Investing General Discussion

I've been watching a bunch of MLP's and want to invest a little stack of dough in one - curious what, if any tax implications there are "day-trading" MLP's vs. typical stocks? Just the regular 28%+ on short term capital gains or is there something else I'm overlooking?

Springbok said:

I've been watching a bunch of MLP's and want to invest a little stack of dough in one - curious what, if any tax implications there are "day-trading" MLP's vs. typical stocks? Just the regular 28%+ on short term capital gains or is there something else I'm overlooking?

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Never heard of MLP's before, so I put it in google. Fuck you for the troll.

Locnar said:

So whats a investor to do? Also do you subscribe to the idea that the "true" crash is yet to come or do you think the worse is behind us and the only question is slow or fast recovery

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There will be no "true crash" as long as the Fed is backstopping the markets. And lets face facts the March 23 low was pretty god damned low.

Do I think we are still in serious volatility land? Yes. Can I see is retrace dow a way based on shitty news? Yes. Retrace back to the March low? No. VIX is back over 30. Can I see another 10% down in the future? Yes.

Next part, what is an investor to do? I can only give my personal advice. Assuming long term investments, look for blue chip quality. Then look for those that are in good sectors (tech/healthcare for instance) and see if some have some outstanding unsettled risk that is creating drag.
An example would be GOOG. Its got the possible anti-trush shit hanging over its head. This and the loss of ad revenue due to Coronachan. This has dragged it back from new highs unlike AAPL, MSFT, FB, NVDA etc. Do it still have some upside headroom but it comes with some risk. JNJ is another example like GOOG that carries some risk (the asbestos talc lawsuits).

So you can wait for a pullback on the big bluechips or you can start browsing the next tier of quakity companies. These would be the good companies. Just not the a-list companies. Maybe this group has more debt than you like. Or growth has flattened. Or maybe its in an unloved sector (consumer staple or energy).

Finally be realistic on expectations. Its June. Half the year is gone. SP500 annual return is about 10%. 20% the last few years has been rocking it. So if you see a blue chip on a pullback fall 5 or 6%, maybe you think I can enter it here and if I get the gap filled and then make another 5% by year end then I'm getting 10% return this year and maybe thats acceptable for this year. Also factor in dividend return. Half a year might net you 1 or 1.5% for half the year.

Here is an example of the above. INTC is a solid blue chip with amazing balance sheet. AAPL is moving away from its chips for MacBooks so that hurt it. Current price is $59. 52 high is $69. Div yield is 2.2%. So it has about 16% room to the upside plus another 1.1% dividend yield to year end. I can see INTC growing 10% from $59 by year end and add the div so 11.1% in six months. Im not saying buy it, but using it as an example of whats available for a long tern investor at current valuations.

Furry said:

Saying tech is over-priced is like saying everest is a big hill. Still, the dumb investors will keep climbing.

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And yet, I will still add to some of my tech positions on pullbacks because everyone else keeps buying tech. I started a position in NVDA at $350 a few weeks ago on a 5% pullback. Before today it had made 3 new highs and I was up like 8%. Betting against tech is like betting against the Fed.

Jysin said:

I think the investment windows are the key question. Tech is massively overbought. Amazon (AMZN) trading at a PE of 130? It's had a lot of stay-at-home sales, but will likely taper off once everything dies down with coronavirus. A solidly managed airline like Delta (DAL)? Trading at a PE of 5 and likely to skyrocket once coronavirus restrictions are lifted. With a long enough time horizon, you can't really go wrong. Trying to time the exact low? That's something different altogether. All I know is, next summer, which has the highest potential gain? Tech or a solid, but currently battered airline stock?

What's your investment timeline?

Of course I could be wrong... but it's a matter of downside risk vs upside potential in the long term.

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And funny enough AMZN made a new high right after the open.

Falstaff said:

Resisting my FOMO for the day on not buying more PTON. Bought some in the low 30s, when I sold a position a couple weeks ago and was sitting on some cash I wanted to buy some more but was waiting for it to dip down to about $45 (was like $46 and change, not sure why I cared about a dollar a share because I wasn't buying 1,000 shares). Now its up to $55... so glad I'm making some money but wish I would have just bought at $46.

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I looked at it during the IPO and laughed "this is such a shitty company these buyers are such bagholders". Yeah I do that more often than I should. Congrats on being smarter than me on this one.

Looks bad again. I'm not holding anything so I'm gonna watch for a few days, see how it shakes out. Maybe find some deals.

I dont buy the "investors are moving into bonds" narrative. Bond yields are crap. I expect there to be some pension fund rebalancing into bonds but not much else. But thats just my opinion.

On a side note I started a position in NOC. Double digit earnings and a safe div yield around 2%. More and more I like having industrials counter balance my tech and healthcare heavy positions. They arent sexy. Most people don't like them but they just consistently make profits. This usually makes them undervalued in my opinion.

Falstaff said:

Great news

U.S. banking regulators ease rules around firm investments, internal trading

U.S. banking regulators on Thursday unveiled new rules that will make life easier for large banks with complex trading and investment portfolios.

www.reuters.com

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This makes my JPM position happy

Crazy little 3pm pop led by banks. I bet anything results of the bank's stress tests "leaked".

Well, I certainly didn't see that coming.

Araysar said:

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The reaction is kind of odd. Banks passed test, can survive another 2008, to be safe they stop buybacks for a quarter and cap dividends at current levels. First move is down about 1%. I think you are going to see overnight call buying and they move higher tomorrow unless the overall markets puke in which case who the fuck knows.

Falstaff said:

good summary if you're interested, especially interesting about Goldman...

Fed Limits Bank Payouts and Suspends Share Buybacks as Pandemic Grinds On (Published 2020)

About a quarter of banks would near minimum capital levels in a double dip recession, the Fed said, as it announced its stress-test results.

www.nytimes.com

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"JPMorgan Chase, Citigroup, Bank of America and Wells Fargo, the four largest banks in the United States, all came through the stress tests with sufficient capital"

Goldman, not so much. GS has been an underperformer for a long while. I always felt its lack of a traditional bank arm hurt it.

JPM pays about 3.5% dividend yield, so I'm content to ride it out for the long term. With no buybacks and capped dividends I dont know what they are going to do with the excess cash? M&A activity?