The Investment Thread

[superfly]

I started dabbling in a couple things today, as I think there was capitulation going on. Preferred stocks (much safer dividends than common shares) were outright being blown out the door, and things like Square rallied 22% off an incredible dump.

 

Not saying we’re out of the woods and we may retest lows again, not sure some of these stocks will see the same lows though.

 

Bought a few as speculative:

 

MSB a little under $10 (iron ore trust in northern MN, no debt and the only thing that it does is distribute royalty payments)

 

NYMTN around $7. preferred stock in a mortgage reit. If they survive it’ll be a 27-30% annual dividend at my purchase price.

 

Eying McDonalds, Delta, and AT&T for the long haul. MCD is getting obscene and Buffett has a large position in DAL already. I think he makes a move on them.

[Samurai Bucky]

Why didn't I buy APRN a week ago?

[superfly]

I started dabbling in a couple things today, as I think there was capitulation going on. Preferred stocks (much safer dividends than common shares) were outright being blown out the door, and things like Square rallied 22% off an incredible dump.

 

Not saying we’re out of the woods and we may retest lows again, not sure some of these stocks will see the same lows though.

 

Bought a few as speculative:

 

MSB a little under $10 (iron ore trust in northern MN, no debt and the only thing that it does is distribute royalty payments)

 

NYMTN around $7. preferred stock in a mortgage reit. If they survive it’ll be a 27-30% annual dividend at my purchase price.

 

Eying McDonalds, Delta, and AT&T for the long haul. MCD is getting obscene and Buffett has a large position in DAL already. I think he makes a move on them.

 

Well didn’t expect that so fast Lol. Took some NYMTN off at 14 and riding free from here on in. Crazy moves.

[GAME05]

A co-worker keeps talking about Carnival. Usually hovers around $50 and has gotten as low as $7. Been bouncing around +/- $4 the past week or so, so I'd guess a lot of folks are using it as a quick buy/sell stock. He's also looking into the company's suppliers, which almost certainly would have Carnival as their biggest client.

[nodakfan17]

Should I receive any stimulus money, I plan on spending a portion at a local coin shop. Silver is attractively priced and it would help keep those dollars flowing in the community.

[DHonks]

Preferred stocks (much safer dividends than common shares)

 

Why would preferred stocks have safer dividends? They are non-voting shares. Do companies ever pay dividends to preferred shares but not common? The difference is that if a company liquidates, you'd get a portion of the leftovers (although less than the value of your investment)

[DHonks]

Thinking that in the next week or so it should be time to return my 403(b) and Health Savings Account investments to index and mutual funds. I moved them to MM/bond funds back in late February when the market was getting volatile. I don't think the market will be ready to go up much until May. This earnings season could be brutal, but I hope that analysts and institutional investors don't overreact, as much of the poor earnings is already baked into the stock prices.

[nate82]

Preferred stocks (much safer dividends than common shares)

 

Why would preferred stocks have safer dividends? They are non-voting shares. Do companies ever pay dividends to preferred shares but not common? The difference is that if a company liquidates, you'd get a portion of the leftovers (although less than the value of your investment)

 

Preferred gets paid before common and preferred usually has a fixed dividend and is usually higher a lot higher than common stock.

 

Some other differences below.

 

 

A company must pay out dividends to preferred shareholders before common shareholders receive any dividends.

If a company fails and its assets get distributed to investors, preferred shareholders must receive a fixed amount of money before common shareholders can get any of their investment back.

[brewcrewdue80]

Thinking that in the next week or so it should be time to return my 403(b) and Health Savings Account investments to index and mutual funds. I moved them to MM/bond funds back in late February when the market was getting volatile. I don't think the market will be ready to go up much until May. This earnings season could be brutal, but I hope that analysts and institutional investors don't overreact, as much of the poor earnings is already baked into the stock prices.

 

Thing is I think markets historically endure a lull late May til maybe October Maybe its late August. Obviously we're in abnormal times.

 

Im just leery on the markets being propped up by the fed, Care plan, Trump's continued push to keep the economy in higher spirits. How bad will NY really be in the coming 2weeks now with aid from the Navel Boat? Market was also propped up when Biden had that big Super Tuesday. But he is clearly having speech issues[dementia?] and that may push Sanders back in to the Democrat candidate for Pres.

We've all just been pushed back til April 30th. What happens if/when that becomes May 14th? When do small businesses go bellyup? Unemployment just last week for WI was 115,000+ new applicants. Trump i just read said tonight it's going to be a painful 2weeks. Seems just still a bumpy volatile road we're on to me to keep on the sidelines.

[JackNicholson1974]

Bizarre day for sure. I was positive 16% today, but that is because for years I have been heavily invested in $ATHX a company that is close to breaking out with their product, one of the indications it treats is ARDS which is essentially one of the complications from COVID-19 that leads to death.

 

 

Im still long ATHX. My portfolio is up 186% since March 1. The CEO just did an interview on Fox News today. We will see double digits soon.

[owbc]

What isn't baked into the stock prices is the reverberations of this initial shock wave. When those dominoes start to fall it will get really, really ugly and the government will have already exhausted any means of stopping it. And if the economy does try and get back on track, other problems will emerge such as an oil supply crisis. It might take the entire decade to get out of this.

[brewcrewdue80]

What isn't baked into the stock prices is the reverberations of this initial shock wave. When those dominoes start to fall it will get really, really ugly and the government will have already exhausted any means of stopping it. And if the economy does try and get back on track, other problems will emerge such as an oil supply crisis. It might take the entire decade to get out of this.

 

Why would you think something like an oil supply crisis would happen? Trump filled the US oil reserves to the absolute tops couple weeks back or so when the oil prices were thought to be a great discount...one even better today.

 

Here's where the economy will take a freefall, supply and demand with ongoing employment. I seen a Meier post early today letting customers be aware prices for many goods will be noticeably higher as we stay shut down. The last example which I remember was given eggs will have higher pricing. The millions of people that are or will be collecting unemployment, a reduced income that will end up purchasing less than what you could purchase with that same amount a week ago. It'll be a rippling effect. Food or clothing. Answer Food. Effect-say good bye to Kohl's in WI. Effect-jobs Lost. Effect-Unemployment increase. Effect-Market worsens. You get where this is trending. It'll only get worse when the money people get during this isn't saved and used for bills and rent. When that happens the housing market will take a bigger hit when mortgages are falling behind. But we'll see, what does the gov't do to slow that scenario? How long do we choose flattening the curve vs an economy slowly in ruins?

[superfly]

Preferred stocks (much safer dividends than common shares)

 

Why would preferred stocks have safer dividends? They are non-voting shares. Do companies ever pay dividends to preferred shares but not common? The difference is that if a company liquidates, you'd get a portion of the leftovers (although less than the value of your investment)

 

Preferred gets paid before common and preferred usually has a fixed dividend and is usually higher a lot higher than common stock.

 

Some other differences below.

 

 

A company must pay out dividends to preferred shareholders before common shareholders receive any dividends.

If a company fails and its assets get distributed to investors, preferred shareholders must receive a fixed amount of money before common shareholders can get any of their investment back.

 

Preferred are also “creditors” although they rate behind bond holders and can still lose in a bankruptcy. PCG for instance, their preferreds never fell much below par value ($25) throughout the bankruptcy process while ordinary stock lost a ton of value and probably will never get much of it back.

[owbc]

What isn't baked into the stock prices is the reverberations of this initial shock wave. When those dominoes start to fall it will get really, really ugly and the government will have already exhausted any means of stopping it. And if the economy does try and get back on track, other problems will emerge such as an oil supply crisis. It might take the entire decade to get out of this.

 

Why would you think something like an oil supply crisis would happen? Trump filled the US oil reserves to the absolute tops couple weeks back or so when the oil prices were thought to be a great discount...one even better today.

 

Here's where the economy will take a freefall, supply and demand with ongoing employment. I seen a Meier post early today letting customers be aware prices for many goods will be noticeably higher as we stay shut down. The last example which I remember was given eggs will have higher pricing. The millions of people that are or will be collecting unemployment, a reduced income that will end up purchasing less than what you could purchase with that same amount a week ago. It'll be a rippling effect. Food or clothing. Answer Food. Effect-say good bye to Kohl's in WI. Effect-jobs Lost. Effect-Unemployment increase. Effect-Market worsens. You get where this is trending. It'll only get worse when the money people get during this isn't saved and used for bills and rent. When that happens the housing market will take a bigger hit when mortgages are falling behind. But we'll see, what does the gov't do to slow that scenario? How long do we choose flattening the curve vs an economy slowly in ruins?

 

The oil industry is about to crash. There's nowhere to store what's coming out of the ground. You can't just turn off a well and turn it back on again. Companies will fail and the drilling capacity will plunge. When demand eventually increases prices will skyrocket.

[Fear The Chorizo]

The market overall has an awful lot of stress trying to drag it down further - uncertainty breeds panic and unfortunately the month of April looks like nothing but uncertainty from a business standpoint right now. Last week's rally sure looks like one of those dead cat bounces temporarily propping stocks up by Washington printing $, but my gut tells me it's going to drop further back to reach lows from a couple weeks ago and likely fall further down to find a true bottom. 6.6 million+ new unemployment claims over the last week reinforces that, unfortunately.

 

The rebound isn't going to be instant, either. The only way out of this economically without facing crippling permanent job losses and business closures is to take the next couple of weeks to develop a risk-based set of criteria that local communities can use to assess how quickly they can reopen business. That includes expanded testing programs and continued hot spot area management. The country is too large to continue with a one size fits all approach indefinitely until New York is able to reopen, for example. Hot spots will undoubtedly pop up here and there in other parts of the country, which will need to be managed as best they can - but maintaining this current strategy across the country is going to lead to much larger longterm financial and health problems than the risk this virus presents to the population.

 

I'm not saying to greenlight MLB Opening Day for May 1 and start packing stadiums/conference centers/concert halls right away - but there's got to be an end to this current wet blanket approach to manage social interactions by restricting businesses being open. Give people some benefit of the doubt for making good decisions in the workplace and out in public in general - after all, the people that are fools about this have continued to act as fools and make bad decisions even during the past few months.

[owbc]

Washington and CA governors Inslee and Newsom are the ones who have the biggest say over how we're going to come out of this since those are the first two states to have successfully slowed this thing down. It's a tricky proposition because everyone is desperate to go do stuff. I don't know a single person in my social circles in Seattle who got a confirmed case of coronavirus (although likely some were asymptomatic and others thought they might have had it in February). So it will just spread like wildfire again if they open stuff up too soon.

 

You have to start by reopening parks and outdoor spaces, maybe open some restaurants for outdoor seating while keeping people 6 ft apart at tables. And they really need to open nonessential businesses with the same social distancing restrictions that grocery stores have. Do that around mid-April and wait another month until mid-May to make sure the case count doesn't start going up too much again. And anyone who comes through the airport will have to quarantine for 2 weeks.

 

For opening larger gatherings like weddings, etc, they are going to have to be taking people's temperature and doing randomize testing to isolate the positives. There's no way around that.

[DHonks]

What isn't baked into the stock prices is the reverberations of this initial shock wave. When those dominoes start to fall it will get really, really ugly and the government will have already exhausted any means of stopping it. And if the economy does try and get back on track, other problems will emerge such as an oil supply crisis. It might take the entire decade to get out of this.

 

Why would you think something like an oil supply crisis would happen? Trump filled the US oil reserves to the absolute tops couple weeks back or so when the oil prices were thought to be a great discount...one even better today.

 

Here's where the economy will take a freefall, supply and demand with ongoing employment. I seen a Meier post early today letting customers be aware prices for many goods will be noticeably higher as we stay shut down. The last example which I remember was given eggs will have higher pricing. The millions of people that are or will be collecting unemployment, a reduced income that will end up purchasing less than what you could purchase with that same amount a week ago. It'll be a rippling effect. Food or clothing. Answer Food. Effect-say good bye to Kohl's in WI. Effect-jobs Lost. Effect-Unemployment increase. Effect-Market worsens. You get where this is trending. It'll only get worse when the money people get during this isn't saved and used for bills and rent. When that happens the housing market will take a bigger hit when mortgages are falling behind. But we'll see, what does the gov't do to slow that scenario? How long do we choose flattening the curve vs an economy slowly in ruins?

 

The oil industry is about to crash. There's nowhere to store what's coming out of the ground. You can't just turn off a well and turn it back on again. Companies will fail and the drilling capacity will plunge. When demand eventually increases prices will skyrocket.

 

 

I've been buying Energy companies on discount in the last two years, accelerating in the last 45 days. Most larger oil and gas companies are fairly well positioned to be around in the post-oil world. This oil surplus isn't new. Before COVID-19 we were already consuming less oil than a decade ago.

[LouisEly]

The oil industry is about to crash. There's nowhere to store what's coming out of the ground. You can't just turn off a well and turn it back on again. Companies will fail and the drilling capacity will plunge. When demand eventually increases prices will skyrocket.

They absolutely can cut production. They took hundreds of oil rigs off-line in 2015/2016 the last time oil crashed. There are 200 fewer functioning oil rigs in the US than a year ago. In a two-year time span they went from 1600 rigs in late 2014 to 318 in May 2016.

 

https://ycharts.com/indicators/us_oil_rotary_rigs

[nate82]

Russia is just trying to kill off the US oil industry mostly the offshore and fracking industry in the US, but like a bear it will go into hibernation and will be back once the price of oil goes back up.

[RWeeksFan23]

What isn't baked into the stock prices is the reverberations of this initial shock wave. When those dominoes start to fall it will get really, really ugly and the government will have already exhausted any means of stopping it. And if the economy does try and get back on track, other problems will emerge such as an oil supply crisis. It might take the entire decade to get out of this.

An entire decade? That's a little strong no?

[igor67]

I have no relevant insight into how long for the market, but I did see a prominent Libertarian oriented blogger suggest that he was significantly rethinking the benefits of globalization as the hyper market specialization has left everyone vulnerable to huge disruptions in supply chains. It's undoubtedly influenced by his deep reading of history and understanding that prior plagues have wreaked havoc on many an empire and helped to stimulate significant upheaval.

[RWeeksFan23]

What isn't baked into the stock prices is the reverberations of this initial shock wave. When those dominoes start to fall it will get really, really ugly and the government will have already exhausted any means of stopping it. And if the economy does try and get back on track, other problems will emerge such as an oil supply crisis. It might take the entire decade to get out of this.

?

[owbc]

An entire decade? That's a little strong no?

 

Just wait for the effects of this to cascade through the economy. Currently everything is being held together by short-term fixes and the assumption that things can return to normal quickly. Air travel is down 96%. How long is it going to be before travel even gets back to 50% of normal? They just announced a record drop in retail. 31% of Americans didn't pay rent at the start of April...how many will be able to afford rent in May? June? What will landlords do without rental income?

 

Virtually everyone is preparing for massive budget cuts. This is happening at my university, it is happening behind the scenes at every corporation in America. Most of us lucky enough to be employed are going to see pay cuts at some point later in 2020 or 2021. Which will then further ripple through retail, travel, etc.

[thebruce44]

The S&P 500 crashed, what, 30%? The question is if that priced in all the damage to come. I'd say it really happens how long this lasts. I think that drop priced in a significant shelter in place order. If those restrictions are eased and another wave of this hits, I think there is going to be another drop.

[Fear The Chorizo]

Virtually everyone is preparing for massive budget cuts. This is happening at my university, it is happening behind the scenes at every corporation in America.

 

That's going to be the driver that opens everything back up - when entire hospital systems are on the verge of collapse due to an economic shutdown originally enacted as a way to try and protect hospital systems and public health, the writing is on the wall that it isn't sustainable no matter what the health risk is. Nonexistent tax revenues emptying coffers of state and local units of government, regardless of regional political leaning, will drive economic reopening, and I think it will happen at a faster pace than even currently rosy economic predictions lay out. I think we'll avoid a depression but have a bad recession, and the rebound will be hampered by dealing with this disease and prolonged public fears of returning to some societal norms - but that will be far better than stretching shutdowns into summer and leaving the economy to start so far down that it leaves scores more people in generational poverty.

 

Doom and gloom longterm economic forecasts are being put together much the same way initial Covid-19 modeling was done forecasting millions of dead - depicting worse than worst case scenarios and assuming no societal/economic changes would be made during an extended period of time. Those models will be shown to the same government officials who were largely responsible for driving the economic shutdown along with what projected budget shortfalls will be if these actions remain in effect, and there will be a sobering realization that this just can't continue.

 

As for public sentiment, look what is happening in Michigan today - despite it being a midwest state that is pretty hardhit by Covid-19, especially in the Detroit area...a rapidly growing contingent of people have had enough and the fear of indefinite economic collapse on a nationwide scale outweighs the fear of a disease - no matter how infectious or potentially harmful it is to the elderly and medically vulnerable. The market is still propped up because corporations "got theirs" in terms of recent stimulus/printed assistance dollars - small businesses and hourly workers are totally skewered by the shutdown.