Discussion ***Official*** 2021 Stock Market Thread

[herm0016]

This seems like a good place to ask -is this worth it?

My company is again soliciting for their ESPP, but I don't think it's not really worth it for the somewhat marginal gains, and the increased complications come tax time:

5% discount
Purchase day is last day of the period (each period is 3 months)
Purchase price is average share price on said last day
Minimum $40 fee to sell, but no holding period
Stock is for a services-based industry, and has been pretty constant at $70-80/share for the past 5 years (not including the big market dips)

If I did buy in, I'd probably sell every 6 months, just to mitigate some of that minimum selling fee.

sell fee seems odd, if you expect the stock to go up then its a deal. hell, 5 % is not bad anyway. does your company pay dividends? another little bonus. Take the 5% and sell, invest in what you want or build a limit order every 6 months to sell at some peak price you think you will hit. if you dont hit it, no big deal as you do it again for the larger value. this is great if your time horizon is long eg: you are young and don't need the money right away. You could do pretty well on it. and you can build your portfolio in the process, automatically. I have found that the best way to save and build wealth is to never see the money in your main account.

I am putting a lot into our espp, but its a much better deal than yours. no sell fee and lowest of first or last day of the quarter - 15% I have never sold without having more than a 100% gain on it. oil industry volatility is a huge plus for this kind of thing. i use it more as a savings account really. my avg cost basis is like 25% of the current stock price. at the moment. + I get dividends!! the dividends have funded all of my portfolio, it makes my real cost basis , on the scale of my total net worth, about free for my whole portfolio. I have been doing it since i was able, when i got hired right out of college 12.5 years ago. so its built up to a nice little chuck, plus i bought some toys out of the money, and my first house down payment. that bit really accelerated my net worth with property value increases.

a gain is a gain... take what you can get, especially early in life. that little gain builds the snowball a few flakes faster, but it accelerates as you build.

 

[Brainonska511]

sell fee seems odd, if you expect the stock to go up then its a deal.

The sell fee seems high to me - it's $0.10/share, $40 minimum. That minimum fee seems like it could wipe out most of the small gains I'd get from a relatively stable stock and a mediocre 5% discount that has no look-back provision.

hell, 5 % is not bad anyway. does your company pay dividends? another little bonus. Take the 5% and sell, invest in what you want or build a limit order every 6 months to sell at some peak price you think you will hit. if you dont hit it, no big deal as you do it again for the larger value. this is great if your time horizon is long eg: you are young and don't need the money right away. You could do pretty well on it. and you can build your portfolio in the process, automatically. I have found that the best way to save and build wealth is to never see the money in your main account.

I am putting a lot into our espp, but its a much better deal than yours. no sell fee and lowest of first or last day of the quarter - 15% I have never sold without having more than a 100% gain on it. oil industry volatility is a huge plus for this kind of thing. i use it more as a savings account really. my avg cost basis is like 25% of the current stock price. at the moment. + I get dividends!! the dividends have funded all of my portfolio, it makes my real cost basis , on the scale of my total net worth, about free for my whole portfolio. I have been doing it since i was able, when i got hired right out of college 12.5 years ago. so its built up to a nice little chuck, plus i bought some toys out of the money, and my first house down payment. that bit really accelerated my net worth with property value increases.

a gain is a gain... take what you can get, especially early in life. that little gain builds the snowball a few flakes faster, but it accelerates as you build.

Company does pay a dividend - quarterly, ~$0.60-0.70/share.

Regarding other investments, I already largely max out retirement funds, and have a good amount in taxable index funds (some of which include my company).

The reason I wouldn't want to hold this stock long-term is just the amount of risk. I already carry risk by deriving my salary from them, I wouldn't want to contribute further to that risk by having a lot of money in company stock (hence, the idea to have a rolling sell off).

 

[dullard]

This seems like a good place to ask -is this worth it?

My company is again soliciting for their ESPP, but I don't think it's not really worth it for the somewhat marginal gains, and the increased complications come tax time:...

Suppose you put in $500 a month. And suppose your company's stock price was stable. Then you'd gain $300/year. Subtract your $80 in selling fees for your proposed selling plan. Subtract lets say $100 for the hassle and/or expense of added tax forms. Net gain: $120/year. Then you pay ordinary income tax on that. That is a nice free gain, but certainly not life-changing.

You could make it a larger possible gain by selling even less often. But, then you run the risk of putting all your eggs into one basket. If your company runs into trouble then you can be out both your job and your investments. See how well Enron employees did.

In the end, I'd only consider it worth doing only if you max it out and sell immediately. You didn't list your company's cap. But a quick Google search comes up with $6000/quarter legal limit. Put in $6000/quarter, sell immediately, and your net gain is $24000*.05 - 4*$40 - ~$100 = $940 after the added tax preparation expenses (note: also you still need to pay income tax on that gain). To me, that is worth it. Go big or just don't do it.

 

[Brainonska511]

Suppose you put in $500 a month. And suppose your company's stock price was stable. Then you'd gain $300/year. Subtract your $80 in selling fees for your proposed selling plan. Subtract lets say $100 for the hassle and/or expense of added tax forms. Net gain: $120/year. That is a nice free gain, but certainly not life-changing.

You could make it a larger possible gain by selling even less often. But, then you run the risk of putting all your eggs into one basket. If your company runs into trouble then you can be out both your job and your investments. See how well Enron employees did.

In the end, I'd only consider it worth doing only if you max it out and sell immediately. You didn't list your company's cap. But a quick Google search comes up with $6000/quarter legal limit. Put in $6000/quarter, sell immediately, and your net gain is $24000*.05 - 4*$40 - ~$100 = $940 after the added tax preparation expenses. To me, that is worth it. Go big or just don't do it.

Thanks. I think the IRS limit is $25000/year, so I can contribute $23500/year, max (because of the discount), if I remember the materials correctly.

 

[otho11]

This seems like a good place to ask -is this worth it?

My company is again soliciting for their ESPP, but I don't think it's not really worth it for the somewhat marginal gains, and the increased complications come tax time:

5% discount
Purchase day is last day of the period (each period is 3 months)
Purchase price is average share price on said last day
Minimum $40 fee to sell, but no holding period
Stock is for a services-based industry, and has been pretty constant at $70-80/share for the past 5 years (not including the big market dips)

If I did buy in, I'd probably sell every 6 months, just to mitigate some of that minimum selling fee.

I've been buying into a similar system with a 10% discount and high selling fees. It's a fortune 500 company whose price is sensitive to any hint of government statements or changes.

I've maxed it out for years and sold quarterly ASAP. It takes 7-10 days for the purchase to be available in my account, so other than the precipitous drop last March it works out great.

The basis isn't properly reported, so it take an additional 10 minutes a year to correct and file taxes.

I'd still do it at 5% if the money wasn't immediately needed.

 

[repoman0]

The sell fee seems high to me - it's $0.10/share, $40 minimum. That minimum fee seems like it could wipe out most of the small gains I'd get from a relatively stable stock and a mediocre 5% discount that has no look-back provision.


Company does pay a dividend - quarterly, ~$0.60-0.70/share.

Regarding other investments, I already largely max out retirement funds, and have a good amount in taxable index funds (some of which include my company).

The reason I wouldn't want to hold this stock long-term is just the amount of risk. I already carry risk by deriving my salary from them, I wouldn't want to contribute further to that risk by having a lot of money in company stock (hence, the idea to have a rolling sell off).

Keep in mind that Mass for some reason taxes short term capital gains at 12% rather than the usual 5 for income or long term capital gains. Not totally sure but I’m guessing you might get hit with that on the 5% discount for selling right away, in addition to federal income taxes. Doesn’t really seem worth it to me based on @dullard’s calcs. Basically under 4% annualized before taxes and nonzero risk (if you get an unfavorable buy in price and end up selling for a loss).

I’ve only ever seen the espp thing be 15% discount off the lowest of the open or close price, which makes it a no brainer to max it out.

 

[Brainonska511]

Keep in mind that Mass for some reason taxes short term capital gains at 12% rather than the usual 5 for income or long term capital gains. Not totally sure but I’m guessing you might get hit with that on the 5% discount for selling right away, in addition to federal income taxes. Doesn’t really seem worth it to me based on @dullard’s calcs. Basically under 4% annualized before taxes and nonzero risk (if you get an unfavorable buy in price and end up selling for a loss).

I’ve only ever seen the espp thing be 15% discount off the lowest of the open or close price, which makes it a no brainer to max it out.

That's a good point on the MA taxes; and for at least the next 4 years, I'll be in MA. Thanks all for the input.

With some shifting budgets, I don't think I'll be able to contribute more than $5-10k/year. Seems like a fair amount of hassle and modest risk just to make maybe $500 before taxes. I'll probably just keep shoveling money into some taxable index funds (or my MA municipal bond fund, which provides some nice tax free dividends) I have instead, since it will also leave me with greater cash-flow flexibility on a monthly basis.

If the ESPP was better - 10-15% discount, I would have started using it earlier.

 

[FelixDeCat]

My SAVA puts are sitting on a nice profit right now and January is a long ways away.

I'm really thinking hard about cashing out.

SAVA has had a really sweet rally this week. I traded calls, bought shares and shorted puts. Based on the chatter June and July are supposed to be big months for big Alzheimer stocks like Biogen. Tomorrow is May option expiration and I think a lot of this weeks action was people buying back short calls they thought would expire worthless. I think it closes between $47-$50 on Friday.

After that its the run to June. Usually things dont happen until the end of the month (but could potentially happen at any time). Either SAVA will drift back down to the low $40s the next 2 weeks to wear down call premium or it will take the $50s and wait for news. Another market correction might bring the $30s however.

I have a funny feeling it could see $99 again this year - but will it? Or could June and July be bad months and it crashes below $20? I dont know. Just have to play cautiously and do not assume anything.

I have no position ATM....but that could change at any time.

 

[FelixDeCat]

ANVS on fire. Another Alzheimer's drug stock. Market cap under $1b.

Edit: Lots of gains to digest be careful. They don't have a drug yet and will definitely dilute shares.

 

[dasherHampton]

Wow. ANVS killing it.

Nobody's selling SAVA puts for a price I'm comfortable with. I guess the waiting game will continue for now.

 

[PlanetJosh]

SAVA just popped up over 2 points in the last hour and a half, at over $51.50 atm. Which I missed out on because I couldn't anticipate the rally in the midst of the mid day downturn in the Dow and Nasdaq. So haven't traded in it today, yet.

Edit: Ok just bought it at $52.32, 570 shares on my ETrade account. Not sure if I should day trade sell it or hold overnight for Monday morning. I'll figure it out before the close.

Edit 2: Sold it at $53 about 10 minutes later so made a little over $390. No guts no glory if the stock pops up to the high 50's today or Monday. Was too scared to churn with worry over a whole weekend waiting.

 

[ultimatebob]

I bought COIN at $340 and it is now trading at $255 (I plan to hold for the long term regardless). I'm looking forward to the part where the NASDAQ and crypto get on the same page.

Ironically, despite the massive loss, gains on my actual crypto easily exceed COIN losses.

COIN seems like a good stock to buy right now, since I think that it will rebound. Crypto goes up? They make money on commissions. Crypto goes down? They STILL make money on commissions.

I don't think that it's a long term holding, though. They're kinda like the "AOL of crypto" at the moment. Like AOL, their high fees and lousy customer support will eventually bite them in the ass and cost them customers.

 

[dasherHampton]

It's pretty easy to see what's going on. Its happening with SAVA right now. It goes something like this:

1) Large financial entities with lots of capital cooperate to sell puts on a stock.

2) They then buy large amounts of the stock, raising the stock price and lowering the market value of the puts.

3) When a predetermined level is reached they take profit on the puts and immediately sell the stock they bought.

I'm sure its more complicated than that but that's the basic plot. Is it legal? Why not. SAVA is up $5 a share right now. Let's see if it drops significantly later today.

 

[dasherHampton]

SAVA is already back under $4 and the market value of my puts is down around 20%.

There is no doubt this is happening.

edit - and just like that the loss on the puts is mostly erased. The original buyers must have re-bought at the lower level.

 

[jpiniero]

Amazon is buying MGM. Maybe they can cast Bezos as the next Bond Villian?

 

[herm0016]

Amazon is buying MGM. Maybe they can cast Bezos as the next Bond Villian?

and quantum group AG, a swiss investment group and company name from a bond movie, made a bid to buy lambo from VW for 9 billion. think its Bezos?

 

[Svnla]

Amazon is buying MGM. Maybe they can cast Bezos as the next Bond Villian?

Let see.

Bald head = check.
Strange droopy looking face = check.
Unfulfilled ambitious = check.
Ruthless = check.

<Scene 3, act 11...> ...Bezos as ............BaldnGreedy....

"No, Mr. Bond, I don't want to kill you yet...I want you to renew your Prime membership so I won't have to keep sending out reminders"

 

[herm0016]

Let see.

Bald head = check.
Strange droopy looking face = check.
Unfulfilled ambitious = check.
Ruthless = check.

i'm thinking more like:

prime drones swarm bond in his db9, alexa voice comes on the speaker of the car "Ready to die Mr. Bond" and drones drop bombs disguised and amazon boxes on the car.

 

[zinfamous]

and quantum group AG, a swiss investment group and company name from a bond movie, made a bid to buy lambo from VW for 9 billion. think its Bezos?

that seems a bit overpriced for a boutique car brand that sells like, 400 cars a year. (yes, I'm probably exaggerating; but I can't imagine that price is in the same atmosphere as Lamborghini's real value)

 

[Roger Wilco]

COIN seems like a good stock to buy right now, since I think that it will rebound. Crypto goes up? They make money on commissions. Crypto goes down? They STILL make money on commissions.

I don't think that it's a long term holding, though. They're kinda like the "AOL of crypto" at the moment. Like AOL, their high fees and lousy customer support will eventually bite them in the ass and cost them customers.

Coinbase is evolving fast. I personally think they will continue to grow and improve and be a very good long-term hold.

I think people will consider Coinbase as one of the safest options for holding crypto online. Defi options will always be available, but they will always carry a higher level of risk that many won't be comfortable with.

 

[woodman1999]

Just realized where AMC is currently at. Completely forgot I bought a sliver back in late January of this year during the GME craze.

 

[FelixDeCat]

Beware this short week:

A big jobs report looms in the week ahead, as markets enter the often-weak month of June

May's employment report is the big event in the week ahead, as stocks enter the often weak month of June.

www.cnbc.com

All times EST:

Tuesday: 10:00 a.m. ISM manufacturing, 2:00 p.m. Fed Governor Brainard

Wednesday: 8:15 a.m. ADP employment, 2:00 p.m. Beige book

Thursday: 8:30 a.m. Initial jobless claims, 1:00 pm More Fed speakers

Friday: 8:30 a.m. May Employment Report


Expect volatility.

 

[dasherHampton]

Just for kicks I went back to last year and checked. I guess I officially clawed my pandemic losses some time last week or the week before. I'm up about $10,000 from where I was at the time.

Of course, that's just realized numbers. I have tons of unrealized gain from options. But if I decided to buy back everything right now I'd be in the green post pandemic.

 

[Red Squirrel]

AMC shares are up, I bought 1 share for the lulz a while back and I'm making $10 right now lol. I'm not selling it though. Diamond hands!

Making around $1000 with Victoria Gold right now. Still wondering if I should sell my Gowest shares at a loss and put it into that. I hate to sell at a loss though.

My company ESP is doing well too, I'm sitting on around 48k of potential cash. Well, before taxes anyway. Probably closer to like 30k or so.

 

[woodman1999]

So what are people's thoughts on AMC? I know it's tough to give an opinion on this one, but trying to sort out if I take my profit now or diamond hands it all the way back to single digits.