Stocks to Watch Thread

[Randolphkeys]

At 80 cents i almost bought in. But i figured any amount in would ultimately go to zero.

You are still in prime position to go into the large exotic cat investment portfolio. It's a declining market now, but just you wait. Just you wait...

 

[The Wizard of Moz]

they are taking pre-orders with $0 deposit and projecting revenues as if every single one becomes and actual order that includes they full revenue of using their non existent refueling service.

Founder cashed out $70 million while the company itself took out a $4.1 million PPP loan.

What you’re mentioning is fundamental analysis. We haven’t been there in a while (and even in normal times I don’t believe fundamentals really drive the market nearly as much as sentiment does).

Look at the chart today and someone tell quote the efficient market hypothesis so I can melt into a puddle and evaporate into the sky

 

[The Wizard of Moz]

Maybe people skip the middle step of moving money out this time and go right back to tech and stay at home stocks as the new safe haven because now they know the formula that worked last time.

I think we’re seeing this now. FAANG all up with little volatility today, most other things burning. NVDA up, Microsoft flat. It seems like these are being viewed as a safe haven asset class during this pandemic.

I think this dump will be bought. Too many people were on the sidelines wishing they got a better price that will jump on this because they were feeling FOMO. but if we get an extremely dramatic slide in the coming months I think FAANMG will be more insulated than the broad market

VIX up another 5% though which warms my heart.

 

[The Wizard of Moz]

Btw this morning shows what i believe will happen if we get another big selloff

Look what got hit the hardest. Same thing that got hit the hardest in March. The companies with questionable long term prospects and balance sheets. The ones that were the last ones invited to the bull rally. The same way the airlines can rip up 20%+ at a time, they can and have also ripped down aggressively. Volatility cuts both ways. Honestly I think the safest play is fucking FAANMG which is remarkable to me. It used to be tech was the crazy risky sector that you fucked with in bull markets but get me out of there and into Exxon Mobile, GE, WMT, DIS when things get hairy. Now it’s like how many companies are more profitable than Apple, Microsoft, Facebook or Google? How many have better revenue and growth potential than Amazon? It’s odd to see the paradigm shift to big tech being the safe haven class, but they’re some of the worlds best companies AND they come without crippling debt or extremely expensive infrastructure that comes with a huge cost of carry

 

[The Wizard of Moz]

Btw this morning shows what i believe will happen if we get another big selloff

Look what got hit the hardest. Same thing that got hit the hardest in March. The companies with questionable long term prospects and balance sheets. The ones that were the last ones invited to the bull rally. The same way the airlines can rip up 20%+ at a time, they can and have also ripped down aggressively. Volatility cuts both ways. Honestly I think the safest play is fucking FAANMG which is remarkable to me. It used to be tech was the crazy risky sector that you fucked with in bull markets but get me out of there and into Exxon Mobile, GE, WMT, DIS when things get hairy. Now it’s like how many companies are more profitable than Apple, Microsoft, Facebook or Google? How many have better revenue and growth potential than Amazon? It’s odd to see the paradigm shift to big tech being the safe haven class, but they’re some of the worlds best companies AND they come without crippling debt or extremely expensive infrastructure that comes with a huge cost of carry

From their highs THIS WEEK:
Last ones invited to bull rally:
Delta down 26%
AAL down 26.8%
Royal Caribbean down 28.3%
Carnival down 28.9%
Hertz down 67.1%
MGM resorts 24.5%
Boeing: 20.6%

Broad market
S&P down 3.4%
Nasdaq down 2.1%

Last ones invited to the bull rally are the first ones kicked out. If this downtrend continues (which I don’t read palms) then everyone who piled into the travel sector better be damn confident in their companies because buying the dip on companies doesn’t always work. It took 17 years for the NYSE airline index to recover from 9/11. In that time United, Delta, and American ALL filed for chapter 11. American was the only case where the shareholders didn’t lose everything. My friend tells me every day people will start flying again and that’s why he keeps buying airlines. It’s just not that simple. Everyone knows people will be flying again and they knew it in May when everything in the world rallied and the airlines sat there like cuckholds

We get a 2-3% broad market selloff and the travel sector pukes all over itself. That should tell you a lot about investors confidence in the sector.

At the same time like I said I don’t read palms and we could switch course. All I recommend is that people keep in mind that if you’re the last invited to a bull rally there’s a reason for that and many times you will be the first kicked out on drawdowns

Oh and if there’s ever people saying ‘this is a once in a lifetime rally and you’ll miss out if you don’t get in’ it’s almost always not the time to get in. Keep FOMO in check

 

[The Wizard of Moz]

Lordy what a fucking bloodbath today. Nothing wakes you up like a 6% slide and a 48% VIX spike (MUCH bigger deal than the slide to me. People paying big premiums for options and it is big skewed to the put side)

FOMO’d into some stupid shit with 2.5% of my portfolio late last week. Hard not to capitulate sometimes when the market is melting up. Sometimes the absolute hardest times to buy are the best and the times when you’d rather do anything but sell is when you’ve got to strongly consider it

Oh well. Always trying to learn and minimize mistakes. Disappointed in myself for not building out more of a put profile before the VIX erupted but have to constantly try to get better at keeping emotions in check.

I’m surprised by the complete lack of dip buying. Some weak fucking hands shook out today. Makes me wonder how much people really believe and How much people just wanted to ride the wave.

I sold some puts on some banks I like today to take advantage of massive VIX spike. I think we see some green tomorrow. There was a ton of FOMO earlier this week, I think buyers will come in after panic sellers had their day to de-risk. I don’t think we fall into the abyss without bulls fighting. I will probably try to reduce stake slightly more if we pop back to 3150. Ship probably sailed on getting “cheap” put options for a while after that fucking mess today. Definitely Woke some people up. I’ve heard the argument, ad nauseam of ‘look at bond yields, no where else to park your money meaning this rally is not going away’

And it’s interesting to me because I genuinely think sometimes people forget stocks can go down and a 0% yield is better than a -30%

Bond yields are dick. And if there wasn’t a literal pandemic and recession ongoing I’d be right there with you saying there’s no other good places to park cash. But sometimes cash is a good parking spot.

Also I saw Hertz approached the bankruptcy judge about raising 1B from issuing new shares because of the heightened interest in their equity. That would be more than 3 times their current market cap. I have no idea what to make of this. If it happens, it makes it more likely they can save shareholder value (or else why would anyone buy them), but like.... that’s over 3 times as many shares as you have. What a weird fucking market we’re seeing right now. And I love it

 

[brownindian]

Are Banking Stocks a good buy now ?

 

[bob2the2nd]

Are Banking Stocks a good buy now ?

depends on what the headless chicken decides

 

[Cavatt]

The Fed is just dumping money into the stock market. This is a very tenuous bubble.

What is the point of the stock market if the taxpayers continually bail out the losses for the wealthy. This is counterproductive.

 

[The Wizard of Moz]

The Fed is just dumping money into the stock market. This is a very tenuous bubble.

What is the point of the stock market if the taxpayers continually bail out the losses for the wealthy. This is counterproductive.

The fed is dumping money into the bond market

They have never and have no current plans to purchase individual stocks Or even stock ETFs

The fed is acting as a lender of last resort because in March credit markets absolutely froze and liquidity dried up. That is a financial crisis in the making so the fed said if everyone else is too spooked then we will provide liquidity. The funny thing is, merely the act of saying they would buy bonds calmed markets almost instantaneously and normal borrowing/lending resumed

Central banks providing liquidity isn’t limited to America. It’s happening all over the world because illiquid markets have disastrous consequences for every day people, not just the wealthy. Think about how effected the average person was in 2008-2010 when the financial entities misbehaved so greatly. It wasn’t just banks and insurance companies that felt the hardship. It was the country.

I don’t like the zombie companies We are propping up and I hope the Fed doesn’t roll their debt continuously, but having that many defaults at once affects MUCH more than the wealthy. In fact, it could end up affecting some very wealthy People much less than the general public because the wealthy usually have advisors that have them shorting while the more modest retail investors continuously buy the dip and end up holding the bag

I think the Fed acted appropriately given the incredibly dire Unprecedented situation at hand, but I don’t want to see them continue to let these zombies suck at the teet when normal times realize.
My hope is that this was a temporary intervention and just gives the zombies a little bit more life support so they can die off spaced out over the coming years when they can’t pay their debt and no one will roll it for them. My fear is that the Fed rolls it for them and at that point too big to fail will apply to pretty much every company

Also a very important point is they are loans. The majority of companies getting them will pay them back and there will be no impact to the taxpayers. Some corporations got true free money, but the Fed’s bond buying program is intended to just provide liquidity, not relief

 

[The Wizard of Moz]

From around the world

Banks Snap Up ECB’s Loans in Another Trillion-Euro Moment

The European Central Bank reached another trillion-euro milestone in its fight to bolster economies that are seeing years of growth wiped out in months by the coronavirus pandemic.

www.bloomberg.com

Bank of England Prepares Its Next Act in Saving of U.K. Economy

The Bank of England is widely expected to boost its support for the U.K. economy again on Thursday amid signs that recovering from the pandemic-induced recession will be harder than hoped.

www.bloomberg.com

It’s an unprecedented situation, but when many companies have revenues slashed so aggressively, I think it’s better to provide temporary liquidity than watch the interconnected web burn down.

 

[The Wizard of Moz]

Look I’m gonna be honest. If you believe AT ALL in Nikola long term consider selling puts on it

The premiums on the August puts are mostly greater than 50% of the strike price.

For example a 60 strike put is selling for $31. That means the stock needs to fall to 29 for you to start losing on the trade. It was even worse a week ago where some of the premiums were over 60 fucking percent of the strike.

Based on the insane put option premiums I tend to believe this is a meme stock, but if I had even an ounce of faith in it I’d be selling puts. Literally 3100 in premium for that August 60 and if it actually did get to in the money then you can just hold the shares if you believe in it long term when you’re assigned

But I’ve never seen premiums that large for any stock. And the call option side is no where near as aggressive. The 70 strike call has a mid price of 6.4 (the equivalent OTM Call on the other side since NKLA is trading ~65)

There are bears on bears on bears in the option market for this stock. If you’re bullish there’s a lot of premium out there for the picking

 

[KI4MVP]

Look I’m gonna be honest. If you believe AT ALL in Nikola long term consider selling puts on it

The premiums on the August puts are mostly greater than 50% of the strike price.

For example a 60 strike put is selling for $31. That means the stock needs to fall to 29 for you to start losing on the trade. It was even worse a week ago where some of the premiums were over 60 fucking percent of the strike.

Based on the insane put option premiums I tend to believe this is a meme stock, but if I had even an ounce of faith in it I’d be selling puts. Literally 3100 in premium for that August 60 and if it actually did get to in the money then you can just hold the shares if you believe in it long term when you’re assigned

But I’ve never seen premiums that large for any stock. And the call option side is no where near as aggressive. The 70 strike call has a mid price of 6.4 (the equivalent OTM Call on the other side since NKLA is trading ~65)

There are bears on bears on bears in the option market for this stock. If you’re bullish there’s a lot of premium out there for the picking

I never trade options, but took a look at buying puts, and the cost was too high. Whole point of options is to minimize the cost.

Still can't see how the company isn't just all smoke and mirrors selling to people who don't want to miss the next Tesla.

Tesla shows how incredibly hard it is to start a car company. After years building cars, they still nearly failed when Model 3 rolled out because of production problems. As far as I know, Nikola has never even built a full prototype, much less manufactured a single vehicle in any quantity.

They're about to take orders from a render, and their semi reveal a few years ago wasn't remotely a complete vehicle. Clips from that

 

[The Wizard of Moz]

I will say IMO although there’s no way to definitively know this I find it extremely hard to believe the market is expecting a second spike in the near term. There might be itchy trigger fingers in fall, but if we see a big spike soon I think the travel sector goes right back down. Maybe people skip the middle step of moving money out this time and go right back to tech and stay at home stocks as the new safe haven because now they know the formula that worked last time.

Since this post

broad market
S&P500: -4.9%
Nasdaq: +1.42%

last invited to the bull rally:
American Airlines: -34%
Delta: -23.7%
Carnival: -34%
Royal Caribbean: -34.4%
Hertz: -73.5%
Kohls: -26.5%

FANG-MAN:

facebook: +2.1%
Apple: +9.1%
Nvidia: +6.6%
Google: +0.6%
Microsoft: +6.2%
Amazon: +9.3%
Netflix: +10.39%

stay at home:
Zoom: +21%
Wayfair: +16.84%
Peloton: +21%

Now if only I would have done something about it lol.

 

[KI4MVP]

I sold a few things in my IRA today so I have cash if states start shutting down and market crashes again.