Investing Thread

[TSmith34, Inc.]

DIS is doomed.

I'd like to find out what else Douchey thinks is doomed.

[TSmith34, Inc.]

In a note to clients on Friday, Deutsche Bank chief equity strategist Binky Chadha highlighted that 83% of US companies are beating earnings estimates. Per Chadha's research, this is the highest mark in two years and "well above the upper end of its pre-pandemic range."

‌It's also significantly higher than the beat rates in other countries, which could be an indicator of why US stocks are outperforming other markets.

"Such elevated beats have historically been seen only in the early stages of recovery from major cyclical downturns," Chadha wrote.

"Several strategists recently noted a similar trend to Yahoo Finance when explaining how the S&P 500 could rise to new highs later this year without outsized contributions from a few large tech stocks that have been driving the market action as of late.

"As investors stop worrying so much about exactly when the Fed will start to cut rates, I think we'll see a lot of these companies outside of the Magnificent Seven have pretty strong earnings growth, and that will cause them to do pretty well in turn," Goldman Sachs equity strategist Ben Snider told Yahoo Finance.

[MU82]

[MU82]

I'm trying to remember if I've ever seen as much build-up to a single company's earnings report as has been the case re this one for NVDA's, which reports after today's close.

The drumbeat started a few weeks ago and has gotten louder and louder. The hype is incessant. And I get it ... NVDA has been the hottest stock in the world, and AI has been the hottest subject in the world, and now here we come to this earnings report.

The swing for NVDA stock price is expected to be double-digits either way, depending on what the experts think about the report/guidance. And that is expected to affect the overall market, perhaps significantly (even if only for the short-term).

I don't remember any over-the-top lead-up like this for AAPL or MSFT or AMZN or TSLA or any other stock, though maybe my memory is cloudy.

A cautionary tale might have come yesterday after hours, when PANW's guidance disappointed. As I write this, it's down 26% this morning. Yikes!

NVDA shares already have pulled back the last several sessions headed into its report. And there will be fireworks, one way or another, after close today and into tomorrow's open. Fun!

[TSmith34, Inc.]

Exceeded estimates and guided higher. Bad day tomorrow averted.

[MU82]

You beat me to it, TS. Here are the particulars, from Seeking Alpha:

Nvidia (NASDAQ:NVDA) shares jumped 6.4% in extended-hours trading on Wednesday after the semiconductor giant reported quarterly results and guidance that topped Wall Street's expectations.

Looking to the first-quarter of fiscal 2025, Nvidia expects to generate $24B in revenue, plus or minus 2%. Analysts were forecasting $21.9B in revenue for the Jensen Huang-led company.

Adjusted gross margin is forecast to be around 77%, plus or minus 50 basis points, while adjusted operating expenses are expected to be around $2.5B.

"Accelerated computing and generative AI have hit the tipping point," Huang said in a statement. "Demand is surging worldwide across companies, industries and nations."

For the fourth-quarter, Nvidia (NVDA) earned an adjusted $5.16 per share on $22.1B in revenue, as gaming revenue surged 56% year-over-year to come in at $2.9B, above the $2.72B estimate. Data center revenue flew past expectations, coming in at $18.4B, compared to estimates of $17.21B. Automotive revenue for the period clocked in at $281M, while professional visualization revenue rose 105% year-over-year to $463M. Total revenue for the period rose 265.3% year-over-year.

Adjusted gross margin came in at 76.7%, above the 75.4% estimate.

The company said data center sales to China declined "significantly" during the period amid the Biden Administration's export curb controls.

Analysts expected the Santa Clara, California-based company to post earnings of $4.63 per share on revenues of $20.5B for the quarter.

NVDA always seemed outrageously expensive so I never bought it, darn it.

[HowardsWorld]

What do people think about investing in a high yield municipal bond ? Spoke with my investor today and he said you can get 7-8% right now. Unless I'm missing something what is the downside?

[The Sultan]

What do people think about investing in a high yield municipal bond ? Spoke with my investor today and he said you can get 7-8% right now. Unless I'm missing something what is the downside?

My guess is he is quoting you the tax equivalent rate since they are tax free, so be careful about what underlying tax assumptions he is using. (i.e., you are in a lower income bracket than he is basing that figure on.)

(A tax equivalent rate is what someone would need to make on a taxable instrument to make up for the tax free return of a muni.)

[TSmith34, Inc.]

What do people think about investing in a high yield municipal bond ? Spoke with my investor today and he said you can get 7-8% right now. Unless I'm missing something what is the downside?

High yield typically indicates a higher rate of risk, i.e., default. Default risk might still be minimal, but that is the downside.

[rocky_warrior]

My guess is he is quoting you the tax equivalent rate since they are tax free

+1.  Would be surprised with a rate much over 4.5% (and that's assuming a 30ish year bond)

But, muni bonds are fairly low risk.  Especially since rates probably aren't going to go up much in the near future, the downward pressure on sale price should not be a major concern.

That said, they're currently not my cup of tea.  But if the federal tax free status and (real) rate appeal to you...maybe.

[rocket surgeon]

hope no one here tried to short nvda...up over 9% $61.00+/share after hours

i've got multiple positions starting at $130 up to $375

also loaded up up AMD, tsm, intc, meta, msft, ibm,  over the past 8 mos.

[Goose]

Nice work, Rocket!!!

[MU82]

hope no one here tried to short nvda...up over 9% $61.00+/share after hours

i've got multiple positions starting at $130 up to $375

also loaded up up AMD, tsm, intc, meta, msft, ibm,  over the past 8 mos.

Nicely done. Serious question: What have your biggest losers been?

I've got a couple utilities that hit the skids and a couple struggling Canadian banks now, and back in late-2021 I was in late on a few of the "disruptors" that were in fashion at the time and ended up selling them pretty quickly at slight losses.

Folks love to talk about all their brilliant buys and prescient sells, but we all have had some clunkers.

[rocky_warrior]

Folks love to talk about all their brilliant buys and prescient sells, but we all have had some clunkers.

Hah.  Agreed.  And I don't think there's been much, if any, talk of shorting here.  Maybe some do, I'd rather gamble on potential winners, long term. Most are looking to profit from long positions, And sometimes looking for other opinions on their crazy ideas. 🙂

[rocket surgeon]

Nicely done. Serious question: What have your biggest losers been?

I've got a couple utilities that hit the skids and a couple struggling Canadian banks now, and back in late-2021 I was in late on a few of the "disruptors" that were in fashion at the time and ended up selling them pretty quickly at slight losses.

Folks love to talk about all their brilliant buys and prescient sells, but we all have had some clunkers.

  i have numerous positions in generac(gnrc) that is slowly coming back.  it's going to need a few quarters of good stuff to rebound back to mid $200's which was my original basis.  i have since bought some more in the low $100's

altria(MO) except i have been holding only due to the decent dividend

NIO-thought they would become more of a competitor to tesla.  i am holding however just in case  sold my tesla in mid $200's at a nice profit.  want to let the whole EV thing shake out

dollar general(DG) although my imtial buy in was $70, i have since added to that and the additions are presently under water.  although i am in the black overall, the additions are a little pink

boeing(BA) f'ing max 737 is killing me.  i am right around $200 basis and holding but i have quite a few shares. 

devon energy(DVN) a little bit down, but love the dividend

3m-a little bit down, but like their position going forward

woodside energy(WDS) although i received that as part of a merger with BHP which is doing wonderfully, it is down a little bit.  but it also has a decent dividend over 10%

FMC corp has a buy rating but is sluggish

VF corp has a buy rating but has been dragging hind titty as well

[rocket surgeon]

Hah.  Agreed.  And I don't think there's been much, if any, talk of shorting here.  Maybe some do, I'd rather gamble on potential winners, long term. Most are looking to profit from long positions, And sometimes looking for other opinions on their crazy ideas. 🙂

  agree!!  it's always been hard for me to short anything.  i hate to root for losers to lose except anyone playing MU

[rocket surgeon]

oh, i've had a couple of real bombers in the past-remember syntax-brillion?  and another gem called medi-hut

syntax brillion was supposed to be the cats-arse in plasma screens et.al. 

medihut was a penny stock (retractable needle) i thought i was going to retire at 30 on.  was the big schmidt during the aids crisis in late 80's-90's.  billybob was supposed to sign the "needle stick" mandate and the retractable needle hub thing was "gold" in them thar hills right?  if i ever run into the fly by night broker who kept pumping that thing to me, he's gonna need some of those medihut needles

both are contributing to why i am still working-just kidding, but they were killers!

[TSmith34, Inc.]

Hah.  Agreed.  And I don't think there's been much, if any, talk of shorting here.  Maybe some do, I'd rather gamble on potential winners, long term. Most are looking to profit from long positions, And sometimes looking for other opinions on their crazy ideas. 🙂

I've never shorted a stock. Like Vegas, it seems like the house odds are against you. The LT bias of the market is upwards, you have to pay the equity owner an ongoing fee for the privilege to do so, and even if you make a perfect call you are limited to a 100% upside.

I've had pretty good success with long puts (63% win rate) as well as short (cash covered) puts (85% win rate), though the latter is definitley a different investment thesis.

[MU82]

  i have numerous positions in generac(gnrc) that is slowly coming back.  it's going to need a few quarters of good stuff to rebound back to mid $200's which was my original basis.  i have since bought some more in the low $100's

altria(MO) except i have been holding only due to the decent dividend

NIO-thought they would become more of a competitor to tesla.  i am holding however just in case  sold my tesla in mid $200's at a nice profit.  want to let the whole EV thing shake out

dollar general(DG) although my imtial buy in was $70, i have since added to that and the additions are presently under water.  although i am in the black overall, the additions are a little pink

boeing(BA) f'ing max 737 is killing me.  i am right around $200 basis and holding but i have quite a few shares. 

devon energy(DVN) a little bit down, but love the dividend

3m-a little bit down, but like their position going forward

woodside energy(WDS) although i received that as part of a merger with BHP which is doing wonderfully, it is down a little bit.  but it also has a decent dividend over 10%

FMC corp has a buy rating but is sluggish

VF corp has a buy rating but has been dragging hind titty as well

Thanks for listing these. As I've said, we've all had plenty of clunkers. Back in the dot-com-boom days I first started buying individual stocks and I had a bunch of wonderful names - WCOM, LU, PALM, NT ... Ugh! And, as I mentioned, I've still got a few that are underwater.

Thankfully, if one is a long-term investor who works hard to choose high-quality companies, one can overcome a few clunkers. Holdings like MSFT, AAPL and MA - not to mention all my "boring" dividend-growing stocks - have risen so well over the years that having a handful of losers has barely registered.

Hah.  Agreed.  And I don't think there's been much, if any, talk of shorting here.  Maybe some do, I'd rather gamble on potential winners, long term. Most are looking to profit from long positions, And sometimes looking for other opinions on their crazy ideas. 🙂

I've never shorted a stock, and I'm pretty sure I never will. Feels too much like gambling.

[JWags85]

I've never shorted a stock. Like Vegas, it seems like the house odds are against you. The LT bias of the market is upwards, you have to pay the equity owner an ongoing fee for the privilege to do so, and even if you make a perfect call you are limited to a 100% upside.

I've had pretty good success with long puts (63% win rate) as well as short (cash covered) puts (85% win rate), though the latter is definitley a different investment thesis.

Many people say, usually correct, that market timing is a losing venture.  And I often agree on a long position, longer term basis.  I think the difference is shorting.  Shorting can be great and effective but it needs a fairly defined time frame.  Puts are usually the better play for any retail investor cause you don't need to worry about borrowing costs, margin, etc...

I don't think shorting is gambling anymore than going long is.  The "your downside is unlimited" is kind of an overblown idea cause how many non-penny/non-micro cap stocks really go 50/60/100+% up on a regular basis, about as many truly go to zero.

If there is a true catalyst (financial, market factors, rulings, etc...) its a potentially great move cause stocks usually take the stairs up, but an elevator down.  But I'm always wary about holding a short position more than a quarter cause it doesn't take much in terms of numbers reporting, positive guidance, or some fluff around earnings to wipe out downside gains quickly, provided we're not in a bear market.

[MU82]

NVDA up 15%. Congrats to all holding, especially those who bought when it got under $150 just last year. Price was collapsing back then, and it's never easy to buy a potential "falling knife." So good on those who did!

[Hards Alumni]

NVDA up 15%. Congrats to all holding, especially those who bought when it got under $150 just last year. Price was collapsing back then, and it's never easy to buy a potential "falling knife." So good on those who did!

People chasing news.  I dunno, a lot of this AI stuff feels sort of dot com bubbly.

But I am terrible at picking winners, so I'm not a good person to ask (no one did).

[MU82]

I dunno, a lot of this AI stuff feels sort of dot com bubbly.

Totally agree. My main AI-related investments are with companies I wanted to own before AI became the only thing that matters. Like MSFT, GOOGL, AMZN, AAPL, LMT, etc.

[rocket surgeon]

could very well be dot commy...that's why i'll be watching closely, looking to drop some "stop losses" on a few

[SoCalEagle]

Bubbly may be the right word for this market.  Today's intra-day high of 5111.06 represents a year to date gain of 7.15%.  Less than two months into the year and the gains keep rolling in at a fast pace.  Bubbly, frothy, whatever you call it ......