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    Stocks - r/Stocks Daily Discussion Wednesday - Sep 09, 2020

    September 09, 2020

    Stocks - r/Stocks Daily Discussion Wednesday - Sep 09, 2020

    r/Stocks Daily Discussion Wednesday - Sep 09, 2020

    Posted: 09 Sep 2020 01:06 AM PDT

    These daily discussions run from Monday to Friday including during our themed posts.

    Some helpful links:

    If you have a basic question, for example "what is EPS," then google "investopedia EPS" and click the investopedia article on it; do this for everything until you have a more in depth question or just want to share what you learned.

    Please discuss your portfolios in the Rate My Portfolio sticky..

    See our past daily discussions here. Also links for: Technicals Tuesday, Options Trading Thursday, and Fundamentals Friday.

    submitted by /u/AutoModerator
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    Home Depot adapts 2020 holiday shopping season to pandemic era with 2 months of Black Friday deals

    Posted: 09 Sep 2020 06:43 AM PDT

    https://www.cnbc.com/2020/09/09/home-depot-adapts-black-friday-holiday-shopping-season-to-pandemic-era.html

    Home Depot is adapting its approach to the holiday season, a time when customers shop its stores and website for home decor such as snowman lawn inflatables and artificial trees.

    Among the changes, the home improvement retailer said it will extend Black Friday specials to nearly two months, feature Pinterest-inspired homemade gift ideas and put promotions on its mobile app first.

    Target, Best Buy and Macy's have all said they expect a longer shopping season during the holidays, as retailers space out specials and customers shop online to avoid crowded stores or long lines.

    submitted by /u/coolcomfort123
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    Don't be fooled. This IS The Market Crash: My DD.

    Posted: 09 Sep 2020 02:02 PM PDT

    I've been researching this a LOT lately because I didn't want to get caught in it. Looking at trends and past data. I believe, strongly, that we're in the middle of the market crash. I used my knowledge and was able to fully exit my entire $500k portfolio on Tuesday, maintaining all my gains. I've even taken a sizeable position in SPY puts ($50k worth of Dec $260). I got my close friends out (well the ones who listened) on Friday at the first sign of positive movement.

    First of all, a little history lesson on the Minksy Bubble. It's basically a theory for how market bubbles happen. It occurs in 5 steps. I will outline what they are in basic and how the current market looks in relation.

    1. Displacement: This is the beginning of a new paradigm where the market changes in a big way. For this, that was the Coronavirus. This took place between February to April.
    2. Boom: Increase in spending begins and major gains start to be made. Media attention and market involvement begin to increase. Currently, we've seen a HUGE increase in retail traders (who are extremely volatile) and massive media attention toward the stock market as it relates to corona news as well as stimulus and recovery speed gains. This took place between April and July.
    3. Euphoria: People stop caring about any sort of reasonable investment strategy and just start throwing money at stuff. Tesla is a fantastic example of this, but many other stocks in the tech sector are guilty of this. July was the beginning of this phase as Tesla saw insane growth within a few week period and other companies followed suit very quickly. This continued into late August with Apple and Tesla going to stupid prices after their splits, and all the other big tech names reaching wild valuations.
    4. Profit Taking: Smart money starts withdrawing funds from the market as they prepare for the crash. We are seeing record insider selling, but most publicly, it began with Tesla announcing they would sell $5bn in new shares. Their second biggest shareholder then announced they were conveniently "rebalancing" their portfolio to sell many Tesla shares as well. This was nothing more than a ploy to pull money out without crashing the market, even though it did anyway. I will get more in depth on this phase later. The biggest catalyst was Softbank, though, and that leads me to the final stage.
    5. Panic Selling: This is when people start to exit en masse in order to recoup whatever they can. We are currently witnessing this. The last few days have been a trainwreck on the market, wiping out August's gains entirely.

    Now I know you want to say "well look at today. We're up 2% in the S&P!" This is par for the course on a crash. With the Corona crash, these were the rough day to day movement patterns (I'm using Corona as an example for its shortness/simplicity but all crashes have similar patterns):

    • 1 small loss day
    • 2 BIG loss days
    • 3 medium loss days
    • 5 gain days (there were 5 days of gains in the middle of the March crash)
    • 1 GIANT loss day
    • 3 Sideways days
    • 8 slightly down days, leading to the bottom

    Of those gain days, the first was a slowdown, but the second was a change of 4.8% in S&P/SPY from an open of 294 to a close of 309. Consecutive, positive days occurred during every major crash. We can see that being mirrored today and will likely see more upward mobility before more big money starts exiting. Don't be fooled by positive days. That does NOT indicate the crash is over. Novices tend to think crashes are a short event and that they should hold through them because they missed the boat. Crashes take weeks, minimum, but usually months, if not years, to become fully realized. Covid's crash is the fastest we've had at one month.

    Another trend I've noticed is that these market bubbles are happening and recovering faster and faster. The late 80's Japanese market crash took 6 years to play out. The 2000 dotcom bubble was 4 years. The Chinese 2007 bubble took 2 years. The 2008 oil bubble took 1 year. On the flipside, the 2007 housing bubble took 5 years. The 2008 energy bubble took 3 years. We're about 6 months into this current bubble, but more if you account for any forming bubble from before covid. Maybe this means nothing, but I thought it was worth mentioning.

    Bubble analysts always say there is a warning sign prior to a true collapse. I've been seeing these called "violent shake-offs." Most crashes get one, but some get two. We had one with the June mini-crash. One could argue that this current crash could be a violent shake-off. I'll get to the alternate scenario later. Assuming it's not, which I don't think it is, we move to the final trigger, the catalyst.

    Catalysts: These are are things required to trigger a bubble collapse. Almost every bubble has had some notable catalyst(s) to trigger the rapid decline. As mentioned in Profit Taking, we've had three catalysts occur so far that triggered panic selling. New Tesla shares, secondary Tesla offloading, and Softbank. They are the big one and who I will focus on for a minute.

    To those who don't know, Softbank bought $4 billion in options during the early days of the market post-covid. These options are worth a fortune right now ($30bn estimated), but they have to be sold in order to be fully capitalized on. What everyone is afraid of is Softbank doing just that, or worse, for shareholders: holding through a market crash and losing it all. In the movie, Margin Call (great movie), a hedge fund got wind of the housing market crash before everyone else and ultimately sold EVERYTHING they had in order to get ahead of it, single handedly beginning the inevitable market crash. To be fair, this is a fictional movie and they had a portfolio of like a trillion, but it's really just mentioned to illustrate my point. Softbank has to exercise these options, which have strike prices likely WAY below market value. If they sell those shares, they could easily double their investment, even through a crash. The problem is that people got so spooked by this revelation that Softbank lost over $15 billion in market cap (currently at $112bn). Had this not happened, the speed at which we decline would've been much slower. They have to make those losses up now. You know what would do that? Exercising all their options and selling them for market gains.

    They can't keep those options forever, either. At best they have 2 years. Softbank will try very hard to sell all those off without crashing the market, but if it keeps dipping, they will become more desperate and start selling them more frantically, promoting a panic selling cycle. And what are we in? A panic selling cycle.

    If this cycle continues with Softbank, more will tack on and we'll see this bubble continue to collapse. If it can hold a recovery this week, it might survive, but of course, I don't think it will. The end of day today really showed that people are afraid and that given any opportunity, selloff will occur. I think this IS the crash. But, I could be wrong. That brings me to the second and third catalysts.

    Commercial Real Estate Crash: The eviction crisis is a real threat to our economy. It's brushed under the rug pretty heavily, pointing to the home real estate market and its gains, but the damage is done. Most major commercial real estate buildings, especially apartments, are in disarray. Go look around and see the kinds of deals your local apartments are offering. Where I am, I'm seeing up to 2 months of free rent in some places. I've never seen that before. Everyone is desperate for paying tenants. Most commercial properties can weather a bit of this kind of thing, but we haven't seen anything like this. Small businesses are shutting down, new businesses are not opening. No one is shopping. Who replaces those lost tenants? All these properties are heavily in debt. That's how the industry works, for the most part. Entrepreneurs and builders finance all projects because they are seen as very safe and it's a rule of thumb to never use your own money for investment. The margins had become abysmal before corona. I once looked into buying commercial real estate and found that I would only cover the expenses and have to solely rely on the property value increasing, to make anything worthwhile. This will cause properties to bleed out extremely fast. There is a commercial real estate collapse coming, likely within 6 months, and it will compound any damage the tech bubble has done. Don't forget that this isn't strictly a US problem. This is a worldwide problem.

    Vacation Industry Crash: Many countries around the world rely on a steady influx of visitors in order to keep their businesses afloat. This, in turn, boosts GDP. Malaysia, for instance, is a place I personally visited, during Covid, and it was a desolate wasteland. Most shops had employees literally standing outside waiting for a single customer. It was like this for blocks and blocks. Huge tourist attractions were completely devoid of people. It's only a matter of time before our lack of flying catches up to these already poor and extremely hard to maintain businesses. The country in Malaysia I visited had a notoriously low success rate for new restaurants, during the best of times. Now, they are lucky to get any customers. That affect will bleed into the second catalyst. More businesses going under, causing commercial real estate to lose tenants with no one to replace them, causing those buildings to go under, causing banks to be stuck with a boat load of vacant, unprofitable properties, causing them to go under.

    Even with a vaccine, we won't go back to normal fast enough to recover the losses. The airline industry is reporting that they don't estimate returns to normal until late 2021, early 2022. Do you think a random Joe has enough liquidity to keep his business running that long at extreme drought? The people at the bottom of the chain, consumers and small business owners, were never prepared to have a cash supply on hand for this kind of hit to their lives. That is going to trickle up to the top and when it does, goodbye market.

    Of course, there's also the US election, but that will be a small catalyst as far as I'm concerned.

    ------------------------------------------------

    Other notable indicators/insights that things don't look good:

    1. Market cap to GDP was 2:1 at peak. The dotcom crash was 1.4 and the recession was 1.1. Currently 1.77:1.
    2. Google trend results for "Market Crash" are trending up. Last week, which only accounted for 3 days, really, already topped the June mini-crash.
    3. An analyst who witnessed the Japanese crash of the 1980's believes this will be the biggest crash we've ever seen.
    4. EVs are the new dotcom company. Many will fail as car creation proves to be more difficult than anticipated.
    5. High growth, high revenue companies do not automatically equate to sustainable companies, despite stock prices pretending they do. For example, Sea Ltd. doubled revenue but also doubled expenses in Q2 2020. eToys is a prime example of this, from the dotcom bust era. Had huge revenue, but their expenses could not be lowered to a sustainable level and went out of business, despite the business model making sense and the revenue stream looking really good.
    6. The PE ratio of the market is above 30, which has historically always resulted in a market crash.
    7. Apple saw 12 million shares exited at the bell today. Prior to that was around 600k peak. This happened for MOST tech stocks.
    8. If you bought Microsoft at peak dotcom bust, you would have to wait 10 years to breakeven (longer if you account for inflation losses). That kind of stagnation is what we're looking at, even today.

    ------------------------------------------------

    This does NOT mean the entire market will crash. Quite the contrary. Yes, most stocks will go down as the market collapses in overvalued sectors (TECH) brings down the whole thing, but they will stay high if priced fairly. Most epicenter is priced within a reasonable area, for instance, and will weather the storm quite well. At least, until the commercial real estate market collapse catches up to them.

    Plan accordingly, set stop losses, and do your own research. I don't expect you to just follow my information blindly. I may have gotten things wrong or mixed some wires. You need to figure this out on your own and make your own judgement call. I simply hope to raise awareness for what I believe is a market crash so that people don't lose their shirt during this. I hope I'm wrong, though I'm literally betting with my money that I'm not.

    Good luck.

    submitted by /u/ItsAllJustASickGame
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    Anyone else completely ignored ZM back in February?

    Posted: 09 Sep 2020 07:14 AM PDT

    My school was already using Zoom for online classes back then, since the country where I live is pretty close to China and we were one of the first places to go on lockdown. Well several of my friends bought it at around 67, but being the Contrarian that I am, I completely disregarded it. I was thinking that companies like Microsoft and Google would dump money into their online meeting services(teams, meet) but zoom turned out to just stay dominant. never did i think a small company's service would outperform two well-established systems. now my friends are laughing at me and telling me I'm an idiot. but i really did have a reason not to touch ZM, and though I made the wrong decision, I don't regret it at all. I had my reasons, and did thorough research and thinking before looking away. What are some silly choices you picked back in the 1st quarter of the disaster that is known as 2020?

    submitted by /u/SpeedyChingChong
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    Covid-19 vaccine developer $AZN is reporting "serious"adverse reaction from a participant in the UK

    Posted: 08 Sep 2020 07:31 PM PDT

    Just saw on Twitter that $AZN is apparently pausing what they call a "routine" procedure because a participant in the covid-19 vaccine trial is experience serious adverse reactions.

    The stock was +1.13 today (2.11%) and down 8% in after hours (not sure if related or not), and not sure if this news will affect the stock come the morning opening.

    Article: https://www.statnews.com/2020/09/08/astrazeneca-covid-19-vaccine-study-put-on-hold-due-to-suspected-adverse-reaction-in-participant-in-the-u-k/

    submitted by /u/majorchamp
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    WMT is testing Drone Delivery

    Posted: 09 Sep 2020 08:35 AM PDT

    WMT said today they are starting drone delivery services for basic household items and groceries in Fayetteville NC. The first test I believe is scheduled for today.

    Below is the link to the article:

    https://www.cnbc.com/2020/09/09/walmart-to-test-drone-delivery-of-grocery-household-items.html

    submitted by /u/SpeedoManXXL
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    Market Recap for today Wed Sept 9 - Please enjoy!

    Posted: 09 Sep 2020 02:16 PM PDT

    PsychoMarket Recap - Wednesday, September 9, 2020

    Stocks shot up today and recovered some losses after sharp declines in big tech stocks. After several red days, shares of Amazon (AAPL), Apple (AAPL), Microsoft (MSFT) and other big companies rallied. On a sour note, reopening stocks (travel, cruise lines, airlines, hotels, etc) were down after AstraZeneca (AZN) announced it had its COVID-19 vaccine trial paused.

    The S&P finished 2.08% up, the Nasdaq was 2.92%, leading the day, and the Dow finished 1.68% up. The volatility index (VIX) was down 4.8%, indicating increased risk appetite in traders.

    Today, it was announced that AstraZeneca, a forerunner in the development of the COVID vaccine announced a pause of their experimental trial after one patient became more ill, pledging to make safety a priority and take the time necessary to let science prevail. This setback comes in stark contrast to politicians and governments who seem to imply a cure is just around the corner. Shares of AstraZeneca sank 2%, while those of companies competing to develop a Covid-19 vaccine including Moderna (MRNA) and Novavax (NVAX) rose.

    US oil prices plunged nearly 7% today, after Saudi Aramco, the largest oil producer in the world, announced it would be slashing its selling price to Asia and the United States, per Bloomberg. "Oil demand globally is really sluggish. All of the low hanging fruit from the global oil recovery has already happened," said Michael Tran, managing director of global energy strategy at RBC Capital Markets.

    Asia-Us cargo rates are at the highest since March lows. For bulls evidence of a rebounding economy, for bears activity is fueled by liquidity and the shoe has yet to drop.

    Highlights

    • After falling nearly 20% in the week, Tesla (TSLA) stock roared back today, finishing the day 10.9% up.

    • Big Commerce (BIGC) reported earnings today. While estimates were beaten, investors were not impressed. Stock is down 10% today (4% during session (6% after-hour)

      • EPS of -$0.38 v -$0.43 estimate
      • Revenue of 36.3 million v 35.6 million estimate

    • Facebook (FB) underperformed the market, finishing a modest 0.94% up.

    • Precious metals were up today, with gold miners ($GDX) leading, up 4.34%. Silver was up 1.58% and gold was 0.92% up.

    • McConnell announced plans to unveil the new $300B relief bill and took procedural steps needed to set up a vote "as soon as this week." Schumer and Pelosi said "Republicans bill which doesn't come close to addressing the problems and is headed nowhere"

    • Analyst Upgrades:

      • $MSFT Microsoft had a nice boost by Morgan Stanley $MS who raised its price target from $230 to $245
      • $PTON Peloton had Price Target raised by Wedbush from $66 to $100
      • $RPD Rapid7 Target raised by $MS Morgan Stanley $55 to $60 (nice stock check it out)
      • $SFIX Stitch Fix initiated by Deutsche Bank at BUY with pt $34
      • $SPCE Virgin Galactic Upgraded by Credit Suisse from $22 to $24 and NEUTRAL to OUTPERFORM.

    Notable Earnings for Tomorrow Thur Sept 10: Chewy CHWY (AH), Dave & Busters PLAY (AH), Oracle ORCL (AH), Peloton PTON (AH)

    Interesting recent CEO purchase transactions: CWH $3MM, VST $750k, BKR $1MM, FRG $4.5MM, IVZ $3MM, SDC $10MM, PLAG $1.7MM

    submitted by /u/psychotrader00
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    What's your Bull and Bear argument for Snowflake?

    Posted: 09 Sep 2020 04:39 AM PDT

    I'm not experienced in data storage and was curious to hear what Snowflake has going for it and what it's obstacles are. I know there's a lot of hype around it and I'm curious to find out what sets it apart. Thanks!

    submitted by /u/TheTiestoHouse
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    Community for European investment topics

    Posted: 09 Sep 2020 07:50 AM PDT

    Hi all,

    I just made the r/InvestEurope community to give users a subreddit that focuses on investing & finance related topics strictly from a European standpoint

    This is in contrast to other subreddits that are mainly US-centric

    Feel free to join and post :)

    submitted by /u/LentilGod
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    Warren Buffett's Berkshire Hathaway to buy $250 million worth of Snowflake's shares in private placement

    Posted: 08 Sep 2020 03:17 PM PDT

    https://finance.yahoo.com/news/warren-buffett-berkshire-hathaway-snowflake-private-placement-194954363.html

    Snowflake, Inc., the cloud-based data platform company, revealed in its amended S-1 filing on Tuesday ahead of its initial public offering that Warren Buffett's Berkshire Hathaway agreed to take a stake in its class A shares in a private placement.

    The company said Salesforce Ventures and Berkshire Hathaway would each purchase $250 million worth of its Class A common shares in a private placement at a price per share equal to the initial public offering price.

    "Based on an assumed initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, each of Salesforce Ventures and Berkshire Hathaway would purchase 3,125,000 shares of our class A common stock," the filing said.

    submitted by /u/coolcomfort123
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    6/6 analysts now rate SPCE a buy

    Posted: 09 Sep 2020 01:11 PM PDT

    https://www.barrons.com/articles/virgin-galactic-stock-another-upgrade-now-it-joins-an-elite-list-51599666159

    • average target price - $26.50
    • have test flights next month, and plan to fly Sir Richard Branson to space next year

    "In addition to space tourism, Galactic also has plans to offer hypersonic flight—traveling at multiples of the speed of sound—and is potentially a larger market than space tourism"

    submitted by /u/sunshine_MD
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    Lululemon earnings

    Posted: 09 Sep 2020 05:55 AM PDT

    Why is Lulu down so much after beating earnings expectations? They also grew in sales, including like 150% in online sales growth? Granted brick and mortar sales are down but their overall sales still grew. Can somebody explain this backwards phenomenon to me please?

    submitted by /u/Routine_Minimum519
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    Investing in REITs during the pandemic - Part 2

    Posted: 09 Sep 2020 12:49 PM PDT

    In my previous article I discussed the benefits of REITs and exactly which categories are safer in my opinion to invest in. Without further ado, I present them here with a small description and comment. This list was comprised especially for the readers of the newsletter through searching almost all worldwide REITs that have a reasonable market capitalization. Keep in mind that the idea of diversification applies and I hand-picked a list that includes Europe, Canada, USA, Australia and Japan so I also diversify in currencies.

    Residential REITs

    We are careful here because there is the effect of the pandemic and work from home that drives people to the outskirts of cities combined with mortgage defaults and people that don't have enough to pay the rent. So the choices are handpicked and low risk.

    • Vonovia (VNA) has residential properties in Germany and it's very diversified. They don't specialize in big expensive cities and the best of all is that almost every pension fund in Europe has exposure to them. That means government help if needed and strong hands that don't panic sell.sun communities
    • Sun Communities (SUI) specializes in manufactured housing and recreational vehicles spaces. Think of retirees that have guaranteed pension and also people with financial trouble that will leave expensive cities. The P/E is a bit high but in principle FFO is more important in REITs.
    • LEG IMMOBILIEN (LEG) is again a German REIT also very diversified and with the same properties as VNA. They do hold some offices which is not very good at the moment but so be it.
    • European Residential (ERE.UN) is a Canadian company that has bought a lot of Dutch properties for rent all over the place and mostly in up and coming areas since the major cities are in my opinion borderline overvalued. The Netherlands has a very buy happy population and a big shortage of properties.
    • Camden Property Trust (CPT) has residential properties in the mid-range price diversified across mostly the southern part and the coastal areas.

    Industrial, logistics & other

    This is primarily my focus because of the pandemic. The industrial sector first took a big hit in March 2020 but since then recovered fully because goods still are being transferred. REITs that have contracts with e-commerce companies did especially well and will continue to do so. There are some odd ones in this lot with a sound justification.

    • Warehouse De Pauw (WDP) is in Belgium and have warehouses,storehouses and logistics centers. Europe is very active and Belgium is a trading hub also for shipping.
    • AEDIFICA (AED) is in Belgium and has apartment buildings and senior housing. Trust me, pensions are good in Europe and nobody is getting evicted. They also took a hit so there is space to move upwards.
    • Tritax Big Box (BBOX) is a London based logistics and warehousing for all the major e-commerce sites and has been on a tear.
    • MONTEA (MONT) operates in Belgium, Netherlands and France with logistics,warehouses and semi-industrial spaces.
    • Target Healthcare (THRL) own healthcare facilities and senior housing in the UK. Again the pandemic and population aging will expedite the need for this type of buildings.
    • AMT,CCI,SBAC,PLD are USA plays on cell towers, 5G tech and they are not going anywhere. Solid choice so I group them all together since most investors are familiar with them.
    • Dream Industrial (DIR.UN) is a Canadian industrial REIT that operates worldwide so we get the diversification benefit of exposure to both CAD currency and geolocation.
    • CATENA (CATE) is a Swedish company diversified into many non-residential such as cold storage, logistics, offices and others. This is a bet on Sweden and their efficiency and good economy.
    • Innovative Industrial (IIPR) is a play on the weed mania. Ya man. Why bet on weed stocks when everyone will need to grow it somewhere and pay rent and facilities? 📷
    • Granite (GRT.UN) is an industrial REIT operating in North America and Europe with a good dividend yield.
    • First Industrial (FR) doesn't need a lot of explanation. It's the biggest in USA.
    • Americold (COLD) operates temperature controlled warehouses in the states. Nice moat there.
    • SEGRO (SGRO) is UK based but operates industrial and data center warehouses all around Europe so it's not affected (hopefully) too much from the coming Brexit.
    • Assura (AGR) operates primary care facilities in the UK. Again I am bullish on healthcare in general because unfortunately this is not a good period and also the population is aging.
    • Gecina (GFC) has mostly offices and student housing. There is a reason why it made the list although I avoided offices,malls and retail like the plague. The own properties in the center of Paris and they will never be empty. In case everyone is cybering in a couple of years while working they will just convert the spaces. And it's Paris..
    • XIOR has student housing in the Netherlands, Belgium and expanding in Spain now. There is a huge shortage of housing and cheap student apartments especially there and I expect them to grow very fast because they are relatively young still.
    • STAG is my preferred industrial REIT in the States. They have huge names signed up for the e-commerce boom and have a beautiful graph that just keeps going up and up.

    Conclusion

    There is a strategy to the madness. I think real estate can generate very good results long term but it's smart to avoid the sectors that we are unsure of such as retail, malls, offices, business centers and expensive city centers. Given the low interest rates and inflation that is coming (?) this is a safe bet to diversify your positions.

    P.S If you find value in what you are reading please consider subscribing to the newsletter.

    submitted by /u/aelaos1
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    AMD, MSFT, or SQ

    Posted: 09 Sep 2020 08:11 AM PDT

    I'm looking to buy into one of these today and can't decide. I think the outlook looks great for all 3 companies, and may eventually buy into all three. I really only have funds to buy a substantial amount of 1 right now.

    That being said, I'm leaning towards SQ because I like the growth potential. I'm not saying the other two don't have growth potential, but it seems like MSFT and AMD exist in a crowded space within their respective industries and don't offer as much innovation as SQ. P/E ratio scares me a bit, however.

    I'd like to know what you guys think, thanks.

    submitted by /u/SaveThemTurdles
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    Prepping for Snowflake IPO - Market Buy at Open

    Posted: 09 Sep 2020 01:18 PM PDT

    Looking at getting involved with the Snowflake IPO thats happening in the next few weeks.

    I know it's impossible to buy at the IPO price because of the underwriter and market maker BS they do behind the scenes. But would love to know what the strategy is for buying at open.

    Has anyone tried just putting in an market order to see what happens? I am worried about paying some extremely high price and then being in the red a few seconds after my trade.

    For example - if IPO price is set at $80, just set a market order for 100 shares and submit the night before so it's ready at open.

    https://techcrunch.com/2020/09/08/snowflakes-ipo-could-value-it-as-high-as-24b-salesforce-and-berkshire-to-invest/

    submitted by /u/manooch1
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    Is it normal to look at your portoflo like consistently every 20 minutes, particularly on red days?

    Posted: 08 Sep 2020 07:13 PM PDT

    I feel like I have spent so much time just looking over my portfolio today. Maybe a subconscious way of feeling like I'm doing atleast something with the marker being red? I definitely don't think it's healthy how much I have been on the last few days. What do you do to keep the consuming at bay? HOW do you not check every 10 minutes when it's in red?!

    submitted by /u/Heatheranny2020
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    Boeing, Raytheon, or Airbus?

    Posted: 09 Sep 2020 09:24 AM PDT

    Out of the three, which one looks poised for the most success? What are some pros and cons of each? I'm conflicted as to which one to pick up for my portfolio. Any and all input appreciated! Thanks guys!

    submitted by /u/coughingcoffee01
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    The true value of Amazon's stock is $40,000? - Stock Split Question

    Posted: 08 Sep 2020 08:00 PM PDT

    Hey guys, I did some history of stock splits because I was bored on Monday.

    I found out that Amazon split their stocks 3 times between 1998 and 1999

    1. 2:1 - June 1998
    2. 3:1 - January 1999
    3. 2:1 - September 1999

    If we trace the true value of Amazon's stock price, it's now around $39,375—If they didn't split their stock until now. Is that correct?

    submitted by /u/Laakhesis
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    PTON earnings

    Posted: 09 Sep 2020 10:42 AM PDT

    Whats everyones thoughts on PTON earnings tonight? Will you be selling before or holding through? I personally expect a strong earnings, but am not sure if people feel earnings are priced in at this point or if it has more room to run.

    submitted by /u/FrankieC159
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    SE Investment Thesis

    Posted: 09 Sep 2020 02:44 PM PDT

    Introduction:

    The company has a very strong gaming branch (like Tencent) called Garena, an online shop (like Alibaba) called Shopee, and a payment solution (like WePay and Alipay). But the good news is that Sea is much earlier in its development than those giants.

    The Pitch:

    This is simple. If you could've invested in Activision, Amazon, and Square when they first IPO'd, would you have? Well, here is your opportunity. Sea is a combination of these companies all in one, but with much more growth opportunities.

    Of course Sea isn't as developed as these companies, but with outstanding management and a region that has 2-3x the growth rate of the American GDP, Sea is excellently positioned to thrive for a long time.

    What does the company do?

    Sea mostly operates in South East Asia: The Philippines, Indonesia, Thailand, Malaysia, Vietnam, Taiwan and Singapore. It combines three businesses under one roof. The biggest part of the company's business (for now?) is gaming with the Garena brand. Gaming is also where it all started. Sea is a holding company of the three branches and SEA, the name of the holding, is an acronym of South East Asia.

    Garena (which stands for global arena) was started in 2009 and is still the biggest branch. But there is also Shopee, Sea's e-commerce arm that is growing fast and therefore making Sea's revenue stream more diversified. The third business is SeaMoney, which was first known as AirPay. It was started in 2014. In 2019, Sea changed the name Airpay to SeaMoney. It already serves 8 million customers and it could become a major digital payment solution.

    In the rest of the thesis, we will dive deeper into each one of the three branches.

    Garena

    Garena is where it all started for Sea in 2009. Garena was founded in Singapore by Forest Li.

    In 2010, Garena+ was launched. It's a platform for gaming and social interaction where people can find, download, and play online games. The platform was able to publish a lot of premium games over the course of the next years. Garena publishes some really famous games for the region: League Of Legends, Call Of Duty Mobile, Fifa Online 3, etc

    📷

    Garena+ was built out not just with games but also with social features. BeeTalk, comparable to Tinder, was integrated in addition to TalkTalk, where live shows are broadcasted of over 3,000 DJs. You can chat with the celebrities and send them virtual gifts. This is, of course, a very high margin business. You can also use TalkTalk to chat with friends in a private room.

    📷

    In Garena, you can make friend lists, chat with friends, form clans, and see what progress and achievements you and others make in the games. Gamers can customize their avatars. Again, this is something that Tencent has introduced very successfully (and profitably) in China. Inside Garena+ you can use a virtual currency called Garena Shells.

    In 2012, the Garena Premier League (GPL) was launched. It was a professional e-sports league with more than 100 matches over 6 months. The game that was played was League of Legends, and GPL matches were broadcasted live with commentators, just like ordinary sports games.

    In 2018, the GPL was replaced with League of Legends Sea Tour, and in September 2019 this was replaced by the Pacific Championship Series or PCS. The competition was postponed because of the coronavirus, but it began on February 29.

    Ten teams compete in this competition: 4 from Taiwan, 2 from Hong Kong, and 1 from Malaysia, the Philippines, Singapore, and Thailand. These e-sports events are very popular. And aside from a great marketing machine for Garena, they also bring in revenue: the operating income of 'other revenue' of Sea increased by 40.2% to $6.0M in Q4 2019 and the main contributor to the jump was increased sponsorship from sponsors of the gaming events and tournaments. With the huge interest in e-sports, the PCS may be another landmark for Garena.

    📷

    In November 2018, Garena obtained the first right to publish all Tencent games in Indonesia, Taiwan, Thailand, the Philippines, Malaysia and Singapore, which is very important, as Tencent is the biggest gaming company in the world.

    A pivotal moment for Garena was the launch of Free Fire in December 2017. It's a battle royal game that was not only published by Garena, but this time it was also developed for Garena. Free Fire is a massive success and is still extremely popular. It was the most downloaded mobile game of 2019. Mind you, not in South East Asia, but worldwide.

    📷

    Garena is currently working on an enhanced version of Free Fire for high-end mobile phones. It will be called Free Fire Max and at this moment, the game is being tested by some selected beta players, which means that the launch will probably be for one of the next weeks.

    In the last quarter, Garena's revenue was $479.9mm, up 107.4% and that was, of course, mostly due to Free Fire. With total revenue of $909.1mm for Sea, Garena accounts for 52.8% of Sea's total revenue. That percentage has come down a lot, despite the huge success of Free Fire. The reason is that other highly successful Sea branch: Shopee.

    Shoppe

    Shopee was founded in 2015. Shoppe was first launched in Singapore, but has now expanded to Malaysia, Thailand, Taiwan, Indonesia, Vietnam, the Philippines and finally Brazil in October 19'.

    📷

    The Brazilian launch was the first one of the e-commerce branch of Sea outside of the South East Asian market. Brazil is an interesting but very competitive market due to MELI and AMZN. The launch has not been a full-blown dive, though. Management is simply testing the water to see if Shopee can carve itself a place in this competitive landscape outside of its core region. This is what Yanjun Wang, the Chief Corporate Officer (comparable to the COO role) had to say about Brazil on the last conference call after an analyst said that the company seemed to hire more people in Brazil:

    "In terms of e-commerce in Brazil, we're – this is a cross-border project and by popular demand of our cross-border sellers who, of course, would always prefer the platform can offer more markets to them for the same amount of work they pretty much need to do, integrating with the platform, and the fact that we have already operational capabilities from the game side and understanding of the market give us a competitive advantage in serving them in this regard."

    Shopee has been diversifying from the competition from the start by focusing on women because the company was convinced that women decide on the big majority of the purchases, not men. The consequence was a social-first approach. Reviews are very important, of course, but that's not unique for Shopee. What is different is the social platform setup around Shoppe. On social media sites, you can see what people like and follow. Well, on Shoppe you can see which of your friends buy certain items. You can interact on there, etc. There is much more interaction on Shopee than on other e-commerce sites.

    Shopee is also very mobile-centric. At launch, it even was mobile-only and that resonates well with a younger public. With the South East Asian average age of just above 30, this was a smart approach.

    Another big contributor to its success, and one that sets Shopee apart from almost all other e-commerce sites, is Shopee Guarantee. It's a service that stalls the money the consumer pays until she accepts the delivery. At that moment, the seller is paid. 99% of the transactions on Shopee are with Shopee Guarantee, which shows the need for safety. One of the disadvantages of AliExpress in South East Asia, is that it's hard to return the packages if they have been damaged or are counterfeits. That's not a problem with Shopee Guarantee and that is, of course, a big advantage for Shopee.

    In the last quarter, Shopee had $358.3M of revenue, up a jaw-dropping 182.3% YoY. And although Shopee still loses quite a lot of money, the trend is very promising. The adjusted revenue as a percentage of total GMV increased to 6.3% in Q4 2019, up from 3.7% in Q4 2018. Gross profits are positive, but Sea invests a lot of money to attract as many customers as possible.

    Sales and marketing expenses came in at $254.7M, up 38.1% YoY, and 71% of the total revenue. But if you look at the revenue growth of 182%, then a 38% increase in sales and marketing looks like well-spent money. It's the game that has been invented by Amazon. If Shopee would stop spending so much on sales and marketing and R&D, it would be wildly profitable in a blink. But instead, it focuses on growth. Over time, sales and marketing will become less substantial on a percentage base compared to the revenue.

    Another statistic that shows Shopee's strength, is user retention. It's the foundation for Shopee's exponential growth. Shopee has a 3-year order retention of 70% in Indonesia, the largest market in South East Asia with about 270 million inhabitants. What that means is that the total orders of the new buyer in the first month of the period three years ago is divided by what they bought the in the last month of those 3 years.

    📷

    In a 2018 interview with CNBC, former President Nick Nash discussed customer metrics. I'm not sure if these numbers are still valid today, but- it costs Shopee about $4 to $8 to acquire a customer. I suspect this number has gone up to somewhere between $6 and $12. But bear with me. The average buyer buys 3.6 times per month (at that time) and the average shopping basket was worth about $16. So, 3.6 x $16 = $57.6 per month. That will have gone up by now, but let's assume only to $60. Amazon's take rate is between 6% and 20% depending on the item. So, once Shopee has the maturity that Amazon has had over the last few years, it will become a contributor to the profits of Sea. And while Amazon has built out a huge logistical network that has sucked up dozens of billions of dollars, Shopee is much more asset-light. It takes the Alibaba approach by working with a big pool of independent logistical companies for distribution. I think it's logical to conclude that Shopee's e-commerce will be profitable sooner than Amazon's. Alibaba has shown the way for Shopee in that regard.

    In 2019, the e-commerce market in South East Asia was worth about $40bn and it is expected to be catapulted to more than $150bn in 2025, according to a study by Google, Temasek and Bain Company. With a market growing so exponentially and Shopee doing so well, there's a huge opportunity in plain sight. This is the Amazon part of the pitch.

    SeaMoney

    SeaMoney is by far the smallest branch of Sea but a very promising one. In 2014, it was introduced to lessen the friction of unbanked or underbanked customers who wanted to buy online in Garena+ games. And, as management has said, it has saved the company a lot of money because Sea doesn't have to pay commissions on its transactions. Smart move.

    SeaMoney was originally named AirPay until 2019. It now offers e-wallets, payment processing solutions, micro-lending and other digital financial services. We don't have a view on how much SeaMoney's revenue is since it's calculated together with Shopee. But, in the future I think this will be split out. This is what Forrest Li had to say about SeaMoney on the last conference call (my bold, DFS = digital financial services):

    "Based on a recent Google, Temasek and Bain report, the DFS industry in the 6 largest economies of Southeast Asia is expected to grow at a 22% CAGR between 2019 and 2025 to reach $38 billion in revenue. Based on the report, 3 out of every 4 adults in Southeast Asia have insufficient access to financial services and a 49% are unbanked. By comparison, just 7% of people in the United States are unbanked and 20% in China, according to U.S. government and World Bank data, respectively. Similarly, the World Bank estimates that just 5% of adults in Southeast Asia have access to credit cards compared to 66% in the U.S. and 21% in China. This reflects that the region has massive untapped opportunities in DFS and these opportunities will only continue to grow as the overall digital economy of this region expands. And we believe that Sea is very well positioned to capture the most significant portion of this growing high."

    And this also illustrates the huge opportunity of SeaMoney and the strategy that Sea will follow:

    "Our quarterly paying users for our e-Wallet services have exceeded 8 million in the fourth quarter as we deepened integration of our e-wallet with the Shopee platform and further expanded our e-wallet services to third-party online and offline merchants and use cases. In January 2020, about a year after we started integrating our e-wallet with Shopee in Indonesia, more than 30% of Shopee's gross order in that market were already paid using our own e-wallet services. Such integration has shown clear benefits in reducing payment friction and improving user experience for consumers on Shopee."

    SeaMoney could become the MercadoPago of South East Asia, a digital wallet that can be used both online and offline for mostly unbanked customers.

    If you compare the numbers of South-America, MercadoPago's territory, and South East Asia, you can see that although the percentage of unbanked people is lower, the absolute number of unbanked is much higher in South East Asia. There is a population of almost 669 million people and it's still growing more than 1% per year. The average age is just 30 years, which means that a majority of the population has always had a mobile phone. In South America, there are about 430 million people, 35% less than in South East Asia, and the number is growing slower at about 0.85%. So, if SeaMoney takes off as MercadoPago has in South America, the potential is enormous.

    In January of this year, SeaMoney applied for a Singapore digital full bank license. It did this all independently, not in a combination with a traditional bank. We don't know yet if it will get the license since there are only 5 to be distributed and more than 20 applicants have been registered. The licensees will be made public later this year. But even if SeaMoney doesn't get a license, I think it shows where Sea wants to go with SeaMoney.

    So, this is clearly the Square part of the pitch. The big plus for me is what makes me most enthusiastic about Square-- the combination of the two ecosystems (merchants with the POS technology and customers with Cash App), is also the strength of Sea. The company has even more insight into the ecosystems because of the third-party sellers, the customers' baskets and the Shopee Guarantee system.

    SeaMoney now serves 8 million customers, but I could see that explode in the next few years, giving Sea another leverage to grow the company exponentially.

    Competition:

    I think it's important to stress that the competition in e-commerce is brutal in South East Asia. Shopee fights to be the most important e-commerce store and goes head-to-head with the Alibaba-owned Lazada. Alibaba has poured $4B into Lazada to buy it out. It offers its Taobao marketplace products to the South East Asian consumers and the CEO of Lazada is Peng Lei, or Lucy Peng with her English name, a billionaire that was one of the 12 original founders of Alibaba. That says enough about how important Alibaba thinks Lazada is.

    As if that was not enough yet, another big competitor of Shopee, Tokopedia, is also backed by Alibaba. The Chinese giant has invested over $1bn in Tokopedia in 2017 and another $1.3bn together with Softbank's Vision Fund at the end of 2018. Tokopedia is only in Indonesia, though. It's the market leader there, but it says it has no plans to expand its territory.

    Shopee is not an isolated cowboy, though. It has powerful help to compete against Alibaba. Tencent owns 25% of the shares of Sea, and that helps. Despite the fact that Lazada is a few years older, Shopee and Lazada compete to be the number one in the South East Asian market. It depends on what metrics you look at to say who's the biggest, but let's keep it simple: it's close. A study of price group, App Annie, and SimilarWeb gives the first place to Shopee for the whole region in website visitors (mobile and desktop), MAUs (monthly active users) and downloads, although some other studies suggest that Lazada leads in sales. Shopee seems to grow faster. It has found an edge and became the biggest.

    📷

    There is a lot of potential for e-commerce companies in South East Asia. If you look at the e-retail market, you see that only 5% of retail is done online. In the US, e-commerce accounted for 11.4% in Q4 2019 (although that will have gone up considerably because of Covid-19). In China e-commerce already takes 20% of all retail sales.

    If you look worldwide, Shopee is the fourth-most downloaded shopping app:

    📷

    So, despite the fierce competition, Shopee seems to do very well.

    1. It targets women, not men, because it believes that it believes (correctly, I think) that women make a huge majority of the purchases. That's why the company focuses on social features in the app.
    2. It has a safety policy with Shopee Guarantee. The consumer pays, the money is held by Shopee and when the buyer accepts the package, the seller is paid. In that way, counterfeits and unreliable sellers are much less a problem than on other sites.

    The bottom line here is that, yes, there is competition, but Shopee has grown faster than its competitors by focusing on a few competitive advantages. In tech, a small difference can have a huge impact. Google's algorithm was just a bit better and faster than that of its competitors, but it was enough to annihilate every other player.

    Conclusion:

    I think Sea is in an excellent place to grab the emerging e-market for games, payments, and retail in South East Asia. I think this is still in the very early stage, and you can still get into the elevator on the first floor before it goes up.

    With a visionary CEO like Forrest Li and smart backing from Tencent, I think Sea could become a $200bn+ company over time. As with all growth stocks, there will be rough times, and it's more probable than not that the stock will lose half of its value at a certain moment. But, I'm very confident that over the long run you will be happy to hold this one and you'll be able to say in, "I got in when it was just worth $75bn"

    submitted by /u/Avid_Hiker98
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    AMD NAVI release tomorrow

    Posted: 09 Sep 2020 06:17 AM PDT

    So after Nvidia dropped their Ampere to challenge the GPU market, everyone is expecting AMD to bring their new Radeon series. When? No one was exactly sure. Today, though, they hinted that they might reveal it tomorrow.

    After NVDA's launch of RTX series last week, the GPU is where AMD needs to increase their revenue. There is a high likelihood Q4 and 2021 Q1 revenues >3B. With margins still around 45% and PE values for AMD >50 at least, AMD could be heading for 120B-140B valuation. stock price target: 105-115.

    So, long calls are where you want to be, with $87.5 by 10/02 being very likely. Thoughts?

    submitted by /u/UnusualW_Mod
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    S. Korean stock investors swoop on Tesla

    Posted: 08 Sep 2020 08:18 PM PDT

    looks like they love Tesla in South Korea...

    Domestic investors bought a net US$1.56 trillion won worth of Tesla shares between July 1 and Tuesday, according to the data from the Korea Securities Depository.

    Turnover of overseas stock transactions came to $42.3 billion over the cited period, more than the full-year amount of $40.98 billion for 2019. The value of U.S. stock trading accounted for nearly 87 percent of the total.

    https://en.yna.co.kr/view/AEN20200909001400320

    submitted by /u/ratshow
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    Capital gain/loss

    Posted: 09 Sep 2020 08:23 AM PDT

    This might be a dumb question, when I see my net gain/loss under report in TD is that what I'll have to pay taxes or claim a loss at the end of the year?

    What is the difference with wash sale vs without wash sales adjustments?

    Just to clarify- there is no tax on the $$ Adjusted cost and proceed you trade since that's just trades you open and closed? Kind of scary to see the number grow but yet my gain is like laughable and goes negative.

    submitted by /u/Snowballeffects
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    Walgreens (WBA) How low will it go?

    Posted: 09 Sep 2020 07:59 AM PDT

    It seems like Walgreens Boots Alliance commonly known as your friendly neighborhood pharmacy chain keeps hitting new lows. Any bets on how low this stock will go? Are they doomed? Can they turn things around? Amazon buyout?? Joking! Or am I? I'm curious about what everyone thinks about this recognizable brand.

    submitted by /u/dehdjer
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