Investing and finance thread

[MightyGiants]

This thread is for discussing investing, the market, crypto, and other financial topics.   Please do not post political commentary or political talking points



I am going to start by sharing one of my quirks as an investor.  I love stocks or stock funds that pay dividends.   I know you can make more (and it's more efficient tax-wise) to invest in growth stocks, but I like the idea of dividends.   As long as they are stable, you can ride out the bear markets while still getting paid, versus only making money when you sell.

[Bob In PA]

This thread is for discussing investing, the market, crypto, and other financial topics.   Please do not post political commentary or political talking points

I am going to start by sharing one of my quirks as an investor.  I love stocks or stock funds that pay dividends.   I know you can make more (and it's more efficient tax-wise) to invest in growth stocks, but I like the idea of dividends.   As long as they are stable, you can ride out the bear markets while still getting paid, versus only making money when you sell.

Rich: Nice idea for a topic.  IMO there is nothing quirky about your preference, regardless of age. 

Key points: it's more about assuming no more risk than you're comfortable with and maintaining as much diversification as you see fit.  And there is CLEARLY nothing wrong with patience (which you have).

For anyone interested, especially if you are interested in reviewing basic points, you can get Charles Payne's book "Unstoppable Prosperity" essentially for free.  You pay less than $10 shipping (I think it's $7.95).

You get his book, a DVD, and some other stuff for free, no strings attached.  Well worth reading for the average person.  I've been investing for 54 years and consider myself average in knowledge and results. 

The link is below.  There is no "pestering" or any other hidden cost.  They hope you'll sign up for seminars, etc., but it is definitely not a requirement for getting the free materials.  It's just their cost of doing business.

https://www.googleadservices.com/pagead/aclk?sa=L&ai=DChcSEwjdguiZuf_1AhWw_-MHHZshCmEYABAAGgJ5bQ&ohost=www.google.com&cid=CAASE-RoUQzjYtjLTDgBiqMpf9CxMU4&sig=AOD64_3uvQgutc35COQvNFUs42LqkNcAaw&q&adurl&ved=2ahUKEwjL1d-Zuf_1AhVtjokEHU-kAxYQ0Qx6BAgDEAE

Bob

[MightyGiants]

Does anyone listen to investing podcasts?  I do, including Motley Fool Money and Morningstar along with a Zack's podcast and occasionally the Disciplined investor.

Does anyone else listen to podcasts?  If so, which ones?

[MightyGiants]

I am planning on buying on the dip.  Any sector or stock you think I should look into?

[Jolly Blue Giant]

I am planning on buying on the dip.  Any sector or stock you think I should look into?

Really, really volatile right now. There's a huge dip right now, but it could get even worse thanks to Putin's idiocy. And of course, the stock market overreacts whenever any crisis comes along. It has the emotions of an hysterical hormonal teenager.

Unfortunately, right now no matter what anyone does, they are losing money. If your money is in cash, it's getting eroded every single day by inflation. Bond rates are so minuscule that investing there just means you don't lose quite as much money from inflation as you do holding it in cash. The market and precious metals are all over the place and not in a good place. All in all, because of inflation and Putin making trouble, there are few options for growing your nest egg.

The tech correction is a killer right now. Metaverse is getting killed and it might not get better as people are abandoning Facebook like rats on a sinking ship and nearly every country is looking to regulate it with tough laws. There might be some opportunity in the energy sector, especially oil, but tread carefully because that's volatile too. I am staying out of it.

As far as advice goes, I don't like to give advice because if it turns out badly, I have an ex-friend who will never forgive me if all goes to hell. And in the stock market, that can happen. Best bet IMHO, no matter what the market does, think long term.

Here's a couple of links to articles by people far smarter than me:

https://www.businessinsider.com/how-to-invest-russia-ukraine-crisis-stock-market-strategy-morningstar-2022-2

https://www.bloomberg.com/news/articles/2022-02-22/will-putin-rhetoric-and-russian-troops-in-ukraine-affect-stocks-and-markets

For tracking individual stocks, this site is pretty good. You can look into any stock to see how it has performed in 1-day, 5-days, 30-days, 1-year, etc as well as see every article on the internet that talks about that stock. It also has daily news articles about what the market is doing and analysts discussing what might happen, etc. https://stockanalysis.com/

[MightyGiants]

Ric,

For the record, I only seek investing ideas (that I pursue with my own research) versus advice where I would invest blindly

[DaveBrown74]

FWIW I have begun to dip my toes into some of the battered "tech" names. Uber and Netflix are ones I have bought recently around the current levels. My thinking is that while the selloffs could continue in the near term, both have had very big corrections (50-ish percent), and both are companies that I don't think are going anywhere. Both are smart, cutting edge companies that are pioneer brand names in their industries. Not only are they not going anywhere, but I don't think these are companies that will just sit on their laurels and fail to innovate/adapt. On the contrary, I think that is what these two (and other) companies are all about. Obviously, none of what I have said means that the stock price cannot continue to go lower from where it is today -- in fact I think it likely may -- but I do think these are both sound very 3-5 year investments (or longer). I think it is reasonable to speculate that the majority of the "pain" in these moves has played out.

Tech was extremely frothy heading into early-mid Q4 of last year. You had the covid stimulus and the QE/zero rate environment leading people to really chasing moves higher to silly levels in a lot of these stocks. However since then, the corrections have been huge. Moreover the market has become much more realistic and accepting about the reality of fed hikes and the removal of QE. So while again I am not saying these stocks can't/don't have further near term downside, when something that I regard as an excellent long term company corrects 50%, it begins to pique my interest. Should the ongoing downward moves continue, I will likely look to add further in these and other stocks.

While I am certainly long stocks overall, because the environment is skittish, I am continuing to hold a reasonable amount of cash, although my intention is to continue deploying it in certain areas when opportunities present themselves.

[MightyGiants]

FWIW I have begun to dip my toes into some of the battered "tech" names. Uber and Netflix are ones I have bought recently around the current levels. My thinking is that while the selloffs could continue in the near term, both have had very big corrections (50-ish percent), and both are companies that I don't think are going anywhere. Both are smart, cutting edge companies that are pioneer brand names in their industries. Not only are they not going anywhere, but I don't think these are companies that will just sit on their laurels and fail to innovate/adapt. On the contrary, I think that is what these two (and other) companies are all about. Obviously, none of what I have said means that the stock price cannot continue to go lower from where it is today -- in fact I think it likely may -- but I do think these are both sound very 3-5 year investments (or longer). I think it is reasonable to speculate that the majority of the "pain" in these moves has played out.

Tech was extremely frothy heading into early-mid Q4 of last year. You had the covid stimulus and the QE/zero rate environment leading people to really chasing moves higher to silly levels in a lot of these stocks. However since then, the corrections have been huge. Moreover the market has become much more realistic and accepting about the reality of fed hikes and the removal of QE. So while again I am not saying these stocks can't/don't have further near term downside, when something that I regard as an excellent long term company corrects 50%, it begins to pique my interest. Should the ongoing downward moves continue, I will likely look to add further in these and other stocks.

While I am certainly long stocks overall, because the environment is skittish, I am continuing to hold a reasonable amount of cash, although my intention is to continue deploying it in certain areas when opportunities present themselves.

I am wondering about Netflix in the long run.  I mean there was a time that Netflix was the unquestioned king of streaming.  Now you have Disney and HBO max nipping at their heels.   Plus you have other entries like Paramount Plus, Apple Plus, and Peacock to go along with old favorites like Hula

The more players, the more demand there will be in terms of the the talent used to create content which will drive up prices and make it harder to produce high end content. 

[DaveBrown74]

I am wondering about Netflix in the long run.  I mean there was a time that Netflix was the unquestioned king of streaming.  Now you have Disney and HBO max nipping at their heels.   Plus you have other entries like Paramount Plus, Apple Plus, and Peacock to go along with old favorites like Hula

The more players, the more demand there will be in terms of the the talent used to create content which will drive up prices and make it harder to produce high end content.

I feel like HBO Max is a slightly different model. A lot of their content is driven by their flagship channel, which is not what Netflix is based off of as their brand is pure streaming. We have HBO Max, but that's in part because we like many HBO shows. Since they also sometimes do HBO max exclusives, they got us roped in. However this doesn't make me want Netflix any less. I appreciate that there are others like Amazon Prime and the ones you mentioned, and that is a totally valid point and I have considered it as well, but I still think Netflix is the pioneer name, and I still believe they are innovative and cutting edge.

I get your overall point. We have moved from a situation where one player was completely dominant to there being many players. I think the big loser in this though is the past means of entertainment like cable TV and brick and mortar movie theaters. As the concept of streaming is still relatively young, I don't think the leading name in it is on the brink of extinction or even significant decline because other players have entered the arena. I still think they will remain a powerhouse myself.

I feel similarly about Uber by the way. 7-9 years ago there were not really other players in that arena. I guess there may have been, but nobody really knew who they were. Not you have tons of others like Lyft, Via, Curb, Gett, etc. I think when you're the first monster in a new space though you have a real advantage. You can lose that advantage by slacking off and resting on your laurels, but if you remain cutting edge (which Uber definitely is), people will continue to respect you as the preeminent, most trusted force in that market and the competition can only take away so much from you. I think Netflix is similar in this respect, personally. I'm happy to nibble on these companies after a roughly 50% decline.

[MightyGiants]

I am truly baffled by the stock market for the last two days.  I was planning on buying on the dip, but for some reason beyond my comprehension, the market has been rising the last two days.  This is why I invest in stocks rather than trade stocks.  For the life of me, I can't understand how markets react.  I wonder if computerized trading has something to do with the unpredictability

[Bob In PA]

I am truly baffled by the stock market for the last two days.  I was planning on buying on the dip, but for some reason beyond my comprehension, the market has been rising the last two days.  This is why I invest in stocks rather than trade stocks.  For the life of me, I can't understand how markets react.  I wonder if computerized trading has something to do with the unpredictability

Rich: I saw what you saw yesterday. IMO you will get another chance.  Generally, trying to find the exact bottom is a losing proposition.  IMO it will go back down once more to again test the low point of the recent dip.

In view of your stated investment style, the following will be of more relevance to you: I do think there are super values to be had, but you'll probably be safer to continue to wait a short while longer.

IMO, we're still not "out-of-the-woods." I see you as a relatively long-term value-type investor, and IMO therefore you should be slow to act unless and until you're SURE we're not at the end of this bull market.

Bob

[MightyGiants]

Rich: I saw what you saw yesterday. IMO you will get another chance.  Generally, trying to find the exact bottom is a losing proposition.  IMO it will go back down once more to again test the low point of the recent dip.

In view of your stated investment style, the following will be of more relevance to you: I do think there are super values to be had, but you'll probably be safer to continue to wait a short while longer.

IMO, we're still not "out-of-the-woods." I see you as a relatively long-term value-type investor, and IMO therefore you should be slow to act unless and until you're SURE we're not at the end of this bull market.

Bob

I appreciate you can never time a dip or peak, but I really thought there was no rush, that things would be down at least for a week or two (perhaps more depending on the world event).   

[Bob In PA]

I appreciate you can never time a dip or peak, but I really thought there was no rush, that things would be down at least for a week or two (perhaps more depending out world event).

Rich: Me too.  IMO the quick strong rebound shows the presence of value and a seriously oversold condition, BUT it also means lots folks agree with us (I'm always wary of moving with the crowd).  Bob

[MightyGiants]

On a slightly different note.  Crypto currency got hammered during this (came back much like stocks though).  Prior to this week, some people were pushing the idea that like gold, Crypto was a safe harbor for your money during troubled times.  Boy was that claim proven to be wrong.

[DaveBrown74]

On a slightly different note.  Crypto currency got hammered during this (came back much like stocks though).  Prior to this week, some people were pushing the idea that like gold, Crypto was a safe harbor for your money during troubled times.  Boy was that claim proven to be wrong.

It sure has. Crypto has been buoyed by zero rates/QE/stimulus like every other risk asset. With the fed now finally beginning to let the air out of the balloon, crypto has taken a dive over the past few months.

What's kind of funny/ironic is that crypto was supposed to be this disruptor, alt asset for those who are opposed to excessive Fed money printing, artificially low rates, and heavy government stimulus spending, etc. And yet the surge in crypto in 2021 was due pretty much entirely to those exact forces. And now that those forces are being reduced, and the Fed is about to begin normalizing and is almost done tapering QE, crypto is weaker. So this whole premise that it's this rebellious asset is kind of false in a way. It benefited tremendously from the same market forces that have benefited stocks, real estate, and other assets prices.