Daily General Discussion and spitballin thread - June 08, 2021 Investing |
- Daily General Discussion and spitballin thread - June 08, 2021
- Daily Advice Thread - All basic help or advice questions must be posted here.
- The lifespan of SPY depends on the lifespan of 11 specific millennials. SPY will cease to exist 20 years after the last of them dies.
- Deutsche Bank warns of global ‘time bomb’ coming due to rising inflation
- Biogen (BIIB) drug Aduhelm (Aducanumab) Approved by FDA for Alzheimer's Disease Treatment
- Capturing Alpha using Risk Premia
- The very first Psychedelic stock on the TSX and soon to be the 2nd on the NASDAQ - Field Trip Health Making all the right moves. LIVE on CNBC @ 10:45AM
- 200+ Years of Asset Class Returns & Economic Future Commentary
- How would US Inflation affect other countries?
- When do you buy back your covered calls?
- A failed attempt at beating VOO
- Ivanhoe Mines - Tier 1 Copper Deposit vs south Africa threats?
- Thoughts on the future of Alibaba
- Anyone else feeling bullish on PSY?
- Cigna International Taps Teladoc Health To Expand Telehealth Capabilities In India
- Can ETFs 'Wag the Dog' ? How does it work?
- Investing in physical goods
- Fidelity Fully Paid Lending vs. Interactive Brokers Stock Yield Enhancement (small DD)
- Why is the redemption value of a bond usually higher than the initial price of that bond?
- WELL Health Acquires MyHealth - making it Canadas Largest Medical Clinic Operator.
- Minimizing capital gains taxes on Robinhood
| Daily General Discussion and spitballin thread - June 08, 2021 Posted: 08 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: 08 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: 07 Jun 2021 09:20 PM PDT https://www.bloombergquint.com/markets/meet-the-spy-11-kids-with-250-billion-riding-on-their-lives Quote from the article: "SPY as we know it will cease to be on Jan. 22, 2118, or 20 years 'after the death of the last survivor of the eleven persons' -- whichever occurs first." And apparently at least 8 of the 11 people didn't even know their role in the creation of SPY (since they were babies when it happened and I guess no one told them). Edit: In case anyone was wondering, yes, this is mentioned in the SPY prospectus: https://www.ssga.com/us/en/institutional/etfs/resources/doc-viewer#spy&prospectus Quote from the prospectus: "The Trust has a specified lifetime term. The Trust is scheduled to terminate on the first to occur of (a) January 22, 2118 or (b) the date 20 years after the death of the last survivor of eleven persons named in the Trust Agreement, the oldest of whom was born in 1990 and the youngest of whom was born in 1993. Upon termination, the Trust may be liquidated and pro rata Units of the assets of the Trust, net of certain fees and expenses, distributed to holders of Units." Just thought this was an interesting fact that not many people may be aware of. Funny how old financial laws work. [link] [comments]  | ||||||||||||||||||||||||||||||
| Deutsche Bank warns of global ‘time bomb’ coming due to rising inflation Posted: 07 Jun 2021 10:19 PM PDT Using CNBC as I'm not seeing a better source at the moment. Inflation may look like a problem that will go away, but is more likely to persist and lead to a crisis in the years ahead, according to a warning from Deutsche Bank economists. In a forecast that is well outside the consensus from policymakers and Wall Street, Deutsche issued a dire warning that focusing on stimulus while dismissing inflation fears will prove to be a mistake if not in the near term then in 2023 and beyond. The analysis especially points the finger at the Federal Reserve and its new framework in which it will tolerate higher inflation for the sake of a full and inclusive recovery. The firm contends that the Fed's intention not to tighten policy until inflation shows a sustained rise will have dire impacts. "The consequence of delay will be greater disruption of economic and financial activity than would be otherwise be the case when the Fed does finally act," Deutsche's chief economist, David Folkerts-Landau, and others wrote. "In turn, this could create a significant recession and set off a chain of financial distress around the world, particularly in emerging markets." As part of its approach to inflation, the Fed won't raise interest rates or curtail its asset purchase program until it sees "substantial further progress" toward its inclusive goals. Multiple central bank officials have said they are not near those objectives. In the meantime, indicators such as the consumer price and personal consumption expenditures price indices are well above the Fed's 2% inflation goal. Policymakers say the current rise in inflation is temporary and will abate once supply disruptions and base effects from the early months of the coronavirus pandemic crisis wear off. The Deutsche team disagrees, saying that aggressive stimulus and fundamental economic changes will present inflation ahead that the Fed will be ill-prepared to address. "It may take a year longer until 2023 but inflation will re-emerge. And while it is admirable that this patience is due to the fact that the Fed's priorities are shifting towards social goals, neglecting inflation leaves global economies sitting on a time bomb," Folkerts-Landau said. "The effects could be devastating, particularly for the most vulnerable in society." Most on the Street see tame inflation To be sure, the Deutsche position is not widely held by economists. Most on Wall Street agree with the Fed's view that current inflation pressures are transitory, and they doubt there will be any policy changes soon. Jan Hatzius, chief economist at Goldman Sachs, said there are "strong reasons" to support the position. One he cites is the likelihood that the expiration of enhanced unemployment benefits will send workers back to their jobs in the coming months, easing wage pressures. On price pressures in general, Hatzius said that much of current spike is being driven by "the unprecedented role of outliers" that will ebb and bring levels back closer to normal. "All this suggests that Fed officials can stick with their plan to exit only very gradually from the easy current policy stance," Hatzius wrote. That will be a mistake, according to the Deutsche view. Congress has approved more than $5 trillion in pandemic-related stimulus so far, and the Fed has nearly doubled its balance sheet, through monthly asset purchases, to just shy of $8 trillion. The stimulus continues to come through even with an economy that is expected to grow at about a 10% pace in the second quarter and an employment picture that has added an average 478,000 jobs a month in 2021. "Never before have we seen such coordinated expansionary fiscal and monetary policy. This will continue as output moves above potential," Folkers-Landau said. "This is why this time is different for inflation." The Deutsche team said the coming inflation could resemble the 1970s experience, a decade during which inflation averaged nearly 7% and was well into double digits at various times. Soaring food and energy prices along with the end of price controls helped push that era's soaring inflation. Then-Fed Chairman Paul Volcker led the effort to squash inflation then, but needed to use dramatic interest rate hikes that triggered a recession. The Deutsche team worries that such a scenario could play out again. "Already, many sources of rising prices are filtering through into the US economy. Even if they are transitory on paper, they may feed into expectations just as they did in the 1970s," they said. "The risk then, is that even if they are only embedded for a few months they may be difficult to contain, especially with stimulus so high." The firm said interest rate hikes could "cause havoc in a debt-heavy world," with financial crises likely particularly in emerging economies where growth won't be able to overcome higher financing costs. [link] [comments]  | ||||||||||||||||||||||||||||||
| Biogen (BIIB) drug Aduhelm (Aducanumab) Approved by FDA for Alzheimer's Disease Treatment Posted: 07 Jun 2021 08:31 AM PDT Biogen's Aduhelm has been approved by the FDA to treat Alzheimer's Disease. Aduhelm targets amyloid plaque deposits, long thought to be associated with the cognitive decline of Alzheimer's Disease. There are still many hurdles with translating the drug to profits, as a followup study is pending. Pricing concerns based on drug efficacy raised by the Institute for Clinical and Economic Review (ICER) may also lower the upper limit of profitability. Insurers may be hesitant to cover Aduhelm without a clearer demonstration of efficacy. [link] [comments]  | ||||||||||||||||||||||||||||||
| Capturing Alpha using Risk Premia Posted: 08 Jun 2021 06:29 AM PDT From a brief search it's been a while since anyone posted on this subject or covered it in a satisfying way. Hopefully this is helpful to new investors or even seasoned ones who haven't looked into these concepts in detail. Modeling Assset PricesRisk premium is the compensation one receives for taking on additional risk, in the form of expected excess return compared to the risk-free rate of return. The risk-free rate of return would be something like the yield of US treasury bills. ELI5: If you invest in something dangerous, you want to be paid more. When it comes to equities, there is a concept called the efficient market hypothesis, which states that asset prices reflect all available information. The most effective way to verify this is to develop an asset pricing model which is sufficiently accurate based on given inputs. You may have heard of CAPM (Capital Asset Pricing Model, Sharpe-1964 and Lintner-1965) – which is one of the first major accepted models whose main input is β. You've probably heard of α and β, but essentially α is the ability to beat the market, and β is the volatility (specifically the sensitivity market conditions). As an investor, your goal is generally to get as much α as possible, without taking on more risk than you can tolerate. CAPM does a decent job of explaining Market risk premium as a function β – which is effectively the benefit you get from investing in stocks rather than bonds. However, it was found to capture only about 70% of the excess return, so either the market isn't efficient, or there were other undiscovered factors. Enter the discovery of the Value and Size factors. Researchers discovered that value stocks (ones that had high book value relative to price) and small cap stocks (ones that had smaller total valuation) tended to outperform the market in a way that wasn't explained by CAPM. So Fama and French (1992) developed a new 3-Factor Model incorporating Market, Value, and Size premiums. This now explained about 90% of asset pricing. More recently (2015), Fama and French have since updated to a 5-Factor Model, which includes the Profitability and Investment factors that could explain about 95% of asset pricing. Profitability is rather self-explanatory, while Investment refers to conservative vs. aggressive asset growth (with conservative outperforming). One interesting finding was that the Value premium could actually be omitted without hurting the model accuracy because the Value premium could be absorbed by the Profitability and Investment premiums. So from here on, I'll use a 4-Factor model of: Market, Size, Profitability, Investment. Quantifying Risk PremiaSo why should you care, as an investor? One major debate in investing is active vs. passive, with most evidence indicating that active management in aggregate fails to deliver excess return after accounting for fees. This is why most people are recommended to simply use low cost, market-cap weighted index funds such as $VOO or $VT for the majority of their portfolio. However, for more risk-tolerant investors, this may not be the best possible result. If there are indeed ways to capture independent risk beyond the Market premium, then it is possible to increase expected return while still remaining passive and diversified. Let's look at data from the Ken French Data Library, over the period 1963-2020. We examine the overall risk premiums generated by Market, Profitability, Investment, and Size factors. We also examine the probability of a positive risk premium existing over a 10-year period. The assumption here is that if you are risk-tolerant, you are probably younger and looking at long timescales. The premiums can vary widely or be negative for individual years, so we are hoping to buy and hold, harvesting a positive premium over many years. If you are middle-aged, you might be better off sticking to the basic market-cap weighted approach as it is lower risk. Aggregating this data, let's further account for geographical effects. Since the premiums vary between different market regions, we'll use a crude 60-20-20 respective weightings for USA, developed, and emerging markets. Obviously this is not a perfect weighting but it's good enough to illustrate the broader trend. The resulting premium is measured in additional % annualized excess return compared to the risk-free return. The result is as follows: 4 Factor Risk Premiums, 1963-2020 This is a surprisingly intuitive result. As the value of each factor premium increases, the reliability of that premium decreases. This chart behaves as if the efficient market hypothesis is true, and provides a rough guideline for the cost of each premium. If you only want a slight boost to expected return, you can increase weight in small cap stocks. If you want a more sizeable boost with more risk of downside, you can increase weight in profitable stocks. Disclaimer: at the end of the day, it is always dubious to predict future returns even based on long historical periods like this one. You also need to be able to stomach long periods where the premium may not exist, such as the poor performance of value stocks this past decade. However, for disciplined investors with a long horizon – capturing these factors has a good chance of generating real excess returns. So, what to actually invest in? These days, there are more and more ETFs out there that incorporate factor-based investing. However, it's difficult to get exposure to the right factors and across all market regions. I've compiled a table of some options here:
There are quite a few gaps, if you know any options to fill those feel free to comment and I can edit them in. There are also other non-fundamental factors such as Value and Momentum that have numerous options. How to weight them is another issue beyond the scope of this post, and depends again on your risk tolerance. Hope that was helpful, and happy investing. [link] [comments]  | ||||||||||||||||||||||||||||||
| Posted: 08 Jun 2021 07:37 AM PDT If you are new to psychedelic stocks, than you aren't alone. Just recently, psychedelics have been taking the mental health sector by storm. Studies are providing proof of their ability to outperform traditional anti-depressants with the added benefit of not being addictive. These studies are becoming more common and there are a multitude of companies getting involved in the sector. Field Trip Health is one of the sectors leaders and has recently made some big advancements that are putting psychedelics in the spotlight. As of Monday June 7th, they are the FIRST and only psychedelic stock to be listed on the Toronto Stock Exchange. As of today, June 8th they have applied to list on the NASDAQ which would make them the 2nd company yo list on the NASDAQ in the psyc sector. The first being MindMed. Also today, the co-founder Ronan Levy and former senator Tom Daschle will speak on CNBC @ 10:45am EST. WATCH LIVE - https://watchnewslive.tv/watch-cnbc-live-stream-free-24-7/ Ticker: TSX - $FTRP USOTC - $FTRPF Do your own research, but don't let this slip past your radar. Keep it on your watch list. [link] [comments]  | ||||||||||||||||||||||||||||||
| 200+ Years of Asset Class Returns & Economic Future Commentary Posted: 07 Jun 2021 10:02 PM PDT This paper and blog post provides some incredibly interesting data on past market returns as well as the potential implications for the global economic future. Full Paper: http://www.epge.fr/wp-content/uploads/2020/09/The-age-of-disorder.pdf Blog Post breaking down the part specific to the stock market : https://awealthofcommonsense.com/2021/05/200-years-of-asset-class-returns/ The full table of returns: https://imgur.com/gallery/uWdoVFd There's so much to this 75-page paper that it's honestly hard to generate a full hypothesis on what this means for the future, as much is concluded within the paper itself which I have only started reading myself. Regardless, I agree firmly with the final conclusions drawn in the blog post regarding the asset class returns. Specific takeaways well worth as a reminder if nothing else:
Page 43 goes into large-cap stocks moreso, stating in part...
Now, let's digest this fantastic paper together! [link] [comments]  | ||||||||||||||||||||||||||||||
| How would US Inflation affect other countries? Posted: 08 Jun 2021 09:13 AM PDT I'm basically trying to hunker down and divest all my US currency assets. Will try to turn them into real estate, non US stock, commodities, or maybe even crypto. This whole inflation thing is coming and I don't want to get left dry. So a few questions for you guys: 1. Are you asking any moves to diversify your currency exposure? 2. Which other non USD assets are you looking at? 3. What are the main repercussions of US Inflation for the local economy? 4. How are you planning to not just avoid the downsides of inflation, but actually make money off it? [link] [comments]  | ||||||||||||||||||||||||||||||
| When do you buy back your covered calls? Posted: 08 Jun 2021 08:42 AM PDT This is for anyone out there who sells covered calls. Do you always let them expire and then revaluate upon expiry or do you buy them back after a certain price action? I think buying them back if the value craters and rolling them out to a different strike could be a play but I imagine this depends on any fees you need to pay per trade. Also common sense not to write them for a strike below your price average. [link] [comments]  | ||||||||||||||||||||||||||||||
| A failed attempt at beating VOO Posted: 07 Jun 2021 01:11 PM PDT It seems the consensus that the S&P (specifically vanguard's VOO) is the most basic way to diversify holdings while keeping strong returns. (when only looking at US market). Looking at the sector breakdown, you can hold more assets, thus being more diverse, by owning the individual sectors that comprise the S&P. Using [portfolio visualizer]( Backtest Portfolio Asset Allocation (portfoliovisualizer.com) ), and comparing VOO to Vanguard's sector breakdown etfs [with the same sector weightings as VOO]( Sector By Sector In The S&P 500 With ETFs | ETF.com ). [We get these results]( Backtest Portfolio Asset Allocation (portfoliovisualizer.com) ) VOO returned 14.54% annualized return since 2011. From $10,000 to $41,163. With about ~$100 in expenses (0.03% expense ratio) VOOBreakdown returned 15.49% annualized return since 2011. From $10,000 to 44,836. With aobut ~$400 in expenses (avg. 0.1% expense ratio across all 11 sector etfs) The difference is small, but VOOBreakdown has higher returns with more diversity (Sharpe ratio 1.07 compared to 1.04 of VOO). ------------------------------------------------ Looking back I was wrong and forget an important detail. When accounting for rebalancing, the difference in returns is minimized. The more often you rebalance VOOBreakdown, the less returns you'll see. When you don't rebalance, I believe the larger allocation of tech stocks carry some of the returns later on, but the aim of VOOBreakdown is to beat VOO only using broken-down etfs for more diversity, but it seems that is redundant with no difference in returns. I have failed once again to beat VOO. This post is useless but I already wrote it up so ¯\_(ツ)_/¯ [link] [comments]  | ||||||||||||||||||||||||||||||
| Ivanhoe Mines - Tier 1 Copper Deposit vs south Africa threats? Posted: 08 Jun 2021 04:07 AM PDT Hello fellow investors. Lately I am looking into opportunities for long term investments. Rather very long, and looking at the Invahoe Mines (IVN:TSX). I watched some interviews with Rick Rule and he points out the Ivanhoe is one of his best investments lately. The deposits of copper (mainly copper) seems to be one of the best known deposits currently under development. The Cap of company with comparison to others is qute small (about 10B). With comparison to the growing demand for copper looks that the comapny seems to be promissing opportunity, especially if we will look into the scale of the deposit. Lastly they started production (Phase 1 - Initial production of copper concentrate at the Kakula Mine processing plant began on May 25, 2021). https://www.ivanhoemines.com/projects/kamoa-kakula-project/ But still, this is Africa, so I am wondering did anyone of you consider Ivanhoe in your investmetns? Maybe you have any thoughts / threaths about investing in the assets located in Africa? PS: It's not a financial advise, just a discussion. [link] [comments]  | ||||||||||||||||||||||||||||||
| Thoughts on the future of Alibaba Posted: 07 Jun 2021 09:05 AM PDT Sold Nvidia, GM, and PSTH (Lol boomer SPAC) to buy Alibaba (BABA), now my largest position. Anyone else think Alibaba fundamental is crazy good for the depressed price? Rock solid balance sheet, highly profitable, growing both revenue and profit like crazy (last quarter revenue, net profit & free cash flow alone is more than 150%+ the annual revenue and 200%+ the annual profit just 3 years back (excluding 2021). China GDP will likely continue growing faster than US with the rise of the middle class and Alibaba businesses are so embedded in Chinese society that it's hard not to grow even if they don't want to. The only thing it comes down to is political risk (both domestic and foreign). Which is not zero but feels overblown as it's mostly noise. I feel like the discount is too high for the risk level and we are likely to see a huge rise as Alibaba continues to grow and print cash like mad and nothing happening in the political landscape. Analysts seems to agree with a avg of $294 price target, low of $228, and high of $352, which are all 5.5%-63% upside (usually for the next 12 months). Anyone have any thoughts on this business? [link] [comments]  | ||||||||||||||||||||||||||||||
| Anyone else feeling bullish on PSY? Posted: 07 Jun 2021 03:19 PM PDT The first psychedelic medicine ETF. Top holdings include medical psychedelics, ketamine, and cannabis stocks. I'd been wanting to invest in Charlottes Web but it wasn't available on my platforms and PSY holds it! Investor Place article shared details to know about it: PSY is the first psychedelic stocks ETF. While it's the first, it hasn't been around for long. The ETF was only just set up at the end of May. PSY's focus is on investing in psychedelic stocks that can be used to treat mental illnesses. That includes depression, which it points out is a growing problem. That comes from claims that as many as 30% of depression patients aren't responding to current treatments. It also says that research budgets for psychiatric medicine have declined by 70% at large companies. PSY believes that this presents an opportunity for new treatments making use of psychedelic treatments to meet growing demand. These treatments could potentially be used for those suffering from "anxiety, PTSD, OCD, eating disorders, depression" and more. The ETF says that it looks to track the BITA Medical Psychedelics, Cannabis, and Ketamine Index. It mentions that companies in the index must have a market cap of at least $75 million. They must also be connected to the medical psychedelics, medical cannabis, or ketamine industries in some way. Its top holdings include Charlottes Web (OTCMKTS:CWBHF), Aurora Cannabis (NASDAQ:ACB), Cronos Group (NASDAQ:CRON), Corbus Pharmaceuticals (NASDAQ:CRBP), and Supreme Cannabis (OTCMKTS:SPRWF). [link] [comments]  | ||||||||||||||||||||||||||||||
| Cigna International Taps Teladoc Health To Expand Telehealth Capabilities In India Posted: 07 Jun 2021 06:03 AM PDT – Cigna International today announced a collaboration with Teladoc Health to support populations in India during the current humanitarian crisis through telehealth solutions. – In a coordinated approach, Cigna International Markets and Teladoc Health activated local and global telehealth capabilities in less than 24 hours and brought much needed care to many people who desperately need help from the global community. – Together, both companies delivered an agile solution that empowered hundreds of thousands of locally-based individuals to connect with a health care professional who could then safely and securely manage their care and write prescriptions as needed. Other solutions deployed included a dedicated emergency hotline, providing needed local ground support with an Employee Assistance Program (EAP) and associated behavioral health support and grief counseling. Does this help Teladoc's dwindling stock price or is it a pipe dream? https://hitconsultant.net/2021/06/04/cigna-international-teladoc-health-india/#.YL4Y9lNlAzR [link] [comments]  | ||||||||||||||||||||||||||||||
| Can ETFs 'Wag the Dog' ? How does it work? Posted: 07 Jun 2021 10:59 AM PDT There is something that just melts my brain when it comes to ETFs price action. According to Investopedia, "An exchange traded fund (ETF) is a basket of securities that trade on an exchange, just like a stock." So an ETF is a basket of securities - therefore a simple explanation could be that the ETF price is just the average of all securities it tracks. So we know how a stocks price move up and down - It's a function of the supply and demand on that stock. How much someone is willing to pay for a share. The more people who want shares and are willing to pay ever increasing prices from the sellers will drive the price of the stock upward and vice versa. But there is more to it isn't there. Options play a very important role in the price fluctuations of a stock. If there are significant Puts and Calls against a stock then the Market Maker (MM) has to buy and sell shares to become Delta neutral. As this occurs, large purchases or sell offs can occur, which would push the stock price around. How does any of this work with ETFs? As I stated at the top, an ETF is only an average of the sum of its parts therefor none of this price action is supposed to work right? SO I ask you all who are much smarter than me - How does an ETF's price work? Since supply & demand still apply to an ETF. You can still watch ETFs on Level 2 and see the price rise and fall with the orders executed. And since MMs still have to hedge options on ETFs, how does it affect the price of something that is only an average of something else? Furthermore, if an ETF's price can rise independently of the movement of the securities it tracks, can those movements effect the value of the individual stocks its made up from and if they can be manipulated by the ETF wouldn't that mean that the individual stock inside the ETF is more/less valuable than the stock outside the ETF, essentially giving an individual stock different values (value inside the ETF, value outside the ETF)? This is the point where my head acts like a robot presented with a paradox and smoke starts coming out my ears. Any clarity would be really helpful. [link] [comments]  | ||||||||||||||||||||||||||||||
| Posted: 07 Jun 2021 03:44 PM PDT For the past decade I invested in ammunition. Mostly factory, but some surplus that I correctly assumed would increase in value once the surplus ran out. It didn't take a ton of room in the garage, I figured if I didn't sell it, I could use it, and I was under the assumption that prices of copper, brass, and lead would increase. I sold a lot in the last year and did well. Ammo prices are now through the roof and not coming down for at least a few years, so I've stopped buying. I also put money in precious metals, which have done ok. The problem with precious metals is you usually pay over spot and sell for less than spot. What other physical goods would make smart investments in this inflationary economy? [link] [comments]  | ||||||||||||||||||||||||||||||
| Fidelity Fully Paid Lending vs. Interactive Brokers Stock Yield Enhancement (small DD) Posted: 07 Jun 2021 08:54 AM PDT Which stock lending program offers the highest lending rates? I haven't been able to find any data on this online, so I decided to try it out for myself. Interactive brokers talks a good game: they promise 50% to give you of the interest collected, and they advertise very high borrowing rates. In my case, I was looking at RIDE: borrowing rate is currently 47%, but it was 80% when I decided to start my experiment. I opened an IB account, and enabled SYE. I also enrolled in Fidelity's "fully paid lending" program. Fidelity consistently reports lower borrowing rates than IB, so I was expecting IB to be a better deal for me. Here's the outcome: Fidelity currently gives me 17% interest on my RIDE shares. IB gives me only 10%. For some reason, IB collects only 20% interest (of which I get half), even though they list the borrowing rate as 47%. I'll be moving back to Fidelity. EDIT: to clarify a little further, this only makes sense if you own highly shorted stocks that yield high interest rates. I own RIDE and UWMC, which to me look like low risk, high return investments courtesy of the shorts. I totally agree that shorts can keep them down for as long as they want, but if I get 17%/year while they're doing it (plus any cap gains), I'm not going to complain. [link] [comments]  | ||||||||||||||||||||||||||||||
| Why is the redemption value of a bond usually higher than the initial price of that bond? Posted: 07 Jun 2021 08:01 PM PDT I understand the redemption value of a bond to be the price an issuer of a bond has to pay in order to redeem a bond before its maturation. I also understand that the owner of the bond can redeem a bond too, which confuses me. Is it that there is a set redemption value of a bond, i.e., $1200 for a bond that was initially priced at $1000, and the bond can be redeemed by the issuer if it's callable or if the owner agrees to redeem it (if not callable), or it can be redeemed by the owner if the owner deems it advantageous but in this case the issuer would also have to agree to redeem it. (does the issuer have to agree?) Basically, if the redemption value of a bond is higher than the initial price was to purchase it, why wouldn't people just buy an endless amount of bonds and sell them at a markup? I know there's something I'm missing, and if anyone can help that would be greatly appreciated. Thank you very much [link] [comments]  | ||||||||||||||||||||||||||||||
| WELL Health Acquires MyHealth - making it Canadas Largest Medical Clinic Operator. Posted: 07 Jun 2021 07:54 AM PDT $WELL $WLYYF just acquired MyHealth for $206M. Less than 5% dilution for 20% and 28% accretion on EBITDA and Revenue per share. Under the deal, Well will pay $82 million in cash, $94.3 million in shares at a deemed price per share of $9.80 (Currently trades at $7.5) and $30 million in convertible promissory notes. Pro forma rev of ~$400M and EBITDA of ~$100M. MASTERMINDS! [link] [comments]  | ||||||||||||||||||||||||||||||
| Minimizing capital gains taxes on Robinhood Posted: 07 Jun 2021 09:20 AM PDT I use Robinhood for trading, which uses FIFO and unfortunately doesn't easily allow for one to select specific lots when selling. Because of this, I've been tracking when my longest-held shares reach their 1-year shelf life so I can be taxed for long-term capital gains if I sell. Do any Robinhood users know of any tools or services that assist with this? Do you just settle with manual accounting like I do (which gets pretty tedious)? Also curious if other FIFO trading platforms convey this info natively. [link] [comments]  |
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