Stocks - Why is there so much inflation? What happened? |
- Why is there so much inflation? What happened?
- Acting on the dip
- Russia could hit U.S. chip industry, White House warns
- Insider Sell: Advanced Micro Devices AMD
- [PLTR] Anyone here an end-user for Palantir's tech? How replaceable are their services?
- Fundamental analysis and valuation of Airbnb - Hyped from the start (value $79.87 vs price $171.95)
- What would Russian sanctions do to stocks? Any thoughts on industries/sectors which would go or down?
- Walmart and recession
- New to the market feeling overwhelmed should i be aiming for growth stocks or high dividend stocks
- About to unleash a huge portion of my money on NVDA before their next report
- What's the purpose of after and pre market trading? Why do stocks change direction aftrr hours?
- Near-Worthless Stock Advice/Help
- LUMN- Once again a huge bargain for value investors
- Will NDX rises from the dip again this monday?
- Looking to start a stocks/brokerage account. Which platform/service is right for me?
- got a cash gift , did I just blow it ?
- Affirm (AFRM) is now down over 40% in the last 24 hours - anyone bullish?
- Does anyone else feel like we are about to experience a catastrophic change in finance?
- How do you make money from Reverse index funds?
| Why is there so much inflation? What happened? Posted: 11 Feb 2022 02:09 PM PST I have a very basic understanding of economics (supply & demand, printing more money devalues currency, opportunity cost & gdp) but I haven't been able to wrap my head around what's currently going on in the economy. What does it even mean to "raise rates" or whatever the Federal Reserve is doing? [link] [comments] | ||||||||||||||||||||
| Posted: 11 Feb 2022 07:06 PM PST Since almost everything went on sale today, what stocks would you tell new investors to buy Monday and hold for a while? I've actually been investing for a little over a year and about 65% of my portfolio is in index funds, but I'm wondering what stocks would be good to open positions in right now. Edit: Also what are your thoughts on Walmart and Target stock for the long term. [link] [comments] | ||||||||||||||||||||
| Russia could hit U.S. chip industry, White House warns Posted: 11 Feb 2022 10:27 AM PST For those like me wondering why semis are getting hit particularly hard today. WASHINGTON, Feb 11 (Reuters) - The White House is warning the chip industry to diversify its supply chain in case Russia retaliates against threatened U.S. export curbs by blocking access to key materials, people familiar with the matter said. The potential for retaliation has garnered more attention in recent days after Techcet, a market research group, published a report on Feb. 1 highlighting the reliance of many semiconductor manufacturers on Russian and Ukrainian-sourced materials like neon, palladium and others. According to Techcet estimates, over 90% of U.S. semiconductor-grade neon supplies come from Ukraine, while 35% of U.S. palladium is sourced from Russia. Peter Harrell, who sits of the White House's National Security Council, and his staff have been in touch with members of the chip industry in recent days, learning about their exposure to Russian and Ukrainian chipmaking materials and urging them to find alternative sources, the people said. The White House declined to comment on the specifics of the conversations, but a senior official reiterated that the administration was prepared if Russia invaded Ukraine. "Part of that is working with companies to make sure that if Russia takes actions that interfere with supply chains, companies are prepared for disruptions," the person said. "We understand that other sources of key products are available and stand ready to work with our companies to help them identify and diversify their supplies." Joe Pasetti, vice president of global public policy at the chip and electronics manufacturing suppliers group SEMI, sent an email to members this week gauging exposure to the vital chipmaking supplies, according to a copy obtained by Reuters. "As discussed on today's call, please see the attached document ... regarding Russian/Ukrainian production of a number of semiconductor materials," he wrote, referencing a summary by Techcet on C4F6, Palladium, Helium, Neon and Scandium from the troubled region. "Please let me know if potential supply disruptions to any of them are a concern for your company." Neon, critical for the lasers used to make chips, is a biproduct of Russian steel manufacturing, according to Techcet. It is then purified in Ukraine. Palladium is used in sensors and memory, among other applications. The Biden administration has threatened to impose sweeping export controls against Russia if it invades Ukraine. Russia, which has massed over 100,000 troops along Ukraine's border, denies it plans to attack. Some chipmakers have been reviewing their supply chains to scan for potential fallout from conflict in Ukraine. One person at a chipmaking company who declined to be named acknowledged that it has been looking into its supply of neon and other gases, some of which originate in Ukraine. "Even if there was a conflict in Ukraine it wouldn't cut off supply. It would drive prices up," the person said. "The market would constrict. Those gases would become pretty scarce. But it wouldn't stop semiconductor manufacturing," he added. According to one power chip design startup executive, unrest in Ukraine has caused rare gas prices to increase and could cause supply issues. Fluorine is another gas that has a large supply from that part of the world and could be affected, the executive added. William Moss, a spokesperson for Intel Corp , said the chipmaker was not anticipating any impact to neon supply. But the issue is still concerning, because global chip supplies are tight and chip orders are only expected to pick up. Techcet estimates demand for all the materials will rise by more than 37% over the next 4 years, pointing to recent announcements by Intel, Samsung, and Taiwan's TSMC in Ohio, Arizona and Texas. Neon prices rose 600% in the runup to Russia's 2014 annexation of the Crimean peninsula from Ukraine, since chip firms relied on a few Ukrainian companies, according to the U.S. International Trade Commission. [link] [comments] | ||||||||||||||||||||
| Insider Sell: Advanced Micro Devices AMD Posted: 11 Feb 2022 11:21 AM PST Advanced Micro Devices (AMD) shares slipped nearly 9% in Friday afternoon trading after CFO Devinder Kumar sold 28,964 shares in the company for $3.5 million. Volume at 2.15 pm ET was up over 106 million, versus an average of 70 million. Price: 115.13, Change: -10.64, Percent Change: -8.46 EDIT: Ukraine tensions, inflation push chip stocks even lower [link] [comments] | ||||||||||||||||||||
| [PLTR] Anyone here an end-user for Palantir's tech? How replaceable are their services? Posted: 11 Feb 2022 11:43 PM PST At the current prices, I would consider opening up a position however I am a bit unsure about how sticky and replaceable their services are especially within the Enterprise side of the business. I know they do well with Govt contracts. [link] [comments] | ||||||||||||||||||||
| Fundamental analysis and valuation of Airbnb - Hyped from the start (value $79.87 vs price $171.95) Posted: 11 Feb 2022 12:39 PM PST Airbnb went public on December 10th, 2020, which is not that long time ago. The IPO price was $68/share and on the first day, it opened at $146. This already points to the fear of missing out to invest in a company that disrupts an industry as the demand was incredibly high. In this relatively short period, the stock price was very volatile moving from $130 to $220 a couple of times. For a company that is highly dependent on traveling, to go public in the middle of a pandemic is definitely brave. Currently, the market cap of the company is at around $106b, but let's round it down to $100b and we can refer back to it. In this post, as in all of the previous ones, I'll do my best to provide an in-depth analysis of the company's fundamentals and at the end provide calculate its intrinsic value based on certain assumptions. How does Airbnb make money? We can divide the company into two operating segments: Segment #1 - Marketplace that connects hosts and guests (both groups are customers of the company) - This is what the company is known for. It gets 3% flat-free from the hosts and anywhere between 6% and 12% from the guests. The average take-rate has been around 13% of the gross booking value. The total addressable market is estimated at around $2 trillion: -$1.8t is related to short-term stays. -$210m related to long-term stays There's no doubt that this is a disruptive business as it provided value to both the hosts and the guests. On one side, the hosts have an easy way to set up their business and make money from their property that is not being used. On the other side, the users have more affordable alternatives to choose from. Segment #2 - Marketplace that connects experience hosts and experience users. There has been an attempt to sell this as an important part of their business and their take-rate, in this case, would be around 20%. I did some research to figure out what kind of experiences are available around my area and in some major cities and I was not very happy with the results. The most common ones were restaurants and photoshoots. It is clear that the first segment is disruptive, but I am fairly pessimistic about this one. There are plenty of alternatives to find what to do in a given place and when it comes to restaurants, I would say Google Maps is one of the go-to place as it has lots of reviews as well. Although the total addressable market is $1.4t, I am not confident that Airbnb can capture a significant portion of it. Of course, I could be wrong. How did they perform in the past? Let's start with the gross bookings, which is the value of the services provided through their platform. In 2017, there were roughly $20b gross bookings and this amount more than doubled to $41.5b for the last 12 months (ending September 2021). Their cut is around 13%, so the revenue that the company brings increased from $2.5b in 2017 to $5.3b for the last twelve months. That means the company's currently trading at over 20x Price/sales. Of course, it is too early to draw any conclusions, there are plenty of pieces of the puzzle to put together. What about the margins? The first costs that they need to cover are the direct costs, in this case, payment processing fees, costs related to 3rd party data centers that are used to host the platform, and community (customer) support. Historically, they've been around 40% of the revenue, which brings the gross margin to 60%. The economy of scale can definitely kick in here and I would not be surprised if the gross margin increase to 70% over time. After that, there are 3 operating expenses that need to be covered: - Product development (16% of revenue in 2017 to 59% LTM) - Sales & Marketing (34% of revenue in 2017 to 28% LTM) - General & Administrative (13% of revenue in 2017 to $25% LTM) - Restructuring (0% of revenue in 2017 vs 2% LTM) - During 2020, Airbnb reduced the # of employees by 25% If we deduct these percentages from the gross margin, we can see that in 2017, they had a negative operating margin of 3.2%, while for the LTM, it is negative over 50%. This is not surprising as the pandemic had a huge impact. So, looking into the future, there are three main questions to answer: Question #1 How quickly can the company grow the top line? The analysts are forecasting growth between 12% and 32% for 2022. My assumption for the next twelve months is 30%. It might seem that I'm on the high end, however, as my base year, I have the last twelve months up to September 2021, so I'm forecasting 1 quarter of 2021 and 3 quarters of 2022. After that, I'm forecasting 20% growth in the next 5 years and then slowly decline to the risk-free rate (1.93%). By then, the company's revenue will grow 315% to $22.1b. If we assume a take-rate of 14%, that brings the total gross bookings to almost $158b, which I think is a fair portion of the total addressable market. Let's not forget that the current market cap is $100b, that's 5x my forecasted revenue in 10 years. Question #2 What is the operating margin that can be expected? Airbnb operates as an intermediary and if we take a look at Booking, they have an operating margin of 35%. In my model, I am assuming that Airbnb will be improving the operating margin over time and will get to 30%. Question #3 How much will they reinvest? I've forecasted a relatively high sales/capital ratio of 4. The reason behind it is, Airbnb doesn't need to invest in heavy machinery in order to grow nor to provide the service to more users. A lot of the reinvestment is already done through their expenses (product development and sales & marketing) DCF valuation The assumptions related to the revenue, operating margin, and reinvestment are already provided above. The discount rate used is based on WACC and it amounts to 8.15%. Based on these assumptions, I got a fair value of $79.9/share. What if the assumptions are significantly incorrect? Let's take a look at different scenarios in regards to the revenue in 10 years & operating margin:
There are plenty of pieces in this puzzle, so feel free to contribute in the comments below and let me know if I'm missing something or if you agree/disagree. [link] [comments] | ||||||||||||||||||||
| Posted: 11 Feb 2022 06:44 PM PST So I am not a commodities trader and don't buy options. I am someone that buys shares outright. But I'm curious as to what people think might happen should Russia invade Ukraine. Today we saw a swift reaction to potential news, and it got me wondering what plays would go big? My thought was Defense Contractors (ie Lockheed Martin, Raytheon); Oil Companies; Cyber security; And FAANG stocks given there will be a move to companies with strong balance sheets and have minimal global exposure to armed conflicts (could be way wrong on that) Downside - unprofitable tech given fed indecision, semi conductors - I heard that potentially was on the list; banks - I imagine they have some exposure to Russian debt. Would like to hear others thoughts and hope you all have a great weekend [link] [comments] | ||||||||||||||||||||
| Posted: 11 Feb 2022 01:02 PM PST I would imagine Walmart (WMT) will be one of the best performing companies in inflationary and recessionary environment. When folks are short of money they tend to pick the cheapest options available and Walmart consistently is the best value in shopping. So why does Walmart have so many sell ratings from analysts ? [link] [comments] | ||||||||||||||||||||
| New to the market feeling overwhelmed should i be aiming for growth stocks or high dividend stocks Posted: 12 Feb 2022 01:01 AM PST Have 100k to put into the market. Everywhere i read its saying the market will crash however i also know time in the market > timing the market so i want to get in already. I am unsure if i should be aiming for high growth stocks or stocks that pay dividends? So far ive been looking at alibaba and palantir because they have fallen high from their ATHs and I think they have a bright future. Am i going about this the wrong way? What % should i be putting into ETFs [link] [comments] | ||||||||||||||||||||
| About to unleash a huge portion of my money on NVDA before their next report Posted: 11 Feb 2022 11:14 AM PST Hello!! I am a young COVID investor that is now on the 3rd year of investing (still a noob). Just wanted to come and ask the smarter people here to see if this was a smart or stupid move. I know the market has been pretty crazy with the fed rates and now Putin threatening war against the world, but there has been so much news about how nothing will stop Nvidia from growing. With their next quarterly result looking strong, it only seems to make sense that it has a higher chance of rising on Wednesday even though it might not be a lot. I wanted to confirm whether I was being stupid or making the right decision with the wiser people of this subreddit before I stumble into a thoughtless mistake. [link] [comments] | ||||||||||||||||||||
| What's the purpose of after and pre market trading? Why do stocks change direction aftrr hours? Posted: 11 Feb 2022 02:11 PM PST Just wondering what the purpose of having pre and post trading hours. Today of course we had a red day. I've noticed also that on heavy red days that after hours a lot of stocks go green? What causes this? [link] [comments] | ||||||||||||||||||||
| Near-Worthless Stock Advice/Help Posted: 11 Feb 2022 12:39 PM PST Can someone suggest a way to remove a near-worthless stock from my Fidelity account? Calling it a penny stock would be an unwarranted compliment. This was some scam purchase I made 20 years ago when I used to be naive. I'm still naive, but I used to be too. I contacted customer service and they said a security has to be defined as worthless before you can treat it as such, ie. just getting rid of it? I asked if there was a way to get rid of it and they gave me zero options, perhaps because they are aware I'm trying to transfer my assets and these shares are making it difficult. I tried creating a gifting account to transfer it over there, but apparently it's not tradeable or something? I even tried filling out a contribution form and letter of instruction. There is no way to set a sell order for it. If I try and sell it for .0001 (the lowest Fidelity allows me to set, it gives me an error about average daily volume cannot be determined. It wont let me sell it for market or because there is no bid/ask. Any help would be appreciated! [link] [comments] | ||||||||||||||||||||
| LUMN- Once again a huge bargain for value investors Posted: 11 Feb 2022 10:58 AM PST Lumen Technologies(LUMN) is a telecommunications company formerly known as CenturyLink. Following Q4 2021 earnings, Lumen's stock dropped from $12.82 to a 52 week low of $10.10, and is now trading at a 5.35 P/E ratio and 9.80% dividend yield. The primary reasons for the drop in price following earnings were likely:
While these things are concerning, there isn't really much that has changed to the underlying fundamentals of the company. Their upcoming sale of Apollo for $7.5 Billion and their Latin American business for $2.7 Billion should help them fund the overall expansion. From what I can tell, The projected sale price of these assets exceeds the current market capitalization of the company after accounting for the debt being transferred with the sale. That means hypothetically, if Lumen paid out the cash proceeds from the sale of those assets as a dividend, you would already break even from that alone. But they won't be doing that. Based on their earnings release, they intend to continue the $0.25/share quarterly dividend, invest in growing out fiber, and I assume work on de-leveraging. Lumen is trading well below its intrinsic value. LUMN isn't a stock that will rocket any time soon as its business is stagnant, which makes it overseen in a market that is focused almost entirely on growth. But at current valuations, it can produce a very substantial return just from the cash flow it produces. I've had a lot of success buying LUMN whenever it is below $10-11, selling at $13-14, and holding for the $0.25/share/quarter dividend when the price is between that. Alternatively, if you don't want to watch the market time sells, you can sell covered calls at $14 and bring in additional income. Disclaimer: I hold over 1000 shares of LUMN with a cost basis averaging around $10.30-ish [link] [comments] | ||||||||||||||||||||
| Will NDX rises from the dip again this monday? Posted: 12 Feb 2022 03:11 AM PST Hello, I am not a US. resident so I dont know how bad the situation of inflation is over there. I am however, contemplating putting option call/put on NDX when the market opens with the assumption that if the economic situation isn't THAT BAD over in the US., the index should easily go up when the market open. Can anyone help me out with this? I am not really familiar with the stock market behaviour of the USA's market, thank you. [link] [comments] | ||||||||||||||||||||
| Looking to start a stocks/brokerage account. Which platform/service is right for me? Posted: 12 Feb 2022 02:50 AM PST So I just started my first job out of college/university and I'm looking to start investing in some stocks, index funds, etc. I am in the United States. I've been using this NerdWallet article to make a decision on a few platforms. So far, it seems like I might go with TD Ameritrade, Fidelity, E-Trade, or Robinhood. I'm curious as to what the best platform for someone like me will be. In general, I plan to be a buy-and-hold type of person. I do NOT intend to be a day trader or someone who is going to be buying and selling very frequently. Right now, I'm hoping for some ROI in about 1-5 years from now and am intent on buying and holding most stocks for at least a year at a time with about $2k-$10k invested by the end of the year. Things I will in particularly value are as follows:
I may consider investing in international stocks or currencies (ones on non-American based exchanges) in the long-term, so if specific platforms offer that, that would be nice for later on. I also do crypto with coinbase, so I'm not looking for ability to trade crypto. I guess if you can also answer what happens if your service/platform gets acquired, that would be nice to know in advance. I had a teacher who used to use TradeKing, which was acquired by Ally Invest, and I'm unaware if acquisition can have like complex implications. In a similar category, what would happen to your holdings if you trade on a platform that shuts down? I'll also be starting a 401(k) and an IRA, too. If there is any benefit, convenience, or incentive to making all accounts with one service/platform, please let me know too as I will take that into consideration. [link] [comments] | ||||||||||||||||||||
| got a cash gift , did I just blow it ? Posted: 12 Feb 2022 02:42 AM PST So, I'm new to this - like, a few weeks. I recently got a small gift in cash and decided to try investing for the first time. I bought msci and s&p after researching that it was apparently a good etf to invest into. The Apple stock came with the app and the rest was because I had quite a lot about them. Did I do something wrong in putting so little into so many different options ? https://ibb.co/Ss0PN6p [link] [comments] | ||||||||||||||||||||
| Affirm (AFRM) is now down over 40% in the last 24 hours - anyone bullish? Posted: 11 Feb 2022 11:43 AM PST I don't get the valuation of AFRM but I also didn't expect it to fall another 20% today. It's now trading at it's lower levels since IPO and is down over 70% from it's high. I guess I'm interested in how cheap it would need to get before you guys would consider buying? It still looks very overvalued to me. I took a look at the stock yesterday and felt fair value was closer to $25-30. That said 40% down in 24 hours seems so excessive that I'm now wondering if we'll see a bounce next week... [link] [comments] | ||||||||||||||||||||
| Does anyone else feel like we are about to experience a catastrophic change in finance? Posted: 12 Feb 2022 12:08 AM PST I recognize that my perspective is heavily influenced by the information and content that I expose myself to. I'm a novice to finance and stocks and I know I am in fact naive. I began investing and trading in late 2020, so up until now I've experienced relentless optimism in the market, and in my portfolio. I know at this point we are all well aware of the 40 year high inflation and the gigantic bubble that is the US (and perhaps global) economy. We are all coming to terms with the fact that the face melting bull run of the last two years is coming to an end, and likely sooner than later. Now setting that aside, is anyone else getting the sense that finance as we know it, might be coming to an end? Monetary policy for the past 14 years following 2008 (plus a lot of other things) seems to have brought us right to the brink of economic collapse. The Fed is no longer being proactive about mitigating inflation, but instead trying to react to it. I think concern over the fact that the Fed seems to have totally lost control is warranted. To be candid, I personally don't think this situation we're in was an "oops" and it's hard to imagine that this is all not by design in some way. I'm not at all a sucker for the narrative being created by the financial news shows, and for the most part I do not tune into them at all. I understand their spin weighs heavy on the underlying emotions in the stock market. That being said, this is the first time in my investing journey that the information I'm consuming is overwhelmingly bearish. Not just bearish though, but quite frankly alarmist. The economic situation we are in currently is probably something to be alarmed over, in my opinion. I think at best we will experience a proper market crash followed by a recession, triggered by the conclusion of QE and rising interest rates, which when combined with all of the other economic struggles the US is facing, won't look pretty. At worst, we could be launched into economic turmoil so unprecedented, that we will never return to business as usual - and what I mean by that, I don't really know. I don't have a plan for what's to come. I have no hedges against a falling market. I honestly have no clue what I'm talking about or what's going to come next. This is essentially just an assortment of my thoughts and feelings assembled into a rambling monologue. Please don't take anything I've said too seriously. I just thought I'd share my thoughts here and see what others have to say. Have I just gotten sucked into the emotional market narrative? Or is it likely that what's to come is going to be very bad? [link] [comments] | ||||||||||||||||||||
| How do you make money from Reverse index funds? Posted: 11 Feb 2022 10:36 AM PST I was looking at SOXS and thought it may be a good purchase with the worry of a crash. My only question is how do people make money off of those? If you own something that goes up when the market crashes, why would anyone buy it when it's really high? Like if there's a 80% dip and This goes up 240% (being a 3x), why would anyone buy that? Is it that there are people dumb enough to think it would go higher so they buy it then? Like when gold shot up in March 2020? [link] [comments] |
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