Daily General Discussion and spitballin thread - April 04, 2021 Investing |
- Daily General Discussion and spitballin thread - April 04, 2021
- Daily Advice Thread - All basic help or advice questions must be posted here.
- Lumber Prices are Up 250% in the last 3 months
- High Yield when they are Low Yield
- Why are fossil fuel investors in the green for 2021? The clean energy trade seems overcrowded for now - JOHN DIZARD Opinion FTfm
- Drd gold , a vertical growth gold mine
| Daily General Discussion and spitballin thread - April 04, 2021 Posted: 04 Apr 2021 02:01 AM PDT 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: 04 Apr 2021 02:00 AM PDT 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]  |
| Lumber Prices are Up 250% in the last 3 months Posted: 03 Apr 2021 06:30 AM PDT This weekend I went and bought some Plywood for the house. I couldn't believe how much I had to pay for some simple 2'x4's. The price has gone up by 250% in just the last few months. With the housing boom happening and everyone trying to remodel their house I see this continuing on for a while. Is anyone else noticing this and trying to take advantage of it? The two lumber stocks I found are Weyerhaeuser(WY) and Rayonier (RYN) both of the stocks are up slightly but don't seem outrageous in terms of evaluations. You can see WY doesn't have a crazy evaluation. It also peaked in 2007 during the last housing boom. Is anyone else noticing this shortage? [link] [comments]  |
| High Yield when they are Low Yield Posted: 03 Apr 2021 06:58 AM PDT Using data sources from FRED, the US High Yield Effective yield (EY) is below 5%. This is new territory. Looking at the EY average for the end of each week, Pre-pandemic, there are 155 weeks in total where the EY traded below 6%. I decided to see what the subsequent 12-month total return (TR) was when yields were this low. Here are those findings:
A few bits I find interesting, yet not surprising, is that the best TR period with historically low yields came during a period of high volatility (COVID) while the worst TR period came from a period of a relatively long period grinding-ly low yields. Surprisingly, the number of weeks with a positive TR vs negative or zero TR is a ratio of 5.74:1, not something I would have expected. Then again, in the grand scheme of things, sub-6% EY is itself new territory. In the end, the average and median returns are quite meager and it's likely that the subsequent 12-month return in this space, from 2021 Q1, will fall below these numbers barring some short lived period of high volatility with a recovery, e.g. COVID-19 like period. [link] [comments]  |
| Posted: 02 Apr 2021 09:57 PM PDT https://www.ft.com/content/3e042435-5d90-4ff2-a3f5-3f4e11ef6f41 Quite interesting comment in the end: from "EcoQuant": // Well, one can offer the mindless "contrarian trade" argument, but to what end? In substance, what should be proper prices and earnings expectations are difficult to estimate. First, there is no documented precedent for such a mammoth energy transition. Historical comparisons are so different even if available. What do we know about markets and shares during the transition from camphor to whale oil? Or the displacement of the latter by petroleum and gas? Second, this is an odd-duck technology transformation, not a classical energy transformation based upon mining and extraction and analog elements, although it isn't completely devoid of that. The analogy always is various digital electronics, whether semiconductors and computing and digital photography. In those markets, the best and most expensive are offered first, and then, as demand grows, proceeds fund development of versions which are as capable, but much cheaper, and the most expensive are offered, in subsequent years, models which cost the same but now have more capability. The price of a unit of goodness goes down. You can always get the cheaper by waiting, but then there are no advantages now. Zero Carbon energy isn't entirely like that. The idea of changing out wind turbines for more efficient ones does not quite work. It mind work for solar PV, however, assuming the inverters can keep up. All these elements influence costs and pricing. Third, if PV and wind are cheaper to generate with technology a year from now than today, new players to markets using these cheaper technologies can undercut zero Carbon offerings which are older. To some degree, the technology means these energy sources are competing against themselves. That may seem bad, but realize whether considering computers or digital cameras or smart phones, these successes were not hindered by such rollouts. Now, that may be because those are a consumer marketplace and wind and solar are wholesale business marketplaces, but in the long run, shouldn't the behavior be the same? Fourth, scaling up wind and solar and storage to the level needed for a global transformation itself imposes resource and financial costs. It is notable that Copper funds have also traded up, because cheaper sources of Copper are being exhausted, and Copper is needed everywhere, in PV, wind, and in EVs and storage. Prices for companies which assumed one cost of Copper are discovering that, in time, these will be higher. That's not destructive, but it has an influence. Fifth, there's the wild card of software and innovation and improvements in the basic technology, especially concerning energy storage. A sudden innovation could make the grid work better, or storage be cheaper even if the chemistry hasn't changed, or make overlay energy networks the de facto model. This affects prices and expectations, too. In net, these short term concerns are just that, and anyone who is betting long term on fossil fuels may profit in the short run, but will lose out in the long, no matter the fate of the current U.S. administration, its policies, or whoever wins the next Congress or Presidency. A contrarian political leadership can throw artificial impediments into the path of continued rollout, but that will not be popular with corporations, who have now committed billions to making this a reality. Those continuing to back fossil fuels are equivalent to those who invested in horses and buggies in 1904. // [link] [comments]  |
| Drd gold , a vertical growth gold mine Posted: 02 Apr 2021 11:09 PM PDT (first dd, constructional critism will be welcomed) disclaimer : i am not a financial advisor I will not and cannot be held liable for any actions you take as a result of anything you read here. company overview : founded at south africa in 1895. drdgold invented itself in the late 1900's and now is a world leader (although operates only in south africa) in retreatment of gold from tailing dams, in 2018 almost doubled its reserves with the acquisition of wrtrp from world platinum and gold mining giant sibanye stillwaters for majority stake in the company, traded primary at jse and secondary as nyse adr. i believe this company and inevitably the stock is about to enter, or more accurately maintain and accelerate a fast growth phase which will potentially multiply the company value numerous times . my belief comes from the company past present and its clear and very solid future that is almost secured, on this post i will explain each one of the three and why those are contributing its growth potential and the implementation of the spoken potential. first of all, let's talk about the past of the company in the last critical 5 years: performance : the company eps took off 520% percent from 2016 the roe jumped from 4 to 16 percent the company profit margin skyrocketed from 2.55% in 2016 to 15% in 2020, fact that is important(from reasons i will explain later) is that the profit margin in 2019 was 2.8% the explain later part, or cash flow : drdgold numbers weren't really great from a really fantastically good reason :capital expenditure . the percent of fcf only from financing and operating activities that lost in investment activities in 2016 was around 75 percent, in 2017, a weak year that they use to plant the seeds of future growth , the rate was 1600% percent, they lost cashflow that year , 2018 75% , 2019 105% and in 2020, after years of enormous growth rate in cash flow invested they invested 38% less and the fcf from financing and operating activities that reinvested was 12%, while their earnings got bigger and the profit margin and roe skyrocketed, they invested for future growth for years and now instead of a first bud to peek from the surface of the well watered ground, a mighty oak tree welcomed the gardners in the morning, but as big a oak tree is, i believe this stock is a giant sequoia. why is the growth at 2020 was so big: the reserves acquisitions from Sibanye stillwater wasn't functional until 2019-2020, and i believe that it still have a room to become fully functional, as the company stated, they are in stage 2 of the wrtrp , the first was to start operating and the second is a high volume processing plant near the dumps.
present and sustained future or the affects of the deal outside gain in reserves : gold is Sibanye stillwater third biggest export, the first is pgm, and as the ceo stated, drdgold will start in partnership with Sibanye stillwater to process pgm tailings, which will not only cause a huge vertical growth and huge growth in profit, it will make the company less dependant in the cycle of the gold price, and will make more investors to buy it. additionally their use of big data helps stabilize and slightly improve(when multiplied in 20 million tons a month is quite a bit) their operations some more future : in the annual report the company wrote about their strategic outlook which is a huge vertical growth phase by those means: 2021-2026 DRDGOLD – through acquisitions, be able to offer integrated, sustainable tailings management solutions with international reach and by doing this, expand our role in environmental clean-up in the interest of sustainable land use, reduced pollution and societal upliftment Platinum group metals – consider opportunities through our anchor shareholder, locally and internationally 2027 and beyond DRDGOLD – consolidate all surface tailings in South Africa and look to international opportunities for surface mining those, combined with horizontal growth by improving the efficiency of the current facilities, building west rand storage facility, and optimasion the use of already majority of the water grey water, will make them a big ass square, so my conclusion is that drdgold will experience massive growth at the next 5 and the next 10 years. i hope you found my post useful. [link] [comments]  |
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