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Stock Thread (25 Viewers)
- Thread starter St. Louis Bob
- Start date
sporthenry
Footballguy
Well 80% of workday traffic would be a start. Fortunately or unfortunately for the US, I think we're stupid enough that we wouldn't stay home. Heck, we can't get people to stay home now.
Perhaps the restart is a bit slower but China also started its lockdown at the end of January. So if you're telling me that weekday economic activity is 80% at the end of May? I'd take that.
I do also think there gets a point, say July 1, if they said that there were enough ventilators and hospital capacity, but you could still get sick, would you go out? People who are at-risk would be heavily advised to stay home. But as a healthy, relatively young person, I'm willing to bite the bullet for two weeks if I get sick and get the immunity for the next year or two.
jvdesigns2002
Footballguy
You can't really compare the timelines of the Chinese lockdown to our lockdowns. In China--they locked down with an organized plan, they had 9000 people whose job was to do nothing but contact tracing, they had far more systematic and organized testing and sanitation measures--and even with that perfectly orchestrated organization--it took them 2 or more months of police/military enforced quarantine. Over here--some states didn't lock down until a few days ago. There has been no systematic testing, no contact tracing--its been a very scattered response at best.
In my opinion--it would be very foolish for any lockdown to be lifted until there is a surplus of ventilators, PPE's, a healthy surplus of testing kits that can be done easily and quickly, and a healthcare system that has had a chance to catch it's breath. The worst thing that could happen is doing a premature opening of the economy and in doing so trigger a second wave of the virus to start before the first wave has been absorbed/processed. In my opinion--both in regards to health and economically--I think we're far better off opening up our economy a couple weeks too late than we are opening it too early.
JerseyToughGuys
Tough Guy
Economy isn’t 80 percent back to normal. Weekday traffic is 80 percent back to normal.
JerseyToughGuys
Tough Guy
Good article about the road to recovery in China. The second half, which points out the lasting impact on its service industry and small businesses, is particularly relevant.
But really doesn’t matter for this thread as the real economy in the US has clearly decoupled from the equities markets.
But really doesn’t matter for this thread as the real economy in the US has clearly decoupled from the equities markets.
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This run is going to lose $ for the shorts. Once it's over and starts dropping again, it will lose $ for the. Longs who piled in and panic sell.
The fake rally is based on a drop in overall daily cases & deaths in NY. Once it hits resistance and the all clear is not given (which it won't be), back down we go. Lower cases means nothing until a valid treatment or vaccine happens.
I agree. I’m holding my cash and maybe selling a bit that I might want to invest elsewhere. That said you can see people in here who clearly don’t want the market rallying at all.
Capella
Footballguy
None that did should get bailouts, outside of $ to keep the employees employeed and that must be paid back down the road, with their profits. Won't happen but that's the way it should be and the CEO's work for minimum wage.
sporthenry
Footballguy
What about companies that paid billions in dividends? Or used cash to buy companies at peak valuations?
No idea why buybacks get all the attention when at this point, any use of cash looks dumb.
ConstruxBoy
Kate's Daddy
Isn't the whole job of the CEO to maximize his shareholder's value? Aren't all three of those methods ways to generally do that? So you want to punish them because they didn't see Coronavirus coming last year?
Not imo. His job is to make a company great or better than it was. If he does that, the shareholders value will increase. Not artificially inflate it with stock buybacks.Isn't the whole job of the CEO to maximize his shareholder's value? Aren't all three of those methods ways to generally do that? So you want to punish them because they didn't see Coronavirus coming last year?
sporthenry
Footballguy
Not to mention, if an airline CEO kept billions of dollars on his balance sheet, he likely would be out of a job or fighting a proxy fight. There is the argument to be made that a company should return excess capital to shareholders and allow them to do what they want with it. I'm conflicted about this, obviously companies probably should have done more to brace for this. But at the same time, if we mandate companies keep billions on their balance sheet for a true black swan, once in a lifetime or two event, there is an argument that will be worse for the economy.Isn't the whole job of the CEO to maximize his shareholder's value? Aren't all three of those methods ways to generally do that? So you want to punish them because they didn't see Coronavirus coming last year?
And if buybacks weren't allowed, there'd be nobody buying.
https://twitter.com/realwillmeade/status/1246952163294748672/photo/1
ConstruxBoy
Kate's Daddy
ConstruxBoy
Kate's Daddy
I get some of the argument with buybacks, but you mentioned dividends as well. Disagree there.
jvdesigns2002
Footballguy
I’m not sure about that. I think that there are people in here that don’t think that we are anywhere close to out of the woods when it comes to the market impact of the pandemic—but I don’t think there’s anybody here that actually wishes that the market freefalls every day. I personally don’t believe that we are close to the finish line—and I personally wouldn’t buy or trust todays rally as being a guarantee to last the next couple of weeks—but I absolutely love seeing some big up days while we battle this thing. We need some big positive days and some good news every now and then.
sporthenry
Footballguy
Well what is the difference? Buybacks and dividends are just ways to return capital to shareholders and in the US, with double taxation, usually more efficient anyways.
ghostguy123
Footballguy
IMMU up 120%
Good or bad for CYDY?
Good or bad for CYDY?
jvdesigns2002
Footballguy
I think a lot of the issue is where buy back money originated from. The corporate tax cuts were implemented for the primary purposes of taking less money from big companies so that they could hire more and to motivate them to bring some of their manufacturing back to the states. The tax cuts were not done for companies to do stock buy backs—especially if those companies don’t have enough liquidity to survive a month or two of business disruptions. Anyhow—that’s just my 2 cents.
![[icon]](/data/avatars/m/5/5167.jpg?1660313464){kind=avatar}
ConstruxBoy
Kate's Daddy
sporthenry
Footballguy
That is a fair point and I never liked the tax cuts to begin with. Was a sugar high on a performing market and a waste of fiscal stimulus. Perhaps that bubbles up again in November. But again, if you're a corporate manager and you run project level IRR and can't find anything else to do with your capital, what should you have done with the capital? Obviously playing Monday morning quarterback, should have held onto it, but you could have said that for 10 years then?
Last week's headlines: Bottom is not in.
Today's headline: Stock market may have already bottomed.
fantasycurse42
Footballguy Jr.
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fantasycurse42
Footballguy Jr.
I'm selling 22,500 again, keep going back to the well until it fails me.
Jefferson the Caregiver
Rebel Without A Pause
This seems like a really bad take. I don't think there is anyone in here that doesn't want things to get back to normal. I imagine most have more to lose than as you say are "shorting the market" People are giving their honest opinions on the way they see this playing out.
fantasycurse42
Footballguy Jr.
There is a difference between not wanting things to get back to normal, and looking at the situation and saying it's impossible for things to get back to normal right now.
If a large swath of FOMO investors are chasing a rally right now, and I don't see the path in Q2 of going back to normal, I'll adjust my investing accordingly. I want to go back to my office in NYC, that's just not realistic right now, and the longer we stay away, the more likely these things become permanent (that's not what most, prob all, employed people want).
ETA:
My investment thesis is made on data modeling, not on what I hope happens.
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The General
Footballguy
fantasycurse42
Footballguy Jr.
I disagree, we all knew what was going to happen with the tax cuts, one of the reasons they should've been 100% for individuals and 0% for corporations.
fantasycurse42
Footballguy Jr.
jvdesigns2002
Footballguy
There is reason. There are countries in Europe where there is belief that the virus growth curve is flattening or coming down. The numbers out of New York yesterday could be an indication that they might be at or near the top of the curve. With that said—things can change quickly—-but it’s not like the market rally today is completely random.
Remember that. If and when reality comes back into play and the market drops big, BLMN will be a major steal at lower levels AND will rocket back up.
Whatever is up big today is going to be what you want to be in.
I know you got AMZN and if I had it, I would dump it all and look at the beaten down stocks that are performing well today. Then after you get that huge win as things turn back to normal, you shift back into AMZN, even though you would be buying at a higher price. You will have way more $ than if you just sit in AMZN, imo.
-OZ-
Footballguy
jvdesigns2002
Footballguy
I don’t disagree with you. My point was that there was a gap between what the tax cut was designed for versus what happened (and what we knew would happen). When I was growing up— I was trained to spend in a disciplined fashion—and once I was old enough to have a job—I was taught that I should not be spending money of frivolous things unless I had a safety net of at least 6 months saved up. In my opinion—no publically traded company should be allowed to do buy backs if their balance sheets indicate that don’t have enough liquidity to survive at least a 6 month disruption in business.
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The General
Footballguy
How about some LEVIs?
Was at 20 before this now around 10. People wearing sweats for a month eating bonbons going to need some new jeans.
Iconic brand.
Was at 20 before this now around 10. People wearing sweats for a month eating bonbons going to need some new jeans.
Iconic brand.
McBokonon
Footballguy
This is where listening to the earnings calls is valuable because pretty much every company said, during those calls, we're going to initiate stock buybacks and increase dividends. And we shareholders demanded it, really. If you're publicly traded you have a duty to provide value to shareholders, and hiring people you don't need or giving raises when the market doesn't demand it won't do that. It sucks but it is what it is. The main takeaway being that everyone knew what was happening with the tax cuts - the CEO's said it out loud. The administration just lied about it.
Buffett sold shares of an airline but still has tons. It was a non event.
So people sitting around are eating and getting even fatter. I can buy that for a dollar...or $10.
