Lack of trading and market thoughts/opinions on this site
I remember when I first joined this site there was a lot of talk about what moves the market and the true fundamentals of why security value changes. After any relatively "significant" move of any security, a thread would be started and a good debate would ensue where I would be able to learn and gain a bit more knowledge.
However, the site has devolved into something more along the lines of students asking for advice and people giving their opinions about relatively unimportant matters. While I too did ask for help on this site and post dumb things that could have been found/answered with a wuick Google search, I'd like to ask the community to try and push towards going back to what this site was founded on: talking about Wall Street. I want to hear more about what goes on in the market and what big players are doing.
I get this isn't r/wsb but I really miss the content of people talking about their market positions and what their outlook on the economy/ securitiy is.
I'll try to start us off, I have a 327 $SPY 06/12 Call which is down around 12% (11 dollars) and am planning to hold until the 11th or 10th. On Wednesday, I managed to get into some very good Delta, United, and American calls and turned around 280 dollars into 800 by selling at market open on Frisay. I also have a couple of positions in Delta, American, and BRK.B which have yielded very solid returns (around 25%). If you have any cheap buys or discounted equities drop them below.
For next week, my mentality is that the market overracted to the "good" news of unemployment numbers falling and that we will see a small (1-2%) decline in $SPY for the day with the dip coming in the morning and equities remaining flat throughout the trading day. However, with Trump doing everything he possibly can to save the economy and big daddy powell making the printer go bbrrr, equities will be back to highs within a week or two. Should I load up on calls and buy the possible dip or look for cheap buys (airlines, manufacturing, C&R, etc).
Also, what will the effect of the OPEC decision be on the overall market? Will higher prices help the economy grow or add to the COVID destruction of wealth? With demand growing at an ever slowing pace and a glut of supply globally, O&G firms were already levered to shit and im danger before being destroyed by COVID. While higher prices may save some firms on the brink of collapse, what will the higher prices mean for the economy?
In my opinion, the market has become completely out of wack with true fundamentals. The market is weighing states reopening the economy and a possible vaccine too heavily in the overall trend. Additionally, the economy hasn't been able to fully evolve to deal with the aftermath of Covid. I believe most furloughed workers aren't going to get their jobs back, yet many don't realize that due to the Fed providing insane stimulus packages for unemployed workers (most unemployed workers right now are making more than when they worked full-time). Consumer demand is at all time lows and just because states are reopening doesn't mean demand will be back at pre-Covid levels.
It seems that all the market cares about today is the Fed, vaccines, and reopenings. Equities continue to climb higher despite numerous issues that would normally shake investor confidence. We have civil unrest in the country and we also have international unrest with China over Hong Kong.
I know this was a little rantish and slightly rambled, but I am honestly confused on how stocks continue to climb higher and how investors continue to have confidence to buy. If I am missing something please let me know.
https://www.cnbc.com/2020/06/04/stock-market-futures-open-to-close-news…
I do not believe that the market has moved away from fundamentals to the point where there is an insane crash coming due to COVID. I do believe that we are overdue for a downturn that will be brought on not by COVID but by stagnating growth across the world. A few months ago we had an inverted yield curve and Trump passed the historical tax cut as essentially a way to boost corporate earnings which were already growing at a slower rate than before. Slowing economic growth was already occuring in Asia and Europe while the US was an outlier because of sentiment of having orange man at the helm (which helped US asset classes hit historica highs because foreign money poured into the economy). The global ecocnomy was struggling even before COVID and everyone knew a recession was coming. COVID complicated things, an understatement, and crashed entire industries, but not because of normal cyclical economic factors, but because of the fucking virus that destroyed supply chains and made demand for goods fall to 0 because of fear and uncertainty.
Right now, stocks are going up because printer go brrr. Think of it as this way, the PV of 100 dollar at a 10% discount rate 90.91 dollars. The Fed is essentially cutting that rate to .000000001% which makes PV of cash flows go up. On top of that, the Fed is actively scooping up assets so from a supply and demand perspective, you have low risk, infinite demand, and prices skyrocketing because the storngest central bank on the planet is guaranteeing securities.