Daily General Discussion and spitballin thread Investing |
- Daily General Discussion and spitballin thread
- Daily Advice Thread - All basic help or advice questions must be posted here.
- Just because a company has a bright future, that doesn’t make it a good investment.
- U.S. Bureau of Labor Statistics announces decline in unemployment rate from 6.3% to 6.2% over the last month, beats expectations
- T notes, bonds, why stocks are selling off
- Why Cathie Wood's once hot Ark Innovation ETF has lost all its 2021 gains
- DD: Upcoming Roblox $RBLX IPO Next Week (March 10th, 2021)
- Still Bullish On Uranium (Also, I Have Not Been Able To Find Published Bear Cases And I Would Be Very Interested If Any Exist)
- Trucking boom prompts Old Dominion to add 1,200 drivers and dockworkers
- Interest rate vs bond yield.
- My second post on international shipping : NYT : I’ve Never Seen Anything Like This’: Chaos Strikes Global Shipping
- Reducing Your Risk By Diversification
- Please explain the correlations below
- ETFs choice for long-term investment
- Technical Indicators Suggest a Correction in the Nasdaq/Growth Markets, and a Hedge
- Mode Crypto - £20 in BTC for buying £100 (instant reward/withdrawal) (Android & iOS)
- Shoot at me: Long term yields will have to reverse soon
| Daily General Discussion and spitballin thread Posted: 06 Mar 2021 02:01 AM PST Have a general question? Want to offer some commentary on markets? Maybe you would just like to throw out a neat fact that doesn't warrant a self post? Feel free to post here! This thread is for:
Keep in mind that this subreddit, and this thread, is not an appropriate venue for questions that should be directed towards your broker's customer support or google. If you would like to ask a question about your personal situation or if you are asking for advice please keep these posts in the daily advice thread as that thread is more well suited for those questions. Any posts that should be comments in this thread will likely be removed. [link] [comments]  |
| Daily Advice Thread - All basic help or advice questions must be posted here. Posted: 06 Mar 2021 02:00 AM PST If your question is "I have $10,000, what do I do?" or other "advice for my personal situation" questions, you should include relevant information, such as the following:
Please consider consulting our FAQ first - https://www.reddit.com/r/investing/wiki/faq And our side bar also has useful resources. 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]  |
| Just because a company has a bright future, that doesn’t make it a good investment. Posted: 05 Mar 2021 10:07 AM PST I see people making DD posts on here all the time about the next big company and why they are poised to do so well in the future. All these posts always seem to ignore valuation and they rarely make an effort to justify the valuations of the companies they preach. It's easy so say that a company will grow sales 25% year over year for the next decade, but if the company trades a 100x P/S then what good is it? The market has already priced in the high growth of these companies. You cannot make money betting on something already priced in. In order to think the stock is a good investment, you have to expect it to grow more than what the market currently expects. A lot of people don't seem to make that connection. They just say "company do good = stock go up." I have no doubt that all these hyper growth stocks like TSLA will be much larger in 10 years than they are today. That doesn't make it a good investment because the market is already expecting absurdly high growth and so that is factored into the stock price. Many companies grew substantially over a certain period of time despite their stock suffering. An easy example is Microsoft in 1999. Was Microsoft a better company in 2009 than in 1999? Microsoft had revenue that was 3x higher in 2009 than in 1999. Despite this, the stock was down over 50% during that timeframe. The simple fact is that it doesn't matter how great a company is if you overpay for that company. Keep that in mind the next time you are analyzing hyper growth stocks. [link] [comments]  |
| Posted: 05 Mar 2021 05:30 AM PST Total nonfarm payroll employment rose by 379,000 in February, and the unemployment rate was little changed at 6.2 percent, the U.S. Bureau of Labor Statistics reported today. The labor market continued to reflect the impact of the coronavirus (COVID-19) pandemic. In February, most of the job gains occurred in leisure and hospitality, with smaller gains in temporary help services, health care and social assistance, retail trade, and manufacturing. Employment declined in state and local government education, construction, and mining. More here. [link] [comments]  |
| T notes, bonds, why stocks are selling off Posted: 05 Mar 2021 02:45 PM PST Coming into 2021, most guessed that we would see rising long-term interest rates. However, we didn't expect interest rates to move this high, this fast. The 10-Year Treasury yield started the year at 0.91% and ended the month of February at 1.41%, down from an intraday high of 1.61%. As such, core fixed income assets (bonds) are off to one of their worst starts ever (remember that as yields go up, prices go down). So what is driving interest rates higher? Changing expectations Inflation and growth expectations are important factors into the fundamental outlook for interest rates. Broadly speaking, what we've seen in the bond market this year is a re-pricing of both higher inflation and higher growth expectations. Inflation expectations have steadily moved higher, and market-based gauges of inflation expectations are the highest they've been since 2011. We also need to keep watching how additional fiscal stimulus flows into the economy. Additionally, it seems increasing economic growth expectations have picked up recently as well. An increase in growth expectations may put pressure on the Federal Reserve (Fed) to move away from its low interest rate policy sooner than expected, which has put upward pressure on longer-dated Treasury yields. An unfortunate byproduct of those higher expectations is that we've seen an increase in the volatility of the 10-Year Treasury. We've expected the Fed to keep yields from moving too high or too fast. However, during Fed Chairman Jerome Powell's recent testimony, he welcomed the sharp move higher as a sign of "confidence" in the economic recovery. Moreover, during last week's Treasury Auction, selling bonds to the public to fund deficits, natural buyers of these securities largely balked at the offering, and in order to sell the offering in its entirety, the Treasury had to increase yields to make them more attractive. It seems that the market is challenging the Fed's resolve to keep interest rates at current levels. If the natural buyers of Treasury securities continue to stand on the sideline or the Fed doesn't take a harder stance on rising rates, we could see yields drift higher from here. As interest goes up speculative or growth (many tech) stocks start to lose their attraction from the whale investors. They want a sure play or to park their funds into what's growing next which currently is recovery "epicenter" stocks. Stuff that has pent up demand, stuff that is inflation proof, and stuff that makes real money now and has a favorable price to earnings ratio. There's a few more days of Treasure auctions coming up next week so expect the same sell offs from weeks past, especially with a raging Dow index that indicates full blown recovery mode, favorable vaccine news, states reopening and big leaps in jobs numbers. Key point to remember: Yellen is all about job creation and Powell is all about managing rates to stave off inflation. Neither care about growth stocks selling off... Treasury auction dates this week are Tues-Thurs [link] [comments]  |
| Why Cathie Wood's once hot Ark Innovation ETF has lost all its 2021 gains Posted: 05 Mar 2021 04:09 PM PST
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| DD: Upcoming Roblox $RBLX IPO Next Week (March 10th, 2021) Posted: 05 Mar 2021 06:50 PM PST Roblox (RBLX) IPO for March 10th, 2021
Info
SummaryRoblox (RBLX) is a content creation gaming platform that allows users to develop a wide variety of mini-games and have other users play them through the Roblox Player. Creators can earn a virtual currency called Robux by selling various items to players which can then be converted into actual money at certain milestones. As of September 30th, 2020, Roblox had over 18 Million experiences for players. Robux can also be purchased directly from Roblox and used for various in-game items such as player customizations and game-specific power ups. Roblox offers a monthly subscription service called "Roblox Premium" where users can obtain exclusive items and a monthly supply of Robux. In 2020, Roblox was the 2nd most watched game on YouTube with 75 Billion views Market DataIPO source
Financials as of Sept 30th, 2020 Source: Pre-Page 6 of Sec Filing
Valuation source
Revenue source
Shareholders as of Nov. 2020 source
Growth Source: Prospectus Summary Pages 2-4 of SEC Filing
Risk Factors Source: Prospectus Summary Pages 9-10 of SEC Filing
Revenue GenerationRoblox generates revenue in several ways. Players purchase Robux directly for prices ranging from $4.99 to $99.99. Players can spend Robux on game-specific purchases that goes to the Creators with a 30% fee taken out. Creators can exchange Robux for USD at a current rate $350 per 100,000 Robux as of March 4, 2020. To purchase 100,000 Robux would require 10 purchases of the $99.99 package (10k Robux each) for a total of $999.90. Roblox also offers three subscription tiers ranging from $4.99 to $19.99 a month, which earns a player Robux and Exclusive store items. Merchandise plays a role in revenue generation as well. Roblox offers clothing, figurines and gift cards which can be purchased online and in person from places like Amazon, Walmart, Target, and other retail locations. Growth Potential and CatalystThe current outlook for Roblox to grow is promising. There are active investments being made in expanding the age range, international reach, monetization, and technical capabilities of the platform. By continuing to employ modern technology to improve the platform, higher quality experiences and content that appeals to older age demographics can be created. Current international markets for Roblox include US, Canada, and the United Kingdom. Roblox is actively investing in technology that they hope will enhance their growth around the world. For example, they hope to use automated translation and built-in regional compliance tools to help scale into other global markets. Monetization is another key component to Roblox growing. Recently Roblox Premium which offers a monthly subscription service to its users was added. Roblox actively works with its creator and developer community to help bring them improve their monetization, which in turn increases Roblox's monetization. Roblox expects to work with leading brands to build unique marketing opportunities to the platform. Competitors and DifferencesOne of the things to keep in mind about Roblox itself is not a game, but a gaming platform and ecosystem of multiple gaming experiences. Over 18 million games can be launched from their website and played through a downloaded app on the user's computer. Each game can be completely unique from every other game. Roblox as a platform would more closely related to that of Steam (by Valve) or Epic Games Launcher (by Epic) or Origin (by EA). However, instead of purchasing games through this, a user simply launches whichever one of these free experiences they want at any time. There is no purchasing of the game like there is on the other mentioned platforms. Roblox's main difference is they use the underlying tools to create Roblox specific games utilizing their Software Development Kit (SDK). Other games launched on Steam or Epic are much more loosely connected to the platforms distributing it, whereas Roblox games are highly connected to the Roblox platform in general. The barrier of entry to create a Roblox gaming experience is much less difficult than to create a game to release on other distribution platforms, however the games themselves are "Roblox-centric" and have common styling, controls, and gaming mechanisms. Roblox does not charge for the games themselves, but a user buys virtual items and enhancements through their virtual currency called Robux (See "Revenue Generation"). A user can also be a Roblox Creator who can create virtual items that will appear on their character in all games. They can also create their own Roblox experiences and sell items unique to that game on their own store for Robux. Robux can then be turned into real money (100k Robux -> $350 USD) if the creator wishes to cash out, or they can spend it for themselves within Roblox. The User Experience and YouTube SceneWhen a Roblox player wants to play a game, they navigate to the Roblox website and login. This allows them to browse a list of games and launch the experience within a downloaded application on their computer called the Roblox Player. Users on the website can change their avatar and browse the shop for various items such as gear, emotes, characters, and other customizations. Players can connect with their friends or join 1 or more groups of other players to form smaller communities to play together. Roblox is massive in the YouTube scene. The official Roblox channel has ~2.9 Million Subscribers. Some YouTube creators attempt to create their own content and promote it on their channel to earn Robux, which they can then exchange for real-life cash. Roblox can appeal to different age groups for different reasons. While younger age-groups are the ones playing the game, older age-groups are finding ways to make tons of money as developers and creators. In 2020, Roblox was the second most watched game on YouTube (second only to Minecraft) ConclusionBeing relatively new to trading and this being my first due-diligence for a company, I hesitate to make any sort of predictions personally on where this price will go up or down. My gut tells me the $45 price doesn't feel over or under valued, but I think Roblox has a lot of growth potential over the next year. Again, you should NOT take any of this as sound financial advice. I am very new to this. I do welcome all criticisms and feedback you have to offer. Tell me what's good, bad and missing from this DD! [link] [comments]  |
| Posted: 05 Mar 2021 01:35 PM PST As we close the book on another chaotic week, I wanted to share my views on the current state of clean energy investing, on uranium in particular, and where I see this heading. As always, any and all feedback is greatly appreciated. First, one thing to get out of the way. Last night, a relatively small Canadian uranium miner, Denison Mines Corp, ($DNN), trades at less than $1, and was a top 5 trending stock ahead of its earnings. The message boards were typical gains propaganda and it became another sad pump and dump story. As a long-time uranium investor, watching tens of millions of $DNN shares change hands in after-hours was a real sign of the times, which, I guess is a nice way of saying that a lot of people are living a ridiculous fantasy when it comes to investing. This is a pretty good segue into clean energy since a lot of folks are living a fantasy there as well. We cannot power the Earth on wind and solar alone. And we do not have the battery capacity to store it. It is simple math. Either we maintain the status quo on coal, oil and natural gas, or we embrace uranium as part of the solution. Here is how I see the market on uranium developing going forward. Generally speaking, I am looking at this as a macro investment based on the supply and demand dynamics of the market. At a high level, uranium needs to be in the $50+ (some say $60+) range in order to cover the cost of production. Right now the spot price is hovering around $30. On the demand side - From what I have researched, utilities have managed to get by with fuel reserves and long term contracts, however the long term contracts are expiring and fuel reserves are working their way through the market. This presents a scenario where buyers will need to start coming into the market to lock in new long term contracts. There is also the question of China's growing influence in nuclear. This will increase global demand significantly over the next few decades. China has been and, I am guessing, will continue to secure supply with a long term geopolitical strategic view. On the supply side - There is a ton of uranium in the world but it is challenging to mine it at the current costs. New mines take years to come on line (finding, permitting, developing, exporting, etc). This results in a relatively small number of companies that actually produce uranium or have the potential to produce uranium in the next cycle. There seem to be a lot of companies talking a big game but I have tried to stay with companies that either are or can produce uranium in the next few years. If anyone is interested, I am happy to provide a list of companies that I have been successful with. There are also secondary sources of supply which are harder to find numbers on. One secondary source is from decommissioned nuclear weapons (the US had/has an agreement to buy uranium from the Russians). There are several good reports on the supply side from the nuclear associations. The major catalyst in Q4 that resulted in the upswing in equities was a supply side story. Two or three major mines (CCJ and the Kazaks) were shut down due to COVID scares and/or because of the economics. The market took some notice and equities jumped significantly. This said, the price of uranium has not moved publicly. I expect equities to decrease from today's levels until the price moves up. Once the price moves I think we will see 3x - 5x from today's levels. This could take a few years, but my bet is that we start to see moves sooner. As said at the outset, I would be very appreciative of any feedback. I could be wrong on this and it would be great to get a critical eye. -BooOnClay [link] [comments]  |
| Trucking boom prompts Old Dominion to add 1,200 drivers and dockworkers Posted: 06 Mar 2021 01:38 AM PST Citing "a strong economic recovery with robust freight demand," less-than-truckload carrier Old Dominion Freight Line (NASDAQ: ODFL) announced Thursday plans to add 800 drivers and more than 400 dockworkers and clerical personnel. The Thomasville, North Carolina-based company said it was looking to add Class A CDL drivers over the next three months to meet growing demand. The plans include hiring 275 linehaul drivers, 260 pickup and delivery drivers and 100 team drivers. It will also add more than 430 workers on its docks over the same time period. Average pay for new linehaul drivers will be $99,000, with pickup and delivery drivers earning $73,000 annually. The full-time, nonunion positions also offer health insurance, 401(k) and paid vacation. Old Dominion will pay a $5,000 signing bonus for qualified drivers in certain locations. "Our OD people are the heart of our operations and we're looking to add to our workforce in response to a growing demand for our premium service," said Marty Freeman, EVP and COO at Old Dominion. "There's never been a better time to consider a career in transportation. These career opportunities offer a great work-life balance, a competitive compensation package, on-the-job training and career advancement opportunity." Old Dominion's announcement comes as the carrier is executing a terminal expansion plan, which produced nine new or expanded facilities in 2020. Similar additions are planned for 2021. The facility expansion is part of the company's efforts to increase market share in a favorable trucking environment. On Tuesday, the carrier announced that year-over-year trends in February (revenue +9.2%) slowed from more robust growth seen in January (revenue +14.6%). Severe winter storms were noted as the reason for the deceleration in the growth rate. Even with the slowdown, the carrier fared better than others in the month. Saia (NASDAQ: SAIA) reported a 2.3% year-over-year decline in February tonnage after posting a 5.4% increase in January. The company said roughly 70 terminals were fully or partially offline for several days during the month. ArcBest Corp. (NASDAQ: ARCB) reported flat tonnage through the first two months of the year in its asset-based segment as February wiped out a 6.6% year-over-year increase to start the year. [link] [comments]  |
| Posted: 06 Mar 2021 03:03 AM PST Would someone mind help clarify the difference between interest rate and bond yield? To me, they seem to be the same thing but worded differently. Am I wrong? If so, why am I wrong? What am I not understanding? So for example, this is how I understand the two:
Thanks. [link] [comments]  |
| Posted: 06 Mar 2021 03:40 AM PST Parts for those that can't see it : Peter Baum's company in New York, Baum-Essex, uses factories in China and Southeast Asia to make umbrellas for Costco, cotton bags for Walmart and ceramics for Bed Bath & Beyond. Six months ago, he was paying about $2,500 to ship a 40-foot container to California. "We just paid $67,000," he said. "This is the highest freight rate that I have seen in 45 years in the business." In early September, he waited 90 days to secure space on a ship for a container of wicker chairs and tables. Another U.S. importer, Highline United, which imports women's shoes from China and Hong Kong for brands like Ash, Isaac Mizrahi, is paying more than five times its usual price for shipping. "It's a classic supply and demand issue,'' said Kim Bradley, the chief operating officer of the company, which is based in Dedham, Mass. 'I've Never Seen Anything Like This': Chaos Strikes Global Shipping https://www.nytimes.com/2021/03/06/business/global-shipping.html I have DAC + DSX + CTRM Others I looked at: ZIM + GNK + SB + INSW + TOPS + SHIP + SBLK [link] [comments]  |
| Reducing Your Risk By Diversification Posted: 05 Mar 2021 09:56 AM PST One of the best ways to reduce your risk is by diversification. This can usually be done by holding many stocks in different industries or more simply holding an index. Let me explain why. There are two kinds of risks. One is systematic risk and the other is non-systematic risk. We can eliminate non-systematic risk through diversification, but not systematic risk. Systematic risk is also called market risk which means it impacts the whole market. For example, this could be due to a hike in interest rates, Treasury Yields rising and etc. This impacts the whole market and cannot be diversified. However, there is also called non-systematic risk. This is a firm-specific or industry-specific risk. For example, if a company has a product recall, the risk is only for that specific company and not other companies. An industry-specific risk is if the whole industry is shaken by something only impacting that industry. For example, we saw this with oil prices a year ago. Oil companies went down, but other companies weren't specifically down. Why does this matter and how does it relate to risk. Well, we can eliminate all non-systematic risk by holding a diversified portfolio. The reason for this is because many stocks won't be as correlated with one another, which means that any really bad gains can be offset by any really good gains and vice versa. Theoretically, You won't be exposed to non-systematic risk since you are eliminating it by holding a diversified portfolio. The only risk you have is systematic risk (market risk). Theoretically, we are not compensated by non-systematic risk since it is a risk we can diversify. Just keep in mind that when you buy industry-specific ETF's or if your portfolio is concentrated in one sector, you are exposing yourself to more risk than necessary. [link] [comments]  |
| Please explain the correlations below Posted: 05 Mar 2021 05:33 PM PST Saw this on WSJ today:" Stocks have stumbled in recent weeks as a climb in bond yields has called into question whether low interest rates, which propelled valuations higher for much of the past year, will continue. Yields, which rise as bond prices fall, have rallied in response to expectations of a quickening pace of growth and inflation as the economy reopens from the coronavirus pandemic." My question are:
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| ETFs choice for long-term investment Posted: 06 Mar 2021 01:51 AM PST Good Morning All, I am trying to create a parallel portfolio made only in ETFs on Degiro and I'd like to get your opinion around the following ones: CSPX EMQQ BATT ELCR ESPO (not really sure about this about future) XDBC WCLD They are almost in TER lower than 0.60% with YTD return higher than 10%. I am trying to find out another one related to banks and Uranium/Nuclear on EU markets (as Degiro is not offering US ones) but I am not able to find them out. Thanks in advance for your opinion! [link] [comments]  |
| Technical Indicators Suggest a Correction in the Nasdaq/Growth Markets, and a Hedge Posted: 05 Mar 2021 05:35 AM PST Forgive me for the technical jargon, just trying to save a lot of people some money. TL/DR below. (1) The Ishares Russell 2000 Growth ETF which measures growth stocks (think tech, TSLA, ARKK and others with higher P/E ratios) over the 6 month appears to be falling. MACD (Moving Average Convergence/Divergence) dropped below 0. The slope of the line is similar to that observed in March 2020. (2) Momentum (a measure of the continuity of the existing trend) dropped below the 4-month moving average. This only happened twice in the last year – once in November, at which point it bounced and retraced, and the second time in March 2020. MACD is breaking below 0 at a rate not seen since March 2020. RSI is below 50 and dropping at a high rate of speed.. (3) The VIX – a measure of market volatility. The one-year trend suggests a flag/pennant pattern indicative of consolidation. This pattern continues on the six-month scale. On the 1-month scale, the indicators suggest an upward breakout will occur. (4) SQQQ (a short-index of the NASDAQ) trends on the 3-month indicate a convergence in moving averages, with MACD above 0 and increasing. RSI has been at or above 50 since February. The slope of the RSI and MACD lines indicate the trend is set to continue. The SQQQ, currently at $15/share, topped $150/share in the March 2020 correction and $100,000/share in 2011. The 10-year trend suggests consolidation. TL/DR: Technical indicators signal that the correction in growth stocks will pick up speed over the period of March to April. SQQQ, whose performance is inverse of that of the NASDAQ, is a potential hedge. [link] [comments]  |
| Mode Crypto - £20 in BTC for buying £100 (instant reward/withdrawal) (Android & iOS) Posted: 06 Mar 2021 03:35 AM PST Mode is a UK crypto platform to buy and sell bitcoins Bitcoin They give £20 BTC in one of two ways: a) for buying £100 or b) depositing 0.01BTC into their "Interest Account", this earns 5%APY. This offer takes about 10 to 20 minutes to complete. Open to UK residents only. Steps
Buying BTC with Mode is very quick and easy as the bank transfers are instant. Both depositing and withdrawing. Definitely a promising and very functional platform. * The original purchase can be sold immediately after triggering the reward. So it's basically impossible to take a loss as the £20 reward will not go to zero overnight. BTC would have to go to zero for the £20 to have no value. Anyone can: - buy £100 ----> this triggers a £20 reward that gets credited 24hrs later - sell the BTC we purchased with the £100 Even accounting for fees (buy/sell), everyone will very likely be making a decent profit as Mode are effectively giving away free money. (£18/19 min) [link] [comments]  |
| Shoot at me: Long term yields will have to reverse soon Posted: 05 Mar 2021 04:37 AM PST Fellow r/investing members, please shoot at me any reasons why this is flawed. It seems to me, with the huge government deficit last year and this year, rising long-term yields reflecting low demand for bonds, the Fed have their hands tied and will need to start buying the long end of the curve. Now of course Powell is trying it avoid that by reassuring the markets about inflation, and reiterating his dedication to pinning the short-term yield to zero. But if the bond market doesn't reverse by itself, what choice does he have ? [link] [comments]  |
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