Stocks and Trading Thread - Channeling your inner Mono

[alfred russel]

I'm mostly just poking fun at the hemming and hawing over buying after such a downspot in the market. You know everything's down 20-30% from the top, but are still hesitant? Even if it went down another 10% tomorrow, I'd consider the price good, long-term. 

Actual value has been destroyed.

The S&P 500 is a lot lower than it used to be, but it includes companies like Boeing, Airlines, hotel companies, Carnival Cruise Lines, retailers like Macy's, restaurant groups, oil companies...

Even for the companies not as directly harmed as those, their valuations must be different if we initially assumed a economy producing a 3.5% unemployment rate quickly transformed into an economy with double digit inflation.

Finally, the market value of the US stock market is really dominated by multinationals. Put aside that other countries have closed down much more than the US and the US stimulus plan hasn't been matched in comparable size in many other places. The dollar has strengthened significantly. This is a major blow to the earnings of multinationals, as the USD equivalent of their foreign earnings is now less.

[Habbaku]

I don't disagree with any of that. I am purely speaking from a long-term perspective here. I don't expect the market to suddenly start piling up double-digit growth because of all the dislocations and damage that's been done.

[DGuller]

My concern is that we don't actually have COVID-19 effect priced in.  The 20%-25% drop in the market prices could've come out on nowhere, even without the virus, as the widespread belief was that the market was a little too hot.  Then you have to factor in the already realized effects of COVID-19, and on top of that you have to factor the potential for secondary economic fallout if the ramp up to normal life is handled poorly, and numerous otherwise viable businesses go bust because the shock to the economy wasn't managed well.  With all those factors combined in mind, I'm not sure that a 25% drop is it.

[Habbaku]

Those are all very valid concerns. My personal view is that I'm willing to take the risk of another significant drop in the short-to-mid-term and count the 20-30% drop we have already as enough inducement to buy in further.

Timing the bottom is always going to be difficult in any time where so much is unknown and changes on a weekly basis, but everyone has to make their own call as to how long they think is acceptable before they commit anything significant beyond what they're (hopefully) already doing on a regular basis.

[Josquius]

So far I have bought Google, Skechers (Nike knock off manufacturer), and added to Canopy Growth (pot) and Tesla.

I would like to buy some Visa if I could figure out how to open a Roth on the suddenly very hinky Etrade platform.

How much does it cost you to buy stocks directly? (on top of the actual price of the stock or course)

[MadImmortalMan]

Used to be nine bucks a trade but now zero. Sixty five cents for options contracts.

https://www.tdameritrade.com/retail-en_us/resources/pdf/TDA4075.pdf

Almost all brokers offer a certain number of free trades for new accounts.

[crazy canuck]

My concern is that we don't actually have COVID-19 effect priced in.  The 20%-25% drop in the market prices could've come out on nowhere, even without the virus, as the widespread belief was that the market was a little too hot.  Then you have to factor in the already realized effects of COVID-19, and on top of that you have to factor the potential for secondary economic fallout if the ramp up to normal life is handled poorly, and numerous otherwise viable businesses go bust because the shock to the economy wasn't managed well.  With all those factors combined in mind, I'm not sure that a 25% drop is it.

If you are waiting to be sure that there will not be another drop then you probably have time lines that are too short to be thinking about equities in the first place, unless you are a day trader, in which case good luck.

[Caliga]

Used to be nine bucks a trade but now zero. Sixty five cents for options contracts.

https://www.tdameritrade.com/retail-en_us/resources/pdf/TDA4075.pdf

Almost all brokers offer a certain number of free trades for new accounts.

Yeah, I noticed when I bought DIS a few weeks back I wasn't charged commission (I have an Ameritrade account).  Didn't realize that they had waived commission.

[mongers]

I feel this virus will largely kill off market and economic optimism for sometime, which was after all significantly behind the ramp up in stock markets during Trumps first administration, despite his wide ranging incompetence.

[MadImmortalMan]

I noticed when I bought DIS a few weeks back

Stay away from the destroyers of Star Wars. 

[Caliga]

[alfred russel]

If you are waiting to be sure that there will not be another drop then you probably have time lines that are too short to be thinking about equities in the first place, unless you are a day trader, in which case good luck.

Theoretically you should be looking at buying stocks the same way as an interest in any other company. Ie, looking at the cash flow projections of the business and discounting them back to a present value at a risk adjusted rate - and then comparing that value to the price you are asked to pay.

Looking at the current asking price to buy in to a stock (or bundle of stocks/index) and judging that as too expensive is not indicative of being a day trader.

[DGuller]

My concern is that we don't actually have COVID-19 effect priced in.  The 20%-25% drop in the market prices could've come out on nowhere, even without the virus, as the widespread belief was that the market was a little too hot.  Then you have to factor in the already realized effects of COVID-19, and on top of that you have to factor the potential for secondary economic fallout if the ramp up to normal life is handled poorly, and numerous otherwise viable businesses go bust because the shock to the economy wasn't managed well.  With all those factors combined in mind, I'm not sure that a 25% drop is it.

If you are waiting to be sure that there will not be another drop then you probably have time lines that are too short to be thinking about equities in the first place, unless you are a day trader, in which case good luck.

Doesn't matter what your investment horizon is, buying something before it falls in price is a loss.  It's a loss whether you buy it for one week or for 500 years.

[crazy canuck]

I think misunderstood

[DGuller]

I think misunderstood

I think you need to find a place with a better reception.