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

    July 02, 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: 02 Jul 2020 05:09 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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    US jobs increase by 4.8 million in June, vs 2.9 million estimate; unemployment rate at 11.1%

    Posted: 02 Jul 2020 05:32 AM PDT

    https://www.cnbc.com/2020/07/02/jobs-report-june-2020.html

    Nonfarm payrolls jumped by 4.8 million in June and the unemployment rate fell to 11.1% as the U.S. continued its reopening from the coronavirus pandemic, the Labor Department said Thursday.

    Economists surveyed by Dow Jones had been expecting a 2.9 million increase and a jobless rate of 12.4%. The report was released a day earlier than usual due to the July Fourth U.S. holiday.

    The numbers capture the move by all 50 states to get activity moving again after the virus seized up much of the U.S., particularly service-related industries.

    However, because the government survey comes from the middle of the month, it does not account for the suspension or rollbacks in regions hit by a resurgence in coronavirus cases.

    The unemployment rate also likely is understated due to counting errors at the Bureau of Labor Statistics. Workers who still have jobs but have not been working are being counted as employed and even though as supposed to be considered unemployed under BLS rules.

    submitted by /u/minhntz
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    Uber, Lyft, HopSkipDrive and Zum jointly filed papers challenging the authority of the California Public Utilities Commission to determine that their drivers are employees.

    Posted: 01 Jul 2020 03:26 PM PDT

    https://www.sfchronicle.com/business/article/Uber-and-Lyft-say-regulator-can-t-make-drivers-15380707.php

    Uber and Lyft may be headed for a showdown with the California agency that regulates them.

    The San Francisco ride-hailing companies, along with two smaller ride services for children called HopSkipDrive and Zum, on Tuesday filed papers challenging the authority of the California Public Utilities Commission to determine that their drivers are employees.

    At issue is a June 9 "scoping memo" from agency commissioner Genevieve Shiroma that said "for now, TNC drivers are presumed to be employees," using the acronym for transportation network companies, which is what the commission calls on-demand ride services. A scoping memo is a mechanism to identify future issues rather than a formal decision.

    The scoping memo's reason was AB5, California's new gig-work law that makes it harder to companies to claim that workers are independent contractors, as the ride-hailing companies classify their drivers. The scoping memo and a June 2 letter from a director at the commission said the ride services must provide workers' compensation for their drivers under AB5, which set a July 1 deadline for that insurance coverage.

    "No such finding (that drivers are employees) was or could be made by the Assigned Commissioner, or even by the full Commission," the four ride companies wrote in a motion filed Tuesday. "There is a substantial risk that the Scoping Memo will be misinterpreted, and that the ultimate decision in this proceeding will be based on an erroneous legal foundation."

    The four companies said they want the commission to clarify that the scoping memo statement "is not a determination that drivers who use the TNCs' (software and services) are employees." They also want Shiroma, the scoping memo's author, to clarify that "she did not reach — nor is authorized to reach — any decision finding that all TNCs are obligated to provide workers' compensation insurance for drivers."

    Uber and Lyft fiercely reject any contention that AB5 means they must reclassify drivers as employees, and are battling that possibility in the courts and with a November ballot measure.

    Now they are also battling the state commission that regulates them.

    The motion said the commission lacked any authority under AB5 to make decisions or findings on drivers' employment status. Instead, that authority rests with courts, it said, referring to a misclassification lawsuit against Uber and Lyft by the state attorney general and city attorneys.

    Moreover, the memo was written by a single commissioner, who "lacks authority to resolve a contested issue of substantive law," the companies wrote. Only the full commission could determine that, they said, and that would require hearings, public input and a formal board vote. The companies said they have a right to present their own "substantial evidence" about why they believe AB5 does not apply to them.

    Moreover, they said, the commission already waived its oversight about driver status. In 2013 it wrote that it would not "meddle in their business model by forcing TNCs to designate each driver an employee or contractor."

    The commission did not reply to requests for comment on the companies' motion. Before the filing was submitted, spokeswoman Terrie Prosper said in a email that it "expects all carriers to comply with the workers' compensation insurance requirements and will determine a course of action if and when it discovers that a (ride-hailing company) is out of compliance with those requirements."

    "Because AB5 deems (ride-hail) drivers to be employees, the (agency) must ensure that (the companies) comply with those requirements applicable to employees," Prosper said in an earlier email.

    Uber and Lyft both said their focus is on the ballot measure which would keep drivers as independent contractors while entitling them to some benefits and earnings guarantees.

    "In the meantime, we are seeking further clarification from the (commission) around their flawed presumptions," Lyft spokeswoman Julie Wood said in an email.

    "If California regulators go beyond their authority to force this misguided policy, it would threaten continued access to this work, and undermine the reliability and affordability of these essential services that Californians depend on," Uber said in a statement.

    The utilities commission already waded into the classification issue late last year. In an order on Dec. 19, Robert Mason, an administrative law judge with the commission, asked Uber and Lyft for detailed responses on why they think their drivers should not be employees. That order requested comments in late July and reply comments in early August.

    "There is a possibility, as with all proceedings, that staff proposals are issued for further comment or follow-on workshops scheduled," Prosper said. "A proposed decision may be issued after we hear from parties, review the comments, and determine if anything else may be necessary to develop the record."

    submitted by /u/jayatum
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    Initial Jobless Claims For the week ending on June 27, 2020: 1,427,000

    Posted: 02 Jul 2020 05:47 AM PDT

    Source: https://www.dol.gov/newsroom/releases/eta/eta20200702

    Initial Jobless Claims:

    Survey:

    Actual: 1,427,000

    Prior Week: 1,480,000

    Prior Week Revised: 1,482,000

    Continuing Jobless Claims:

    Survey:

    Actual: 19,290,000

    Prior Week: 19,522,000

    Prior Week Revised: 19,231,000

    Total Jobless claims in the last 15 weeks: 46,515,000

    For comparison sake, the worst weekly jobless claims during the Global Financial Crisis was 665,000, for the week ending on March 27, 2009. This is the 14th consecutive week of new weekly jobless claims being over 1 million.

    submitted by /u/Annapurna__
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    Private payrolls up 2.37 million in June; May revised up to 3.065 million gain from 2.76 million loss, ADP says

    Posted: 01 Jul 2020 05:22 AM PDT

    https://www.cnbc.com/2020/07/01/adp-private-payrolls-june-2020.html

    1. Private payrolls rose by 2.369 million in June, a bit below the 2.5 million estimate from economists surveyed by Dow Jones, according to ADP.

    2. May's number saw a stunning revision, going from an initially reported loss of 2.76 million to a gain of 3.065 million

    3. Hospitality industry workers saw the biggest gain, with 961,000 hires, while small businesses overall added 937,000

    submitted by /u/photowanderer
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    Big Tech CEOs set to testify before Congress

    Posted: 02 Jul 2020 04:44 AM PDT

    Considering the Source, that might cause a stock price drop for these big companies, which might be a good entry point for investment.

    Despite the overall market situation, I think investing in blue chips companies always pays off in long term.

    Please share your opinion - thanks

    submitted by /u/AeroMostafa
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    Goldman real-time data shows first "reverse course" in 9 weeks of improvements as COVID cases rise

    Posted: 01 Jul 2020 10:55 AM PDT

    In week 9 of Goldman's "Measuring the Reopening of America" report series, the analysts see the first reversal in the rate of progress towards normalization across the aggregation of data covering "Stay at Home" (food delivery, eCommerce, streaming media, grocery sales, etc.) and "Back to Normal" (commuting, box office, travel, etc.) categories.

    While conditions vary widely from state to state, based on "high frequency data across a number of micro data points" Goldman is finding the first regression in 9 weeks of steady improvement as consumer behavior respond to more restrictive policies in states with rising COVID cases. Over the past 7 days (week ending July 1), "back to business" categories like dining and retail fell w/w while "stay at home" categories like online media, food delivery, video chat apps, and home fitness reaccelerated.

    Y/Y % change for week ending July 1:

    • Video Game Consumer Spend +101%
    • Grocery Apps +74%
    • eCommerce Apps +54%
    • Online Payment Apps +38%
    • Department Store Spend +30%
    • Mortgage Application +17%
    • Streaming Apps +6%
    • Food Delivery Apps +2%
    • Weekly Retail Visits -20%
    • Commute Apps -27%
    • US Occupancy -42%
    • Kayak Domestic Flight Search Volume -56%
    • OpenTable Reservations -62%
    • TSA Passengers -78%
    • Live Event Apps -81%
    • Top 10 Box Office Gross -100%
    submitted by /u/street-guru
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    Uber's former Chief Business Officer on Postmates: "At $2.4B it is unclear how Uber benefits, as a combined entity would improve its market position in just one major city, Los Angeles. There are likely better ways for Uber to spend $2.4B it feels a little expensive."

    Posted: 01 Jul 2020 03:01 PM PDT

    https://www.benzinga.com/media/20/07/16472169/ubers-ex-chief-business-officer-isnt-a-fan-of-reported-postmates-deal

    is reportedly interested in acquiring rival Postmates for $2.4 billion. The company's former Chief Business Officer Emil Michael was a guest on Fox Business to talk about the deal and the general state of the food delivery business.

    Michael On Uber Acquiring Postmates: Postmates is ranked fourth in the food delivery market, and an acquisition would make sense — but only at the right price, Michael said.

    At a price of $2.4 billion, it is unclear how Uber benefits, as a combined entity would improve its market position in just one major city, he said: Los Angeles.

    There are likely better ways for Uber to spend $2.4 billion, as this price tag "feels a little expensive."

    submitted by /u/jayatum
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    GNC Delisted so what do I do now?

    Posted: 01 Jul 2020 11:34 AM PDT

    I still have 2000 shares in a company that has filed for chapter 11 and is now delisted by NYSE.

    What do I do with these shares now that they're not trade able within the app I use?

    I'm relatively still new to investing as a whole so any insight would be greatly appreciated!

    Edit: This has been an array of interesting answers and I thank all of you who took the time to write something back! I really do appreciate the help!

    submitted by /u/Yeahboyinsanity
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    It's pretty depressing being 30-40% invested in an international index fund.

    Posted: 01 Jul 2020 02:57 PM PDT

    My portfolio is 90% equity and 10% bonds. Of my equity positions, 60% is in a US total market index, the other 40% is in an international index. 5% of my US equity is in individual stocks.

    My international index tracks the MSCI ACWI ex U.S. (ACWX), and that index has never recovered to pre-2008 highs. It's be a 10+ year lost decade.

    I've only been investing since 2016, but it's hard to remain hopeful that we'll see reversion to the mean, and international stocks will start out performing US stocks at times.

    It's got to happen sooner than later, right? In the meantime, I see other funds absolutely smoke the ACWX.

    I'm talking pre-COVID. COVID did not help, but the under performance was true before the pandemic.

    submitted by /u/CD_Johanna
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    I have cash and want to get in the market but I'm intimidated by the current volatility. Does writing cash secured puts solve this?

    Posted: 01 Jul 2020 06:58 PM PDT

    Really looking for someone to red team this. I'm interested in putting my cash into a taxable investment fund and buying a broad ETF (e.g. SPY). But with the volatility right now as much as I want to resist trying to time the market -> the idea of putting a lump sum of cash in and losing 10% or 20% of it within a matter of weeks is too much for me to handle.

    So I've been thinking a way to get around this is to write cash secured puts every month with a strike about 10% less (about because I'd make sure there is decent volume on the amount) than the ETF trades at. This way I'm getting paid for waiting out the market conditions -> and if there is a downturn -> at least I'm buying at 10% less than I would have if I bought the asset directly.

    I've looked up the historical return and it's somewhere around 1.0-1.3% returns monthly. Let's call it 1% to be conservative. That's a 12.68% return on an annual basis.

    So the way I'm looking at this is that I either never get in (the ETF doesn't drop 10% in a month) and make over 12% return on my cash sitting in the account. Or it does drop and I buy 10% lower than the top - which I'm fine with.

    ​

    Thoughts?

    submitted by /u/pr0g3ny
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    Long-Term Falling Interest Rates and the Rise of Neofeudalism

    Posted: 01 Jul 2020 08:09 AM PDT

    Historian Paul Schmelzing recently published an exceptional working paper on eight centuries of global real and nominal interest rates, from 1311 to 2018.

    Nominal rates graph

    What he discovered surprised me: nominal and real rates over very long periods of time are in "suprasecular decline" and that the fall in real and nominal interest rates over the last forty years are merely a reversion to long-term historical trends. When I say "interest rates", I mean both literal rates (paid for debt servicing), as well as effective rates (i.e., at what earnings multiple stocks trade). Schmelzing is more limited in his definition but I will use the term "falling rates" to mean both lowering bond yields and rising equity multiples.
    What's more surprising, the rate of decline is fairly "rapid" across human history at about 2 basis points (.02%) a year. In 100 years, interest rates will be a full 2% lower in expectation. If this phenomenon is reliable and persists into the future, what will the world look like when interest rates are near-zero or negative? Allow me to engage in some rank speculation.

    1). Outsized wealth creation will no longer be possible by professional "asset compounders" like Warren Buffett because there's not a lot of "compounding" one can do when rates are so low. I mean this very literally: since expected human lifespans are only getting a little bit longer, and the Rule of 72 remains true for all non-relativistic finance we literally can't live long enough to compound enough money to move the needle.
    Instead, capitalism will heavily favor "asset gatherers" and "money-raisers" that invest in direct capital projects -- people who raise a lot of money to do something low-return and (legally) skim a bit off the top, because there's going to be simply so much more money floating around and the return hurdle is so much lower. Insofar as this is already painfully true of capitalism by the early 2000s and 2010s, it will be even more the dominant reality for our grandchildren's grandchildren. Someone like Warren Buffett was truly born in the right decade: a time when, at the midpoint of his life, interest rates were unusually high (i.e., assets were unusually cheap) and began a long decline, driving outsized returns for "professional capitalists" and especially for value investors who correctly assigned a very high cost of capital to earnings. The dominant model of wealth creation has shifted from squirrely hoarders like Buffett to either bombastic asset gatherers like Adam Neumann, or to extremely talented builders like Elon Musk, in part because interest rates are much, much lower.

    2). Monopolies will be more valuable than ever and non-monopolies will trade at more significant discounts. As required returns lower, capital will flow toward non-monopolistic, competitive industries (think Quip, Boll & Branch, and whatever other favorite podcast sponsor you have) and reduce returns in those industries even further than where they are now. What really matters isn't how much money a company is making per se, but the certainty that they will earn those returns in the future. This certainty in maintaining pricing, margins, and market share enables investors to capitalize businesses at very high multiples because there's "nothing else left to invest in". More on this later.

    3). Commodity-capital industries become particularly bad industries over time. Finance (all of it: main street banking, investment management, insurance) becomes even more commoditized than it already is. Funnily, I think investment banking is a service and will be excluded from this implosion, and the high-end firms should remain well-insulated as capital raising and valuation-setting activities from IPOs remain a fairly sensitive activity. Real estate cap rates should continue to decline and so should their associated capitalization requirements and costs of capital: one day we'll commonly start to get 100% debt financed apartment complexes that only cost 3% to service (China is perilously close to this phenomenon already).

    4). The rise of what I can only describe as Neofeudalism. Imagine a world where a "typically risky" asset has a 2.5% nominal return:
    a. If you can build an income stream, it will trade at 40x earnings.
    b. If you fail to build an income stream, you need 40x the money to replicate the same-sized income stream.
    c. If your parents were rich and frugal, you will be rich, because they amassed all of the asset increase benefits from when interest rates were high and dropped. Inheritances, in some weird reversion to the mean, will once again become a greater determinant of wealth.
    d. It will be almost impossible to become independently wealthy as a wage-worker, because if you save money, you'll only be earning a 2% nominal return.
    e. "High-certainty assets" will be seen as even more valuable than before, relative to peers. This is due a weird intersection of behavioral finance and arithmetic: an investor being willing to accept a company valued at 1% cap rate instead of 2% will go from valuing a company at 50x earnings to 100x earnings. In low interest rate worlds, the value of securitizing and financializing income streams only grows, because the equivalent capital required to generate those equivalent streams becomes very high. This is why payments startups make so much more sense today than ever before: their revenue streams are incredibly reliable, on an ever-growing churn of economic activity. Even if their profits are low now, the certainty of the growth of future cash-flows is extremely high, and being certain as interest rates asymptote to zero enables the biggest and best valuations.

    Why do low future rates bring about Neofeudalism? Interest rates are like a very long lever. As rates go lower, the lever gets longer, and the more valuable income streams become. At some point the lever itself becomes a sort of king-maker: if you are able to build a perpetual-income business of any kind, you will effectively control an economic fiefdom, because that income stream will be considered incredibly valuable. And if you fail to create that perpetual income stream, you'll be a serf, forced to either deplete your savings (since returns aren't high enough) or work forever.

    This also re-calibrates our understanding of Baby Boomer wealth. They entered the job market when interest rates were at their very highest in recent human history. If you were a reasonably competent young person who could secure a job, you could compound an unbelievable amount of wealth over the ensuing 5 decades.

    submitted by /u/bunnydoge
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    VTI/ITOT Arbitage

    Posted: 02 Jul 2020 05:16 AM PDT

    *Arbitrage... damnit!

    VTI and ITOT, for all intents and purposes, are identical ETFs. Virtually the same holdings, move almost identically. However, I've noticed there are sometimes random 1-2 day divergences in price. What causes this and how can I profit off of it?

    Examples

    Also, although they're virtually identical, why does VTI have a large P/E?

    submitted by /u/undefined_reference
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    Is it safe to invest in gold at these price levels?

    Posted: 01 Jul 2020 11:01 PM PDT

    Price of gold has risen ridiculously over the last one year whereas they were constant for the last five years or so. I am craving the safety of precious metals in my possession but the prices are scaring me off. Is it safe to blindly invest in gold at these levels, is it a "bubble" at this point or better to hold on to cash and see how it unfolds. I don't need this money for the next 5-10 years and am already adequately exposed to equity and bonds.

    submitted by /u/catodi
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    $GRUB Buyout Analysis (DD)

    Posted: 02 Jul 2020 02:21 AM PDT

    In case you haven't heard GrubHub was purchased by Just Eat Takeaway an EU company for 7.3B. That is an implied share price of 75.15 aprox.. the current price of GrubHub is 70.70 on RH with market cap of 6.4B and a lower than average volume today (July 1st after close / July 2nd before open).

    TLDR/Conclusion: right now GrubHub could be a good buy, and moreso GrubHubs derivatives could be especially active in the coming days and the price catches up to GrubHubs implied value being 14% higher than it's current value; For example, I bought calls at a strike price of and around $70 and they expire on the 17th.

    Read about the acquisition here:

    MarketWatch Article

    Barron's Article

    NY Times Article

    submitted by /u/igrantmil
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    Wall Street Analysts new scam play

    Posted: 02 Jul 2020 08:00 AM PDT

    Tesla is a prime example of that. Most analysts on Tesla now come with base target/bear case/bull case.

    Wedbush Analyst on Tesla has bull target of 2000, the base of 1250. Hee has covered himself in all scenarios.

    Same goes for that crazy lady Kathy wood.

    They know they are lying and propping but making sure they dont ruin their career.

    submitted by /u/nycbay
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    What are your favorite downside protection ETFs?

    Posted: 01 Jul 2020 01:50 PM PDT

    VXX - Short term VIX etf. When the market goes tits up, this explodes. Decays a bit too fast for my tastes though unless I can time it really well.

    TLT - 20 year treasury ETF. A nice long-term hold that doesn't decay, though with rates near zero, it might not have much more upside left.

    TAIL - Relatively stable hedge that I like to buy at strategic moments.

    VIXM - Mid term VIX etf. Probably the most stable VIX etf out there. Doesn't grow as explosively as VXX, but subsides slower which makes a badly timed purchase more forgiving.

    BTAL - Goes up when the market goes up, goes up when the market goes down, only goes down when we get euphoric moments like when JETS was trading at $22 back in early June.

    What other downside protection ETFs do you like? Preferably ones that don't decay away if mistimed.

    submitted by /u/adayofjoy
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    Unusual Option Activity for July 1, 2020 - AA - Featured Trade: SHLL OCT 16 '20 - 25P

    Posted: 01 Jul 2020 02:15 PM PDT

    Welcome to another Unusual Options Activity post. Why do DD when you can see what stocks people are heavily investing in? I post these daily.

    Context -

    The S&P 500 increased by 0.5% today. There was positive news recording a vaccine and Pfizer. PFE notably had the highest number of contracts traded for the day. The ADP Employment Change Report for June again showed gains for private-sector payrolls. The ISM Manufacturing Index for June beat consensus with 52.6% (consensus was 49.2%). The communication services, utilities, and real estate sector led the market higher, increasing +1.8%, +1.9%, +1.9%, respectively.

    Today's Option Activity Fast Facts -

    Sentiment – CBOE Put/Call Ratio - 0.90, VIX: (28.96, -1.47, -4.8%).

    Highest Multiple Over Daily Average - DXC with 46 x the ADV of 4173. There were 96199 calls and 94803 puts.

    Ticker with Most Contracts - PFE with 329836 contracts traded today with an AVD of 95042. There were 277805 calls and 52031 puts.

    Largest Put / Call Ratio - MUR with a 102.87 P/C ratio. There were 30142 puts and 293 calls.

    Largest Call / Put Ratio - SKX with a 97.16 C/P ratio. There were 34978 calls and 360 puts.

    \Stocks must be >$6, Highest Multiple must have >1k ADV, Largest ratios must have an option volume >10k*

    MOMENTUM UNUSUAL OPTION ACTIVITY -

    Ticker : AA 10.95 -0.29 ,( -2.58 %) Earnings : 2020-07-15

    Name : Alcoa Corp. Sector : Non-Energy Minerals

    Special Considerations : Industry : Aluminum

    Option Information -

    Today's Option Volume: 41029 OptionOI: 208019

    ADV: 10621 Multiple of ADV: 4

    Total Calls: 37921 Total Puts: 3108

    Calls at Ask: 43.0 % Calls at Bid: 32.3 % C/P Ratio: 12.2

    Puts at Ask: 28.1 % Puts at Bid: 21.4 % P/C Ratio: 0.1

    Notable Strikes :

    JUL 10 '20 12C had 29.9k VLM with a 2.12k OI.

    DarkPool Prints :

    None

    News : 24-Jun-20 6:10 pm: USTR conducting review that could lead to $3.1 bln in additional tariffs on EU imports

    My Impression :

    Yesterday featured MT which is a steel company. The hypothesis was the call volume at the time may have been related to some sort of new tariffs being enacted. It appears there was confirmation of this yesterday after I posted. I'll likely be picking up some shares of this tomorrow.

    Featured Trade: SHLL

    I don't make featured trade posts often, because these opportunities do not come around all that frequently.

    SHLL added options today. There has been significant number of comparisons between NKLA and SHLL. The premiums are very high, especially for the puts. SHLL is a SPAC - or a Special Acquisition Company. These stocks typically have a floor of $10.

    "A typical SPAC will offer stock at $10 per share and give the management team two years to find a suitable target. If the SPAC doesn't find a good merger candidate, then its terms call for it to liquidate. Unless the SPAC finds a candidate, the money raised in the IPO is held in trust, and so IPO investors typically get most or all of their $10 initial investment back." - Sorry can't provide links, but it was a motley fool article. You can search for it if you are interested.

    The Hyliion and SHLL merger is slated to go through sometime in Q3, September or October. The premium for the OCT 16 '20 25Ps is high. I sold 10 of them for 11.70. I was the only volume at this strike price at the time. A few others have decided to follow the trade, but the volume is still low. This makes my break-even price for SHLL 13.30.

    Hypothetically, if the merger does not go through the floor for the stock should be right around $10. It can go lower, but it is less likely. You are essentially risking about 3.30 for a maximum upside profit of 11.70. Not a bad return. Other risks include SHLL being sub $10 after the merger.

    This is the first day that SHLL has had options. The option chain was not available on all brokers, however, it was present on IB. The option OI and VLM reflects that it is not available on all brokers. You should exercise caution because as of right now the low volume is causing wide spreads, which likely helped my fill. Right now, the largest call that can be bought is the 30C. I would expect the option chain to be extended tomorrow or in the next few days. People are likely to buy a lot of OTM calls and force the MMs to start delta hedging the sold call so there is a potential catalyst for this stock to move significantly higher in the nearer term.

    There is no such thing as a risk free trade, but there are good bets. I think this is a good bet with limited downside risk.

    DISCLAIMER – These are my observations that I have made at the end of each day and trades that I am considering placing or watching. I am not responsible for your financial losses if you follow any of these trades. As always, do your due diligence.

    submitted by /u/noentic
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    The case made for WellsFargo - WFC ? Is it really cheap as it looks to be ?

    Posted: 01 Jul 2020 03:15 PM PDT

    Morningstar reports that the Banking sector appears to be well-capitalized after the recent federal stress test and banks will be much harder to break this time around compared to 2008. Though wellsfargo is slated to cut dividends this time around like all other banks but it's wide moat, rock bottom value, decent guidance, lowering legal fees(compared to last year or so) seems like decent buy. isnt it ?

    submitted by /u/sandyydarling
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    CEFs sound too good to be true. Please affirm my instincts

    Posted: 02 Jul 2020 05:12 AM PDT

    This article floated across my browser this morning: https://stocknews.com/news/spy-inx-dia-iwm-qqq-how-to-generate-a-8-income-stream/

    Does anyone have experience with CEFs like $GDV? I'm relatively versed in investing and have never heard of a CEF before this morning.

    submitted by /u/Kajex13
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    Economists expect the US added 3 million payrolls

    Posted: 01 Jul 2020 03:04 PM PDT

    https://finance.yahoo.com/news/june-jobs-report-preview-economists-expect-the-us-added-3-million-payrolls-lowered-unemployment-rate-170827884.html

    But also this:

    "Downside risks to the June report remain, however. Some economists noted that stimulus-related impacts may have powered May's non-farm payrolls gain, distorting the underlying trends in hiring in a way that may not have been replicated in June."

    submitted by /u/purplebrown_updown
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    The Summer Lockdown - My Plays for the Pandemic

    Posted: 01 Jul 2020 11:34 AM PDT

    As reality becomes clearer, I realize that this summer non-essential businesses will continue to close down. I will not return to working in the office until September, and I would be surprised if it doesn't get pushed back further. For the summer there are a few things to note:

    1. The virus is not going anywhere. Cases continue to rise, but the market is reacting positively to the fact that mortality rates are staying low compared to infection rates.
    2. Markets are diverging. Bond markets are staying flat/falling, while equity markets are rallying higher. If debt and equity markets fall simultaneously, then we know volatility is back.
    3. The market is going to move like a pharmaceutical stock.

    I have two plays for this summer, one is bearish and one is bullish. Let's get to the details...

    The healthy workout trend was at an all-time high before the pandemic shocked the world. Beckys were buying organic juices and meeting up at the local LA Fitness and the free weight benches were crowded with Chads every Monday. Covid-19 changes all of that, though. This summer I'm short $PLNT.

    1 year and 3 month charts: https://imgur.com/gallery/kY34Ayy

    Fundamentals for $PLNT are rapidly falling as the new reality settles in. Last quarter earnings took a big hit and I expect an even bigger hit. I wouldn't be surprised if the company sees a small net loss in Q2.

    Take a look at those charts; this stock is anything but calm. Volume has ramped up in the current year as investors flee what could be a sinking ship. The stock has seen lower highs and higher lows forming a bearish wedge. Watch for higher volume as the price falls below support levels on this trend. RSI and MACD are both bearish signaling no upside momentum.

    The options chain is pricing in a $7 move after earnings (ER on 8/4) on both sides but volume and open interest are both very bearish.

    I like $PLNT in a normal world where businesses aren't categorized as essential and non-essential. That isn't the world we're living in, though, so I'm going to short $PLNT. I'm playing the downside here. Over the next few weeks, the price will continue to drop on virus fears as it trades closer to ER. I'm expecting a huge miss on earnings. We've already seen the price trade below $30 at the market bottom. I want to play a cheaper contract here so I'm going to watch the 8/21 40p for a good entrance. Additionally, I would consider a spread on the 7/17 expiry to play the near term downside before earnings.

    Next on the list is a play on the work-from-home trend and the inevitable shift towards 5G. I like this cloud communication company because it has and opportunity to take market share: $OOMA

    2 year and 1 month charts: https://imgur.com/gallery/uC7I92U

    $OOMA operates in a niche market that offers 5G cloud communication services. It competes with big names like AT&T, Verizon, Comcast, etc... but it also partners with Sprint/T-Mobile. No single customer makes up 10% of the company's sales. Core customer growth has increased 13% over the last two fiscal years. Additionally, sales have increased 61% and 4% YoY in the business and residential segments, respectively. What does this mean? $OOMA is capturing market share in the business segment even as it competes among blue chip companies.

    Terrestrial cables are expensive to manufacture and the infrastructure is costly and timely to lay. $OOMA is offering an alternative. Wireless communication with 4G and 5G capabilities. The company found that the 5G push is making it increasingly cheaper to offer fast, clear video/audio communication without the cost of cables.

    $OOMA looks to increase sales and margins, while cutting expenses like SG&A and R&D. The company is shooting for a future EBITDA % of 20-25%. My biggest concern at the moment is the lack of working capital to take on new investment opportunities - working capital has fallen from $35 million to $1 million over five years. This can definitely be a positive thing, because it means $OOMA has been capitalizing on growth opportunities over the last five years.

    I picked up 100 shares at $16 when it was testing the break out and I'm looking to load up on more. I like this stock at $22.50 and I'm going to hold it for the next decade.

    TL;DR

    $PLNT deep OTM puts - 8/21 40p

    $OOMA long shares

    submitted by /u/enronCoin
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    Is Luckin Coffee's delisting a cautionary tale for investors?

    Posted: 01 Jul 2020 06:53 AM PDT

    Luckin Coffee was one of the fastest-growing start-ups of all-time, rivalling Starbucks in its home country less than three years after it opened.

    Last year's IPO was one of most anticipated in recent memory, and in February, Luckin's share price hit a year high of $39.56. Now it is practically worthless, leaving many shareholders out of pocket.

    At its peak, Luckin Coffee had a market cap of over $12 billion... it is now worth $359 million.

    What happened to Luckin Coffee and its share price will do down as one of the most infamous cautionary tales in modern investing.

    What do people think we should learn from this?

    submitted by /u/OPTO_reddit
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    What do you do with your extra cash that you hold?

    Posted: 01 Jul 2020 01:30 PM PDT

    I holding a decent amount of cash from some gains that I sold and am wondering what to do with it. I have a Schwab high yield checking account, one Mutual Fund (SBLGX) and a handful of ETFs and have slowly stopped gambling on speculative stocks. Should I just put it in another Mutual Fund or Money Market fund? What do you guys do?

    submitted by /u/misc412
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    Investing Performance Research Website or Tool?

    Posted: 01 Jul 2020 08:54 PM PDT

    Is there a website or tool available that would give performance data for an investment?

    For example:

    Say I want to see how investing $2,000 of Walmart, with the buy date of January 1st, 2010 with the market price of that day and see how it's performance was to current date....

    I know investopedia.com has the stock market training section, but doesn't let do past dates for the purchase...

    Thanks!

    submitted by /u/DRB1928
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