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Stock Thread (17 Viewers)

humpback said:
So you think you and I have been the cause of this sell-off, and the whales have been buying but couldn't hold us off that's why the market is getting destroyed?  :lol:
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Pandemic related supply chain issues, China lock down, inflation fear, and war in Ukraine are a the main catalysts of the sell off.  Retail investors only exasperated the issue. 

 
2Squirrels1Nut said:
Pandemic related supply chain issues, China lock down, inflation fear, and war in Ukraine are a the main catalysts of the sell off.  Retail investors only exasperated the issue. 
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Completely disagree, the 180 in monetary policy by the Fed is the main catalyst of the sell off, but that's a separate point.

I know there's this conspiracy theory that the big wigs on wall street will always make out while the little guy always gets the shaft, but the big wigs are what moves the markets- they are net sellers right now, otherwise we wouldn't be getting crushed.

 
So we maxed out our Roth IRA's for 2022. Maxed out my 401k for the year. Still have about 25 percent of my available cash left. 

So the question is do I buy a bunch of stuff from @Todem master list or do I hold on just incase we go lower?

 
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humpback said:
Completely disagree, the 180 in monetary policy by the Fed is the main catalyst of the sell off, but that's a separate point.

I know there's this conspiracy theory that the big wigs on wall street will always make out while the little guy always gets the shaft, but the big wigs are what moves the markets- they are net sellers right now, otherwise we wouldn't be getting crushed.
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Don’t kid yourself. The markets have rules that always cater to the big wigs. The game is rigged to a certain extent.  The reason the markets are going down now is because inflation is a threat to the big wigs—-recession is not.  High costs eat their profits, hurt their margins and actually put their money at risk. Uncontrollable inflation can cause even big companies to falter and go extinct.  Recessions on the other hand tend to be relatively temporary, usually result in the government feeding some money to the markets, and end up being opportunities for the big wigs to accumulate assets for a fraction of what they usually go for. Just go back through recessions—the people that suffer the most are the lower and middle classes. Generally speaking—the upper and elite classes end up owning more as a result of recessions.  

The reason the markets are selling off now is because the risk of inflation is enough to scare some people to have less exposure to the markets and move some of their assets into what they think are safer areas (instead of maybe being 80-90% in stocks—they might want to reduce that exposure to 60-65% for example..etc).  The thing that people are realizing is that our own government/fed cannot fully control inflationary pressures.  The wheat that comes from Ukraine isn’t just going to be replaced overnight.  The oil/gas that Russia marketed to the world before the war isn’t just going to be replaced instantly.   The Chinese government isn’t going to go from a hardline zero covid stance to fully opening things back up instantly...etc.  

I would argue that the markets are going down the way they are because they feel like the fed is moving too slow in raising rates to fight inflation. When Powell saiid that anything above a fifty basis point rise was off of the table—the markets temporarily went up—before people realized that the slower the fed raises rates—the longer that inflation probably lasts. Since that realization occurred—the markets tanked.  

 
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jvdesigns2002 said:
Don’t kid yourself. The markets have rules that always cater to the big wigs. The game is rigged to a certain extent.  The reason the markets are going down now is because inflation is a threat to the big wigs—-recession is not.  High costs eat their profits, hurt their margins and actually put their money at risk. Uncontrollable inflation can cause even big companies to falter and go extinct.  Recessions on the other hand tend to be relatively temporary, usually result in the government feeding some money to the markets, and end up being opportunities for the big wigs to accumulate assets for a fraction of what they usually go for. Just go back through recessions—the people that suffer the most are the lower and middle classes. Generally speaking—the upper and elite classes end up owning more as a result of recessions.  

The reason the markets are selling off now is because the risk of inflation is enough to scare some people to have less exposure to the markets and move some of their assets into what they think are safer areas (instead of maybe being 80-90% in stocks—they might want to reduce that exposure to 60-65% for example..etc).  The thing that people are realizing is that our own government/fed cannot fully control inflationary pressures.  The wheat that comes from Ukraine isn’t just going to be replaced overnight.  The oil/gas that Russia marketed to the world before the war isn’t just going to be replaced instantly.   The Chinese government isn’t going to go from a hardline zero covid stance to fully opening things back up instantly...etc.  

I would argue that the markets are going down the way they are because they feel like the fed is moving too slow in raising rates to fight inflation. When Powell saiid that anything above a fifty basis point rise was off of the table—the markets temporarily went up—before people realized that the slower the fed raises rates—the longer that inflation probably lasts. Since that realization occurred—the markets tanked.  
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I am acutely aware of how the markets work. You are correct about some things here, incorrect about others, but again, that's not the point.

My response was to a post saying that it will come out in 2-4 months that the big money has been snatching up shares during this sell off. The reality is that they are the ones who move markets and have been net sellers during this, causing the decline. They aren't "secretly" accumulating shares while mom and pop sell their fractional shares, that's not how it works.

 
humpback said:
I am acutely aware of how the markets work. You are correct about some things here, incorrect about others, but again, that's not the point.

My response was to a post saying that it will come out in 2-4 months that the big money has been snatching up shares during this sell off. The reality is that they are the ones who move markets and have been net sellers during this, causing the decline. They aren't "secretly" accumulating shares while mom and pop sell their fractional shares, that's not how it works.
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It's not a secret or a conspiracy it will however be a new quarter and folks like Berkshire will will be releasing their moves. 

 
FreeBaGeL said:
$2.3T Apple is down 3% AHs because snapchat, which my phone autocorrects because it doesn't even recognize the name of the company, had bad earnings. 

Neat market. 
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Facebook down 8%. Love when my stocks get bombed because of some garbage company I don’t even own. 

 
PhillipPhoto said:
I'll add that talking to my financial advisor this morning he was in lock step will all the advise @Todem has been giving in this thread.  Buckle up, plow any dry powder in while prices are cheap and ride it out.  We're at the max in all retirement account contributions including mega backdoor. I have more than I should in savings, and while it makes me feel safe, he said there is no better time to invest it than now put it in the market and don't try and time the bottom.  Savings rainy day fund shouldn't exceed 6 months of living expenses right now.

I missed the Q2 Market and Economy Update they had earlier this week, but he said he would send the presentation and I will share any insight they might have for what they expect to happen this year after I get it.

One thing he shared that puts things in perspective is that going back 27 years in the S&P if you missed the 5 biggest days you would be up 8%+ per year.  If you missed the 15 biggest days you'd still be up 6%+ per year.  But if you missed the top 50 biggest days you would be negative 1%+.

So I think that illustrates several things.  Just 50 days in 27 years drives the market.  There are a lot more bad days than there are good and we are just experiencing a bunch of those.  But if you bail and happen to miss the good ones when they do come along you wont come out ahead in the end.  Buckle up and sit tight friends.
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In addition to the nifty 50 days of the S&P example above here is how they made their case for this being a Correction and not a Recession into a Bear Market: 

There has been meaningful multiples compression while earnings growth estimates continue higher the rest of this year and in 2023.  High inflation and rising interest rates do not equal the pressure of complete shutdown of the economy due to coivd that caused the last bear market.

Return to Normal: Lower equity market returns than the last 10 years.  High single digits.  Higher volatility than the last 2 years, S&P to dip below the 200 day occasionally. 

Short Term 2022:  US consumer strength was tested by higher commodities price. Cyclical stocks make a second comeback.  Growth slows down, not a recession.  We are at the 4th bottom that we saw in 2011 and 2016 -> Floor is at or near current levels.  Labor reaches a peak.  Inflation finally starts to decline.  Fed interest rates reach about 3%.  Interest rates sap housing market demand to into a slow decline.  China is no longer the growth engine.  

 
This is because of Snapchat? Is that the app where teenagers and bored moms make themselves look like the Easter bunny? 

 
BassNBrew said:
Damn...who would have thought a pandemic would be better for the market than some inflation.
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The recession during the early part of the pandemic was self induced by government shut down of the economy.  Add in very aggressive supportive Fed policy and we got a quick rebound in the market.  Now we have panic in the market because we don't have Fed support.  Economic indicators are still decent currently and I do not see a recession in the near future, probably in middle to late 2023 if any.  I am in the camp the market is over sold and am buying with any cash I have and will hold long term.

 
So if part of the problem with the Walmart/Target earnings reports was that they are sitting on excess inventory due to overestimating demand due to the post covid boom, doesn't that mean they'll have to lower prices to move that inventory which is kind of exactly what we want to see right now with regards to inflation?

It looks like used car prices are coming down, about 6% so far, for the same reason.

A big part of raising rates is to decrease demand to combat inflation.  It seems like the market is starting to do some of that on its own.  Inflation was never going to be culled without demand slowing, so isn't this kind of exactly what we want?

 
FreeBaGeL said:
So if part of the problem with the Walmart/Target earnings reports was that they are sitting on excess inventory due to overestimating demand due to the post covid boom, doesn't that mean they'll have to lower prices to move that inventory which is kind of exactly what we want to see right now with regards to inflation?

It looks like used car prices are coming down, about 6% so far, for the same reason.

A big part of raising rates is to decrease demand to combat inflation.  It seems like the market is starting to do some of that on its own.  Inflation was never going to be culled without demand slowing, so isn't this kind of exactly what we want?
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It's a catch 22- sure, one possibility is that they lower prices and thus inflation, but that also lowers profitability. Same with demand slowing in general. The bottom line is, the economy/inflation slowing down generally isn't good for companies/stock prices. So yes, in a way it's what we want, but here's the rub- what we want isn't good for the stock market.

****'s Sporting Goods is the latest casualty- they actually reported better than expected numbers, but way lower guidance going forward and is getting crushed. It's very painful, but probably going to have to see most companies go through a similar process before we can rebuild. The market obviously hasn't fully priced in this softer environment going forward.

 
One thing that I very much worry about is the weather. I saw some article the other day saying that they are predicting the hurricane season to have above average activity this year in the Atlantic —and there is some sort of phenomenon about water temperatures in the Gulf of Mexico that could make that area also experience more hurricanes than normal.    With the global energy crisis and oil shortages already wreaking havoc—the prospect of hurricanes temporarily disabling the ability to refine the oil into gas and diesel could be very traumatic to the markets.  If we get a few hurricanes over Texas where many of the refiners are —-that knock them out of service for a few days/weeks—I think you could be seeing gasoline temporarily spike to $8-9/gallon which would be scary for the markets.  I’m not sure what the play is market-wise to hedge against this risk—but I do think it’s something worth thinking about. 

 
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SNOW and NVDA report tonight, both down a lot off their highs (about 70 and 50%). I worry more about NVDA potentially reporting bad news than SNOW. SNOW is barely above the IPO price that Warren Buffet paid. I have a feeling like Intuit that they post a nice quarter. That said, that hasn’t even mattered lately. I think I may grab a bit by selling other things, not putting new money in.

 
2Squirrels1Nut said:
Bought 5, May 27, 2022, M $17 put for $0.90 each. 
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Up 10% today on no news.  Hope isn't an investment plan but hoping it just short covering.  I'm not sure how Target had a horrible quarter but Macy's dominates.  Millions of people actually shop at Target. 

So added 

Bought 5, June 3, 2022, M $19 put for $1.35 each. 

 
FreeBaGeL said:
So if part of the problem with the Walmart/Target earnings reports was that they are sitting on excess inventory due to overestimating demand due to the post covid boom, doesn't that mean they'll have to lower prices to move that inventory which is kind of exactly what we want to see right now with regards to inflation?

It looks like used car prices are coming down, about 6% so far, for the same reason.

A big part of raising rates is to decrease demand to combat inflation.  It seems like the market is starting to do some of that on its own.  Inflation was never going to be culled without demand slowing, so isn't this kind of exactly what we want?
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Thank you 

 
jvdesigns2002 said:
One thing that I very much worry about is the weather. I saw some article the other day saying that they are predicting the hurricane season to have above average activity this year in the Atlantic —and there is some sort of phenomenon about water temperatures in the Gulf of Mexico that could make that area also experience more hurricanes than normal.    With the global energy crisis and oil shortages already wreaking havoc—the prospect of hurricanes temporarily disabling the ability to refine the oil into gas and diesel could be very traumatic to the markets.  If we get a few hurricanes over Texas where many of the refiners are —-that knock them out of service for a few days/weeks—I think you could be seeing gasoline temporarily spike to $8-9/gallon which would be scary for the markets.  I’m not sure what the play is market-wise to hedge against this risk—but I do think it’s something worth thinking about. 
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Can play UGA

 
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