Don Hutson
Footballguy
Adam Feuerstein's take on Sorrento:
https://twitter.com/adamfeuerstein/status/1261340584549154816/photo/1
https://twitter.com/adamfeuerstein/status/1261340584549154816/photo/1
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Stock Thread (30 Viewers)
- Thread starter St. Louis Bob
- Start date
fantasycurse42
Footballguy Jr.
Dividends, very simple:
Stock closes at $5, you have 1k shares, and it pays $0.1 dividend. Stock opens at $4.9 the next day (dividend taken out of share price), the money is deposited into your account (in this scenario, $100), and you are taxed on that dividend as income. This would be a big yield; 8% ($0.1 * 4 dividends / $5).
Dividends are mainly for income, or in my case and younger investors, compounding more shares via DRIP (Dividend Reinvestment Plan). Which instead would deposit 20 new shares into your account, versus the $100.
That's about as simple as dividends can be explained.
ETA: some brokers have fractional shares where your DRIP might not equal (usually the case) a whole number for shares, some do not and the the balance is deposited in cash.
Stock closes at $5, you have 1k shares, and it pays $0.1 dividend. Stock opens at $4.9 the next day (dividend taken out of share price), the money is deposited into your account (in this scenario, $100), and you are taxed on that dividend as income. This would be a big yield; 8% ($0.1 * 4 dividends / $5).
Dividends are mainly for income, or in my case and younger investors, compounding more shares via DRIP (Dividend Reinvestment Plan). Which instead would deposit 20 new shares into your account, versus the $100.
That's about as simple as dividends can be explained.
ETA: some brokers have fractional shares where your DRIP might not equal (usually the case) a whole number for shares, some do not and the the balance is deposited in cash.
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Todem
Footballguy
People who are willing to speculate that it will rebound briskly when we get back to some sense of normalcy.
The key to investing in stocks it buying when the news sucks on companies you have strong conviction on before the news get’s a lot better and everyone else jams into it.
Buy low....sell high.
Which retail stock do you buy? Well that is where you have to do your homework and really weed out the crap and find the gems that were thrown out with the bath water. This is the essence of stock picking.
Me? I have not touched a single retail stock as I have stayed away from that sector for a very long time.
The only ones I own are TGT, NKE and WMT and of course AMZN. Tradtional retail stocks are really tough to navigate the last several years with online commerce taking over. The Malls are dying a slow painful death and Covid may put the final nail in the coffin for many traditional retailers. A lot of dead money out there. Can they be traded? Yeah sure. But the dividends are all in jeopardy and long term I simply can’t invest in a lot of these stocks with any degree of confidence.
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Why are dividends taken out of the share price? I thought they were paid from income the company earn during the last quarter. If what you are saying is true then a dividend is basically worthless
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Bossman
Footballguy
FreeBaGeL
Footballguy
Yeah what I don't get is if dividends are just taken out of the stock price, then why do companies cut dividends to save money? If it's not actually a net gain for the stock owner then how does it cost the company money? Is it just that it's essentially the same thing as forcing everyone to sell a small percentage of their holdings all at the same time?
Don't Noonan
Footballguy
fantasycurse42
Footballguy Jr.
The company is paying that cash, therefore, the price is reflective of the company paying $xx.
ConstruxBoy
Kate's Daddy
They're not literally taken out of the share price, just figuratively. Stock prices are estimates of future cash flows. Once a cash flow happens, minus other changes, the stock is "worth" less by that valuation measure.
Sand
Footballguy
Have to disagree, GB. Things to remember about dividends - they are the sole promise that a company makes to it's shareholders and is a direct reflection of that company's attitude toward those shareholders.
Most importantly, it has been shown over the years that the overall returns of dividend payers and growers far exceeds that of non-dividend payers. Paying dividends, is then, smeared over the stock universe, a pretty reasonable sign of financial and business health.
The General
Footballguy
I'll share this here...
Cleaning off work PC for a network migration.
I found a folder from 2004 called "Trading".
Had a list of stocks I purchased, must have been my first stuff I had bought.
One of them was Apple.
Bought 90 shares on 11/29/2004 for $68. The stock split 2:1 and then 7:1 since that date. That would be over 1200 shares at today's price of $300 = about $400K.
I don't have anywhere near 1200 shares of Apple today
Cleaning off work PC for a network migration.
I found a folder from 2004 called "Trading".
Had a list of stocks I purchased, must have been my first stuff I had bought.
One of them was Apple.
Bought 90 shares on 11/29/2004 for $68. The stock split 2:1 and then 7:1 since that date. That would be over 1200 shares at today's price of $300 = about $400K.
I don't have anywhere near 1200 shares of Apple today
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culdeus
Footballguy
I mean modern stock theory basically says that dividends are the way to pay out your working capital that is no longer required to grow the business.
For some industries the maintenance of this payment is expected (Think energy stocks), while others it is seen as a negative (Think tech stocks).
A dividend basically says, I have no idea what to do with all this money I'm making so here, you have it. Could that money instead be used exclusively for stock buybacks, sure. But it's more tax efficient to distribute it.
culdeus
Footballguy
I think it is the height of speculation to think there is pent up demand for stuff like cosmetics, gasoline, and other consumables. That is clear.
It's harder to envision a world where a J Crew just captures all it's 2020 revenue in 2021 AND all it's 2021 revenue.
I'm looking a lot harder at places that are not relying on demand creation from idle money, and feeding off that speculation.
Energy stocks still seem an absurd value in that context.
Bob Sacamano
Footballguy
CNA is trading for 2/3 book value? Company specific or industry trend?
Don Hutson
Footballguy
Bob Sacamano
Footballguy
MKL not nearly that low, but also relatively lower. Unknown liability for things like business interruption claims?
Bossman
Footballguy
Just like your stock is worth less when the company buys lunch for the boys in the mail room.
Any expense would lessen the companies value. Suppose dividends would be a way to jettison some cash from the checking account.
Jayrok
Footballguy
To offer up testing for covid-linked childhood inflammatory diseases, BP must have a lot of confidence in his RANTES thesis. Said RANTES was a protein that is significantly elevated in Kawasaki disease and they already are setup to do testing for this since they discovered it in covid.
The last minute of the interview was a decent update from NP on the BLA submission for HIV. I know many were confused on the status of the submission (caused multiple lawsuit investigations!). He said priority review will be filed next week.
I almost never hold options to expiration. Most often, I will sell a covered call (no more than one month out), for stocks I don't mind selling. If the price per share stays flat or dips in, say, two weeks, I am probably buying back those calls and closing the position while keeping the shares. On the next rise, I'll sell calls again.
As for puts, I only do cash-secured, usually about one month out for a ticker that I like. BUD is a good example. Almost pulled the trigger to buy 100 shares at $40.50 (or thereabouts) yesterday. Instead. I sold a put for June with $40 strike price and netted $250. That's only about a 5% ROI (whereas bossman shoots for multiples of that). If BUD rises a bit or just languishes, that put will only be worth $50 or so once we get to about a week from expiration, cheaper than that if BUD is trading higher. During that last week, or when the put is a fraction of what it was when I bought it, I'm closing that position.
Not only do you lock in your profit (and the BUD example is meager, i get it, but demonstrates the principal). More importantly, it gives me access to that cash so that I can sell another put. I don't want to tie up a lot of money just to squeeze out those last few dollars of a sale.
I think you answered your own question- they cut dividends because it saves them money (instead of paying it out to shareholders, they keep it and can use it to pay expenses, etc.).
It's not nothing, you get the ~5% in the form of a cash dividend in exchange for a ~5% drop in share price. It's just not "free".
In regard to dividends, this is really a good site to explain most of the questions posed https://www.investopedia.com/terms/d/dividend.asp
There are many arguments on both sides as to whether they provide value or not, but that is a discussion for another time.
I will mention, when I was in college, there were studies done that showed you could make a small profit more often than not when trading stocks around ex-dividend dates as it does tend to add a small value to the stock. Now, this was a long ### time ago because I'm old af, but I'd bet it's still the case. Kind of like arbitragers are still a thing, where you are looking to make a very modest gain on an acquisition, but risking tons of capital. Markets are not totally efficient, so you can make some money, but not sure it's worth it on a small scale.
There are many arguments on both sides as to whether they provide value or not, but that is a discussion for another time.
I will mention, when I was in college, there were studies done that showed you could make a small profit more often than not when trading stocks around ex-dividend dates as it does tend to add a small value to the stock. Now, this was a long ### time ago because I'm old af, but I'd bet it's still the case. Kind of like arbitragers are still a thing, where you are looking to make a very modest gain on an acquisition, but risking tons of capital. Markets are not totally efficient, so you can make some money, but not sure it's worth it on a small scale.
Sand
Footballguy
Been eyeing this one for forever. I know they do specialty insurance, but I don't know their exposure.
I generally like the way it's run and barring liability it's a great value right now. But I haven't jumped on it due to those issues.
skycriesmary
Climbing up the Walls
####...I bought into this turd near the high at $10.44
Edit: they removed the #### emoji? Why is it still listed as available if they change it when posted?
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Big League Chew
Footballguy
sorento hasn't been tested on humans and it jumps like that?
Bought at 10.48, 9.44, 8.14, 7.23####...I bought into this turd near the high at $10.44
Sold 7.60
Going to have to trade my way out of this hole. Moral of the story, tankers tank, onions bloom.
Jayrok
Footballguy
This is important to me as well. In these times when you're looking for cash to have on hand while waiting for your chosen stock to come down, having it tied up in a long option trade sort of sucks.
Todem
Footballguy
Bossman
Footballguy
Someone posted a link in here ... this is what I took from it...
that some known bio-tech guy tweeted that the company had success in killing the virus in a petri dish ... and announced "cure for covid found"
When other companies are way beyond that and already in human testing.
Fox news reported "cure for covid" and the stock soared.
Jayrok
Footballguy
You can say that again. I'm still waiting for 2 of these to get close to getting me even so I can dump them. EURN was the only one where I made a profit when I sold.
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Bob Sacamano
Footballguy
To me, logic dictates the exclusions for pandemic should be honored, and they should have no liability where that is the case. If they're held liable for those exposures, even though they're specifically excluded from the contract, every commercial premium across the board is going to explode to incorporate risks whether or not they're intended to be covered. It's bad for everyone long-term.
That doesn't stop departments of insurance, though. CA has been ruling against insurance companies to include coverages specifically excluded from contracts for years. They had a field day with that after the wildfires. How are insurance rates in CA these days?
Don Hutson
Footballguy
Here is a Bruce Patterson quote from an interview published May 1st that puts a damper on Sorrento's claim:
Jayrok
Footballguy
Could be the difference in being listed on NASDAQ vs being OTC. More investors aware?
Bossman
Footballguy
I've seen others post this and I never asked. So let me ask now, how does one sell AMZN options?
1 option is equal to 100 shares ... at $2000 a share, would tie up $200,000 in funds now ... or maybe $120,000 back when it was $1200 a share.
I'm feeling like the small fish in here now.
Jayrok
Footballguy
Credit spreads, not naked or cash covered puts. I sure couldn't afford to sell AMZN puts. Credit spread gives you a hedge where the cost of the trade might be a couple grand (max loss) for a premium of $300 or whatever depending on volatility at the time. My typical spread was 5 or 10 and would average out to, say, risking $1300 for a $250 premium. Closer to the current SP the more premium you can make but also more risk. It's why the further OTM you go the smaller the trade price.
I liked to go out around ~80% OTM with close to .10-.13 delta or at least one standard deviation.
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According to their web site, it hasn’t even gone into animal testing. All that’s been tested is in a lab under perfect conditions. I should incorporate and put out PR that I found the cure for CV-19 in lab tests with soap. As soon as I applied the soap, the viruses died. We’ll start injecting rats with soap next but we found the cure.
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FreeBaGeL
Footballguy
Imagine what that would look like if it included Robinhood.
Man, one thing I need to figure out is how to not beat myself up for missing opportunities. I’m having a nice day. 2 of 23 stocks in the red, but both are up 30-50% in the past two months/1 year. 9 of 23 up 3-10% today, but I always look at those flyers that I’ve been watching and didn’t buy. TDOC, LVGO and WIX all easy double/triples. Not trying to gloat as we all have some really nice gains the past two months, just feels like that FF mentality coming back with this why didn’t I start X or Y or what if I drafted Z. I’ve only been truly investing in stocks in the past year and even then I dabbled until last October when I really jumped in.
@Todem I know you’ve been doing this forever, is there good advice to smack me in the head? I’m actually being serious because I’m sure someone who’s gone through this knows that there are always things you miss and there’s no way you can do it all. Funny thing is there’s probably way less thinking about the dogs you didn’t buy and avoided.
@Todem I know you’ve been doing this forever, is there good advice to smack me in the head? I’m actually being serious because I’m sure someone who’s gone through this knows that there are always things you miss and there’s no way you can do it all. Funny thing is there’s probably way less thinking about the dogs you didn’t buy and avoided.
If only I had listened earlier to the random guy on a message board, lol. I mean, I could sell CYDY right now and net $20k. That’s insane. I’m letting it roll, but that’s hysterical to me.
Todem
Footballguy
I always tell my clients (and myself for that matter).
You can’t own everything.
Also you cannot buy stocks that you know are super risky (easy doubles look like that on paper but why are they so volatile?) without understanding you are willing to risk and lose most of your capitol chasing a quick HR. So typically when you are staring at the ledge....you back off knowing this. Look how long it took me to buy CCL a stock I have been looking at hard since March 16th. Finally bought a small position where I am willing to lose all that capitol. I am taking a calculated risk based on my knowledge of their balance sheet and confidence they will return to a normal earnings environment 12 months from now.
I am not a day trader.....not in the least bit. DO I make fast trades? Well yes for my own personal account I sure do....as we have seen here. But I really focus on a couple of stocks when I do this....make my money and I am done. And to be frank....I only trade like this in bear markets. They are the best time to make “fast money”. No question.
So don’t beat yourself up with the coulda, shoulda woulda. We all should have dropped 10K into AMZN in 1997 and sat on it.
Then we could all have been fat, rich and retired already LOL. Shoulda coulda woulda.....ugh!!!!
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Jefferson the Caregiver
Rebel Without A Pause
Not gonna watch but do you think NP is banging Christine yet?
editing for my upcoming suspension: this is a consensual thing
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fantasycurse42
Footballguy Jr.
SRNE is going to be brutally raided by shorts. They claim to save the world, basically... Going to need any proof at all whatsoever on this claim, fairly certain we witnessed one of the greatest pumps of all-time in that one, and when it goes down, it'll be ugly.
SEC should make an example of the people behind it, but we know they want.
SEC should make an example of the people behind it, but we know they want.
McBokonon
Footballguy
NP sent out a press release last week saying he had, but issued a clarifying press release today explaining he'd only made it to second base but plans on completing the entire process after a few drinks tonight.
