General Investing and Economics Discussion - No Politics

[LibertyTurns]

Looks like I might have jumped in to soon. I'll let everyone know in a year or so how it worked out.

It’s very tough to catch a falling knife, not impossible, just very tough. Hope it works out ok for you.

https://www.investopedia.com/terms/f/fallingknife.asp

 

[Peacone36]

I got into Hilton with a small investment at $6.55 this week. Even if it gets to half of what it was ($35 I believe) I have still almost tripled my money. I am thinking about jumping into Norwegian as well. A buddy of mine went into Six Flags.

Anyone else making any of these plays?

 

[Deleted member 2897]

I got into Hilton with a small investment at $6.55 this week. Even if it gets to half of what it was ($35 I believe) I have still almost tripled my money. I am thinking about jumping into Norwegian as well. A buddy of mine went into Six Flags.

Anyone else making any of these plays?

Well the best time to buy low is if you can find a 1 time negative event unrelated to the core business - like a natural disaster. Companies with high fixed costs are certainly in a pickle - kind of like the airlines but without the bailout. If they can survive the now, they certainly should have a normal business a year from now. Good luck!

 

[Peacone36]

Well the best time to buy low is if you can find a 1 time negative event unrelated to the core business - like a natural disaster. Companies with high fixed costs are certainly in a pickle - kind of like the airlines but without the bailout. If they can survive the now, they certainly should have a normal business a year from now. Good luck!

I just want to make enough to build the dream patio (fire pit, hot tub, arbor with string lights, bad *** grill) next summer!

 

[LibertyTurns]

I got into Hilton with a small investment at $6.55 this week. Even if it gets to half of what it was ($35 I believe) I have still almost tripled my money. I am thinking about jumping into Norwegian as well. A buddy of mine went into Six Flags.

Anyone else making any of these plays?

I’ll double down on my falling knife commentary. I’d recommend against.

Here’s the dilemma. You have to rationalize that Hilton will return to normal & the stock was not overpriced to begin with. For a return to normal the following has to happen:
a. Companies have $$ to afford expensive business travel
b. Companies permit business travel
c. Companies do not opt to use teleconferencing at a much higher rate than before
d. Conventions, sports and other lucrative type events return at previous levels
e. People are willing to congregate at these big events at levels approaching before
f. Consumers have disposable income to afford leisure travel
g. Loans taken out to build infrastructure, in this case more hotels and renovate other is restructured at more favorable rates
h. Many competitors fold leaving Hilton in a favorable position with respect to percentage of available rooms allowing them to not depress their rack rates
i. There is no coronavirus reattack.

I probably missed a few.

 

[Techster]

 

[Deleted member 2897]

The caveat of course is that nobody can predict the market. All the expectations of those sorts of curves are already factored into people’s actions. There’s no way to know if we get a vaccine in 2 months and this all completely goes away, or if we remain mired in it for several more months. Which could then lead to all kinds of financial ruin.

 

[mts315]

I got into Hilton with a small investment at $6.55 this week. Even if it gets to half of what it was ($35 I believe) I have still almost tripled my money. I am thinking about jumping into Norwegian as well. A buddy of mine went into Six Flags.

Anyone else making any of these plays?

I think Six Flags is a loser. They were struggling before the Coronavirus.

I am still waiting it out on Delta (DAL) and Jet Blue (JBLU). Will probably eventually jump in on one of the Cruise Lines (CCL or RCL).

The one other stock I am really tracking is Live Nation (LYV), Ticketmaster is a subsidiary. I am not sure at what point though people are going to want to congregate in large numbers again. At what point will we all feel comfortable going into a venue with 25k+ other people. I personally don't believe, if this thing last much longer, it will be within the next year. We may have sports again by the fall but I would be willing to bet it will be without fans in the stadium. Until a near 100% treatment is developed or a vaccine the risk is to great to board a cruise ship or go to a large event.

 

[LibertyTurns]

Still not a good look for the market. If you’re an active trader there’s money to be made, but if you cashed out like I did incrementally starting late Jan/early Feb I’d recommend being real judicious about how fast you dive back in. The market fundamentals are still perilously weak.

https://research.investors.com/markettrend.aspx

 

[MountainBuzzMan]

Still not a good look for the market. If you’re an active trader there’s money to be made, but if you cashed out like I did incrementally starting late Jan/early Feb I’d recommend being real judicious about how fast you dive back in. The market fundamentals are still perilously weak.

https://research.investors.com/markettrend.aspx

I agree. I did jump in on Ford and Boeing when I thought they were over sold. The bounce was to tempting to hold and I have sold again. Got a couple of years of returns in less than a week. I still think I can pick up Ford in the mid $3 and Boeing the mid $70's for a long term hold

 

[Deleted member 2897]

I don’t like to give investment advice, as I think it varies person to person. If you have money in the market you might need in the next few years, you might be judicious about that. If you have a long time frame, you probably don’t need to worry...but you have to be able to sleep at night too. This market still is the most disconnected from our economic conditions that I have ever seen. Last night on the news they said they couldn’t find a single small business that has gotten money yet. Not a single tax payer has gotten any. It’s an absolute disaster on the streets.

 

[Deleted member 2897]

Another 6.6m file for unemployment.
https://finance.yahoo.com/news/coro...initial-jobless-claims-april-3-163825214.html

That's somewhere around 17m in the last 3 weeks.

Given the workforce was somewhere around 165m, that's a 10% absolute value increase in unemployment, meaning we're real time running around 13% right now. Underemployment includes people that are technically not officially laid off, but have seen their hours reduced. There are a TON of those types of people. I'm guessing real time unemployment is around 15% as of today and real time und the underemployment (U-6) number to be around 25%-30%.

By comparison for that 17m number, Obama is generally credited with having created 12m jobs over his 8 years. Reagan is generally credited with having created 20m jobs over his 8 years.

This is a massive number. Its an undoing of over a decade of economic growth.

 

[Deleted member 2897]

https://finance.yahoo.com/news/fede...r-households-local-governments-123445078.html

We really are turning this into a monopoly game. Corporate bonds, mortgages, car loans - now not only are banks going to make a margin on the sale, they are only on the hook for 5% of the loan and the federal government will take the rest. This is some real loony baloney ****.

Imagine being able to stop paying your mortgage, car payments, etc. All you have to do is negotiate with the bank to cover 5% of the loan value to keep them whole. They'll then kick it over to the federal government who will never kick you out of your house. They'll just write off the loan.

 

[Deleted member 2897]

Goldman Sachs estimates the federal government's deficit this year ending September 30th will be $3.6 Trillion.
https://www.wsj.com/articles/coronavirus-crisis-legacy-mountains-of-debt-11586447687

 

[Deleted member 2897]

Yet another new stimulus. $2.3T announced by the Fed, largely through vehicles like buying bonds offered by state and local governments, speculative corporate bonds, etc. This is really banana republic stuff now.

https://finance.yahoo.com/news/fed-seizing-control-entire-u-144633849.html

 

[LibertyTurns]

@mts315 You might want to jump in the back seat of this ambulance chaser’s car.

https://www.tenlaw.com/2020/04/luckin-shareholder-investigation/

 

[Deleted member 2897]

Federal Reserve's balance sheet is now over $6 Trillion. And obviously this is early days with everything they have going on.

https://www.reuters.com/article/us-...-swells-to-record-6-13-trillion-idUSKCN21R3FR

 

[CuseJacket]

 

[CuseJacket]

That last graphic is a segue to a series of questions I meant to post yesterday.

At what point do you all expect the market will/would capitulate? In other words, how long can the Fed and stimulus packages keep us afloat?

Is it possible for government to overcome or bridge the gap of a downturn, or do you see these actions as the few remaining bullets left in the chamber?

 

[684Bee]

That last graphic is a segue to a series of questions I meant to post yesterday.

At what point do you all expect the market will/would capitulate? In other words, how long can the Fed and stimulus packages keep us afloat?

Is it possible for government to overcome or bridge the gap of a downturn, or do you see these actions as the few remaining bullets left in the chamber?

This is such a unique situation we are in. The weakening of the economy and all the job losses was a very quick, purposeful thing. Businesses either voluntarily shut down or scaled way, or they were forced to, and it wasn't gradual. It was a very abrupt thing. The economy was doing good. Everyone I talked to (across different sectors) was having a good year so far. Now, how quickly will that come back? U-shaped or V-shaped recovery. If I had to guess, I'd say U-shaped is more likely, and a lot of it is due to what a big psychological hit we all just took. A lot of people will be fearful to venture back out to "normalcy".