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Stock Thread (5 Viewers)
- Thread starter St. Louis Bob
- Start date
fantasycurse42
Footballguy Jr.
Could've hit capitulation today if they didn't buy the open, just delaying a bottom, IMO.
If we rally for the rest of the week, which is possible, especially since nobody expects it, I'd bet they sell it hard next week.
If we rally for the rest of the week, which is possible, especially since nobody expects it, I'd bet they sell it hard next week.
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LOL, I dont think Bitcoin should be worth anything. I believe more in the software/VISA like companies than something that is basically the thing in the middle of the transaction.
I love Amazon as a company and I think we are seeing them focus on their earnings more and blowing those numbers up rather than just reinvesting with no eye on profit. I should have known better that we were fighting a headwind for the short term and dumped for a nice profit when I had the chance. Oh well, I think in a year I'll probably be up, so no need to panic on retirement money which was up quite nicely the past few years.
Looking at your edit comments- I used to be in this camp as well, but lately I'm not seeing how those things would even make a big improvement. If the Fed backs off the tightening, it's only going to be due to the economy slowing, which isn't good for markets either. The trade stuff theoretically could give a boost, but it seems highly unlikely that China is just going to cave and we come out of it with some fantastic deal for us. Much more likely that it'll be give and take, which shouldn't move the needle much overall. Also, the longer it drags out the lower we go, so even if we do get some big boost out of it we still might end up lower than here after all is said and done.
culdeus
Footballguy
I wonder if we have any target fund people in here, I mean if you sell out down $3k in a 2060 fund and back down to a 2035 fund, it's kosher? If you stay in the same provider they use most of the same internal funds.
Honestly, I don't think the IRS is watching this stuff AT ALL. In 2016 I did some selling in accounts that had stocks moving from one brokerage to another. I self reported basis on all that, and they didn't even blink. I imagine even thinking this stuff gets flagged is overly paranoid.
Honestly, I don't think the IRS is watching this stuff AT ALL. In 2016 I did some selling in accounts that had stocks moving from one brokerage to another. I self reported basis on all that, and they didn't even blink. I imagine even thinking this stuff gets flagged is overly paranoid.
fantasycurse42
Footballguy Jr.
I've learned one major lesson in this bull market, the Fed is really the only thing that matters. I mean, sure everything else is important in bits and pieces, but when it is easy money policy from the Fed, you go all-in equities, when they pull liquidity and tighten, you look for shelter. It's obviously cliche, but it is prob the best investing advice you can give and it is only four words, don't fight the Fed.
Powell does not give me the impression he is an easy money guy unless there is chaos, which right now there is not. Sure, we're slowing, but we're far from crisis mode.
Bob Sacamano
Footballguy
Are there anymore Pop Tarts in the freezer?
Bob Sacamano
Footballguy
Capella
Footballguy
Amazon is a big part of my portfolio but nothing compared to my index funds. This is really the one thing I play around with constantly. That said, if this thing falls to 1100 or something I will just be so angry at myself for not finally pulling the trigger. That would be a noticeable shaving.
I’m still sitting on it but GD it’s a lot of money to shed.
Just like "buy the dips", it works until it doesn't.
In any event, I agree with the last part, which is why it's hard for me to be optimistic- he's made it clear that he's focused far more on employment and the economy than he is the markets (as he should), so it seems highly unlikely that his course is going to change anytime soon unless there was far more carnage first, leaving us worse off overall.
I'd argue that what is happening to specific stocks such as AMZN isn't normal either, but I was specifically referring to bigger picture macro stuff. We are navigating through all sorts of things that we haven't experienced before.
Sand
Footballguy
I've looked into stuff like this and (in my completely unprofessional, unbinding, legally non-culpable opinion) since in that one the stock/bond mixture should be quite different they're not equivalent, so it's fine.
Personally I wouldn't flip out IVV and replace with SPY, but I just did sell IVV and replace it with DIA. Different indices there, though they behave very similarly overall. Also just flipped out some MTUM for QQQ - also different but largely the same.
I'm similarly concentrated into one stock at a similar level and I hate it. That's my personal preference, though. I keep wanting to get out of it and the markets keep pulling the rug out for that one, so just hold and collect dividends for now.
Sand
Footballguy
It certainly makes your portfolio look like it's holding up better.Tax loss harvesting is fun.
Remove excess fat from turkey carcass
Submerge carcass in cold water, with the water covering about 2.5" above the carcass
Add 2-3 bay leafs per gallon of water
Quarter 1 onion and add that
add 3 pepper corns
Bring to boil on medium heat
simmer for at least 2 hours, ok to go longer
do not stir, but continue to skim the fat off the top
Submerge carcass in cold water, with the water covering about 2.5" above the carcass
Add 2-3 bay leafs per gallon of water
Quarter 1 onion and add that
add 3 pepper corns
Bring to boil on medium heat
simmer for at least 2 hours, ok to go longer
do not stir, but continue to skim the fat off the top
dickey moe
Fingerpicker
St. Louis Bob
Footballguy
Looking at a S&P about 100 points lower than it is now, 2540 or do, then doing some buying.
ffldrew
Footballguy
Amazon has REInvent next week in Vegas - I'd expect some news and announcements that will further cement their leadership in the cloud. Now the question becomes do you sell on the news?
St. Louis Bob
Footballguy
Earnings were great for AMZN they are just getting slaughtered with everything else. Buy more IMO. I guess I should have waited a little longer but still got a 20% discount than a month or so ago. Would love to buy more but overweight the way it is.
fantasycurse42
Footballguy Jr.
I think an unspoken fear on Amazon is they're closing in on peak saturation in the retail space and the ecomm business is going to start to see slower growth.
I'm taking a stab at it with that, as the selling has been heavy and you have to look for the reasons why.
St. Louis Bob
Footballguy
Ray Karpis
Footballguy
Noob question: I have money sitting in an account that is not yet invested....just rolled over. Should I go ahead and invest now with market down or should I wait for it to drop further?
St. Louis Bob
Footballguy
I'm NOT a professional but most would suggest putting 1/3 in now. Set two other price points based on the S&P, 5-10%+-,to make two more purchases with of a 1/3. HTH
@General Malaise What say you?
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fantasycurse42
Footballguy Jr.
I'm simply saying, they're getting dragged down with the market is a dangerous game that lulls an investor into a sense of security. The so called smart money sees something as they've been taken to the woodshed almost as bad as anyone in the last 6 weeks.
Need to come up with a theory as to why they're getting beaten down so badly.
Let me ask you this, if a consumer hasn't been buying on Amazon for the last few years, why are they going to start now? They've obviously avoided them for whatever reason, so where is that explosive growth we've seen over the last 5 years going to continue to come from? We've already priced that explosive growth into AWS and a chunk into advertising revenue.
Look, I love Amazon as much as the next guy, I have no doubts about their business over 20 years, but for those that still like to pick individual stocks, you need to try and read the bear case as well and figure it out. Over the last few months I've posed the same question I just did to other Amazon bulls and the 4% number you quoted (a friend actually quoted 2% in their response to me, although I find that suspiciously low) has basically been the same response. That's great and all, but they aren't going to keep capturing marketshare if they don't grow their consumer base. If the market thinks their revenue is slowing again when they report Q4 numbers, I think there will be real pain here. It's a rich valuation, they need to justify it with massive continued growth. Coming up on the lower end of guidance with revenue pisses the market off, we've seen that since they reported.
fantasycurse42
Footballguy Jr.
Depends on your time horizon - 20 years, buy SPY, DIA, QQQ and forget about it.
I've been raising cash, I've got a lot to deploy. My plan is simple, I'm waiting to get in when we hit a bear market. When the indexes hit a peak to trough of 20%, at that point I start deploying it. 1/3 when that happens, then I intend on making scheduled emotionless monthly purchases for the following 18 months with the remaining 2/3. That's my plan.
fantasycurse42
Footballguy Jr.
I agree. If the earnings were excellent, they wouldn’t be at $1,500.Pretty much the opposite of this IMO.
When they reported, there were constant whispers that they’re the next $1T company. I expect $5B in quarterly profit (a lot more tbh) from a company worth that much. I also expect to see continued massive growth, their YoY didn’t show it.
Market is spooked, was it a one off? Million dollar question right there.
fantasycurse42
Footballguy Jr.
This is what I'm referencing:
https://www.macrotrends.net/stocks/charts/AMZN/amazon/revenue
Look at the green chart, see the deceleration in revenue growth Q1 (43% YoY) to Q2 (39% YoY) to Q3 (29%)
To me, this is why the market is spooked on Amazon, and it comes back to growing the consumer base. Those aren't trends for a company with a huge P/E.
And the most damaging part of their earnings was their Q4 guidance; $66.5 - $72.5B. In Q4 of 2017 they did $60.5B - The low end of that range is 10% YoY revenue growth, the high end is 20%. You see the YoY trends taking shape:
Q1 - 43%
Q2 - 39%
Q3 - 29%
Q4 - 10 - 20%
That's the bear case in a nutshell.
Bottom line IMO, they better hit at least the top end of that range when they report Q4. I think revenue is the most important thing here, and they need to show they can keep growing it at a solid pace. Their revenue starts growing at < 10% YoY, this becomes a $700-$800 stock.
https://www.macrotrends.net/stocks/charts/AMZN/amazon/revenue
Look at the green chart, see the deceleration in revenue growth Q1 (43% YoY) to Q2 (39% YoY) to Q3 (29%)
To me, this is why the market is spooked on Amazon, and it comes back to growing the consumer base. Those aren't trends for a company with a huge P/E.
And the most damaging part of their earnings was their Q4 guidance; $66.5 - $72.5B. In Q4 of 2017 they did $60.5B - The low end of that range is 10% YoY revenue growth, the high end is 20%. You see the YoY trends taking shape:
Q1 - 43%
Q2 - 39%
Q3 - 29%
Q4 - 10 - 20%
That's the bear case in a nutshell.
Bottom line IMO, they better hit at least the top end of that range when they report Q4. I think revenue is the most important thing here, and they need to show they can keep growing it at a solid pace. Their revenue starts growing at < 10% YoY, this becomes a $700-$800 stock.
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BassNBrew
Footballguy
if anyone is thinking of selling, it's too late. You will almost assuredly end up buying back in higher. The sell was at S&P 2880. Avi said sell if it breaks that and I did not. But I now see what they see. This can go to as low as S&P 2200 with violent rallies that are sold. Most ertailny can go to where FC42 said, ~2540.
You can't time the bottom so you should put some in now (say 25%) but I'll tell you this, you will see 4-6% up days in the NAZ that will fool you into thinking you are missing the boat. Buy some on down days, not up days. I've looked back at the last beatdown in 2009 and that's what you get in up days and then more selling. You have already avoided 33% of the beatdown in the worst case scenario. Yes we are down 10% from highs (S&P) and can go down another 20%. You gotta look at it as saving 10%.
On 10/10/2008, there was a day the S&P went up over 9%. It was lower 12 days later. It rocketed 9.74% on the 27th, rallied for day up another 6.5% and lost it all by the 12th of November. Plummeted another 10 % from there after a 6% up day. Rocketed right back up the next day 10% but that wasn't the bottom. That was another 9% down 3.5 months later. Of course, that was the housing bubble.
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fantasycurse42
Footballguy Jr.
https://www.cnbc.com/2018/11/20/trump-says-he-would-like-to-see-lower-fed-rates.html
You guys remember when Trump said that we were in a false economy propped up on low rates? Now we have a real economy with still historically low rates and he is getting angry!
Shocked the King of Debt wants lower interest rates. I made the same comment endlessly, you don't juice a late cycle economy, these politicians are such ####### morons! And these tax cuts really didn't help them at all.
Should've gone with infrastructure first, and saved the tax cut bullets for when they were needed.
You guys remember when Trump said that we were in a false economy propped up on low rates? Now we have a real economy with still historically low rates and he is getting angry!
Shocked the King of Debt wants lower interest rates. I made the same comment endlessly, you don't juice a late cycle economy, these politicians are such ####### morons! And these tax cuts really didn't help them at all.
Should've gone with infrastructure first, and saved the tax cut bullets for when they were needed.
Sand
Footballguy
Not to comment on the politics as I want to keep this thread clean, but I did want to note that there is no definitive proof that we're late cycle. There is no time frame bracket that demarcates a late cycle economy. This touches on it. There are earlier articles, but SA now blocks some of those with a paywall.fantasycurse42 said:
dickey moe
Fingerpicker
This is key.fantasycurse42 said:
Bad news starts to drip and the stock gets hammered after a massive multi-year run-up? Shocking.
Sand
Footballguy
I do have to thank you for the timing of this note. I harvested a good bit and, at least at present, that timing looks to have been very well chosen. I owe you aTax loss harvesting is fun.
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culdeus
Footballguy
I mean at schwab you can go from a core ETF to a core mutual fund, and back again every 60 days. When the market topped I trimmed off some equity, and was able to shave a bunch of short term gains this way. I'm honestly not sure why I didn't fall in love with this earlier, just really the last 2-3 years I've been at it hardcore. I royally ####ed up just doing a buy/hold on my kids college stuff too. If their stuff flips red I'll be looking for a bread line.I do have to thank you for the timing of this note. I harvested a good bit and, at least at present, that timing looks to have been very well chosen. I owe you a
Sand
Footballguy
I use Fidelity and prefer to just stay with ETFs, so make sure to have "same but different" pair trades ready.
NeverEnough
Footballguy
I also use Schwab & have had $ in some of their ETFs over the years. Currently have cash just sitting & looking to get back in. May I ask which ETFs & Mutual Funds you like?culdeus said:
culdeus
Footballguy
The ones that charge like basically no fees. SWPPX is slightly different than their Schwab 1000 index ETF, but not enough to lose sleep over.
I bounce between
SCHX
VT
SCHB
SCHK
etc. etc.
This time I cycled a lot more SCHV into my mix and SCHD. That is a relatively new and more defensive structure for me.
In the past I bounce between vanguard and schwab funds, picking for all intents the same stock. Lately I've just been staying in the Schwab ecosystem.
The one thing about harvesting that I really didn't get at first, is that you basically want to sell your whole portfolio monthly as long as the gains are there no matter what and cycle it. This way you are never building up such a large CapGain exposure that you can't deal with. Schwab lets you sell, and cover so there isn't some gap. Though it is fun for a short time to see some giant cash balance.
I’m confused by this especially with the difference in tax rates between short term gains (taxed as income, which is bad for me since we are dual income) and long term gains (taxed at lower rates) if held for a year.
If you don’t want to hold for a year, that’s one thing but selling the entire nut monthly means gains are always taxed as income. That’s around a 20% tax rate difference if you make a decent living.
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Bob Sacamano
Footballguy
He makes an indecent living
Warrior
Footballguy
Same here. Can you please explain? Seems like selling every month and re-buying something similar would be a horrible decision.
culdeus
Footballguy
I think I over complicated things.
Basically, I'm taking steps to match cap gains and cap losses in the short term. Nothing fancy. Just sell out of ETF and buy into like minded ETF.
I would prefer to take short term cap losses, to avoid long term gain taxes.
Where gains do go long term I'll manage those as best I can, but there are worse problems to have. In this world you will not take many long term capital losses. I suppose it's possible, but not anticipated. If that makes sense.
Warrior
Footballguy
I see. The selling monthly when you're down makes sense to me, since you're trying to offset your gains. However, the selling monthly when you're up is what doesn't make sense to me. You're just ensuring that you pay short-term income tax on the gains rather than waiting for long-term capital gains tax, which is much lower. Harvesting tax losses is nice, but the benefit is more than wiped out if you're realizing all of your gains as short-term to do it.
culdeus
Footballguy
I'm avoiding short term gains at all cost except in a situation where there is a pretty catastrophic asset balance mix delta. As it turns out, most of the time a big equity/income mix comes with corresponding short term losses. That's what makes this sort of magic.
