Stock Market - 5 Basic Screener Presets To Help You Find Stocks [OC] |
- 5 Basic Screener Presets To Help You Find Stocks [OC]
- When to sell a stock
- Tesla Shares hit 1,000 a share, could go much higher
- Gundlach: A 'wave' of layoffs is coming for $100,000/year white-collar jobs
- Dovish Fed sees no interest-rate hikes for years, will keep buying assets
- Why does VNQ invest so heavily in VRTPX and should that worry me?
- When unemployment benefits inevitably return to normal/balances hit $0, an enormous amount of capital will likely be liquidated
- Frustrated with my choices this pandemic
- Is it possible to see where trading volume is coming from ?
- Newbie here looking for guidance
- AMC and market buying
- Reverse stock splits
- DGLY? Worthwhile or waste?
- Not sure I understand how an ETF like S&P500 can be listed as a UK ETF
- Stock drop after positive earnings report?
- Airlines and cruises
- Nasdaq just say Stock Market Crash or Correction Is Inevitable?
- I’m not really understanding calls and puts
- Fed Meeting
- Looking for some insight from some more experienced traders
- When would it make sense based on US Markets for the Fed to stop juicing the market
- Why airlines red today: Delta airline management are virtue signaling trashes
- What website or apps are good to use for checking a company's earnings over the course of the last few years?
- OPES Burgerfi spac Merger
| 5 Basic Screener Presets To Help You Find Stocks [OC] Posted: 10 Jun 2020 02:29 PM PDT Hey folks, I want to share some basic screener presets to help you find stocks. I use FinViz, but the filters I've listed below could be applied to any screener platform/software with a little tweaking and/or interpretation. I've tried TradingView, ChartMill, TrendSpider, I even demo'd Trade Ideas, but I always come back to FinViz. I love everything about the site. It looks "old" compared to some of the others, but it's intuitive to actual day-to-day use. There are interactive charts available, but no kitschy HTML5 animated nonsense taking up 1/4 of the screen, etc. Just clean data to review each morning. They do not have an app, though. That turns some people off, but I don't think your mobile device should be doing the heavy lifting anyhow. At least in my old opinion. ;) I use the All filter in the Screener to show all available parameters at once — https://i.imgur.com/FGXa576.png You may need to change some of these values otherwise you will get the same results over and over. Market cap or share price, for example. Review each line and determine its context. Don't limit yourself. Here are my 5 basic presets that I review regularly — Daily Stocks in Play Pre market gap up or down 2% Pre-market trades of 50,000 or more shares Avg daily volume of 500,000 shares Avg True Range of at least .50 cents Fundamental catalyst such as earnings or event within 24 hours No short interest higher than 25% Buy and Hold Value Plays Mkt cap > 50mm EPS growth next 5 years > 10% ROE < 15% PEG < 1 Current Ratio < 1.5 Price above SMA20 *Beta < 1.5 Short Squeeze Float Short: Over 15% Average Volume: Over 100k Price: Over $2 Institutional Ownership: Under 50% Filter by news within 24 hours Undervalued Dividend Growth Dividend yield stocks greater than 0% Market Capitalization of over $10bn Input P/E ratio less than 20x EPS growth next year of greater than 5% Input EPS growth next 5 years of greater than 5% PEG < 1 Use a payout ratio of less than 50%. Sort by P/E Institutional Interest Current Price greater than Price from 1 Week Ago Price from 1 Week Ago greater than Price from 2 Weeks Ago Price from 2 Week Ago greater than Price from 3 Weeks Ago Weekly Volume greater than Weekly Volume from 1 Week Ago Weekly Volume from 1 Wk Ago greater than Weekly Volume from 2 Wks Ago Weekly Volume from 2 Wks Ago greater than Weekly Volume from 3 Wks Ago Price greater than or equal to $5 Average 20-day Volume greater than or equal to 100,000 shares I'll admit that FinViz is not the best tool for determining institutional interest. You may need to piece a few things together to get the big picture, but you'll figure it out. What are some of your favorite screener presets? Let's get a list going. Be sure to include the context in which you'd use the screener -- daily plays, swing trades, etc. Cheers [link] [comments]  |
| Posted: 10 Jun 2020 06:55 AM PDT When to sell a stock DISCLAIMER- this article is for long term investors ONLY, if you're a day trader, you might not be much value from it. Selling a stock is a tricky thing to do. If you sell it too early you might miss multi bagger returns just for a 10% profit. But if you wait for too long your 30% profit will become a giant loss. This is a common problem faced by majority of the investors out there. The ideal answer is to never sell a stock but we both know that doesn't work in the real world. About a year ago I was making a killer profit on BEL. This was a really good trade that I'd made. I could have exited the stock with a nice profit but I got greedy I held on to the stock for a long time and soon enough things turned sour. My profit went down. I waited until the price came back to my original target but the stock fell. My lower profits were soon vanished. I'd just broken even. Now my only desire was to make a little profit but soon enough I went in the red territory. The stock fell down for no apparent reason I lost money. I could have taken a loss and moved on but I just wanted to break even. So I waited but again the stock went further down and hit my stop-loss. I went from a winning double digit return profit to a negative trade in a short period of time. I could have exited at any point. But I didn't because back then I had no idea when to sell a stock. Selling a stock is really tricky.  Another time I had purchased shares of a company and the stock went down within a few days. I quickly sold my shares because I didn't want to take the loss. But later the same stock went up at least 35% in less than a year. I felt stupid for selling too early. Once I saw a company trading at 230 rupees, something like that. I decided that whenever the stock hit 220 rupees I'd buy it. The stock went down to 226 but then it rose, it rose like a fucking space shuttle. The stock then went from 230 to 600 in less than a year. A true missed opportunity. The opportunity cost was huge. I lost a multi bagger just to save a few bucks! After the third incident I learnt a crucial lesson- Selling at the right price (and time) is vital yet extremely difficult. The example mentioned earlier in the book about Rakesh Jhunjhunwala is an example of extreme patience. Rakesh J bought Titan Company's shares at just 3 rupees. He had a chance to sell them at 6 rupees and double his money. He didn't. he had a chance to sell them at 30 and make 10x returns. But he didn't. most of us would have sold our shares at 10 rupees or around that range. But the ones who wouldn't sell it at 10 would've sold the shares at 100 or 200. Holding a stock which is up 10x or 100x is extremely difficult. The moment the stock falls from 120 to 90 and you 4,000% return goes to "just" 30x it feels bad. We feel an urge to sell it before it goes down any further. But the same stock went to 200 and then to 500 and finally above 1,000. Rakesh Jhunjhunwala made 400x more money on his trade and he still holds a significant amount of shares of Titan even though the stock fell from 1200 to 1000.
So when should you sell you shares? There are 7 situations I could think of when it would make sense to sell your stake in a winning or a losing trade. Valuation Level Sell. We've talked about valuation and how to find the intrinsic value of a stock and buy it below the intrinsic value. This way we limit our downside but what about the upside? In this method we sell a stock after it has hit a certain valuation. How do we find out the valuation? Through valuation ratios and market capitalization of the company. Market capitalization. Every company has a market capitalization and there is a ceiling to the market cap of a company. The price of 1 share is 1,000 rupees and the total number of shares is 1000, the market capitalization of the company is 1000×1000= 1 million rupees. A lot of time value investors buy companies with a fixed exit. For example they buy a company at a specific market cap amount so if they enter a stock when the company's market cap is 10,000 crores they plan to sell it at a market cap of 50,000 crores because they believe that the company won't grow much after that. This is not the best strategy as it is almost impossible to predict when (if at all) the company will hit a specific market cap. So I don't really use this strategy.
P/E ratio. Every company has a P/E ratio unless the earnings are negative. So the plan is to buy a company at a low P/E ratio and sell it when the P/E is relatively higher than the industry P/E. if you buy a stock at the P/E of 17 when the industry P/E is 21 and 4 years later the stock's P/E goes up to 38 when the industry P/E is 29, this might be a chance to sell the stock because it is severely overvalued. You'll have to factor in the other factors too such as the P/S ratio, the P/BV ratio, the charts, etc and if the company is still overvalued by 30% or more you can plan an exit with a whopping profit. Opportunity Cost Sell. If you hold a few thousand shares of a company for 5 years and there is no significant movement in the price, for example you buy Power Grid at 196 and the price after 5 years is 203 or 180, this is a very small movement for a period of 5 years. Then you might consider selling that stock to find a newer, better one. But beware that the price after 5 years may be 203 or 180 but if the high and low the price in that period is 90 and 350, you might want to reconsider your thought. If you hold a loss making stock for 5 long years think of all the time and money you've wasted. In these 5 years you could have booked a small (or a big) loss and invested that amount into a better company and covered that loss. Some people agree on selling a low return stock and investing that amount into a higher return stock to cover the opportunity cost. This way he could have risked a minimum downside for a major upside. Constant switching between companies adds up to high transaction cost and higher payment of taxes (STCG)
Deteriorating fundamentals sell. A lot of times we buy a fundamentally strong company at an attractive price but over the course of 5 years or so the fundamentals become weak. The company undergoes major changes like change in the management or it acquires a lot of unnecessary companies which rises the debt level or the industry undergoes a major shift and the company becomes a dinosaur. Anything can happen which can make a company weaker. DHFL was a strong company a few years ago. It was at 600-700 rupees and then it suddenly fell to 250 and the stock is trading at just 20 rupees! That's a major fall. The company has a poor management and the debt has skyrocketed! This once good company is down to its knees. If you had invested in it at 200 levels it would have gone to 691 but then I would have fallen down to 20 rupees and you would have lost 90% of your capital. Fundamentals change. The companies that were once strong can become weak. Yes Bank is another example. This company was strong priced at 350 rupees and it fell to 30 rupees in less than two years. Sometimes you may buy a wonderful company but over time that wonderful company doesn't stay wonderful. You should regularly check your investments. I recommend going over you portfolio at least twice a year. An amazing fact is that majority of the Fortune500 companies in the 1950s and the 60s don't exist anymore. So even the biggest, strongest and the most powerful companies can fall over time. In the picture below you can see that the intrinsic value of the stock was 80 rupees and the market price was 60 rupees. So if you though that it was undervalued and bought it, it would have been a big mistake. The company performed so poor that the intrinsic value fell to a price below the market price and a new intrinsic value was calculated. Falling fundamentals is a giant threat to your strategy. Might be a good strategy to limit losses, not really for profiting. down from cost and up from cost sale. This is a technique used by amateurs in investing. It simply means that selling a stock when it is up or down certain % from your buying price. This is a very common approach and apparently it works. For example you buy a company at 250 rupees and decide that you will sell the stock when you make a 30% profit or a 10% loss. Those are the two possibilities you need to look for. So if the stock goes up 30% i.e. to 325 you sell it or if the stock goes down to 225 (10%) you sell it. This way you'll know when to exit a stock and you'll not face too much risk. The moment you make a 10% loss you'll be out and the moment you make a 30% profit you'll be out. So your profits will not drag down into losses and your downside will be limited. This is actually a pretty good strategy. The only downside to this strategy is that you will lose the potential upside too. You'll protect the downside but miss the potential upside. What if you book a profit at 30% and the stock goes up 300%? You'll miss it. But isn't protecting the downside more important than gaining the upside? Force sell. This is a bad reason to sell a stock. Imagine that you invested 10 lac rupees and 18 years later it turns into 50 lacs. You now have increased your money almost 3x in 18 years. That's impressive. But what if you want to buy a new house or pay for your kid's college? You can simply sell your shares and buy the things you need. This strategy talks about selling your shares to buy something. Target Price Sell. This is the most advanced type of exit from a company. Let's assume that you buy a stock at 100 rupees and your set a stop-loss at 90 the target at 140. That's a 1:4 risk reward ratio. Unlike the forth strategy you consider more factors and set a pre decided set price (not percentage). So if your stock goes up to 140 and the stock P/E rose from 17 to 19 but the industry P/E is 21, you don't sell your shares. Instead you set a new target and a higher stop-loss. You can even use a trailing stop-loss. So your new stop-loss and target prices will be 126 and 211 respectively. Then if the stock rises to 211 and the P/E is still not overvalued you can hold it and set a new target and stop-loss. But if the price reaches 200 and the stock's P/E rises to 25 while the industry's P/E is still 21 you can consider selling it. You can also look at the charts of the company (daily or weekly time frame) and decide. If there is a resistance coming up soon you can sell it after testing the resistance and place a stop-loss below the support and hope for an upward breakout. If the stock is going in an uptrend you can use 50 day SMA along with 250 day SMA as support and use Fibonacci retracements to find new targets and resistance levels. This method of investing is definitely more complicated than the other methods but this provides the maximum upside with the limited downside. The other methods lack either of the two factors. Limited riskLimited (but higher) return
The Never Sell strategy. Warren Buffet recommends this. He tells us to buy amazing companies at awesome prices and never sell the shares, but following this blindly can be catastrophic. You have the maximum downside in this strategy but the upside too is maximum, this is what makes this strategy the high risk, high reward strategy. You can acquire potential multi baggers through this strategy but you can also lose it all through this strategy. It is dangerous. Even Warren Buffett sells his shares regularly. Unlimited riskUnlimited return
Here's how to use this strategy in the best way possible. You find an amazing company and buy it below its intrinsic value. Let's say that you buy 100 shares of this company at 100 rupees and the company pays 6% dividend every year. The stock rises to 160 in 6 years (10% annual growth). What should you do? Here's a possible answer- since you've bought the shares at 100 and the company grows at 10% per year and pays 6% dividends every year you accumulate 4610 rupees as dividends. 2014- 100 rupees @6%= 6 rupees x 100 2015- 110 rupees @6%= 6.6 rupees x 100 2016- 121 rupees @6%= 7.2 rupees x 100 2017- 133 rupees @6%= 8 rupees x 100 2018- 146 rupees @6%= 8.7 rupees x 100 2019- 160 rupees @6%= 9.6 rupees x 100 So the addition of the dividends is 4610 rupees over the course of 6 years. And the capital appreciation is 6000 rupees (160×100 – 100×100). So what you can do is sell those 6000 rupees worth of shares which amounts to 37 shares. Sell 37 shares and your amount from capital gains and dividends will be equal to 10,610 rupees which is 6.1% more than your invested capital. Keep the remaining shares as they are i.e. hold them as long as you can (the company must be fundamentally strong). So basically you've gotten back your entire invested amount with a 6.1% gain and the remaining is free floating shares for holding forever. You'll have 63 shares of the company. Hold them forever and reinvest the dividends. After splits, bonuses and reinvesting dividends you'll have a significant holding in the company which will multiply after each split and bonus. The 6% dividends will give you a decent amount of yearly income and you'll have no risk as the investment has already paid for itself. So even if things go sour you won't lose money as your capital has already been covered. Everything above that price is pure profit. No risk (after recovery)Unlimited returns
Of course this strategy is made super simple and taxes, inflation and other charges aren't taken into consideration but overall this was just to give you a fair idea on how you can eliminate risk after a few years and earn pure profit. This strategy is difficult as you need a company with strong fundamentals at an attractive price which provides regular dividends (or increases a lot in value) and stays amazing for a long period of time. Wipro and Infosys are prime examples of this type of companies. These companies have made massive amount of wealth to investors who got in early. This strategy might have worked like a magic in these companies. Speaking of magic we'll soon discover the magic formula of investing. So these were the 7 reasons to sell a stock. Now I hope that you have a fairly good idea on when you should sell a stock. This doesn't guarantee you that you'll always have the lowest downside with the highest upside but it'll give you a small edge. And that small edge makes all the difference. [link] [comments]  |
| Tesla Shares hit 1,000 a share, could go much higher Posted: 10 Jun 2020 07:16 AM PDT Tesla shares hit 1,006.95 a share this morning, and could go much higher according to a few bulls. New developments on Tesla producing electric semi-trucks was leaked today in an email. I personally think Tesla could hit 2,000 a share a year from now. [link] [comments]  |
| Gundlach: A 'wave' of layoffs is coming for $100,000/year white-collar jobs Posted: 10 Jun 2020 11:45 AM PDT Billionaire bond investor Jeffrey Gundlach, the CEO of $135 billion DoubleLine Capital, sees the potential for a "wave of more higher-end unemployment' hitting white-collar workers making more than $100,000 per year as employers increasingly question the value these employees bring. In 11 weeks, more than 42 million Americans filed for unemployment insurance as the COVID-19 pandemic wrecked the economy. The bulk of these job losses hit lower-income households the hardest. [link] [comments]  |
| Dovish Fed sees no interest-rate hikes for years, will keep buying assets Posted: 10 Jun 2020 02:30 PM PDT Powell pushes back on criticism he has put too much money into markets The Federal Reserve on Wednesday maintained a firmly dovish stance despite some tentative signs that the economy is bottoming. The Fed said it doesn't expect to lift its benchmark interest rate until 2023. Only two of 17 top officials said rates would move slightly higher in 2022. "We're not even thinking about thinking about raising rates," Fed Chairman Jerome Powell told reporters. The Fed also announced it would end the steady tapering of its asset purchases. Going forward, the Fed would keep buying Treasurys and mortgage-backed securities, "at least at the current pace." There had been concerns among some economists and financial markets that these purchases, which the Fed says are supporting market functioning, might end as they have been tapered in recent weeks. At the moment, the Fed will buy $20 billion in Treasurys this week and up to $22.5 billion in mortgage bonds to stimulate the economy in quantitative easing. "The June FOMC meeting has delivered a firmly dovish outcome across both QE and rates in what we view as a concerted effort to prevent any acceleration higher in yields and signal maximum support for the recovery," said Krishna Guha of Evercore ISI. The central bank's balance sheet has already topped $7 trillion. Former New York Fed President William Dudley thinks it might hit $10 trillion before the Fed is done. Some economists thought May's jobs report issued just a few days ago, which showed 2.5 million jobs were created last month after April's sharp losses, was a good sign. Powell said the report was a welcome surprise but just one month's data. "I think we have to be honest, its a long road," Powell said, pointing out there are 20 million people who are displaced in the labor market. Luke Tilley, chief economist for Wilmington Trust Investment Advisors, said he thought Powell was putting pressure on Congress for another stimulus package. "The Fed's ability to support the economy is clearly limited. The Fed cannot give money away. There is high hope at the Fed that Congress will continue to provide more accommodation and stimulus in the second half of the year...without him explicitly saying it," Tilley said in an interview. ... Powell pushed back on criticism that the Fed has put too much money into the economy and is fueling a bubble in stock prices. "What we want is investors to be pricing in risk. We're not looking to a particular level," he said. "The concept that we would hold back because we think asset prices were too high...what would happen to the people we're supposed to be serving?" he added [link] [comments]  |
| Why does VNQ invest so heavily in VRTPX and should that worry me? Posted: 10 Jun 2020 04:33 PM PDT Recently, I've been trying to buy a real estate fund and thought VNQ would be a great choice but when I saw the top 10 holdings, VRTPX had close to 12% of the total fund assets. From the surface level research I've done on VRTPX, it just invests in real estate investment trusts. Idk why but seeing VRTPX as the top holding made me nervous and I'm wondering what people think. VNQ still have the most amount of holdings and lowest turnover out of any other funds I've compared it to such as (SCHH, FSRNX, and BBRE) but i've never come across a top holding being a secondary type of asset. Always assumed reits only invested in stocks and not other funds. Thanks in advance. [link] [comments]  |
| Posted: 10 Jun 2020 05:59 PM PDT How do you think this will affect the market? I know a pretty significant percentage of investments since March are from people with a newfound income, but when everyone needs cash instead of shares, won't that initiate an equally significant sell-off trend? Kind of hesitant to ride this out... [link] [comments]  |
| Frustrated with my choices this pandemic Posted: 10 Jun 2020 08:02 AM PDT Feeling like I completely missed so many opportunities this pandemic. I am a little bit above where I was at the start of the year but lost a ton of money since my peak pre-covid. I just feel like I missed all my opportunities to make back what I lost while all these RH guys who just jumped in during the rally made bank. This pandemic and rally has completely gone against everything I've seen in the market/ what makes sense to me. In 2019-Mar 2020 I nearly tripled my money. The pandemic I lost half of it and am still down a large amount. Granted I have a lot more money than people my age it still feels awful. I missed so many opportunities and stocks seem artificially high and I'm just not sure what to invest in anymore. If I would have stuck to my normal tech stocks like I did pre-covid I would be in the positive and now the tech stocks are at an ATH and I find it hard to justify buying them at their peak but it also seems like they keep going up and up when everything else goes down. I have never been so unsure what to do in the market. This is my first recession since I entered the market and I feel like I just got completely fucked. [link] [comments]  |
| Is it possible to see where trading volume is coming from ? Posted: 10 Jun 2020 07:42 PM PDT Specifically for a particular stock example : Amazon I'd like to know what percentage of trades are institutional/retail and also who are the institutional accounts making those trades [link] [comments]  |
| Newbie here looking for guidance Posted: 10 Jun 2020 07:04 PM PDT Newbie here just fresh off of taking a lil loss bc i didn't know any better and invested in a couple of bankrupt stocks (WLL and Hertz). I dumped them today. I have 3 airlines stocks left (American, Spirit and Delta). What are your thoughts of those in the near future and longer term if I decide to sit on them? [link] [comments]  |
| Posted: 10 Jun 2020 05:07 AM PDT AMC is up 16% after releasing Q1 earnings? Who is buying this and why? Saw a garbage cnbc interview with TD Ameritrade ceo. Unfortunately they didn't let him talk. What is the function or phenomena in the market driving these stocks like AMC htz chk nkla higher? Is it high frequency trading manipulating the price and drawing Robinhood investors in? [link] [comments]  |
| Posted: 10 Jun 2020 02:19 PM PDT Are they good or bad for companies? Does it vary? Xspa is doing a 3 to 1 reverse stock split and itll reach 5-6 dollars. Is this to attract bigger investors? Is it still a penny stock or pump and dump? [link] [comments]  |
| Posted: 10 Jun 2020 08:45 AM PDT So many speculators and anticipation... but all I see is red on it from pump and dump. I don't want to get burned by that... or by FOMO for that matter. Anyone care to share their DD on where the price is headed for the EOW or EOM? What I know: everyone is waiting for the Senate and Donny to proceed with a pretty big police bill (The Justice in Policing Act of 2020) that includes the mandation of recording equipment on all federal officers. AAXN and DGLY are the most popular suppliers of such equiment. During Ferguson riots, DGLY peaked over $20 (although I don't like this piece of DD because of speculation) Feel free to add more relevant information and advice in the comments if you have. [link] [comments]  |
| Not sure I understand how an ETF like S&P500 can be listed as a UK ETF Posted: 10 Jun 2020 09:46 AM PDT Can someone explain to me how it works. I'm interested in spreading out into some more ETFs but my options are limited to UK & Ireland ETFs. I saw VUSA (Vanguard S&P 500) ETF. Not sure how this works.. especially with the difference in trading hours. Can someone help explain this and maybe some pros and cons too. [link] [comments]  |
| Stock drop after positive earnings report? Posted: 10 Jun 2020 07:07 AM PDT UNFI has plunged 17% at market open after a positive Q3 earnings report before market open today United Natural Foods reports earnings that blow past expectations"Reported third-quarter net income of $88.1 million, or $1.60 per share, up from $57.1 million, or $1.12 per share, last year." Can someone please explain this logic to me? [link] [comments]  |
| Posted: 10 Jun 2020 08:05 PM PDT I am thinking to get DAL, CCL, NCLH. They dropped heavily today and seems like they dropped in AH as well. Should I buy them now? or do you think they will drop more this week? What do you expert traders think? [link] [comments]  |
| Nasdaq just say Stock Market Crash or Correction Is Inevitable? Posted: 10 Jun 2020 09:19 AM PDT Can you believe Nasdq itself comes out with statement like this? I thought their agenda is to keep the index up? A Stock Market Crash or Correction Is Inevitable -- History Says SoIt's an absolutely wild time to be an investor. It could be argued that in a span of less than four months, investors witnessed about a decade's worth of volatility. The physical and financial toll tied to the COVID-19 pandemic led to an incredible amount of selling pressure in the broad-based S&P 500 (SNPINDEX: ^GSPC) by mid-February. After closing at an all-time high on Feb. 19, the benchmark index proceeded to lose 34% of its value in a stretch of just 33 calendar days. The 17-trading-session decline into bear market territory, as well as the expediency of the 30% drop, mark the swiftest descents from a recent high in history. But just as quickly as the stock market fell off a cliff, it seems to have reestablished a brand-new bull market. Over the past 11 weeks, the S&P 500 has rallied more than 40% off of its March 23 lows and even has its all-time high within sight. The question is: Can this immense rally last in the wake of weak economic data, or should investors expect another stock market crash or correction? History would suggest that the latter is inevitable. Statistically speaking, crashes or corrections following a bear market are normalAccording to data provided by Wall Street analytics company Yardeni Research, there have been eight official bear-market declines (a non-rounded drop of at least 20%) since 1960 in the S&P 500, not counting the COVID-19 bear market. In the three years subsequent to each of these previous eight bear markets, or until the next bear market hit, if less than three years, there were 13 official stock market corrections of at least 10% (again, not rounded). On average, the bounce-back from a bear market is going to feature either one or two 10% to 19.9% drops in the S&P 500. For example, the Great Recession wiped away almost 57% of the value of the S&P 500, before bottoming out in March 2009. Though in hindsight, we know the rally from those lows was ferocious, investors put up with a 16% decline spanning 70 calendar days in 2010, and a 19.4% drop covering five months in 2011. Also, following the end of the dot-com bubble in 2002, the market almost immediately corrected for 104 calendar days after a double-digit-percentage bounce for the S&P 500 from its lows. The point being that anytime a new bull market is established, volatility doesn't suddenly disappear. There are fundamental reasons supportive of a correction or crashOne of the weird quirks about Wall Street and the stock market is that it's always forward-looking. It's almost always the case that equities bottom out well before the U.S. economy hits its trough. But there's little denying how wide the gap is between Wall Street and Main Street at the moment, which leads to a strong likelihood of an eventual downside in equities. Aside from the fact that historical data shows a crash or correction to be highly likely within three years of a new bull market beginning, perhaps the biggest fundamental threat to the U.S. economy is the upcoming end of certain aspects of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, for short). When the CARES Act was passed in late March, it apportioned $260 billion to expand the unemployment benefits program. This expansion entailed sending approved beneficiaries $600 extra a week for up to four months. But this extra $600 a week is set to end July 31. As of May 23, there were almost 21.5 million continuing claims (i.e., people receiving unemployment benefits), per the U.S. Employment and Training Administration, which suggests that the economy is nowhere near healthy. When these benefits stop, it's a near certainty that, without additional stimulus, we'll see a dramatic increase in rental, mortgage, and loan delinquencies. It's also not unreasonable to expect the U.S. economy to ramp up slowly throughout the remainder of June and into the third quarter. As we've witnessed from the opening of nonessential businesses throughout most of the country, many are not functioning at full capacity, and consumers are still far too scared to part with their cash. In April, the personal saving rate in the U.S. hit 33%, which is nearly double the all-time record of 17.3% set in May 1975, shortly after the oil embargo. If people aren't spending in a consumption-driven economy, that's a bad sign. Here's what smart investors do when the stock market crashes or correctsIf the historical data suggests that some form of correction is likely coming, and the economic data appears to concur, you might be thinking that the best thing to do is tuck your tail between your legs and run for the hills. But that's not what smart investors will be doing. The first thing to do when the stock market corrects (aside from realizing that corrections are a normal part of the investing cycle) is to review your initial investment theses throughout your portfolio. You'll find that, more often than not, the reasons you've bought into a company haven't changed just because investor sentiment has been temporary hijacked by the latest worry. It rarely makes sense to sell great companies during periods of panic. The next thing to do is ensure you have dry powder at the ready. Billionaire investing mogul Warren Buffett, who's been the CEO of conglomerate Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) for more than five decades, has always been a strong believer in having a healthy cash position for periods of panic and fear. In fact, Buffett can't even repurchase Berkshire Hathaway stock unless both he and his right-hand man Charlie Munger agree it's intrinsically cheap and Berkshire Hathaway has at least $20 billion in cash, cash equivalents, and marketable securities at its disposal. Buffett has historically made some of his best investments during stock market corrections and crashes, which should incentivize you to always have some cash at the ready for investment. Lastly, take a deep breath. Despite undergoing 38 official corrections over the past 70 years, the S&P 500 has put 37 of those corrections firmly in the rearview mirror. Eventually, the same will be true for the COVID-19 crash. Although a correction or crash may be inevitable, that's no reason to deviate from a successful buy-and-hold strategy. [link] [comments]  |
| I’m not really understanding calls and puts Posted: 10 Jun 2020 08:50 AM PDT Recently got into trading and I want to try to maximize my earnings short term I have about 700$ in an unnamed penny stock and I'm not losing money but if I can make a better choice than just leaving it as it is I would like to do that with buying and selling puts and calls [link] [comments]  |
| Posted: 10 Jun 2020 09:29 AM PDT Federal reserve meeting today. Is it expected to benefit the stock market or leave it in the red for a few days? Would low interest rates be good or bad, and specifically for what industries? [link] [comments]  |
| Looking for some insight from some more experienced traders Posted: 10 Jun 2020 07:11 PM PDT Fresh off of taking my first loss bc i didn't know any better and invested in a couple of bankrupt stocks (WLL and Hertz). I dumped them today. I have 3 stocks left all airlines (American, Spirit and Delta). What are your thoughts of those in the near future and longer term if I decide to sit on them? [link] [comments]  |
| When would it make sense based on US Markets for the Fed to stop juicing the market Posted: 10 Jun 2020 06:37 PM PDT If the market doubled from where it stood today would you expect the Fed to stop the printing press? What negative consequences would there be if the stock market quadrupled? If we are the only "safe" place in the world to put money into then realistically what is holding the Fed from just doing truly unlimited. Make everybody on earth a millionaire [link] [comments]  |
| Why airlines red today: Delta airline management are virtue signaling trashes Posted: 10 Jun 2020 10:47 AM PDT Today airlines got another brutal day. Tuesday, it was understandable, it's profit taking. But today, no, it's Delta. Their management released statement saying their Q2 revenue's down 90% Y/Y, and they will fail to pay the minimum debt obligation early 2021 if debts aren't renegotiated (aka BANKRUPCY). This probably spooked the market and sent all airlines down. But it's not representiative of all airlines. Delta is in such position because the management choose to virtue signal by blocking the middle seat. No other major airlines doing that. Filling the middle seats means the difference between a profitable flight vs. a loss. While AAL, UAL etc. fill their airplanes to the max, Delta sacrifice so much revenue and profit by not filling the middle seat, turning every single flight into a loss. And they wonder why their outlook is so freaking dire?! But hey, the management get paid millions even if the airline go under, in fact, they'd get paid more for staying during bankrupcy proceedings. So what do they care? Screw investors. It's better to feel better about themselves by virtue signaling. Someone else pays the bill after all, not them. The investors are literally paying for the stupid karens and simps to not get scared while flying. Seriously, screw Delta's management. [link] [comments]  |
| Posted: 10 Jun 2020 06:17 PM PDT |
| Posted: 10 Jun 2020 02:28 PM PDT |
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