Discussion ***Official*** 2020 Stock Market Thread

[KB]

That may be true, but if you remember, TSLA already did a secondary around $700 ....and the stock still went up! I dont think they will be hurting for cash. Frankly all companies should have cashed in. Instead, the majority of them were buying back shares to please shareholders and feed the stock market bubble and going into debt to do it.

Going into debt to buyback shares is really pretty stupid, but lots of companies are cowed into it by "activist" investors like Carl Icahn and other hedge funds. Companies should preserve cash for expansions, pay cash dividends or to weather storms like the one we are in now. When their stocks get frothy, they need to issue shares and payoff all debt, not go into debt because they can borrow really cheap.

Thats what companies should do, but companies have figured out they can manipulate the stock price in the short run, get huge bonuses for executives and when times get bad, ask the government for a bailout.

 

[FelixDeCat]

Thats what companies should do, but companies have figured out they can manipulate the stock price in the short run, get huge bonuses for executives and when times get bad, ask the government for a bailout.

Debt is repaid by future cash flows. However if the economy goes bad how do you repay debt? Did you know that during the 1920s companies did stock buybacks to juice up prices. It was one of reasons cited for the bubble back then and therefore was made illegal by the SEC.

That rule was overturned in 1982, just around the time CEO pay was starting to take off and average worker pay was starting to remain relatively the same in comparison.

 

[[DHT]Osiris]

Debt is repaid by future cash flows. However if the economy goes bad how do you repay debt? Did you know that during the 1920s companies did stock buybacks to juice up prices. It was one of reasons cited for the bubble back then and therefore was made illegal by the SEC.

That rule was overturned in 1982, just around the time CEO pay was starting to take off and average worker pay was starting to remain relatively the same in comparison.

Sorry, can I use the same reasoning for not paying my own debts? 'Sorry, Mastercard, I'll be sure and pay my debts based on my future cash flow, not when they're actually due.'

 

[cytg111]

yeah, I'm wondering what the proper comparable value is pre-corona after the dilution on Friday. I'm thinking of putting a pile of money into SPCE "very soon," but wondering if it's really 1/3rd the cost or maybe only 1/2. ...

I am tempted to move today, but then again, we havent reached peak corona yet.. And when we reach and overshoots hospitals capacity its going to be even more restrictive.

N.Y. May Need 18,000 Ventilators Very Soon. It Is Far Short of That. (Published 2020)

Doctors are increasingly anxious that New York — like other states — won’t have enough of the breathing machines that are key to fighting the coronavirus.

www.nytimes.com

IIRC NY has ~2000 ventilators available right now so this :

"New York could be short by as many as 15,783 ventilators a week at the peak of the crisis. "

and this

"While a national stockpile of ventilators exists, it is unclear how that will be doled out. In a conference call on Monday with a group of governors, including Gov. Andrew M. Cuomo of New York, President Trump said that states should not count on the federal government for more ventilators and other equipment. “We will be backing you, but try getting it yourselves,” he said, according to a recording of the call. "

All points to people dying in the hallways and in army emergency build barracks.
Two days ago there were 65 corona patients on ventilators in NY, given this fact and the numbers above, 2000 available, ~15000 pr week short, your can easily extrapolate that we have not even seen the beginning of the beginning of the worst.

So get ready to hunker down for the long stretch. Stocks? As long as people are dying in the halls, I guess restrictions will apply.

 

[s0me0nesmind1]

Sorry, can I use the same reasoning for not paying my own debts? 'Sorry, Mastercard, I'll be sure and pay my debts based on my future cash flow, not when they're actually due.'

You actually can. Whenever someone says you owe them and you legitimately can't afford it - tell them and specifically tell them based on whatever actions you feel you can take:
Examples:
I will pay you half right now - or nothing.
I will pay you over the course of the next 2 years - but with no added interest.

etc.. You can bargain with debt, regardless of what anyone has scared you into believing.


The problem is people are too stupid to think for themselves anymore - they just see a bill and say "They say I owe this, therefore it's official and it's the only way I can clear this debt". Not true in the slightest.

Debtors aren't stupid either, they know statue of limitations... they know bankruptcy will clear your debt.... they know that regardless of any judgement, if you don't have money then it's like trying to extract blood from a rock. Use those things to your advantage.

Just because I got a medical bill for $6k for "out of network" doesn't mean I paid it. I called them up and said "I'll pay you 20%" - and we settled in the middle.

 

[ThatsABigOne]

Just bought some UPRO.

Not sure if I should buy more TSLA and SPCE. SPCE is so cheap right now.

 

[s0me0nesmind1]

yeah, I'm wondering what the proper comparable value is pre-corona after the dilution on Friday. I'm thinking of putting a pile of money into SPCE "very soon," but wondering if it's really 1/3rd the cost or maybe only 1/2. ...

SPCE is now a third it was before all went to shit.

Sorry for living under a rock - but wtf is SPCE? Virgin Galactic space company? Da Fuq does this have to do with coronavirus?

 

[[DHT]Osiris]

You actually can. Whenever someone says you owe them and you legitimately can't afford it - tell them and specifically tell them based on whatever actions you feel you can take:
Examples:
I will pay you half right now - or nothing.
I will pay you over the course of the next 2 years - but with no added interest.

etc.. You can bargain with debt, regardless of what anyone has scared you into believing.


The problem is people are too stupid and think for themselves anymore - they just see a bill and say "They say I owe this, therefore it's official and it's the only way I can clear this debt". Not true in the slightest.

Debtors aren't stupid either, they know statue of limitations... they know bankruptcy will clear your debt.... they know that regardless of any judgement, if you don't have money then it's like trying to extract blood from a rock. Use those things to your advantage.

Just because I got a medical bill for $6k for "out of network" doesn't mean I paid it. I called them up and said "I'll pay you 20%" - and we settled in the middle.

Right, but that's bargaining with a debtor. If a company gets a bailout, it's not a break from a debtor, it's a break from the federal government. I'd be fine with the govt giving companies a break on taxes, the part that the govt has control over, but why can we not hold companies accountable for their own finances enough to weather the storm, so to speak?

 

[ThatsABigOne]

Sorry for living under a rock - but wtf is SPCE? Virgin Galactic space company? Da Fuq does this have to do with coronavirus?

Perhaps you've been living under the rock? Travel is limited or restricted, especially potential space travel since fewer investors have free money to pump up the stock.

 

[cytg111]

Sorry for living under a rock - but wtf is SPCE? Virgin Galactic space company? Da Fuq does this have to do with coronavirus?

Yup and indeed! I mean people shelling out 250K for the 90min ride and there is a long line of clients ... But it has tanked along side with everything else.

 

[ponyo]

Thats what companies should do, but companies have figured out they can manipulate the stock price in the short run, get huge bonuses for executives and when times get bad, ask the government for a bailout.

That's why I have big problem with these affected companies asking for government bailout now. These companies like Boeing borrowed billions of dollars of cheap money to use that money on stock buybacks to juice their stock price so their stock options would be worth more. So they took on debt voluntarily when it wasn't needed. Boeing execs paid themselves millions of dollars of bonuses for their "excellent" stock performance and reaped millions on stock price gains. Now these same jokers are asking for government bailout. Boeing will get it because the airplane manufacturing industry is vital to national security. But it should be done like GM bailout. The stock should go to $0 first if they want a bailout. All the existing shareholders should get wiped out first. It's only fair.

Boeing should be forced to raise money like every other company. They should sell their stock and do an equity raise. Just like all those stock buyback using borrowed money juiced their stock price, now the opposite should occur when the company sells additional stock to raise money it desperately needs.

Any airline and cruise company asking for government bailout/handout should be forced to sell stock and executive bonuses clawed back if they borrowed money for stock buyback in the past 5 years. That's only fair.

 

[s0me0nesmind1]

Right, but that's bargaining with a debtor. If a company gets a bailout, it's not a break from a debtor, it's a break from the federal government. I'd be fine with the govt giving companies a break on taxes, the part that the govt has control over, but why can we not hold companies accountable for their own finances enough to weather the storm, so to speak?

I was just going by your example of Mastercard.

Personally I don't care if the government bails out companies (that the free market otherwise wouldn't be able to do)... as long as 3 things:

1. Company pays back the loan in full WITH reasonable interest
2. Ensure that the company is meeting strict guidance/audits on efficiency to ensure the debt-load doesn't occur again. No use doing something like restructuring the debt of places like Sears or Toys R' Us if they are going to keep making the same mistakes.
3. If the reason for the bailout was from internal corruption, bad actions, and negligence by the management/CEO (*COUGH* 2008 Housing Bust*COUGH*) then prosecute criminals, impose FAT fines, and ensure upper management/CEOs are fired with no bonus'. (This is what DIDN'T occur with 2008)

 

[FelixDeCat]

Just bought some UPRO.

Not sure if I should buy more TSLA and SPCE. SPCE is so cheap right now.

Stay away from SPCE over $10. Moonshot stocks with no revs right now are risky...unless its a daytrade. Then go for it!

 

[[DHT]Osiris]

I was just going by your example of Mastercard.

Personally I don't care if the government bails out companies (that the free market otherwise wouldn't be able to do)... as long as 3 things:

1. Company pays back the loan in full WITH reasonable interest
2. Ensure that the company is meeting strict guidance/audits on efficiency to ensure the debt-load doesn't occur again. No use doing something like restructuring the debt of places like Sears or Toys R' Us if they are going to keep making the same mistakes.
3. If the reason for the bailout was from internal corruption, bad actions, and negligence by the management/CEO (*COUGH* 2008 Housing Bust*COUGH*) then prosecute criminals, impose FAT fines, and ensure upper management/CEOs are fired with no bonus'. (This is what DIDN'T occur with 2008)

Now you're talking about creating an institutionalized loan program from the govt though, should the govt be in that market? Or is that go beyond their role of governance? Why not just nationalize them at that point?

Remember that the entire purpose of this is to prevent certain blessed companies from failing, for fear of the potential repercussions.

 

[cytg111]

And DOW is sub 20K..

 

[IronWing]

And DOW is sub 20K..

It’s just crouching, getting ready to pounce.

 

[ponyo]

I sold May 15 TSLA puts. Sold 1 $450, 4 $420, and 1 $380 puts. Collected close to $60k in premium.

 

[ponyo]

I chose higher price puts to sell because I actually want to buy the stock. So I hope I get the stock rather than just keep all of the put premiums. But I guess there's worse than earning $60k if TSLA price is above the put strike price in May and I don't get to buy TSLA stock.

 

[ponyo]

Just bought 100 shares of TSLA at $414. I'm going to start scaling in TSLA stock again. I don't 100% trust puts I sold will be assigned. I feel naked without having TSLA stock. I'm going hate myself if TSLA stock recovers and I don't have some stock.

 

[FelixDeCat]

I sold May 15 TSLA puts. Sold 1 $450, 4 $420, and 1 $380 puts. Collected close to $60k in premium.

Good luck on St Pats day. Im not brave enough to short puts right now. Too much money being made just buying them.

 

[ponyo]

Good luck on St Pats day. Im not brave enough to short puts right now. Too much money being made just buying them.

I expect things to get worse the next 4 weeks. But the puts I sold are 2 months out. And you don't understand. I want TSLA stock to be below the put price I sold. I want to buy and own the stock. I want to own at least 1,000 shares of TSLA again. So these 6 puts I sold are just the start. I'm comfortable buying TSLA shares at around $300, $320, and $350 price levels. And that's what these puts will allow me to do provided TSLA closes below $380 on May 15. But because I'm not too sure TSLA will be below $380 on May 15, I'm also going to buy stocks now at higher price. That's why I bought 100 shares at $414 today. And I'm going to keep buying shares every $20 down or so until I buy 500-600 more. In perfect world, I would've just sold 10 $380 put if I was guaranteed those puts would be assigned.

 

[Svnla]

One of the guy on Wall Street said this morning on NPR radio. Over 30 Trillion (yup, with a T) USD in wealth wiped out from the stock market within the last week or so.

Oh and I thought SPCE was stock label for the Spice porn pay TV channel. LOL.

 

[ponyo]

I'm not touching SPCE right now. SPCE is type of stock that works when the indexes at all time high or close to it. Now you want to buy stocks you know will dominate in the coming decade. TSLA is my #1 bet on that. I'm also looking at AMD and NVDA but I don't have as much conviction in those names. So I can be shaken out. You want to buy stocks you have 100% faith in now so you can't be shaken out. Once I buy all my TSLA shares, I'm not even going to watch the market anymore. I'm just going to ignore the market for the next 5 years. Those are the type of stocks you want to buy now or think about buying during this panic. And you got to expect the prices to keep going down. You're not going to pick the bottom so it's better to scale in knowing you're going to suffer short term losses on anything you buy now. Or you can try to wait to buy on uptrend but that's risky too. Everyone needs to do what they're comfortable with. For some, that means not buying anything and staying in cash. Maybe the world will end.

 

[zinfamous]

Sorry for living under a rock - but wtf is SPCE? Virgin Galactic space company? Da Fuq does this have to do with coronavirus?

It was on a ~300% run over about 2 weeks prior to the corona effect, based on some really good earnings, forecast, and where most expect them to be 2, 5 whatever years from now. I look at stocks like this that have no rational crash outside of "corona effect." as absolute bargains.

so, as with much of the market, none of these companies and their stock price logically have any thing to do with coronavirus, which is exactly the point.

that being said, SPCE is a "hyper luxury brand," so there is only so much room this kind of thing can run, imo--in our lifetimes, anyway.

TSLA is much, much different. They aren't just cars, for one thing, and that's the best thing about them, imo.

 

[zinfamous]

Sitting here wondering what all of those rubes who spent $$$$$ flipping KFC friend chicken logs on EBay back in December would be doing if they had enough free cash to buy up toilet paper futures right now.