Daily General Discussion and spitballin thread - June 06, 2021 Investing |
- Daily General Discussion and spitballin thread - June 06, 2021
- Daily Advice Thread - All basic help or advice questions must be posted here.
- Why is having "liquidity" in markets considered important enough to give "market makers" special privileges (such as naked shorting)?
- Negotiating Brokerage Fees and Commissions
- Quick question about options.
- Why would anyone ever choose a Traditional 401(k) plan over a Roth 401(k)
- S&P500 vs Russell1000 - popularity vs stability?
- Confused about what is in my Common Trust Fund (CTF)
- Undervalued stocks in an overvalued market
- Baltic Dry Index falls for 8 consecutive days, what's the outlook of freights and shipping in the near future?
- Why are Biotech ETFs (XBI) so low right now?
- Looking for feedback on my medium term aggressive strategy using margin.
- Is Palantir on a league of its own?
- Over The Counter Market Investing
| Daily General Discussion and spitballin thread - June 06, 2021 Posted: 06 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: 06 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]  |
| Posted: 06 Jun 2021 12:56 AM PDT I've been learning more about how the stock market works and I'm amazed that naked shorting legal, and that financial firms have mechanisms which permit it to happen. I hear that "market makers" have special privileges to naked short sell, and these privileges exist in order to "provide liquidity". Why is providing liquidity considered to be a good thing? In my mind, in an illiquid market, there might be a massive spread between the bid and ask and (without market makers able to nakedly short sell) this might mean that no trade occurs for a long time until one side cracks and changes their price to close the spread. But... why would that be a bad thing? So there's a big spread for a while and no trading occurs? So what? What's the problem? Since naked shorting is so transparently an opportunity for market manipulation and fraud, there must be some rationale for why it exists, right? What's the worst that could happen if market makers were not able to nakedly short? [link] [comments]  |
| Negotiating Brokerage Fees and Commissions Posted: 05 Jun 2021 06:12 AM PDT I transferred a good chunk of my brokerage account out from Brokerage A to Brokerage B. Within the hour, Brokerage A placed a phone call and assured me that they could match any bonus Brokerage B offered or negotiate any trading options fees or commissions. Has anyone had experience negotiating down options fees, margin rates, or even getting bonuses with brokerages? This was the first time I learned about the possibility. What rates did you end up getting, if so? [link] [comments]  |
| Posted: 06 Jun 2021 12:23 AM PDT New investor here, still trying to wrap my head around options. I've understood the basics of how to call and put options work and what they do, but I'm still a little confused about how you take profit if the trade works out. First off I don't live in the US, so I have to use Plus 500 if I am to start trading options (if you have any other recommendations please let me know). Here's my question. To take a profit from a call option, do I have to exercise the option and buy 100 stocks and then sell them on the market if they're over the strike price. If not, can I sell the option contract itself, and if I sell the contract, do I have any responsibility after I sell it as the seller? Thanks a ton in advance. [link] [comments]  |
| Why would anyone ever choose a Traditional 401(k) plan over a Roth 401(k) Posted: 05 Jun 2021 07:13 PM PDT I understand that you can lower taxable income with a Traditional 401(k) plan. But you will end up paying taxes on your earnings when taking distributions. Earnings are much larger than contributions when you have been investing for 20+ years. If someone decided to invest in a Traditional 401(k) they will owe taxes on 20 years worth of earnings JUST because they wanted to save a lower taxable income. With a ROTH 401(k) plan, you dont have to pay anything on decades of earnings. What am I missing? [link] [comments]  |
| S&P500 vs Russell1000 - popularity vs stability? Posted: 05 Jun 2021 12:32 PM PDT Hi all. Newcomer here, who has been amazed on the generally positive attitude on the sub. I've been researching lately for a long term investment, and while I consider S&P500 a good option, I've also came across Russell1000. After reading and looking at the data a bit, the main takeaways I get are:
Obviously, the S&P500 cos. are chosen according to certain rules, but in any case there's human intervention. See e.g. Wikipedia. I tend to like the idea of a fixed algorithm behind the selection of the companies, particularly for long-term investments. So: what are your thoughts or knowledge about this? Am I making any clear mistake on the rationale? [link] [comments]  |
| Confused about what is in my Common Trust Fund (CTF) Posted: 05 Jun 2021 09:20 AM PDT Hello, I have shares in a common trust fund with Comerica Bank. The portfolio itself is called the Total Return Investment Portfolio (TRIP). Recently I called the portfolio manager to ask some questions about the account because I wanted to learn more about what securities I hold. I review the account statements regularly but these don't list the mutual funds or other securities that make up the portfolio. I was told that there's no way to tell me which mutual funds make up the account, and there's no prospectus to give me, because the CTF holds shares in "thousands of companies." I found this to be suspicious. Does anyone know about common trust fund investment accounts? Do they work differently than regular investment accounts? Thanks very much [link] [comments]  |
| Undervalued stocks in an overvalued market Posted: 06 Jun 2021 04:00 AM PDT First off is huya. Huya is a twitch competitor in the Chinese region. They are mostly owned by Tencent and therefore have exclusive rights to stream Tencent games. Their current p/e works out to 25 and peg of 0.6. Excepted growth in earnings is around 44 percent this year and a potential merger is underway with a competitor that would give them a monopoly on the industry in China and thus market in-elasticity. They have a market cap of 3 billion dollars and have a whopping 1.5 billion in cash meaning losing over 50 percent is a near impossibly as the book value would exceed the share price. It's down 60 percent from it's peak in a growing market and i thought I'd share it with you. Second one is General Motors. This may seem like an interesting one as General Motors is thought of a slow growing automotive company but gm currently trades at a p/e of around 10. With almost 20 billion dollars on its balance sheet. More importantly the company is on the forefront of the automotive industry. They have a controlling stake in an autonomous driving company called cruise which is now valued at 30 billion dollars or half their market cap. They have the second best battery technology on the market and they have a profitable electric car business and expect to invest 20 billion dollars into electric cars in the next couple of years. They produce battery powertrains that are extremely efficient and are the second cheapest to make and are selling it to third party companies. Overall they are on the forefront of multiple industries and are turning into more of a technology company whose future profits could very well be driven by strong software profits instead of hardware Third one is Corsair. Corsair gaming currently trades at a p/e of around 20. Last year it had revenue growth of 75 percent and its forward pe now works out to a 15, which is extremely low for the growth of the company. As streaming picks up so has the demand for the companies products do as well they own Elgato (the biggest streaming equipment brand on earth), they also own origin pc, and are extremely good value because they can secure deals directly from Corsair giving them advantage in the sector. Overall Corsair has high growth,low pe, and an exceptional outlook. Fourth and final one is baozun. Baozun does e-commerce distribution and management for overseas companies coming into the Chinese e-commerce market. E-commerce in China is a rapidly growing industry not expected to slow down at all in coming years and as China continues to open up it's economy by reducing regulations on foreign brands, we should see baozun capitalise on such. It's p/e is a bit higher then the rest at 35 but it's expected growth of 33 percent puts that down to 27. It has a good balance sheet with 400 million in cash and also has a shopify like business for small businesses in China. Overall a great stock at a fair price. Apparently this wasn't welcomed in Wall Street bets so I'd thought I'd share it here. [link] [comments]  |
| Posted: 05 Jun 2021 03:01 PM PDT https://tradingeconomics.com/commodity/baltic "The Baltic Dry Index fell for the 8th straight session to 2,438 on Friday, a new low since April 19th, amid concerns over demand, price controls of key commodities and delays at Shenzhen's port of Yantian after a Covid-19 outbreak earlier closed part of the facility. The capesize, which tracks iron ore and coal cargos of 150,000-tonnes, slumped 65.3 to 2,524, a near two-month low. Meanwhile, the panamax index which tracks cargoes of about 60,000 to 70,000 tonnes of coal and iron ore, rose 1.3% to 2,933, the highest since May 14. Among smaller vessels, the supramax index edged up 8 points to 2,449. The Baltic Dry Index fell 6% in the first week of June, the fourth straight weekly decline" I got into some shipping stocks like DAC, DSX in mid-March due to some pertaining posts here about shipping and anecdotes by people in the chain. Would like to see if there are any updates on the matter from knowledgeable people, particularly if the scope of the business has shifted from overbooked and backlogged forever, to less pressure, and if inflation of prices are consistent regardless of the index's movements. [link] [comments]  |
| Why are Biotech ETFs (XBI) so low right now? Posted: 05 Jun 2021 12:38 PM PDT Looking at XBI, and I see it has a P/E ratio around 11. Seems like a good play long term with the average P/E now so high, and innovation on the horizon for this space. Looking at some of the talking heads online, and they are just bearish about biotech, but I guess I must me missing something. Any thoughts on why the biotech world has such a low P/E and doesn't seem to be booming along with the rest of the market? [link] [comments]  |
| Looking for feedback on my medium term aggressive strategy using margin. Posted: 05 Jun 2021 08:43 AM PDT Hi everybody! First time posting here but I figured this would be a solid place to start to get some feedback on a strategy that I have been using involving about 25% margin and using dividends to pay the interest down. Over the years ive found that when something seems easy, its generally because I'm missing something in the bigger picture which isnt factored into my overall plan so any feedback would be greatly appreciated! This portfolio is founded on higher cap tech heavy stocks leaning towards growth, some value and some less fun index funds, the key component is really focusing it around dividend paying investments…I've chosen to omit the actual investments as to not create any bias or general judgement on my holdings. I am simply looking for feedback on this strategy regarding my utilization of margin and how to more effectively use it. So here's what ive been doing for about the past 6 months. I started this portfolio with 10k and have generally been DCA'ing in every week or so and recently I made the decision that on some of my positions the bottom was in and I took about 20 percent margin to buy more. Currently the entire portfolio is worth about 15k and here's where I am looking for feedback..My plan is just to continue to DCA in as I normally do, pay down a small amount of my margin every month and then when the opportunity arises buy back in using leverage when I feel like a dip presents an opportunity. My margin interest rate is about 6.5% so its not the end of the world and my dividend payout will be used to cover majority of the interest on that anyway. I personally feel that 30% seems to be a safe number however I could be completely wrong. I guess my question is, am I utilizing margin effectively or am I making a mistake by paying down margin too quickly where that money could be better utilized by just buying more. What am I missing and/or what are some strategies you use regarding margin for growth heavy stocks? Am I paying my margin down the right way or is it better. Also not looking for "dont use margin"…obviously I am aware of the risks of using margin. I know theres a lot that I'm leaving out here with my personal risk tolerance, but I'm just kind of trying to get a feel for the best way to utilize leverage in this weird turbulent market. Another note, I do not wish to exceed 30% margin under any circumstances. This is just a portfolio that I have to learn and develop some skills and not max out margin and try to make as much money as fast as possible. EDIT: I want to avoid selling anything to pay down my margin, I would rather pay it down from other sources of income rather than selling stock to cover that cost as well. [link] [comments]  |
| Is Palantir on a league of its own? Posted: 05 Jun 2021 08:31 PM PDT Through my rudimentary research, I don't think there are other companies out there capable of doing what Palantir can accomplish. Am I wrong? I truly believe the saying that data is the new oil and I have been following the lead of Cathie Wood and her ARK Invest team into snapping up shares of PLTR. What do my fellow Redditors think? Is PLTR a great long-term investment? I have read quite a few articles from naysayers who said PLTR is too expensive based on valuation and that their very extensive stock-based compensation will dilute shareholders value. But I disagree with all these articles on the premise that they basically just ignore the growth PLTR has been and will be enjoying and the technology and AI that underlie the business model of PLTR. Various US government departments have been signing contracts with PLTR. They can't be wrong, can they? [link] [comments]  |
| Over The Counter Market Investing Posted: 05 Jun 2021 05:28 AM PDT Anyone know of any apps/online brokers that allow for investing in Over the Counter markets? There's a couple companies id like to invest in but there really aren't any full service brokers in my area. The company I currently work for is listed otc in the us but they are one of the largest companies in France and listed on the euronet as a CAC 40 company. They do allow me to purchase their stock through a specific program at work once a year with a 20 percent discount off the market price and a euro match usually around 350-400 euros; however, I can only purchase through them at the end of the year and it has a hard limit on the amount I'm allowed to purchase. I've followed this subreddit for quite a while but I've don't really recall seeing anyone talk about OTC markets or I would of asked them specifically. Sorry if asking questions like this isn't allowed; I read over the rules and I didn't see anything specifically saying that I couldn't post a question like this. Thanks in advance [link] [comments]  |
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