Investing in the stock market - Discussion

[NewbieCanuckFan]

2 minutes ago, Warhippy said:

Major US retailers releasing earnings reports this week.

 

J. Crew just filed for Chapter 11.  Air Canada just released it's earnings reports to a $1.05 billion loss.  Southwest and Delta all down today.  Maybe Buffett was right, again.

 

I'm no expert in the subject of "financing" & don't know fully understand the reasons behind the move but didn't J Crew do some 'switcheroo' with their assets to an offshore Caymen Islands type of subsidiary & license back all that stuff (logos, intellectual property, etc.,) back to the parent company recently? 

 

 

[Warhippy]

20 minutes ago, NewbieCanuckFan said:

I'm no expert in the subject of "financing" & don't know fully understand the reasons behind the move but didn't J Crew do some 'switcheroo' with their assets to an offshore Caymen Islands type of subsidiary & license back all that stuff (logos, intellectual property, etc.,) back to the parent company recently? 

 

 

if I recall yes, they did.  I believe they also got government money from the US in the last month while many americans STILL haven't seen a dime

 

It's funny how that works isn't it?

[NucksPatsFan]

12 hours ago, AriGold2.0 said:

May see ?

 

It's happening, and it's going to be big. I've been waiting for it, it's almost time to pounce.

 

SQ has been calling my name for a while, I missed the boat at 47.9 because I was a chicken. Won't happen this time.

 

I'm going to be dumping around 30K into the bank of the future. Below is one of the best articles about Square and it's very bright future.

 

https://www.fool.com/investing/2019/11/14/where-will-square-be-in-10-years.aspx

Trying to decide when to pounce on AC myself

[HI5]

10 minutes ago, NucksPatsFan said:

Trying to decide when to pounce on AC myself

Still too high for my liking --considering we did see it hit below $10 in March.

[NucksPatsFan]

20 minutes ago, HI5 said:

Still too high for my liking --considering we did see it hit below $10 in March.

Wasn't $12.15 it's lowest on March 19

[HI5]

2 minutes ago, NucksPatsFan said:

Wasn't $12.15 it's lowest on March 19

Not buying that day still haunts me at night.

[NucksPatsFan]

4 minutes ago, HI5 said:

Not buying that day still haunts me at night.

Woof.

 

Drooling thinking at the profit margin if you had gotten in.

[Warhippy]

7 minutes ago, HI5 said:

Not buying that day still haunts me at night.

Me too, but judging by what is happening to airline stocks world wide right now I am ok waiting as I think it's possible we'll get to within $3 of that again

 

 

[inane]

What's the obsession with AC and other airline stocks when there are so many others that do far better? Gambling on AC seems like such a high risk, low reward approach...

[NucksPatsFan]

1 minute ago, inane said:

What's the obsession with AC and other airline stocks when there are so many others that do far better? Gambling on AC seems like such a high risk, low reward approach...

They're a growing company that was trading on average at $47/share pye-covid and if you can get it for $15 why not? Plus most of us trade on the TSX so it's always good when there's good Canadian options.

[HI5]

16 minutes ago, inane said:

What's the obsession with AC and other airline stocks when there are so many others that do far better? Gambling on AC seems like such a high risk, low reward approach...

Just a safe bet --even though airlines are risky, I think people are confident in AC management, cash reserves and government bailing them out. For airlines, I have been following Chorus as well, they've suspended their dividend for now, but if I can make similar gains as I would with AC and potentially gain dividends later I will be making a buy to hold. 

[NucksPatsFan]

26 minutes ago, HI5 said:

Just a safe bet --even though airlines are risky, I think people are confident in AC management, cash reserves and government bailing them out. For airlines, I have been following Chorus as well, they've suspended their dividend for now, but if I can make similar gains as I would with AC and potentially gain dividends later I will be making a buy to hold. 

Been watching Chorus as well since they're very cheap and they're tied to AC 

[Warhippy]

1 hour ago, inane said:

What's the obsession with AC and other airline stocks when there are so many others that do far better? Gambling on AC seems like such a high risk, low reward approach...

So AC being a national carrier trades on the TSX and as such any investment is in CAD, making it vastly cheaper for Canadians to buy in.  They are currently bouncing around $17 a share but over the past 2+ years have trended around $49.72 a share.  This makes them a very safe investment as they currently hold one of the best balance sheets of any global national, but also will be deemed "to big to fail" so as such will be assured government money.

 

They're currently among the safest buy in of any type of airline outside of Southwest

[nuckin_futz]

We're in the perfect speculative storm and it's a complete game-changer

Mon 4 May 2020 18:48:42 GMT

 

There's a speculative boom

 

I've seen an endless amount of articles and posts about the effects of COVID-19 on the economy and businesses. Some of the most-interesting angles are about how long-term changes in the economy -- like telecommuting -- will be accelerated by the pandemic.

 

However for market participants, the biggest change might be the explosion in no-cost trading. I joked at the start of the rout in oil about the sudden spike in interest in trading oil from people who had no idea how the market worked.

 

"What are all the tourists who would be in Paris and New York doing? Evidently they're trading oil," I wrote.

 

With the implosion of USO in the days that followed, it became clear that unsophisticated retail investors were a major factor, bigger than I ever imagined they could be. At one point they held 30% of the front-month contract in oil and had no idea what they were doing. I suggested shorting USO and it was cut in half two weeks.

 

What's concerning is that the trend is accelerating. The WSJ reports:

 

'TD Ameritrade said last week that retail clients opened a record 608,000 new funded accounts in the quarter ended March 31, with more than two-thirds of those opened in March. E*Trade saw a net gain of 363,000 accounts in the quarter-a company record-around 90% of which were retail. Charles Schwab Corp. reported a record 609,000 new brokerage accounts in the quarter, including individuals' self-directed accounts and those managed by financial advisers.'

Online trading is exploding and the absence of any trading fees have changed speculative behaviour. No doubt this is a continuation of the long-term declines in trading costs but the arrival at zero has altered the holding period for investors from short-term to almost no term. While $5/trade or $0/trade really shouldn't change behaviour, you can see from this chart that it's been a revelation.

 

 

Compounding the change in market structure are increases in leverage and cheap borrowing costs and the explosion in the options market, which coincides with the shift to weekly options from monthlies.

 

Add it all up and you have the perfect storm:

 

1. Increased financial market volatility
2. No cost trading
3. Cheap leverage
4. Better options market access/liquidity
5. Smartphone trading

On top of that you have growing communities like Wall Street Bets on Reddit that glorify reckless risk taking. So you probably have a cultural shift going on in investing as well.

 

Investor Amnesia has a great, closer look at the history of bubbles in speculation itself.

 

Over and over, the story is the same:

 

Their results show that these speculative margin loan holders largely follow the herd by buying at the top, and selling out at the bottom.

That's something we've seen countless times here. The irony of Robinhood is that it's ultimately going to steal from the poor and give to rich, sophisticate investors.

 

It's clear to me that one of the great trading styles -- perhaps the great style -- in the months ahead will be to simply sell whatever retail is piling into at the moment. For that, there are some great, emerging tools and one of them I'm looking at closely is Robintrack, which shows popularity changes over different periods (down to 1 hour).

 

********************

 

Lot of people off work during the pandemic, piling into markets.

 

[nuckin_futz]

Worth a chuckle.

[inane]

50 minutes ago, Warhippy said:

So AC being a national carrier trades on the TSX and as such any investment is in CAD, making it vastly cheaper for Canadians to buy in.  They are currently bouncing around $17 a share but over the past 2+ years have trended around $49.72 a share.  This makes them a very safe investment as they currently hold one of the best balance sheets of any global national, but also will be deemed "to big to fail" so as such will be assured government money.

 

They're currently among the safest buy in of any type of airline outside of Southwest

I guess I'm wondering why you would look at airlines at all...TSX or not.

[Warhippy]

3 minutes ago, inane said:

I guess I'm wondering why you would look at airlines at all...TSX or not.

$$$$$ over time.

 

Decent ROI, dividends are decent and while you'll never see a 10x return like start ups and run on IPOs it's good to have safe money somewhere

[inane]

19 minutes ago, Warhippy said:

$$$$$ over time.

 

Decent ROI, dividends are decent and while you'll never see a 10x return like start ups and run on IPOs it's good to have safe money somewhere

Banks do that and are way less volatile. Or Telus, Fortis, things like that. 

[HI5]

6 minutes ago, inane said:

Banks do that and are way less volatile. Or Telus, Fortis, things like that. 

Potential for higher return with AC, rather then going with one the big 5 banks.

[HI5]

2 hours ago, NucksPatsFan said:

Been watching Chorus as well since they're very cheap and they're tied to AC 

Yep, potential for decent amount of dividend income eventually. I like it!