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bleachercreacher said:
I have a quick question, and this may not be the right place for it.  We have paid off all debt other than house, cars, and her student loans and are in our mid 30's.  Our financial guy is talking to us about a backdoor IRA vs. a life insurance retirement plan.  He strongly suggested the life insurance retirement plan. We already have life insurance through him, but I felt like he was too pushy towards the life insurance and it rubbed me the wrong way.  I'm not trying to get political, but he did.  He was talking about how terrible Trump has been for the stock market and said people have been loosing money left and right for the last 3 years. First, I know we need to find someone else. We really wanted to aggressively pay off our credit cards before we talked about retirement and one of her friends liked this guy, but it's just not going to work out if I'm not comfortable.  I have a friend that used a lady that he likes really well, we're going to meet with her when it's safe too. My wife is nervous about switching, but I'm hoping that meeting with a lady will make it easier on her.  I wanted to see if I could get advice on the backdoor Roth vs. life insurance plan in the meantime though.  
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Probably better in the 401k thread, but mostly the same people.

I highlighted the part that makes me :rolleyes: .  This will be some whole life or universal life pitch and, in general, is a set of products that are made to be sold, not to be bought.  Unless you have a huge salary they shouldn't even be in a conversation.  I'd look to pay off all the loans and at the same time dump this guy.  He's selling you a bill of goods.

 
bleachercreacher said:
I have a quick question, and this may not be the right place for it.  We have paid off all debt other than house, cars, and her student loans and are in our mid 30's.  Our financial guy is talking to us about a backdoor IRA vs. a life insurance retirement plan.  He strongly suggested the life insurance retirement plan. We already have life insurance through him, but I felt like he was too pushy towards the life insurance and it rubbed me the wrong way.  I'm not trying to get political, but he did.  He was talking about how terrible Trump has been for the stock market and said people have been loosing money left and right for the last 3 years. First, I know we need to find someone else. We really wanted to aggressively pay off our credit cards before we talked about retirement and one of her friends liked this guy, but it's just not going to work out if I'm not comfortable.  I have a friend that used a lady that he likes really well, we're going to meet with her when it's safe too. My wife is nervous about switching, but I'm hoping that meeting with a lady will make it easier on her.  I wanted to see if I could get advice on the backdoor Roth vs. life insurance plan in the meantime though.  
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We have a personal finance thread here. It’s a decent start. There is Also a personal finance subreddit with a very helpful wiki.

To your question, I agree with Sand, don’t mix insurance and investing, and dump the financial advisor as he is not acting in your best interests.

If you are able to do a backdoor Roth than you are in a great place and success in retirement saving is all about steadily setting aside as much as you can in tax-protected space using well-diversified investments at the lowest cost possible. The details are up to personal preference. With a little reading you can likely do this without a financial advisor at all.

 
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cubd8 said:
It's baking in, but not fully finished cooking yet. Nobody knows how long this will last, except that the economy is basically shut down until further notice and the number of new cases/deaths will rise through April. It's pretty bad when I saw a Youtube video for making your own mask and I just ordered my supplies to pick up from Target. I guess this is the new normal.
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Shortage of masks, shortage of vents......now a shortage of the sedatives for the people on the vents is going to come about soon.  That is not a good thing.

Things are going to get very, very bad.  I cant imagine this stuff is "priced in".  Its one thing to hear and read about stuff, and it's another thing to actually see it.  We are all going to see some #### in the next few months.  

What does this mean for stocks?  Not sure, but it sure doesnt appear that what's to come is priced in.

Heck most people seem to think the NFL will kick off week 1 like nothing ever happened.  Sorry, barring a miracle that is not going to happen.  

Edit......4 nurses I work with quit in the last 2 days, and its not a big place.  Get ready for a serious shortage of medical staff as well.  The exact opposite of what we need.

 
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Sand said:
Probably better in the 401k thread, but mostly the same people.

I highlighted the part that makes me :rolleyes: .  This will be some whole life or universal life pitch and, in general, is a set of products that are made to be sold, not to be bought.  Unless you have a huge salary they shouldn't even be in a conversation.  I'd look to pay off all the loans and at the same time dump this guy.  He's selling you a bill of goods.
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D_House said:
We have a personal finance thread here. It’s a decent start. There is Also a personal finance subreddit with a very helpful wiki.

To your question, I agree with Sand, don’t mix insurance and investing, and dump the financial advisor as he is not acting in your best interests.

If you are able to do a backdoor Roth than you are in a great place and success in retirement saving is all about steadily setting aside as much as you can in tax-protected space using well-diversified investments at the lowest cost possible. The details are up to personal preference. With a little reading you can likely do this without a financial advisor at all.
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Thanks guys, I'll head over to the other thread.  Trying to get as much information as possible before we meet with someone else.

 
ghostguy123 said:
Shortage of masks, shortage of vents......now a shortage of the sedatives for the people on the vents is going to come about soon.  That is not a good thing.

Things are going to get very, very bad.  I cant imagine this stuff is "priced in".  Its one thing to hear and read about stuff, and it's another thing to actually see it.  We are all going to see some #### in the next few months.  

What does this mean for stocks?  Not sure, but it sure doesnt appear that what's to come is priced in.

Heck most people seem to think the NFL will kick off week 1 like nothing ever happened.  Sorry, barring a miracle that is not going to happen.  

Edit......4 nurses I work with quit in the last 2 days, and its not a big place.  Get ready for a serious shortage of medical staff as well.  The exact opposite of what we need.
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I don't have any doubt that we have underestimated the impact here.  

 
So if all the airlines are possibly on the brink of dying, who is gonna come out on top?  Southwest clearly has the best financials, however, if they all get bailouts will that put them all on an even playing field moving forward?  

Is it even possible that any of them DONT need to go either bankrupt or get a huge bailout??

Cant imagine right now is the time to buy...........or is it.

 
Airlines are getting bailed out or saved somehow. Maybe now isn’t the time to buy, who can tell really, but they aren’t going anywhere. 

 
Capella said:
Airlines are getting bailed out or saved somehow. Maybe now isn’t the time to buy, who can tell really, but they aren’t going anywhere. 
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Correct.  Not like airlines wont be a huge part of things moving forward.  Are ALL the airlines gonna get bailed out?  Will some just die?  Who is the lead dog?

Is JETS the way to go when it's around 10?

 
ghostguy123 said:
Correct.  Not like airlines wont be a huge part of things moving forward.  Are ALL the airlines gonna get bailed out?  Will some just die?  Who is the lead dog?

Is JETS the way to go when it's around 10?
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JETS may reach the 10's on Monday.  In afterhours trading Friday DAL dropped below 20, AAL below 9, UAL at 21, LUV 29.  If I had to pick one it would be DAL.  Last choice UAL because I hate flying through O'Hare and sitting on the tarmac for hours.      

 
Just because airlines aren't going away doesn't mean the equity is worth anything. I'd have to assume they'll structure it like the past and know the public is watching so they can't just backstop the companies without getting something in return. Now that they have investment banks involved, I have to assume they'll come up with something more creative than just a bridge financing especially since none of the advisors are lending banks. So I'd have to assume there will be some dilution from all of this. Even during the crisis, Buffett said the government should get market rates. Now he's selling. Is that to get access to better terms? Or does he just not want to be seen as conflicted? 

Either way, it's tough to get a ton of confidence until we know what the bailout terms are. Would assume the better positioned guys like DAL do best but who knows. Arguably, no airline is in as bad of a spot as GM was heading into the crisis. 

 
beef said:
JETS may reach the 10's on Monday.  In afterhours trading Friday DAL dropped below 20, AAL below 9, UAL at 21, LUV 29.  If I had to pick one it would be DAL.  Last choice UAL because I hate flying through O'Hare and sitting on the tarmac for hours.      
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United Airlines is the worst. I do everything to avoid flying them, never mind investing in them.

Hope they go under really.  

 
cosjobs said:
I thinking putting all you can every year in a  Roth is the way to go. I did not start until late in life. Its funded with post tax dollars and it can all be withdrawn in retirement, including all profits, with no tax consequences. I use it as my gambling type of account and try o hit homeruns with it, so if I connect on one, its free (non-taxable) retirement money. I think most start much earlier and and are more conservative.
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Thanks. I figured the 15% savings is too good to pass up, but I was looking at this as my "gambling money" and didn't mind cashing out sooner rather than 24 years from now.

I guess I can always sell the LUV stock and switch to something else down the line to keep it rolling.

 
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sporthenry said:
Just because airlines aren't going away doesn't mean the equity is worth anything. I'd have to assume they'll structure it like the past and know the public is watching so they can't just backstop the companies without getting something in return. Now that they have investment banks involved, I have to assume they'll come up with something more creative than just a bridge financing especially since none of the advisors are lending banks. So I'd have to assume there will be some dilution from all of this. Even during the crisis, Buffett said the government should get market rates. Now he's selling. Is that to get access to better terms? Or does he just not want to be seen as conflicted? 

Either way, it's tough to get a ton of confidence until we know what the bailout terms are. Would assume the better positioned guys like DAL do best but who knows. Arguably, no airline is in as bad of a spot as GM was heading into the crisis. 
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Yah I was all gun-ho about LUV, but then I read the Buffet thing. What does the Oracle know? 

I'm not sure how the other airlines fare, but I think LUV is the best one I've personally flown. I know they have a bunch of 737 Max in their fleet, but that didn't stop them from being in nearly double their current value.

 
ghostguy123 said:
So if all the airlines are possibly on the brink of dying, who is gonna come out on top?  Southwest clearly has the best financials, however, if they all get bailouts will that put them all on an even playing field moving forward?  

Is it even possible that any of them DONT need to go either bankrupt or get a huge bailout??

Cant imagine right now is the time to buy...........or is it.
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I am hesitant of jumping in on airlines after watching the bailout of autos last time. GM took all equity holders out and Ford stock has been a dog in the market for the last 15 years.  

 
Nugget said:
I am hesitant of jumping in on airlines after watching the bailout of autos last time. GM took all equity holders out and Ford stock has been a dog in the market for the last 15 years.  
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F went from 2.6 to 16 in 3 years.  I'd adopt that dog.

 
Charlie Harper said:
Yah I was all gun-ho about LUV, but then I read the Buffet thing. What does the Oracle know? 

I'm not sure how the other airlines fare, but I think LUV is the best one I've personally flown. I know they have a bunch of 737 Max in their fleet, but that didn't stop them from being in nearly double their current value.
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I'll take a stab at your question about what Buffet could possibly know.    Again--this is just me hypothesizing why a typical bargain hunger like buffet would be appear to be going completely against his nature and selling at what looks to apparently be "cheap".  

To me this means that his outlook shows him that perhaps right now is not selling "cheap"--which makes one wonder why.  So I vaguely remember a stat from a few years ago watching cnbc that on average that while business travelers are only reflective of 12% of the travelers on flights--that they are reflective of anywhere between 50-75% of the profit for those flights.  So the key to the airlines rebounding is not about  planes getting more full with passengers--as "most" passengers are not super profitable for them--its about getting the "right" passengers (which in this scenario would be the business travelers).  

The point here is this---if you are not bullish on business travel bouncing back--then you probably shouldn't be super bullish on the airlines (unless you are looking to invest in the really long term).   I personally think that this pandemic is definitely going to reduce buisness travel for a lot of companies.  Right now--most companies are going to basically be having a 2 month period where they are doing all of their meetings virtually.   Because this lockdown isn't a a week or two type of thing--many companies will be adding these virtual meetings to their infrastructure and systems.  If a plane goes from having 12% buisness travelers to having 7-8% buisness travelers--you are looking at looking at a flight that is 35-60% less profitable.   Keep in mind that best case scenario for a vaccine would be around 18 months--and a lot of people will refuse to fly until one comes out.    I personally do think the airlines are attractive at these levels--but thats from a very long term point of view perspective.  

 
bleachercreacher said:
I have a quick question, and this may not be the right place for it.  We have paid off all debt other than house, cars, and her student loans and are in our mid 30's.  Our financial guy is talking to us about a backdoor IRA vs. a life insurance retirement plan.  He strongly suggested the life insurance retirement plan. We already have life insurance through him, but I felt like he was too pushy towards the life insurance and it rubbed me the wrong way.  I'm not trying to get political, but he did.  He was talking about how terrible Trump has been for the stock market and said people have been loosing money left and right for the last 3 years. First, I know we need to find someone else. We really wanted to aggressively pay off our credit cards before we talked about retirement and one of her friends liked this guy, but it's just not going to work out if I'm not comfortable.  I have a friend that used a lady that he likes really well, we're going to meet with her when it's safe too. My wife is nervous about switching, but I'm hoping that meeting with a lady will make it easier on her.  I wanted to see if I could get advice on the backdoor Roth vs. life insurance plan in the meantime though.  
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I would straight up ask this guy if he is a fiduciary because he does not seem to have your best interest in mind. If you end up with a new guy (or gal) make sure to check if they are a fiduciary that legally should be looking out for you.

 
According to what I read, Buffett sold 2.3M shares of LUV, but still has 51M shares.  To me this does not seem like an indicator Buffett is all that down on LUV.

 
Otis said:
Does it matter?  It's happening.  We need airlines.  Full stop.
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Of course it is.  I thought we were discussing it as an investment here.

Like others have mentioned, it didn't really work out in shareholders' favor the last time we bailed out an industry.

eta - id love to be shown I am wrong on this.

 
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BassNBrew said:
My opinion is that to much attention is being put on the Covid news.  The odds are someone else comes up with something before them.  Even if someone finds a "cure", the vaccine will eventually put the cure out of business.  The real path to financial success here is the cancer drug.  I suspect many aren't in cydy for that and it will get crushed in the near future as those people bail.

That said, it sure is fun playing these bounces.
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To this point:

one in phase III

And a list of 60 in development, linked out from the article above

 
ghostguy123 said:
How would you know if a particular bailout is good or bad for stockholders?
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This is one time where the individual investor is at a pretty big disadvantage to the street. I mean there will be whispers on what is going on. Sell side equity analysts are likely to have a better call into certain people. And there may even be some distressed folks involved in the discussions which is a whole other situation. 

In terms of good or bad, I think the biggest thing will be size of the bailout which will signify just how bad things are and what the government gets in terms of equity, warrants, etc. But remember, GM took on several loans from TARP before ultimately filing. Now they had some issues, notably pensions that I don't think are as bad at the airlines. 

If you're playing for a near-term trade, then something like a few billion dollar bridge loan would likely be the best option although the market could view that as not enough. But if they get a bridge loan like F, that is probably best case scenario. GM on the other hand, had an initial pop when it was announced but then sank back down as their TARP funds were accompanied with a restructuring requirement which was essentially a prelude to a bankruptcy. 

But for a long-term investment, you essentially have to figure out what the long-term earnings of the company are.  Figure out an enterprise value for the company and work backwards. Banks are likely modeling out 2021 EBITDA based on some decline in its earnings and applying a discounted multiple. Subtract net debt from this enterprise value and figure out how much value is left. 

 
pecorino said:
I am out and about shopping at the grocery store. And I have a hard time believing that this crisis is fully baked in to where the markets are right now. It looks like a war zone out here and this entire amount month is supposed to be filled with more infected and more deaths. I’m a seller on Monday.
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I'm a likely seller as well, but weren't you pretty optimistic just a few days ago? Did this trip to the grocery store change your mind or is it something else?

 
humpback said:
I'm a likely seller as well, but weren't you pretty optimistic just a few days ago? Did this trip to the grocery store change your mind or is it something else?
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I don’t know if I’m selling. Not that I don’t think there’s downside but most of my stocks are in three buckets. Either they have held up or done better (like ZM, ZS and CYDY), dropped a little but honestly will be stronger (like AMZN) or already dropped well more than the S&P. The ones that have gotten whacked are the ones the jumped like 50% the week before.

I’m still 25% cash so I might sell some things that I’d like to reallocate but I think I’m more waiting for another drop to push all in and sit and wait for a few years. I think I need to start setting some real targets. Been watching but need to be more tactical so I can stop thinking about it, lol.

Also, I’m not looking at the at risk/bailout type companies. There may be opportunities but I’m not a day trader and I think I could easily get pummeled and don’t know enough about them. 

 
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At this point, I think the market is more worried about when we re-open the economy and how quickly they can restart the economy. Given NYC is at or near the apex, I did think the market would be more jittery at this point since most investors live there but has held up fairly well. At this point, I think 3/18 will likely be the local lows for a lot of the investable companies. Seems like that was the peak of forced selling and you won't be getting a cable company like CHTR at $350 again (now trading at $433). 

That said, I'm not in a rush to put money to work as I see things likely going down and retesting lows. At best, things may trade flat but I think you'll continue to get divergence between quality companies and crap companies. I don't think we ever got full capitulation by the bulls where people just got scared of stocks. Maybe investors are getting smarter? I may try to catch the next bear market rally because we'll probably rally a bit once the virus is behind us.

But the big question is, when do things start to open? Seems like people expect some economic activity to restart in June or the summer. Then, what happens after everything reopens? We've never had to restart an economy. I assume the Fed and government are just going to throw money at the problem so tough to fight that. Is this a recession or a depression? Because a depression means we should all take our cash and come back in 6 months before putting money in the market. 

 
Nugget said:
I am hesitant of jumping in on airlines after watching the bailout of autos last time. GM took all equity holders out and Ford stock has been a dog in the market for the last 15 years.  
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I think the difference is that GM and Ford are inferior cars to Toyota, Honda, and the rest. Where as airlines are essential.

 
sporthenry said:
But the big question is, when do things start to open? Seems like people expect some economic activity to restart in June or the summer. Then, what happens after everything reopens? We've never had to restart an economy. I assume the Fed and government are just going to throw money at the problem so tough to fight that. Is this a recession or a depression? Because a depression means we should all take our cash and come back in 6 months before putting money in the market. 
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This is the biggest question I have too.  My gut feel is we have to largely, even if not entirely, restart the economy as soon as this wave subsides.  That doesn't mean we won't have more outbreaks, but we won't have anything to come back to IMO if we don't.  Nobody knows how much damage is being done and how long this will take to climb out of.  But everything I know of economics and business tell me the amount of time we spend shut down, has to be multiplied exponentially for a recovery.  The virus spread isn't the only thing that can spread fast.  My fear is the economic despair that we could cause.

 
sporthenry said:
Because a depression means we should all take our cash and come back in 6 months before putting money in the market. 
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Even a regular recession would usually indicate you’re not buying back 4 weeks later eIther :shrug:

We’re far from priced to 6 months of no economic activity right now, imo. And I think 6 months is optimistic, tbh.

The 12 year bull market still lingering in people’s mind and a driver for bad decisions.

 
Shula-holic said:
This is the biggest question I have too.  My gut feel is we have to largely, even if not entirely, restart the economy as soon as this wave subsides.  That doesn't mean we won't have more outbreaks, but we won't have anything to come back to IMO if we don't.  Nobody knows how much damage is being done and how long this will take to climb out of.  But everything I know of economics and business tell me the amount of time we spend shut down, has to be multiplied exponentially for a recovery.  The virus spread isn't the only thing that can spread fast.  My fear is the economic despair that we could cause.
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Starting too early will lead to a worse economic outcome than waiting.

 
fantasycurse42 said:
Even a regular recession would usually indicate you’re not buying back 4 weeks later eIther :shrug:

We’re far from priced to 6 months of no economic activity right now, imo. And I think 6 months is optimistic, tbh.

The 12 year bull market still lingering in people’s mind and a driver for bad decisions.
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6 months almost certainly result in a depression.  I hope we don't do that, but who knows

 
Shula-holic said:
6 months almost certainly result in a depression.  I hope we don't do that, but who knows
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Look, I'm prob out of a job I love with a company I've been at since pre-IPO by June if we're not reopened, but I don't see how we're reopened without a widespread drug that brings people off of ventilators.

The choices are widespread death or the economy reopens. It only takes a month for case numbers to explode as we've seen over the last month, so when we bring the case numbers down, once we reopen, they explode again, same situation, confidence shrinks even further. I think waiting for a viable treatment that has at least a 60-70% success rate is sadly our best option. 

I'd say we're at a minimum of 4-6 moths away from a viable drug and 12-18 from a vaccine. 

 
Even if we come up with a treatment or a cure, how are people without healthcare going to afford them?  We've got a LOT of unemployed people now and I have to imagine not all of them will have healthcare.  Healthcare is expensive - my monthly premium is almost on par with my mortgage.  That's insane.  If I lose my job, I lose my insurance.  I'm not losing my house.  I'll suck off a rodeo clown to make my mortgage payment but screw expensive health insurance premiums.  

I dunno....this is our Great Depreasion.  Deflation coming soon.  I think we're years away from a recovery.  

 
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