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Author Topic: Investing Thread  (Read 287180 times)

JWags85

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Re: Investing Thread
« Reply #1525 on: October 28, 2021, 11:55:09 AM »
I think that there is a lot financial engineering going into corporate earnings at the moment. To say that I am shocked with some of the earnings is an understatement. I have noted many times on the firsthand evidence on the supply chain side, rising costs and increased labor costs, yet all have gone unnoticed in the big boys earnings. While I hope I am 100% wrong, I am becoming more skeptical on how earnings are being reported. I expected beat on the top line due to higher sales prices, I thought bottomline  would suffer.

There is also TONS of BS involved in analyst estimates and "predictions" for earnings.  That game of upgrades/downgrades, EPS projections on quarterly reports, etc... has been a joke for years.  Add that to financial engineering and its clear as mud on a quarterly basis.  Also why price reactions to earnings reports are more unpredictable than ever.

China has raised prices on a lot of goods... as you well know. 

Inflation imported from the East.

It was going on before inflation.  Goose can speak to it, but I personally know multiple industries and companies in said industries that have shifted away from China due to increasing costs.  Sure its cheaper than the US, but that doesn't mean rising costs are any more fun to bear.  A lot of it gets ridden out cause its costly to move and cause the logistics, supply chain, and process through China is so established and well defined.

Should I sell AAPL today as I'm officially up over 200%?  Or should I wait 15+ yrs and buy more on the dips?  I think most people are worried about a major market correction in the next year.

I mean, I would scale some off.  If you truly think its going to keep going up over time, there is ample opportunity to rebuy after some healthy corrections and pullback.  Big tech is majorly overheated.

I'm not making a Heisey call of an AAPL crash, but I remain skeptical on major AAPL 2x/3x/5x returns into the future.  They are a $1T hardware company now and with innovation in products a bit lagging, I'm not sure the cycle churn of new versions of existing products is enough.

TSmith34, Inc.

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Re: Investing Thread
« Reply #1526 on: October 28, 2021, 12:10:35 PM »
Should I sell AAPL today as I'm officially up over 200%?  Or should I wait 15+ yrs and buy more on the dips?  I think most people are worried about a major market correction in the next year.
Are you good at timing the market? Do you believe AAPL will outperform over underperform the market in those next 15 years you talk about?

I wouldn't get too wrapped up in hitting a particular percentage gain. Congrats on hitting a triple, but the real question is what you think the stock will do relative to other options going forward. If you think it is overheated as Wags does, there is nothing wrong with taking a profit, though remember that you'll pay cap gains. The question is, if you do that, what will you do with the remaining proceeds after selling and paying gains?

I've shared before that timing my selling if definitely not my forte, so I am giving no advice here.
If you think for one second that I am comparing the USA to China you have bumped your hard.

MuggsyB

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Re: Investing Thread
« Reply #1527 on: October 28, 2021, 12:24:22 PM »
Are you good at timing the market? Do you believe AAPL will outperform over underperform the market in those next 15 years you talk about?

I wouldn't get too wrapped up in hitting a particular percentage gain. Congrats on hitting a triple, but the real question is what you think the stock will do relative to other options going forward. If you think it is overheated as Wags does, there is nothing wrong with taking a profit, though remember that you'll pay cap gains. The question is, if you do that, what will you do with the remaining proceeds after selling and paying gains?

I've shared before that timing my selling if definitely not my forte, so I am giving no advice here.

My philosophy mirrors yours. It's a decent chunk of money but it's not like I can retire off of it, especially after the cap gains taxes. I tend to believe it's better to hold onto despite likely peaks and valleys.  I would sell it immediately if the profits could help in MU hoops dominance.  :)

Skatastrophy

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Re: Investing Thread
« Reply #1528 on: October 28, 2021, 12:39:31 PM »
Should I sell AAPL today as I'm officially up over 200%?  Or should I wait 15+ yrs and buy more on the dips?  I think most people are worried about a major market correction in the next year.

The question I ask myself when considering exiting a position is, "Would I buy more at the current price?" and, "If I ran a large PE firm, would I want to own a large % of that business and sit on their BoD for the next ~5-10 years?" If the answer is hell yeah then I hold.

I tend to be chasing larger gains with growth-stage companies, so this may not resonate with you:
For AAPL, personally? I own enough AAPL in my index funds for my liking. I don't believe that the portfolio concentration risk is equally weighted with the percentage chance of outsized returns. AAPL has been struggling to push past $300B in annual revenue for 3 years now. They broke $100B in 2010, $200B in 2015, and then have hung around $250B annually for years now. Their net income has been hanging around $50B for years.

That being said, AAPL holds $38B in cash, $30B in current securities, and $20B in receivables. They could straight up buy an S&P 500 company right now with cash as long as they are willing to repatriate that money to the US.

Long story short: AAPL isn't a growth company right now, but they have enough cash on hand that if they re-find their innovation culture they could be off to the races. Hopefully you like their dividend in the meantime. It's a nice, safe brand to hold onto. An outstanding company with outstanding management.

Skatastrophy

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Re: Investing Thread
« Reply #1529 on: October 28, 2021, 12:40:48 PM »
I'm up 1000% with Cloudflare and I'm not selling. See you all on the moon.

TSmith34, Inc.

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Re: Investing Thread
« Reply #1530 on: October 28, 2021, 02:27:37 PM »
I'm up 1000% with Cloudflare and I'm not selling. See you all on the moon.
Nice
If you think for one second that I am comparing the USA to China you have bumped your hard.

MuggsyB

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Re: Investing Thread
« Reply #1531 on: October 28, 2021, 02:45:33 PM »
I'm up 1000% with Cloudflare and I'm not selling. See you all on the moon.

SWEET!!!  And ty for the detailed response and analysis.  Without getting political what's your take on cap gains going up or even the possibility of unrealized gains being taxed?  I can deal if they bump it to 28% but the unrealized gains?  This would  be a complete disaster imo.  I have to believe that wont happen but nothing is certain outside of my cross-over dribble making fools look silly.  :)

jesmu84

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Re: Investing Thread
« Reply #1532 on: October 28, 2021, 02:50:24 PM »
SWEET!!!  And ty for the detailed response and analysis.  Without getting political what's your take on cap gains going up or even the possibility of unrealized gains being taxed?  I can deal if they bump it to 28% but the unrealized gains?  This would  be a complete disaster imo.  I have to believe that wont happen but nothing is certain outside of my cross-over dribble making fools look silly.  :)

You didn't ask me, but capital should be taxed at the same levels as income.

MuggsyB

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Re: Investing Thread
« Reply #1533 on: October 28, 2021, 03:10:22 PM »
You didn't ask me, but capital should be taxed at the same levels as income.

What if you are retired or semi-retired and have a low/no income but a high net worth and investment income ?  I don't neccessary have a prob with divs and c-g's taxed based on your income but it's conceivable it will drive the wealthiest away from the market which impacts everyone.   

ZiggysFryBoy

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Re: Investing Thread
« Reply #1534 on: October 28, 2021, 03:35:30 PM »
What if you are retired or semi-retired and have a low/no income but a high net worth and investment income ?  I don't neccessary have a prob with divs and c-g's taxed based on your income but it's conceivable it will drive the wealthiest away from the market which impacts everyone.

Don't bother. 

Anyone gonna invest in Meta?  🤪🤪

MuggsyB

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Re: Investing Thread
« Reply #1535 on: October 28, 2021, 04:05:52 PM »
Now you know why I asked about AAPL!  Their earnings were extremely disappointing.  Lol..

TSmith34, Inc.

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Re: Investing Thread
« Reply #1536 on: October 28, 2021, 05:21:01 PM »
Now you know why I asked about AAPL!  Their earnings were extremely disappointing.  Lol..
Were they? Yes, relative to estimates they came in light. But for the fiscal year revenues were up 33% and earnings were up 71% (thanks in part to buybacks), despite $6B in lost sales due to supply chain.

Sounds like Q4 will be more of the same.
If you think for one second that I am comparing the USA to China you have bumped your hard.

jesmu84

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Re: Investing Thread
« Reply #1537 on: October 28, 2021, 06:01:03 PM »
What if you are retired or semi-retired and have a low/no income but a high net worth and investment income ?  I don't neccessary have a prob with divs and c-g's taxed based on your income but it's conceivable it will drive the wealthiest away from the market which impacts everyone.

I stand by my first statement - capital should be taxed at same levels of income.

I think there's discussion to be had about a progressive tax system for capital though, much like income.

While we're here...get rid of the step-up basis and the carried interest loophole.

JWags85

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Re: Investing Thread
« Reply #1538 on: October 28, 2021, 06:30:31 PM »
While we're here...get rid of the step-up basis and the carried interest loophole.

Ehh, I feel like step-up basis is actually something that can meaningfully impact middle class people.  It’s not just some tool of the rich.  Inherit your parent’s $250K house but not have to pay capital gains on the $200K in appreciation since the house was purchased decades ago. $50K can be mean a lot to someone who otherwise might not have received much.

jesmu84

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Re: Investing Thread
« Reply #1539 on: October 28, 2021, 06:39:36 PM »
Ehh, I feel like step-up basis is actually something that can meaningfully impact middle class people.  It’s not just some tool of the rich.  Inherit your parent’s $250K house but not have to pay capital gains on the $200K in appreciation since the house was purchased decades ago. $50K can be mean a lot to someone who otherwise might not have received much.

Okay. Easy fix. Progressive structure

MuggsyB

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Re: Investing Thread
« Reply #1540 on: October 28, 2021, 06:44:47 PM »
I stand by my first statement - capital should be taxed at same levels of income.

I think there's discussion to be had about a progressive tax system for capital though, much like income.

While we're here...get rid of the step-up basis and the carried interest loophole.

Short-Term  cap gains are taxed at income level brackets.  If you tax long-term cap-gains at 37% or more I think it could lead to far less investment.  I could be wrong but I would think the ultra-rich would consider other options and perhaps even those fortunate to have a decent net worth would as well.  I  think JWags brings up an interesting situation. 

JWags85

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Re: Investing Thread
« Reply #1541 on: October 28, 2021, 07:05:30 PM »
I don’t agree that they need to be taxed at normal income. It’s still at risk capital and should be treated differently as such.

 But I have no problem with an increase. 25-27% top rate puts the US in line with many of the European countries. Do that and clean up some of the loopholes and call it a day.  There will be some hemming and hawing, but that puts it around the rate in the 90s which is fine and won’t lead to reduced investment.

MuggsyB

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Re: Investing Thread
« Reply #1542 on: October 28, 2021, 07:29:20 PM »
I don’t agree that they need to be taxed at normal income. It’s still at risk capital and should be treated differently as such.

 But I have no problem with an increase. 25-27% top rate puts the US in line with many of the European countries. Do that and clean up some of the loopholes and call it a day.  There will be some hemming and hawing, but that puts it around the rate in the 90s which is fine and won’t lead to reduced investment.

That sounds fairly reasonable. 

The Sultan of Semantics

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Re: Investing Thread
« Reply #1543 on: October 28, 2021, 07:39:16 PM »
I don’t agree that they need to be taxed at normal income. It’s still at risk capital and should be treated differently as such.

 But I have no problem with an increase. 25-27% top rate puts the US in line with many of the European countries. Do that and clean up some of the loopholes and call it a day.  There will be some hemming and hawing, but that puts it around the rate in the 90s which is fine and won’t lead to reduced investment.


Dividend income is being increasingly treated like wage income. It really needs to be taxed as such. Capital gains? Cool with a discount on that.
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Skatastrophy

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Re: Investing Thread
« Reply #1544 on: October 28, 2021, 07:54:29 PM »
SWEET!!!  And ty for the detailed response and analysis.  Without getting political what's your take on cap gains going up or even the possibility of unrealized gains being taxed?  I can deal if they bump it to 28% but the unrealized gains?  This would  be a complete disaster imo.  I have to believe that wont happen but nothing is certain outside of my cross-over dribble making fools look silly.  :)

If they suddenly tax unrealized gains I'm sure they'll allow us to amortize those expenses over a few years.

If they decide to raise short/long-term cap gains taxes, what are you going to do? Where else will you park your money? Do you have something else to do with your invested cash that will give you higher returns, lower taxes?

While this does add some unknown into my retirement calculations, so does the thought that it would be in the best interest of the government to tax my IRA dollars as income.

The best thing we can do is diversify our income streams among taxable & tax-advantaged accounts, and plan for the worse. It's more likely that a sudden, catastrophic health event will negatively impact my retirement IMO. Worst case you can just get a job at Arby's, I heard that nobody wants to work these days so you should have some leverage in salary negotiations.

JWags85

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Re: Investing Thread
« Reply #1545 on: October 28, 2021, 08:12:04 PM »

Dividend income is being increasingly treated like wage income. It really needs to be taxed as such. Capital gains? Cool with a discount on that.

Yea I don't have an issue with that.  I view dividends and cap gains as separate situations.

MuggsyB

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Re: Investing Thread
« Reply #1546 on: October 28, 2021, 08:13:18 PM »
If they suddenly tax unrealized gains I'm sure they'll allow us to amortize those expenses over a few years.

If they decide to raise short/long-term cap gains taxes, what are you going to do? Where else will you park your money? Do you have something else to do with your invested cash that will give you higher returns, lower taxes?

While this does add some unknown into my retirement calculations, so does the thought that it would be in the best interest of the government to tax my IRA dollars as income.

The best thing we can do is diversify our income streams among taxable & tax-advantaged accounts, and plan for the worse. It's more likely that a sudden, catastrophic health event will negatively impact my retirement IMO. Worst case you can just get a job at Arby's, I heard that nobody wants to work these days so you should have some leverage in salary negotiations.

True.....there aren't a whole lot of options. 

TSmith34, Inc.

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Re: Investing Thread
« Reply #1547 on: November 03, 2021, 09:08:04 AM »
Another beat and raise from CVS.

I do think it is pretty much fully valued here after being up +38% YTD. Next catalyst will be restarting dividend increases either with the Q4 earning report or before the Q1 dividend declaration.
If you think for one second that I am comparing the USA to China you have bumped your hard.

MU82

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Re: Investing Thread
« Reply #1548 on: November 03, 2021, 06:18:36 PM »
Another beat and raise from CVS.

I do think it is pretty much fully valued here after being up +38% YTD. Next catalyst will be restarting dividend increases either with the Q4 earning report or before the Q1 dividend declaration.

Yes, a very nice report. A medium-sized position for me, and I'm fine with that. Like you, I'm hoping they get back to raising their dividend again.

Re market overall ... actually went up after the Fed announced its taper. Seems a classic case of something already been priced in, as it had been talked about and expected for months and months and months.
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DegenerateDish

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Re: Investing Thread
« Reply #1549 on: November 04, 2021, 01:02:23 PM »
Rough day for $PENN (on a couple different levels if you’re digging around on Twitter).

$DKNG probably priced to miss, but the bottom could fall out tomorrow there. If you like gambling stocks and don’t own any, the time to buy is near.