Stocks - r/Stocks Daily Discussion & Technicals Tuesday - Nov 23, 2021 |
- r/Stocks Daily Discussion & Technicals Tuesday - Nov 23, 2021
- U.S. to release oil from reserves in coordination with other countries to lower gas prices
- Some words of advice for those who are entering stock market for the first time.
- PYPL anyone?
- Biden picks Jerome Powell to lead the Fed for a second term as the U.S. battles Covid and inflation
- Cathie Wood’s Genomics Fund Is Down 27% and Outflows Are Growing
- Zoom falls 15% as Wall Street slashes price targets on earnings
- This paper has been going around investing subreddits and it is complete BS - here's why
- Options trading is poised to overtake the stock market
- Here is a Market Recap for today Monday, Nov 22, 2021. Please enjoy!
- When large caps inevitably correct, what do you think will happen to small caps?
- What is your moat stock?
- Today "big tech" moves after Powell's nomination announcement.
- What are some common strategies of newbies that simply just doesn't work?
- Why is Square trading down sharply today and underperforming recently
- Advise on responsibly investing $50k in stocks.
- Cathie keeps buying TDOC...at least someone has not given up on this!
- Did I miss any bad news on SOFI technologies?
- Market condition right now
- Diversifying outside of stock
- Thoughts on $ZBRA?
- Why are small-caps doing so bad compared to large caps ?
- Is AMD not a good buy?
- Teachers????
- HUYA, DOYU, BABA, BIDU and Tencent's recent earnings broken down, plus a rundown of recent news and possible price movements over the next f
| r/Stocks Daily Discussion & Technicals Tuesday - Nov 23, 2021 Posted: 23 Nov 2021 02:30 AM PST This is the daily discussion, so anything stocks related is fine, but the theme for today is on technical analysis (TA), but if TA is not your thing then just ignore the theme and/or post your arguments against TA here and not in the current post. Some helpful day to day links, including news:
Technical analysis (TA) uses historical price movements, real time data, indicators based on math and/or statistics, and charts; all of which help measure the trajectory of a security. TA can also be used to interpret the actions of other market participants and predict their actions. The main benefit to TA is that everything shows up in the price (commonly known as "priced in"): All news, investor sentiment, and changes to fundamentals are reflected in a security's price. TA can be useful on any timeframe, both short and long term. Intro to technical analysis by Stockcharts chartschool and their article on candlesticks If you have questions, please see the following word cloud and click through for the wiki: See our past daily discussions here. Also links for: Technicals Tuesday, Options Trading Thursday, and Fundamentals Friday. [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| U.S. to release oil from reserves in coordination with other countries to lower gas prices Posted: 23 Nov 2021 05:15 AM PST CNBC:
According to Barron:
Is this oil reserve gambit going to slow down inflation enough to keep the growth stocks in the green? Or was yesterday's drop just the beginning? [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Some words of advice for those who are entering stock market for the first time. Posted: 22 Nov 2021 06:10 PM PST If you are a first time investor, especially a young investor, it is very easy to fall in the trap of buying the stock that your friend, relative, or a stranger on internet recommended. Just because someone made 1000% gains on something doesn't mean you are going to make that. Remember, that the faster any asset climbs up the faster it comes down like a house of cards. If it had no resistance going up, there is no support going down and when such stocks crack, they fall through the roof in a matter of hours, not even days. Nowadays, you get ads on YouTube every 2 seconds with someone shouting in your face with so called their magic formula where their students make $500-$2000 every trade. Don't fall for these snake oil salesman. If making money were that easy, nobody would work their ass off for years just to buy a house or a car. Pick up a book and learn the basics of Finance. Fundamentals will help you get a handle of how to start valuing a company. While Technical charts play a role in short to medium term movements of the stock, long term is always going to be based on Fundamentals. Watch Peter Lynch's videos on YouTube, he is an old school investor just like Warren Buffett, but has some really good food for thoughts in his videos. Needless to say, if you are investing in Crpto be extremely conservative. 10% of your portfolio is too much. Anything more than that, and you lose your hard earned savings very quickly if things go south. I understand there is a Euphoria when you make quick money, but derivatives like Futures and Options are sure shot way of getting screwed if you don't know what you are doing. Everyone has an itch to make a lot of money in a short period of time, but trust me, losing your original investment is one the worst feeling you can ever have if you earned that money by working hard. If you don't know anything at all about investing and want to start putting some money into an investment account, buy a broad market based ETF like SPY or QQQ on a regular basis. Think $100-$200-$500/month. Time in the market is always going to beat timing the market. Lastly, as Warren Buffett said - Rule 1: Never lose money and Rule 2: Never forget Rule 1. TL;DR: Don't invest blindly in Stocks that some friend/stranger recommended you. Efforts to make money quickly on Stocks, Crpto, or Derivatives (Futures and Options) without understanding the fundamentals and risks, will make you lose your hard earned money and your shirt. If you don't know anything about investing, buy broad market based ETF like SPY and QQQ on a regular basis. [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Posted: 23 Nov 2021 03:11 AM PST As of yesterday, I thought this was nothing but an overreaction to that infamous downgrade. Now I'm not sure. It even makes me think shouldn't they come up and try that PINS deal again. I think this stock, with all its challenges, belongs to the high 200$'s. Thoughts? [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Biden picks Jerome Powell to lead the Fed for a second term as the U.S. battles Covid and inflation Posted: 22 Nov 2021 06:08 AM PST Jerome Powell, who guided the Federal Reserve and the nation's economy through the staggering and sudden Covid-19 recession by implementing unprecedented monetary stimulus, has been nominated for a second term as chairman of the U.S. central bank. President Joe Biden made the announcement Monday morning following weeks of speculation that a push from progressives might see Fed Governor Lael Brainard get the spot. Brainard instead will be vice chair of the board of governors; she had been widely expected to get a separate vice chair for supervision post, which oversees the nation's banking system. As vice chair, she would succeed Richard Clarida, whose term expires Jan. 31, 2022. "As I've said before, we can't just return to where we were before the pandemic, we need to build our economy back better, and I'm confident that Chair Powell and Dr. Brainard's focus on keeping inflation low, prices stable, and delivering full employment will make our economy stronger than ever before," Biden said in a statement. The nominations next head to the Senate for confirmation. In making the decision, Biden praised the Powell Fed for its "decisive" action in the early days of the pandemic. The Fed rolled out an unprecedented array of lending programs while also cutting interest rates back to near zero and instituting a monthly bond-buying program that would increase the central bank's holdings of Treasurys and mortgage-backed securities by more than $4 trillion. "Chair Powell has provided steady leadership during an unprecedently challenging period, including the biggest economic downturn in modern history and attacks on the independence of the Federal Reserve," a White House statement said. "During that time, Lael Brainard – one of our country's leading macroeconomists – has played a key leadership role at the Federal Reserve, working with Powell to help power our country's robust economic recovery." Though Powell carried the day, it was not without controversy. The Fed has been under fire lately following an ethics scandal in which multiple officials engaged in trading stocks at a time when the institution was implementing policies aimed at boosting markets. Powell disclosed that he owned municipal bonds, which the Fed also was buying, and he also bought and sold funds tied to the broad stock market indexes. At the same time, the Fed has been hit with inflation running faster than it had anticipated – in fact, at the sharpest pace in 30 years. Official Fed policy since September 2020 has been to let inflation run somewhat hotter than the standard 2% target if it allows for full and inclusive employment, but prices have been rising well above that level. Powell has held to the line that inflation will cool off once factors associated with the pandemic return to normal. But the recent readings have raised questions about the so-called average inflation targeting that signaled a historic turn in central bank monetary policy. The inflation also has come with a rapid economic recovery and a decline in the unemployment rate from a pandemic peak of 14.8% to its current 4.6%. The White House statement said the recovery is "a testament to the success of the President's economic agenda, and it is a testament to decisive action by Chair Powell and the Federal Reserve to cushion the impact of the pandemic and get America's economy back on track." Brainard emerged as a key force in the race over who would carry the Fed through the next four years. She has taken point on several issues important to the Biden administration, particularly the need for the Fed to brace the banking system against disruptive climate change events. A former undersecretary of the Treasury during the Obama administration, Brainard also has been a strong proponent of a digital dollar. The White House statement stressed the importance of progressive for the Fed in the years to come. Biden said that Powell and Brainard "also share my deep belief that urgent action is needed to address the economic risks posed by climate change, and stay ahead of emerging risks in our financial system." "Fundamentally, if we want to continue to build on the economic success of this year we need stability and independence at the Federal Reserve – and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs," he added. Political pressure, and a Covid struggle President Donald Trump appointed Powell to the position in 2018 in somewhat of a surprise. Trump chose to pass over then-Chair Janet Yellen, an unusual move in that Fed leaders are rarely removed after just one term. Former President Barack Obama initially appointed Powell to a 14-year term as governor in 2014. Though Trump nominated Powell, he later fired withering criticism at the Fed chief when the central bank raised interest rates seven times in 2017 and 2018. The former president went as far as to call the Fed policymakers "boneheads" for trying to normalize policy as the economy recovered. As for Brainard, she is now widely expected to be named vice chair of supervision, a key Fed post to oversee the nation's banking system. The Fed is empowered by Congress to fulfill two mandates: Maximize U.S. employment and keep inflation stable. Its leaders, known as governors, are nominated by the president and vote on how to adjust interest rates, regulate the nation's largest banks and monitor the health of the economy. To combat the spike in unemployment and recession that began in the spring of 2020, the central bank slashed interest rates and began buying some $120 billion in Treasury bonds and mortgage-backed securities every month. It also instituted a variety of lending programs aimed at keeping fixed income markets functioning after they endured significant stress at the beginning of the pandemic. Economists credit that quick and sizable response for stabilizing financial markets and later repressing long-term interest rates. Lower interest rates make it easier for corporations to take on loans to build new factories, or for individuals to buy homes or cars. "Under Powell the Fed has placed more emphasis on having the economy operate at maximum employment," Mike Feroli, chief U.S. economist at JPMorgan, said via email. "This is a goal progressive economists have long advocated and a goal which is presumably consistent with Biden's agenda." Treasury Secretary Janet Yellen, one of Biden's top economic advisors and a counselor on his Fed nominations, told CNBC earlier this month that she is happy with the Fed chief's work. Yellen was the first woman to serve as the Fed's chair and is the country's first female Treasury secretary. "I talked to him about candidates and advised him to pick somebody who is experienced and credible," Yellen said. "I think that Chair Powell has certainly done a good job." Powell is also popular on Capitol Hill, where lawmakers on both sides of the aisle have praised his leadership and amiability since he took over for Yellen in February 2018. The news is likely a disappointment to progressives including Sen. Elizabeth Warren, D-Mass., who said in September that the Fed's role in relaxing banking regulations in recent years makes Powell a "dangerous man" and that she would oppose his renomination. [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Cathie Wood’s Genomics Fund Is Down 27% and Outflows Are Growing Posted: 22 Nov 2021 09:39 AM PST Bloomberg) -- Investors appear to be losing patience with Ark Investment Management's genomics fund. The Ark Genomic Revolution ETF (ticker ARKG) has seen roughly $520 million of outflows in November amid sinking returns. The fund is down 27% year-to-date as investors shun health-care stocks in favor for more cyclical names that perform well during an economic recovery. Even so, the ETF is faring far worse than the broader biotech sector, with the Nasdaq Biotechnology Index up 10.49% this year. ARKG is currently trading at $66.38 a share, lower than its level a year ago, before a steep rally that crested early in 2021. The genomics fund has also seen the largest outflows among Ark's ETFs this year. "It's interesting that typically loyal Ark investors have been bailing on the ETF," said Nate Geraci, president of The ETF Store, an advisory firm. "The fund's assets have been chopped in half since February. While I don't believe the ETF is experiencing some of sort of 'doom loop,' clearly the outflows are putting downward price pressure on the underlying holdings and testing the will of remaining fund owners." The ETF's two top holdings, Teladoc Health Inc. and Exact Sciences Corp., have weighed on its performance, with drops of some 45% and 37% this year, respectively. The recent outflows may be due to investors looking for shorter-term opportunities into the year-end and freeing up cash, said Sylvia Jablonski, chief investment officer at Defiance ETFs. Ark Chief Executive Officer Cathie Wood is well-known for prioritizing longer term investments over short-term gains. "This is a 5-10 year hold. AI in health care is going to change the way that we can predict, treat and manage the most difficult diseases like cancer, and the Ark fund gives investors access to the companies who are on the cutting edge of that research," said Jablonski. [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Zoom falls 15% as Wall Street slashes price targets on earnings Posted: 23 Nov 2021 06:47 AM PST -Shares of Zoom dipped Tuesday after the video-chat company warned investors of a revenue slowdown. -The report led Wall Street banks to slash price targets on the stock. Shares of Zoom dipped more than 15% on Tuesday after the video-chat company warned investors of a revenue growth slowdown, leading some firms to cut price targets on the stock. Zoom was one of the pandemic darlings, going from a relatively niche business software segment to a household product. Millions of people used the company's tech over the past nearly two years in order to keep up with school, work or socializing. But growth is slowing as people return to work and school. BTIG, which lowered its price target to $400 from $460, reiterated its buy rating, but said the cut was to "better reflect current market sentiment and group multiple compression." Deutsche Bank Research also lowered its 12-month target to $280 from $350. Zoom opened at $218.05 on Tuesday and the stock is down more than 35% year-to-date. "While we're positive on Zoom's strategic initiatives and investments in key growth areas, we find it tougher to like a stock with more sharply decelerating growth and incremental pressure on profitability," the researchers wrote in a Tuesday note. Baird, Guggenheim, Wells Fargo, Stifel, UBS, Piper Sandler and KeyBanc also dropped their price targets. But Wall Street is generally still bullish on Zoom's future. "Moderating growth has been, and could continue to be a near-term stock headwind, though we remain positive on the long-term growth and platform opportunity particularly as the growth rate troughs over the next couple quarters," Baird researchers wrote Tuesday. Zoom's revenue increased 35% from a year earlier in the quarter, which ended Oct. 31, slowing from 54% growth in the quarter before. For the fiscal fourth quarter, Zoom forecast adjusted earnings of $1.06 to $1.07 per share on $1.051 billion to $1.053 billion in revenue, which implies 19% growth. [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| This paper has been going around investing subreddits and it is complete BS - here's why Posted: 22 Nov 2021 07:09 PM PST You may have seen this paper (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2741701) floating around various investment subreddits over the past week. It usually comes with the title How to 3x the S&P CAGR with less risk | Leverage for the Long Run with people praising it as an amazing new strategy that requires little effort, provides a high degree of safety, and allows you to experience only the good side of leveraged ETFs. Here's why it's complete bullshit. I've seen the 200 SMA argument posted hundreds of times before in r/LETFs. I'm glad this one at least comes with a paper, but the paper is still falling for the same mistakes other believers fall for. The author is correct that volatility increases below any significant moving average (20/50/100/200), however, avoiding volatility should not be your main concern when holding unhedged leveraged ETFs. Your main concern should be flash crashes like in 1987 where the market fell 22% in one day. The author says this:
Wow look at that, moving averages helped avoid the worst two days... but why? The answer is partially due to the fact that both the best and worst days will be in periods of high volatility, but it's also heavily influenced by pure chance. A day like Black Monday could happen at anytime and if there wasn't a choppy market leading up to it you will miss it with moving averages. An unleveraged 22% drop would be a 66% drop for the portfolio suggested in the paper. The market would then likely dip below the 200 SMA and the person would sell! Missing the entire ride back up, even if there was more to fall you're not going to be left in a good place. There is no macroeconomic reason that moving averages have any form of predictive power. The closest thing would be the concept of a self fulfilling prophecy which would require a massive audience of believers to have an impact (there are not nearly enough). People always use 200 SMA, but if you try to test other SMAs nearby you sometimes get significantly worse results. The 200 SMA just happens to get you out before the Dot Com crash as well as the GFC. When your entire reasoning is based on well it did good in the past you're overfitting by definition. Let's look at another strategy that has an economic backing - HFEA. Holding stocks and bonds together isn't something that just happens to work when you test it. When stocks experience uncertainty large investors move their money into the safety of bonds which forces them in the opposite direction to the stock. Stocks and bonds are slightly, but not perfectly inversely correlated and both of them have positive expected returns. This is why they are the ideal hedge. I also want to point out that this is not an academic paper that came from a university. It was published by https://www.leadlagreport.com/ which says on its homepage "Consistently win in the stock market and minimize risk regardless of market conditions" followed by a subscribe button. This is called bullshit and I encourage anyone who cares about honesty to call it out when shit like this is posted. [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Options trading is poised to overtake the stock market Posted: 22 Nov 2021 02:31 PM PST The average daily notional value of traded single-stock options has risen to more than $450 billion this year, compared with about $405 billion for stocks, according to Cboe Global Markets data
[link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Here is a Market Recap for today Monday, Nov 22, 2021. Please enjoy! Posted: 22 Nov 2021 02:32 PM PST PsychoMarket Recap - Monday, November 22, 2021 After trading mostly even throughout the day, the Nasdaq (QQQ) and S&P 500 (SPY) sold off sharply in the last hour. Early in the morning, President Biden announced this morning that Jerome Powell was renominated to lead the Federal Reserve for another four years. Federal Reserve Governor Lael Brainard, who was Powell's main competitor, was nominated as the Vice-Chair. Looking ahead, market participants are waiting for more inflation data set to be released later this week. On Monday, President Biden announced he was nominating Jerome Powell for a second, four-year term as the Chair of the Federal Reserve and Fed Governor Lael Brainard as the Vice-Chair, ending weeks of speculation who would be tapped to run the nation's Central Bank. Biden was expected to select either Powell or current Fed Governor Lael Brainard as Fed chair. Following the nomination, Powell will go before the Senate Banking Committee for approval, and if confirmed, will serve another four-year term. Eric Browne, Managing Director and Portfolio Manager at Pimco, said "I think this was largely expected by markets. Certainly there were some conversations in markets over the last couple of weeks about Brainard potentially being elevated to the Fed chair position. But by and large the expectation was for consistency. You may see a little bit of a rally on the back of this with the expectation that policy is going to remain in place and intact, and everything that's been articulated already by the Fed is likely to continue into 2022 and beyond." Looking ahead, more inflation data is set to be released later this week, which will provide further insight into the pace of inflation and any potential reactions by the Federal Reserve. The Core Personal Consumptions Expenditure (PCE) , which is Fed's preferred measure for inflation, is set to be released Wednesday and expected to show a 4.1% year-over-year increase. This would be the biggest annual jump in roughly three decades. Highlights
[link] [comments] | |||||||||||||||||||||||||||||||||||||||
| When large caps inevitably correct, what do you think will happen to small caps? Posted: 23 Nov 2021 03:16 AM PST So large caps have had an incredible runup. Costco, Nvidia, Apple, it's all just become ludicrously overvalued (Costco's ev/ebitda doubled since 2019, nvidia's ev/ebitda went 6x). Around the same time there's been this trend of small caps getting crushed into the dirt, not in small part due to extreme short action. Do you think that when the large indexes finally correct small caps will just go down more? Or will at some point all doom and gloom be priced in and investors will stop selling their shares? Especially certain cannabis companies are priced at a extremely compelling valuation (Green Thumb is projected to grow 30% annually well into 2023 while trading at a fwd ev/ebitda of 12). Same for Village Farms ($VFF). I'm hesitant on jumping in with both feet due to the obscene valuations in large caps, I fear that their eventual correction will drag down anything and everything. Would love to hear your thoughts! [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Posted: 22 Nov 2021 08:22 AM PST This refers to a company that has an economic "moat" or an advantage a company has over its competitors which allows it to protect its market share and profitability. Usually you'll have to pay a premium for these companies due to their security. I'll go first, my moat is MSFT. [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Today "big tech" moves after Powell's nomination announcement. Posted: 22 Nov 2021 01:42 PM PST I followed the market today and right after Powell got nominated by Biden some stocks skyrocketed, NVDA hit up to $346 a share for example, while others plummeted. Granted, the ones that skyrocketed followed the ones that went down soon after. Powell in the chair seems to be, as far as I seem to understand, "good for stocks" because of easy money and whatnot. I'm going to assume I either miss some event or are just failing to grasp some very basic concepts, what happened today that turned a supposedly very green day into an all-red one? I mean the NASDAQ started pretty high and ended up like -1.4% when the closing bell hit. [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| What are some common strategies of newbies that simply just doesn't work? Posted: 22 Nov 2021 08:53 AM PST When I was younger, I used to hunt for stocks that dropped significantly from its highs because I viewed them as "cheap" and those that were setting record highs were "overpriced" and it was too late to get in. This, of course, is silly thinking and not at all a good strategy. What are some other pitfalls that newbies get trapped in? [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Why is Square trading down sharply today and underperforming recently Posted: 22 Nov 2021 08:40 AM PST My Square cost basis is around $230, Cash App is very widely used by many people and square has been expanding rapidly. But the stock just keep trading lower everyday and now it is trading closing to 52 week low from May 2020. Does anyone know is this a payment sector issue or reasons from Square itself. [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Advise on responsibly investing $50k in stocks. Posted: 23 Nov 2021 01:01 AM PST So I'm going to be getting $50k in the next few days and I was planning on investing it as I don't need it for anything else. I already have $100k invested in various ETFs. For this money I'm confused whether I should put it all in an ETF like $SPY and let it grow or maybe start selling cash secured puts on stocks that I like to make weekly premiums. Are there any other better ways to invest this amount? [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Cathie keeps buying TDOC...at least someone has not given up on this! Posted: 22 Nov 2021 05:32 PM PST https://cathiesark.com/arkk/trades Today's buys: ARKK: 86,550 shares ARKW:23,000 shares ARKG: 28,000 shares ARKF: 13,500 shares Total: 151, 050 (at closing price today, that will be 16.5M) And funny to see my cost basis is almost the same as hers (mine is 161, hers is 163). Cathie, please don't abandon us!:-) [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Did I miss any bad news on SOFI technologies? Posted: 22 Nov 2021 08:30 AM PST SOFI reported $272 million revenue in Q3, over the consensus estimate of $251.6 million, and way over the same period in 2020 which was $201 million. I don't understand the reason for the share price drop. What am I missing? [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Posted: 22 Nov 2021 10:48 PM PST Am I being crazy or something is going on with the market this last few weeks? It's extremely choppy and depressing at the same time, like for example in the previous weeks all good earnings after a 10% gap up it gets sold to red, and bad earnings gets -20%, any buildup is immediately followed by big dump. And now everything is going down besides FAANG, XLF and XLE that ended up also down. [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Posted: 22 Nov 2021 08:05 PM PST I have about 80% in stock, 10% in intermediate term bonds, and about 10% in cash. I have an extra emergency fund on top of this. I'm thinking about what to do with my investable cash, the 10% above. I was thinking about loading up on more bonds because I imagine the market slowing over the next 6 months, but I'm not sure if that's the right move. I don't have a solid understanding of the bond market which is the primary reason for my hesitancy. I'm a buy-and-hold guy so I don't do individual stocks generally, just VTI/VOO/VUG and then I forget about it. I do own some shares of companies like AAPL but it's not much. Anyways, I am not trying to do anything that requires too much active management. Just trying to position myself right. I figure I won't need to sell anything for a minimum of a year unless I buy a house, but given the prices right now and the possibility I'll move cities, that seems highly unlikely. Thoughts? [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Posted: 23 Nov 2021 01:35 AM PST Hi, Any thoughts on Zebra Technologies ? It has been performing quite good in the recent times. I think their strength is possibly the association with warehouse/online sellers for their handheld barcode scanners etc. However, I looked into their CEO transaction etc and looks like he sells stocks from time to time. What do you guys think of this company. I don't know what to make of it and I am wondering if I should wait for a pullback on it as I don't see any reason for it to grow as it does. [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Why are small-caps doing so bad compared to large caps ? Posted: 22 Nov 2021 12:12 PM PST I know they had their run at the start of the year but most of them lost 60% or more of their value since then. Some as close as -80% and are trading under cash value. Meanwhile large caps keep breaking record after record every few weeks. You'd think money would flow to the undervalued small-caps again but it isn't happening yet for some reason. At some point high inflation/interest rates has to be priced in right ? [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Posted: 22 Nov 2021 09:37 AM PST I had people on another sub jokingly make comments that buying AMD was like "gambling". I don't see how this can be as it is fairly cheap compared to NVDA and demand with the chip shortage and rise of EV's. Am I missing something? [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Posted: 23 Nov 2021 07:44 AM PST I don't know if this has been asked before, I bet it has. What are some of the best teachers you have had that has helped you succeed in the stock market. Wether that be paid classes or just YouTube. Thanks [link] [comments] | |||||||||||||||||||||||||||||||||||||||
| Posted: 23 Nov 2021 07:22 AM PST Over the last couple of weeks, a lot of Chinese companies listed in the US have released their latest earnings. In this video, we will take a look at five of them, HUYA, DOYU, Baidu, Alibaba and Tencent. We will first look at earnings before checking the latest news and possibly price movements. Baidu ($BIDU)Let's start with Baidu. For the tenth consecutive quarter, Baidu beat analyst earnings expectations with an EPS of $2.3 US dollars which was $0.29 dollars or 14.4% above expectations. However, Baidu's earnings were lower than last quarter and 25.5% lower compared to the same period last year. Plus, the GAAP EPS was minus $7.48, which is a big, big loss. That's not great for the share price because price follows earnings as Peter Lynch likes to say. Even though Baidu's revenue was in line with expectations at exactly $5.00 billion US dollars, this is their higher quarterly revenue ever with a 4% increase compared to last quarter and 16.7% increase compared to last year! That was driven by Baidu's AI cloud which grew by 73% compared to last year! Cloud is massively growing in China with Baidu and Alibaba being two of the main players in the country so let's take a look at Alibaba. Alibaba ($BABA)Alibaba posted one of its worst earnings releases ever! Alibaba failed to meet earnings expectations with an EPS of only $1.75, missing analyst expectations by $0.19 US dollars or 9.7%! This is a 31.9% drop from last quarter and 35.6% drop from last year which is really concerning. On top of it all, Alibaba missed revenue expectations with only $31.4 billion dollars. It is still 33.8% higher than the same period last year, but the revenue came 2% under analyst expectations. Out of the last 3 earnings reports, Alibaba has failed to meet earnings and revenue expectations twice, which is a very, very concerning sign for a growing company. Even worse, Alibaba reduced their revenue guidance for the current fiscal year which is typically not a good look and it's even worse when combined with both an earnings and revenue miss. Tencent ($TCEHY or $0700.HK)Then, we've got Tencent. Unfortunately, Tencent missed both earnings and revenue analyst expectations for the latest quarter just like Alibaba. Tencent reported an EPS of $0.51 dollars, which is what they also reported last year. In terms of revenue, Tencent reported $22.28 billion US dollars which is 2% under expectations although it still shows a 17.5% increase as compared to last year. Tencent's biggest segment, gaming, is doing well, increasing by 28% as compared to last year if we take out changes in currency. Tencent's second biggest segment, FinTech and Business services, also grew by 30% which was good to see. Overall, Tencent is posting a decent revenue growth, but its profits are lagging behind. HUYA ($HUYA)The next company is HUYA who released their earnings on the 9th of November. HUYA reported an EPS of $0.12 US dollars which was $0.06 US dollars above analyst expectations, basically double of what they expected. That looks good, but we need to remember that analysts massively reduced expectations in the month leading up to the earnings release. Plus, HUYA had an EPS of $0.23 US dollars for the same quarter last year and an EPS of $0.16 for last quarter so we can see that HUYA's earnings are trending down. On the upside, HUYA reported a revenue of $465.5 million US dollars, which was 2% under analyst expectations, but it was still 10% higher than last year and 2% higher than last quarter's so there's a steady improvement there. Their paying users for HUYA Live remain the same number as last year so no changes there even though their total mobile users went up by 15%. Douyu ($DOYU)Now, let's take a look at DOYU which are essentially HUYA's main competitor even though both companies have Tencent as their majority owner. Just like HUYA, DOYU beat the analyst earnings expectations by $0.01 US dollars with an EPS of minus $0.03 US dollars, but, again, the expectations were lowered going up to the earnings so an earnings beat doesn't mean much. Their EPS for the same period last year was $0.06 so there's a big drop there although the current EPS is slightly better than the previous quarter. In terms of revenue, DOYU missed expectations like HUYA by just under 1%, which is pretty much in-line really. However, DOYU's revenue has dropped over 5% from the same period last year, which is not good. Also, their paying users have dropped by 10% year-on-year to just 7.2 million in the latest quarter. Trend, news and outlookSo, the overall trend here is a slowing revenue growth and slowing earnings. We can see that in the results and we can see it in the guidance. So, why is this happening? There are several reasons behind this. First of all, the Chinese economy has been slowing over the last quarter which has concerned a lot of investors. Inflation is also going up worldwide along with shipping costs. Then, we have still not seen the fallout from Evergrande's collapse in China and that is worrying. Evergrande has the potential to inflict a massive hit to the global stock market. We also have the new regulations around data security, data privacy, gaming, tech companies overall. We've seen Alibaba and Baidu taking a revenue and earnings hit. We have seen Alibaba getting the massive fine. In addition to all that, DOYU's CEO has also just reported that Chinese regulators have suspended the approval of new games in China to tackle the perceived video game addiction by Chinese youth. This will cut into the earnings of the gaming industry in which DOYU, HUYA and Tencent are involved. Basically, the next 3 to 6 months look a bit bleak right now although some analysts argue that this is setting up China for steady growth after an initial slowdown. Personally, I'm currently bearish on China. We've seen the latest price action for HUYA, DOYU, Baidu, Alibaba, Tencent. We had a few false breakouts, but in the end the prices dropped again. All five companies currently trade at a massive discount. HUYA and DOYU are trading at their all-time lows! Alibaba is trading at a PE of 17.5 compared to its historical average of 27 to 30. When's the last time that Tencent has traded at a PE of 21? Over 5 years ago, maybe more. All of these look like amazing bargains right now, but are they? I read a detailed interview with Stanley Druckenmiller years ago and he said something along the lines of "Don't look at the fundamentals, look at what's moving the price". With DOYU, HUYA, Alibaba, Baidu and Tencent there's been two main things moving the price. Regulation is the big one, but there's also the slowdown in revenue and earnings. This tells me two things. First of all, investors wants to see reassurance that China will not destroy its tech companies. There is a decent chance that China will want to exercise more control over its tech companies, maybe even place members of the CCP on the board like it did with Bytedance, the company behind TikTok. Do you know what would happen if they do that? These companies will be delisted from US stock exchanges. Just think of all the institutions and hedge funds that would have to exit. Share prices will plummet. I'm not saying that it will happen, but there is a small chance. Plus, the Chinese government has outlined a 10-year plan that includes strict regulation of big tech companies. A ten year plan. I wouldn't hold my breath for any good news in terms of regulation there over the next year. Second of all, investors want to see better earnings. However, again, we need to see signs that earnings will be improving and this will not happen for at least 3 months ahead, most likely for longer if the slowdown in Chinese economy continues. Summary and personal thoughtsThe way I see it, buying these companies is a bet on the actions of the Chinese government. Personally, I think this is extremely risky. I have less than 2% of my total portfolio in these companies and my plan is to continue adding a bit every month in case I turn out to be wrong, but keeping my overall exposure to about 2.5%. However, I know that a lot of retail investors are bullish on these companies. There are good reasons behind it, but I think it's extremely important to consider the risk here and manage the exposure. As Peter Lynch likes to say, be careful when thinking that a company cannot go lower because it can and often it will. DOYU, HUYA, Alibaba, Baidu and Tencent can very well turn out to be value traps for the next year. We still haven't seen any signs that the bearish trend in their prices has been reverted. If you want to buy the dip, that's fine, but just be careful and manage your exposure. I'm not a financial advisor and you can make up your own mind, but just do your research and think about the risk. I don't think we will see a big rise in price until we see a catalyst and I think there are stocks, even indexes, that can offer better returns over the next 12 months. Overall, I'm neutral, given China's recent regulation record plus the slowing revenue and earnings growth seen. However, I also think that the market is punishing those companies way too much so I think they're actually trading at a decent discount, which is why I continue to build a position even though it's a smallish one. What do you think? Bullish, neutral or bearish? [link] [comments] |
| You are subscribed to email updates from Stocks - Investing and trading for all. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment