Daily General Discussion and spitballin thread - May 11, 2021 Investing |
- Daily General Discussion and spitballin thread - May 11, 2021
- Daily Advice Thread - All basic help or advice questions must be posted here.
- CNBC: A psychedelic drug boom in mental health treatment comes closer to reality CMPS MNMD CLXPF ATAI by Eric Rosenbaum
- [Motley Fool] Current model for Uber, Lyft just doesn't work. Expenses have scaled up in near-perfect step with revenue, as have net losses. As it stands now, both EBITDA improvement outlooks are tough to believe.
- What is the longest future trend you know of that can be invested in?
- What Are the Best Online Research & Analysis Tools?
- Do you think the Sotheby's Banksy auction on the 12th May will go anyway to "normalising" Ethereum and Bitcoin as a payment method?
- Harvesting my Ark ETF losses
- Investing during a potential bubble
- DraftKings (DKNG) Due Diligence - The "King" of Online Sports Betting
- Some long-term strategies worth remembering in today's speculative and volatile markets
- My shortlist for screening stocks against inflation
- werid financial statements of Skillz
- If an ETF reflects the stock prices of the underlying securities, why do I see a bid/ask?
- MX Arbitrage opportunity with a 6 months timeframe
- HTZGQ A BUY? BIDDING WAR HAS INCREASED THE EQUITY PAYOUT 3 TIMES
- LFC CONFUSION HELP!! Value investing
| Daily General Discussion and spitballin thread - May 11, 2021 Posted: 11 May 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: 11 May 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]  |
| Posted: 10 May 2021 06:00 AM PDT Mental illness is among the most costly medical expenses in the U.S., and it has a high cost to employers in lost productivity. In 2019, 51.5 million adults were living with a mental illness in the U.S., and the number of people suffering and drug costs, already in the tens of billions of dollars annually, are projected to grow in the years ahead, with Covid-19 compounding mental health issues globally. Drugs long stigmatized, such as psilocybin and MDMA, are rising in profile as mental illness treatment options. Just last week, results from a phase 3 trial of MDMA combined with talk therapy for post-traumatic stress disorder showed results that were impressive. "This is a pivotal event," said Elemer Piros, a biotech analyst at Roth Capital Partners who covers the emerging alternative mental health treatment space. "It may not seem humongous, but it is one of the best and most rigorously executed trials in the space. And the results corroborate what we have seen time and time again from smaller studies over the past two decades," he said, referencing remission rates double that of a placebo. "The magical experiences kept showing up, but no one had the courage to take it through to regulators." [link] [comments]  |
| Posted: 10 May 2021 08:09 AM PDT https://www.fool.com/investing/2021/05/10/quarterly-losses-uber-lyft-confirm-ride-hailing/ The business premise seems sound enough, at least on the surface. The problem: Owning a vehicle is more trouble than it's worth, but taxi cabs are costly and so yesterday. The solution: Just use a mobile app to summon a contracted driver who will ferry you from one place to another at a more efficient (i.e. cheaper) price. Everyone wins. Except not everyone is winning with this modern-day business model. Shareholders of ride-hailing powerhouses Lyft (NASDAQ:LYFT) and Uber Technologies (NYSE:UBER) just saw another quarter of steep losses. Both companies fared better than expected, mind you, at least on the earnings front. But both companies' losses continue to scale up in step with revenue growth rather than decline, as their two biggest expenses are directly tethered to sales. Those expenses are the cost of revenue -- what Uber and Lyft are paying their drivers -- and marketing expenses. It's past time for investors to ask what the plausible path to profitability looks like for these companies. Woman on cell phone standing in front of a broken-down car. IMAGE SOURCE: GETTY IMAGES. What's changing? For the record, the analyst community isn't fazed by the losses so far, apparently convinced that both ride-hailing brands are on the cusp of fiscal breakthroughs. Current estimates imply Uber will cut its operating losses by more than half this year, and do the same again in 2022. Those same analysts are predicting Lyft will swing to operating profitability next year. Investors are (for the most part) buying into this bullishness. The graphics below put things in perspective, starting with Uber Technologies. Notice how, thus far, the company's cost of revenue has consumed 45% to 50% of revenue. Analysts believe these costs will fall toward 40% of sales in the foreseeable future, when marketing spending is expected to slide well below 30% of revenue. Uber's profitability is projected to widen soon, but the company's not explained how its driver costs are going to be curbed. DATA SOURCE: THOMSON REUTERS. CHART BY AUTHOR. DOLLAR FIGURES ARE IN MILLIONS. The same basic concern applies to Lyft, though at different proportions. Lyft's cost of sales -- or its direct cost of delivering services -- lingered in excess of 50% of sales before COVID-19 took hold. Now expectations are that those costs can be whittled down to under 40% of revenue. Marketing expenses are projected to fall to single-digit percentages, while administrative expenses are expected to fall despite expansion into new ventures like bikes, scooters, car rentals, and mass transit (public busing) partnerships. Lyft's driver costs are supposed to inch lower, improving profits. The ride-hailing outfit has yet to explain how this biggest cost is feasibly going to fall though. DATA SOURCE: THOMSON REUTERS. CHART BY AUTHOR. ALL DOLLAR FIGURES ARE IN MILLIONS. What's missing from both of these progressive forecasts, however, is a clear explanation of how the ride-hailing business model is going to cost less on a per-mile or per-ride basis in the future than it has in the past. More scale doesn't inherently translate into profitability if most of your expenses are variable costs rather than fixed costs. Unanswered questions and overlooked threats Being pessimistic about either company's future is tough these days, of course. Both stocks are rated as buys, and each is currently trading below analysts' consensus price targets. Then there's the encouraging commentary of each outfit's top executives. Lyft CEO Logan Green explained during the company's first-quarter conference call that "as the recovery continues, we're confident we'll be able to deliver strong organic growth and adjusted EBITDA improvements." That swing to positive EBITDA should take shape during Q3 of this year, according to the company. Uber's chief Dara Khosrowshahi is just as bullish, commenting during his company's first-quarter call that "Even as we invested for growth, the benefits of scale and rigorous cost management drove an adjusted EBITDA improvement of $253 million year on year and $95 million quarter on quarter." Khosrowshahi also broadly suggested positive EBITDA figures were in sight. Package and food deliveries will help on that front. Neither chief, however, explained exactly how or why it's going to cost less to drive a passenger from point A to point B in 2021 than it did in 2019 -- before the pandemic shook things up, and when gasoline was still dirt-cheap. It's also naive to ignore how efforts to protect so-called "gig" workers aren't already threatening both companies' business models, which lean heavily on the relatively lower costs of contracted drivers (as opposed to conventional employees). The threat of that additional expense will only grow as time marches on, and even without the regulatory movement we've already seen, would-be drivers aren't being lured back en masse despite big sign-up bonuses and incentives put in place last month. Uber's management clearly conceded this headwind during last week's call, although it downplayed the actual scope of the risk. To its credit, Lyft cut its marketing spending dramatically last quarter. Uber's Khosrowshah believes his company will need less advertising in the future as well. That too may mostly be wishful thinking, though, given the competition coming to the market. Alphabet's driverless ride-hailing service Waymo is up and running in Phoenix, and the company's ultimate aim is to expand the service. In the meantime, smaller start-ups like Blacklane, Myle, and Nomad are just some of the names standing ready to swipe share from a market Uber and Lyft largely developed. The point is that marketing isn't something that's easy to simply stop doing, or even curtail. It's conceivable both of these companies will need to expand rather than reduce their marketing outlays in the future. Bottom line Both Uber and Lyft can continue to scale up, but to what end? Both have already been scaling up for some time. Expenses have merely scaled up in near-perfect step with revenue, as have net losses. Investors may want to start asking for specifics about each company's cost-reduction plans, and then decide whether or not they're plausible. As it stands now, both EBITDA improvement outlooks are tough to believe. [link] [comments]  |
| What is the longest future trend you know of that can be invested in? Posted: 10 May 2021 09:03 PM PDT Inflation or deflation, is crypto a bubble or an S curve, are value stock investors missing by not investing in bankrupt or non-profit generating companies... it seems nothing is certain these days. Which made me think. Are there long term trends that it makes sense investing in for at least the next two to five decades? For example, ARK Invest identified 5 big trends. One other big trend seems to be the end of petrodollar dominance. Boomers getting older and millennials taking over. Petrodollar slowly losing dominance. Maybe index investing dominance, but that's debatable. I'm not looking at a short-term 5 to 10 year trends such as, for example, weed stocks which I expect to reach market saturation relatively soon (but what do I know), or real estate bubbles, although perhaps it makes sense looking at the long-term trend of urbanization. Any ideas? [link] [comments]  |
| What Are the Best Online Research & Analysis Tools? Posted: 10 May 2021 09:59 PM PDT What are the best online tools available out there (free tools first, please) for doing online research & analysis, etc? I remember once seeing a chart tool which showed newslinks about the asset in question embedded into its timeline. It helped in being able to look at news events around a particular price event (spike, dip, etc) so that I could quickly see what the reason for that price behavior was. Anybody know of anything like that, especially if it's free? I'm just generally wondering what tools most people use, which ones they find to be the best and why. Are there any FAQs about this? Any tips or help would be appreciated. Also, if there are any paid tools recommended, if their prices could also be mentioned too, that would be great. [link] [comments]  |
| Posted: 10 May 2021 11:54 PM PDT On the 12th May Sotheby's will auction a Banksy and, for the first time, allow payment in both Bitcoin and Ethereum. I'm interested in what effect this might have on the value of Ethereum (especially as I have some of those) but also, the effect on other crypto currencies reputation in the general economy as a normal means to purchase goods? I'm curious from an investment perspective but also from an economy perspective. If this becomes the new norm then how will purchases of these kind of assets be tracked / taxed / audited etc. And what would this spell for banking in general. I see it as a potential paradigm shift in the way things are sold. Especially if the successful bidder actually pays for the Banksy using crypto currency. Really interested to hear thoughts on this? Do you think its just a stunt (Banksy is known for them) or a genuine effort to open up bids to people who hold a lot of their wealth in crypto? Or the dawn of a new era of crypto currency transactions? [link] [comments]  |
| Posted: 11 May 2021 03:31 AM PDT I've been giving this a lot of thought and I'm looking for some opinions. I've been reading about tax loss harvesting Short version is that you can use losses to offset your tax liability on gains. Important: You can't immediately buy back a stock you sell at a loss for 30 days, but this doesn't apply to ETFs. You could, for instance, harvest the loss on a S&P 500 ETF like IVV and immediately buy a different S&P 500 ETF like VOO to keep the same exposure. I've been thinking about how I might do this with my Ark funds that have taken a beating during this tech crash. Let me give you a real example:
So the risk there, I guess, is that the ARK funds will shoot back up and I'll miss the gains (though more realistically it'll just keep dropping cuz tech is crashing). Remember, I can't buy back the ARK funds for 30 days or it would trigger a wash sale. My initial thinking was... well, maybe I can just buy a similar tech-heavy ETF immediately after selling ARK. That way, if Tech rebounds, I can ride it back up. Or, alternatively, if tech continues to drop I'd just sell that ETF 30 days from now, harvest those losses as well, and buy back ARK. Problem is, I wasn't really seeing any ETFs that mirror ARK. My Plan B is this... what if I just look at ARK's actual holdings (for instance, with ARKK you can see the 58 stocks and their weighting here) and just buy the individual stocks with the same weighting? In theory, this seems like it would be relatively easy for me to do with a spreadsheet. If I am holding $10,000 worth of ARKK and know that Roku makes up 5.2%, I just buy $520 worth of Roku.... and do a similar thing with the other 57 stocks. 30 days from now, I'd be able to sell all the individual stocks and buy back my $10,000 of ARKK. That way, I'm literally holding the exact same exposure so that if ARKK rebounded in the next 30 days, I'd ride it up while still saving $7200 in taxes due to the loss harvesting. I suppose the next issue would be that ARKK is actively managed and could see stocks sold/bought over the next 30 days, but I could probably manually handle mirroring that, right? And really, the main thing I'm trying to account for is the entire tech sector rebounding within the next month, which is pretty unlikely as-is. Thoughts? Tell me why this is a bad idea. Tell me why you ARK bagholders aren't doing the same thing. Thanks. [link] [comments]  |
| Investing during a potential bubble Posted: 10 May 2021 09:06 AM PDT I've posted this question in the advice thread but I haven't read anything that has satisfied my curiosity, so I would love to hear from the greater r/investing community if possible. There's been no shortage of posts regarding high valuations / the potential bubble / the supposedly inevitable correction/crash/bear market. Whenever there is a post asking how to best prepare/protect against this potential correction, the general response is "lump sum always beats DCA / don't try to time the market." If I first began investing in a basic s&p 500 index just before the dot com bubble crashed, and lump summed all of my cash, it would have taken me nearly two decades to get out of the red, that is, if I was able to hold all that time without selling at a loss. As a new investor, I'm afraid of this happening again. I'm debating whether or not it's even worth investing right now, but the general sentiment seems to be to never hold cash trying to time the market. I'm not investing for retirement, as I have a pretty good pension plan and I'm still relatively young (25). For someone with no money currently in the market who is looking to invest with more short term goals (say 5-10 years), what is the best option given current valuations? With the knowledge you have now after years of investing, what would your strategy be? Edit: Thank you all for the responses! This has been very helpful / informative. [link] [comments]  |
| DraftKings (DKNG) Due Diligence - The "King" of Online Sports Betting Posted: 10 May 2021 10:04 AM PDT One lucrative industry is going through massive growth caused by the speedy de-regulation and legalization throughout the U.S. This market is… Online Sports Betting (OSB). We will be taking a bird's eye view into the one and only DraftKings. Why DraftKings? DraftKings is already a market leader with roughly 20-40% market share (this varies by state). Their main competitors are FanDuel who has yet to IPO. Close 2nd and 3rds are Dave Portnoy's Barstool app and BetMGM. FanDuel and DraftKings have such a huge lead in front of the market because they've been able to transition their Fantasy Sports apps into OSB. This is all about branding. When you think fantasy sports and the possibility of being able to bet on them it's only natural you think of DraftKings, FanDuel, or now Dave Portnoy who is becoming more relevant with Barstool. DraftKing's branding started years ago with their entry into the fantasy sports market and they are now plastered on all things sports. Sports-betting is still a small piece of the pie when it comes to anything Casino or gambling, but the covid lockdowns have started transitioning the legalization of Online Sports Betting at a faster pace. This is the result of massive policy changes that help both DraftKings increase their addressable market and eventually governments who will also take a cut via taxes. The way it is: Governments taking people's money directly from taxes = BAD. Governments legalizing lucrative industries and taxing the crap out of them = GOOD. The Online Gambling industry is set to go through hyper-growth over the next 10 years. Here's a forecast done by GrandViewResearch What makes DraftKings an alluring investment? For the most part DraftKing's revenues are RECURRING. Remember, although this is "gambling" many people enjoy OSB as a hobby and losing (or winning) money is all part of having "fun". The goal of most online gambling apps/companies right now is all about user acquisition and paying whatever it takes to secure their market share. This is a tactic for those with deep pockets and willing to spend as the cost of acquisition per user racks up FAST. The two ways these companies are acquiring customers are through:
You can see how both these marketing tactics come with high costs, but as long as these companies keep their Customer Acquisition Costs (CAC) lower than a user's Life-Time Value (LTV) they will be laughing all the way to the bank. It's like saying they will spend $100 for a customer that will eventually provide $200 in revenues. Closing In my opinion DraftKings is the Starbucks or Dunkin Donuts of the online gambling industry. You are investing in THE main brand when it comes to sports betting. Although with expensive costs allocated to marketing they are securing market share in an industry that is going through a massive de-regulation and shift in policy changes. Does their current valuation match the TAM and expected growth? That's for you to decide, but at least know that you are investing in one of the top players in the OSB market with one of the strongest brand names out there. [link] [comments]  |
| Some long-term strategies worth remembering in today's speculative and volatile markets Posted: 10 May 2021 06:22 AM PDT Before we get into the juicy details, think for yourself: What are you shooting for? What is your financial goal? How risk-sensitive are you? Answering these questions will help to set you up for eventual success and develop your individual asset allocation strategy accordingly. Let's get to the facts: actively trading stocks, and timing market entries and exits come with inherent risks. Missing the best 10 days in the market between 2010 and 2020 would mean an overall decline of 33% (see Bank of America chart below). Moreover, it is unlikely you sell your assets right before a crash and buy back at the bottom. In most cases, the worst days are followed by the best days which would put you back on square one holding your cash waiting for the crash. Strategies to Pick StocksAlthough stock-picking follows a more active approach, long-term investing means being active 1% of the time while leaving your portfolio alone for the other 99%. It is important to keep in mind that less than 10% of all public companies drive 100% of long-term stock-market returns. Therefore your mission is to find the 10% and patiently ride the wave. Some hands-on advice:
I believe that beating the market is possible if you are patient and willing to invest time. After all, the business world is like a car race. In the last quarter of the race, it becomes more evident who might win, and your odds can be calculated with minimized risk exposure. Then you invest in the top-performing racers and still reap much of the benefits. Keep in mind that most stocks underperform the market. The outsized gains of a few winners are pushing your portfolio higher and make up for any losses on the way. CashOh, sweet cash sitting ducks in my account, what am I going to do with you? At current rates of around 1% (if even) it would take 70 years to double my money. By that time it is more likely that I am buried 6 feet underground. I wouldn't even get to experience my slim gains. Yet there is some upside to holding a percentage of your overall portfolio in cash. Besides, you can't pay your expenses off by handing out your stocks. Holding some cash is in both active and passive investing approaches detrimental. I advise holding approximately 5-15% of cash as it allows you to:
Buying stocks in times of recession has historically brought about outsized gains for investors. It is worth remembering, the more it hurts holding some cash in market booms the more likely you will profit from a swift down-market. The best time to hold cash is when it really hurts to do so. Holding cash allows you to be prepared, and you don't have to worry about timing the market. Full article on leofontana.net. [link] [comments]  |
| My shortlist for screening stocks against inflation Posted: 10 May 2021 05:53 AM PDT It seems many are trying to bail on stocks because inflation. (collectibles that we treat as currency, commodities etc). I wanted to explore is if there are certain categories of stocks that are better positioned against Inflation. So I came up with a short-list of they type of stocks I might look for in a period with volatile inflation.
What would you do if you were worried about inflation eating your gains? [link] [comments]  |
| werid financial statements of Skillz Posted: 10 May 2021 08:47 AM PDT After I heard about their earnings, I wanted to look at specific financial statement. I first went to their website and found quarterly reports that I saw online. However, when I went to SEC.gov, their 10-q filings seemed to be a lot different than Skillz quarterly results? https://www.sec.gov/edgar/browse/?CIK=1801661&owner=exclude Also, their filings were under different name, is this becauee Skillz is a blank check company? I thought all publicly traded companies were supposed to file under SEC.gov https://investors.skillz.com/financials/sec-filings/default.aspx Lastly, does anyone see 10-q for q1 here? it's their official website but only have 8-k for 2021. [link] [comments]  |
| If an ETF reflects the stock prices of the underlying securities, why do I see a bid/ask? Posted: 10 May 2021 06:46 AM PDT Not sure if this is geared more for /r/trading or not, but thought to try here first. I wanted to buy a small amount of an Ethereum ETF listed here in Canada. But I noticed there is a bid/ask on it. Does a bid/ask mean much in the context of an ETF? Those numbers were definitely different, but if an ETF is a reflection of various securities, and not a driver (at least directly) of the price, curious how the bid/ask comes into play. For example, this ETF had a bid/ask of CAD$18.18/$18.23 when I bought it (market price). EDIT: I realize I should have just said "reflects the prices" in the title. ETF can be other than stocks [link] [comments]  |
| MX Arbitrage opportunity with a 6 months timeframe Posted: 10 May 2021 09:02 AM PDT Hi all, I've been a lurker and got some nice ideas form here, so thanks for that. Now it's the time for me to give something back. I discovered in the weekend that Magnachip is being bought up in a 29$ per share deal while the price of the stock is just 24$ per share. (https://www.magnachip.com/magnachip-enters-into-definitive-agreement-with-wise-road-capital-in-a-take-private-transaction-valued-at-1-4-billion/) The deal has a definitive agreement and "The transaction is expected to close during the second half of 2021, subject to customary closing conditions, including the receipt of shareholder and regulatory approvals". Also "The transaction is fully backed by equity commitments and not contingent on any financing conditions. " The way I see it it's a 20% win in less than 6 months (they said second half of the year, so most probably will be sometime September-October-November). The risks are small: Shareholders might oppose- but this is highly unlikely given the company is 78% own by institutions and the board of directors approves the deal. What do you guys think? I went and put 10% of my portfolio in this, was it dumb? [link] [comments]  |
| HTZGQ A BUY? BIDDING WAR HAS INCREASED THE EQUITY PAYOUT 3 TIMES Posted: 10 May 2021 08:17 AM PDT They are actively bidding up the equity payout and warrants will assigned to shareholders. "Their proposal offers a 50 cents in cash recovery to current Hertz equity holders and allows them to buy equity in new Hertz, either through a rights offering or through warrants. The group has pegged the value of this package at roughly $2.25 per share, according to one person directly familiar with the matter. " https://www.ft.com/content/c24245fa-88e2-4dcc-a5b2-78d945970b1d [link] [comments]  |
| LFC CONFUSION HELP!! Value investing Posted: 10 May 2021 07:19 AM PDT Hi everyone, I am new to the group but been investing for a while. I'll keep it short. I'm trying to get the intrinsic value of LFC by using Buffet's method and Pabrai's DCF. Both methods are spitting out strange numbers. I've applied a 50% factor of safety to the Pabrai method and it's suggesting that the value of the shares should be $739 and buffets method is suggesting $105 per share. LFC is currently trading at $10. Either I have a hidden gem or a huge error. Could someone please calculate the intrinsic value using your own method and show me the workings, nothing seems to be working for me. Thanks. [link] [comments]  |
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