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

    October 10, 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: 09 Oct 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:

    • 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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    For the people: Moderna won't enforce COVID-19 vaccine patent during the pandemic

    Posted: 09 Oct 2020 06:27 AM PDT

    What is Happening?
    Moderna is not enforcing patents on its coronavirus vaccine. Per Moderna's President Stephen Hoge: "We're not interested in using that IP to decrease the number of vaccines available in a pandemic".

    Why does this Matter?

    This is an enormous development for the efforts being made by other companies and governments across the globe. Moderna will not be blocking further advances made by other firms due to proprietary information.

    Investors have reportedly been inquiring about what Moderna had been planning to do with the patents for quite some time. Moderna executives found it important to notify both investors and the greater public that pharmaceutical firms will be working together to address the COVID-19 pandemic as efficiently as possible.

    This is obviously a positive sentiment for the greater market. The sooner pharmaceutical companies mass-produce an effective vaccine, the sooner we can enter economic recovery.

    The Takeaway from Taylor Hoffman Capital Management:
    Despite the reputation of 'Big Pharma', companies such as Pfizer and Moderna are willing to work in conjunction with each other for the sake of bringing the pandemic to an end.

    submitted by /u/MarketBites
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    Big inflation in a year? How position?

    Posted: 09 Oct 2020 09:14 PM PDT

    To deal with the pandemic economy, it seems the Fed has pumped up the money supply hugely: see this chart.

    But inflation has remained in check due to a precipitous drop in money velocity: see this chart.

    During the pandemic, the well-to-do have been pouring money into savings, including the stock market, explaining its perplexing rise.

    So, what about a year from now, if and when a vaccine and time help us emerge from the pandemic, and the economy starts roaring back - aided by unleashing all that pent-up money into purchases?

    Won't inflation soar? Might stocks plummet?

    In this scenario, what's a safe investment hedge to start investing in now?

    Maybe an inflation protected bond fund such as VAIPX?

    Or buy TIPS directly?

    submitted by /u/stankind
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    ARK ETF’s an opinions on future growth

    Posted: 09 Oct 2020 12:49 PM PDT

    ARK ETF's are all growing at amazing return rates this past year, and most of them since inception. However, according to their portfolio manager the markets they're investing in are innovative markets that he doesn't expect to reach their true potential for as much as 10-15 more years.

    My question is does he believe these ETF's will truly be cutting edge for the next 15 years or is it possible these long-term funds are already near being priced in for that far in advance? I see a lot of coverage on them, but haven't seen a lot of clarification if they believe their 5 active funds are sustainable for such a long time in these specific fields.

    submitted by /u/Thraex_Exile
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    $LMND: Is their AI technology for real or just another Theranos?

    Posted: 09 Oct 2020 05:34 PM PDT

    I want to point out several things about AI technology.

    1. From what I read, it is hard to do complex AI technology. If you look at the successful AI technology today: Self driving by TESLA and graphics processing (DLSS 2.0) by Nvidia, it is the extremely simple AI technology that is done at an incredibly fast pace is how companies seem to be achieving results. And even then it is a long, timely, and expensive training process. (Training AI is like training a dog)
    2. More recently, the most successful complex AI technology story is Tik Tok with Microsoft specifically requesting their AI source code. Tik tok search AI is vastly superior to anything in the US at this time. Its video recommendations are incredibly good. This AI technology is easy to verify.

    My question is Lemonade insurance claims using Complex AI technology to detect fraud. Is this true?

    I find it unlikely that Lemonade has achieved this. If they have, they are worth their stock price for sure.

    However, think about companies like Theranos who apparently also achieved a "breakthrough" in science. Wirecard also made claims of complex AI technology breakthroughs but in reality they were using "spreadsheets."

    The investor risk level for Lemonade is not low from my perspective. And it is hard to verify their level of AI technology as an outside investor

    submitted by /u/ggdotcomdotcom
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    IBM to move on from IT Infrastructure in spin-off deal, focus on cloud growth

    Posted: 09 Oct 2020 06:32 AM PDT

    What is Happening?

    IBM is spinning off its legacy business of IT Management in order to attempt to return $IBM to its blue-chip glory. IBM will now look to take advantage of the $1T hybrid-cloud market and its $34B acquisition of Red Hat in 2018.

    Why does this Matter?

    This is a major shift for a company that has long been considered an American household name. The spinoff is expected to contain more than 50% of the current business, however, IBM is now positioned to be considered more of a software company than a services vendor moving forward. The operational costs of the spinoff are estimated to be in the $5B range.

    "We divested networking back in the '90s, we divested PCs back in the 2000s, we divested semiconductors about five years ago because all of them didn't necessarily play into the integrated value proposition"
    IBM CEO Arvind Krishna

    The two separate firms will be paying a joint dividend in line with the expected dividend for the fourth quarter. From there, it is expected that IBM continues to look for future acquisition opportunities as they make an aggressive push for revenue growth.

    The Takeaway from Taylor Hoffman Capital Management:
    Krishna's first big move as CEO tees up the firm to pursue becoming a growth powerhouse. Many analysts like the move for IBM as the traditional IT Management unit has been considered a low growth laggard that has hurt the stock against larger cloud competitors.

    submitted by /u/MarketBites
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    90% of Lemonade customers are millennials and first time insurance purchasers. Which has very positive implications for their growth rate in the next 5-10 years.

    Posted: 09 Oct 2020 03:01 PM PDT

    Essentially this means that lemonade will be able sustain their IFP (in force-premium) growth rate as their customer base are mostly millennials and first time renters. As their customer base ages, the natural progression is from renting to home ownership.

    This is also reflected in the growth rate of premium per customer. Which has increased 18% every year since the companies founding. Current premium is now at $190 per customer. CEO Daniel Schreiber has brilliantly targeted most of his marketing on trying to capture the millennial population, and on underserved markets such as home owner's, renter's, and pet insurance.

    Furthermore they're collecting 100x more quality data points per customer than legacy companies.

    https://www.lemonade.com/blog/precision-underwriting/

    I say quality because the data collected at old insurance companies are atrocious. "Yes there mountains of it, but it's hardly in a readily usable form for machine learning. The amount of effort to gather and clean the data is much more than you think (think poorly scanned handwritten documents)."

    I know I made a few topics on lemonade already. But if they succeed in disrupting the insurance industry then this is easily a 10x investment that legacy insurance companies can't replicate. The legacy insurance companies simply don't have the same organization structure, company DNA, and work culture, to replicate lemonade.

    Just like how traditional retail companies couldn't easily replicate Amazon.com, or Blockbuster was unable to replicate Netflix in time, or the automobile industry on Tesla, or banking on Square.

    But when you combine this with a [very capable CEO](https://www.youtube.com/watch?v=LDJkZzqx4-8) and increasing brand loyalty from their customer I'm convinced this is going to be a successful company.

    submitted by /u/Okmanl
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    Help understanding Brookfield (BEP, BAM, BIP) - MLP, UBTI, none of the above?

    Posted: 09 Oct 2020 04:12 PM PDT

    Hi all,

    I am fairly new to investing, so forgive any silly questions, I am making a few assumptions based on what my understanding is as of writing this.

    Currently I have a Roth IRA and a Brokerage account. Specifically for the Roth, I was looking for a solid company with stable growth/dividends. I have been reading up on the Brookfield line of stocks and am a bit confused on one thing, is it an MLP or is it not? Seems like its structured like one but they state in terms of taxes they are not. (page 2)

    As I understand, one should avoid MLP's within a tax exempt account because of the possible UBTI tax trigger that occurs if gains reach over $1000. However, from what I am reading, while BEP is considered an MLP(?) and you get a K1, they say they do not generate UBTI.

    To backup quickly, this concern stemmed from initially looking at ET (Energy Transfer LP). Long story short and I could very well be wrong, is that this is a bad choice to have in an IRA because of the UBTI issue and from what I have read, the distributions (dividends) count towards the yearly UBTI total.

    TLDR: Would owning BEP, BIP or BAM or all three in an IRA account be good or bad practice? Again, this is going off my assumption that the distributions count towards the annual UBTI total (like with the ET example). So if you theoretically owned enough of any of those shares to be getting a yearly distribution of $1000 or more, is this is tax issue (triggering a UBTI tax event) within a Roth IRA? Would these be better placed in a taxable brokerage account?

    ​

    Thank you for any insight!

    submitted by /u/Ginnarr
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    NextEra Now More Valuable Than Exxon as Clean Power Eclipses Oil

    Posted: 09 Oct 2020 02:09 PM PDT

    Bloomberg: NextEra Now More Valuable Than Exxon as Clean Power Eclipses Oil

    I know the title makes it sound super amazing but a lot of it has to do with the drop in value for Exxon. From Bloomberg's own graph. Yet, it is a sign of changing times.

    Investors have endorsed NextEra's clean-energy strategy, with renewable energy becoming both mainstream and desirable. At least a dozen U.S. states have policies that will eventually mandate completely clean power grids, and Democratic presidential nominee Joe Biden has proposed a green electrical system in the U.S. within 15 years.

    "It's not a niche investment anymore," said Kit Konolige, a utilities analyst with Bloomberg Intelligence. "It's a big industry."

    submitted by /u/aude5apere
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    Dividend stocks for 2021

    Posted: 10 Oct 2020 04:05 AM PDT

    This is the last quarter of 2020. I am currently doing a re-balancing of my personal portfolio. I am buying more of dividend stocks. Dividend stocks are companies that pay out consistent dividends over a long time. They are typically large companies that have a proven business model and have survived several economic situations. I am buying more of the stock of the largest cement company in Africa (Dangote Cement Plc). You can learn further here. https://youtu.be/URJcG7rg9fM

    submitted by /u/Nickogufere
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    Who here is skeptical of the pace self driving cars are making to scale on the market?

    Posted: 09 Oct 2020 10:06 PM PDT

    Not too long ago there was a post on here about a manager or key employee within Lyft or Waymo, at one of the self driving labs gave an expose on how the engineering teams are in conflict on how to program these cars to be sufficient enough to not crash. And after many tests already it's being determined that self driving vehicles are nowhere near ready to scale given the complex programming constraints for a self driving car to take action in.

    I've been trying to find that article or reddit post

    submitted by /u/ploobadoof
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    Pandemic Investment

    Posted: 10 Oct 2020 03:44 AM PDT

    In this time of crisis. The pandemic is still going on right? What is the best investment one can make in times like these? Would you say stock market? Would you say invest in the internet? Cyrpto? Online stores? What do you think will be the best way to go here?

    submitted by /u/Future-Body
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    Fiverr $FVRR vs Fastly $FSLY

    Posted: 10 Oct 2020 02:05 AM PDT

    Hi All,

    I would like to hear the opinions of these 2 overvalued hypergrowth stocks, which will you pick to go small on? (taking getting both is not an option)

    Aware that they are both saas stocks offering different products and they are often compared with Upwork and Cloudflare respectively. I personally think Fiverr is slightly cheaper than Fastly currently but then Fiverr has ran up more in the past 6 months.

    Fastly had also ran up more this week while Fiverr is on a steady uptrend. Each of them may be winners and can even reach $300/500 in 5 years' time but their recent run up is way too hot. And my worry is that they will fall harder in the next depression within these 5 years. Just curious about your thoughts.

    submitted by /u/SenobiWolf
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    The German Car Industry Musters for a New Tech Battle

    Posted: 09 Oct 2020 06:54 AM PDT

    My favorite quote was

    Our customers spend about one hour a day in their car and one hour a day away from their phone. Any car maker who tries to create an ecosystem around the car deserves to lose the customer," says Martin Kristensson, head of digital business at Volvo Cars.

    ​

    From the WSJ

    ​

    Is the heart of your car a screen?

    Having spent years—and tens of billions of dollars—preparing for a shift in production toward electric vehicles, German car makers are expressing a new angst: that digitally "connected cars" could prove even more disruptive to their traditional strengths. This second leg of their race against Tesla could become a fresh excuse to squander investors' capital.

    Daimler set two priorities for technological leadership in a new strategy for its Mercedes-Benz DMLRY -0.55% brand this week: electric drive and car software. For the latter, the company is working on an entire operating system, MB.OS, that from 2024 will run not just Mercedes's proprietary infotainment system and its mobile broadband connection but also crucial elements of the driving experience, including self-driving features and battery management.

    The company will partner with technology specialists for specific applications, notably Nvidia for automated driving. Yet the closer the software gets to the customer experience, the more Daimler wants to do in-house. The interface with the driver in particular "is not something that we would like to outsource to somebody else," said Chief Executive Ola Källenius.

    Volkswagen VOW +0.00% is on a similar road. At last week's annual general meeting, Chief Executive Herbert Diess said replacing engines with electric batteries and motors would be simple to manage compared with the transformation of the car into a "fully networked mobility device." He is tackling the challenge by investing heavily in coding: VW wants to increase the proportion of software written in-house to at least 60%, from 10% currently, at a cost of €7 billion, equivalent to $8.23 billion, by 2025.

    The shadow haunting the German automotive industry is, of course, Tesla. Mr. Diess regularly spurs on his managers by invoking the U.S. company's technological lead and astronomical market value. The starring role accorded to the infotainment screen in a Tesla seems to be a popular feature with the kind of tech-loving consumers who might otherwise buy an Audi. Auto makers are also envious of Tesla's capacity to keep consumers' systems fresh via "over-the-air" updates.

    One reason Daimler cited for focusing on software was the scope for using this kind of live digital connection with its customers to sell them services well after they have bought their Mercedes-Benz. Many manufacturers have talked of this potential, but Daimler was bold enough to pin a number on it: It hopes to make €1 billion in operating profit from digital services by 2025.

    The software industry has been through a wrenching transition over the past decade from selling one-off packages to subscriptions for access to a constantly updated, cloud-hosted service. As more vehicles are connected to the internet, infotainment systems are likely next in line. One big unknown is what consumers will be prepared to pay for, and who will get it—vehicle manufacturers or software developers. Another is how deeply the infotainment system will end up being linked to driving controls.

    For now, though, most car makers are more relaxed than Daimler and VW about ceding control of at least infotainment to the tech industry. General Motors, Volvo Cars, the Renault-Nissan-Mitsubishi alliance and Peugeot (which Fiat-Chrysler will likely follow) all are partnering to varying extents with Alphabet's Google, which has developed a vehicle version of its smartphone operating system called Android Automotive.

    "Our customers spend about one hour a day in their car and one hour a day away from their phone. Any car maker who tries to create an ecosystem around the car deserves to lose the customer," says Martin Kristensson, head of digital business at Volvo Cars.

    Volvo and others say partnering with Google makes sense because consumers already use and like its products. The glitchy reputation of auto makers' existing vehicle infotainment systems adds weight to this argument. But partnering also is probably the cheaper option.

    "There are a lot of economies of scale in software development. Auto makers who want to get more programmers and do the work themselves are generally underestimating the costs," says Mark Wakefield, co-leader of the automotive and industrial practice at AlixPartners.

    The insistence of Daimler and VW on building up software skills might therefore be another iteration of their historic bias toward over-investment. The vast expense of electric-vehicle development has forced both companies to get more serious about cutting fixed costs in recent years; Mercedes-Benz this week committed to a 20% reduction by 2025. Ominously, though, the company also is charging into yet another technological battleground.

    Drivers and investors alike may end up preferring auto makers to focus on what they are best at: assembling cars.

    ​

    Google makes the operating system that is in the majority of the world's phones. The idea that VW is going to be able to really compete with that just doesn't make sense. Especially when their history of tech is pretty much a failure.

    ​

    I don't think that the German automotive industry is going to be near the same in 10 years. I wonder how that is going to impact Germany and Europe's overall economy.

    submitted by /u/VCUBNFO
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    Energy and Financial blue chips, how can this not be a good 2-5 year investment?

    Posted: 09 Oct 2020 08:28 AM PDT

    First post here, sorry if this has been addressed many times. What scenario in the future would see stocks like Exxon, Chevron, CIT, USB, JPM be lower in 2-5 years? I know they are not good short or even mid term plays (maybe if you playing the bumps every time stimulus is mentioned). It just seems like so much upside and very little risk. Clearly I am missing something.

    submitted by /u/eatsrainbowsz
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    How to research other countries?

    Posted: 09 Oct 2020 06:37 PM PDT

    Hello, I own VTI and VXUS at 90% and 10%. VTI I know about but VXUS is a little confusing. I know what it is but I would like to learn more. How would I go about researching general country investing conditions? The top 3 countries in VXUS are Japan, China, and the United Kingdom. Any tips on how to approach this type of analysis? Sorry if I am asking the wrong thing

    submitted by /u/Naitor295
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    Under discussed investment strategy: use your employers ESPP if they offer one and if you believe in the company

    Posted: 09 Oct 2020 09:24 PM PDT

    When I was 18 I took a job working at an Apple Retail store part time and then full time. I believed in the company and the products so I elected to put 10% of my paycheck into their ESPP which granted me a 15% discount on the stock at the price at the start or end of the quarter, which ever was the lower figure. I only worked there around a year and despite a lot of temptation throughout my 20s I held onto my shares which after all the splits and whatnot have a cost basis of 3-4.50 a share.

    I don't think ESPPs get discussed enough here. My only regret is that I didn't re-invest the dividends.

    submitted by /u/Bogglethowaway
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    What are your opinions on Virgin Galactics?

    Posted: 09 Oct 2020 02:32 PM PDT

    They have entered the space tourism industry as well as satélite launching. The company had a couple incidents where people died and got injured which in my opinion is a positive sign: the company can deal with failures staying afloat and is learning from their mistakes. They have 640 customers with pre-ordered flight to the space. On December 13 of 2018 their aircraft went up to 51.4 miles. Their goal is 68.35 which is 6.21 miles beyond the defined boundary of space. They do have a trouble with scheduling. The company became publicly traded in October of 2019. Valve, for example, tends to postpone their major projects (like HL), but it's a revolution each time. I'm truly interested in buying their stocks. You can be cruelly skeptical and a dream crusher, if your opinion is objective and rational. Thank you.

    submitted by /u/polygroot
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    Tesla Weekly Analysis - week ending 10/10/2020

    Posted: 09 Oct 2020 08:04 PM PDT

    What the charts are saying about Tesla's price action this week, charts and technical analysis on Tesla supporting price predictions and price targets for the following week. The latest Tesla news for week ending 10/10/2020 including Chamath Palihapitiya Says Tesla is Still Undervalued; Tesla Dissolves Public Relations Department; Gigafactory Berlin Will Be First to Implement New Battery Technology in Model Y; Tesla Model Y Roof Blows Off: Quality Control Issues; Tesla Catches Employee Engaging in Malicious Sabotage.

    https://youtu.be/l_lpN6Pfe-o

    submitted by /u/rexmakesbeats
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    IIPR : All set for rapid growth?

    Posted: 09 Oct 2020 01:11 PM PDT

    IIPR's stock price closed at $129.78 a share at market close on Thursday 8th October 2020. As a real state investment trust, Innovative Industrial Properties, Inc. (IIPR) concentrates on acquiring, owning and managing specialized industrial properties for regulated state-licensed cannabis facilities. In recent years the increasing acceptance of cannabis for medical & recreational uses has fueled demands for the product and in turn more and more cannabis facilities are popping up around the states. IIPR is well positioned to take advantage of this growing trend.

    I present below the grounds on which I believe this stock is poised for exceptional growth.

    Increasing earnings:

    One of the most common elements in stocks that post large gains is the increasing earnings in recent quarters. IIPR earnings for the last four quarters are shown below:

    Q2 2020 USD 0.73, compare to Q2 2019 USD 0.30 an increase of 143%

    Q1 2020 USD 0.72, compare to Q1 2019 USD 0.33 an increase of 118%

    Q4 2019 USD 0.78, compare to Q4 2018 USD 0.24 an increase of 225%

    Q3 2019 USD 0.55, compare to Q3 2018 USD 0.21 an increase of 162%

    As can be seen, for all the last 4 quarters IIPR has posted an earnings increase of more than a 100% compared to the same quarter in previous year. This exceptional earnings trend and its consistency for the past 4 quarters shows that IIPR has fuel to rocket upward in the near future.

    Tight trading range and accumulation: Daily chart

    The stock is also exhibiting signs of money inflow and accumulation. In the daily chart above it can be noticed that that shares have been trading steadily in a range between $115 and $130 since mid August on higher than usual volume. Also, the range of daily price move has been smaller compared to the trend seen before August. This pattern usually is observed before a major upward breakout.

    Steady base and impending breakout: Weekly chart

    Its can be seen from the weekly chart above that after hitting a high of ~$132 in July 2019 the stock price has consistently traded below this value and formed a double bottom W pattern. A decisive breakout above $132 a share on high volume is all that is needed to thrust the stock in a rapid upward trend. Interestingly, just this week the stock price has started to really test the resistance at $132. It would be wise to keep an eye out on this stock on Monday and in the coming weeks for a breakout. This breakout should be the entry point to open any new position. Make sure the volume is high on the the day it breaks out or else it may just be a false signal.

    To sum up, IIPR is presenting very strong bullish signals and might skyrocket after a high volume breakout above $132 a share. I would suggest a target selling price of $200 to $220 a share by end of next year. Let me know your thoughts.

    submitted by /u/frankenstein_911
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    Piedmont Lithium : Long

    Posted: 09 Oct 2020 08:13 AM PDT

    Mineral/Battery investor question : What is your opinion on Piedmont Lithium. They signed a 5 year deal with Tesla ($TSLA) to be a lithium source for batteries. Delivery is a year or two out but the prospects are good. Big multinational minerals company from AU operating in NC. The stock pumped when the deal was signed and has recently dipped. When is a good time to buy? Wait till closer to delivery date.. or buy and wait. Any lithium/ nickel talk is welcome.

    submitted by /u/relavant__username
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