Daily General Discussion and spitballin thread - June 28, 2021 Investing |
- Daily General Discussion and spitballin thread - June 28, 2021
- Daily Advice Thread - All basic help or advice questions must be posted here.
- People who say “value investing” is dead are idiots
- By One Measure, March 2020 Was Worse Than the Financial Crisis
- Stock Market Power Rankings for July 2021
- FRX<BODY on monday morning
- Charles Schwab: Higher margin requirements for short positions on AMC/GME.
- What am I missing? DSS DD looks great, but prices keep going down
| Daily General Discussion and spitballin thread - June 28, 2021 Posted: 28 Jun 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: 28 Jun 2021 02:00 AM PDT If your question is "I have $10,000, what do I do?" or other "advice for my personal situation" questions, you should include relevant information, such as the following:
Please consider consulting our FAQ first - https://www.reddit.com/r/investing/wiki/faq And our side bar also has useful resources. Be aware that these answers are just opinions of Redditors and should be used as a starting point for your research. You should strongly consider seeing a registered financial rep before making any financial decisions! [link] [comments]  |
| People who say “value investing” is dead are idiots Posted: 27 Jun 2021 12:07 PM PDT Value investing, at its core, is essentially buying great businesses at prices lower than their intrinsic value. Combine good analysis of intangibles, and you can find some really good plays. I feel, however, people have chosen to ignore the potential of lower priced, lesser known companies for companies trading well over their intrinsic values. Apple was trading at around 100$ in the early 2000's, and the fundamentals made sense for a buy back then, but people didn't buy it until it became mainstream. There are still many companies TILL THIS DAY that have amazing fundamentals, are in up and coming industries, and also have competitors doing decently well. If you can find these companies and hold on to them, then how is value investing dead? Is it easy to find the next Microsoft or Johnson and Johnson? No. It wasn't easy in 1995, it wasn't easy in 1965, and it's not gonna be easy in 2021. But the notion that value investing is some how less effective would mean that fundamentals don't matter long term. I think that's a very dangerous narrative to push. If you're not betting on a companies fundamentals for the long term, then what are you betting on exactly? Somebody to come along pay more for the stock you just bought? [link] [comments]  |
| By One Measure, March 2020 Was Worse Than the Financial Crisis Posted: 27 Jun 2021 08:44 PM PDT One of the hallmarks of last year's market crash was the speed with which the Federal Reserve responded to it, stepping in to purchase billions of dollars worth of U.S. government debt within days of the Treasury market seizing up. A new staff working paper from the Federal Reserve helps explain the urgency behind the central bank's actions, exploring the mayhem that engulfed the Treasury market in 2020 when the yield on the benchmark 10-year jumped by 65 bps in fewer than 10 days as hedge funds unwound billions of dollars worth of leveraged trades. The trade typically saw hedge funds borrow money in the repo market to arbitrage the difference between Treasuries in the cash market and futures. But in March of 2020, as investors stampeded into the most liquid contracts in the market (Treasury futures), the spread between the two suddenly went haywire, leaving hedge funds to nurse significant losses. You can see just how painful the trade was in the below excerpt from the paper, which show hedge funds' average returns over time: "Given that the mean quarterly return over our sample is 2.3% with a standard deviation of 8.1%, a sector-wide return of -9.9% reflects unprecedented losses for these hedge funds, which is also depicted in Figure 5. This indicates that during the COVID-19 crisis in March, these hedge funds were under a significant amount of stress, to a greater extent than at any point since Form PF reporting started in 2012. Clearly, the current crisis unfolded more precipitously than the global financial crisis in 2007-2009, which was characterized by relatively longer periods of a buildup of uncertainty from 2007 onward." By March 15, after yields had been spiking for about seven days, the Fed announced a new U.S. Treasury and mortgage bond purchasing facility aimed at soothing the mayhem in the world's most important funding market. By the end of the month, the central bank had purchased some $775 billion in U.S. government debt and $291 billion in mortgage-backed securities guaranteed by U.S. housing agencies. According to the paper, much of the blow-up in basis trades occurred not because of a pullback in repo funding from big dealer-banks trying to protect their balance sheets, but rather as function of good old-fashioned liquidity management in anticipation of investor redemptions. Here, longer lockups on hedge fund money may actually have helped protect the market and prevent the crisis from becoming much worse. Or, as the authors put it: "We find evidence that the cutback in hedge fund UST exposures was driven by liquidity management considerations and investor redemption risks. By the end of March 2020, hedge funds with significant Treasury exposures increased their cash holdings by over 20% and scaled down the size and illiquidity of their portfolios. This boost to the precautionary liquidity holdings and the step back from UST market activity were less pronounced for funds with stricter share restrictions and lower redemption risk. Longer share restrictions allowed hedge funds to avoid fire sales and hold onto more of their convergence trades, thereby bolstering both fund and Treasury market stability … Compared to previous crisis episodes, the March 2020 shock was unprecedented, particularly in the speed and scale at which extreme moves occurred and in its impact on otherwise safe and liquid markets such as the UST market." The whole paper is available here. https://www.federalreserve.gov/econres/feds/hedge-fund-treasury-trading-and-funding-fragility-evidence-from-the-covid-19-crisis.htm Here is the Link to the Bloomberg article: https://www.bloomberg.com/news/articles/2021-06-28/by-one-measure-march-2020-was-worse-than-the-financial-crisis?sref=K5kiE5Jr [link] [comments]  |
| Stock Market Power Rankings for July 2021 Posted: 27 Jun 2021 12:02 PM PDT I did a lot of research this weekend trying to put together a good list for the best stocks to buy in July. Feedback and ideas are appreciated! Obviously we're all not gonna have the same opinions but I think this list is a good guide. Let me know what ya think. I'm of the opinion that the market is going to rotate towards beaten down growth stocks but not the ones that are extremely high flyers. For example, some stocks that made the list are those such as AMD, SoFi, and Disney. I think the most controversial part of where I think the market is headed is in regards to Chinese companies. I am of the opinion that companies like JD.com, Alibaba and even though it didn't make my list, Baidu will see significant recoveries in the coming months. Although, I won't rule out the idea of them being value traps entirely and I could understand investor fears relating to them as their is so much uncertainty. Thanks for hearing me out and for any ideas you may have. https://www.fosterfinancialfreedom.com/post/stock-market-power-rankings-july-2021 [link] [comments]  |
| Posted: 27 Jun 2021 08:52 AM PDT What do you guys think will happen on open Monday? Merger is complete but we also have 30% short interest. Is this something investors are worried about? I am holding long as an investor with 430 shares. Trying to get a feel for public consensus. Also curious about what marketing the company will release, they mentioned they are holding until post merger to begin really marketing this merger especially to the broader consumer. I certainly hope Schwarzenegger and Shaq play a big part of it. I think they are key to the short term success of the company. [link] [comments]  |
| Charles Schwab: Higher margin requirements for short positions on AMC/GME. Posted: 27 Jun 2021 08:46 PM PDT *Not financial advice Shcwab has updated their margin requirements for short positions for AMC/GME to 200% and 300% respectively. (https://www.schwab.com/margin-updates) It's no coincidence we see this pair of stocks appear together here. Others will possibly follow suit, this increased requirement shows we are covering ground. Hold strong, remember the MOASS is always next week, keep the pressure up on those dirty hedge funds. [link] [comments]  |
| What am I missing? DSS DD looks great, but prices keep going down Posted: 27 Jun 2021 02:41 AM PDT Hoping someone smarter than me can chime in. Looking at Document Security Systems (DSS). I'm new at this. It is basically a company that buys and sells other companies in various industries. They recently closed 50 million bucks in a public offering, and they bought a few companies and the executive chairman seems pretty bullish cuz he bought a chunk of shares all around the same time. They have a ton of cash, their Current Ratio is great, their P/E is great. Their numbers look good to my limited understanding. The leadership team seems to have swapped over in 2019. They grabbed the COO from one of their acquisitions, Premier Packaging Corporation, which also seems to be driving a good chunk of their revenue. Seems that he is working to help the other companies in the portfolio do what he did for the packaging company. He's the business guy on the leadership team. The rest seem to be savy financial guys and lawyers. It really seems like the company did a big transition in 2019 and it sounds like they are making smart plays. My only concern is that they have issued closed public offerings of common stock 6 times since 2019. Usually small amounts, like 3 to 6 million, but the last 2 were bigger, 30 and 50 million. I'll admit, I'm not 100% on what this will eventually mean if I buy. From my understanding, if I owned stock, my ownership percentage would be diluted, but my share price would stay the same unless normal things happen to lower a share price. Since I don't really participate in voting or anything, all this means to me is that the company I invested in has more capital, which if the business model is to buy and boost companies, that seems like a good thing. So, why shouldn't I buy this stock? What am I being too dumb to see? Thanks for helping me here. I'm trying to get better at my dd. figured opening my mouth here and potentially sounding like an idiot is a good way to learn! [link] [comments]  |
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