General Investing and Economics Discussion - No Politics

Deleted member 2897

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New jobless claims over 5m again last week, bringing the last 30 days total to about 25m. That equates now to a real-time unemployment rate of 19%. That doesn't include people whose hours are down. Underemployment (U6) is probably 25%+. My wife filed for unemployment on March 30th since as a nurse her hours were cut from 40 to 10. Still has not seen a payment and the website doesn't give any guidance for when one might come - we're on day 18. We don't need the money per se, but think about all the regular working class people who do who haven't seen a penny.

I won't be surprised to see the Dow go up 1,000 points on this news the way its been lately, LOL. We're now crossing into Great Depression economic statistics land and the stock market is the same place it was in December 2018 LOL.
 
CuseJacket

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bwelbo said:
New jobless claims over 5m again last week, bringing the last 30 days total to about 25m. That equates now to a real-time unemployment rate of 19%. That doesn't include people whose hours are down. Underemployment (U6) is probably 25%+. My wife filed for unemployment on March 30th since as a nurse her hours were cut from 40 to 10. Still has not seen a payment and the website doesn't give any guidance for when one might come - we're on day 18. We don't need the money per se, but think about all the regular working class people who do who haven't seen a penny.

I won't be surprised to see the Dow go up 1,000 points on this news the way its been lately, LOL. We're now crossing into Great Depression economic statistics land and the stock market is the same place it was in December 2018 LOL.
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One thing to keep in mind. The stock market is usually 1 year ahead of GDP in bear market recoveries.

In other words, if market speculation is typically 1 year out, then the bet that investors are making now is that the economy and GDP recover in a meaningful way by April 2021. Way oversimplified way of summarizing, but that's my interpretation of the data I've seen from past market corrections and what I've read.

Also, most of the GDP statistics I've seen published over the past 4 weeks generally annualize the impact of Covid, but the reality is the quarterly impact in Q2 and Q3 on their own are therefore 1/4 of actual impact. I say that to simply provide context when economists are predicting V-shape vs. U-Shape vs. L-shape recovery models.
 
LongforDodd

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LibertyTurns said:
More Chinese fraud exposed. Fake stocks, fake cities, fake Wuhan virus data....... These people are not honest & we’ve got American leadership buying their BS lock, stock & barrel. Sad.

https://www.businessinsider.com/these-chinese-cities-are-ghost-towns-2017-4

https://www.forbes.com/sites/ywang/...tion-and-luckin-coffee-reveal-inflated-sales/
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I remember seeing articles about these cities in about 2010. It was a couple of years after the beginning of the Great R and the article was giving an example of the Chicoms were doing to keep up their GDP numbers vis a vis construction spending while ours were not so good.
 

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Oil is at $1/barrel. (Not a typo.). Its basically worthless - all storage is full, even the pipelines. They are basically trying to give it away because its going to cost a lot of money to figure out how to store anything as they shut it all down.

If anybody has big guts, you can make a huge multiple over time if you have patience. The big risk I would see is that the ETFs and vehicles you'd use to invest in oil could completely shut down at these levels and you'd be out everything.
 

684Bee

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bwelbo said:
Oil is at $1/barrel. (Not a typo.). Its basically worthless - all storage is full, even the pipelines. They are basically trying to give it away because its going to cost a lot of money to figure out how to store anything as they shut it all down.

If anybody has big guts, you can make a huge multiple over time if you have patience. The big risk I would see is that the ETFs and vehicles you'd use to invest in oil could completely shut down at these levels and you'd be out everything.
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What about buying shares of Exxon or BP right now? Seems like they are at good values right now, especially if you are willing to hold for a decent amount of time.
 

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684Bee said:
What about buying shares of Exxon or BP right now? Seems like they are at good values right now, especially if you are willing to hold for a decent amount of time.
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I worked for a major oil company for several years in an earlier life. The longer term contracts are changing hands around $20/barrel. They can make money there, but its going to be really hard. Anytime you're under $30/barrel, you're really skimping on capital projects. XOMs trailing PE is 12. And their earnings are about to get punched in the face since oil has cratered here in the last month. Most analysts are predicting XOM to make no money this year. Oil companies are also some of the least profitable companies in the world. XOM's profit margin is 4.5%. Most people wouldn't even get out of bed for that. They also have over $50B in debt. If it were me, I wouldn't make a play on oil right now. Its just a complete mess. If you're into speculation and you're willing to take a risk, I'd look at an ETF that tracks oil further out in the future like maybe BNO and USO. I actually did that after the great recession for awhile - I was in BNO huge. But its such an unnatural mess right now its not really for me. But I could definitely see those ETFs popping up and down quite a bit over the next several months to allow for making of some good short term trades.
 

684Bee

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bwelbo said:
I worked for a major oil company for several years in an earlier life. The longer term contracts are changing hands around $20/barrel. They can make money there, but its going to be really hard. Anytime you're under $30/barrel, you're really skimping on capital projects. XOMs trailing PE is 12. And their earnings are about to get punched in the face since oil has cratered here in the last month. Most analysts are predicting XOM to make no money this year. Oil companies are also some of the least profitable companies in the world. XOM's profit margin is 4.5%. Most people wouldn't even get out of bed for that. They also have over $50B in debt. If it were me, I wouldn't make a play on oil right now. Its just a complete mess. If you're into speculation and you're willing to take a risk, I'd look at an ETF that tracks oil further out in the future like maybe BNO and USO. I actually did that after the great recession for awhile - I was in BNO huge. But its such an unnatural mess right now its not really for me. But I could definitely see those ETFs popping up and down quite a bit over the next several months to allow for making of some good short term trades.
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Thanks
 
Techster

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Personally, I think there's money to be had in the oil industry if you know what you're doing. I don't invest in anything I'm not familiar with, so it's not in play for me.

Here are my thoughts on Oil:

1. It's a "sacred cow" industry. Along with industries like banking/finance, guns, agriculture, tobacco...and probably a few others. That is, there are certain industries that are very friendly to the government in terms of lobbying. This is NOT a political statement, so I hope no one takes it there, but Oil and the Republican party have always been "good friends". The government will not let the "big players" in this industry fail. Trump has already tweeted financial support for the Oil Industry so you know aid is coming.

2. This goes along with point 1, this industry is too big to fail, therefore the government will backstop it. You essentially have a built in government stop loss. You just have to figure out the sweet spot to pull the trigger. Go back to the financial crises in 2008, the government essentially back stopped large banks. If you invest, keep in mind the American based companies (Chevron, Exxon-Mobil), which companies are most likely to get the aid?

3. Despite low demand for Oil, at some point the world will need to get back to normal. When that happens, more people will be on the roads. Outside of that, our supply chain (trucking, shipping) depend on oil and gas for transport. Despite the rise in electric vehicles, EVs still only represent less than 2% (being generous) of the total US cars on the road. There is no way Oil will collapse to zero forever because it would cripple our economy. In some shape or form, every sector of our economy depends on Oil.

Obviously the trick, just like any investment, is at what point does it hit bottom?
 
LibertyTurns

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BuzzStone said:
Does anyone here follow Kroger Stock? I am thinking now is a good time to get out but not sure how long they will keep trending up.
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Read an article the other day about grocery supplies hoarding due to the pandemic. At some point people are not going to need 6 jars of peanut butter and 350 rolls of toilet paper.

I rarely offer specific stock advice but if I were you here’s some general guidance you can use for anything.

I’d closely watch price AND volume action. If the price appreciation is slowing on decreasing volume then starts to drop rapidly on high volume then it’s time to head to the exits. Keep your stops in place.

If a stock is rising in price on rising volume, jump on the bus. Still keep your stops in place.
 
IEEEWreck

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BuzzStone said:
Does anyone here follow Kroger Stock? I am thinking now is a good time to get out but not sure how long they will keep trending up.
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I guess it depends on what you're looking to get out of it. Is this a search for stability or for short term gains?
 
IEEEWreck

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BuzzStone said:
Its short term gains.
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I agree with LibertyTurn's advice, although I personally doubt how much is driven by supply shock reactions (or hoarding, if you will) and the extent to which supply shocks are over.

TP has a fascinatingly long supply chain, and it seems that meat may be in for a shock here soon.

FWIW, I made some decent gains investing in bidet manufacturers. Good time for them right now.

In terms of practical advice, recognize that you're gambling and institute a control scheme to keep you disciplined like you were playing blackjack.

Set concrete goals for gains and liquidate a certain amount of a position on each goal. It's ok not to literally sell if you decide to reinvest in the same position, but that is a distinct reinvestment decision at each goal. You also need to be keeping a portion as locked in gains. For me that goes into my general growth oriented portfolio, but you can do with it whatever you want.

A structure like this will give you short term gains on short term market behavior. Without controls you need to both get short term behavior right AND time the market. And only a fool tries to time the market, especially consistently.
 
LibertyTurns

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@IEEEWreck @BuzzStone I traded in and out of JNJ for years like that. It was in a trading range and I waited until it was at the bottom of the range and would pick up 500 shares and dump it when it got near the top of the trading range. Picked up $3-4 per transaction every couple months it seemed. Made damn near $15k one year so I kept 200 shares. Next year I added another 100 in shear profits. Over a decade I amassed 1000 shares that way. It was trading at around $130/share when I dumped it. That stock also pumped out $.90/share in dividends so $900 in cash hit my account every quarter.

Got back in at $115 and wish I’d gone all in because it’s about $150 now. Oh well.
 
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