Investing General Discussion

Gravel · Aug 8, 2023

Blazin said:
Gravel I'm saying I think our mindset is most similar. Not particularly bullish on societal trends but still understanding where the best bet for our money is.

The above posts are me 36% ago on the nasdaq explaining the bullish divergence I was seeing in the price action. Showing my thought process and actual process for capitulating from bearish "feelings". Not because I understood why they were wrong but because the markets price action simply informed they were. I do like going back and seeing my own process in hindsight, I think there is something to take away from it for others about the never ending mantra of trading what is front of you not what you want or what you fear but what is quantifiable in front of you. When things change change with them.

So where do we stand today? Well still in a bullish configuration. We have some room for weakness, if things are going to materially sour there will be signs and we'll just keep an open mind to them each and every day.

That's fair, I suppose. I'm incredibly bullish on the markets only because...where else does the money go? I think the country and west are a fucking dumpster fire and on borrowed time. But it's also the least worst place to stash money.

I think you kind of touched on it in one of your posts earlier today, but yeah, the middle class is dying and the poor are getting squeezed, but we also printed trillions and trillions and that money will drive investments.

I absolutely agree that if you've already got money, you're probably golden at least for a while. I don't know when the ride ends, but for now the stock market will likely diverge from the "economy" completely. The economy could get crushed and equities will barely feel it. I think we'll also see some interesting times as the boomers die off and we have a massive wealth transfer from inheritances. If 2021 and 2022 didn't see the massive drop in consumer spending we all expected, I don't honestly know what will finally kick that off.

Sanrith Descartes · Aug 8, 2023

Sanrith Descartes said:
Follow-up on that previous post, There is a treasury auction closing on 8/8 for 3-year notes. Face value is 4.5% coupon with the expected yield about 4.391%
Think I am going to grab some.
Now that my house sale closed in NY and I no longer need any cash out of my accounts for my new purchase I am free to start investing it again. Off the sidelines at last.

View attachment 485525

There is a 10-year auction on 8/9 at 4% a coupon. Some things I like to side with Buffett on and I might piggyback this trade with him.

View attachment 485526

The three year was expected to go at 4.391% and stopped through at 4.398%. The when issued yield was 4.416%. Face value was 4.5%

Blazin · Aug 8, 2023

Gravel said:
That's fair, I suppose. I'm incredibly bullish on the markets only because...where else does the money go? I think the country and west are a fucking dumpster fire and on borrowed time. But it's also the least worst place to stash money.

I think you kind of touched on it in one of your posts earlier today, but yeah, the middle class is dying and the poor are getting squeezed, but we also printed trillions and trillions and that money will drive investments.

This is exactly what I'm saying.

On the we are fucked side there are all sorts of personal choices that I'm making to guard against those threats that I believe are all more productive than being a market bear. I'm securing food sources, buying land, guns in minecraft, working towards energy independence etc.

Sanrith Descartes · Aug 8, 2023

Blazin said:
guns in minecraft,

surprised i don't believe you GIF by Saturday Night Live

Blazin · Aug 8, 2023

Sanrith Descartes said:

Don't worry no pistol braces as I don't want to raise the caliber of my guns in minecraft.

Hateyou · Aug 8, 2023

Sanrith Descartes said:
I didnt mention whether it was overdue or not. I posted that its an all-time and high and it is combined with an all time high in average interest rates. I totally get that it doesn't seem relevant to you, but I do look at it as something to consider. Especially since I am long V and MA.

What's makes those two items fake? Is the debt not over $1T or the average interest rate on it not at 20.5%?

Well everything is setting all time highs as far as strictly dollar amounts because we’ve printed so much fucking money and inflation over the past 3 years it’s just inevitably going to be higher. Wages have gone up along with it. When you start looking at percentages, things seem to basically be in line with the past so it’s not really a big deal.

Lightning Lord Rule · Aug 8, 2023

Really like the discussion on fake news and market fundamentals, great stuff guys.

Question for the analysts out there, I recently saw in an email that I get from Seeking Alpha recommending Enbridge (ENB) as a good buy right now. It's a Canadian energy company, and the stock price is at a 2Y low or so right now. SA also recommended it for its healthy 7.X% dividend. The thing is, when I look at the info on Fidelity's page about it, it kind of looks like crap to me other than the dividend. The technicals are all bad, the P/E and EPS seems poor compared to the other companies Fidelity listed for comparison, and well... it's Canadian.

There's also my thoughts that if we are in for a recession soon, doesn't that mean energy is going to be affected negatively due to people and businesses being less economically active? Not as many things being built, etc etc. I mean, the overall market might not be affected by the economy, but that certainly won't apply to all sectors, such as real estate, industrials, etc.

Sanrith Descartes · Aug 8, 2023

Blazin said:
So where do we stand today? Well still in a bullish configuration. We have some room for weakness, if things are going to materially sour there will be signs and we'll just keep an open mind to them each and every day.

So we are working on red day number 5 out of 6 days for SPY. This following two really long green session streaks. You think we get down to the 50-DMA? And if we breakthrough a possible move down to the 100?

Gravel · Aug 8, 2023

Hateyou said:
Well everything is setting all time highs as far as strictly dollar amounts because we’ve printed so much fucking money and inflation over the past 3 years it’s just inevitably going to be higher. Wages have gone up along with it. When you start looking at percentages, things seem to basically be in line with the past so it’s not really a big deal.

Which, just as a side note, is why buying a house versus renting is an incredible way to build wealth.

Inflation hit 15%? Yeah, well my mortgage payment stayed the same (although fuck you insurance and taxes). My mortgage is for around $1300, but houses this size are renting for like $2200.

Sanrith Descartes · Aug 8, 2023

Lightning Lord Rule said:
Really like the discussion on fake news and market fundamentals, great stuff guys.

Question for the analysts out there, I recently saw in an email that I get from Seeking Alpha recommending Enbridge (ENB) as a good buy right now. It's a Canadian energy company, and the stock price is at a 2Y low or so right now. SA also recommended it for its healthy 7.X% dividend. The thing is, when I look at the info on Fidelity's page about it, it kind of looks like crap to me other than the dividend. The technicals are all bad, the P/E and EPS seems poor compared to the other companies Fidelity listed for comparison, and well... it's Canadian.

There's also my thoughts that if we are in for a recession soon, doesn't that mean energy is going to be affected negatively due to people and businesses being less economically active? Not as many things being built, etc etc. I mean, the overall market might not be affected by the economy, but that certainly won't apply to all sectors, such as real estate, industrials, etc.

The energy sector is a complex raid zone in my opinion. So many moving parts to understand. That being said, I am currently long OXY but only because I am riding it with Buffett. I think your quote here answers your question...

"The technicals are all bad, the P/E and EPS seems poor compared to the other companies Fidelity listed for comparison"

Blazin · Aug 8, 2023

Lightning Lord Rule said:
There's also my thoughts that if we are in for a recession soon, doesn't that mean energy is going to be affected negatively due to people and businesses being less economically active? Not as many things being built, etc etc. I mean, the overall market might not be affected by the economy, but that certainly won't apply to all sectors, such as real estate, industrials, etc.

Weakness would likely start in companies that most depend on the lower strata. Tyson FOods, cambell soup, dollar stores etc. And for the ones I've followed so far this earnings that seems to be baring out. They aren't seeing large problems yet but are noting weakening. The million dollar question will be, will that spread?

Fortunately I know a guy who is better than anyone and anything at sniffing out a recession months ahead of time. His name is Mr. Market and he'll let us know if what he is finding in hidden places is starting to stink.

Furry · Aug 8, 2023

Blazin said:
I honestly can't understand how its so low, its actually an oddity given the inflation we have seen it should be pushing 2-3T just to be on the level of previous periods of credit extension. Consumers became more disciplined through the pandemic (hate that words because it's bs there was no pandemic but whatever whenever I say pandemic I mean the govts response not reinforcing it actually being a thing) . That is wearing off and the US consumer should at some point return to it's glory days of overextension. Don't even get me started on the ridiculous amount of home equity consumers are sitting on way beyond historical levels.

I kinda wonder if this is a scenario where the upper income to middle class and generally skilled blue-collar worker are sitting right fine and dandy, because this is an extremely job friendly economy. I don't know anyone who owns a house who's really having any financial trouble at all. My mortgage gets laughably cheaper every year, I paid cash for my car, cause why not, and my wages have gone up way faster than inflation. (almost +50% in the past 2-3 years).

Meanwhile, a lot of people in more questionable financial situations seems to be not doing as well. Car repossessions and things like that have trended upward pretty aggressive, but part of that is the market being weird, and lenders seem to be somewhat in front of the game. And people I know that rent or are paycheck to paycheck definitely have been working more OT than usual and seem to be complaining about finances.

The economy is sick atm, but I just don't see the credit market being a huge influence into it like last time. The power balance that's been falling into place since the 70s being turned upside down seems a much, much bigger factor to me, plus god knows what boomers cashing out will do to things.

Lightning Lord Rule · Aug 8, 2023

Sanrith Descartes said:
The energy sector is a complex raid zone in my opinion. So many moving parts to understand. That being said, I am currently long OXY but only because I am riding it with Buffett. I think your quote here answers your question...

"The technicals are all bad, the P/E and EPS seems poor compared to the other companies Fidelity listed for comparison"

Well sure, but WTF do I know? That's the barest surface level of analysis compared to what you guys do. I haven't had the time to sit down and figure out how to do a thorough analysis on company/stock X like you guys have.

Blazin · Aug 8, 2023

Sanrith Descartes said:
So we are working on red day number 5 out of 6 days for SPY. This following two really long green session streaks. You think we get down to the 50-DMA? And if we breakthrough a possible move down to the 100?

View attachment 485842

I'm just watching one level at a time right now the 50d, my feel is we get a test but days like today where the bears just have zero follow through even with perfect set ups and volume is meh. Price action telling me this is becoming less likely. Maybe the 50d comes to us instead via further consolidation.

Sanrith Descartes · Aug 8, 2023

Lightning Lord Rule said:
Well sure, but WTF do I know? That's the barest surface level of analysis compared to what you guys do. I haven't had the time to sit down and figure out how to do a thorough analysis on company/stock X like you guys have.

First questions I would ask yourself is why you want to buy it? Do you want exposure to the sector? Are you just looking because of the dividend? Did that email give you a reason to buy it other than "check this stock out". I generally don't deep dive into a stock until I have identified why I want to own it. Exposure to the space is a viable reason. Its why I started a position in ALB recently.

Sanrith Descartes · Aug 8, 2023

Blazin said:
I'm just watching one level at a time right now the 50d, my feel is we get a test but days like today where the bears just have zero follow through even with perfect set ups and volume is meh. Price action telling me this is becoming less likely. Maybe the 50d comes to us instead via further consolidation.

So the math tells me that if I were to go long with a 25% tranche at the 50-DMA, and it goes to shit so another 25% tranche at the 100-DMA, it keeps falling, a third 25% at the long dated support and finally the last 25% at the 200-DMA, I would end up with a full position with a cost basis of $421 which is sitting just below the 100-DMA and at the early June price point.
The above assumes a bearish movement. If it bounces off the 50 and runs then I look for a new set of entries on the way up.

Thoughts?

Lightning Lord Rule · Aug 8, 2023

Sanrith Descartes said:
First questions I would ask yourself is why you want to buy it? Do you want exposure to the sector? Are you just looking because of the dividend? Did that email give you a reason to buy it other than "check this stock out". I generally don't deep dive into a stock until I have identified why I want to own it. Exposure to the space is a viable reason. Its why I started a position in ALB recently.

I don't know if I really want to buy it, other than the usual: a good opportunity to scalp some $$$. I mostly want to check to see if these guys are full of crap or not.

Blazin · Aug 8, 2023

Sanrith Descartes said:
So the math tells me that if I were to go long with a 25% tranche at the 50-DMA, and it goes to shit so another 25% tranche at the 100-DMA, it keeps falling, a third 25% at the long dated support and finally the last 25% at the 200-DMA, I would end up with a full position with a cost basis of $421 which is sitting just below the 100-DMA and at the early June price point.
The above assumes a bearish movement. If it bounces off the 50 and runs then I look for a new set of entries on the way up.

Thoughts?

Not bad for a bearish plan but whats the plan for a more bullish outcome

Khane · Aug 8, 2023

There's always money in the banana stand

Sanrith Descartes · Aug 8, 2023

Lightning Lord Rule said:
I don't know if I really want to buy it, other than the usual: a good opportunity to scalp some $$$. I mostly want to check to see if these guys are full of crap or not.

Fair enough. Financials:

Bottom half of the income statement:

Balance sheet:

Cash flows:

So off the top of my head is their Debt to EBITDA is scary. $80b in debt alone is scary but its running at 7x normalized EBITDA. Their net debt position is growing each year. Also a red flag for me. They have the free cash to cover the dividend but just barely and they are borrowing money to cover it. They borrowed $2b in 2022 and after paying the dividend ended up with a new cash flow of only positive $500m.

Based just on the financials, I wouldn't put money into it. I also know very little about the industry and their could be compelling reasons in their sector to make it an investment. I cant answer that part.

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