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.
- With MSFT, AAPL AMZN, GOOGL and FB making up more than 1/5 of the S&P500, what are practical ways to de-risk your portfolio from this imbalance?
- GoodRx Files to Go Public!
- Hershey: The quintessential Buy-And-Hold stock
- Value investors who have not yet FOMOd into the market, where do you spend your cash now?
- Help me understand SPACs
- Drawback of CFD?
- Vanguard move HQ to Shanghai- more exposed and vulnerable to US-China conflict??
- BRK.B - How much can they grow?
- A reminder on what moves the price of a stock
- What are your thoughts on big companies that were hit hard by COVID and are still down?
- Investing in S&P500 ETF
- Conspiracy theorists buying silver/gold
- Is FDEWX good for my age?
- Something i don't understand about pre-market prices
- RNS Email alerts for european stocks?
- ARKK & ARKW
- Direct Public Offerings? (DPOs?)
- When to actually sell and is it dumb to have 3 accounts following the same strategy?
- Big oil rebound: is it a matter of when or if?
- US Self-Directed Investor Bill-of-Rights. And, Broker-Dealer illegal actions towards Self-Directed investor.
- Ray Dalio, Warren Buffet and quite a few others are advocating Gold right now. Any thoughts on why?
- Does anyone invest in pre-seed startups
- Wanna play Farmville in real life and buy a cow for $350?
- What do you guys think of this strategy: 50% in SPYD, 50% evenly distributed among FAANG
| Daily Advice Thread - All basic help or advice questions must be posted here. Posted: 28 Aug 2020 05:12 AM PDT If your question is "I have $10,000, what do I do?" or other "advice for my personal situation" questions. If you are going to ask how to invest you should include relevant information, such as the following:
Please consider consulting our FAQ first - https://www.reddit.com/r/investing/wiki/faq Be aware that these answers are just opinions of Redditors and should be used as a starting point for your research. You should strongly consider seeing a registered financial rep before making any financial decisions! [link] [comments]  |
| Posted: 28 Aug 2020 08:17 AM PDT For those who subscribe to having the majority or the entirety of their equity holdings to consist of ETF/funds from the S&P 500, the impact to their portfolio as a function of any one company has increased substantially. Even with total market funds like Vanguard's VTI, these five stocks make up an outsized portion of the fund because of market cap weight. Much like investors using "ex-US" funds to increase exposure to international holdings, are there funds that are "ex-FAANG" so individuals can lessen the impact? If not, would another practical strategy be to buy more non-tech sector funds as opposed to say buy more of the 400+ other S&P 500 stocks as counterweight. Thoughts? EDIT: /u/exaggerate_a_point summed up my ask better than my own attempt so I'll add it here instead of responding to similar comments:
Another good summary of the ask for this discussion from /u/FerociousGiraffe :
EDIT2: For comments related to balancing with international equities, this discussion is contained for U.S. equities. Assume whatever percentage of bonds, precious metals, digital currency, international equities or whatever you think is appropriate in a portfolio has been addressed. EDIT3: Outside of suggestions like "Why do you hate winning?", some of the top solutions to dilute these stocks from your S&P 500 / U.S. equities part of a portfolio:
[link] [comments]  |
| Posted: 28 Aug 2020 03:39 PM PDT Hey folks, In exciting news today, GoodRx filed to go public. If you've never used GoodRx, they're primarily known for helping Americans get discounts on their prescriptions. They are also a profitable company with growing revenues. Their technology is top notch with the sheer volume of data and touch points that they process. Their S-1 is here : https://www.sec.gov/Archives/edgar/data/1809519/000119312520234662/d949310ds1.htm And CNBC did a write up on them too: https://www.cnbc.com/2020/08/28/goodrx-files-for-ipo-has-been-profitable-since-2016.html Let me know what you think about GoodRx and/or if you or your family members have had experiences using their services. [link] [comments]  |
| Hershey: The quintessential Buy-And-Hold stock Posted: 28 Aug 2020 01:09 PM PDT Intro When it comes to building a portfolio of SWAN (sleep well at night) stocks for the long term, HSY is a layup. In the world of stock investing, HSY is an ideal stock for beginners and seasoned investors alike because of its relatively simple business model and its ability to generate consistent returns. The business itself is very straightforward. HSY owns some very recognizable brands such as Reese's and KitKat (HSY owns the rights to KitKat in the US). On average they manage to sell more candy than the year before and with it also raise prices at a rate higher than inflation. As the bulk of their profits are earned in the US, their income statements (reported in USD) are an accurate reflection of what they actually earned. Compare that to other excellent companies like CL, KO etc which are a little harder to evaluate as they earn most of their profits overseas and you have to factor in currency fluctuations to get the real picture (their annual reports usually do a good job of it though). As Peter Lynch said, "Invest in what you know" and it's safe to say most Americans have consumed a Hershey's product at some point in their lives. Heck, you can even use the excuse of "market research" to buy some Reese's peanut butter cups the next time you go to the store. $$$ Morningstar does a great job putting together the financials. Check with your local library to see if you can get access to Morningstar or Value Line. It's very useful to anyone looking to research individual stocks. While paying for a subscription yourself can cost several hundreds of dollars annually, most public libraries in the US give you access to one or both of those services for free. I'll try to sum up the key metrics shared in the link above (anyone can view that page even without a subscription) Over the last 10 years Net sales growth of ~4% (What's even more impressive is that most of it was achieved with volume increases and pricing power alone. Acquisitions had little to do with it) EPS growth 8-10% Div yield 2-3% (The payout ratio stays around 50% which means you also see dividend growth that's 8-10%) They buy back roughly 1% of outstanding shares each year. Just like that you get 11-13% CAGR (excluding PE compression/expansion). ROIC consistently in the high teens to 20+ (consumer staples usually average in the mid teens) Operating margin has increased from 17.4% to 21% (PEP for example was around 15% last year) To check the quality of the balance sheet, we look at the interest coverage ratio and Net Debt w.r.t Operating Profits. With capital light businesses like HSY, their ability to grow profits/free cash flow is a better indicator of financial strength than shareholder equity. Interest coverage ratio (Interest expense/EBIT) ~ 10 (A double digit value for a consumer staples company is considered very safe) Net Debt/EBIT ~ 2.5 (Anything less than 3 for a consumer staples company is considered very safe) Stock Performance HSY has historically fluctuated between a PE of 30 (overpriced) to a PE of 20 (a bargain). Every once in a blue moon the PE dips below 20 and the div yield approaches 3% at which point it becomes a screaming bargain. Barring a total economic collapse or horrendous mismanagement, it's very unlikely you'll see HSY trading at a PE of 15. I would say a PE of 23-25 is a fair price for a wonderful company. As with any investment, the price you pay affects future returns. To get the real picture of returns generated by HSY, one needs to look at a full business cycle as consumer staples generally tend to outperform during a recession. The absolute worst time to buy HSY in the last 15 years would have been in early 2005 when the PE was over 30 and the dividend yield was below 1.5%. A $10,000 investment with dividends reinvested in April 2005 would result in a present value of $34,863 with a CAGR of 8.49% (underperformed the SPY which returned $37,404 at 8.98%). Buying it at its lows in early 2008 when the PE was under 20 and the dividend yield was over 3%, A $10,000 investment with dividends reinvested in January 2008 would result in a present value of $50,619 with a CAGR of 13.76% (outperformed the SPY which returned $28,659 at 8.73%). Realistically speaking, for an investor who DCAs into this stock, their returns would've been somewhere between 8.5% - 13.8%. HSY is not a stock that you can expect 20%+ CAGR from, but with some luck compounding at 11-12% can build significant wealth (and potentially even outperform SPY). Risks As far as stocks go, HSY has to be one of the safest investments out there. The company is very conservatively run as the Hershey Trust owns roughly 40% of the company (but over 80% voting rights) and uses the dividends to fund a school for underprivileged children. The dividend is sacrosanct and HSY management is less likely to jeopardize the dividend in search of growth. Consumer staples as a business also face less disruption than other industries. Profits are consistent and the business requires fairly little reinvestment. Candy, alcohol and tobacco are centuries old and consumer tastes change fairly slowly which gives companies plenty of time to adapt. MSFT would go out of business if they were still selling the same OS they made in the 90s. HSY on the other hand is more or less still selling the same candy it was 30-40 years ago. That being said, past performance is no guarantee of future results. So let's address some realistic risks - Ruining the quality of the product due to cost cuts in search of short term profits. Irene Rosenfeld at Mondelez did this to the Cadbury Creme Egg, which didn't bode well for the stock. A big part of the reason why I'm willing to pay a premium for a Reese's Peanut Butter Cup (over some generic brand candy) is because of the taste. HSY would lose their hard earned market share and goodwill in search of short term gains. - Compromising the balance sheet for a bad acquisition. KHC is a good example of this. The 3G method involves slashing costs and levering up the balance sheet to acquire more businesses. Of course, if the acquisition doesn't pan out the stock gets punished accordingly. HSY has tried to build their international presence through acquisitions and it hasn't panned out well so far. Lately they've started diversifying into savory snacks. However, these tend to be pretty small in nature. - A sugar tax to combat obesity. I don't think it'll hurt the underlying business too much, but HSY might start trading at a lower earnings multiple. - E-commerce might affect HSY a bit. Outside of a few holidays the bulk of candy sales come from impulse purchases a consumer makes at the checkout counter at the store. It usually isn't something a person puts on their shopping list. I think with some proactive management, HSY can get around that by working with vendors to advertise their products while checking out online (much like how pizza joints upsell soda/breadsticks etc at checkout time). Conclusion If you've made it this far, I thank you for reading this post. I mostly wrote this for people who might be looking into buying individual stocks. I think HSY is an excellent stock for those looking for an above average dividend yield and dividend growth. Buffet often speaks fondly of his See's Candies investment. Much like his own investment, with some luck HSY's dividends alone can pay you back your initial investment and then some over an investing lifetime. As always, sticking with a low cost index fund is a sound strategy. Even a stock like HSY requires a few hours of work each year. TLDR: HSY good. VTSAX good. [link] [comments]  |
| Value investors who have not yet FOMOd into the market, where do you spend your cash now? Posted: 29 Aug 2020 03:38 AM PDT I have never invested in stocks, I want to get started now, but waiting because if I buy now that would be 100% based on FOMO and I just don't want to do that so just bought low-risk bonds in my country where I could get ~4.5% yearly return. Just to try to keep up with inflation. [link] [comments]  |
| Posted: 28 Aug 2020 08:59 PM PDT Hey I have experience in the additive manufacturing realm and know/feel strongly that the company desktop metal will be a great investment and will be a profitable company. They announced that they were doing a reverse ipo through an acquisition by Trine (TRNE). If I buy TRNE will those get converted to Desktop Metal stocks or does buying TRNE just give me the right to buy desktop metal stocks at a certain price? [link] [comments]  |
| Posted: 29 Aug 2020 01:16 AM PDT If I have done my DD seriously and am convinced that it would go up long term, imo CFD is better than LEAP because of no theta decay. InteractiveBroker is not market maker as a CFD trading platform. It just makes money by charging commission and margin rate(<2%) so we don't have to worry that we are fighting against brokers. What's more, because it can leverage 5x at most, I wouldn't be wiped out even if the stock drop 20% (assume the leverage is 2.5x) or 40% (assume the leverage is 2x). While the margin loan only accept 2x leverage at most, investors are usually forced to sell even if they actually don't mind to keep hold or you can only leverage like 1.2~1.5x. There is also CFD for SPY,VOO, which is better than ES future because there is no expiry date. TLDR: I think CFD is much better tool if leverage is below 2.5x. Here to learn, so any opinion would be appreciated! [link] [comments]  |
| Vanguard move HQ to Shanghai- more exposed and vulnerable to US-China conflict?? Posted: 28 Aug 2020 07:05 PM PDT As many of you might have read, Vangaurd is going to scale down/move out from Hong Kong and Japan, and increase presence in Shanghai instead for their operations in Asia, a move to focus on individual investors in mainland China which could be immensely profitable. I am wondering what implications this has with the escalating tension and conflict between US (and Five Eyes) and China. It is no news that trying to profit from both sides/markets is becoming increasingly treacherous (Just look at HSBC). In particular,
What are your thoughts? Edit: By HQ, I meant their Asian HQ. [link] [comments]  |
| BRK.B - How much can they grow? Posted: 28 Aug 2020 04:25 PM PDT Hi all, I'm interested in BRK.B as a long-term hold. I know some here are worried about BRK after Warren and Charlie but personally I think it will drop then recover in relatively short order. I think the numbers and Buffet's actions show it's relatively near intrinsic value, it will hold if the market goes up and it may be insulated better than the S&P in the case of a bear. With that said I'm trying to project the future growth rate for it. Analysts have it at 7%, but can a company the size of Berkshire realistically grow at 7% a year? Or is it too big now to grow at that rate - anyone have any thoughts on where they're going? [link] [comments]  |
| A reminder on what moves the price of a stock Posted: 28 Aug 2020 04:43 PM PDT Let's get this straight: the price of a stock is not random*. The price is (theoretically) all future earnings of a company discounted at some rate (depending on the risk of the stock) to the present day. What this means is that in order for you to rationally price a stock, you first want to see what money it will deliver to you in the future, and how likely it is to deliver that money. The more earnings and/or the more likely it is to achieve those earnings, the higher the price. So, to price a stock, you form your expectations about all future earnings and discount them depending on the risk of the stock to today's money, and now you can rationally decide if a stock is a buy or sell or even short. This whole thing is called the Discounted Cash Flow Model. Now, this is the essence of this post: a change in expectations about future earnings, or a change in the discount rate are the only things that change investor sentiment about a stock. It is not how it has historically performed nor about its current situation. It is always how do investors feel about the future of the company. A lot of people on this sub like that point out the history of a stock to jusifity going long, or the fact that the company is projected to make a lot of money or that it currently does. The reality is that all of that is reflected in the price of the stock. You can use historical earnings to project future earnings, but that is all, and those future earnings are already reflected in the stock's price. Only a change in expectations or the risk of a company meeting expectations influence the price of the stock. This ultimately means only future events can change the price of the stock, and unless you can predict the future, for all intents and purposes, the price of a stock today is right. Here's a consequence of this line of thinking: You want to know why Apple is $2.1T in market cap? It is a mix of high earnings in the future and a very low risk of missing. Have low risk necessarily means having lower future returns. Almost all (>97%) returns are explained by taking on more risk (using the Fama-French 5 factor model). This is the fundamental idea behind investing, and is basically a law at this point. High risk = high reward. Apple being priced high means that it's expectations are high (meaning for anyone who invests in Apple right now, they are expecting Apple to earn lots of money) and those expectations are not terribly risky. This ultimately means that for Apple investors to make returns at or above the market, Apple has to consistently beat expectations and become even a safer investment in order for current investors to make returns. What this ultimately means is that in the long-term, large cap growth stocks are not the best investments you should have. Companies like Apple are basically guaranteeing you low returns in the long run. If you have a long time horizon, you should be investing in systematically risky assets because in the long run, you make more returns. Things like value, and small cap stocks are higher risk and higher reward. *Price movements are a random walk, but that is because the future is effectively random. [link] [comments]  |
| What are your thoughts on big companies that were hit hard by COVID and are still down? Posted: 28 Aug 2020 10:51 AM PDT Hopefully, this isn't against the rules. When the market crashed I was fortunate enough to buy into a handful of stocks nearly perfectly at the bottom. I bought a few things like SixFlags, Carnival Cruise Lines, Delta Airlines, and Boeing (in addition to some stuff that was less directly affected). If I sold right now, I would stand to make a pretty good profit probably averaging around 30% return on those purchases. The thing is, at the time I bought them because they dropped sooo far and it seemed like they would definitely bounce back eventually. Now I am starting to wonder if there's a good chance they won't bounce back for years or maybe won't ever get back to where they were. Maybe I should just take my profits and get into better investments. Maybe I would have been better off initially getting stocks that crashed but weren't as directly tied to the virus. Several stocks are higher now than before the crash. Hindsight I guess... On the other hand, maybe stocks like these that are still down quite a bit (since things like air travel, cruises, etc have not really gotten back into swing), are good things to add more money to now before they start to climb again. What are your thoughts on sectors like airlines, cruise lines, theme parks, etc. for the upcoming year or so? [link] [comments]  |
| Posted: 29 Aug 2020 03:56 AM PDT Hey , I'm new to investing and I want to know how good of an idea is to invest a small amount every month for 10-20 years in a index fund. [link] [comments]  |
| Conspiracy theorists buying silver/gold Posted: 29 Aug 2020 03:56 AM PDT Anyone noticed a big trend of conspiracy theorists talking about a 'planned financial reset' and 'new world order' etc, and that silver/gold is the place to invest to protect yourself from this event? This narrative has gained a lot of traction on the internet and is spreading like fire. Have met a few IRL and have several acquaintances on facebook spouting this nonsense, promoting it to others. Is this potentially driving up silver recently, or are they just a tiny blip that won't make a difference? [link] [comments]  |
| Posted: 29 Aug 2020 03:14 AM PDT I'm currently 32, and have been able to max out my Roth IRA in Fidelity for the last two years. After lurking around this sub for a while I selected FDEWX to just set it and forget it. Also to note I have my 401k through my employer which I have been maxing out for the last 4 years (and doing the company match (6%) 2 years before the last 4 years). [link] [comments]  |
| Something i don't understand about pre-market prices Posted: 28 Aug 2020 06:41 AM PDT I'm based in Hong Kong. There was a new ETF (3033) launched today that tracks one of the newer indices (HSII) that contains Asian (but mainly Chinese) tech stocks eg alibaba, tencent etc. The launch price was at HKD7.5 but 15 mins to open i noticed it was priced at HKD42. 15 mins after open it dropped back to HKD7.6-7.8 which makes more sense because the index only reached 7,700 today. My question and what i don't understand is why the price jumped so high prior to open and what caused it drop back to launch price clearly there are some other people who don;t understand this either [link] [comments]  |
| RNS Email alerts for european stocks? Posted: 29 Aug 2020 02:57 AM PDT Is their any website that allows RNS email alerts as soon as a piece of information is published by a company? I know LSE has one but I'm looking for france/spain/germany etc. The Euronext only seems to have terrible email alerts for stock price movements and crap. [link] [comments]  |
| Posted: 28 Aug 2020 02:59 PM PDT Thoughts? I'm considering buying some TSLA after the split (I know it doesn't matter in theory, but with the memeish aspects to TSLA I want to wait it out) and I've been looking at SQ, and a lot of other smaller companies I'm seeing...it just seems to make sense to get into one of these ETFS. I've already got a lot of my portfolio in QQQ and Berkshire, as well as some VOO and a bunch of total market and world market exposure through my IRA, but it seems like ARKK or ARKW (leaning toward the later) would be a good buy as well to really position me for all things future looking. In case anyone is thinking of energy I'm invested in NEE, which I like. [link] [comments]  |
| Direct Public Offerings? (DPOs?) Posted: 28 Aug 2020 07:22 PM PDT Wondering if anyone has experience buying DPOs on opening day? For example $WORK $SPOT I'm looking to buy a big lot of an upcoming DPO and am wondering if there's a better way of purchasing than refreshing my brokers page on opening day? Also would the stock be available pre-market or randomly throughout open hours? Having trouble find info on this Thanks! [link] [comments]  |
| When to actually sell and is it dumb to have 3 accounts following the same strategy? Posted: 28 Aug 2020 02:44 PM PDT I am currently 18 years old with a ROTH IRA opened and an individual taxable account. In my ROTH, I hold VTI, VXUS, and BND. In my taxable, I hold VUG and VXUS. Both are growth plays, and when I graduate with a job that offers a 401k I plan to invest in VOO. I know the goal is to grow the accounts large enough where you can pull out 4% per year, so does this mean I just never sell the stocks/funds? Also, would that mean, my primary goal for the 3 accounts to have them at $ 1 mil + or do people just calculate their portfolios as the whole amount? Getting 3 accounts each past 1 mil just to retire seems difficult. Lastly, would it be silly to have 3 different investments account essentially follow the same growth strategy, or should I each one a different strategy such as dividend-focused? Thank you. [link] [comments]  |
| Big oil rebound: is it a matter of when or if? Posted: 28 Aug 2020 02:27 PM PDT Will big companies like RDSA and XOM be able to recover from this downturn and reach previous highs (or close to it) or have we really seen peak oil demand in 2019? On the one hand I personally feel that EV's will eventually take over the market. But I feel that the market has an exagerated euphoric sentiment towards this energy transition (largely "fueled" by TSLA) and that in reality such a transition will take much longer than we anticipate. I feel that oil demand is unusually surpressed by the coronavirus situation, lockdowns and the OPEC pricewar. Sort of like a perfect storm these factors have battered the energy sector. I see these factors as temporary however and feel that if the coronavirus eventually passes, and the pricewar is resolved, oil will rebound to peak at or near its previous highs. I am skeptical of the fact that EV's will truly be able to overtake a large share of the oil market in such a (relatively) short timeframe. On the other hand, technological innovations in the past have been exponential in growth at times. It could be that TSLA is the trigger that set into motion the largest energy transition of recent history and that oil consumption will be largely reduced by a large chunk of the market share being taken up by EV'S. This is more likely if we consider that the crisis for oil companies is probably going to last a couple of years at least, before demand is able to recover. It is evident from the speeches of BvB, CEO of Shell, that he believes that after this last collapse of the oil market, it will never reach near its former highs again. Hence why Shell is accelerating its transition into renewable energies. Warren Buffet selling out of OXY seems to share the same type of sentiment (than again WB was really bearish on airlines and these seem to recover slowly aswell). How do you view these two possible outcomes? [link] [comments]  |
| Posted: 29 Aug 2020 02:00 AM PDT To help Self-Directed Investors know their legal right in business with a broker (e.g TD Ameritrade), and also what is considered illegal actions from a broker to self-directed investors, is there information out there that could be used to compile a "Self-Directed Investor, Bill-of-Rights" and, "Common Illegal Activities Directed towards Self-directed Investors"? [link] [comments]  |
| Ray Dalio, Warren Buffet and quite a few others are advocating Gold right now. Any thoughts on why? Posted: 28 Aug 2020 05:39 PM PDT I think that we are perhaps entering bubble territory with how insane the market is getting right now. Not only that but the amount of money that's being printed is decreasing the value of the dollar. Meanwhile there will always be a limited amount of gold in the world. And so maybe the rationale would be to hold onto gold and then rebalance once the crash does happen? Or is there something else I'm missing? [link] [comments]  |
| Does anyone invest in pre-seed startups Posted: 28 Aug 2020 06:47 PM PDT So i am interested in knowing about the pre-seed investment market and what you look for when analysing a pre-seed start up.
I'd love to hear your thoughts on any of these questions and i will be truly grateful to learn from your experience. [link] [comments]  |
| Wanna play Farmville in real life and buy a cow for $350? Posted: 29 Aug 2020 12:11 AM PDT I saw this webinar about people using blockchain technology to allow farmers to use their livestock as collateral to get funds. The returns are pretty high. Does this count as an alternative investment? Is this a new idea? https://istox.com/events/how-blockchain-has-revolutionized-fundraising-for-farmers/ [link] [comments]  |
| What do you guys think of this strategy: 50% in SPYD, 50% evenly distributed among FAANG Posted: 28 Aug 2020 02:23 PM PDT FAANG being Facebook, Apple, Amazon, Netflix, and Google. The thought process here is that FAANG stocks are rapidly growing (all have doubled or more over the past 5 years if memory serves) blue-chip stocks with promising future and likely aren't going anywhere worst case. All this, backed by the consistent, incredibly safe gains of a high dividend ETF. I feel like this is a good mix of aggressive and safe. My goal to be safe, but have high growth potential [link] [comments]  |
| You are subscribed to email updates from Lose money with friends!. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment