Investing General Discussion

Attog said:

Locnar I like your list but you need to be careful. Depending on your age, risk tolerance, investing timeline, etc. this could be a fine time to buy or it could be a big mistake. While most of these are down a full 20% or more from recent highs, they could very easily lose another 50% from here. The next two weeks will be a wild ride.

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I am still expecting recovery to some degree. Fed is creating lots of free cash and the news this weekend was more good than bad. I think it's optimistic to limit volatility to just two weeks. We're in for a few months of volatility minimum imo.

Locnar said:

Can we talk about bottom feeding some? In a attempt and throw of the dice gamble to come out on top with my liquidated individual account (not touching 401k) I've been looking at some gutted stocks from good companies. So far i've got my eye on:

XOM
JBLU
SAVE
RCL
NCLH
BA
DAL
LUV
DIS

Yeah I know not very original. Anyone care to share what they have their eye on?

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To echo what Blazin said, these stocks are hammered for a reason.

XOM is commodity driven in an increasing disliked industry by millenials. It is over sold but... if you are comfortable holding something for many years that may perennially underperformed the SP500 but you want a dividend play then buy it and don't look at it again. Its going to be ugly for a while.

DIS gets about 35% of its revenue from parks. Its going to be ugly for the rest of the year. Movies are kinda a risk also. That being said, it is a quality company down the road.

All the rest but BA are travel stocks. Their lost revenue is never coming back. 2020 is basically a lost year for them. I'm not saying there isn't money to be made but ask your self this. If you have 10k you want to buy into one or some of these travel stocks, are they going to do you better than putting that 10k in APPL down 20%, MSFT down 20%, JPM down 30% or the SPY down 20% ? Think about the opportunity cost of using that cash on the travel sector instead of blue chips.

Finally BA - its a national commodity and it isn't going away. That said it doesn't mean I would own the stock. A bankruptcy and government bailout ala GM fucks the stock holders and bond holders. Don't discount it as a possibility. It could be a lucrative long dated call play as your downside risk is much less than buying stock.

Disclaimer - I am long XOM, AAPL, MSFT, JPM, IVV (SPY clone), DIS and DAL. I have option plays on RCL and BA.

Pharazon2 said:

How confident are you on JPM now though ? Won't they have more trouble making money as rates approach zero ? Honest question. I've seen smart people saying recently that US banks will get destroyed if rates go negative (a la Deutsche.) And the market was pricing in another 100 bp cut recently, though maybe that's changed as rates moved up this week.

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Of all the banks I feel JPM is the strongest and best positioned. In the short term they are all going to take it in the ass to some degree or another. My take is this isn't 2008. We don't have a financial meltdown happening. We have a short term (under 1 year) shock to our economy. Long term view JPM is a buy at this price in my opinion.

And here we go...

Buried in the article...

"The Fed also cut reserve requirement ratios for thousands of banks to zero."

ver_21 said:

Really curious to see what this does for the regular borrower. Lenders had too much demand after last week's drop. Can't hold that many mortgages and can't sell them, either.

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Part of the QE is buying mortgages from the banks.

Notice they got this decision out before the futures opened.

Pops said:

During these panic times, expect to be hammered. I puke at how much I'm down on my first buys. Some bonds and preferreds in the energy biz are trading at bk levels.

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