ManofOne
Plus Member
Buy RIOT, if BTC goes up.
Futures holding well. Well see if it continues into early tomm.
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Stock-Age: Stocks, Options and Dividends oh my!
- Thread starter koam
- Start date
Buy RIOT, if BTC goes up.
Futures holding well. Well see if it continues into early tomm.
Ozzy Onya A2Z
Member
This little baby keeps getting better. Solid performance again and now sitting at $0.315. I revise my statement to "I'll take tripling my money any day".
ManofOne
Plus Member
This is also pretty interesting. So as you can see if interest rates rises by 100 basis points (1.0%) government net interest increases nearly 2 billion dollars. If we assume inflation hits 3.0% or higher then interest rates would have to rise by an amount higher than 3.0%. This would inflate net interest and reduce resources in government budget. If the government becomes the main source of economic activity vs the free market, it leads to ruin.
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CrankyJay™
Member
It is only going to keep going up. Someone a lot smarter than the both of us explained why at least 4 to 5 years ago why it was eventually going to hit $50k.
edit: reports of people losing access to their “millions” in BTC will only drive the price up further. If true, it diminishes the available supply. Makes me wonder if some of the claims are even true, or if they’re trying to pump the value of BTC by making a perceived supply issue.
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ManofOne
Plus Member
Its becoming less volatile (but imo that's the law of large numbers). Also I think that b/c their is so much cash chasing too few assets (generating return higher than expected inflation) and b/c of portfolio limits on funds (10% max exposure), funds are moving into bitcoin hoping to etch out some degree of return.
I'm not sure that's a viable long run strategy.
ManofOne
Plus Member
I'm gonna make a bold prediction here within Q2 or Q3 we will see a stock market bubble burst. I'm gonna try to layout my case simply without going to much into the math.
Firstly, I'm going to start with monetary policy & fiscal policy. Right now the market is undergoing unprecedented support via the federal reserve, the FED balance sheet has increased to US$7.4 trillion within a matter of months. The assumption here is that through Quantitative Easing ( the increasing of money supply buy buying assets, namely treasuries and giving cash), the FED restored market liquidity thus preventing a credit crisis. It also lower interest rates massively to reduce both refinancing costs and new debt costs. This also opened an opportunity for the federal government to borrow trillions in dollars to fund programs and checks (PPP loans and $2000 checks). We've had 3 rounds of stimulus, US$2.2 Trillion in March, US$980 billion in December and the upcoming $1.9 Trillion.
Now with this level of unprecedented support a few unpredictable scenarios are emerging.
Let's examine what we do know. Inflation expectations are rising. Why is it rising? Well its rising due to the the shift in global supply chains as a result of COVID-19 away from China, rising global commodity prices, higher shipping costs, added covid costs and not enough supply to meet current demand (example the microchip market). With all this money chasing too few goods expected inflation is looking to near 2.0% in the short term probably in Q3 which is where it has averaged. Higher than anticipated inflation can affect the market in variety of ways, this includes the net interest on government debt which can reach as high as $600 billion if interest rates rise to meet inflation expectations. However, I suspect that expected inflation will rise faster than anticipated and cross that 2.0% near term view and can hit has high as 3.0% -4.0%. The U.S government is spending 3 times it output gap with its latest proposal. Which can most certainly lead to faster than expected inflation if money is released immediately.
This sudden injection of cash to households and economy built upon the already pervasive excess liquidity in the banking system, due to the previous support prior will be unleashed onto the economy this year as lock down measures ease. Additionally with liquidity so high and rates so low, households, corporate entities, ETFs and Mutual funds will be looking at ways to maximize their returns. With expected inflation rising and rates low this will incentivize households, corporate and financial entities to take on more risk as it doesn't make sense to have money lying around earning a negative real rate of return (inflation and costs higher than nominal).
Financial entities receiving excess funds will continue to pay a premium on assets as long as the money keeps coming in. Limited by their exposure limits, funds will continue buying a variety of normally uncorrelated assets to maximize returns. Funds like ARK for example are already running into the problem of too much money but too few stocks. Fund flows in 2020 broke records at US$509 billion and is expected to surpass that figure for 2021 (with no unforeseen circumstances). Other entities like SPACS have also exploded due to high liquidity, which has contributed to this issue of rapidly rising asset pricing. Households with their excess savings, will be looking to put their money to work in the stock market especially with the liberalization of trading technology ( RobinHood). With rates at historic lows, margin financing, is also rising. This has compounded the problem of too much money chasing too few assets, where it is contributing to the inflation in asset pricing where investors are willing to pay any premium despite fundamentals.
So there you have it, inflation is affecting asset pricing, so what is the eventual fallout? Well to determine the fallout we have to look at the indicators, U.S treasury yields have cross 1.0% and are expected to end the year higher (leading to a valuation reset or sooner than expected increases in underlying rates). Market & Asset correlations are becoming stronger due to diversity issues and return goals while expected inflation will continue to rise for the foreseeable future. At some point these things must come to a head which will trigger one of or possibly the largest black swan event in financial market history.
In the event of a collapse, money will be flowing out of the market rapidly, liquidity issues could return and could overlap into the credit markets worsening the scenario for financial markets. Thus prolonging or possibly leading to another double dip recession.
The dangerous assumption behind the democrat spending plan is that people will save more than put that money to work which could soften inflationary pressures. However, given the unprecedented lockdowns and pent up demand I would argue otherwise which could lead to an eventual collapse in financial markets.
Firstly, I'm going to start with monetary policy & fiscal policy. Right now the market is undergoing unprecedented support via the federal reserve, the FED balance sheet has increased to US$7.4 trillion within a matter of months. The assumption here is that through Quantitative Easing ( the increasing of money supply buy buying assets, namely treasuries and giving cash), the FED restored market liquidity thus preventing a credit crisis. It also lower interest rates massively to reduce both refinancing costs and new debt costs. This also opened an opportunity for the federal government to borrow trillions in dollars to fund programs and checks (PPP loans and $2000 checks). We've had 3 rounds of stimulus, US$2.2 Trillion in March, US$980 billion in December and the upcoming $1.9 Trillion.
Now with this level of unprecedented support a few unpredictable scenarios are emerging.
Let's examine what we do know. Inflation expectations are rising. Why is it rising? Well its rising due to the the shift in global supply chains as a result of COVID-19 away from China, rising global commodity prices, higher shipping costs, added covid costs and not enough supply to meet current demand (example the microchip market). With all this money chasing too few goods expected inflation is looking to near 2.0% in the short term probably in Q3 which is where it has averaged. Higher than anticipated inflation can affect the market in variety of ways, this includes the net interest on government debt which can reach as high as $600 billion if interest rates rise to meet inflation expectations. However, I suspect that expected inflation will rise faster than anticipated and cross that 2.0% near term view and can hit has high as 3.0% -4.0%. The U.S government is spending 3 times it output gap with its latest proposal. Which can most certainly lead to faster than expected inflation if money is released immediately.
This sudden injection of cash to households and economy built upon the already pervasive excess liquidity in the banking system, due to the previous support prior will be unleashed onto the economy this year as lock down measures ease. Additionally with liquidity so high and rates so low, households, corporate entities, ETFs and Mutual funds will be looking at ways to maximize their returns. With expected inflation rising and rates low this will incentivize households, corporate and financial entities to take on more risk as it doesn't make sense to have money lying around earning a negative real rate of return (inflation and costs higher than nominal).
Financial entities receiving excess funds will continue to pay a premium on assets as long as the money keeps coming in. Limited by their exposure limits, funds will continue buying a variety of normally uncorrelated assets to maximize returns. Funds like ARK for example are already running into the problem of too much money but too few stocks. Fund flows in 2020 broke records at US$509 billion and is expected to surpass that figure for 2021 (with no unforeseen circumstances). Other entities like SPACS have also exploded due to high liquidity, which has contributed to this issue of rapidly rising asset pricing. Households with their excess savings, will be looking to put their money to work in the stock market especially with the liberalization of trading technology ( RobinHood). With rates at historic lows, margin financing, is also rising. This has compounded the problem of too much money chasing too few assets, where it is contributing to the inflation in asset pricing where investors are willing to pay any premium despite fundamentals.
So there you have it, inflation is affecting asset pricing, so what is the eventual fallout? Well to determine the fallout we have to look at the indicators, U.S treasury yields have cross 1.0% and are expected to end the year higher (leading to a valuation reset or sooner than expected increases in underlying rates). Market & Asset correlations are becoming stronger due to diversity issues and return goals while expected inflation will continue to rise for the foreseeable future. At some point these things must come to a head which will trigger one of or possibly the largest black swan event in financial market history.
In the event of a collapse, money will be flowing out of the market rapidly, liquidity issues could return and could overlap into the credit markets worsening the scenario for financial markets. Thus prolonging or possibly leading to another double dip recession.
The dangerous assumption behind the democrat spending plan is that people will save more than put that money to work which could soften inflationary pressures. However, given the unprecedented lockdowns and pent up demand I would argue otherwise which could lead to an eventual collapse in financial markets.
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SpartanN92
Banned
I didn’t pick up any stocks during March of 20 (I cashed out on everything because I needed the money) and I regretted it all year.
For the first time in my adult life I have a real financial buffer between me and disaster.
If there is a big crash this year I look forward to the buying opportunity.
For the first time in my adult life I have a real financial buffer between me and disaster.
If there is a big crash this year I look forward to the buying opportunity.
BigBooper
Member
I am not able to think it all through, but there's a great big house of cards on labor and basic infrastructure too. If people get free money, then poor paying manual labor jobs are less needed, making the employer pay more money for less labor.
An aquaintance got fired one day last week for drug use and safety violations and was hired the next day at another factory. There's growing demand for labor in my rural area, but lots of people are lazy enough that the extended unemployment and stimulus are good enough for them.
I also watched a video this week where a company owner was talking about international shipping costs having tripled recently.
So what's the scenario like if we have a big market crash in these conditions? More like 2008 or more like Great Depression 2.0? I have a feeling it will look closer to the latter.
AppleBlade
Member
Some unsolicited advice . . . . Don't make the same mistake again. Your mistake in March wasn't that you read the markets wrong, your mistake was that you tried to read the markets. Waiting for a big crash as a buying opportunity is not a reliable way to build wealth. Regularly weekly contributions into index funds at an asset allocation that matches your risk profile IS the best way to invest. If you want to be aggressive about something be aggresive about increasing how much you contribute not about WHEN you are doing the investing. Remember the value of your shares do not matter until the day you sell. The ups and downs of the market do not matter you should be trying to accumulate as many shares as you can.
SpartanN92
Banned
I get all that but I vividly remember in March seeing Microsoft stock down to $130 and seriously considering borrowing some money from my parents to invest.
ANYBODY with 2 brain cells saw what was happening and that it would pay off big to buy then. The problem was I had no spare money to invest because hell everyone was terrified about Covid at the time. I had a new born then and I was putting every dime I had into stockpiling baby food, diapers, ammo etc because we were facing the very real possibility of extended lockdowns.
BigBooper
Member
Small consolation I know, but nobody really knew how the lockdown deal would turn out. It wasn't a foregone conclusion that the markets would bounce back immediately. Everyone here could be kicking themselves that they didn't buy up all the could afford of Bitcoin when it was $50 a piece. Sounds like the investments you made were also good investment. Perfect is the enemy of the good. Definitely a good idea to have some liquid money available for the unforeseen though.
Starlight Lotice
Member
I worry that there could also be a Liquidity Crisis in the US after the Bubble Bursts.
In the UK, EU and Asia, the markets only recovered after hearing about a Vaccine but are still seen as undervalued still despite the 20% increase from last October.
The US market is the opposite of that, but could hurt it in the long run if Inflation does exceed the 2%. It's sadly going to be scary to see for American Investors who are new to the Market either rushing to get their money out or holding multiple bags once it happens.
In the UK, EU and Asia, the markets only recovered after hearing about a Vaccine but are still seen as undervalued still despite the 20% increase from last October.
The US market is the opposite of that, but could hurt it in the long run if Inflation does exceed the 2%. It's sadly going to be scary to see for American Investors who are new to the Market either rushing to get their money out or holding multiple bags once it happens.
Omega Supreme Holopsicon
Banned
The supply should only get smaller and smaller over time, small errors sending the bitcoin to irrecoverable addresses, people forgetting their passwords, people dying without providing seed or password or people who kept their holdings secret dying too.
ManofOne
Plus Member
This is very much true. Morgan Stanley released some interesting research on this. That for investors who invest during a bear market. They don't need to wait long to see green in the portfolios due to the assumption that once the market reaches the bottom, the recovery is often fairly quick.
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Omega Supreme Holopsicon
Banned
I think index funds are a good set it and forget it(long term assuming no massive long term economic catastrophe happens), Warren Buffet recommends the sp500 index I think.
That said, while riskier some individual stocks like certain growth stocks and certain reits can grow significantly faster than sp500 index.
For example SP500 index average asset doubling time is 7 years. But it appears something like the Reit Realty Income can double on average every 5 years. Not only does it seem to double, but that doubling is even without dividend reinvestment. And Realty income dividend is quite good.(although as a reit the dividend is counted as regular income for taxation purposes.). Other good performing stocks are stocks like apple, though given their high market cap I'm not sure if they can keep up their performance(there is a lot of positive news for the future, there is the m custom chip lineup, the apple glass rumor, and the apple car rumor in the future. And they also do stock buybacks.).
In the following calculator you can see that apple returns more than quadrupled asset value in the last five years, almost 5x initial asset value. The last two years have seen even faster rate with per year returns over 70+% per year.
DRIP Returns Calculator | Dividend Channel
dividend reinvestment calculator,drip calculator,returns calculator
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Omega Supreme Holopsicon
Banned
Well lost wallets the quantity still remains in some sense, and might be recovered if the wallet can be found, allows for cracking and the password is weak. For example I've heard the trezor wallet can be brute force hacked if you have access to the physical wallet and the password is relatively weak(just pin). https://hackaday.com/2021/02/04/hac...racting-the-cryptographic-seed-from-a-trezor/
That said if Bitcoin like several other blockchains allows sending to irrecoverable addresses, bitcoin sent to irrecoverable addresses I think is effectively as if destroyed.
Ozzy Onya A2Z
Member
I've been thinking of similar (nowhere near your level of expertise and analytics, just hunch stuff) and cashing everything out on a high so it's all ready to buy back in during the burst/crash. Of course timing is everything. In Australia there will be a mini-crash/contraction basically the start of April as government support ceases March 28. It will affect people and the markets IMO. If the vaccines aren't effective the world is going to see financial drop off this year, governments cannot keep loaning money for stimulus and handouts.
I'm building a war chest (nothing stupid large) but I'm wanting to cash in on the markets this year but diversify for risk reduction.
I've put my kids savings all into two ETF funds that are quite differently focused, one balancing the other so to speak. One has built up from $18 to $28 in 12 months so happy days. It's not make you rich gains but far better returns than long term deposits etc. I'm not expecting to pull the kids money out for a decade or more as they're young still but their current $8K investment should gain very nicely over the next 10 years.
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HoodWinked
Member
What do I do about free riding. I'll sell a stock to buy another but this locks the funds so I can't sell the new stock until the previous sale clears. I don't want to get caught bag holding and I don't have any extra money I can deposit. Do I have to enable margin trading? Will this then cause me to pay interest on the margin until the sale clears?
CrankyJay™
Member
The broker sometimes lets you get away with it. Can’t do it more than once in a given timeframe. This is when I was using ScottTrade.
Ass of Can Whooping
Gold Member
Only two more days for Fiverr and ROKU earnings reports and I am in balls deep
Honey Bunny
Member
All the penny stocks I tried last week, albeit with tiny amounts, look so ridiculous in my portfolio now. I need to de-redditize.
Honey Bunny
Member
Argo is flying too, 90 percent on the week.
CrankyJay™
Member
oooo boys we buiying more PLTR today?
I'm going to wait, I'll be happy to buy more if it goes closer to $25
BigBooper
Member
Buy high sell low? Jk, I have no idea about it, except they announced their scanner 3 months ago, so something else is driving the price. Good luck!
haxan7
Banned
I sold it already for slightly above break even
ManofOne
Plus Member
Keep your low volitilty positions. I'm keeping mine.
StreetsofBeige
Gold Member
Another down day -1%. My bro told me about SOS on the weekend. It popped.
CrankyJay™
Member
WOW...WOW!
So I followed a stock tip one of my friends gave me years back. Long story short, it didn't pan out, and the guy running the company seems incompetent at best. I won't get into which ticker it is.
They were listed on the NASDAQ and I bought a small position at just over $1. Price decreased as nothing happened in the company. I averaged down like an idiot, not knowing any better. Over the course of a few years the stock went down all the way to 1 cent. The stock was de-listed and put on the pink sheets.
As a lark I averaged down because I'm an idiot to bring my average down to .25 cents from over $1.
Fast forward to just a few weeks ago ... some pumpers start buying up small lots of the stock gradually bringing the share price up a few cents a week. All of this action is independent of what is actually going on with the company.
I set a limit for just above my average and it sold. I made like net $50 after being down $2500 for so long. It's like found money for me and I was just happy to escape without a loss.
I was holding onto those shares for tax loss harvesting against my other holdings. Just shows that sometimes being patient pays off.
Now, if for some reason pumpers take this thing up like they have others I'll have missed out on tens of thousands of dollars, but I don't give a fuck right now. I'm happy here.
So I followed a stock tip one of my friends gave me years back. Long story short, it didn't pan out, and the guy running the company seems incompetent at best. I won't get into which ticker it is.
They were listed on the NASDAQ and I bought a small position at just over $1. Price decreased as nothing happened in the company. I averaged down like an idiot, not knowing any better. Over the course of a few years the stock went down all the way to 1 cent. The stock was de-listed and put on the pink sheets.
As a lark I averaged down because I'm an idiot to bring my average down to .25 cents from over $1.
Fast forward to just a few weeks ago ... some pumpers start buying up small lots of the stock gradually bringing the share price up a few cents a week. All of this action is independent of what is actually going on with the company.
I set a limit for just above my average and it sold. I made like net $50 after being down $2500 for so long. It's like found money for me and I was just happy to escape without a loss.
I was holding onto those shares for tax loss harvesting against my other holdings. Just shows that sometimes being patient pays off.
Now, if for some reason pumpers take this thing up like they have others I'll have missed out on tens of thousands of dollars, but I don't give a fuck right now. I'm happy here.
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Honey Bunny
Member
Well my day was screwed by a massive sell off of a few loosely related tech stocks despite no real news about them.
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CrankyJay™
Member
Stock got crushed on negative sentiment on their stock-based compensation to employees and a potential looming selloff before of share lockup expiring.
SpartanN92
Banned
Warren Buffet revealed today that Berkshire Hathaway has purchased over $8Billion worth of Verizon stock since November.
As a Verizon employee (well technically I’m a third party but it’s a Verizon retailer) I’m VERRRRRRY interested in what he knows about VZW that I don’t know.
As a ground level employee I can say that VZW is a mess. Terrible leadership, Mass layoffs, extremely low moral amongst corporate employees (again thank God I’m 3rd party lol) and a sagging stock price.
As a Verizon employee (well technically I’m a third party but it’s a Verizon retailer) I’m VERRRRRRY interested in what he knows about VZW that I don’t know.
As a ground level employee I can say that VZW is a mess. Terrible leadership, Mass layoffs, extremely low moral amongst corporate employees (again thank God I’m 3rd party lol) and a sagging stock price.
ManofOne
Plus Member
ManofOne
Plus Member
SpartanN92
Pivotal Commware, a 5G mmWave company that is backed by Microsoft founder Bill Gates, closed on $50m C round led by an affiliate of venture capital firm Tracker Capital Management.
Tracker Capital was founded by Stephen Feinberg, also co-founder and co-CEO of Cerberus. Devonshire Investors, a PE firm affiliated FMR LLC, the parent of Fidelity, is also participating.
Pivotal’s existing investors, including DIG Investment, Thermo, Lux Capital and Gates, also participated in the financing.
Pivotal is helping mobile network operators such as Verizon (NYSE:VZ) deploy 5G millimeter Wave (mmWave) networks for mobile and fixed wireless access.
Edit - Btw I have Verizon in my portoflio. It has value, low volatility and the DIV yield is 4.0%. Profitability is highest in the class.
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SpartanN92
Banned
MrMephistoX
Member
Plus Verizon owns a bunch of other internet companies like AOL Huffpo and Yahoo! now so that factors into the stock price.ManofOne
Well 5G makes sense, only our 5G deployment so far has been nothing short of a disaster IMO but I’m sure they know a hell of a lot more about the situation long term than I do
SpartanN92
Banned
That shit has been a drain on our company for the past 5 years.
VZW leadership passed that loss onto their corporate employees.
MrMephistoX
Member
Yeah I could see that I left Yahoo and got a way better job before the sale and from what I’ve heard that part of the business has really gone down the shitter.
Delf
Banned
Was moving all my stuff off RH finally.
End profits from Feb 1st till today, $493
Grabbed 4 stocks on Fri before the weekend and made a quick $50 this morning. My last moves on RH. Waiting foreeeeeever now to have all my old sales clear so I can withdraw them and today's profits/investments.
Moved over to Schwab. Gonna start using it as my main platform. Long term stuff and OTC mostly.
Moved $100 into WeBull, as it will be my new instant deposit/swing trade method. Got 2 trash stocks for free...
Grabbed a bunch of shares of $CIDM at $2 each mid-day. Their making some waves in acquiring services. Just gonna hold and see how their earnings going on the 2nd. Mostly hoping they can bought by a bigger player.
I'm in a stand still and just reading stuff, learning. Got all my money tied up in transactions/clearing and can't do shit.
End profits from Feb 1st till today, $493
Grabbed 4 stocks on Fri before the weekend and made a quick $50 this morning. My last moves on RH. Waiting foreeeeeever now to have all my old sales clear so I can withdraw them and today's profits/investments.
Moved over to Schwab. Gonna start using it as my main platform. Long term stuff and OTC mostly.
Moved $100 into WeBull, as it will be my new instant deposit/swing trade method. Got 2 trash stocks for free...
Grabbed a bunch of shares of $CIDM at $2 each mid-day. Their making some waves in acquiring services. Just gonna hold and see how their earnings going on the 2nd. Mostly hoping they can bought by a bigger player.
I'm in a stand still and just reading stuff, learning. Got all my money tied up in transactions/clearing and can't do shit.
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HoodWinked
Member
Why Schwab? Most people seem to be going to Fidelity.
GHG
Member
ManofOne
Thinking you might be able to shed some light on this... SPACs... What happens if you are a holder of shares when the merger takes place? Realistically are you looking at a drop in value?
I'm specifically asking in light of everything going on with CCIV. Let's say for example the shares are priced at $60 when it happens is it likely to hold and increase in value from there or do all the CCIV shareholders at the time of the deal get screwed due to dilution (related to the $10 a share thing?) ?
I'm reading a lot of conflicting articles about this so not sure if you or anyone else here knows their way around SPACs?