EPTTrading/Investing Thread - Page 42
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LegalLord
United States13779 Posts
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FiWiFaKi
Canada9859 Posts
https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details When looking here, the QE doesn't seem that absurd to me in relationship to what was happening before, and comparing to the US equities market. | ||
KwarK
United States43750 Posts
My logic was that the worst news a company could announce was that it was going bankrupt and that the shares were worthless because debts exceeded assets and could not be paid. Hertz had already announced that and so logically there could be no further bad news. | ||
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LegalLord
United States13779 Posts
On August 24 2020 04:35 KwarK wrote: I did a WSB style play on Hertz at the start of July. Stock price was $1.50. I sold 7/31/20 $1.50 puts for about $0.60 apiece. Basically I was betting that the stock price would stay above $0.90. For every cent above $0.90 it stayed I got a cent up to $1.50. Hertz didn't move the entire month, made a nice 40% return on the month. My logic was that the worst news a company could announce was that it was going bankrupt and that the shares were worthless because debts exceeded assets and could not be paid. Hertz had already announced that and so logically there could be no further bad news. Bankrupt stocks are certainly interesting... I've been following SHLDQ / Sears for quite a while. It has mostly been a slow-but-steady descent into lower and lower levels, but for whatever reason in early August it just doubled. Hertz did something similar, with a weird breakout and then a flatline. | ||
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Vivax
22249 Posts
On August 24 2020 03:50 FiWiFaKi wrote: I guess my thing is, if it really is unlimited QE, where is the inflation? When is that going to happen. Makes me think that it's not as much as it's made out to be. I don't see a lot of numbers posted, just hur dur, printer goes brrr. https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details When looking here, the QE doesn't seem that absurd to me in relationship to what was happening before, and comparing to the US equities market. To my understanding QE means borrowing directly from the central bank. Most of it went towards buybacks, but also bailouts probably (no strict need to make them official any more). The inflation remains limited to financial assets, bank owned real estate. Most of the real inflation of the classic type with rising living costs would come from measures like the 1200$ checks towards Americans, or supply shocks (worst inflation would probably come from energy scarcity but nuclear gives an easy out). My guess is that the limits of QE lie in internationally traded commodities. While a company can issue stock when needed, you can't just issue commodities against a weakening currency. It's also bad for banks that issued dollar loans to other countries. Even Buffett divested from financials and went into gold (mining) lately. As for financials at risk of crisis I'd guess this time they'll turn out to be commoditiy derivative and stock exchanges. | ||
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FiWiFaKi
Canada9859 Posts
Reminds me so much of bitcoin late 2017, the pullback might not be tomorrow, or this year, but when the rug gets pulled, many will be hurting. | ||
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ShoCkeyy
7815 Posts
On September 01 2020 03:31 FiWiFaKi wrote: If I just listened to some idiot on the internet and bought Tesla lol. What is actually going on. Reminds me so much of bitcoin late 2017, the pullback might not be tomorrow, or this year, but when the rug gets pulled, many will be hurting. Trust me, I think about the same thing, but this stock split let a lot of people hoping to catch Tesla back at $420 enter :D The same thing with Apple. | ||
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LegalLord
United States13779 Posts
Play that as you will. In a economy that's declining but also heavily QE'd, there are some fantastic WSB-esque plays to be made. | ||
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KwarK
United States43750 Posts
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Vivax
22249 Posts
Must be a great environment to sell covered calls tho. | ||
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FiWiFaKi
Canada9859 Posts
On September 02 2020 02:52 Vivax wrote: No bank without a money printer has the money to buy stocks at these valuations during heavy selling. Must be a great environment to sell covered calls tho. Don't know what other market has has decent spreads on options besides the US, that's the only thing stopping me. In theory it's very nice, if you have a stock you're wanting to sell at x, might as well some covered calls on it. But at the same time, if your stock drops 15%, you're going to get no premium trying to sell covered calls 20-25% OTM, and maybe you don't want to sell 5-10% OTM, because if it gets exercised you lock in your losses. (my situation on Suncor). | ||
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FiWiFaKi
Canada9859 Posts
On September 01 2020 05:39 LegalLord wrote: It's definitely possible to make a lot of money on timing a bubble. It's possible to lose money doing that as well, but if stonks only go up you don't really have to worry about that. Play that as you will. In a economy that's declining but also heavily QE'd, there are some fantastic WSB-esque plays to be made. You sounds like a closeted WSB user haha. I enjoy reading it though, makes me feel better about my losses. | ||
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KwarK
United States43750 Posts
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micronesia
United States24761 Posts
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KwarK
United States43750 Posts
On September 02 2020 05:11 micronesia wrote: In order for that to make sense you need to be pretty confident that the stock will lose less than ~60% by mid January. What is your basis for that? How many contracts are you envisioning selling? My basis for that is that their strong balance sheet. They’ve got half a billion cash on hand and a positive current ratio. The tangible book value per share is considerably higher than $3.50. I think they’re not likely to be around forever because their business model is outdated but I also don’t think they’re anything like as worthless right now as the market does. They’re like a dairy ranch on prime development land. The dairy may not make any money but the high value of the land creates a floor price it shouldn’t fall below. Their market cap was far below their net book assets and liquidation impairment doesn’t seem likely in the next four months due to their current assets. I sold my puts weeks ago when they were $4.50/share at $0.80 and I thought it was a good move then. Only 50 of them ($4k total profit if it stays above $3.50). GameStop has since appreciated by 67% so I guess really I should have bought calls but I wasn’t expecting the market to revalue it so quickly. Since then I’ve been watching the value of my puts and the market still seems to think it’s likely GameStop will be below $3.50 by year end. I thought it was unlikely when that was only a 22% drop, I think it’s significantly more unlikely now it would take a 53% one. But people still seem to be overpaying for GameStop puts which is why, if I hadn’t already sold as many as I’d like to, I’d sell more. | ||
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FiWiFaKi
Canada9859 Posts
The play seems good though, though that expiration is pretty far out for me, if they underperform during the holidays that shit could drop hard. Anyway, I appreciate the thought process, always nice. Im kind of diamond handing my portfolio, would like to sell VFV around 85, depends how quick the run up is, and what happens with the exchange rate. Looks like US is trying to get through recession with QE, and Canada is doing it with idk, increasing taxes once it passes and building a lot of debt. Hoping Canada also realizes that it will need to do some printing, because if USD/CAD gets to 1.2, I think all our exports will be too expensive. Also building slowly building more cash through work, another 20k that I'll be looking to throw into something at 2-2.5x margin. Maybe double down on oil if it keeps dropping, I still think it's very undervalued, and will inverse tech once there's a pullback... I'm going to be unhappy if this tech run in a going to go on another 3 years. If this foreclosure thing people have been anticipating does happen, then financials will be attractive to me as well. Haven't been this lost in what the market was going to do ever, really. | ||
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ZerOCoolSC2
9037 Posts
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KwarK
United States43750 Posts
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ZerOCoolSC2
9037 Posts
On September 05 2020 01:38 KwarK wrote: Going down in a death spiral being a retreat to the barely remembered lows of the all-time high 2 weeks ago? From what I'm seeing, everything is in the red and continuing downward. I guess it may have been superlative, but it was shocking to see everything I'm watching in the red when I opened my eyes. | ||
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KwarK
United States43750 Posts
On September 05 2020 01:46 ZerOCoolSC2 wrote: From what I'm seeing, everything is in the red and continuing downward. I guess it may have been superlative, but it was shocking to see everything I'm watching in the red when I opened my eyes. Sure, but it's going down 20% after everything went up >100% in the middle of a recession. This is 10 steps forward, one step back, it's not a retreat. If you'd told someone 6 months ago that the market would be at the current "death spiral" levels they'd put every penny they had into the market. It could shed another 10% and still be a great year. It could shed another 30% and still be no worse than expected given the pandemic. Market goes up 10% for no reason, everyone thinks it's perfectly normal. The 110% value becomes the new "normal" 100% value that everyone expects forever. Market does it again, again, perfectly normal. Market drops back down from 120% starting level to 110% starting level and the world is ending. It's all made up numbers. | ||
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