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Making Money 2017 Stock Market thread
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Kid Twist Offline
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Post: #526
RE: 2017 Stock Market thread
(07-06-2019 01:16 PM)jbkunt2 Wrote:  Some of you on here and basically conspiracy theorists.

The idea we need to "bring America back"... What does that even mean?

There is no better place to make money than the US. Have you ever even left the country?

We need reforms to make sure it doesn't evaporate, jb. Please tell me how any of us are "conspiracy theorists"

jb, it's slipping, but yes of course it's the best place to make loot

being the tallest midget after a while isn't that great of an accomplishment

especially when you fall off the stilts
07-07-2019 03:37 PM
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bacon Offline
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Post: #527
RE: 2017 Stock Market thread
I don't see any meaningful (30% of more) downturn in stocks as long as investors are "forced" to look for higher yielding assets since bonds are providing such poor yields. Additionally, a 2008 style crash is really unlikely. The banks have much different regulations which require them to be stress tested and basically now they can withstand severe shocks to the financial system. Real estate, in the US, only is inflated in select cities with a very high demand for housing, caused by limited available units and job growth. In most of the country it's still possible to get a reasonably priced home at a low long term rate. Finally, the unemployment rate probably is as reliable of an indicator of a recession as any since when people are out of work consumer spending goes down which would lead to lower corporate earnings. This is not the case, as unemployment continues a long term decline. Most likely, we will see a slowdown of growth this year from the previous year but that is not indicative of a recession. The trade wars are probably going to blow over and it is unlikely that that specifically would cause a recession, although it could lead to a temporary spike down 20% if irrational fear gets the better of investors.

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"Chicks dig power, men dig beauty, eggs are expensive, sperm is cheap, men are expendable, women are perishable." - Heartiste
(This post was last modified: 07-07-2019 11:01 PM by bacon.)
07-07-2019 11:00 PM
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BB1 Offline
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Post: #528
RE: 2017 Stock Market thread
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”
— Peter Lynch
07-09-2019 07:13 AM
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BB1 Offline
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Post: #529
RE: 2017 Stock Market thread
(12-15-2017 02:03 PM)BB1 Wrote:  I would be more inclined to invest in fast growing, innovative companies that could return over 500% in the next few years and that are under the radar for most investors.

Alteryx (AYX)
The Trade Desk (TTD)
Noah (NOAH)
Nutanix (NTNX)
Varonis Systems (VRNS)

Just checking in on Alteryx (AYX) since my post 18 months ago. I has grown into my 2nd largest position now after its stock has risen from $28 to $117 - a 317% increase. They are crushing it in the data prep space.

Im very bullish on data in general, hence my big investments in Alteryx, Elastic and MongoDB.
(This post was last modified: 07-09-2019 08:28 PM by BB1.)
07-09-2019 08:25 PM
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Kid Twist Offline
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Post: #530
RE: 2017 Stock Market thread
(07-07-2019 11:00 PM)bacon Wrote:  I don't see any meaningful (30% of more) downturn in stocks as long as investors are "forced" to look for higher yielding assets since bonds are providing such poor yields. Additionally, a 2008 style crash is really unlikely. The banks have much different regulations which require them to be stress tested and basically now they can withstand severe shocks to the financial system. Real estate, in the US, only is inflated in select cities with a very high demand for housing, caused by limited available units and job growth. In most of the country it's still possible to get a reasonably priced home at a low long term rate. Finally, the unemployment rate probably is as reliable of an indicator of a recession as any since when people are out of work consumer spending goes down which would lead to lower corporate earnings. This is not the case, as unemployment continues a long term decline. Most likely, we will see a slowdown of growth this year from the previous year but that is not indicative of a recession. The trade wars are probably going to blow over and it is unlikely that that specifically would cause a recession, although it could lead to a temporary spike down 20% if irrational fear gets the better of investors.

Good reasoning, but what's bubbling up is the corporate credit side of things (stock buybacks) with pensions and insurance companies chasing greater gains, as I've said and you state too, due to QE and lowered rates. The confidence crisis first with municipal debt and pensions (see Chicago, Illinois, New Jersey, etc) will be the catalyst in my opinion. It's the same process, as there is shadow banking going on here looking for those returns, which pensions haven't gotten.

That said, and I'll stress again, we will see new and newer S&P and Dow highs ... the melt up continues. I'm listening to Peter Lynch, at least for the time being, Idea
07-11-2019 10:14 PM
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bacon Offline
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RE: 2017 Stock Market thread
(07-11-2019 10:14 PM)Kid Twist Wrote:  
(07-07-2019 11:00 PM)bacon Wrote:  I don't see any meaningful (30% of more) downturn in stocks as long as investors are "forced" to look for higher yielding assets since bonds are providing such poor yields. Additionally, a 2008 style crash is really unlikely. The banks have much different regulations which require them to be stress tested and basically now they can withstand severe shocks to the financial system. Real estate, in the US, only is inflated in select cities with a very high demand for housing, caused by limited available units and job growth. In most of the country it's still possible to get a reasonably priced home at a low long term rate. Finally, the unemployment rate probably is as reliable of an indicator of a recession as any since when people are out of work consumer spending goes down which would lead to lower corporate earnings. This is not the case, as unemployment continues a long term decline. Most likely, we will see a slowdown of growth this year from the previous year but that is not indicative of a recession. The trade wars are probably going to blow over and it is unlikely that that specifically would cause a recession, although it could lead to a temporary spike down 20% if irrational fear gets the better of investors.

Good reasoning, but what's bubbling up is the corporate credit side of things (stock buybacks) with pensions and insurance companies chasing greater gains, as I've said and you state too, due to QE and lowered rates. The confidence crisis first with municipal debt and pensions (see Chicago, Illinois, New Jersey, etc) will be the catalyst in my opinion. It's the same process, as there is shadow banking going on here looking for those returns, which pensions haven't gotten.

That said, and I'll stress again, we will see new and newer S&P and Dow highs ... the melt up continues. I'm listening to Peter Lynch, at least for the time being, Idea

stock buybacks? Big banks are the biggest buyback companies and have to get permission from the FED to increase their dividend so it mostly goes to buybacks. Most of them have incredible cash flow that needs to go somewhere.

Also for many companies it makes sense to take advantage of the cheap debt to make large acquisitions, its no surprise we have seen the biggest mergers in the last couple years AT&T with Time Warner, Disney with Fox, Comcast with Sky, CVS buying Aetna, Occidental buying Andarko just to name a few.

Additionally consider this line of reasoning for buybacks using corporate debt:

Quote:I mentioned in my 2018 annual letter that stocks looked cheap given they were trading at ~15x forward earnings while interest rates remained low. I’ve always wondered how long that combination could last: if markets are wide open to lend to businesses at 5-6% and their equities are yielding more than that in terms of free cash flow to equity, at some point someone is going to aggressively take advantage of that combination to make a whole lot of money (buy everything you can at a 15x multiple (7.5% after tax cash yield) with the maximum amount of leverage you can at 5-6% pre-tax interest rates and milk the extra cash flow). Over the past ~five years, I think we’ve already seen the beginnings of “bid it up because debt is super cheap” in a lot of stable infrastructure projects and some trophy real estate properties, where long term money (insurance / pension money) has bid the equity on those projects down to low single digit cap rates.
I don’t have any statistics on this, but I wonder if this thinking is starting to bleed into the equity markets / if companies are finally getting more aggressive in taking advantage of this. I say this because I’ve seen a crazy amount of companies raise long term debt at really low rates in the past couple of weeks. As an example, I’ll just pull my favorite company, Charter (disclosure: long through Liberty). This week, Charter raised ~$2B in notes ($1.25B in ~30 year paper and $750m in 10 year paper) at interest rates slightly above 5%. Yes, some of that will go to refinancing some debt that’s about to mature, but some will also go to repurchasing shares. With their equity trading for <20x this year’s FCF and with FCF growing, they are effectively borrowing at 5% to buy their equity at >5%. Eventually, that gets really accrettive. Again, this is nothing new; it’s been happening for years, but I feel like I’ve seen an acceleration in it across companies in the past week and if it turns out companies are getting really serious about pushing debt levels higher to repurchase shares I would guess there’s going to be a ton of really happy equity investors.
source

A pension crisis ironically probably would only happen in a market meltdown. Most of the states promised returns beyond a safe 3-4% drawl down and basically need equities to grow at above 7% to stay solvent. So a market crash would probably be the thing to blow the pension bumble out of the water and not the other way around. Pensions have to buy equities to get the higher returns since "safer" assets are not yielding enough. I don't see them moving out of equities especially in a low interest rate environment.

The shadow banking stuff I've looked into as I used to read a lot of zerohedge and they would sometimes link to that. All of that may be accurate and the system is set to implode. That said, it kind of would also doom the safe heaven dollar and treasury bills wouldn't it? And then what would have value? Gold or silver? The problem with the precious metals market is that they have been highly manipulated through the COMEX for decades. Also the central banks own all the gold so they still win in such a scenario and they are already winning now with getting nations further into debt. The way I see it is they are not driven by money but rather power and the current system provides the type of control that they want. Some monetary shadow banking crisis would necessarily have too many unknown variables.

All that said, another variable for higher equities prices in years to come is that millennial generation represents a very large demographic and they are still marrying and having kids. Essentially, they are entering the biggest consumption years 30 to 50 when their consumer spending is the highest which necessitates that consumer demand might be on the rise for a while.

Game/red pill article links

"Chicks dig power, men dig beauty, eggs are expensive, sperm is cheap, men are expendable, women are perishable." - Heartiste
(This post was last modified: 07-11-2019 11:16 PM by bacon.)
07-11-2019 11:11 PM
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BB1 Offline
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RE: 2017 Stock Market thread
(06-18-2019 07:32 AM)BB1 Wrote:  Brought a full position in Elastic (ESTC) yesterday at $76 . Disruptive technology, hyper growth, founder led, sticky product. Their business model is very similar to MongoDB.
#1 database search engine by a long shot :

https://db-engines.com/en/ranking/search+engine

Elastic (ESTC) now at $93 - a decent 23% gain over the past month.
07-12-2019 05:54 PM
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uhriginal Offline
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RE: 2017 Stock Market thread
(07-12-2019 05:54 PM)BB1 Wrote:  
(06-18-2019 07:32 AM)BB1 Wrote:  Brought a full position in Elastic (ESTC) yesterday at $76 . Disruptive technology, hyper growth, founder led, sticky product. Their business model is very similar to MongoDB.
#1 database search engine by a long shot :

https://db-engines.com/en/ranking/search+engine

Elastic (ESTC) now at $93 - a decent 23% gain over the past month.

BananaBanana
07-12-2019 09:27 PM
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Tail Gunner Offline
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Post: #534
RE: 2017 Stock Market thread
(07-11-2019 10:14 PM)Kid Twist Wrote:  
(07-07-2019 11:00 PM)bacon Wrote:  I don't see any meaningful (30% of more) downturn in stocks as long as investors are "forced" to look for higher yielding assets since bonds are providing such poor yields. Additionally, a 2008 style crash is really unlikely. The banks have much different regulations which require them to be stress tested and basically now they can withstand severe shocks to the financial system. Real estate, in the US, only is inflated in select cities with a very high demand for housing, caused by limited available units and job growth. In most of the country it's still possible to get a reasonably priced home at a low long term rate. Finally, the unemployment rate probably is as reliable of an indicator of a recession as any since when people are out of work consumer spending goes down which would lead to lower corporate earnings. This is not the case, as unemployment continues a long term decline. Most likely, we will see a slowdown of growth this year from the previous year but that is not indicative of a recession. The trade wars are probably going to blow over and it is unlikely that that specifically would cause a recession, although it could lead to a temporary spike down 20% if irrational fear gets the better of investors.

Good reasoning, but what's bubbling up is the corporate credit side of things (stock buybacks) with pensions and insurance companies chasing greater gains, as I've said and you state too, due to QE and lowered rates. The confidence crisis first with municipal debt and pensions (see Chicago, Illinois, New Jersey, etc) will be the catalyst in my opinion. It's the same process, as there is shadow banking going on here looking for those returns, which pensions haven't gotten.

That said, and I'll stress again, we will see new and newer S&P and Dow highs ... the melt up continues. I'm listening to Peter Lynch, at least for the time being, Idea

It is not good reasoning for the well-known reason that while history does not often repeat, it does rhyme -- meaning that it is absolutely certain that another such economic meltdown will occur (it is just a matter of time), but it will happen for another reason. In 2000, the cause was overvalued tech stocks. In 2008, it was overvalued real estate. Next time, it will be something entirely different for which the financial system has not properly prepared. It could be untenable corporate and government debt levels, but it could be China, Japan, Europe, the election of a socialist U.S. President in 2020, etc. Everyone always says: "This time it's different."

There is actually a book by that very title that discusses this topic:

Quote:Throughout history, rich and poor countries alike have been lending, borrowing, crashing--and recovering--their way through an extraordinary range of financial crises. Each time, the experts have chimed, "this time is different"--claiming that the old rules of valuation no longer apply and that the new situation bears little similarity to past disasters.

With this breakthrough study, leading economists Carmen Reinhart and Kenneth Rogoff definitively prove them wrong. Covering sixty-six countries across five continents, This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes--from medieval currency debasements to today's subprime catastrophe.
(This post was last modified: 07-12-2019 11:35 PM by Tail Gunner.)
07-12-2019 11:34 PM
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Tail Gunner Offline
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RE: 2017 Stock Market thread
(07-11-2019 11:11 PM)bacon Wrote:  A pension crisis ironically probably would only happen in a market meltdown.

That is definitively not true. Just public pensions are in the hole by $4-6 trillion -- in a "great" economy. In fact, a pension crisis is one the things that could trigger the next economic crisis.

Quote: Here’s a Wharton School note to place this huge number in context.

Sanitation workers, firefighters, teachers and other state and local government employees have performed their duties in the public sector for decades with the understanding that their often lackluster salaries were propped up by excellent benefits, including an ironclad pension. But Moody’s Investors Service recently estimated that public pensions are underfunded by $4.4 trillion. That amount, which is equivalent to the economy of Germany, accounts for one-fifth of national debt. It’s a significant concern for public employees who were banking on a fully funded retirement to get them through their golden years. The true number could be much higher. Whatever it is, filling it will be painful for somebody. Pensioners will receive lower-than-expected benefits, taxpayers will get higher-than-expected tax bills, or citizens will see government services cut. Or maybe all the above.

https://www.mauldineconomics.com/frontli...-monetized


Investors on this thread sure have a rosy outlook considering the very serious systemic problems with the financial system, including pension debt levels, corporate debt levels, student debt levels, and government debt levels in general. Sure, ride the stock market wave while you can, but if you do not an exit plan in place you may lose many years of stock market gains in just a few months. It has happened before.
(This post was last modified: 07-12-2019 11:51 PM by Tail Gunner.)
07-12-2019 11:49 PM
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jbkunt2 Offline
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Post: #536
RE: 2017 Stock Market thread
I certainly agree that the debt levels and deficits are quite literally petrifying.

It's fairly logical to assume at some point it's going to go tits up. Massively.
07-13-2019 12:24 AM
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Tail Gunner Offline
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RE: 2017 Stock Market thread
(07-13-2019 12:24 AM)jbkunt2 Wrote:  I certainly agree that the debt levels and deficits are quite literally petrifying.

It's fairly logical to assume at some point it's going to go tits up. Massively.

Exactly. I am not saying that investors should not invest in the stock market. I am saying that they should educate themselves to be keenly aware of the underlying economic conditions, to have an appropriate exit strategy, and to have a wealth protection plan in place.
07-13-2019 09:59 AM
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jbkunt2 Offline
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RE: 2017 Stock Market thread
I've been considering buying an existing franchise business for diversification.

You can make nice returns if you do it right.

By buying an already operating franchise business the risks should be lower than starting one from scratch or buying a non-franchise as you will get proper support and training if you select the right one.

E.g. I am keeping an eye out for a Jimmy John's. No matter what, cheap sandwiches will sell. Tech will not impact this area except for maybe lowering labor costs.

My ideal portfolio would be my existing business, a Jimmy John's or similar, and the rest in stocks.
07-13-2019 10:48 AM
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Tail Gunner Offline
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RE: 2017 Stock Market thread
(07-13-2019 10:48 AM)jbkunt2 Wrote:  I've been considering buying an existing franchise business for diversification.

You can make nice returns if you do it right.

By buying an already operating franchise business the risks should be lower than starting one from scratch or buying a non-franchise as you will get proper support and training if you select the right one.

E.g. I am keeping an eye out for a Jimmy John's. No matter what, cheap sandwiches will sell. Tech will not impact this area except for maybe lowering labor costs.

My ideal portfolio would be my existing business, a Jimmy John's or similar, and the rest in stocks.

We think alike. I got into agriculture after years of research. Far higher returns than the stock market with far less risk, if done correctly (e.g., redundant sources of water and lucrative crops). The key with farming is not relying on just the rain. Regardless of what happens, people will always need food and housing. I must say, however, that studying finance and economics for many years set me on this path. The world, especially the financial and banking system, does not function as most people think.

   
(This post was last modified: 07-13-2019 12:07 PM by Tail Gunner.)
07-13-2019 12:04 PM
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Deepdiver Offline
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RE: 2017 Stock Market thread
Interesting Newsletter update today:

https://banyanhill.com/investment-banks-...me-to-buy/

INVESTMENT BANKS ARE DIRT CHEAP – NOW IS THE TIME TO BUY!
Brian Christopher

Posted by Brian Christopher | Jul 18, 2019 | Investment Opportunities, Sovereign Investor Daily, Stocks

4 minute, 25 second read

Investment Banks Are Dirt Cheap – Now is the Time to Buy!
Article Highlights:

The market is certain the Federal Reserve will cut interest rates by at least 25 basis points.
A rate cut will mean more and bigger deals for investment banks.
Two of these firms are on a roll … and they’re dirt cheap right now.

League Table:
[Image: leader-board-deals.png]

TLDR Take-aways...

Over this period, the S&P 500 Index returned more than double these two firms’ returns.

But the league tables suggest business has improved at these investment banks.

And, as you can see, their prices haven’t responded … yet. Both firms are still at least 33% below their all-time highs.

I recommend you look into PJT Partners Inc. (NYSE: PJT) and Jefferies Financial Group Inc. (NYSE: JEF).

Lower rates suggest we should see more deals, not less. And these two firms are on a roll.

The market should soon realize it has failed to price in this improvement.

Deepdiver the OG Hunter-Killer ... NBF - Nuke Boats Forever!
"You do not have to be a perfect person to be a perfect PATRIOT!"

Official Whitehouse.gov President Donald John Trump's real achievements: https://www.whitehouse.gov/trump-adminis...lishments/

Communist Freaking Red China's Plan to Undermine the USA and the West:
https://www.whitehouse.gov/wp-content/up...18-PDF.pdf

The Naked Communists 45 Goals for the USA:
http://www.restoring-america.com/Documen...0NOTES.pdf
(This post was last modified: 07-18-2019 03:23 PM by Deepdiver.)
07-18-2019 03:22 PM
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deneuk Offline
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RE: 2017 Stock Market thread
$estc about to break $100 BananaBananaBananaBanana
Yesterday 12:33 PM
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RE: 2017 Stock Market thread
Yep, I'm up 30% on ESTC already Big Grin
Yesterday 03:38 PM
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