School me on investing...

Got to love the USA, the only country in the world where you are in a Pandemic, 150,000 cases of Corona rising every minute. Ford who can't even build proper truck whose stock is coming off 4 dollars a share, now is in charge of making ventilators, stock 3.3 million claim unemployment last week, it will be more next week, but we are in the green??? Not sure to buy now, it should go down, but if the fed just throws stupid money at any point it should drop, might not drop back down to 18k or below??? In normal times should be around 15,000

 

Anything known is already built into the market price. All those negative headlines you are looking at are very predictable given what we knew a month or more ago. The stock market is a measure of the current AND risk-adjusted, discounted, expected future value of the market.

If you can predict something better than the market then you might gain an edge. If you can reliably and repeatedly do so then you can gain a short term opportunity. However, if you repeat that edge often enough the rest of the market will discover what you are doing and it will no longer provide that edge.

There's a saying..."Buy the rumor, sell the fact". Some investors use options in conjunction with earnings call dates to make money on this premise.

 

The answer to all of this is "it depends". Generally, yes we do mostly trust audited financial numbers reported in Annual Reports and other required reporting unless we have reason to not trust them. Yes, pension numbers are rolled up..but not to hard to reverse engineer.

However, tangible, objective, current accounting analysis is only a small portion of the analysis performed when valuing a stock. Mostly what is being evaluated are intangibles. The function of quantitative finance is turning as many of those intangibles into valuation factors and gaining a temporary edge on the market.

 

Ok, know the market was way overvalued coming to the drop, went into 18's bought some stuff, jumped up last week and sold it. I know the market doesn't make sense but how can it be going up with 2/3 of the Country shut down, a lot of the world shut down, most major company's closed and the US on basic quarantine for the next month ahead, not to mention, 1-3 getting back to normal?

 

Multiple reasons, just a few:

The biggest is many expect this situation to be very temporary. For instance, Goldman Sachs predicts -24% GDP in April-June and +12% in July-Sep. Add another 12% in Oct-Dec with massive government spending and many believe stocks are "on-sale" at today's prices. Market goes up.

With the large influx of USD money supply, inflationary pressures could occur. The market is 1 way to hedge against inflation. Cash devalues in an inflationary environment

The US stock market is still the world's safest and denominated in the world's reserve currency. Foreign portfolio investment may be increasing.

Many large investment funds with required equity holdings may have divested in advance of the meltdown. These funds need to get back to the required stock ratios. Similarly, they may be buying to cover portfolio risk of options or derivatives.

Or... it could be a Bull Trap or Dead-Cat bounce

 

Are any of you investing in oil? I have a decent position in XOM and CVX. I bought all of my CVX and about 1/2 of my XOM on March 20th so that is doing well. I also have a small position in the ETF USO (I bought it too early but I suspect it still was an okay move). Is USO a good way to bet on future oil price increases? Is there a better way? I don't believe $20 barrels of oil are here for long and I'd like to take advantage.

 

I like CVX near the bottom. Waited a day too long after they announced no decrease in dividends. But, I dont think Saudi Arabia or Russia have achieved their strategic goals so there should be opportunities for awhile.

 

bump.... found another $1000 to set on fire... while I'm still employed I say damn the torpedoes!!!

 

Yeah started to officially get back in today in general. Trying to decided between cvx or xom, have a feeling to buy soon, everything between the airlines, cruise ships, cars, life says the demand is going to tank but oil is weird. And guys are fighting, one good meeting changes things fast. And at 20 around a barrel, could go up 5 fast, could go down 5 fast, but its dirt cheap now

 

Don't have to decide, could buy both CVX and XOM.

 

Whew yall been busy with the posts. Let me catch up to yall then... lol Well today was a good day to buy if you are a long investor. I got some CCL for 8.67 today and went ahead and purchased some RCL as well. Both at good prices. I will buy more RCL if the price drops to $20 or less to lower my overall purchase price of RCL stocks. Picked up some MRO as well. MRO is a bit sketchy but took a chance. I got it for $3.13 which isn't bad if the company makes it to the other side after this pandemic. Tomorrow the focus will be on LDOS, SAIC, and DIS. DIS is holding pretty good, haven't dropped no where near March 23rd prices. I would love to buy it around $80 if I can. Watching...

 

I'm watching these also to include BP.

 

What I being doing is splitting it up, say 5 trades... If you are buying 100 shares of it, try to buy it in increments of 20 x 5. Maybe twice during the day if the price drops a lot and the other three purchases over the course of days, month, etc... That way if it drops lower you can pick up more shares which lowers your overall "total" cost of the shares. Once done buying, just calculate your average and that's the true price you paid for all shares.

 

I think it will go lower than today. I'm predicting this to be a bloody week for the stock market. The cruise lines took a major beating today and was a good time to buy.

 

couldn't help but to buy CCL today in the 8ts, bought it in the 10 and 13s 2 weeks ago sold it last week when it went up for no reason at 15 something. Kind of scared they might file bankruptcy, maybe, not so much????? But at this point want to wait a bit before real money get involved

 

CCL has diluted their equity and borrowed close to $6B. It's a gamble particularly because they are incorporated overseas and might not be considered a US problem.

On the plus side, even getting to 1/2 pre-slide makes for a nice return.

 

I've seen several people mention dollar cost averaging. If you have a lump sum to invest, DCA is a losing strategy. Multiple large simulations and historical back tests have seen this approach fall out of favor in quantitative finance.

It's a psychological strategy that may help you start or stay invested in falling or volatile markets. If so, great. Also, keep in mind your 401k is already doing this for you since contributions occur on a regular basis.

 

Was anyone smart enough to buy the cruise line stocks a couple weeks ago? I can't believe they are gonna do well in the long(ish) run, but they're inexplicably kicking ass right now.

 

I got in on the $10 range missed out when they were around $7 sadly
I'll probably buy more shortly

 

yes yes yes