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    Daily General Discussion and spitballin thread - September 15, 2021 Investing

    September 15, 2021

    Daily General Discussion and spitballin thread - September 15, 2021 Investing

    Daily General Discussion and spitballin thread - September 15, 2021

    Posted: 15 Sep 2021 02:02 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. September 15, 2021

    Posted: 15 Sep 2021 02:01 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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    China has just told investors that Chinese Commercial Real Estate developer Evergrande wont pay interest due on September 20, Fitch downgrades rating to CC, from CCC+, indicating that they view a default of some kind as probable

    Posted: 14 Sep 2021 10:49 PM PDT

    https://twitter.com/Fxhedgers/status/1438008812569464836

    CHINA TELLS BANKS EVERGRANDE WON'T PAY INTEREST DUE SEPT. 20

    https://twitter.com/Fxhedgers/status/1438016209765605377

    FITCH WIRE: FITCH DOWNGRADED CHINA EVERGRANDE GROUP TO 'CC' FROM 'CCC+' ON 7 SEPT, INDICATING THAT WE VIEW A DEFAULT OF SOME KIND AS PROBABLE

    More context:

    https://www.reuters.com/business/fitch-says-possible-china-evergrande-default-may-have-broader-effects-2021-09-15/

    Rating agency Fitch said that numerous sectors could be exposed to heightened credit risk if China's No.2 property developer Evergrande Group (3333.HK) were to default, although the overall impact on the banking sector would be manageable.

    Evergrande is scrambling to raise funds to pay its many lenders and suppliers, as it teeters between a messy meltdown with far-reaching impacts, a managed collapse or the less likely prospect of a bailout by Beijing. read more

    Regulators have warned of broader risks to the country's financial system if the company's $305 billion of liabilities aren't contained.

    "We believe a default would reinforce credit polarisation among homebuilders and could result in headwinds for some smaller banks," Fitch said in a note late on Tuesday.

    Fitch downgraded China Evergrande Group to "CC" from "CCC+" on Sep. 7, indicating that it viewed a default of some kind as probable.

    On Tuesday, Evergrande said it has engaged advisers to examine its financial options and warned of cross-default risks amid plunging property sales and lack of progress in asset disposals. read more

    Fitch said 572 billion yuan ($88.8 billion) of Evergrande's borrowings were held by banks and other financial institutions, but banks may also have indirect exposure to the developer's suppliers, who are owed 667 billion yuan for goods and services.

    "Smaller banks with higher exposure to Evergrande or to other vulnerable developers could face significant increases in non-performing loans (NPLs), depending on how any credit event involving Evergrande develops," Fitch said.

    But the agency added a recent People's Bank of China sensitivity test showed the average capital adequacy ratio of the 4,000 banks in the country would only drop modestly if the NPL ratio for property-development loans were to rise by 15 basis points.

    Evergrande's Hong Kong-listed stock slipped as much as another 5% to HK$2.82 on Wednesday morning, a fresh low since Jan 2014.

    Its property management unit (6666.HK) and EV unit (0708.HK), however, bounced as much as 10.4% and 9.3%, respectively.

    In the debt market, Evergrande's Shanghai traded July 2022 bond fell 5.6% to 28.3 yuan, while its dollar bond due March 2022 dropped 20% to 27.502 cents, yielding more than 500%.

    Fitch also said the risk of significant pressure on house prices in the event of a default would be low, and it expected the government would act to protect households' interests to ensure home deliveries.

    On Wednesday, roughly 40 protesters stood near the entrance at Evergrande headquarters in Shenzhen, prevented from going inside by dozens of security personnel.

    This followed chaotic scenes at the headquarters two days earlier, as disgruntled investors crowded its lobby to demand repayment of loans and financial products.

    Some videos circulating on Chinese social media also showed what were described as Evergrande-related protests elsewhere in China.

    submitted by /u/Ok_Context_35612
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    CPI rises .3% in August, 5.3% over last 12 months

    Posted: 14 Sep 2021 05:31 AM PDT

    https://www.bls.gov/cpi/

    Press release: https://www.bls.gov/news.release/cpi.nr0.htm

    The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in August on a seasonally adjusted basis after rising 0.5 percent in July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 5.3 percent before seasonal adjustment.

    The indexes for gasoline, household furnishings and operations, food, and shelter all rose in August and contributed to the monthly all items seasonally adjusted increase. The energy index increased 2.0 percent, mainly due to a 2.8-percent increase in the gasoline index. The index for food rose 0.4 percent, with the indexes for food at home and food away from home both increasing 0.4 percent.

    The index for all items less food and energy rose 0.1 percent in August, its smallest increase since February 2021. Along with the indexes for household operations and shelter, the indexes for new vehicles, recreation, and medical care also rose in August. The indexes for airline fares, used cars and trucks, and motor vehicle insurance all declined over the month.

    The all items index rose 5.3 percent for the 12 months ending August, a smaller increase than the 5.4-percent rise for the period ending July. The index for all items less food and energy rose 4.0 percent over the last 12 months, also a smaller increase than the period ending July. The energy index rose 25.0 percent over the last 12 months, and the food index increased 3.7 percent; both were larger than the increases for the 12-month period ending July.

    Edit: Notably used car prices are down 1.5%

    submitted by /u/splat313
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    Why aren't REITs up more?

    Posted: 14 Sep 2021 12:49 PM PDT

    So for instance, looking at SCHH (Schwab's REIT ETF), it's just barely reaching pre-pandemic levels. But I understand the price of housing is up massively over the same period, and that rent is also at an all-time-high.

    Since I understand that REITs own the real-estate they are renting out, shouldn't their price reflect the value increase of the underlying asset?

    submitted by /u/pragmojo
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    Why are commodity markets so low?

    Posted: 15 Sep 2021 02:23 AM PDT

    With what even bulls would call a frothy stock market. Clear inflationary measures of QE that are now starting to be seen. World wide shock event that is yet to be over.

    Al traditionally would have people piling into commodities.

    Is it just the gamble of greater gains for the right stock? Is it people don't have trust of either market so are holding cash? Is it with Crypto the commodities safe haven is now diluted with more choice?

    submitted by /u/Googlebug-1
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    Does anyone have experience with angel investing specifically with REG A or crowdsourcing?

    Posted: 15 Sep 2021 03:39 AM PDT

    Let's say you invest in a startup from some app like republic or directly with a company and they go public. Do you simply get shares that you then have to sell off or do you get bought out? What if the company never goes public or gets bought out but instead continues to grow independently or maybe through more crowdfunding. I've been looking into this type of investing as a non-accredited individual who has a little extra money and lots of risk tolerance but if there's no potential for profit I'd obviously like to put my money elsewhere.

    submitted by /u/riguy1231
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    Investing in Helium mining

    Posted: 14 Sep 2021 01:41 PM PDT

    Investing in Helium

    Anyone interested I investing in Helium mining companies? Prime area seems to be Saskatchewan area of Canada and there are several companies in the exploratory phase. Companies I look at are Global Helium, Desert mountain energy, blue star helium and royal helium. I've visited all their websites and looked them up on yahoo finance. Anyone have an opinion on which are best? Can anyone really analyze the situation? How do you think I should decide as to which companies to invest in? Should I take a small position in each one of them?

    submitted by /u/Darth_Pervis
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    State of the market————-Developed Companies

    Posted: 14 Sep 2021 03:17 PM PDT

    Am I missing something about the state of the market? And the growth rate these past 5 years.

    I'm very long on V and not worried about it long term, but what the hell justified a 3x jump in stock price from 2017 to 2021. The company fundamentals are terrific but does it really justify such a growth rate?

    The same is to be said with other powerhouse "safe" growing companies such as PG, proctor and gamble has seen explosive stock growth and what is the justification over the past 5 years for these very well established companies.

    submitted by /u/sclop123
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    Advice on a Delisted stoock and recent "Termination of Shares" notice - what to do?

    Posted: 14 Sep 2021 11:04 AM PDT

    I hold a few thousand in CHA on Robinhood, and it's currently untradeable. This was delisted back in May, and I haven't been able to move on the position at all. Any recommendations on how I get my investement back??

    The company is "China Telecom Corporation"

    TERMINATION OF AMERICAN DEPOSITARY SHARES PROGRAM

    This announcement is made by China Telecom Corporation Limited (the "Company") on a voluntary basis.

    We refer to the announcement of the Company dated 7 May 2021 in relation to the review decision by The New York Stock Exchange LLC (the "NYSE") that the NYSE determined to delist the American Depositary Shares of the Company (the "ADSs").

    The delisting of the Company's ADSs has taken effect on 18 May 2021. In light of the delisting, the board of directors (the "Board") of the Company resolved to terminate the ADSs program (the "ADS Program") on 9 September 2021. On the same day, the Company entered into a letter agreement with The Bank of New York Mellon, as the depositary for the Company's ADSs, for the termination of the ADS Program.

    As of 9 September 2021, the number of ADSs in issue was approximately 0.813 million and the number of H shares underlying the ADSs represented approximately 0.09% of the Company's total issued shares. The Bank of New York Mellon has given a notice to all holders of ADSs that the ADS Program will terminate on 8 December 2021 (U.S. Eastern time) (the "Termination Date"). Holders of ADSs will have the right, at least until the Termination Date, to return the ADSs to The Bank of New York Mellon in exchange for H shares of the Company with each ADS returned to be exchanged into 100 H shares of the Company in accordance with the terms and conditions of the deposit agreement. The Company's H shares are traded on The Stock Exchange of Hong Kong Limited. The Bank of New York Mellon expects to commence the sale of H shares of the Company represented by the remaining ADSs as soon as practicable after the Termination Date, and will pay the net cash proceeds, after deducting applicable fees and expenses, to the holders of such remaining ADSs.

    submitted by /u/benbjerke
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    Thoughts on investing in energy & inflation with OXY/WS?

    Posted: 14 Sep 2021 01:12 PM PDT

    I've been buying OXY/WS this month, kicking myself for not buying them a year ago when I first learned of them. OXY/WS is the cheapest way to invest in OXY if you believe the share price will go up significantly. They essentially give you the right to buy shares at $22 plus the current warrant price. You have up until Aug 3 2027 to exercise this right. These warrants were issued to OXY shareholders during hard times in 2020, to throw them a bone, but I imagine most bailed as the stock collapsed.

    Four reasons I like this play are…

    1. Rising Free Cash Flow. Occidential petroleum has been benefiting from an increasing WTI crude oil price, hovering around $70/barrel as of today. Last quarter it averaged around $65/barrel, and they had cash flow in that quarter above 2 billion (market cap is currently ~24.4 billion for reference). Cash flow should continue to increase as crude price increases, and they work to pay down their crippling debt.

    2. The Crippling Debt is Going Away. No one likes debt, right? Especially crippling debt that might bankrupt you in a sudden, extreme downturn? cough Covid 2020 cough. Apparently management got the message that their debt load could kill them, and have a plan to reduce debt by over 40%, planning to drop from 34 billion in debt at the end of 2020 to 20 billion in debt at the end of 2022. As debt gets paid down the current interest payments of 300+ million/quarter will reduce to under 200 million/quarter, adding over half a billion extra to their free cash flow!

    3. Inflation Hedge. OXY has a lot of hard assets, and if US inflation takes off their stock should rise. An example of these hard assets can be found in their land holdings- they own over 1.35 million acres in the permian basin alone. If inflation is high over the next 6 years, I feel the time value of OXY/WS is being very underappreciated. As of today that time value is under $6 per warrant.

    4. Future Energy Needs. Going back to the permian basin, the land that oxy has might one day be reused for alternative energy. Believe it or not, massive solar projects can hit a wall due to environmental groups. Below's a link of this issue recently cropping up in San Diego County. For some reason, I don't think Texas will give a damn about environmental issues, making that previously mentioned 1.35 million acres in the permian basin prime real estate for massive solar projects. In addition to solar potential, OXY has also been working on CO2 sequestering using their pre-existing oil drilling footprint.

    Link

    Thoughts?

    submitted by /u/ORCoast19
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