Daily General Discussion and spitballin thread - November 27, 2021 Investing |
- Daily General Discussion and spitballin thread - November 27, 2021
- Daily Advice Thread - All basic help or advice questions must be posted here. November 27, 2021
- So the market dropped by more than 2% in a day. Can we predict anything from that? The answer might not surprise you (it is "no").
- How does a sukuk share risk that bond doesn't? Don't both share risk of default?
- Thoughts on Northwest Natural? NWN?
| Daily General Discussion and spitballin thread - November 27, 2021 Posted: 27 Nov 2021 02:02 AM PST 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. November 27, 2021 Posted: 27 Nov 2021 02:01 AM PST 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: 26 Nov 2021 01:36 PM PST So today S&P500 dropped about 2 point something%, ending about 3% below its ATH. Of course, the market being 3% under its ATH is nothing to write home about, but the fact that it dropped by two percentage points in a single day seemed to raise some concerns. So I wondered: how common is it for the market to drop by two percentage points or more in a single day, and does this tell us anything about its likely return after, say, 100 days (this is likely much shorter than the time horizon of many of us here, but longer periods would likely make the effect - if any - of the drop harder to notice)? So I downloaded from yahoo finance the daily S&P500 data for the 1994-2021 period and played around a little with it trying to see if any correlation could be found. This graph shows the percentage change from the previous day versus the percentage return after 100 days: Not seeing much of a correlation between one-day fluctuations and 100-days returns here. Also worth noting is that the days which saw a drop of 2% or more from the previous day were uncommon but not that uncommon (I found 299 of them in 6998 days, that is, about one every 23 days). I tried anyway to try to see if I could find a correlation, just for completeness' sake, and the result is what you would expect from that graph: If anything, it would seem that the change from the previous day might be slightly negatively correlated to the 100-days return - i.e., great days might lead to poorer returns after 100 days - but the correlation coefficient is so low and the standard error so high that the only reasonable conclusion is that one-day changes are of no predictive value for 100-days returns. But what about extremes? What if we consider only the "bad" days in which the market dropped by more than 2%? Here is what we get: Let us compare this with the (235 out of 6998) days in which the market rose by more than 2%: About the same mean, slightly lower standard deviation but that's too close to say anything meaningful. For completeness's sake, I also looked at the "meh days" in which the market did not change by more than 2% in either direction from the previous day: for those days, the average return after 100 days was by 4% - more or less in line with the others - and the standard deviation was by by 0.09 -- lower than the others, but not enough that I'd be confident making any conclusions out of this. In conclusion: the fact that the market dropped by more than 2% today tells us nothing meaningful about what it will do in the next 100 days. Is it possible that the market will crash soon? Sure, that is always possible; but today's drop, in itself, tells us nothing about its chances. [link] [comments] |
| How does a sukuk share risk that bond doesn't? Don't both share risk of default? Posted: 27 Nov 2021 01:38 AM PST Hi I am new to Islamic finance and trying to learn here. I have been told Islamic banks tend to be more risk averse than conventional banks because of the ownership of the underlying asset. I imagine this is true for bond holders as well. My question is: don't bondholders also share risk? Specifically the risk of default? Or is that a different risk than the risk that sukuk holders share? I don't fully get that. Thanks! [link] [comments] |
| Thoughts on Northwest Natural? NWN? Posted: 26 Nov 2021 04:59 PM PST Hey Everyone, I wanted to get folks opinions on NWN. NWN is a natural gas and water utility provider based primarily in OR and WA. P/E at today's close is around 15, and revenue has been increasing low-single digits in recent years. Things I like about them include:
Things I don't like about them include: - Being a mature utility, I'm told these trade like bonds at times, and a shift in interest rates can shift their price up (on interest decrease) or down (on interest increase). - The NW seems to be having more weather related issues than say the midwest or northeast. For instance, wildfires in OR have been bad in recent years. I actually evacuated my house in 2020 because of them. There's also been droughts making wildfires more likely. Buying into NWN exposes you somewhat to these regional issues, and if it gets bad enough people move thats less customers. - The stock likely will never be the next apple, and I'm young/looking to grow wealth quickly and safely. Thoughts? [link] [comments] |
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