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    Daily General Discussion and spitballin thread - August 05, 2021 Investing

    August 05, 2021

    Daily General Discussion and spitballin thread - August 05, 2021 Investing

    Daily General Discussion and spitballin thread - August 05, 2021

    Posted: 05 Aug 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:

    • General questions
    • Your personal commentary on markets
    • Opinion gathering on a given stock
    • Non advice beginner questions

    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.

    submitted by /u/AutoModerator
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    Daily Advice Thread - All basic help or advice questions must be posted here. August 05, 2021

    Posted: 05 Aug 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:

    • How old are you? What country do you live in?
    • Are you employed/making income? How much?
    • What are your objectives with this money? (Buy a house? Retirement savings?)
    • What is your time horizon? Do you need this money next month? Next 20yrs?
    • What is your risk tolerance? (Do you mind risking it at blackjack or do you need to know its 100% safe?)
    • What are you current holdings? (Do you already have exposure to specific funds and sectors? Any other assets?)
    • Any big debts (include interest rate) or expenses?
    • And any other relevant financial information will be useful to give you a proper answer.

    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!

    submitted by /u/AutoModerator
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    Roku delivers strong Q2 earnings; Revenue up 81%

    Posted: 04 Aug 2021 01:10 PM PDT

    Roku, Inc. (NASDAQ: ROKU) delivered a strong second quarter, with record revenue growth that was driven by exceptional performance in platform monetization. Audiences, content, and advertisers continue their shift to TV streaming around the globe, and Roku is a key enabler of this long-term secular trend. We more than doubled monetized video ad impressions year-over-year, and leading media companies are increasingly turning to Roku's tools to grow their DTC (direct to consumer) services.

    https://risingcandle.com/business/roku-delivers-strong-q2-earnings-revenue-up-81/

    submitted by /u/lazywizard99
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    Xilinx is now trading at about a third's discount from the implied price of the AMD buyout.

    Posted: 04 Aug 2021 08:22 AM PDT

    AMD agreed in principal to buy Xilinx for 1.7 AMD shares per Xilinx share.

    AMD is trading at 119 dollars, which implies a conversion to 202 dollars equivalent in the swap.

    Xilinx is currently trading at 141 dollars...'Splain to me? This discount may be from trepidation about a block from China from this deal going through, but I don't see a solid antitrust argument for doing so given that Intel is the top rival for both of them and neither are in a marketshare monopolizing position.

    submitted by /u/ShaidarHaran2
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    SEC Chair Gensler remarks on Cryptocurrencies, and their potential qualification as securities

    Posted: 04 Aug 2021 11:08 AM PDT

    Honestly, for as crypto focused as many here can be I'm a bit surprised nobody posted this yet, perhaps because it doesn't appear to be great news for the more anti government focused members of the crypto community.

    Link: https://www.sec.gov/news/public-statement/gensler-aspen-security-forum-2021-08-03

    Noteworthy Excerpts:

    Let me start at the beginning.

    It was Halloween night 2008, in the middle of the financial crisis, when Satoshi Nakamoto published an eight-page paper[1] on a cypherpunk mailing list that'd been run by cryptographers since 1992.[2]

    Nakamoto — we still don't know who she, he, or they were — wrote, "I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party."[3]

    Nakamoto had solved two riddles that had dogged these cryptographers and other technology experts for a couple of decades: first, how to move something of value on the internet without a central intermediary; and relatedly, how to prevent the "double-spending" of that valuable digital token.

    Subsequently, his innovation spurred the development of crypto assets and the underlying blockchain technology.

    Based upon Nakamoto's innovation, about a dozen years later, the crypto asset class has ballooned. As of Monday, this asset class purportedly is worth about $1.6 trillion, with 77 tokens worth at least $1 billion each and 1,600 with at least a $1 million market capitalization.[4]

    /

    We already live in an age of digital public monies — the dollar, euro, sterling, yen, yuan. If that wasn't obvious before the pandemic, it has become eminently clear over the last year that we increasingly transact online.

    Such public fiat monies fulfill the three functions of money: a store of value, unit of account, and medium of exchange.

    No single crypto asset, though, broadly fulfills all the functions of money.

    Primarily, crypto assets provide digital, scarce vehicles for speculative investment. Thus, in that sense, one can say they are highly speculative stores of value.

    These assets haven't been used much as a unit of account.

    We also haven't seen crypto used much as a medium of exchange. To the extent that it is used as such, it's often to skirt our laws with respect to anti-money laundering, sanctions, and tax collection. It also can enable extortion via ransomware, as we recently saw with Colonial Pipeline.

    With the advent of the internet age and the movement from physical money to digital money several decades ago, nations around the globe layered various public policy goals over our digital public money system.

    /

    The SEC has a three-part mission — to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets in between them. We focus on financial stability as well. But at our core, we're about investor protection.

    If you want to invest in a digital, scarce, speculative store of value, that's fine. Good-faith actors have been speculating on the value of gold and silver for thousands of years.

    Right now, we just don't have enough investor protection in crypto. Frankly, at this time, it's more like the Wild West.

    This asset class is rife with fraud, scams, and abuse in certain applications. There's a great deal of hype and spin about how crypto assets work. In many cases, investors aren't able to get rigorous, balanced, and complete information.

    If we don't address these issues, I worry a lot of people will be hurt.

    First, many of these tokens are offered and sold as securities.

    There's actually a lot of clarity on that front. In the 1930s, Congress established the definition of a security, which included about 20 items, like stock, bonds, and notes. One of the items is an investment contract.

    The following decade, the Supreme Court took up the definition of an investment contract. This case said an investment contract exists when "a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party."[6] The Supreme Court has repeatedly reaffirmed this Howey Test.

    Further, this is but one of many ways we determine whether tokens must comply with the federal securities laws.

    I think former SEC Chairman Jay Clayton said it well when he testified in 2018: "To the extent that digital assets like [initial coin offerings, or ICOs] are securities — and I believe every ICO I have seen is a security — we have jurisdiction, and our federal securities laws apply."[7]

    I find myself agreeing with Chairman Clayton. You see, generally, folks buying these tokens are anticipating profits, and there's a small group of entrepreneurs and technologists standing up and nurturing the projects. I believe we have a crypto market now where many tokens may be unregistered securities, without required disclosures or market oversight.

    This leaves prices open to manipulation. This leaves investors vulnerable.

    Over the years, the SEC has brought dozens of actions in this area,[8] prioritizing token-related cases involving fraud or other significant harm to investors. We haven't yet lost a case.

    Moreover, there are initiatives by a number of platforms to offer crypto tokens or other products that are priced off of the value of securities and operate like derivatives.

    Make no mistake: It doesn't matter whether it's a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These products are subject to the securities laws and must work within our securities regime.

    I've urged staff to continue to protect investors in the case of unregistered sales of securities.

    Next, I'd like to discuss crypto trading platforms, lending platforms, and other "decentralized finance" (DeFi) platforms.

    The world of crypto finance now has platforms where people can trade tokens and other venues where people can lend tokens. I believe these platforms not only can implicate the securities laws; some platforms also can implicate the commodities laws and the banking laws.

    A typical trading platform has more than 50 tokens on it. In fact, many have well in excess of 100 tokens. While each token's legal status depends on its own facts and circumstances, the probability is quite remote that, with 50 or 100 tokens, any given platform has zero securities.

    Moreover, unlike other trading markets, where investors go through an intermediary like the New York Stock Exchange, people can trade on crypto trading platforms without a broker — 24 hours a day, 7 days a week, from around the globe.

    Further, while many overseas platforms state they don't allow U.S. investors, there are allegations that some unregulated foreign exchanges facilitate trading by U.S. traders who are using virtual private networks, or VPNs.[9]

    The American public is buying, selling, and lending crypto on these trading, lending, and DeFi platforms, and there are significant gaps in investor protection.

    Make no mistake: To the extent that there are securities on these trading platforms, under our laws they have to register with the Commission unless they meet an exemption.

    Make no mistake: If a lending platform is offering securities, it also falls into SEC jurisdiction.

    /

    Before I conclude, I'd like to note we have taken and will continue to take our authorities as far as they go.

    Certain rules related to crypto assets are well-settled. The test to determine whether a crypto asset is a security is clear.

    There are some gaps in this space, though: We need additional Congressional authorities to prevent transactions, products, and platforms from falling between regulatory cracks. We also need more resources to protect investors in this growing and volatile sector.

    We stand ready to work closely with Congress, the Administration, our fellow regulators, and our partners around the world to close some of these gaps.

    In my view, the legislative priority should center on crypto trading, lending, and DeFi platforms. Regulators would benefit from additional plenary authority to write rules for and attach guardrails to crypto trading and lending.

    Right now, large parts of the field of crypto are sitting astride of — not operating within — regulatory frameworks that protect investors and consumers, guard against illicit activity, ensure for financial stability, and yes, protect national security.

    Standing astride isn't a sustainable place to be. For those who want to encourage innovations in crypto, I'd like to note that financial innovations throughout history don't long thrive outside of our public policy frameworks.

    At the heart of finance is trust. And at the heart of trust in markets is investor protection. If this field is going to continue, or reach any of its potential to be a catalyst for change, we better bring it into public policy frameworks.

    I know when Gensler was appointed there was much hope that he would take a very soft line on crypto markets, it would seem that he is laying out firm intention at this point to pursue fraudulent and misleading offers heavily. Obviously nobody knows what this will look like in practice, but I'm sure anyone who's been paying attention to that space long enough has seen a few coins that ended up being scams of some sort.

    submitted by /u/MasterCookSwag
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    Uber announces Q2 earnings; gross booking reaches all-time high

    Posted: 04 Aug 2021 01:16 PM PDT

    Uber Technologies is reports its Q2 earnings on Wednesday after the bell. The San Francisco based technology company said its Gross Bookings reached an all-time high of $21.9B, up 114% year-over-year. It generated a net income of $1.1 billion and Adjusted EBITDA of $(509) million.

    ​

    https://risingcandle.com/marketnews/uber-announces-q2-earnings-gross-booking-reaches-all-time-high/

    submitted by /u/lazywizard99
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    Etsy reports a 31% increase in GMS marketplace

    Posted: 04 Aug 2021 01:54 PM PDT

    Etsy reported its fiscal Q2 2021 results on August 4 with consolidated revenue was $528.9 million, up 23.4% versus the second quarter of 2020, with a take rate of 17.4%. Net income was $98.3 million, up 1.9% year-over-year, with diluted earnings per share of $0.68.

    https://risingcandle.com/marketnews/etsy-reports-a-31-increase-in-gms-marketplace/

    submitted by /u/risingcandle
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    How much have you been making per year and month by lending your shares?

    Posted: 04 Aug 2021 07:42 PM PDT

    For those who are enrolled in the lending program with your broker, how much in percentage have you been making per year or month? And what stocks are you lending?

    I have been thinking about lending my shares given that it looks like there is a lot of active trading going on but I am not sure if the percentage the broker gives you is even worth it. For the most part I believe it varies depending on the stock and the interest rates.

    submitted by /u/hecmtz96
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    General Motors announce Q2 results; beats on revenue but misses on EPS

    Posted: 04 Aug 2021 05:34 AM PDT

    General Motors (NYSE: GM) reported its fiscal Q2 2021 results on Wednesday, before the opening bell. GM said it had spent $1.3 billion in warranty recall costs, including $800 million related to the Chevrolet Bolt EV. The electric vehicle has been recalled twice in the past year due to fire risks.

    GM beat WallStreet estimates on revenue but fell short on EPS.

    • Adjusted EPS: $1.97 vs. $2.23 expected
    • Revenue: $34.17 billion vs. $30.9 billion expected

    The automaker on Wednesday raised its adjusted full-year guidance to between $11.5 billion and $13.5 billion, or $5.40 to $6.40 a share, up from $10 billion to $11 billion, or $4.50 to $5.25 a share.

    https://risingcandle.com/marketnews/general-motors-announce-q2-results-beats-on-revenue/

    submitted by /u/lazywizard99
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    How to deal with this pickle

    Posted: 04 Aug 2021 07:18 PM PDT

    What to do?

    I currently have my Roth set up with vanguard I max it out and have $40 left over a check to invest. I wanted to do the rest into a taxable account with vanguard aswell into VTI & VXUS (60/40 split) however vanguard doesn't allow automatic investment nor fractional shares into these funds. So my question is.. is it worth it to keep putting this $40 into this account until I have enough to purchase whole shares or go another route.? I feel like I am losing a lot of opportunity cost here. Thanks for your time

    submitted by /u/InitiaLInvestor
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    Tesla AI day scheduled for August 19th.

    Posted: 04 Aug 2021 03:22 PM PDT

    With AI Day approaching in a few weeks, Tesla has started sending out invitations to the highly-anticipated event. Tesla's invitations, including the wording in its RSVP page, suggest that the company may be discussing some interesting topics for AI Day.

    Immediately noticeable in the AI Day invites is an image showing what seems to be a stack of computer hardware. Very little is known about this yet-to-be-announced hardware, though it was initially teased by legendary mechanical engineer Dennis Hong online. This fueled speculations that the image was likely related to Tesla's Dojo Supercomputer, which would be used to train Autopilot software.

    A look at the RSVP page for the event shows a rather interesting description of the upcoming event.

    "Join us in Palo Alto, CA on August 19, 2021, at 5 p.m. PDT. This invite-only event will feature a keynote by Elon, hardware and software demos from Tesla engineers, test rides in Model S Plaid, and more. Attendees will be among the first to see our latest developments in supercomputing and neural network training. They'll also get an inside look at what's next for AI at Tesla beyond our vehicle fleet.

    "If you have received an email invitation for this event, please submit the form below using the same email address to let us know you'd like to attend. Space is limited, and we will be confirming the attendee list closer to the event date. If you are chosen to attend AI Day, you will receive an email confirmation with additional event details."

    Arguably the most noticeable portion from AI Day's RSVP page is the sentence referencing what is "next for AI at Tesla beyond our vehicle fleet." Granted, Tesla is also using its software prowess for its energy products with products like Autobidder, but Elon Musk has also noted in the past that long term, people would likely think of Tesla as an AI robotics company. AI Day seems to be a good venue to touch on some of these initiatives.

    Tesla's AI Day is scheduled for August 19, 2021, at 5 p.m. PST. The event would be held in Palo Alto, CA. It remains to be seen as well if Tesla would be holding AI Day independently similar to Autonomy Day, or together with its Annual Shareholder Meeting like Battery Day last year.

    Source: https://www.teslarati.com/tesla-ai-day-invites-robotics-teaser/

    submitted by /u/redmars1234
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    Global-E up 190% since IPO?

    Posted: 04 Aug 2021 08:26 PM PDT

    So Global E is an e-commerce company which specialises in direct to the consumer cross border which is making e-commerce more efficient for international buyers and sellers.

    This post isn't meant to be a pitch but more of an IPO question since GLBE has seen some crazy growth in only 3 months (May 11th IPO)

    It's a hard question to ask but is this price movement normal in such a short space of time?

    submitted by /u/samsteiger101
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    Paycom Software (PAYC) Q2 Earnings and Revenues Top Estimates

    Posted: 04 Aug 2021 07:43 PM PDT

    https://finance.yahoo.com/news/paycom-software-payc-q2-earnings-212509931.html

    Paycom Software (PAYC) came out with quarterly earnings of $0.97 per share, beating the Zacks Consensus Estimate of $0.83 per share. This compares to earnings of $0.62 per share a year ago. These figures are adjusted for non-recurring items.

    This quarterly report represents an earnings surprise of 16.87%. A quarter ago, it was expected that this maker of human-resources and payroll software would post earnings of $1.42 per share when it actually produced earnings of $1.47, delivering a surprise of 3.52%.

    Over the last four quarters, the company has surpassed consensus EPS estimates four times.

    submitted by /u/YuriTheRussianBot
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    Good aggressive mutual funds?

    Posted: 04 Aug 2021 11:56 AM PDT

    Hello all,

    ​

    I am invested in "Vanguard LifeStrategy Growth Fund Investor Shares" on Vanguard and I have only gained 10-15% total in 3-4 years. 50% of the fund was funded in the last 12 months so obviously that percentage gain doesn't reflect perfectly, but nonetheless I feel like it has underperformed. I was negative in 2018 and 2019.

    ​

    Any suggestions or funds I should look into more? thanks

    submitted by /u/backup28445
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    Could Alibaba and Tencent be Berkshire material?

    Posted: 04 Aug 2021 02:25 PM PDT

    I know Warren has often tried to stay away from companies he can't understand easily, but the valuations in these two companies right now are astronomically low. Plus in regards to Aliabab I wouldn't say their business is really that hard to understand, it's Tencent that is more complex with more branches to the company. Tencent is much more of a conglomerate than Alibaba and I don't think Warren being as smart as he is would have a hard time seeing the opportunity in Alibaba.

    I just look at it from the perspective of they're cheap, they're growing exponentially still, they're liquid and big enough for Berkshire Hathaway to make big moves in. The only negative is the political risk of course, but it hasn't always stopped Warren and Charlie, they bought BYD and that has been a tremendous investment for them.

    Also I realize Munger has a position in Alibaba in his personal company, so theoretically at least one of them seems to agree with it. I also understand that Greg Abel is probably more involved than ever in these decisions and I don't know where he stands on things.

    Thoughts?

    submitted by /u/NEFA91
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    EV charging infrastructure companies

    Posted: 04 Aug 2021 08:50 AM PDT

    With the coming growth in electric vehicles - I don't see this as an if anymore but merely just how soon - I expect that more consumers will want to buy home-based chargers. Also, there will be a need for more charging stations away from home. This leads me to think that buying stock in a company that makes the actual charging equipment could be a good investment.

    I have been able to find a fair amount of material on investing (or advice not to invest) in charging networks such as ChargePoint, but I can't seem to find a lot of detail about which companies make the equipment itself. Is the equipment generally proprietary to the networks or the sellers of at-home stations?

    If anyone has any insight or can point me to some information on the equipment providers, I would appreciate it!

    submitted by /u/AGrumpyOldMan_GA
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    how much do i need to put into my futures account?

    Posted: 04 Aug 2021 11:30 AM PDT

    i have been trading ES and NQ futures at schwab because that's where my savings are. their platform for futures is laughably bad. i have done some research (thanks r/investing!) and opened an account at Tradovate.

    I have had some success trading 1-4 contracts at a time for 2-3 hours up to a couple day/weekend horizons. I am old and lucky and have enough in a liquid account at schwab to cover a 10-20% decline in the underlying index for these contract sizes.

    margin for ES and NQ are 550 day, 1000 night and 12100/17600 initial. does this mean that if I want to trade 2 NQ contracts for 1-2 day horizon i need to have 35200 in the account minimum? i assume if the value falls, I will need to move more money into the account. should i just plan on 50k minimum in order to have some breathing room? maybe i should just trade during the day/night only.

    any advice would be really helpful.

    submitted by /u/CremasterFlash
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    EV demand - Power grid and generation has to grow A LOT

    Posted: 04 Aug 2021 09:30 AM PDT

    Gasoline represents 16% of all energy produced in the US: https://www.eia.gov/energyexplained/gasoline/use-of-gasoline.php#:~:text=In%202020%2C%20total%20gasoline%20consumption,of%20total%20U.S.%20energy%20consumption.

    The efficiency of EVs offsets some of this burden: https://cars.usnews.com/cars-trucks/what-is-mpge#:~:text=Kilowatt%2Dhours%20is%20the%20standard,per%20gallon%20to%20be%20equivalent.

    By about 50% if we are conservative.

    So we can say that the US is 8% short on energy production during a conversion from gas to EVs.

    An 8% shortage would have huge cost implications on the electric utilities sector since they are not flexible in raising rates but instead are rate-limited usually by law.

    There are 22,731 electric generators in the US at 10,346 faciliies: https://www.eia.gov/tools/faqs/faq.php?id=65&t=2#:~:text=How%20many%20power%20plants%20are,least%201%20megawatt%20(MW)).

    This means we need 1,819 more generators at 830 more facilities.

    What does this cost?

    https://proest.com/construction/cost-estimates/power-plants/

    It's variable depending on where the generators are built (and yes - solar is considered a generator in power terms) Solar for example cost $9,000,000,000 for 341 generators only producing 3,100 MW.

    We don't need to get too far into the weeds.

    A lot of power in the US comes from Natural Gas and it is $5,300,000,000 per 74 generators adding 4,755 MW.

    So if we take Natural gas to be a kind of midline in cost then the US needs to add:

    $130,279,729,729 worth of power to the grid to convert from gasoline consumption to EVs.

    I think this is a significant head-wind to EV growth when the power generation starts to get strained and people actually realize they need to spend money on power generation instead of building oil wells.

    This will give BIG OIL some staying power (longer than some think).

    And it provides opportunity for investment into electric utilities at some point before this critical understanding is realized.

    submitted by /u/DarthTrader357
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    Question about when to take profits

    Posted: 04 Aug 2021 08:02 AM PDT

    I have always heard to make sure that you lock in some profits when a stock that you purchased has gained in value. The question I have is does that still make sense if you still want to be in the position? Let's say for instance I am up 50% on a stock that I purchased less than a year ago. Does it make sense for me to close my position to "lock in the profits" and re-buy into the stock? I just don't see the point in that because for one, I'm paying capital gains tax on the profits within a year of holding and then I'm basically still owning the same amount of stock.

    Would the only time I actually lock in profits be for if I no longer want to have a position in the stock?

    submitted by /u/YippeKaye
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    HOOD (Robinhood) is a Large Cap

    Posted: 04 Aug 2021 11:10 PM PDT

    At Robin Hood's closing price today valuing the company at 59 billion dollars. This makes it approximately the 210th largest company in the United States. The company in that slot now is Excel energy and gets almost 1% of the index weight of the standard & Poor's 500.

    A simple Google search yielded that there's a 5.4 trillion dollars benchmarked to the s&p 500 in various index funds.

    This creates compulsory buying to the tune of $50 billion dollars.

    There are of course other large amounts of money benchmarked to other large capitalization weighted index products that would also become possible compulsory buyers at some juncture.

    I'm not a big fan of Robin Hood and I find the under the table practice of selling orders to be a sleazy practice, but perhaps this realization can explain some of the buying frenzy today.

    I'm not sure I'd be brave enough to short it here.

    submitted by /u/imagine-grace
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