Investing General Discussion
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Sanrith Descartes
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It has been beaten into the ground. Probably some fund managers giving it a pity purchase
edit: activist hedge fund investor told INTC to pursue "strategic options"
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Sanrith Descartes
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Theorycrafting for 2021
Since 2020 is all but over, I am going to look at the year in review in my portfolio and start planning for 2021. Anyone have any companies they see as worthy of acquisition in the new year and if so, why?
Also - Since there are new investors in the thread I am thinking about adding some basic financial models for analyzing companies. Of course, as always, take everything with a grain of salt. One of the major challenges is determining what a company's stock is actually worth. I am going to touch on one of many possible valuation models that isn't too complex. Its sometimes referred to as the Dividend Discount Model. It isn't useful for growth stocks or stocks that don't pay a dividend (obviously based on its name), but it is a tool for looking at Boomer stocks and other consistent dividend payers.
A stock's value (stock price) is = the annual dividend / (your required rate of return - the dividend growth rate)
For example lets use T. What should you pay for T stock? First question is how much annual return are you looking for. For sake of the example lets say you want a 10% return since that is close to historical average return of the S&P 500. so to plug in the numbers Stock value = (2.08 / (10% - 2%
or (2.08 / 0.08). This equals $26.
Thus if you wanted a 10% return on your purchase of T stock, You would want to pay $26 a share. It is currently trading at $28.65 so a little over valued for your required rate of return.
Now since math is fun we can just re-arrange the formula to find out what the return would be if we bought it today at $28.65 so...
Expected rate of return = (annual dividend / current stock price) + Dividend growth rate.
or... Expected return = (2.08/28.65) + 2% ( or 0.02) so (0.0726 + 0.02) = 0.0926 or 9.26%
So buying T today at 28.65 you "Should" expect a 9.26% annual rate of return on your purchase.
Since 2020 is all but over, I am going to look at the year in review in my portfolio and start planning for 2021. Anyone have any companies they see as worthy of acquisition in the new year and if so, why?
Also - Since there are new investors in the thread I am thinking about adding some basic financial models for analyzing companies. Of course, as always, take everything with a grain of salt. One of the major challenges is determining what a company's stock is actually worth. I am going to touch on one of many possible valuation models that isn't too complex. Its sometimes referred to as the Dividend Discount Model. It isn't useful for growth stocks or stocks that don't pay a dividend (obviously based on its name), but it is a tool for looking at Boomer stocks and other consistent dividend payers.
A stock's value (stock price) is = the annual dividend / (your required rate of return - the dividend growth rate)
For example lets use T. What should you pay for T stock? First question is how much annual return are you looking for. For sake of the example lets say you want a 10% return since that is close to historical average return of the S&P 500. so to plug in the numbers Stock value = (2.08 / (10% - 2%
or (2.08 / 0.08). This equals $26.Thus if you wanted a 10% return on your purchase of T stock, You would want to pay $26 a share. It is currently trading at $28.65 so a little over valued for your required rate of return.
Now since math is fun we can just re-arrange the formula to find out what the return would be if we bought it today at $28.65 so...
Expected rate of return = (annual dividend / current stock price) + Dividend growth rate.
or... Expected return = (2.08/28.65) + 2% ( or 0.02) so (0.0726 + 0.02) = 0.0926 or 9.26%
So buying T today at 28.65 you "Should" expect a 9.26% annual rate of return on your purchase.
Last edited:
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Thanks for the info for new people as always! I gotta study this stuff some and osmosis-it into my brain.
Are you in finance for a living, or is this just a hobby you learned?
Anyone have an opinion on this guy’s videos?
He lays things out very cleanly. I watched his video on options trading and it helped to start absorbing that a bit.
Are you in finance for a living, or is this just a hobby you learned?
Anyone have an opinion on this guy’s videos?
He lays things out very cleanly. I watched his video on options trading and it helped to start absorbing that a bit.
Big Phoenix
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Sanrith Descartes
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Sanrith Descartes
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Combination. I have an undergrad in Quant Econ and am mostly done with my MBA in Finance. I also enjoy it as a hobby.
Blazin
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Sanrith Descartes
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BABA +7.5%
It seems ANT is willing to create a holding company to appease regulators in China. This I am sure will allow the regulators to buy into the holding company on "the ground floor".
It seems ANT is willing to create a holding company to appease regulators in China. This I am sure will allow the regulators to buy into the holding company on "the ground floor".
TheBeagle
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This is my plan for 2021 Investing:Theorycrafting for 2021
Since 2020 is all but over, I am going to look at the year in review in my portfolio and start planning for 2021. Anyone have any companies they see as worthy of acquisition in the new year and if so, why?
Also - Since there are new investors in the thread I am thinking about adding some basic financial models for analyzing companies. Of course, as always, take everything with a grain of salt. One of the major challenges is determining what a company's stock is actually worth. I am going to touch on one of many possible valuation models that isn't too complex. Its sometimes referred to as the Dividend Discount Model. It isn't useful for growth stocks or stocks that don't pay a dividend (obviously based on its name), but it is a tool for looking at Boomer stocks and other consistent dividend payers.
A stock's value (stock price) is = the annual dividend / (your required rate of return / the dividend growth rate)
For example lets use T. What should you pay for T stock? First question is how much annual return are you looking for. For sake of the example lets say you want a 10% return since that is close to historical average return of the S&P 500. so to plug in the numbers Stock value = (2.08 / (10% - 2%
Thus if you wanted a 10% return on your purchase of T stock, You would want to pay $26 a share. It is currently trading at $28.65 so a little over valued for your required rate of return.
Now since math is fun we can just re-arrange the formula to find out what the return would be if we bought it today at $28.65 so...
Expected rate of return = (annual dividend / current stock price) + Dividend growth rate.
or... Expected return = (2.08/28.65) + 2% ( or 0.02) so (0.0726 + 0.02) = 0.0926 or 9.26%
So buying T today at 28.65 you "Should" expect a 9.26% annual rate of return on your purchase.
Fogel
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This is my plan for 2021 Investing:
Can I interest you in some spacs!?
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Sanrith Descartes
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I like a man who has a plan.This is my plan for 2021 Investing:
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SeanDoe1z1
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Sanrith Descartes
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I got no idea. This year is its own beast. Keep an eye on the Senate and the Bernie filibuster threat.
SeanDoe1z1
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I'm getting that UXVY tingle, probably that seasonal depression kicking in.
positive thoughts!
positive thoughts!
Sanrith Descartes
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SeanDoe1z1
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Pretty sure I take a UXVY position China devolves into multiple states, Brexit happens, Russia declares the end to all nuclear weapons programs. Pakistan and India make peace.
World peace is declared.
Elon Musk declares himself a martian and terraforms Mars.
I can't take that risk.
World peace is declared.
Elon Musk declares himself a martian and terraforms Mars.
I can't take that risk.
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Tinycoffin
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Sanrith Descartes
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200k more puts than calls in open interest today. Not exactly bullish sentiment.
Notable open interest changes for December 30th (TheFlyOnTheWall)
THE FLY 8:55 AM ET 12/30/2020
Tuesday's total option volume of 30.2 million contracts resulted in net open interest growth of 3.00 million calls and 3.40 million puts. Apple(AAPL) , AT&T(T) , NIO (NIO) and Alibaba(BABA) saw the greatest growth. Top five new positions opened include 50k BGC Partners (BGCP) Feb-21 3 puts, 48k AT&T(T) Feb-21 28 puts, 31k AT&T(T) Feb-21 29 puts, 27k AT&T(T) Feb-21 27 puts and 20k Ford (F) Mar-21 10 calls.
Notable open interest changes for December 30th (TheFlyOnTheWall)
THE FLY 8:55 AM ET 12/30/2020
Tuesday's total option volume of 30.2 million contracts resulted in net open interest growth of 3.00 million calls and 3.40 million puts. Apple(AAPL) , AT&T(T) , NIO (NIO) and Alibaba(BABA) saw the greatest growth. Top five new positions opened include 50k BGC Partners (BGCP) Feb-21 3 puts, 48k AT&T(T) Feb-21 28 puts, 31k AT&T(T) Feb-21 29 puts, 27k AT&T(T) Feb-21 27 puts and 20k Ford (F) Mar-21 10 calls.
Sanrith Descartes
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There is a lot of feeling that Ackman isnt going to announce anything until after the inauguration.