Investing Thread

[Tortuga94]

The market had many, many up days, with significant gains, between Oct 2008 (when many thought it had bottomed) and 3/9/09 (when it actually did, finally, bottom). They're commonly referred to as "dead-cat bounces." Unfortunately, we won't know what these little upward blips are, or whether the market did in fact hit a bottom last week, until we can look back in hindsight months or even years from now.

It's true that there are market rallies during bear markets, but that is not the point. The point is no one knows when it will bottom or if it has already. The market will bottom well before the headlines start to turn positive. There will be some ugly numbers being reported over the next few weeks, the markets know that already. Long-term investors should stay invested and not pull out and try to jump back in. They likely won't have a reason to get back in the market because the news will still look bad and won't believe any rally is for real when there are so many negative headlines. By the time the news improves, they will have missed a market recovery.

[MU82]

Stocks go up, stocks go down.  Not picking on you personally, but people are too eager to label every green day as a "dead cat bounce".  Some are just pressure release of oversold conditions, some are better than expected "bad news", some are just major hedge funds with a bearish bias taking a day off of short positions.

People freaking out about a green market today ignore the 8% drop on over the last few days.  The futures bounced hard on overnight oversold conditions and then sold off pretty hard once the actual numbers came out.  Aka, the market front ran the bad news the last few days (buy the rumor, sell the news as we often here...though reversed to the downside), and the fact that it was worse than expected kind of erased the second portion.

People, especially in bad times, just assume everything needs to be an elevator down or the market has to surge/crater in real time.

I don't believe you and I think differently on any of this. Perhaps I shouldn't have used the "dead-cat bounce" terminology.

It's true that there are market rallies during bear markets, but that is not the point. The point is no one knows when it will bottom or if it has already. The market will bottom well before the headlines start to turn positive. There will be some ugly numbers being reported over the next few weeks, the markets know that already. Long-term investors should stay invested and not pull out and try to jump back in. They likely won't have a reason to get back in the market because the news will still look bad and won't believe any rally is for real when there are so many negative headlines. By the time the news improves, they will have missed a market recovery.

I made the same point.

I have not sold a single share of a single stock since last fall. I am a long-term investor, and about 60% of my portfolio is in stocks. I am looking for buying opportunities, and I am well aware that I have just about zero percent chance of doing so at the exact bottom.

[WarriorDad]

Some are going to have to sell for liquidity sake.  People lose jobs and they start to tap into their savings and investments.  That sell off won't happen for a little while, but it is coming.

[rocket surgeon]

haven't really followed the price of 3M, but they are going to get a big $panking

  were sending n95's masks(280 million) over seas while our supplies are in the red zone

[forgetful]

haven't really followed the price of 3M, but they are going to get a big $panking

  were sending n95's masks(280 million) over seas while our supplies are in the red zone

The man in charge said he didn't want to interfere with the market, and let the market handle it. That is what the market dictated.

The person who should get a spanking is the one who didn't execute the defense production act for this very reason. Shame! Shame! Shame!

[ZiggysFryBoy]

The man in charge said he didn't want to interfere with the market, and let the market handle it. That is what the market dictated.

The person who should get a spanking is the one who didn't execute the defense production act for this very reason. Shame! Shame! Shame!

Politics.

Calm down.  Grow up. 

[jesmu84]

Politics.

Calm down.  Grow up.

Forgetful is correct.

Had the DPA been enforced, 3M would have sent those masks to needy hospitals in the US.

[rocket surgeon]

The man in charge said he didn't want to interfere with the market, and let the market handle it. That is what the market dictated.

The person who should get a spanking is the one who didn't execute the defense production act for this very reason. Shame! Shame! Shame!

No. You guys are too predictable. 3M was wrong.  They didn't need the dpa to tell them anything. Do the damn right thing-period.  They sold the country out and their timing was a little off.  Whoever directed those sales for 3M is a treasonous moron. I just wish you guys were just 1/2 as critical on Hussein, as you are today. you know the scandal free one? 

[MU82]

Hussein

Perfect.

When the debate is lost, go to "whataboutism." And then ramp up the hate by calling him Hussein. Well done, Rush.

[Frenns Liquor Depot]

No. You guys are too predictable. 3M was wrong.  They didn't need the dpa to tell them anything. Do the damn right thing-period.  They sold the country out and their timing was a little off.  Whoever directed those sales for 3M is a treasonous moron. I just wish you guys were just 1/2 as critical on Hussein, as you are today. you know the scandal free one?

This is the other side of the story and I'm not taking a position.  Right or wrong we have globalized our Health Care supply chain and this 'war' has exposed that issue.

https://finance.yahoo.com/news/3m-response-defense-production-act-123900468.html

[MU Fan in Connecticut]

Handled another potential customer yesterday helping him get aluminum flat wire, aka nose wire.

He's an awning company in Jacksonville, FL getting into mask making.

[Tortuga94]

CEO of 3M will be on Squawk any minute now.

[Galway Eagle]

Perfect.

When the debate is lost, go to "whataboutism." And then ramp up the hate by calling him Hussein. Well done, Rush.

Actually have him the benefit of the doubt and read it as Sadam Hussein

[MU82]

Back to investing ...

Are folks buying anything this week?

I'm trying to stay very patient.

[Chili]

Back to investing ...

Are folks buying anything this week?

I'm trying to stay very patient.

No. Jim Bianco said something that stuck with me. He said "Don't run out to catch the falling knife". I'd rather be more certain we're down and miss 5% of recovery than to go in and and have it fall another 15%. Anyone who thinks we're going to go back quickly to where we were at the end of 2019 is in for a rude awakening. We're in the middle of an event that will alter history and it's foolish to assume thing will go back to a pre COVID world once we're thru this. Business will begin to rethink how they do business. Lots of unknown.

[TSmith34, Inc.]

Back to investing ...

Are folks buying anything this week?

I'm trying to stay very patient.

Well, I bought SPY puts.  My next mark for any new money is at 40% off the all-time highs, having already put in nearly the full amounts I had previously allocated at 20% and 30% down.  So far those purchases are holding up ok, but I too expect another leg down here. 

I feel like the totally uncoordinated effort of stay-at-home orders and enforcement are going to draw this crisis out into the summer, and I think the death tolls are likely to get bad in the next 2-3 weeks.

[JWags85]

Dumped a bunch into LK yesterday and today, average around $6.  Accounting fraud is bad, yes, however, that came post-IPO.  The IPO price, which was fairly vetted, was $17.  I think it has potential to rise back to those levels fairly easily.

Additionally, LK grabs market share cause its about a third of the price of SBUX in China.  The consumer isn't going to stop drinking coffee at that price cause of accounting malfeasance.  Additionally, they do a lot of grab and go and pick up business which will still thrive in a cautious post-COVID environment.

[Galway Eagle]

Anybody have thoughts on the quibi IPO?

[MU82]

Dumped a bunch into LK yesterday and today, average around $6.  Accounting fraud is bad, yes, however, that came post-IPO.  The IPO price, which was fairly vetted, was $17.  I think it has potential to rise back to those levels fairly easily.

Additionally, LK grabs market share cause its about a third of the price of SBUX in China.  The consumer isn't going to stop drinking coffee at that price cause of accounting malfeasance.  Additionally, they do a lot of grab and go and pick up business which will still thrive in a cautious post-COVID environment.

I think that's a pretty good spec play, Wags, and I like your reasoning behind it. It's not my kind of investing, but I like it.

Back in 2016, the SEC launched an investigation into Boeing's accounting practices and shares dropped under 115, which was a great deal at the time. I bought about $10K worth then and it ended up being a great investment; the investigation proved to be nothing big and shares eventually went over 400. I sold mine last year at 368 because I was tired of the drama. But it shows how an alert buy of a downtrodden company can be fruitful sometimes. (Of course, sometimes it isn't.)

SBUX went way up after the LK news but it has given back most of those gains, FWIW.

[Elonsmusk]

Well, I bought SPY puts.  My next mark for any new money is at 40% off the all-time highs, having already put in nearly the full amounts I had previously allocated at 20% and 30% down.  So far those purchases are holding up ok, but I too expect another leg down here. 

I feel like the totally uncoordinated effort of stay-at-home orders and enforcement are going to draw this crisis out into the summer, and I think the death tolls are likely to get bad in the next 2-3 weeks.

Think that's a great strategy, and one I hadn't thought about.  What strike date did you buy?

[Lennys Tap]

Well, I bought SPY puts.  My next mark for any new money is at 40% off the all-time highs, having already put in nearly the full amounts I had previously allocated at 20% and 30% down.  So far those purchases are holding up ok, but I too expect another leg down here. 

I feel like the totally uncoordinated effort of stay-at-home orders and enforcement are going to draw this crisis out into the summer, and I think the death tolls are likely to get bad in the next 2-3 weeks.

What month and strike price? Volatility has fallen a lot but is still high.

[The Sultan]

No. You guys are too predictable. 3M was wrong.  They didn't need the dpa to tell them anything. Do the damn right thing-period.  They sold the country out and their timing was a little off.  Whoever directed those sales for 3M is a treasonous moron.

I cut the politics out of this.

3M is based in the US but is a multinational corporation. As I understand this, these masks were never in the US but in Asia right?  And people in Asia are suffering too. Hell they are suffering all over the world.

We aren't fighting another country. We are fighting a virus. So phrases like "selling out your country" and "treason" really aren't applicable here. I mean we don't even know if the sales person is American.

This is what you get with multinational corporations and relatively low trade barriers.

[TSmith34, Inc.]

What month and strike price? Volatility has fallen a lot but is still high.

April 17 strike. As far as strike price...I'll only say that I bought these a while back and you are right, volatility has tamped down and now the time premium is eroding so I am underwater currently. I was (am) thinking there is going to be a leg down as the death toll mounts, but I may be running out of time on these puts.

[g0lden3agle]

April 17 strike. As far as strike price...I'll only say that I bought these a while back and you are right, volatility has tamped down and now the time premium is eroding so I am underwater currently. I was (am) thinking there is going to be a leg down as the death toll mounts, but I may be running out of time on these puts.

I've bought some puts as well and am thinking about hedging somewhat by selling other puts that have a good chance of expiring worthless in the next week.

[MU82]

Dumped a bunch into LK yesterday and today, average around $6.  Accounting fraud is bad, yes, however, that came post-IPO.  The IPO price, which was fairly vetted, was $17.  I think it has potential to rise back to those levels fairly easily.

Additionally, LK grabs market share cause its about a third of the price of SBUX in China.  The consumer isn't going to stop drinking coffee at that price cause of accounting malfeasance.  Additionally, they do a lot of grab and go and pick up business which will still thrive in a cautious post-COVID environment.

Thought of you when I read this, Wags. Thought you might be interested.

https://seekingalpha.com/article/4335804-luckin-coffee-crashes-76-thursday-what-you-need-to-know