Investing Thread

[MU82]

Costco (COST) had one of its best months ever, and its stock has hit an all-time high, breaking $600 for the first time. It looks WAAAAY overvalued, but it always does. It's the best business model in all of retail, as folks pay membership fees just for ther right to spend money there. I was just at my local Costco yesterday, and it was packed - on a Wednesday afternoon.

In polls, consumers claim they are struggling and are very worried about inflation. In reality, consumers are spending money like drunk sailors, not just at Costco but also at other stores, at restaurants, on cars (when they can get them), on houses, everything.

[Golden Avalanche]

Costco (COST) had one of its best months ever, and its stock has hit an all-time high, breaking $600 for the first time. It looks WAAAAY overvalued, but it always does. It's the best business model in all of retail, as folks pay membership fees just for ther right to spend money there. I was just at my local Costco yesterday, and it was packed - on a Wednesday afternoon.

In polls, consumers claim they are struggling and are very worried about inflation. In reality, consumers are spending money like drunk sailors, not just at Costco but also at other stores, at restaurants, on cars (when they can get them), on houses, everything.

This dichotomy reminds me very much of the self-appraisal driving ability dichotomy.

[The Hippie Satan of Hyperbole]

Who is going to be more aware of rising prices than those who spend a lot of money?

[Skatastrophy]

Who is going to be more aware of rising prices than those who spend a lot of money?

I spend lots of money but it seems to me that stocks are on sale. Buy buy buy.

[TSmith34, Inc.]

Yahoo Finance Morning Brief (which, until the last two days, has been unrelentingly bearish):

The most bullish story in the stock market right now

Before tensions escalated between Ukraine and Russia in February, a bullish stock market story had been unfolding: Wall Street analysts were revising up their forecasts for 2022 and 2023 corporate earnings.

Since then, geopolitical risks spiked, becoming the top concern among investors. The stock market got rocked, sending the S&P 500 (^GSPC) to a low of 4,114 on February 24.

Meanwhile, inflation data continued to confirm prices were rising at a troubling rate, which caused Federal Reserve Chair Jerome Powell and his colleagues to signal that they were willing to get more aggressive in tightening monetary policy.

Despite these headwinds, something surprising happened: Analysts continued to revise their forecasts for earnings higher.

According to FactSet, analysts expect the S&P 500 to earn $227.80 per share in 2022. This estimate is 2% higher than the $223.43 expected as of December 31, 2021.

Yes, the upward revision is modest. But it follows all of the new concerns that have emerged since the beginning of the year.

Some — not all — of this resilience can be explained by energy producers’ earnings, which have been bolstered by rising energy costs.

“A significant portion of the upgrade comes from the Energy sector (+2.0pp), while companies that are impacted by higher energy costs (-0.5pp) and those exposed to European (-0.2pp) have been minor drags,” Binky Chadha, chief U.S. equity strategist for Deutsche Bank, wrote on Tuesday. “Excluding the impact of these effects, full year estimates are still up +0.8%.”

So, what’s happening here?

It’s simple: The economy continues to be in great shape, supported by massive tailwinds.

Among other things, businesses and consumers have very healthy finances. Businesses continue to invest aggressively in their operations. Consumers — despite having gripes about inflation — continue to spend on goods and services. Consumer finances have been bolstered by $2.5 trillion in excess savings, which has allowed companies facing higher costs to preserve profit margins by raising prices.

Of course, we’re talking about expectations for earnings. And these expectations are sure to get updated as companies announce their quarterly results in the coming weeks. The lingering question: Will these expectations continue to get revised up, or will they finally begin to get revised down?

[TSmith34, Inc.]

Securites fraud and market manipulation, it would be nice if the man-child was ever held accountable.


Elon Musk targets Twitter with $41 billion cash takeover offer
https://www.reuters.com/technology/elon-musk-offers-buy-twitter-5420-per-share-2022-04-14/?utm_medium=Social&utm_source=twitter

Hilariously, the market knows his offer is bullsh!t as the price hasn't budged, though if his fanbois jump in it still could. Either way, the calls I wrote at a $60 strike should expire worthless.

[JWags85]

Securites fraud and market manipulation, it would be nice if the man-child was ever held accountable.


Elon Musk targets Twitter with $41 billion cash takeover offer
https://www.reuters.com/technology/elon-musk-offers-buy-twitter-5420-per-share-2022-04-14/?utm_medium=Social&utm_source=twitter

Hilariously, the market knows his offer is bullsh!t as the price hasn't budged, though if his fanbois jump in it still could. Either way, the calls I wrote at a $60 strike should expire worthless.

Market manipulation?  Thats dramatic.  He didn't tweet it.  He didn't flippantly say it on IG Live.  He wrote it in a letter to the board and it was released in a regulatory filing.  His stake in Twitter is worth $3B, give or take.  A 10-20% jump gives him less than half a billion in gains.  I'm fairly confident he's not in this to make a quick buck.  Regardless about what you feel about his actions with TSLA stock, its a bit different.

Its all bluster to try and get Twitter to cave to his demands or let him control it.  Which are tactics that have been on for decades to the days of LBOs and corporate raiders.

There false rumors that spike and fade stocks every week.  As much as he taunts the SEC, if he actually crossed lines, they would be salivating at a chance to slap at him.

[TSmith34, Inc.]

Market manipulation?  Thats dramatic.  He didn't tweet it.  He didn't flippantly say it on IG Live.  He wrote it in a letter to the board and it was released in a regulatory filing.  His stake in Twitter is worth $3B, give or take.  A 10-20% jump gives him less than half a billion in gains.  I'm fairly confident he's not in this to make a quick buck.  Regardless about what you feel about his actions with TSLA stock, its a bit different.

Its all bluster to try and get Twitter to cave to his demands or let him control it.  Which are tactics that have been on for decades to the days of LBOs and corporate raiders.

There false rumors that spike and fade stocks every week.  As much as he taunts the SEC, if he actually crossed lines, they would be salivating at a chance to slap at him.

The manipulation started with him "forgetting" to file his 5% ownership stake on time, then inaccurately saying he was a passive investor, which allowed him to accumulate stock for $165M less than he could have if he had done it legally. There is most definitely also a large ego element to this, but he does it because he can get away with it, with at most a $10M hand slap. He gets his jollies and pockets an illegal $155M, all with no real repercussions. Why? Because he is rich, he can, and it amuses him.

Did you really dismissively write that he'll only make $500M by pumping the stock?

[JWags85]

The manipulation started with him "forgetting" to file his 5% ownership stake on time, then inaccurately saying he was a passive investor, which allowed him to accumulate stock for $165M less than he could have if he had done it legally. There is most definitely also a large ego element to this, but he does it because he can get away with it, with at most a $10M hand slap. He gets his jollies and pockets an illegal $155M, all with no real repercussions. Why? Because he is rich, he can, and it amuses him.

Did you really dismissively write that he'll only make $500M by pumping the stock?

Yes, cause its a legitimate point and it needs situational context.  Like I said, he's worth $250B+.  $500MM in a pump is the equivalent of someone worth $10MM making under $20K.  It doesn't move the needle.  $5B?  Ok maybe thats a different discussion, but this was just not significant in the net worth/meglomania discussion.

Its ego, its chaos, its amusement, its not some sort of gambit to make quick money.  He could do it far more effectively and on a great scale with TSLA if that was really his goal.  Or with other tech companies.

I'm not a Musk fanboy, but I don't share the blind hatred and fury at him that others do which lacks context and understanding.

[MuggsyB]

Yes, cause its a legitimate point and it needs situational context.  Like I said, he's worth $250B+.  $500MM in a pump is the equivalent of someone worth $10MM making under $20K.  It doesn't move the needle.  $5B?  Ok maybe thats a different discussion, but this was just not significant in the net worth/meglomania discussion.

Its ego, its chaos, its amusement, its not some sort of gambit to make quick money.  He could do it far more effectively and on a great scale with TSLA if that was really his goal.  Or with other tech companies.

I'm not a Musk fanboy, but I don't share the blind hatred and fury at him that others do which lacks context and understanding.

Yep.  t doesn't move the needle much if ar all.  I understand the antipathy towards Musk and other mega-billionaires but if you tax the crap out of them wouldn't they move their money elsewhere?  I still don't really get these "unrealized capital gains" taxes that have been mentioned here and there. 

[TSmith34, Inc.]

Sorry guys, but IMO your responses are exactly the problem. You are both dismissing $500M of illegal gains as no big deal because it doesn't represent a large enough, in your opinions, percentage of his net worth.

Why do the ultra-wealthy get to play by a completely different set of rules? Further, as I said before, Musk does this crap because he can, no one ever holds him accountable...and you are both OK with that.

[MuggsyB]

Sorry guys, but IMO your responses are exactly the problem. You are both dismissing $500M of illegal gains as no big deal because it doesn't represent a large enough, in your opinions, percentage of his net worth.

Why do the ultra-wealthy get to play by a completely different set of rules? Further, as I said before, Musk does this crap because he can, no one ever holds him accountable...and you are both OK with that.

You're not responding to JWags' point about others manipulating the market.

[TSmith34, Inc.]

You're not responding to JWags' point about others manipulating the market.

My response is exactly the same: shouldn't they be held accountable? If not, why not?

[MuggsyB]

My response is exactly the same: shouldn't they be held accountable? If not, why not?

People should be held accountable for insider trading.  I'm no expert but it seems to me stock manipulation of some sort is crazy ubiquitous.  I just don't know how that can be controlled.  Maybe I'm too cynical.

[JWags85]

Sorry guys, but IMO your responses are exactly the problem. You are both dismissing $500M of illegal gains as no big deal because it doesn't represent a large enough, in your opinions, percentage of his net worth.

Why do the ultra-wealthy get to play by a completely different set of rules? Further, as I said before, Musk does this crap because he can, no one ever holds him accountable...and you are both OK with that.

But I didn't say that at all.  I never said it wasn't a big deal, I said it wasn't his motivation.  Manipulating the market for personal gain, at that level, wasn't motivation.  I would dismiss similarly it if it was some other Forbes list member worth $265MM involved in a situation that would net him $500K.

And this stuff happens at funds where a PM uses rumors to try and pump and dump their position to get another $200K tacked to their bonus at the end of the year.   Or one of the banks releases a "research report" with an upgrade/downgrade to spike or fade a position they hold or one of the companies they do I Banking work for.

I never said I'm ok with it.  As someone who is active in the market and who really enjoys the market and its dynamics, I am very open and honest about the fact that its broken and there needs to be changes.  But its not just the "ultra wealthy" that are doing it, or benefiting from it.  If people want to do something about it, then great.  I just side eye punitive hissy fits complaining about the specific wealthy people doing it and wanting them to be punished.  Cause it won't fix anything and will just give people some social media victory dance klout.

Look at Eliot Spitzer.  Its not like he created some lasting legacy of fundamental change and shifts, he just got a couple of scalps to champion and push his political career.

[TSmith34, Inc.]

Having already stated that others should also be held accountable, why specifically Musk? Well, he's 1) probably the most famous person in the U.S., 2) is certainly the wealthiest, and 3) is the most brazen with waving his middle finger around and daring anyone to do anything about it. Sure, the SEC could go after your theoretical fund manager, but that will get a paragraph in the WSJ. With finite resources it makes sense to go after the biggest offenders and prosecuting Musk might actually have some deterrent effect. ("Sup, Peter Thiel?")

But I am going to strongly disagree with you that profit wasn't also a significant motive. Do billionaires ever get tired of making money? Particularly in Musk's case were it also stroke his ego and allowed him to play the system? And while neither of us can know Musk's mind with certainty, here's my supporting evidence:

Musk could have accumulated his 5%, filed his paperwork, and still indulged in his ego stroke, amused himself, spun up the chaos, and made his asinine tweets and Twitter polls and generally continue to act like the pre-pubescent twat that seems to be his primary modus operandi these days.

But he didn't. Instead, he intentionally failed to file his 13D when he legally required to do so, and when he did file it he was intentionally misleading by filing as a passive rather than active investor. Why? Be doing so, he was about to continue to accumulate shares in the high 30s/low 40s rather than at 50+ which the stock went to when the filing came out, thus manipulating the market on the order of $165M. You don't do that if profit isn't a motive.

And that isn't a victimless crime. He stole that money from existing shareholders who legally should have known Musk was accumulating shares. You can give it other more genteel names, but he stole that money.

He could still have indulged himself in all the other bullcrap if he had filed his 13D when he was legally required to do so, but he didn't. Because Profit. I suspect Musk thinks it is hilarious that he has the power to manipulate the market and cause chaos, he'll never be held accountable for it in any meaningful manner, and he can turn a nine-figure profit at the same time.

 

[Herman Cain]

Media Commentary supporting Mr.Musk

https://www.foxnews.com/media/elon-musk-twitter-buy-caitlyn-jenner-hannity

[Uncle Rico]

Media Commentary supporting Mr.Musk

https://www.foxnews.com/media/elon-musk-twitter-buy-caitlyn-jenner-hannity

Lol

[TSmith34, Inc.]

It's cute that Jack Dorsey blames the Twitter BoD for the company's complete failure to take advantage of the platform's popularity and success the entire time he was (part-time) CEO.

[ZiggysFryBoy]

I blame Putin.

[tower912]

He should be blamed for many things.

[Uncle Rico]

He should be blamed for many things.

And the fun thing is, both sides can say it making its truthfulness inconsequential

[MU82]

From the WSJ:

No more free lunch at Goldman Sachs. The bank told employees yesterday that it would soon end the pandemic-era perk of free lunches for those who come into the office. Softening the blow, the bank also plans to distribute 15 percent of the carried interest of its private equity funds among top executives, a perk worth hundreds of millions of dollars.

Thank goodness GS isn't going to deprive its top execs - some were on the precipice of only making 7 figures! Oh, the humanity! I hope they somehow can pull together the funds to buy a hot dog and pretzel from the vendor outside the building.

[TSmith34, Inc.]

Too bad the BoD's of Tesla and SpaceX can't rein on their 12-year-old douchebag leader.

[MU82]

Fidelity’s Retirement Savings Assessment looked at dedicated savers, individuals who were putting away more than 10% of their income, and found that they had a Retirement Score of 99. On the other hand, the median score for a person saving less than 10% was 68. Dedicated savers of all ages had higher median scores but the differences were particularly large for younger savers who had more time to put away money during their careers.