The Stock Market, Investments, and Investing Thread
#1
Alright, so I thought I would kick this thread off. I'd like to create a dedicated thread to investing. 

Appropriate topics for discussion :
  • Analysis and opinion on any asset in an asset class: stocks, bonds, REITs, commodities, ETFs, mutual funds, and maybe even derivatives or alternative asset classes (like crypto) in the right context.

  • Current news and discussion of happenings in the market.
  • Asset allocation in a portfolio and risk management
  • Advantages/disadvantages of various brokerages and financial services (Fidelity, Vanguard, Schwab, etc...)
  • Sharing helpful online resources and articles for doing investment analysis and making investment decisions
  • Related topics like wealth preservation strategies and what to do with a windfall
I will have more to say about this topic later, but for now, I think this is a good start!





Also, standard disclaimer: content posted in this thread is intended to be used for informational purposes only. It's recommended that you do your own research before making any investment based on your own personal circumstances.
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#2
This could be good. I've done futures, stocks, forex over the years.
Perhaps some of us could do "market views" on a regular/semi regular basis?
It shouldn't be considered a recommendation for novices, simply information. Because the execution can be problematic and even risky. The benefit would be that its more a way of building a collective mindset on inter-related markets.

I'm more into forex currently. So I'd be interested in people's views on commodities, bonds, indices etc. A form of synergy be produced.
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#3
If you guys want a pot stock, look at Trulieve. TCNNF. Largest in Florida, 45M revenue per Quarter. Already profitable and Florida is medical use only.
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#4
I have only been investing for 3 years but for me, passive investing has had the best reward to effort ratio. I currently invest in both all world share funds and ETFs and use a strategy where I keep my equity to cash ratio between 25 and 75%. When stocks rise, I sell proportionately to the rise and how much I'm currently invested. When stocks drop, I buy in similar proportions. Means I naturally sell high and buy low. This strategy won't make you rich from investing, but I believe that timing the market is a waste of time/gambling so may as well take emotion out of the game by following a simple and logical plan. Even those geniuses who predicted the financial crisis in 08-09 nearly burned because they shorted the market too early. I avoid bonds because I don't have enough dollar to be worthwhile researching. Banks offer better returns on cash in current accounts for small amounts anyway.

Active investing can be exciting but in my opinion should be done in combination with passive investing and only when you have a decent amount to invest in your active portfolio. The time required to do proper research on stocks that may yield a slightly better return then the market is only worthwhile when you have a large pot. e.g. if you can create an active portfolio that averages 10% a year vs the market doing 7% a year, but you only have $10k to invest, you have spent significant time researching for a $300 annual difference. For very small portfolios, the fixed trading costs also add up quickly. If your broker charges you $5 per trade, $5 per for a $1000 trade is 0.5% in negative before the market has even moved. $5 on a $10k trade is only 0.05%.

My favourite read on investing is intelligent investor by B Graham. It shows how people let emotions and reckless investing make them do exactly the opposite of what they should do every single time.
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#5
(06-02-2019, 09:12 PM)coffeedrinker Wrote: I have only been investing for 3 years but for me, passive investing has had the best reward to effort ratio.

This is exactly why I no longer actively trade. I'd rather chill with WSJ Weekend than actually think about it every day. I'm not convinced that if I did outperform, that it'd be by enough to justify the stress.

I do have some buy-and-hold "future technology" investments in my taxable accounts that I grab when I see a deal, and the exit strategy for those is probably for Lockheed to buy them out and turn them into space-based superweapons or something equally ridiculous. For that kind of speculation, I like things that have obvious "dual use" applications, both guns and butter, like EKSO. If I lose, I have a nice tax write-off against my personal income, and if I win and take a capital gains hit in some future year, I'll wipe my tears with the money.

Other than that, I have all my tax-sheltered long-term money in a low-fee four fund portfolio: bonds, total U.S., total developed international, and total emerging international. My only major market timing hypothesis is that U.S. returns vs. ROW returns are very cyclical, and that we've had a long cycle of high U.S. returns, so a heavier international allocation is a reasonable choice. I do occassionally make large defensive adjustments when there's a very sudden and very obvious risk, I went from 20% to 60% bonds in September 2018 and turned out to be right. I could have just as easily been wrong and missed out on some gains, but I was glad I did it and moved back to my regular AA immediately after the New Year once everybody's 2018 tax-positioning would be off the books.

Otherwise, the single most important thing is to keep stacking cash. Time in the market always beats timing the market.
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#6
(06-03-2019, 01:19 PM)Jetset Wrote:
(06-02-2019, 09:12 PM)coffeedrinker Wrote: I have only been investing for 3 years but for me, passive investing has had the best reward to effort ratio.

This is exactly why I no longer actively trade. I'd rather chill with WSJ Weekend than actually think about it every day. I'm not convinced that if I did outperform, that it'd be by enough to justify the stress.

...

Otherwise, the single most important thing is to keep stacking cash. Time in the market always beats timing the market.

I’m happy to see the discussion centering around the benefits of a passive investment strategy. Historically, it seems to be the better play to invest in index funds rather than managing your own book or picking an actively managed mutual fund.

The two major scorekeepers on this, Morningstar and Standard and Poor’s Indices Versus Active (SPIVA), both indicate that active investment funds (where fund managers pick securities based on analysis) are slaughtered by their benchmark index, especially over time:

Morningstar: https://www.morningstar.com/blog/2019/02...funds.html

SPIVA: https://www.spglobal.com/_assets/documen...h-2019.pdf

I’ll admit that one thing that concerns me about the passive strategy is the ‘dogpile’ effect. This year marks a change where the majority of investment capital has been allocated from active to passive funds (https://www.bloomberg.com/news/articles/2018-12-31/shift-from-active-to-passive-approaches-tipping-point-in-2019).

This could be a problem because the valuations of the individual securities that compose these passive funds could be more based on their inclusion in a given index (like the S+P 500) as opposed to fundamental value (in which they’ve earned their inclusion in an index based on aggregate analysis by various investors).  In other words, if most investors are taking a passive approach, then money will flowing into index vehicles will which favor assets because they are already included in those vehicles and you have a sort of circular reasoning and fertile conditions for a bubble in passive vehicles.

For this reason, I've slept easier having a passive portfolio strategy based on general macroeconomic conditions as opposed to one that is primarily equities based. I'll talk about this in another post.
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#7
I'm curious to know if anybody is trying to figure out how to protect themselves against inflation.

I use a mix of a total bond fund and long treasuries in my bond allocation to try to improve the diversification benefit from bonds. However, between tariffs, fiscal problems, and the Fed backing down on rate increases, it's starting to look like if anything is going to be permitted to give way, it may be the dollar.

TIPs are one strategy.

Non-U.S. equities are another which I've already embraced to try to at least partially decouple my portfolio from the United States, but even most emerging markets funds are dominated by China.

REITs have some historical credibility when rates are too low and there's a case to be made for overweighting them relative to market cap in passive investing strategies, since real estate as a sector is mostly not traded.

Gold is yet another approach that I have my own concerns about, but that some people insist on.
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#8
Rental RE with a mortgage. Real asset, repay the debt in inflated dollars
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#9
Buy Bitcoin, thank me later
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#10
(06-06-2019, 08:38 PM)Hypno Wrote: Rental RE with a mortgage.  Real asset, repay the debt in inflated dollars

This is something I'm headed towards as part of my mid-term plan but hadn't considered the mortgage itself, it's an excellent point.

Part of the reason I'm concerned about positioning for this is because while most policy-making seems to be giving up on inflation as a concern (tariffs are inflationary, rate cuts are inflationary), fiscal policy is really only headed in one direction and inflation is in line with the goal of reducing imports and increasing exports. There's a good write-up in Bloomberg about this this morning. (Not intended as partisan political content, but rather business and financial content.)

https://www.bloomberg.com/news/articles/...ce-at-odds

Quote:The Commerce Department proposal risks adding uncertainty to an already volatile U.S. trade policy, with additional repercussions for the dollar. Historically, presidents and their administrations have promoted the mantra of a strong dollar being in the nation’s interest in part to bolster foreign demand for U.S. debt. Yet pressuring trade partners who are seen as devaluing their currencies could have the effect of weakening the greenback.

“The U.S. is implicitly moving towards a weak dollar policy with its unwillingness to condone other currencies’ weakness against the dollar,’’ said Prasad, author of “The Dollar Trap.”

In a report to clients on Thursday, Morgan Stanley analysts said this week’s meeting in Japan of Group of 20 finance chiefs “could see the dollar coming under early selling pressure.”

Trump has an unlikely ally in suggesting an aggressive currency policy to achieve economic goals: Democratic presidential candidate Elizabeth Warren. In a plan released earlier this week, she called for “actively managing’’ the dollar to bolster U.S. jobs and growth.

Warren, a Massachusetts senator, blames foreign investors and central banks for having “driven up the value of our currency for their own benefit".
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#11
(06-07-2019, 03:54 AM)whiteknightrises Wrote: Buy Bitcoin, thank me later

Bitcoin's massively overrated. How high do you think it'll go?
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#12
Anyone else sell covered calls or put options on stocks that they like?
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#13
(06-06-2019, 08:38 PM)Hypno Wrote: Rental RE with a mortgage.  Real asset, repay the debt in inflated dollars

What kind of RE do you recommend?
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#14
Hey guys, got a hot stock-market tip ya'll. Moments ago on an investing forum I observed how the equity futures markets were off hugely in the last hour, in the wake of Trump's just announced 5% tariff on Mexico, and how to play that to your advantage (i.e., another asset class was up hugely). I expounded on why this was so, what the economic data was saying, and what an appropriate portfolio allocation would be in response. Meanwhile, you boy geniuses 1) didn't know Trump declared a tariff on Mexico, 2) didn't know there was an equity futures market and that it was down over 1% in the last hour, and 3) didn't know there were alternative asset classes that would profit from this and why. You'll wait until it plunges tomorrow and get stuck with the losses. If you have money in investments at all, that is. Meanwhile that other asset is up 50bps in the last hour. But since you guys have nothing to learn from anyone, I'll share that advice with people who can learn something.

I just decided that his isn't forum for me. You smart asses have literally chased me out of here.
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#15
Can't tell if Suits is trolling me or being serious.

I dabble with futures but I don't see anything about the Mexico tariff.

Did they actually go through?
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#16
(06-07-2019, 09:42 PM)samifon Wrote:
(06-07-2019, 03:54 AM)whiteknightrises Wrote: Buy Bitcoin, thank me later

Bitcoin's massively overrated. How high do you think it'll go?

I think the long game with bitcoin is as a hedge against gov over reach and hyperinflation...but that's just my simpleton opinion.
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#17
(06-19-2019, 09:08 PM)Rhyme or Reason Wrote: I think the long game with bitcoin is as a hedge against gov over reach and hyperinflation...but that's just my simpleton opinion.

I think you're on to something with your 'simpleton' opinion, and I'd like to expand on it further. I find the topic fascinating.

Also I’ve been meaning to do a Bitcoin post and my thoughts on bitcoin as an investment, so here it is. Long post incoming…

Traditionally gold has been the standard hedge against inflation. We saw gold prices surge from the 70's to early 80's when the US went off the gold standard (1971) and inflation went batshit crazy.  We saw this all over again from 2009 - 2013 when the Fed started implementing 'quantitative easing' and the markets were expecting inflation after the Fed had pumped a metric fuckton of money into the financial system through low-interest bail-out loans. That inflation never materialized, at least in the CPI, but gold still went up regardless.

And...we're still seeing the effects of the inflation bogeyman increasing the price of gold even today. Many believe that the fed is signalling that it will drop interest rates soon.  Lower interest rates means more loans which means increased money supply which means higher inflation. Today gold shot up ~2.5% to a five year high.

The value proposition of gold is that it's believed to be a scarce resource and it's been universally recognized as a store of value and medium of exchange for millennia. This is reflected in it's market value, and at today's price gold's total "worth" (market cap) is around $7.5 trillion dollars.

So what does Bitcoin have to do with this?

Put simply, Bitcoin could eat into some of gold’s market share and become an alternative store of value and a sort of reserve currency. It is also a ‘scarce resource’ as there will only be 21 million bitcoins created.

There's a strong bull case for Bitcoin:

+ It’s the most well-known crypto currency and currently has 57% dominance of the total crypto market based on market cap.

+ It’s the longest-running blockchain and the network’s security has not been compromised

+ Its use is becoming more normalized and ‘visible’. There were 637 ATMs in June 2016 and today 3 years later there are 4,894.

+ Bitcoin's market cap is a mere 2% of gold market cap ( ~$170 billion for BTC to ~$7.5 trillion for gold)

+ It’s more easily transferable than physical gold since transfers happen on a globally distributed network/ledger

+ Major brokerages (Fidelity, TD Ameritrade, Etrade) are signalling to make Bitcoin trading open to public, which would facilitate wider adoption.

+ It’s seen price appreciation and increase in demand in crisis situations (Brexit, Venezuela collapse, Argentina election)

+ It’s shown to make tech improvements (albeit slowly) e.g. Segregated witness, Lightning Network.

In short, with sizable current adoption, evidence of continued increased adoption, recent historical increases in demand in situations of unrest, and relative ease of transfer, it has enormous potential for more growth and improving its legitimacy as a store of value.

There are also reasons to be skeptical….and I’m not going to get into that here  But all told, IMO you could do a lot worse as a ‘store of value’ hedge on a speculative asset and portfolio wild card.

Disclosure: I hold ZERO Bitcoin, but I do hold Ethereum.


Sources

Fed Rate Cut (June 19, 2019)
https://www.reuters.com/article/us-globa...TL02X?il=0

Gold Price :
https://goldprice.org/

Inflation Data:
https://www.minneapolisfed.org/community...rates-1913

Bitcoin Price + Market Cap :
https://coinmarketcap.com/

Bitcoin at Fidelity
https://www.bloomberg.com/news/articles/...-few-weeks

Bitcoin trading at Etrade
https://www.bnnbloomberg.ca/e-trade-is-c...-1.1250240

Bitcoin Trading at TD Ameritrade
https://www.tdameritrade.com/investment-...ading.page

Bitcoin after Brexit (2016)
https://techcrunch.com/2016/06/23/bitcoi...-year-low/

Bitcoin in Argentina
https://www.ft.com/content/44bfb5b8-7d4d...85092ab560

Bitcoin in Venezuela
https://www.bbc.com/news/business-47553048
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#18
(06-19-2019, 03:58 AM)Christoff Wrote:
(06-06-2019, 08:38 PM)Hypno Wrote: Rental RE with a mortgage.  Real asset, repay the debt in inflated dollars

What kind of RE do you recommend?

I know I wasn't the target for this, but my personal plan - not inflation-specific - is to wait for the next slowdown and purchase a small vacation property in a low-tax sun-and-sand U.S. state which I'll operate as a vacation rental during the high season, then reserve for my own use for part of the shoulder season.

If it covers all of my interest and some of the principal payments after I pay a management company, I did well. Breaking even after tax deductions would be sweet. Capital appreciation should be possible since "second home" destinations see bigger value swings with the economy: when somebody's retirement collapses, the condo in Tampa is the first thing to go. A lot of these properties swung around by 50-100% after 2008.
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#19
(06-19-2019, 05:08 AM)Suits Wrote: Hey guys, got a hot stock-market tip ya'll. Moments ago on an investing forum I observed how the equity futures markets were off hugely in the last hour, in the wake of Trump's just announced 5% tariff on Mexico, and how to play that to your advantage (i.e., another asset class was up hugely). I expounded on why this was so, what the economic data was saying, and what an appropriate portfolio allocation would be in response. Meanwhile, you boy geniuses 1) didn't know Trump declared a tariff on Mexico, 2) didn't know there was an equity futures market and that it was down over 1% in the last hour, and 3) didn't know there were alternative asset classes that would profit from this and why. You'll wait until it plunges tomorrow and get stuck with the losses. If you have money in investments at all, that is. Meanwhile that other asset is up 50bps in the last hour. But since you guys have nothing to learn from anyone, I'll share that advice with people who can learn something.

I just decided that his isn't forum for me. You smart asses have literally chased me out of here.

Hmmm, your ideas are intriguing to me, and I wish to subscribe to your newsletter.
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#20
(06-21-2019, 11:10 PM)Stretch Wrote:
(06-19-2019, 05:08 AM)Suits Wrote: Hey guys, got a hot stock-market tip ya'll. Moments ago on an investing forum I observed how the equity futures markets were off hugely in the last hour, in the wake of Trump's just announced 5% tariff on Mexico, and how to play that to your advantage (i.e., another asset class was up hugely). I expounded on why this was so, what the economic data was saying, and what an appropriate portfolio allocation would be in response. Meanwhile, you boy geniuses 1) didn't know Trump declared a tariff on Mexico, 2) didn't know there was an equity futures market and that it was down over 1% in the last hour, and 3) didn't know there were alternative asset classes that would profit from this and why. You'll wait until it plunges tomorrow and get stuck with the losses. If you have money in investments at all, that is. Meanwhile that other asset is up 50bps in the last hour. But since you guys have nothing to learn from anyone, I'll share that advice with people who can learn something.

I just decided that his isn't forum for me. You smart asses have literally chased me out of here.

Hmmm, your ideas are intriguing to me, and I wish to subscribe to your newsletter.

Sure, just PM me your SSN, credit card information (from at least two cards), the names of 5-8 of your closest relatives and the phone number of the best lay you had in 2018 so that I can verify that you are a "serious subscriber" and not some guy just trying to get rich quick without working for it.
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