Investing General Discussion

Creslin · Jun 4, 2022

Mist said:
lol at taking McKinsey's advice about anything but /shrug.

So much of what's going on is politically manufactured coming straight from bullshit companies like McKinsey.

Ya I meant it more as an example of even the idiots get that one thing right. All of their advice was either obvious or completely unusable. Literally had 20yr olds sitting there telling me if I got all our accounts to a 35% vs 25% GM we would be more profitable. Nothing about how to do it though. Then they declared a huge benefit from that advice to milk us for even more money.

I have worked with a few over the years. I found BCG to be the best and McKinsey the worst, the lead partner from them literally acted like Grima from Lotr just whispering lies about how great they were doing and how bad the company was run without them.

I still take it as a red flag in investing if any company has them in.

Sanrith Descartes · Jun 5, 2022

Why things are a little different this time...

Furious · Jun 5, 2022

So much money to be made in Canadian oil right now.

Some small caps trading at 1.8x EV/CF and a 35 percent free cash flow yield. It's like raining free money. I've been screaming to buy energy for 8 months and people still look at me like im on crazy pills.

Net sector debt free q2 2023, 100% FCF returns to shareholders through NCIB or divs @100 wti.

Am I wrong?

Zog · Jun 5, 2022

I've read quite a few quotes from people warning about "it's different this time."

The 2008 housing collapse wasn't all people who couldn't afford their mortgages, a lot just said fuck it when they're houses dropped in value by half and they couldn't justify paying off their houses that inevitably they would end up selling for a loss. Of course time was on their side but at the time that was the general thought.

I could definitely see this happening in today's market, it's just whether prices will actually drop and i would assume they will, the question is by how much and will that tip the needle to the point it would be smarter to default.

The biggest issue facing these mortgages is whether enough WFH tech jobs get cut that even locked into low rates they can't find work out in the middle of the country to support their payments.

Sanrith Descartes · Jun 5, 2022

Zog said:
I've read quite a few quotes from people warning about "it's different this time."

The 2008 housing collapse wasn't all people who couldn't afford their mortgages, a lot just said fuck it when they're houses dropped in value by half and they couldn't justify paying off their houses that inevitably they would end up selling for a loss.

Feel free to support this take with data.

It was most assuredly about either people who bought a primary residence they could not afford on their income but we're given creative mortgages that would be unserviceable once the intro rate adjusted or speculators who bought investment properties again on mortgages they couldn't service but planned on refinancing as the sky rocketing housing prices have them more "equity".

Actual fiduciary due diligence by banks and mortgage lenders would have prevented the crash from happening.

Mist · Jun 5, 2022

Sanrith Descartes said:
Feel free to support this take with data.

It was most assuredly about either people who bought a primary residence they could not afford on their income but we're given creative mortgages that would be unserviceable once the intro rate adjusted or speculators who bought investment properties again on mortgages they couldn't service but planned on refinancing as the sky rocketing housing prices have them more "equity".

Actual fiduciary due diligence by banks and mortgage lenders would have prevented the crash from happening.

Not being able to repackage bundles of known bad loans into financial instruments while lying about the risks would have prevented the crash from happening.

Not being able to sell insurance on bundles of known bad loans as financial instruments while lying about the risks would have prevented the crash from happening.

Etc.

There were at least 4 distinct layers of institutional fuckups that contributed to that crash being as much of a collasal fuckup as it was. A perfect storm of "what could possibly go wrong? Oh, everything everywhere all at once?"

What we're headed for now is more of a run-of-the-mill recession combined with an energy crisis. But I sincerely believe that local businesses will be less impacted by this recession as they've already gone through the crucible and been pruned during the shutdowns and the businesses that survived are likely stronger and with less competitors. This is going to be a very top-heavy recession striking the big growth-minded tech businesses and investment funds who are used to being able to borrow heavily at ~0% interest to throw money at their problems and grow past them. A bunch of business models that should never work *cough*Uber*cough* were able to just keep borrowing and that's going to really hurt, but we might see new businesses copy those business models but with less spend-heavy overhead.

SeanDoe1z1 · Jun 5, 2022

Tmac said:
Zero accountability for these fucks getting things retardedly wrong.

Elon has way more accountability. If he's wrong he gets the screws.

Yelen was never wrong.

She was just lying. When viewed in that lens, it makes it a lot easier to traverse.

if a laymen can figure it out, an ex reserve chair probably had the discussion 100 times. No one wants to be the one to say “we are fucked, good luck. Thanks for the fish”

It’s what we need, but not what we are going to get.

Wingz · Jun 6, 2022

SeanDoe1z1 said:
Yelen was never wrong.

She was just lying. When viewed in that lens, it makes it a lot easier to traverse.

if a laymen can figure it out, an ex reserve chair probably had the discussion 100 times. No one wants to be the one to say “we are fucked, good luck. Thanks for the fish”

It’s what we need, but not what we are going to get.

Pretty much first 6 mins or so of a montage of Yellen:

Sanrith Descartes · Jun 6, 2022

My AMZN is down 95%.
J/k, stock split in effect. Split should have been about $122.25. trading over $124 in the premarket. I wonder who they boot out of the DOW to make room for AMZN.

Furry · Jun 6, 2022

Mist said:
What we're headed for now is more of a run-of-the-mill recession combined with an energy crisis.

We are not headed to a run of the mill recession. We are entering a financial war with the east. Russia has fully committed, and has the tacit support of china and india. If those two countries join we could enter a decade of technological recession. On top of that, it'd require a massive shift of our economy from service to production based to fully adapt.

The closest thing that has ever happened to this before was how the Soviet union was treated 70s-80s, but that was more of a debt/overspending problem than this. This contagion is bigger and more world-wide though. It's hardly a run of the mill recession. I don't think anyone can accurately predict what will happen other than it being ugly.

Sanrith Descartes · Jun 6, 2022

This should add some green to the markets.

Furry · Jun 6, 2022

Sanrith Descartes said:
This should add some green to the markets.

Appears they'll let ships come out on a designated path, where the russian navy will intercept and escort them. I'm sure escort includes inspect the cargo, especially on a return trip. The operation will be monitored by a command center in Istanbul. Can't find it verified by any other independent sources, was hoping to read more into the details of the agreement.

It's likely not enough to significantly slow or reverse food markets. They still need to get grain to odessa to export it, and have to deal with the fact that a non zero amount of grain stores have been exploded, and the planting season is less than optimal with tractors blowing up on land mines and all that artillery shelling and what not.

Jysin · Jun 6, 2022

TWTR drama continues. -7% premarket

08:53 [TWTR] Elon Musk (9.6% stake) reiterates his request for certain data and information necessary to facilitate his evaluation of spam and fake accounts on the Issuer’s platform; Refusal to provide such data is a breach of obligation under the merger agreement - 13D/A filing

Sanrith Descartes · Jun 6, 2022

Break · Jun 6, 2022

I hope the deal does fall through. I see no wisdom at all in plowing $40-something billion dollars into what is effectively the epicenter of the 'woke-mind-virus' that is California. The sooner investors get really worried about dropping helicopters of cash on SV the sooner the woke bullshit will end.

Sanrith Descartes · Jun 6, 2022

AMZN +5% on the split. What the split has done is make options actually affordable for non-funds. This in term is driving price action as people are plowing into calls forcing the market makers to buy shares to hedge their positions on these options. Granted some of the contracts were existing and just price adjusted but there is a ton of new option action now. GOOGL should catch the same wave when it splits. Also people playing the likelihood that AMZN enters the DOW.

edit: also keep in mind any brokerage that doesnt allow fractional trading (like Merrill) those low dollar customers can now buy some AMZN stock.

Sanrith Descartes · Jun 6, 2022

SPIR hit $2.00 this morning. I believe I am the only one playing it. Up 60% since the low a while back. They grabbed a couple of new contracts and hopefully see profit before the end of the year.