The 2020 Stock Market Crash Thread

Tail Gunner

Hummingbird
Gold Member
One of the large oil companies on my watch list. It would need to drop by another 50% from present levels for me to buy it. Its March 18th low was the lowest price in over two decades.

Royal Dutch Shell Cuts Dividend for First Time Since World War II
Thursday, 30 April 2020 08:30 AM

Royal Dutch Shell Plc cut its dividend for the first time since at least the Second World War as the oil slump triggered by the coronavirus pandemic reshapes the energy industry.

The surprise move is the latest illustration of how the international spread of the deadly disease is causing the biggest upheaval for generations. Energy consumption is undergoing a historic plunge, as is GDP growth in many countries. The global economy that emerges from the other side of the crisis may look very different.

This is a big moment in the history of Shell and the oil industry. The company was by far the biggest payer in the FTSE-100, providing a reliable income to millions of pension fund investors. The two-thirds reduction in its dividend to 16 cents a share -- “much worse” than many investors wanted or expected according to Redburn analyst Stuart Joyner -- underscores the gloomy outlook for the year.
https://www.newsmax.com/finance/str...=DM109564_04302020&s=acs&dkt_nbr=0105022mnjmm
 
RDS.B is on my buy list for exactly the same reasons you mention above. I like them over many other players in the energy space because they are far more diversified in natural gas than many legacy players. Additionally, they still have far more cash on hand than many of their peers, meaning that they're better situated to ride out a protracted downturn. I strongly agree that we need to see at least another 40% or so share price drop before I buy. Sub $20 RDS.B becomes very interesting for a buy-and-hold recovery based strategy.
 

jordypip23

Pelican
Gold Member
I wonder if the contraction of the oil supply has started. I have noticed the fuel prices at the pump climbing back up a little bit.
 
@joost

After usury, cryptocurrency - specifically the kind sold through ICOs - is probably the greatest scam ever invented. Companies get to raise millions and millions of dollars while giving away absolutely nothing of value. Normally companies have to sell shares to raise funds; these guys raise funds for free. Then they get to keep 100% of their profits, to say nothing of the many tokens that were just designed to be quick-exit scams in the first place. There are no shareholders, and token holders get no say in absolutely anything. No sway over company policy or officers. Half the time there's not even a "company" at all. I have to give them credit for how clever the whole thing is.
 
MichaelWitcoff said:
@joost

After usury, cryptocurrency - specifically the kind sold through ICOs - is probably the greatest scam ever invented. Companies get to raise millions and millions of dollars while giving away absolutely nothing of value. Normally companies have to sell shares to raise funds; these guys raise funds for free. Then they get to keep 100% of their profits, to say nothing of the many tokens that were just designed to be quick-exit scams in the first place. There are no shareholders, and token holders get no say in absolutely anything. No sway over company policy or officers. Half the time there's not even a "company" at all. I have to give them credit for how clever the whole thing is.
When's the last time anybody participated in an ICO?
 
Did you ever get a response? I filled out the first complaint form but got another a few weeks later in the email. Wondering if the company threw out the first complaint clandestinely to get out of addressing it?

Ps. Robinhood sells its real time order information of its customers to large brokerages who then bet against Robinhood’s customers. It’s why your order is usually a penny or less against you compared to a real broker.
 
SamuelBRoberts said:
MichaelWitcoff said:
@joost

After usury, cryptocurrency - specifically the kind sold through ICOs - is probably the greatest scam ever invented. Companies get to raise millions and millions of dollars while giving away absolutely nothing of value. Normally companies have to sell shares to raise funds; these guys raise funds for free. Then they get to keep 100% of their profits, to say nothing of the many tokens that were just designed to be quick-exit scams in the first place. There are no shareholders, and token holders get no say in absolutely anything. No sway over company policy or officers. Half the time there's not even a "company" at all. I have to give them credit for how clever the whole thing is.
When's the last time anybody participated in an ICO?
I actually bought the Electroneum ICO and it turned into a ten-bagger for me. But the fact that it happened to work, through sheer twist of fate, doesn't change the fact that it was a poor investing strategy that I've never engaged in again. The proof is in the pudding; I still lost more in crypto, all told, than I gained with that ten-bagger...because one lucky win doesn't make a strategy good. In retrospect I should have listened to Munger and Buffett, but I wasn't mature enough to invest like an adult at the time.
 

godzilla

Pelican
I don't agree with the "deflation is bad for gold" thesis.

The worst Deflation would eventually lead a devaluation of the US dollar.

This is bullish for gold.

In 1933, Roosevelt forced Americans to turn in their gold at $20 an ounce, then revalued it at $35. This was to devalue the dollar.

This is why people in the gold world don't like owning paper gold.

I own some paper gold (AAAU - The perth mint etf allows you to turn in your shares for physical gold), because frankly, its cheaper and I also think our political class is a lot dumber when it comes to finance and technology then before and they don't have no clue what to do. For example, Venezuela doesn't ban crypto despite printing all that money.

If you want to learn more

https://en.wikipedia.org/wiki/Executive_Order_6102
 
MichaelWitcoff said:
SamuelBRoberts said:
MichaelWitcoff said:
@joost

After usury, cryptocurrency - specifically the kind sold through ICOs - is probably the greatest scam ever invented. Companies get to raise millions and millions of dollars while giving away absolutely nothing of value. Normally companies have to sell shares to raise funds; these guys raise funds for free. Then they get to keep 100% of their profits, to say nothing of the many tokens that were just designed to be quick-exit scams in the first place. There are no shareholders, and token holders get no say in absolutely anything. No sway over company policy or officers. Half the time there's not even a "company" at all. I have to give them credit for how clever the whole thing is.
When's the last time anybody participated in an ICO?
I actually bought the Electroneum ICO and it turned into a ten-bagger for me. But the fact that it happened to work, through sheer twist of fate, doesn't change the fact that it was a poor investing strategy that I've never engaged in again. The proof is in the pudding; I still lost more in crypto, all told, than I gained with that ten-bagger...because one lucky win doesn't make a strategy good. In retrospect I should have listened to Munger and Buffett, but I wasn't mature enough to invest like an adult at the time.
Well, you should've listened to the rest of the people on the crypto board here. (Not sure why you didn't, if you were around then.)
You would've walked away with a good chunk of change. Not sure what the average takeaway was but it was probably at least in the realm of 300% returns over a 6-9 month period. If you bombed it, that's on you, not on crypto.


Anyway, there haven't been any high-profile ICOs since early 2018, so it's kind of a moot point.
 

NoMoreTO

Pelican
Warren Buffet has $137 Billion in Cash.

Market Cap for Berkshire Hathaway is $443 Billion.

That is 30% Cash, pretty considerable for a massive investment corp.

He has been adding Cash so far in 2020.

Berkshire Hathaway Inc. was building its massive cash pile to a record $137 billion by the end of March. The company said that figure climbed even higher as it dumped more than $6 billion of stocks in April, making Buffett a net seller of equities so far this year.
Bloomberg - Buffet in Cash
 

Tail Gunner

Hummingbird
Gold Member
NoMoreTO said:
Warren Buffet has $137 Billion in Cash.

Market Cap for Berkshire Hathaway is $443 Billion.

That is 30% Cash, pretty considerable for a massive investment corp.

He has been adding Cash so far in 2020.

Berkshire Hathaway Inc. was building its massive cash pile to a record $137 billion by the end of March. The company said that figure climbed even higher as it dumped more than $6 billion of stocks in April, making Buffett a net seller of equities so far this year.
Bloomberg - Buffet in Cash
Wow! Buffet went from selling $30 million in stock to $6 billion, in just a month! I discussed his dumping of Bank of New York Mellon stock, which is one of the safest U.S. banks, back on April 11th in post 618:

https://www.rooshvforum.com/thread-74769-post-2079265.html?highlight=buffet#pid2079265

Those of us waiting on the sidelines to re-enter the market are in good company with Warren Buffet.
 

Arado

Pelican
Gold Member
godzilla said:
I don't agree with the "deflation is bad for gold" thesis.

The worst Deflation would eventually lead a devaluation of the US dollar.

This is bullish for gold.

In 1933, Roosevelt forced Americans to turn in their gold at $20 an ounce, then revalued it at $35. This was to devalue the dollar.

This is why people in the gold world don't like owning paper gold.

I own some paper gold (AAAU - The perth mint etf allows you to turn in your shares for physical gold), because frankly, its cheaper and I also think our political class is a lot dumber when it comes to finance and technology then before and they don't have no clue what to do. For example, Venezuela doesn't ban crypto despite printing all that money.

If you want to learn more

https://en.wikipedia.org/wiki/Executive_Order_6102
Be wary of over simplifying inflation and deflation, as they can happen simultaneously and in different sectors.


If you have time, this is another interesting podcast discussing inflation/deflation triggers due to debt (start around 24:00 for the main discussion).

 

Tail Gunner

Hummingbird
Gold Member
Tomorrow's stock market opening could prove very ugly after Warren Buffett disclosed selling the entirety of his airline positions.

Berkshire sells entire stakes in U.S. airlines: Buffett
David Shepardson, Jonathan Stempel

(Reuters) - Berkshire Hathaway Inc (BRKa.N) sold its entire stakes in the four largest U.S. airlines in April, Chairman Warren Buffett said Saturday at the company’s annual meeting, saying “the world has changed” for the aviation industry.

The conglomerate had held sizeable positions in the airlines, including an 11% stake in Delta Air Lines (DAL.N), 10% of American Airlines Co (AAL.O), 10% of Southwest Airlines Co (LUV.N) and 9% of United Airlines (UAL.O) at the end of 2019, according to its annual report and company filings.
https://www.reuters.com/article/us-...-stakes-in-u-s-airlines-buffett-idUSKBN22E0VP
 
There's no reason to believe that the airlines will recover any sooner than 2 years from now. They are bleeding cash left and right, even after cutting flights. The fixed costs of running an airline are astronomical. The fact that Buffet was willing to liquidate such a large position with such a big haircut speaks very strongly to a very bearish view that recovery is nowhere near on the horizon for air carriers. As airlines act as a bellwether for the rest of the economy (like oil), I expect a very nasty open tomorrow.
 
Arado said:
Be wary of over simplifying inflation and deflation, as they can happen simultaneously and in different sectors.
You do remember me, Arado. :idea:

Great links, by the way. I loved those, too.
 
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