***Official*** 2018 Stock Market Thread

[fleshconsumed]

Man, I thought we'd have until 2019 before recession hits. Clearly I was underestimating Trump.

 

[Engineer]

Depends on who you get your news from...

Wow, lol! Is soaring defined going from down 579 to down 479 in the last 10 minutes, lol?

 

[zinfamous]

Depends on who you get your news from...

Ministry of Truth

 

[dasherHampton]

Stupid Trump. Couldn't wait until Monday to start a trade war.

Who the hell starts a trade war on a Thursday? Who raised this bastard?

 

[JEDI]

Just saw that. Down more than 550 points since announcing. Maybe a big retest of the 23,500 about a month ago? Maybe worse?

Time will tell....

since announcing what?

nevermind.. trade war.. steel, aluminum

 

[AznAnarchy99]

My plays into NVDA and TECHY have not gone well this week.. lol. I think I'm done trading for now. Unless there is a Feb 2nd style drop again, I'm just gonna sit back and avoid looking at prices.

 

[dasherHampton]

Who knows, maybe a super ball bounce tomorrow? INCY is still in the mix. It might rally.

To put it in common terms:

Watching INCY is going to make me antsy.

(You don't have to laugh at that)

 

[jpiniero]

Man, I thought we'd have until 2019 before recession hits. Clearly I was underestimating Trump.

Stock Market != the economy. Especially one so overpriced. People seem to think that though....

Fed probably plays more into this. Perhaps a 2% rate would be enough to cause the correction.

 

[Ns1]

been a fun couple of days eh

 

[fleshconsumed]

Stock Market != the economy. Especially one so overpriced. People seem to think that though....

No it's not, but it can serve as a barometer. If people think recession is coming, that means lower earnings, and lower valuations.

 

[jpiniero]

No it's not, but it can serve as a barometer.

Not when it's this overpriced. Earnings shouldn't be affected.

OTOH if there's any actual signs of a recession I imagine they will stop the hikes, if not loosen. Which might save the market.

 

[TheVrolok]

Answer 1: Tell that to Vanguard and their stupid donation form writers. Please. Convincing them would make my life much easier when it comes to donations.

Answer 2: Your example is way to simplistic. If you don't mind, I'll change the buying price to make the example more clear. Suppose you bought 1000 shares of Nike (NKE) at the split-adjusted equivalent of $25/share on Jan 18, 2012. Then you also have 400 shares. But over time through reinvested dividends you will also get:

• 1.33 shares at $27.14/share from the Mar 1, 2012 dividend
• 1.34 shares at $27.05/share from the May 31, 2012 dividend
  
• 1.48 shares at $24.44/share from the Aug 30, 2012 dividend
  
• 0.85 shares at $24.61/share from the Dec 6, 2012 dividend
  
• 1.49 shares at $27.23/share from the Feb 28, 2013 dividend
  
• etc, with more shares every few months.
• Suppose you bought another $10000 of Nike at $51.57/share on May 23, 2017. That is 193.91 shares.

Now, suppose you want to donate $200 to the Red Cross. You could donate $200 of Nike Stock to do so. At today's $68.03 closing price, that would be 2.94 shares. But which 2.94 shares? Your brokerage didn't have to keep track of the cost basis as much of this stock was purchased before year 2014.

The mathematically optimal shares to donate would be 1.48 shares that you obtained on Aug 30, 2012 + 0.85 shares obtained on Dec 6, 2012 + 0.60 shares that you obtained on Jan 18, 2012 (leaving you with 399.40 shares from that date).

Why? Because you want to keep the shares with the least capital gains, which are the shares bought May 23, 2017. You don't want shares with high capital gains, which are the shares in the 3rd and 4th dividend payment in the list above. This is to avoid capital gains taxes when you do eventually sell.

This is just a simple example with a steadily growing stock. An automatic first in, first out plan would be almost as good ($25 cost basis is pretty close to $24.44). But first in, first out is terrible if the stock happened to have a sizable dip after you bought it and there were dividends paid during the dip. An automatic last in, first out plan would be really bad (as you want to keep the $51.57 shares with the least capital gains) in this example. Your brokerage didn't keep track. If you didn't keep track, then did you just screw yourself out of $51.57/share-$24.44/share = $27.13/share of capital gains tax? Even the simple dollar cost averaging method (that Vanguard will apply if you don't tell them specific shares) would be terrible as the average cost basis is well over the $24.44/share cost basis that you could use with your own tracking.

Multiply this by several stocks and several donations and the pennies you might get by investing dividends a little bit earlier automatically instead of manually isn't worth the hassle.

Good write up. I don't currently donate stocks, but considering and definitely makes me reconsider reinvesting my dividends.

 

[KB]

Interest rates dont concern me, but a trade war can be devastating for the world economy. The president is exempt from insider trading, so i bet Trump is doing it to on purpose to sink the market.

 

[JEDI]

Interest rates dont concern me, but a trade war can be devastating for the world economy. The president is exempt from insider trading, so i bet Trump is doing it to on purpose to sink the market.

I hope so.
I switched from stocks to long term corp bonds.
waiting for the expected big drop to switch back.

go DOW 19.9k!

 

[DietDrThunder]

I hope so.
I switched from stocks to long term corp bonds.
waiting for the expected big drop to switch back.

go DOW 19.9k!

I'm waiting for a big drop as well. The drop so far is nothing. Plus, I have WAY too much cash sitting on the sidelines waiting for the bargains.

 

[DietDrThunder]

The Pit
I fell in the pit
You fell in the pit
We all fell in the pit

 

[Mermaidman]

Depends on who you get your news from...

I was going to post this - Thanks for saving me the work ;-)
(Aww...They've revised the article: https://www.foxbusiness.com/politic...-caterpillar-falls-on-prospect-of-new-tariffs)

 

[FelixDeCat]

Better cover those short puts...dood. Markets going to lay an egg IMO.

I sure hope he covered.

 

[dasherHampton]

I sure hope he covered.

Unless there's a meltdown of unheard of proportions I'll be fine.

Obviously those puts are covered by margin.

 

[dasherHampton]

I'm still holding out hope INCY can hold above 82.5 for the day.

 

[Udgnim]

looks like another day that I'm going to close my eyes and visit the next day

the stuff I'm interested in possibly buying is still too expensive for what I am looking for

 

[dasherHampton]

If I had any room to spare I'd load up on EEP sitting at 12.20.

It's a 10 percenter that should eventually climb back to at least 14. Probably higher.

Imo it's safe until 2020. Then reassess.

 

[FelixDeCat]

Yes but right now you want to sell calls not puts. Even call spreads if you are ballsy enough.

 

[DietDrThunder]

This market is stupid crazy. I was down -$23K this morning and now I'm up +1K. I'm just sitting on my hands for a while I guess.

 

[dasherHampton]

Yes but right now you want to sell calls not puts. Even call spreads if you are ballsy enough.

I hate to disappoint you but I'm no MIT-bred mathematical genius. lol

I keep it simple: I try to identify stocks that are good puts and when I do get put a stock I sell covered calls until I get bought out. Occasionally I have to sell at a loss of course but its generally been quite good to me.

INCY is sitting good at almost 86. If it holds I'm going to make almost $10,000 on that put.


edit - sorry, I got way confused there. It would be closer to $4000, not $10,000.