertainty the S&P has pretty much ignored this and is now not far from its all time high. What do you all think? is this justified, is it going to plummet again or is it just going to carry on like it has done for the past few months.

    submitted by /u/johnstone12359
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    Youtube Channel that analyzes Options Setups?

    Posted: 06 Jun 2020 06:55 PM PDT

    I'm looking for a YouTube channel that might focus on small to medium accounts ($1000-$20000) selling covered calls and secured puts for weekly or monthly income.

    Most of my account is set with a few core positions (mostly MSFT) but I have some capital that I want to put to better use then sitting in wealthfront or something

    submitted by /u/bushysmalls
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    Cloudflare & CloudflareTV - A visual guide to CDNs, Networking, and the Cloud for non-technical investors.

    Posted: 06 Jun 2020 07:33 PM PDT

    https://github.com/Sheilf/Investment-Research/blob/master/Cloudflare.md

    - 40c NET 8/21

    Github link so you guys can see inline pictures with captions since mods in investing forums wont let us epic DD threads anymore

    https://user-images.githubusercontent.com/37036296/83950335-dbc63600-a7de-11ea-8307-c31c08faf49d.png

    submitted by /u/notbrokemexican
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    Future of REITS?

    Posted: 07 Jun 2020 04:33 AM PDT

    People are shopping online and working from home more and this trend is expected to increase even after the quarantine measurements have been lifted.

    Will REITS continue to perform and pay high dividends if this trend continues for the next 10 years?

    submitted by /u/AugustinPower
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    Uber Eats will stop charging delivery fees and give price cuts to businesses owned by black people.

    Posted: 07 Jun 2020 04:21 AM PDT

    In an email to customers late Thursday, CEO Dara Khosrowshahi said Uber Eats will promote black-owned restaurants on its app, and that the service will not charge delivery fees to those restaurants "for the remainder of the year."

    Uber will also offer discounted rides to black-owned small businesses "who have been hit hard by COVID-19," though it did not add how much of a discount would be given.

    "I wish that the lives of George Floyd, Ahmaud Arbery, Breonna Taylor, and countless others weren't so violently cut short," the 51-year-old CEO wrote. "I wish that institutional racism, and the police violence it gives rise to, didn't cause their deaths."

    https://www.foxnews.com/food-drink/uber-eats-stops-charging-delivery-fees-to-black-owned-restaurants

    submitted by /u/ShotBot
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    What does it really mean if stocks are overvalued?

    Posted: 06 Jun 2020 01:53 PM PDT

    So let's just assume for arguments sake the fundamentals do not support the current stock market. Say external forces just continue to pump massive amounts of money into the stock market. What happens then? Does the market collapse? Do they use the capital to grow the business? What about inflation?

    I'm thinking the stock rally is caused by printing money, more accessible investing from private citizens via apps and whatnot and Chinese money desperate to get it out of the country before a regime collapse via HKD which is pegged to the USD.

    If that is the case what is the impact? Is it good for us or bad for us?

    Technically our own government isn't printing the money its coming from a foreign country so does that still have the negative consequences of a local government printing money?

    submitted by /u/Covid20isbuffering
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    What percentage of portfolio to put in Mutual Funds vs. ETFs and Stocks

    Posted: 06 Jun 2020 11:59 PM PDT

    I have 25% of my portfolio in mutual funds, 25% in stocks and am shooting for the remaining 50% in ETFs. In some ways I'm regretting even having 25% in mutual funds because it's hard to move money in and out of mutual funds should I change my mind about a particular one, like I can with ETFs and stocks where I seem to do pretty well. I'm retired in my 60s, but I'm trying to increase my income with the best mix.

    submitted by /u/AmyTheExplorer
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    $JKS Speculation

    Posted: 06 Jun 2020 11:58 PM PDT

    China's projected to source 62% of its energy from renewable sources by 2030. Jinko Solar is China's #1 solar manufacturer and just recently opened a new factory.

    I think $JKS ($18.05 now) along with stocks in the renewable energy sector are at a huge discount right now. For long term investors: the energy transition is going to happen during our lifetime. Diversify with renewables.

    Not DD, just an idea

    submitted by /u/hiddendrugs
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    Beginning to learn how to day trade

    Posted: 07 Jun 2020 03:30 AM PDT

    I am 18 years old and want to learn how to day trade, i am willing to dedicate the time as i have 6 months ahead of me before i start studying and have already opened a paper trading account. could anyone tell me about the path they took to becoming a successful day trader... does anyone know where to begin in technichal analysis for example

    submitted by /u/Leo_baboin
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    Negative yielding bonds in UK!?

    Posted: 06 Jun 2020 11:40 PM PDT

    There was this news a couple of weeks ago which said that the UK government was able to sell negative yielding bonds worth 4.5bn to the public. Now I reckon negative yielding bonds are sold when countries go through deflation. Considering UK present situation and everything around covid, it's unlikely that it'll face deflation for the next few years. Then why did this happen?

    submitted by /u/mourshresth
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    Treasury / Government Bonds

    Posted: 06 Jun 2020 12:42 PM PDT

    So I am looking to buy some long term (20 year) and some short term (2 year) bonds. It seems treasury or government bonds are likely the best choice for me. What websites do yall recommend I use to buy these from? Or what other way can I buy them and then cash them out once the time is up?

    Edit: I plan to wait a while before I purchase because all the rates are low now. Maybe months, maybe closer towards a year.

    submitted by /u/Prequel_Memes66
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    Federal Reserve Chairman Jerome Powell is expected to reassure markets next week the central bank will do *WHATEVER* it takes to help the economy heal.

    Posted: 06 Jun 2020 10:06 AM PDT

    Key points:

    • The Fed's two-day meeting is the big event for markets in the coming week, and traders are hoping for more details on stimulus and a possible new program.

    • The S&P 500 was very close to being back in the green for the year, adding 4.9% for the week.

    • Strategists expect the market's reopening trade to continue driving investors into cyclicals, like financials and industrials, and other stocks that will be do well in an economic recovery.

    • The bond market joined in the reopening trade for the first time in the past week, and rates jumped as investors sold safety plays and moved into riskier assets.

    Source:

    CNBC version

    AMP version

    submitted by /u/momo00roro
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