Investing in the stock market - Discussion

[NucksPatsFan]

2 minutes ago, TGokou said:

I wouldn't worry about it too much. Even if airlines re-open in 2-3 months who is going to be traveling while this thing is still out on the loose? From the sounds of things, many governments are contemplating re-opening even with positive cases still ongoing. Your going to have a long time to potentially pick away at this if you want. Right now is just the initial rally but it'll come back down. In the long term, expect this to be more of an L - shaped recovery rather than a V o U shaped recovery.

I know.

 

Just sucks they're up 24% since I posted in here "Should I sell? I sold just to best safe" lol. 

 

It's like almost betting on the huge underdog, not doing it, then the dolphins beat the pats on some crazy Miami miracle lateral play.

[Boudrias]

4 hours ago, UnkNuk said:

The Globe and Mail did an article a year ago comparing various online brokerages which can be found here:

 

https://www.theglobeandmail.com/investing/article-which-online-brokerage-is-best-rob-carrick-ranks-your-options/?utm_source=Carrick on Money&utm_medium=Newsletter&utm_campaign=2020-4-7_19&utm_content=CarrickonMoney&utm_term=broker_rankings

Qtrade is pretty decent. 6.95 trades. Biggest beef is they cannot get their statement out until the 18th or 19th. 

[TGokou]

30 minutes ago, NucksPatsFan said:

I know.

 

Just sucks they're up 24% since I posted in here "Should I sell? I sold just to best safe" lol. 

 

It's like almost betting on the huge underdog, not doing it, then the dolphins beat the pats on some crazy Miami miracle lateral play.

You win some you lose some. I don't know what you bought it at but generally you shouldn't buy unless you were planning on holding long-term. I've actually sold majority of my stocks that I bought pretty much right at the bottom for far less than they are today not expecting this huge run-up we've had but I managed to take 20-30% profit for most of them. My point being is that if you bought it as a trade, always go in with a exit strategy and don't play it on emotion. If you go in, and it dropped, don't be satisfied for a 5-10% gain when you put so much risk into it. I find it too difficult to 'trade' knowing what my exit price would be if it kept dropping so I just buy it at the price Im willing to hold long term for it. If I make 20-30% in a couple days then it's fairly easy sell for me. I also never hold/trade any stocks I'm not willing to hold long term. Also for a stock like AC and the way it was dropping I'd be looking for a minimum of 50% gain as a reward - to - risk. I was going to buy CHR.to on monday when it was at $2.20 but was hoping for it to drop a little further on tuesday before picking it up. Unfortunately that never happened so lost my chance.

[I.Am.Ironman]

Will be interesting to see where markets go on Monday after a long weekend.

[Lancaster]

On 4/9/2020 at 10:55 PM, I.Am.Ironman said:

Will be interesting to see where markets go on Monday after a long weekend.

It started much stronger on Thursday morning and did lose a bit of momentum towards the end of the day.

After like a few days of going up, there will probably be a pullback the coming week.  

[Boudrias]

6 hours ago, Lancaster said:

It started much stronger on Thursday morning and did lose a bit of momentum towards the end of the day.

After like a few days of going up, there will probably be a pullback the coming week.  

Extreme volatility and earnings reports haven't even hit the market yet for Q1. I suspect a lot of investors are anticipating a V recovery which is suspect. Establish your selling points and put in limits. Even then your sells might not be filled. AT the height of the March selloff I put a open market sell on a $26 stock and it was filled at 21.50.  

[Warhippy]

3 hours ago, Boudrias said:

Extreme volatility and earnings reports haven't even hit the market yet for Q1. I suspect a lot of investors are anticipating a V recovery which is suspect. Establish your selling points and put in limits. Even then your sells might not be filled. AT the height of the March selloff I put a open market sell on a $26 stock and it was filled at 21.50.  

Lombard is advising against a potential V recovery and is in fact suggesting the worst is yet to come based  on upcoming earnings reports, business and consumer confidence reports and unemployment numbers.

 

https://www.marketwatch.com/story/forget-the-v-shaped-recovery-the-economy-wont-bounce-back-quickly-2020-04-08

 

https://markets.businessinsider.com/news/stocks/stock-market-forecast-outlook-further-declines-coronavirus-recession-ts-lombard-2020-4-1029068946

 

 

[Boudrias]

1 hour ago, Warhippy said:

Lombard is advising against a potential V recovery and is in fact suggesting the worst is yet to come based  on upcoming earnings reports, business and consumer confidence reports and unemployment numbers.

 

https://www.marketwatch.com/story/forget-the-v-shaped-recovery-the-economy-wont-bounce-back-quickly-2020-04-08

 

https://markets.businessinsider.com/news/stocks/stock-market-forecast-outlook-further-declines-coronavirus-recession-ts-lombard-2020-4-1029068946

 

 

Well I am sitting at about 26% cash or equivalent. Really going hardcore on trading limits. Setting my allocations and will not buy until we hit at or below the March lows. I chirp about world debt and the inevitable collapse in many governments. Yet I continue to invest and then question my psychological makeup. I recently read Gladwell's book "Talking to Strangers". It had a lot of psychology in it. Humans seem to be conditioned to view people in a positive light. Cognitive self confirmation is huge in investing.   

[Warhippy]

3 minutes ago, Boudrias said:

Well I am sitting at about 26% cash or equivalent. Really going hardcore on trading limits. Setting my allocations and will not buy until we hit at or below the March lows. I chirp about world debt and the inevitable collapse in many governments. Yet I continue to invest and then question my psychological makeup. I recently read Gladwell's book "Talking to Strangers". It had a lot of psychology in it. Humans seem to be conditioned to view people in a positive light. Cognitive self confirmation is huge in investing.   

The moment the sunshine hits we'll be hearing how we need to travel, consume, buy, purchase.  We've 2-3 generations that are conditioned to purchase to secure happiness.

 

But I do not see a V shaped recovery, I do in fact agree that the bounce is about to get ugly.  2008 was bad, but 2009 is when things really fell apart.  The subsequent drop from the sharp and short lived upticks took a lot by surprise.

 

I don't want to be one of them no matter how much I want to be investing right now.

 

Case in point, Cenovus/Suncor.  I heard about he trade deal, knew to within 36 hours when hey'd planned to announce it.  Still saw an average 20% drop in energy stocks after the announcement.

 

Anything I do will be long term with a 5-10 year exit strategy.

[CBH1926]

Trying to time market or predict the bottom is fool’s errand.

I got into stocks that I plan to hold onto long term, most of them have gone up 25-30% since recent lows.

Maybe I could get them cheaper this year or the next year just like maybe I can win lottery.

[Lancaster]

3 hours ago, CBH1926 said:

Trying to time market or predict the bottom is fool’s errand.

I got into stocks that I plan to hold onto long term, most of them have gone up 25-30% since recent lows.

Maybe I could get them cheaper this year or the next year just like maybe I can win lottery.

Not impossible...... just very difficult in the best case scenario.

There's a reason that financial companies are spending billions into statistic research, quantitative analysis, human psychology, AI learning, etc.

 

That being said, a good quote I've read somewhere before...... "You Make More Money Selling Advice Than Following It".

[CBH1926]

17 minutes ago, Lancaster said:

Not impossible...... just very difficult in the best case scenario.

There's a reason that financial companies are spending billions into statistic research, quantitative analysis, human psychology, AI learning, etc.

 

That being said, a good quote I've read somewhere before...... "You Make More Money Selling Advice Than Following It".

Very true, lot of money is lost chasing the market.

[HI5]

My google searches suggest we’re headed towards a V-shape, U-shape, L-shape or W-shaped recession 

 

 

[sassbs]

Does anyone know of the best 5g tech companies to invest in?

5g is suppose to be revolutionary!! 

[Warhippy]

13 hours ago, HI5 said:

My google searches suggest we’re headed towards a V-shape, U-shape, L-shape or W-shaped recession 

 

 

I would think and suggest a W being far more likely at this rate.

 

We'll see a slow U shaped upturn followed by that 2nd drop based on consumer/business confidence and lack of spending and investment.

 

Case in point, the S&P had an amazing week.  But 17 million people in the US were laid off.  No way anyone can claim that is sustainable.

[I.Am.Ironman]

11 hours ago, sassbs said:

Does anyone know of the best 5g tech companies to invest in?

5g is suppose to be revolutionary!! 

There are apparently health risks to it as well with some people putting up a fuss. Something to do with a higher frequency but shorter wave length compared to 4g. Apparently it is a significant jump on the performance:health risk ratio. Essentially you get awesome coverage/speed but access points (ie. towers/boxes) have to be closer together. This increases radiation exposure. I think most countries are going ahead in some major centers (Canada I think is starting in dt Van, Ottawa, Toronto, Montreal) but I think some countries are delaying the switch until more research is completed on potential health effects (I think Belgium is one?).

 

As an investment... if it is deemed "safe" one would think there is money to be made. However, if it is found that the radiation exposure can be harmful then it will likely be nixed -- ie no money to be made.

Personally, I would rather countries, particularly Canada, ensure with more testing that 5g is indeed safe over the long term. I don't see why we need to upgrade anyway, 4g does the trick.

 

I actually haven't looked into the topic extensively so if anyone has other input that would be welcomed.

[HI5]

I’m going to guess we’ll see a short bullish run on oil again tomorrow thanks to the new deal and then right back down.

[Standing_Tall#37]

23 hours ago, HI5 said:

My google searches suggest we’re headed towards a V-shape, U-shape, L-shape or W-shaped recession 

 

 

I’d heard about both the U and the W. I kind of think that if the Covid isn’t under control by May 1st and isolation continues or a tighter lockdown is forced.... that’s when we’ll see the real drop.

[nuckin_futz]

Further to the discussion of global debt.................

 

The Federal Reserve has encouraged large-scale moral hazard

We have never seen a nationwide lockdown to prevent the spread of a virus. It is right that governments compensate citizens for the quarantines that prevent them from operating and that central banks prevent a short-term liquidity crisis from becoming a solvency crisis. But the answer should not be a cover to bail out the borrowers and speculators out of pocket.

 

Yet last week, we saw unprecedented action by the US Federal Reserve to buy low-rated bonds and even swap funds traded for bad debt. The markets reacted with joy by being rescued again. A Wall Street strategist even called it an “Easter bunny gift.”

 

Former Treasury Secretary Timothy Geithner once described the work of Walter Bagehot Lombard street like “the central bank Bible”. According to this 1873 book, central bankers are supposed to avoid panic by lending early and without limit to creditworthy companies, against good guarantees and at a penalty rate.

 

However, regarding the 2008 crisis, Geithner consciously ignored this sacred text. He and then Fed chairman Ben Bernanke freely loaned to potentially insolvent groups at zero rates. These actions have encouraged large-scale moral hazard. Instead of promoting caution, central bankers have since steadily increased the punchbowl.

The obvious beneficiaries of the unwanted bond buying program are over-leveraged private equity groups and unhealthy borrowers

In a recent report, the IMF warned that central banks have increased financial fragility by encouraging companies to continue “taking financial risks” and gorging themselves on debt. Rather than aiming for lower debt levels, companies have learned that they will be bailed out if they borrow.

 

But with or without coronavirus, we would have seen a wave of bankruptcies. In the United States, corporate debt has never been higher, at 47% of gross domestic product. Overall, non-financial corporate debt has doubled since the last financial crisis.

 

Large swathes of the economy are now inhabited by “zombie” companies, which have not generated enough cash in recent years to cover their interest costs. Researchers at the Bank for International Settlements have suggested that the proportion of zombie companies in more than a dozen advanced economies rose from 4% in the mid-1990s to more than 12% in late 2018. Debt is used to finance more debt, and the zombies cause overcapacity and lower productivity.

 

After a decade of economic growth and generous tax breaks, American businesses should have held tons of cash to keep them going for short periods without income. But most borrowed everything they could and never saved up for a rainy day.

 

Credit spreads are increasing today, indicating a higher probability of default. However, the anomaly is not the current stress level but the artificial calm that preceded it. Research by Variant Perception shows that, historically, companies with a high level of net debt relative to their cash flows have had higher financing costs. But that relationship fell apart after the last crisis. It is only now, during the coronavirus crisis, that the fundamentals are reasserting themselves and that terrible companies are seeing their spreads widen.

Coronavirus commercial update

The position of Fed President Jay Powell, governor of the central bank since 2012, should come as no surprise. Four years ago, he noted in a speech that “a long period of very low interest rates could lead to excessive risk-taking and, over time, high asset prices and growth in unsustainable credit. ” Many times he has warned against removing volatility. However, as soon as the markets faded in December 2018, he immediately reversed course. It has gone from preaching about the risks of credit growth to providing liquidity to unwanted bond ETFs.

 

Lending to potentially insolvent companies is bad enough, but buying corporate bonds and ETFs on the secondary market is questionable under section 13 of the Federal Reserve Act, which allows you to lend against collateral. in “urgent” circumstances. It also does nothing to help finance the economy, and simply helps the returns of investors who have already purchased corporate bonds. It is a paradise for speculators.

 

The obvious beneficiaries of the unwanted bond buying program are over-leveraged private equity groups and unhealthy borrowers. It’s not surprising. Mr. Powell spent years at Carlyle, the private equity giant. After the last financial crisis, Geithner also entered the revolving door to become president of Warburg Pincus, another private equity firm.

 

Investors and CEOs are learning that no matter how reckless their borrowing is in the good times, when the bad times inevitably come, they will be thrown into a lifeline.

 

 

[Warhippy]

2 hours ago, nuckin_futz said:

Further to the discussion of global debt.................

 

The Federal Reserve has encouraged large-scale moral hazard

We have never seen a nationwide lockdown to prevent the spread of a virus. It is right that governments compensate citizens for the quarantines that prevent them from operating and that central banks prevent a short-term liquidity crisis from becoming a solvency crisis. But the answer should not be a cover to bail out the borrowers and speculators out of pocket.

 

Yet last week, we saw unprecedented action by the US Federal Reserve to buy low-rated bonds and even swap funds traded for bad debt. The markets reacted with joy by being rescued again. A Wall Street strategist even called it an “Easter bunny gift.”

 

Former Treasury Secretary Timothy Geithner once described the work of Walter Bagehot Lombard street like “the central bank Bible”. According to this 1873 book, central bankers are supposed to avoid panic by lending early and without limit to creditworthy companies, against good guarantees and at a penalty rate.

 

However, regarding the 2008 crisis, Geithner consciously ignored this sacred text. He and then Fed chairman Ben Bernanke freely loaned to potentially insolvent groups at zero rates. These actions have encouraged large-scale moral hazard. Instead of promoting caution, central bankers have since steadily increased the punchbowl.

The obvious beneficiaries of the unwanted bond buying program are over-leveraged private equity groups and unhealthy borrowers

In a recent report, the IMF warned that central banks have increased financial fragility by encouraging companies to continue “taking financial risks” and gorging themselves on debt. Rather than aiming for lower debt levels, companies have learned that they will be bailed out if they borrow.

 

But with or without coronavirus, we would have seen a wave of bankruptcies. In the United States, corporate debt has never been higher, at 47% of gross domestic product. Overall, non-financial corporate debt has doubled since the last financial crisis.

 

Large swathes of the economy are now inhabited by “zombie” companies, which have not generated enough cash in recent years to cover their interest costs. Researchers at the Bank for International Settlements have suggested that the proportion of zombie companies in more than a dozen advanced economies rose from 4% in the mid-1990s to more than 12% in late 2018. Debt is used to finance more debt, and the zombies cause overcapacity and lower productivity.

 

After a decade of economic growth and generous tax breaks, American businesses should have held tons of cash to keep them going for short periods without income. But most borrowed everything they could and never saved up for a rainy day.

 

Credit spreads are increasing today, indicating a higher probability of default. However, the anomaly is not the current stress level but the artificial calm that preceded it. Research by Variant Perception shows that, historically, companies with a high level of net debt relative to their cash flows have had higher financing costs. But that relationship fell apart after the last crisis. It is only now, during the coronavirus crisis, that the fundamentals are reasserting themselves and that terrible companies are seeing their spreads widen.

Coronavirus commercial update

The position of Fed President Jay Powell, governor of the central bank since 2012, should come as no surprise. Four years ago, he noted in a speech that “a long period of very low interest rates could lead to excessive risk-taking and, over time, high asset prices and growth in unsustainable credit. ” Many times he has warned against removing volatility. However, as soon as the markets faded in December 2018, he immediately reversed course. It has gone from preaching about the risks of credit growth to providing liquidity to unwanted bond ETFs.

 

Lending to potentially insolvent companies is bad enough, but buying corporate bonds and ETFs on the secondary market is questionable under section 13 of the Federal Reserve Act, which allows you to lend against collateral. in “urgent” circumstances. It also does nothing to help finance the economy, and simply helps the returns of investors who have already purchased corporate bonds. It is a paradise for speculators.

 

The obvious beneficiaries of the unwanted bond buying program are over-leveraged private equity groups and unhealthy borrowers. It’s not surprising. Mr. Powell spent years at Carlyle, the private equity giant. After the last financial crisis, Geithner also entered the revolving door to become president of Warburg Pincus, another private equity firm.

 

Investors and CEOs are learning that no matter how reckless their borrowing is in the good times, when the bad times inevitably come, they will be thrown into a lifeline.

 

 

A good example of this is Whiting.  One of the largest Shale producers.  Just declared chapter 11, but also announced they're in full production this spring as they plan to ride it out with the money the feds are throwing them.

 

Almost criminal.

 

A truly conservative government would allow these zombie and sunset companies to fail without worry.  But we've not had a truly conservative government in America or Canada for decades