General Investing and Economics Discussion - No Politics

[Deleted member 2897]

"Fortune favors the bold".

So does disaster, but that's another story... No, I wish I knew how to do that stop loss stuff. Little downside and the upside is skyrockets.

One of my bigger concerns with leveraged things, investing on margins, and stuff like that is trying to get out the door before everyone else. There were likely tons of people this weekend who said, "Maybe its best if I move to cash". They lost 12% this morning before their trades could even be executed.

 

[bobongo]

One of my bigger concerns with leveraged things, investing on margins, and stuff like that is trying to get out the door before everyone else. There were likely tons of people this weekend who said, "Maybe its best if I move to cash". They lost 12% this morning before their trades could even be executed.

Well, like Techster said, stop loss is the key.

 

[armeck]

Yes! The volatility in the bond market has been really high in the last week, so rates haven’t really come down that much. But they should. The Fed has dropped rates 1.5% over the last month. So you should see mortgage rates drop roughly the same amount by maybe the end of this week? Mine is 3.75%, so I need to get to around 2.5-75% to save $200/month to offset the refinance fees in less than a year (my personal bar for refinancing). There are websites that let you do mortgage estimates. If you go to those, plug-in your loan size and theoretical interest rates, you should be able to pretty easily compare that to what you’re paying today and determine if/when it is worth it.

Also, you can roll the fees back into the loan and refinance with nothing out of pocket. Refinancing is basically free money in your pocket every month.

Since the Fed has gone to 0%, over the next months is likely to be the lowest possible interest rates for mortgages we will ever see in a long long time.

Awesome, I too have a 3.75% and was looking to shave off a few hundred a month.

 

[Deleted member 2897]

Goldman Sachs is forecasting -5% GDP in Q2. Not sure if I think that is a fair estimate or not. Large swaths of our economy are shut down. However, think about what people spend a lot of money on - rent/mortgages, groceries, healthcare, utilities (gas/power/cable/internet/cell phone) - all of those will stand firm, if not increase.

 

[Techster]

Well, like Techster said, stop loss is the key.

Not all trading platforms offer it, and some only offer a standard stop loss, not a trailing stop loss You have to be able to use APIs, which I didn't know about myself until one of my computer whiz friends showed me. APIs are a game changer in investing. Now I see why all the big firms are paying quants massive amounts of money directly out of school. (BTW, GT has a really good Quant Program)

 

[kg01]

 

[MountainBuzzMan]

I have been in an all cash position for a while. I am trying to decide do I want to purchase for a bounce and sell or purchase on value. I am wondering if Boeing could be a long term value. Where will they be 5 years from now? I have made a lot of money on Ford in the past, they have a very predictable swing. I am thinking about going in around mid $4 if it hits that. It will most likely hit at least $10 in the next 5 years. Their dividend will probably be cut, but then come back again to add to the overall 5 year gain.

Anyone else have anything especially hammered but should be good 5 years from now?

 

[bobongo]

I have been in an all cash position for a while. I am trying to decide do I want to purchase for a bounce and sell or purchase on value. I am wondering if Boeing could be a long term value. Where will they be 5 years from now? I have made a lot of money on Ford in the past, they have a very predictable swing. I am thinking about going in around mid $4 if it hits that. It will most likely hit at least $10 in the next 5 years. Their dividend will probably be cut, but then come back again to add to the overall 5 year gain.

Anyone else have anything especially hammered but should be good 5 years from now?

Airlines, Cruise Lines. I think Airlines are generally down by about half, and cruise lines are down more than that. Airlines are probably safer, though. People's attitudes toward cruises might be a bit sour for a while after all this. But I'd wait a while for more downside. Just my guess...

 

[LibertyTurns]

On the mortgage rate conversation I was .25% away from locking in a 15yr from 28yrs left on a 30.

In the last week mortgage rates have gone up .75% and now sitting at 3% for a jumbo 15yr. Need rates to drop 1% or so down to near 2% before I will move. Gimme 2.125% and I’ll call it even. If we can just temporarily wreck the economy just a bit more! Please.

 

[Techster]

On the mortgage rate conversation I was .25% away from locking in a 15yr from 28yrs left on a 30.

In the last week mortgage rates have gone up .75% and now sitting at 3% for a jumbo 15yr. Need rates to drop 1% or so down to near 2% before I will move. Gimme 2.125% and I’ll call it even. If we can just temporarily wreck the economy just a bit more! Please.

Selfishly, I've been waiting on the same thing for refi purposes.

 

[MountainBuzzMan]

Airlines, Cruise Lines. I think Airlines are generally down by about half, and cruise lines are down more than that. Airlines are probably safer, though. People's attitudes toward cruises might be a bit sour for a while after all this. But I'd wait a while for more downside. Just my guess...

Which airline do you think is the healthiest? Delta? South West? would bounce back the strongest.

 

[CuseJacket]

Which airline do you think is the healthiest? Delta? South West? would bounce back the strongest.

#404theDelta

(no clue, but my bias says I'm right)

 

[Deleted member 2897]

Which airline do you think is the healthiest? Delta? South West? would bounce back the strongest.

Southwest Airlines / Delta
Net profit margins: 13% / 14%
Cash Flow: $4B / $9B
Cash: $4B / $3B
Debt: $4B / $14B

Delta has a higher debt load, but more than twice the free cash flow, and higher profit margins. I'd say whoever is most aggressive ramping their business down right now will be most able to bounce back strongest. But on the surface, Delta looks to be in a better position right now. The big difference is cash flow - but you have to be operating to get cash flow. So when operating, Delta is more healthy (IMHO).

 

[Techster]

Which airline do you think is the healthiest? Delta? South West? would bounce back the strongest.

My initial inclination is to check cash reserves vs debt obligations since all airlines will be operating at minimal capacity for the foreseeable future.

Stronger the cash/debt ratio is the one I would go with. Of course, there's other factors at play, but that would require more research than I'm willing to spend on it.

 

[bobongo]

Which airline do you think is the healthiest? Delta? South West? would bounce back the strongest.

Don't know about which one. But it would seem that airlines will take off big after all this is over, both figuratively and literally. Think of the pent-up demand for travel. People are going to want to get out of the house and go somewhere. Same with hotels, and most anything associated with trips/vacations. People have been deferring them because of the virus, and they're reminded that life is short...time to live a little. Well, some folks may be loath to spend too much right away because of the depletion of their resources due to the downturn, but down the road all that stuff is going to have a very big upside.

 

[CuseJacket]

Don't know about which one. But it would seem that airlines will take off big after all this is over, both figuratively and literally. Think of the pent-up demand for travel. People are going to want to get out of the house and go somewhere. Same with hotels, and most anything associated with trips/vacations. People have been deferring them because of the virus, and they're reminded that life is short...time to live a little. Well, some folks may be loath to spend too much right away because of the depletion of their resources due to the downturn, but down the road all that stuff is going to have a very big upside.

I like this concept.

Conversely, how long until the psychological damage is unwound i.e., Coronavirus ain't disappearing from the globe any time soon. Even if travel bans and quarantines are lifted in 1-2 months (whether or not that's likely), how many people are going to be jumping on a plane immediately?

There'll definitely be a surge once good news comes. I'm not sure it matters which airline stock one chooses as the difference in controllable performance is minuscule relative to the broader economic trend that hurts all/helps all.

 

[CuseJacket]

Reuters: U.S. airlines urgently need $50 billion in grants, loans - letter

WASHINGTON, March 16 (Reuters) - A group representing major U.S. airlines said the industry needs $50 billion in grants and loans to survive the dramatic falloff in travel demand from the coronavirus outbreak.

In a letter made public on Monday, Airlines for America said members need $25 billion in grants and $25 billion in loans, while cargo carriers need $4 billion in grants and $4 billion in loans.

The group warned that major passenger carriers could run out of money by the end of the year or sooner, and that credit card companies could begin withhold cash from sales. They are also seeking significant tax relief. The letter added that "a 30-day domestic travel ban" could add to another $7 billion to $10 billion in lost revenue. (Reporting by David Shepardson; Editing by Richard Chang)

 

[mts315]

Stock tip of the day...LYV

Live Nation Entertainment

 

[bobongo]

Reuters: U.S. airlines urgently need $50 billion in grants, loans - letter

Now that you mention it, that's another thing airline stocks will have going for them - government bailouts.

 

[Techster]

Now that you mention it, that's another thing airline stocks will have going for them - government bailouts.

Government backed stop loss!!!