Stock Market- Investing

Appears the last round of stimulus checks spurred many first time market investors. Now, word is more money is expected to flow into the market when the $1,400 checks go out, to the tune of $billions! There were a bunch, tens of thousands of people, who opened investment accounts in the stock market for the first time. Heard something about African American first-time investors...why would anyone give a damn what color skin someone is? I mean someone actually documented...and how, BTW, the race of investors????

Anyway, moving past that stupidity, I have been reading a lot, ya know like from the Motley Fool, and other of those on-line "experts" warning against a market bubble driven by newbie investors inflating the value of many equities and the market in general. Some claim at 30,000+ the market is not there, in the fundamentals...which bears a lot of merit given the STUPID-ASS Biden et al wrecking the US economy...and a major correction is pending.

Comments? Opinions?

I am watching the sectors of 5G, cannabis, lithium batteries/EVs, and of course, the whole energy sector.

1. It is good that retail investors are flocking to the market. Owning a part of business is the best way to grow your wealth.

2. Mixing politics and investing is a surefire way to underperform.

3. Current valuations (even after the 10% “correction” of the NASDAQ) look pretty full to me, reflecting historically low interest rates (even with the recent spike in the 10 year). “Don’t fight the Fed” has once again (so far) proven to be accurate. With cash generated 10 years from now being valued close to the same as cash generated today, growth stocks have done quite well. Plus bonds pay less than the yield on SP500, so TINA (there is no alternative) has helped keep stock valuations at relative highs. Of course, if you are calculating trailing P/Es, they should be high anyway because 2020 is an unusual year.

A greater correction would not surprise me, and if it is triggered by rates, it wouldn’t surprise me to see valuations come in more, particularly in companies that don’t generate earnings today...

4. I have been long 5g and cannabis for a couple of years. Sold my cannabis positions in the recent Reddit fueled rally. Might get back in later. Long EV, but I play it through materials rather than betting on a single or combination of OEMs or technologies. Long energy, particularly green energy. Other major themes for me are AI, quantum computing, cloud, and cybersecurity.

Also, bought Bitcoin, banks and other financials in 2020 to prepare for reopening and inevitable rising rates. Didn’t buy the energy sector, cause I am inherently long due to my job, but that is another way to play reflation. But as they say, the biggest gains come from when things go from frightening to just bad, so energy (and financials) have already rallied significantly.

Goosey, my man! your best posts are on our topics like this. You should stick to such and steer clear of your political rantings.

I expect a correction some time during 2021. It might occur later...during the summer, maybe?....after all this additional new money has been absorbed and the market settles back to basic fundamentals. Unfortunately, I'm afraid, many of these newbies who helped fuel the bubble will get clobbered in the correction and that will forever sour them on investing.

When the board is RED! I see BUY signals blinking wildly!!!

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Originally Posted by dawg80

Appears the last round of stimulus checks spurred many first time market investors. Now, word is more money is expected to flow into the market when the $1,400 checks go out, to the tune of $billions! There were a bunch, tens of thousands of people, who opened investment accounts in the stock market for the first time. Heard something about African American first-time investors...why would anyone give a damn what color skin someone is? I mean someone actually documented...and how, BTW, the race of investors????

Anyway, moving past that stupidity, I have been reading a lot, ya know like from the Motley Fool, and other of those on-line "experts" warning against a market bubble driven by newbie investors inflating the value of many equities and the market in general. Some claim at 30,000+ the market is not there, in the fundamentals...which bears a lot of merit given the STUPID-ASS Biden et al wrecking the US economy...and a major correction is pending.

Comments? Opinions?

I am watching the sectors of 5G, cannabis, lithium batteries/EVs, and of course, the whole energy sector.

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Well, if new AA investors get in at the top of a bubble and lose a lot of principal, our resident liberals will be on here complaining that the market is racist and SOME who lost money should be reimbursed with government debt while the financial markets take on more and more regulations. So the color of the investor really matters (to some).

I keep thinking that utilities will have to benefit from any EV usage explosion, as they are not only going to be selling more power but will likely get a lot of government cheese for setting up infrastructure to service these vehicles. Seems logical to me, so I suspect the utility stocks will continue to underperform. :D

At least with utilities you get better yields during underperformance, and I agree that they should benefit from electrification and investments in the grid (since outside of Texas utilities get to pass the costs on in rates at a known ROE).

Got a newsletter, one of those "dime a dozen" type of marketing emails designed to elicit a subscription. You know the types. But it also included a brief article stating that a rise in interest rates will be good for the stock market. I did not subscribe so don't know what they propose as an argument, but I don't think rising interest rates will drive the market higher. In fact, it should have the opposite effect.

1. Rising rates increases the cost of money impacting companies' cash flow, etc.. and also discouraging expansion, hiring, R&D, etc...

2. Rising rates will also make alternative investment products more attractive, even CDs and other safe vehicles, thus siphoning off dollars that would have otherwise been invested in equities.

But, I am always open to learn more. So, does anyone have an explanation that supports this notion?

I don’t know that rising rates cause stocks to go up, but they can go up at the same time when the reason that rates are going up is because of the expectations of real growth.

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Originally Posted by dawg80

Appears the last round of stimulus checks spurred many first time market investors. Now, word is more money is expected to flow into the market when the $1,400 checks go out, to the tune of $billions! There were a bunch, tens of thousands of people, who opened investment accounts in the stock market for the first time. Heard something about African American first-time investors...why would anyone give a damn what color skin someone is? I mean someone actually documented...and how, BTW, the race of investors????

Anyway, moving past that stupidity, I have been reading a lot, ya know like from the Motley Fool, and other of those on-line "experts" warning against a market bubble driven by newbie investors inflating the value of many equities and the market in general. Some claim at 30,000+ the market is not there, in the fundamentals...which bears a lot of merit given the STUPID-ASS Biden et al wrecking the US economy...and a major correction is pending.

Comments? Opinions?

I am watching the sectors of 5G, cannabis, lithium batteries/EVs, and of course, the whole energy sector.

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Lots of newbies in Game Stop. Lots of stimulus money spent on life insurance. Economists didn't see that one coming.

I'll take a 3 1/2 to 4% CD over the possibility of making 7% in the market (assuming I make the proper choices). The reduction of risk is worth the possible 3 percentage points earned on my money.

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Originally Posted by DawgyNWindow

I'll take a 3 1/2 to 4% CD over the possibility of making 7% in the market (assuming I make the proper choices). The reduction of risk is worth the possible 3 percentage points earned on my money.

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Where you finding that CD rate?

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Originally Posted by Guisslapp

Where you finding that CD rate?

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I wish.

The conversation was about higher interest rates being good for the stock market, and my point was that my appetite for risk pretty much goes away as soon as guaranteed income reaches about 50% of what I can expect with a riskier portfolio.

Gimme 3 1/2 percent and I am pretty much out of stocks entirely....I like to sleep well at night. Didn't lose a penny from the dot-com bust when that happened, but did work with a lot of previously retired folks that had to return to work because they lost all their savings.

I'm at the point in my "investing life" where asset protection > asset growth. Yeah, I will always have some "play money" to put in the stock market because I enjoy "the hunt!" Doing research on start-up companies in new industries and getting lucky enough to buy 1,000 shares of some penny stock that jumps up nicely...cha ching! It's like winning a round of golf from friends. I call my money invested in TD Ameritrade and E Trade accounts my "monopoly money." It is also true I have a group of blue chip dividend payers that are steadily growing my kitty, but it's the speculative equities I enjoy the most.

I would buy CDs if they were returning 3% or so. I am in the process of liquidating physical assets I hold, including real estate properties, and all that is doing is swelling my cash position in chunks of $hundreds of thousands at a time. Would like to channel a lot of that into some safe harbor that actually pays something.

Speaking of speculative equities...if any of you wish to share some ticker symbols to watch I'd be interested. I'll start with one I recommend you do some DD on:

Comstock Mining, Co. symbol LODE. It's a gold/silver mining venture that owns the famous Comstock silver mine. The mine that made Randolph Hearst rich! thanks to his father's mining efforts. In the late 19th Century gold was the rage out west and some fellow discovered gold near Virginia City, Nevada...on the lands of the TV show Bonanza, The Ponderosa. The miners complained about the thick, stupid "gray mud" that made gold mining difficult. George Hearst, a mining engineer, went to the mine and discovered the "gray mud" was in fact silver! He bought the failing gold mine for pennies on the dollar and got RICH! mining the silver.

That's the history part. Today Comstock Mining is generating a steady income mining the silver, and also many ounces of gold when a vein is found. But, Comstock Mining also just bought a 62% controlling interest in Linico, a lithium battery recycling company. Nevada is the only state that has licensed lithium reclamation and lithium battery recycling. And, the Linico facility is close to a Tesla plant...hello!

Anyway, check out LODE.

Also check out VUZI. It's been a volatile stock so if you're a day trader or willing to do some short term buying/selling this could work well for you. But, I also recommend you consider a long term position given the technology they hold patents on.

Of course, with all such "recommendations" do your own DD. There is no crystal ball and even stock brokers are really clueless, as Mathew Mac's character in The Wolf of Wall Street said. It's a forgazi...pixie dust.

Bond yields down (bonds are being bought) and a rebound day in growth/tech after mostly getting obliterated over the past few weeks.

Some, including David Tepper, expect bond yields to stay in this range over the next several months as Japan is becoming a net buyer rather than seller of US Treasuries.

I have only invested in US Savings Bonds...which I now cash in every year as they mature. They have not been bad investments. Pretty good, actually.

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Originally Posted by Guisslapp

Bond yields down (bonds are being bought) and a rebound day in growth/tech after mostly getting obliterated over the past few weeks.

Some, including David Tepper, expect bond yields to stay in this range over the next several months as Japan is becoming a net buyer rather than seller of US Treasuries.

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This afternoon’s bond auction could be very telling.

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Originally Posted by Guisslapp

This afternoon’s bond auction could be very telling.

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Well...do tell!

I don't follow the bond market and am, admittedly, not well-versed on it.

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Originally Posted by dawg80

Well...do tell!

I don't follow the bond market and am, admittedly, not well-versed on it.

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Well, if the auction is stronger than last week’s, particularly from overseas buyers, it supports the thesis that the 10 year is not heading to 2% (or higher in the short term). This would be bullish for stocks, considering the volatility that has been triggered by rates over the last several weeks.

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Originally Posted by Guisslapp

Well, if the auction is stronger than last week’s, particularly from overseas buyers, it supports the thesis that the 10 year is not heading to 2% (or higher in the short term). This would be bullish for stocks, considering the volatility that has been triggered by rates over the last several weeks.

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It was strong enough. Yields are down, stocks are up.

What is that old saying "buy on the news..." or something to that effect?

GE's CEO mentions...MENTIONS, mind you!...the possibility of doing a reverse split, to the tune of 1 to 8, and the stock is getting kicked in the teeth today. Even in the midst of some good news, well not just news, but a reality, of GE Capital shedding some debt and GE aerospace selling its jet leasing division for a $30 billion cash infusion and some stock in its former rival in that sector, AerCap. You would think the REAL news would trump the speculative news of the RS, but nah! retail investors are running for the hills!

This is why "Wall Street Big Cats" despise retail investors and are livid about the stimulus checks spurring newbie, first-time investors, and the influence of Robinhood and Reddit, etc. Said BIG CATS are used to being the only market-makers whereby they control pricing on equities. I suppose most of you have been following the Gamestop saga.

I think GE is a good long term play. It is General Electric and is still sitting on some key products, like jet engines, that will soon be seeing a resurgence. Thomas Edison must be rolling over in his grave...either that or celebrating GE's demise since the company was effectively stolen from him when J.P. Morgan masterminded a stock buyout and Edison was booted out.

“Buy the rumor, sell the news”

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Originally Posted by Guisslapp

“Buy the rumor, sell the news”

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Yeah, that's it, and GE is a perfect example right now.

ETFs

Anyone have some insight, experience, and most importantly a recommendation on an ETF(s)? I don't hold any but am looking into them now.

Thanks!

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Originally Posted by dawg80

ETFs

Anyone have some insight, experience, and most importantly a recommendation on an ETF(s)? I don't hold any but am looking into them now.

Thanks!

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What kind of ETF?

Total market like VTI?
SP500 like VOO or SPY?

Sectoral like the Sector SPDR ETFs from State Street?

International?

Thematic like the Cathie Wood ARK funds?

Which itch are you trying to scratch?

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Originally Posted by Guisslapp

What kind of ETF?

Total market like VTI?
SP500 like VOO or SPY?

Sectoral like the Sector SPDR ETFs from State Street?

International?

Thematic like the Cathie Wood ARK funds?

Which itch are you trying to scratch?

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The BEST ETF(s) for dependable dividends. Read an article with recommendations for several, including KBWD, which the article claims is earning 15%, but on the Yahoo Finance site it shows 8%. And the comments are mixed.

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Originally Posted by dawg80

The BEST ETF(s) for dependable dividends. Read an article with recommendations for several, including KBWD, which the article claims is earning 15%, but on the Yahoo Finance site it shows 8%. And the comments are mixed.

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The price has moved a lot, especially recently (upward) because it holds mostly financial services which have caught a tailwind with reopening and rising rates.

“Dependable” and “high” don’t really go together anymore. If you want yield at 10% , you will be taking on more risk.

I have seen that type of yield in mortgage REITS, MLPs, and ETFs that generate a portion of their income from selling covered calls.

https://etfdb.com/compare/dividend-yield/

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Originally Posted by Guisslapp

https://etfdb.com/compare/dividend-yield/

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Some of the super high yielders on the list do not look very liquid.

I have held REITs and MLPs in the past and did well with them. Just have never fooled with ETFs before. But, I am willing to give it a try. Nothing ventured, nothing gained!

REVS looks inviting.

Estimates are a fresh $40 billion will be invested in the stock market from the latest "stimmy." That should inflate the bubble nicely!

Oakland A's selling luxury box suites, $65,000, and taking Bitcoins for payment. Interesting.

Check out CBTC...do your DD!

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Originally Posted by dawg80

Estimates are a fresh $40 billion will be invested in the stock market from the latest "stimmy." That should inflate the bubble nicely!

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Saw an article today that said many people plan to use this latest stimmy on travel and not on gamestop..

https://www.bloomberg.com/news/artic...onomic-opening

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Originally Posted by FriscoDog

Saw an article today that said many people plan to use this latest stimmy on travel and not on gamestop..

https://www.bloomberg.com/news/artic...onomic-opening

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Maybe...but there is still a lot of noise of about $40 billion being invested. The total stimmy is $400 billion, for 40 of that to be invested is not unreasonable.

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Originally Posted by dawg80

I have held REITs and MLPs in the past and did well with them. Just have never fooled with ETFs before. But, I am willing to give it a try. Nothing ventured, nothing gained!

REVS looks inviting.

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Opened a holding with 500 shares of REVS, just to test the ETF waters.

Anyone playing the GME stock buy/sell game?

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Originally Posted by dawg80

Anyone playing the GME stock buy/sell game?

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Been watching that one from the sideline. The short squeeze made sense. The current stock price doesn’t. It doesn’t fit my investing strategy at all to play in these type of stocks.

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Originally Posted by Guisslapp

Been watching that one from the sideline. The short squeeze made sense. The current stock price doesn’t. It doesn’t fit my investing strategy at all to play in these type of stocks.

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Surely the shorts have been squeezed out by now, or will be by the time this peak-valley surge is over. Woe be the short who jumps in again. Fool me once, shame on you, fool me twice, shame on me. Fool me thrice!???

This doesn't fit my investing strategy either. But! I mean...for some play money, wouldn't hurt to pick up a 100 shares at the right LOW price, just for kicks, eh. I did okay, in and out with VUZI. Doubled my money in about 3 weeks.

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Originally Posted by dawg80

Surely the shorts have been squeezed out by now, or will be by the time this peak-valley surge is over. Woe be the short who jumps in again. Fool me once, shame on you, fool me twice, shame on me. Fool me thrice!???

This doesn't fit my investing strategy either. But! I mean...for some play money, wouldn't hurt to pick up a 100 shares at the right LOW price, just for kicks, eh. I did okay, in and out with VUZI. Doubled my money in about 3 weeks.

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I have been buying gold and silver for 25+ years now. Early on... only bought maybe dozen or two dozen coins/bars a year.. last 6-8 years been buying more.

Nah, invest in sugar and whisky. 😉

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Originally Posted by FriscoDog

I have been buying gold and silver for 25+ years now. Early on... only bought maybe dozen or two dozen coins/bars a year.. last 6-8 years been buying more.

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I have never bought gold-silver. I have held gold/silver mining stocks. Except, for some gold I had inherited and sold back in 2012 or 2013 when it topped $1,700/ounce. That was a whopping 8.5 oz. I see those Lear Capital commercials, with that actor, and have thought about it, but have never pulled the trigger.

You don't hold physical gold, do ya?

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Originally Posted by TYLERTECHSAS

Nah, invest in sugar and whisky. 

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Irish whisky!

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Originally Posted by dawg80

I have never bought gold-silver. I have held gold/silver mining stocks. Except, for some gold I had inherited and sold back in 2012 or 2013 when it topped $1,700/ounce. That was a whopping 8.5 oz. I see those Lear Capital commercials, with that actor, and have thought about it, but have never pulled the trigger.

You don't hold physical gold, do ya?

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Yeah I actually have physical gold and silver.. Obviously I don't have large gold bars ( 5 or 10 oz..) due to price. I do have larger silver bars.. For me, it's fun to have, and it is my safety net if the dollar loses it's value. I have smaller 1oz silver bars/coins and 1-10 gram gold and 1oz gold to use as currency if ever needed. It is not my primary retirement platform in any way.. it has always been something extra I've dabbled in..


ETA: I think the actor you are thinking of is William Devane..

It isn’t really a question of “IF” the dollar is going to lose its value. It WILL because (for better AND worse) that is what Fed policy objectives require. Relative to other currencies, who knows?

If we successfully destroy the power of the US dollar, whether by making it more volatile than other competing currencies or by abusing it in foreign policy (I.e., sanctions for its use in connection with transactions with our enemies), that would become really big headwind to a US economy that has benefited from the dollar being the global reserve currency.

Alternative assets (precious metals, crypto, art, collectibles), kept in reasonable allocations (less than 10 percent total) are generally considered appropriate as part of a diversified portfolio. Of course, it trades off with productive assets (including those that can thrive in an inflationary environment), so you wouldn’t want to go overboard. Of course, YMMV...if your primary objective is capital preservation rather than growth or income, maybe you could justify a greater tilt to alternative assets.

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Originally Posted by FriscoDog

Yeah I actually have physical gold and silver.. Obviously I don't have large gold bars ( 5 or 10 oz..) due to price. I do have larger silver bars.. For me, it's fun to have, and it is my safety net if the dollar loses it's value. I have smaller 1oz silver bars/coins and 1-10 gram gold and 1oz gold to use as currency if ever needed. It is not my primary retirement platform in any way.. it has always been something extra I've dabbled in..


ETA: I think the actor you are thinking of is William Devane..

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Yes, Devane!

The 8.5 oz I inherited was in small bars, or really squares. They were in a strong box. I was shocked! none of my cousins bothered with it because most went to my grandparents' house before I did, and my Aunt Elaine was executor(executrix) of the estate and said take whatever you want, including furniture. My cousins were too busy fighting over the antique furniture and never bothered to look thru grandpa's stuff very closely. I also got a 1930's .38 special revolver. Thought I might need it to get out of the house with the gold, should the cousins find out what I had found...

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Originally Posted by Guisslapp

It isn’t really a question of “IF” the dollar is going to lose its value. It WILL because (for better AND worse) that is what Fed policy objectives require. Relative to other currencies, who knows?

If we successfully destroy the power of the US dollar, whether by making it more volatile than other competing currencies or by abusing it in foreign policy (I.e., sanctions for its use in connection with transactions with our enemies), that would become really big headwind to a US economy that has benefited from the dollar being the global reserve currency.

Alternative assets (precious metals, crypto, art, collectibles), kept in reasonable allocations (less than 10 percent total) are generally considered appropriate as part of a diversified portfolio. Of course, it trades off with productive assets (including those that can thrive in an inflationary environment), so you wouldn’t want to go overboard. Of course, YMMV...if your primary objective is capital preservation rather than growth or income, maybe you could justify a greater tilt to alternative assets.

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Hearing some rumblings about governments banning cryptos so as to maintain a monopoly on currency. Some $billionaire named Dalio published an opinion piece on it, advocating for the US government to ban cryptos. I am guessing he missed the Bitcoin explosion and is just pissed off about it. FWIW, Mr. Dalio, I missed the Bitcoin ride too! But, I ain't whining about it...at least not publicly! :shocked2: Maybe he's just warning of the possibility, but I like to read between the lines.


Dalio sees 'good probability' bitcoin gets outlawed (yahoo.com)

Warren Buffett wants you to use your $1,400 stimulus check this way (yahoo.com)

I like the idea in the last paragraph. That would be a very good saving/investing vehicle for young folks and those who lack the discipline to invest. I actually followed (invented???) a similar scheme that after some 20 years, without even trying or noticing, I had right at $30,000 cash!

Penny stocks can be so much fun to buy/sell! But, only use money you can afford to lose.

The economy is opening up as more and more areas relax restrictions on the China virus lockdown. This has meant a return toward full employment...and the unemployment rate is at 6%, so getting closer to the pre-China virus levels. This also means that the stock market will benefit too. Yeah, I know, it's not like it has been hurting, but it should climb when consumer-based companies, like the airlines, restaurants, and movie theatres see a return to capacities.

AMC will benefit greatly. It is a $20+ stock trading at around $9-10 right now. AND! there is the added bonus of the rumors of a short squeeze, ala Gamestop, pending.

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Originally Posted by dawg80

The economy is opening up as more and more areas relax restrictions on the China virus lockdown. This has meant a return toward full employment...and the unemployment rate is at 6%, so getting closer to the pre-China virus levels. This also means that the stock market will benefit too. Yeah, I know, it's not like it has been hurting, but it should climb when consumer-based companies, like the airlines, restaurants, and movie theatres see a return to capacities.

AMC will benefit greatly. It is a $20+ stock trading at around $9-10 right now. AND! there is the added bonus of the rumors of a short squeeze, ala Gamestop, pending.

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The stock market is forward looking, so the reopening is largely priced in. The YOY comps this quarter are going to be super easy to beat. Easy money on the reopening has been made, but the market can keep grinding higher as long as the news remains positive, further removing risks that are baked in...yet the inflationary/interest rate risks still lurk in the abyss.

Jim Cramer says retail investing has entered the dangerous "acceptance stage." Actually, he was referring to a specific sector of investors...those young, newbies, first-timers who used the stimmy from last fall to plunge into the market. A lot of pundits expected this third stimmy to help push the market further up...i.e. further inflate the bubble...but it hasn't manifested, at least not yet. Conservative predictions projected 10% of the total stimmy, $40 billion, to be invested. Nope! hasn't happened.

Cramer says the newbies have been hit over the head in a reality check, many bought trendy stocks at their peaks, and now are shocked by the declines. Cramer also predicts (and is hoping) platforms like Robinhood, Reddit, and Webull have run their course and are done. Cramer is one of those narcissistic "experts" who thinks only he knows best, and wants his show to remain popular (ratings). I know a lot of folks dislike Cramer...nothing but a know-nothing loudmouth...but I watch segments of his show, and when he's calm and professional appearing throughout the day on CNBC, he does offer some sound analysis on the market and individual equities.

Back to the issue...I predicted the newbies who chased quick returns in Gamestop and others would get clobbered and it would sour them on investing. There were also a record number of first-time minority investors, African Americans, who used some of their stimmy to open on-line brokerage accounts. I hope they were a little smarter than the 20-somethings who poured tons of money into those rockets, which have since fizzled. There are plenty of great investment stocks, divie-payers with long term growth potential and as safe as any equity can be. I have tried to steer some of those young investors towards some of those stocks, encouraging them to do some DD. In come cases those youngsters didn't find them "sexy" enough.

Oh, Cramer defines the "acceptance stage" as some realization that only Wall Street and the big guys can win in the market and small retail investors will always lose. I reject that notion. It just takes proper guidance.

I still can't believe Cramer gets paid. I've heard it described as financial pornography...pretty spot on.

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Originally Posted by johnnylightnin

I still can't believe Cramer gets paid. I've heard it described as financial pornography...pretty spot on.

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Some friends joke if Cramer says buy, they sell, and vice versa.

COIN is going public with its IPO today...any takers?

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Originally Posted by dawg80

COIN is going public with its IPO today...any takers?

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Probably not unless it opens at its reference price. Already long crypto so not as interested.

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Originally Posted by Guisslapp

Probably not unless it opens at its reference price. Already long crypto so not as interested.

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Not surprisingly, COIN is indicating well above the reference price and is not likely to open for trading until this afternoon. I am not chasing.

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Originally Posted by Guisslapp

Not surprisingly, COIN is indicating well above the reference price and is not likely to open for trading until this afternoon. I am not chasing.

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I think, may be wrong, that it will generally follow the Facebook IPO opening. At $250 it is over-valued, that implies a $65 billion valuation and it's really a $20 billion company with only a short-term moat. Competitors will emerge and erode Coinbase's market share.

As for the IPO and the days/weeks to come, I think it will mirror FB. It will pop up...$300/share or whatever, and then plummet like a rock closer to its true valuation, $90ish per share. Then, it might trend up from there depending on its fundamentals and how well the company guards its moat.


On another note Bernie Madoff died in prison...good riddance.

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Originally Posted by dawg80

I think, may be wrong, that it will generally follow the Facebook IPO opening. At $250 it is over-valued, that implies a $65 billion valuation and it's really a $20 billion company with only a short-term moat. Competitors will emerge and erode Coinbase's market share.

As for the IPO and the days/weeks to come, I think it will mirror FB. It will pop up...$300/share or whatever, and then plummet like a rock closer to its true valuation, $90ish per share. Then, it might trend up from there depending on its fundamentals and how well the company guards its moat.


On another note Bernie Madoff died in prison...good riddance.

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Right now first trade is indicating $355, which is north of 90 billion.

Disruptive companies with enormous TAMs and a first mover advantage are so hard to value right.

Recent private trades in COIN valued the company at 100 billion.

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Originally Posted by Guisslapp

Disruptive companies with enormous TAMs and a first mover advantage are so hard to value right.

Recent private trades in COIN valued the company at 100 billion.

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It's a $20 billion company....actually $18.9 billion if you trust Motley Fool's analysis...close enough.

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Originally Posted by dawg80

It's a $20 billion company....actually $18.9 billion if you trust Motley Fool's analysis...close enough.

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It is valued what the market values it at, which is way higher than what MF values it.

There is going to be a lot of volatility in this one.

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Originally Posted by Guisslapp

It is valued what the market values it at, which is way higher than what MF values it.

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Those are different valuations, which I'm sure you know. HUGE difference between the values of the stock and of the company.

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Originally Posted by dawg80

Those are different valuations, which I'm sure you know. HUGE difference between the values of the stock and of the company.

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No, it is the same. Price of stock times fully diluted shares is the market cap (value of the company). Thus, the price of the stock is the market telling you what the company is worth.

The value you, me or MF places on the company is just our opinion based on our beliefs about the company’s future earning stream and the discount rate we choose to apply to those streams to determine an NPV.

Quote:

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Originally Posted by Guisslapp

No, it is the same. Price of stock times fully diluted shares is the market cap (value of the company). Thus, the price of the stock is the market telling you what the company is worth.

The value you, me or MF places on the company is just our opinion based on our beliefs about the company’s future earning stream and the discount rate we choose to apply to those streams to determine an NPV.

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Not trying to split hairs...but the value of a stock does not equal the value of the company**. Gamestop is a great example of how the two can depart. No way is GME the "market value" calculated from its inflated...BUBBLE!!...stock price.

Heck! you see this very thing on Shark Tank all the time. Some fellow wants $100,000 for 10% equity in his start-up endeavor and the sharks rightfully scoff saying NO WAY! is your company worth a $1 million. No different when investors chase a stock based on some rumor(s) and artificially inflate its share price.


**well, not necessarily so

Quote:

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Originally Posted by dawg80

Not trying to split hairs...but the value of a stock does not equal the value of the company**. Gamestop is a great example of how the two can depart. No way is GME the "market value" calculated from its inflated...BUBBLE!!...stock price.

Heck! you see this very thing on Shark Tank all the time. Some fellow wants $100,000 for 10% equity in his start-up endeavor and the sharks rightfully scoff saying NO WAY! is your company worth a $1 million. No different when investors chase a stock based on some rumor(s) and artificially inflate its share price.


**well, not necessarily so

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Everyone has an opinion what something should be valued, and that is what makes a market. Value is subjective. It is a function of an unknown future - both what all market participants think will happen and the risk premium we are willing to assign today based on that expectation.

Quote:

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Originally Posted by Guisslapp

Everyone has an opinion what something should be valued, and that is what makes a market. Value is subjective. It is a function of an unknown future - both what all market participants think will happen and the risk premium we are willing to assign today based on that expectation.

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I don't agree with the strictly "value is subjective" concept, not for a company. Yes!! there are assumptions built into every analysis and that is the subjectivity portion of the calculation, but those assumptions are rooted in sound financials, marketing, and the good ole SWOT. I was a fulltime business consultant and still do it part time and putting a value on any business/company is done mathematically in the basic financials of cash flow, the balance sheet, etc...

In terms of stocks, traded on the open market, yes, the factor of unbridled enthusiasm for a stock, for some company (and its products) can artificially inflate the market cap. But then that becomes a pyramid scheme where early investors HOPE other fools continue to jump in and drive the price further up. In such a scenario a savvy investor can gauge this bubble and jump in, and then out, and take some profits with him. But, at NO TIME does that mean THE COMPANY is worth the market cap.

It comes down to this...if you were interested in buying a company, would YOU pay the inflated market cap value for it?

I wouldn't.


BTW, I am also involved in real estate. I work with investors helping them identify and then buy properties they can then flip and/or turn into rentals. As I always remind them..." a no deal is better than a bad deal," learn to walk away. Same is true with bad deal stocks...walk away.

Quote:

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Originally Posted by dawg80

I don't agree with the strictly "value is subjective" concept, not for a company. Yes!! there are assumptions built into every analysis and that is the subjectivity portion of the calculation, but those assumptions are rooted in sound financials, marketing, and the good ole SWOT. I was a fulltime business consultant and still do it part time and putting a value on any business/company is done mathematically in the basic financials of cash flow, the balance sheet, etc...

In terms of stocks, traded on the open market, yes, the factor of unbridled enthusiasm for a stock, for some company (and its products) can artificially inflate the market cap. But then that becomes a pyramid scheme where early investors HOPE other fools continue to jump in and drive the price further up. In such a scenario a savvy investor can gauge this bubble and jump in, and then out, and take some profits with him. But, at NO TIME does that mean THE COMPANY is worth the market cap.

It comes down to this...if you were interested in buying a company, would YOU pay the inflated market cap value for it?

I wouldn't.


BTW, I am also involved in real estate. I work with investors helping them identify and then buy properties they can then flip and/or turn into rentals. As I always remind them..." a no deal is better than a bad deal," learn to walk away. Same is true with bad deal stocks...walk away.

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We are saying the same thing. The assumptions you put in a discounted cash flow analysis are based on judgment, which is subjective. People have different expectations. A company is valued at what someone is willing to pay for it.

Small businesses sell for “discounts” because there are fewer buyers (thus they are less valuable).

Quote:

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Originally Posted by Guisslapp

We are saying the same thing. The assumptions you put in a discounted cash flow analysis are based on judgment, which is subjective. People have different expectations. A company is valued at what someone is willing to pay for it.

Small businesses sell for “discounts” because there are fewer buyers (thus they are less valuable).

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The difference is, we professionals use sensible, time-tested assumptions, while who knows what the average retail investor uses! That was the point I was trying to make. Perhaps I wasn't clear enough.

Speaking of which!!! this retail investor (me!) just opened some positions in two sectors I don't know a lot about: cannabis and crypto. I THINK I have made some sensible investments...and I am in light, so no harm, no foul if it doesn't work out....Bought into two MJs, one of the cannabis companies specializes in recreational use and are developing products, including a beverage, hmmm...and the other focus on medicinal use of cannabis and is a reputable bioscience company.

Quote:

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Originally Posted by dawg80

The difference is, we professionals use sensible, time-tested assumptions, while who knows what the average retail investor uses! That was the point I was trying to make. Perhaps I wasn't clear enough.

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I haven't seen the number in a while, but a few years back I read that individual investors make up about 6% of the market. We talk a lot about market movement, but the market never really moves without the institutional investors moving it. Sure, there are outliers like the GameStop stuff, but that's fleeting and it leaves as suddenly as it arrives.

Quote:

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Originally Posted by dawg80

The difference is, we professionals use sensible, time-tested assumptions, while who knows what the average retail investor uses! That was the point I was trying to make. Perhaps I wasn't clear enough.

Speaking of which!!! this retail investor (me!) just opened some positions in two sectors I don't know a lot about: cannabis and crypto. I THINK I have made some sensible investments...and I am in light, so no harm, no foul if it doesn't work out....Bought into two MJs, one of the cannabis companies specializes in recreational use and are developing products, including a beverage, hmmm...and the other focus on medicinal use of cannabis and is a reputable bioscience company.

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CGC and GW?

Quote:

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Originally Posted by dawg80

The difference is, we professionals use sensible, time-tested assumptions, while who knows what the average retail investor uses! That was the point I was trying to make. Perhaps I wasn't clear enough.

Speaking of which!!! this retail investor (me!) just opened some positions in two sectors I don't know a lot about: cannabis and crypto. I THINK I have made some sensible investments...and I am in light, so no harm, no foul if it doesn't work out....Bought into two MJs, one of the cannabis companies specializes in recreational use and are developing products, including a beverage, hmmm...and the other focus on medicinal use of cannabis and is a reputable bioscience company.

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Your time tested assumptions don’t work very well when dealing with disruptive technology. Never would have bought Amazon, for example.

Quote:

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Originally Posted by johnnylightnin

I haven't seen the number in a while, but a few years back I read that individual investors make up about 6% of the market. We talk a lot about market movement, but the market never really moves without the institutional investors moving it. Sure, there are outliers like the GameStop stuff, but that's fleeting and it leaves as suddenly as it arrives.

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Institutional investors control 94% of the market? Is that measured in volume i.e. number of shares traded daily? I know Hedge Funds and the like, Mutual Funds, and other entities trade in large numbers, and yes, buying/selling millions of shares in a block, or even hundreds of thousands, can move the PPS but such movements also influence retail investors who tend to follow the trends.

One thing for sure, like other industries and economic sectors, the whole equity investment landscape is changing. Platforms like Robinhood and Reddit have taken stock investing to another level, building on what firms like E Trade, TD Ameritrade started. The retail investor continues to get closer to the source...IPOs, SPACs, etc...and brokers continue to slip toward irrelevancy.

The same thing happened in the travel industry, very few "travel agencies" left, and it is gathering steam in the real estate industry too. The old tired real estate brokerages are dinosaurs and need to go away. Stock market investing is on the same path.

Quote:

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Originally Posted by Guisslapp

CGC and GW?

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Did you mean GWPH?

Quote:

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Originally Posted by dawg80

Did you mean GWPH?

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Yes

Quote:

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Originally Posted by Guisslapp

Your time tested assumptions don’t work very well when dealing with disruptive technology. Never would have bought Amazon, for example.

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Ah yes! the now, "tried and true" disrupters! It is true companies like Amazon, itself, would have...and did...fly under the radar. But "the time tested assumptions" methodology has absorbed that factor and such analysis now includes the possibilities. Well, actually it has always been a considered factor, such is the T in the old SWOT analysis. But, it's not accurate to say the "time tested assumptions" can be cast aside. As with all matters, especially in the world of business influenced by technological advancement, proper analysis has always considered and factored-in "disruptions," even if not having a perfect track record of identifying the specific "offender," i.e. an Amazon.

I also used to own a couple US multi-state operators, but took profits. Might get back in at some point...

Quote:

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Originally Posted by Guisslapp

CGC and GW?

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Nope! neither. Went with some penny-stock offerings, with promising financials. Figured if I were entering a new sector (for me) I would throw in with some other interlopers. Maybe we'll ride it up together.

Crypto expert David Zeiler has not issued a "buy" recommendation to his followers for Coinbase (COIN)...yet. But will. He was interviewed by the on-line investing mag Monday Morning and says the price, the true valuation, has not "settled" yet. It is true Coinbase's 1st qtr earnings were a surprise, crushing predictions $86 billion vs. $18 billion, but most pundits say that is not sustainable as competitors enter the sector. Of course, as some of us know, there is a huge difference between the valuations of the business and the market cap created by the open market of stock-buyers. A stock price of $350+ might be a fair valuation if the sector conditions remain as is and Coinbase remains as the, BY FAR!, largest supplier of the exchange services and as a result can continue to charge ridiculous prices for their services such that their current monopoly allows. But those conditions are rapidly changing and Coinbase's market share will begin to erode just as rapidly.

COIN may be a good short-term play, according to Zeiler. It will take some time for competitors to get their feet on the ground and start capturing market share. The two biggest competitors, currently, Kraken and Gemini, are already making inroads and the one to watch, says Zeiler, is Uniswap. Also, deep pockets, like Elon Musk, are floating ideas of breaking into the sector. Long time game-maker Atari already has.

Zeiler thinks COIN could reach $600/share before the end of 2021...possibly, but 2022 will offer stiff challenges. He still has not settled on a good entry point, so one has to assume that will be below $300.

FWIW

The upside for COIN involves the creation of new businesses that can be sold on/leverage the platform.

Interesting stuff...

$AMC & $GME: THE LATEST POSSIBLE DATE THE SHORT SQUEEZE CAN START. THESE RULINGS ARE ALL YOU NEED TO PAY ATTENTION TO. BUY AND HOLD $AMC $GME : BeebsGaming (reddit.com)

You might want to do some DD on AMC and jump in at these $10ish levels. I don't think you can lose as AMC is a legit $15-20 stock based on its own merits (fundamentals), but there is a big squeeze on, much like GME. Check it out for yourself.

Full disclosure: I do hold some AMC shares at this time.

Quote:

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Originally Posted by dawg80

I think, may be wrong, that it will generally follow the Facebook IPO opening. At $250 it is over-valued, that implies a $65 billion valuation and it's really a $20 billion company with only a short-term moat. Competitors will emerge and erode Coinbase's market share.

As for the IPO and the days/weeks to come, I think it will mirror FB. It will pop up...$300/share or whatever, and then plummet like a rock closer to its true valuation, $90ish per share. Then, it might trend up from there depending on its fundamentals and how well the company guards its moat.

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COIN is steadily dropping... down to $293 at last check today...it's finding its way to its true valuation, just like I said it would. Yeah, there are "market makers" who stand to lose a lot and are manipulating the price with fake trades. But that only delays the inevitable. I have read several articles the past couple of days and the new "settling price" is about $100. One bigtime investor, who also has his own blog just posted, "wake me when COIN hits $100, then I will start paying attention to it."

Timber!

On the cutting edge of a revolution...

How Do Hedge Funds Manipulate The Stock Market? - Franknez.com

Retail investors have been getting screwed for decades, but that is beginning to change.

I am in AMC and will not sell, and will add more in dips, to do my part to support the revolution.

Quote:

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Originally Posted by dawg80

On the cutting edge of a revolution...

How Do Hedge Funds Manipulate The Stock Market? - Franknez.com

Retail investors have been getting screwed for decades, but that is beginning to change.

I am in AMC and will not sell, and will add more in dips, to do my part to support the revolution.

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Lying, media manipulation, etc. Sounds more like the dem party and mainstream media than the stock market (maybe they are one in the same in some instances). Information appears then disappears like a Stacey Abrams Major League baseball article.

Interesting read.

Warren Buffet, the old fossil, is bashing anything and everything that seeks to strip some of his establishment advantages. He has attacked Robinhood and Reddit and is now whining about SPACs. Hey Buffet, you don't like those, don't participate! It's that simple.

Of course, he backed the Harris-Biden ticket and other libs just to kill oil pipelines so as to benefit his railroad that stood to lose $millions it transports in barrels. One of his trains jumped the tracks a couple of years ago and spilt more oil in that one accident, that one incident, then ALL oil pipelines leaks combined!! Yet, it is pipelines that are not safe to the environment... Always follow the money.

Back to the first point. Robinhood et al is giving retail investors a voice in the market. The SOBs who "market make" with naked shares and all their shenanigans have cost average retail investors many, many $millions over the years. Way past time to level the playing field. And yeah, azzholes like the Citadel fight dirty and still hold most of the cards. It's an uphill fight for retailers, but it at least it's fighting the good fight.

Charlie Munger, Buffet's right-hand-man, called Bitcoin "disgusting and a threat to civilization." Yeah, the cryptos have their concerns, but "disgusting?"

All of that is what makes a market. When everyone is finally all in on crypto, that will be your sell signal.

Quote:

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Originally Posted by Guisslapp

All of that is what makes a market. When everyone is finally all in on crypto, that will be your sell signal.

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Yep, agreed, the market has a lot of moving parts. Or, it is like water...it seeks its own level. Not for the faint of heart...

SEC meeting today...one of the items on the agenda is how to regulate/monitor the wholesalers, like Citadel, which I hear controls 47% of market transactions. SEC Chairman was on CNBC this morning, some very interesting comments. I hope they will create a fairer market whereby small retail investors don't continue to get shafted. A true free, fair, and open market serves us all the best.

Elon Musk says Dogecoin is a joke, started "just because," and yet some so-called investors are now saying, he is just saying that to drive the price down so he and his cronies can buy more. :icon_roll:

This is an example of that unpredictable factor that affects stock prices. Even when told, by one of the founders, Dogecoin was started as a joke, instead of immediately dumping all their shares and being mad they got duped, some (many!) concoct a conspiracy theory designed to mitigate their delusions. Well, then these so-called investors had better take a look, a hard look, at the facts. Namely, Dogecoin is not set up like true cryptocurrencies are, and thus has NO VALUE. First, there can be an unlimited number of coins, and secondly, Dogecoin does not have a mining mechanism in place. It is nothing but a Ponzi scheme. The ONLY value it can have is the willingness of new investors to continue to pour money into it and drive the share (coin) price up.

I figured this one would shoot up and I tried to buy in for a quick buy/sell but none of the trading platforms I use, like E Trade, support it. And this is why...it's a joke.

The fight is on...

Meme stocks take eerily similar journeys leaving retail traders to wonder why and who - MarketWatch

Many AT&T (T) long time shareholders are feeling betrayed. Why? I have held T since the early 1990's and have made a fortune on the divies. I keep a spreadsheet on all my holdings and went back and looked, wow! the generous divie has been very kind to me and my portfolio. T has always been one of the premier "dividend darlings" that smart investors have bought and held. It was paying a solid 6.3% divie and now the announcement is a cut down to 3.7%. But AT&T management had to right a mistake they made by buying Time Warner and have now dumped that mistake to the tune of a $53 million loss. Water under the bridge, and it would have been worse for AT&T to have clinged to that mistake (like schools do when they refuse to fire a lousy coach), yank that bandaid off, endure some short term pain and get on with rebuilding the brand...and the stock.

But the crying and whining is almost comical. Idiots dumping T stock "to show management my displeasure." Okay, cut off your nose to spite your face too. First, a short term drop to 3.7% divie is not the end of the world. Still a decent return vs. alternatives. Second, AT&T will be a stronger company, more competitive in its core business and gradual increases in the divies will follow in the months and years to come. And finally, word is all we T shareholders will be receiving some Discovery, Inc. shares as partial compensation. That has happened to me several times and I always came out great, often with the gifted shares of another company out-performing my original equity.

But the point is how stupid people are who get emotional about a stock or a company. Eff 'em all...as long as they make me money I don't give a rat's ass about any company or any stock. Betrayed? LOL. Grow up...

T got somewhat screwed by Trump when he put the DOJ on them for the TimeWarner merger. This delayed the merger and added cost all on the theory that it would be too powerful. He and his DOJ were proven wrong in court and now in the real world.

Quote:

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Originally Posted by Guisslapp

T got somewhat screwed by Trump when he put the DOJ on them for the TimeWarner merger. This delayed the merger and added cost all on the theory that it would be too powerful. He and his DOJ were proven wrong in court and now in the real world.

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Oh...naughty man; bad, bad Orange Man strikes again. :rolleyes:

Of course, AT&T's management bears no responsibility for the poor decision to acquire TimeWarner in the first place....

Quote:

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Originally Posted by dawg80

Oh...naughty man; bad, bad Orange Man strikes again. :rolleyes:

Of course, AT&T's management bears no responsibility for the poor decision to acquire TimeWarner in the first place....

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Putting his thumb down on the wrong side of the scale of justice.

T still will own 71% of Warner + Discovery, right?

Yes, T will own 71% of the new merger.

I didn't, and won't, join the rush of disgruntled T shareholders dumping their shares, upset over the divie cut. It'll still have a decent 3.7% divie and T should emerge a stronger company. And! we T shareholders will be getting some Discovery shares as compensation toward the cut in the divie. T is just one of 33 stocks I hold, it is NOT one I am overly concerned about.

Quote:

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Originally Posted by dawg80

Yes, T will own 71% of the new merger.

I didn't, and won't, join the rush of disgruntled T shareholders dumping their shares, upset over the divie cut. It'll still have a decent 3.7% divie and T should emerge a stronger company. And! we T shareholders will be getting some Discovery shares as compensation toward the cut in the divie. T is just one of 33 stocks I hold, it is NOT one I am overly concerned about.

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I have to admit I sold all of mine when they were negotiating to buy Time Warner after they already purchased Direct TV. Just wasn't the company I researched and bought in the first place.

The AMC saga continues to be interesting. Yes, for full disclosure, I am a shareholder, but/and I urge each of you to open a position. Heck, buy just 10 shares for a hoot!

Latest news...

One of the hedge funds (Wanda) holding shares dumped over 30 million shares this past week. They sold over a four day period as the PPS approached $15, they dumped. They closed out by selling 16million shares the last day. During that period, as the price backed up some, retail investors were gobbling up the reduced priced shares. As a result, the price went from $14.50 to a close of $12.08 yesterday. Dumping 30 million shares in one week should have crushed the PPS, but it didn't. The Ape Army is growing and getting stronger.

Facebook shut down a page with thousands of members entitled "AMC Stock." On it folks were discussing the stock, how HFs manipulate the market, naked shares, etc...no explanation was given. But!! turns out Mark Zuckerburg's sister is on the BOD of Motley Fool (Motley Stool) and [drum roll please!] on the board of Citadel (Shitadel) #1 stock manipulator of AMC and other stocks, namely GME, LODE, NGL, and others.

The SEC, Gary Gensler, is promising reforms and new regulations against this unethical, immoral, and really ILLEGAL practices of these HFs. Pelosi has already stepped in to block Gensler's efforts, since she is in deep with Citadel and others. Of course she has to tread lightly, and so far has just danced around the edges, but it is clear she is trying to protect her own selfish, personal interests over those of millions of Americans and the greater good of a fair market. But, this is nothing new for the socialist elites...the pigs of Orwell's Animal Farm.

But, if more average investors will join the Ape Army we can make a difference. Right now the battleground happens to be AMC, but we are seeing the beginnings of other grassroot movements in other stocks/companies. It's shameful...unAmerican!...what these Wall Street firms, these hedge funds do.

NOTE: although I personally have no interest in shorting a stock, it is legal. I don't like the practice since it helps to destroy companies. But, that's not what we're talking about here. It's the use of naked shares, FAKE SHARES, and the use of "dark pools" to manipulate stock prices that we are railing against. This has to end! And, companies like Citadel need to either provide a service or announce itself as an investment firm...but not be able to do both. This is like a referee also being a player/coach of one of the teams playing the game!!!

As always, do your DD. There are bunch of videos on YouTube covering the AMC saga. Check it out.