Stocks to buy right now? (if any)

Mike Hawk's picture
Rank: Monkey | 41

What do you all think of the current market? Has it reached it's lowest point? Do you think the market will crash again? Also are there any stocks I should look at investing in right now or do you think the market is too high at the moment?

Comments (24)

  • Analyst 1 in IB - Ind
May 20, 2020

???

May 20, 2020

Schrodinger

May 20, 2020

Only stock you should be buying is chicken stock.

Financial Data Science

    • 5
May 21, 2020

Bruh where were you in March 2020? U completely missed it

    • 1
May 21, 2020

Voo

    • 1
May 21, 2020

It seems to me that the market is untethered from reality right now. I guess the idea is that the Fed will pump unlimited amounts of money into the system, and that the economy will quickly bounce back. I have a hard time seeing the latter...the virus will be a concern for a while, and a lot of the damage done so far will last for years. Apart from stock prices, a lot of the economic indicators aren't just bad- they're insanely, unprecedentedly bad.

Here's the current unemployment situation. Nuts. This isn't going away in a couple of months.

https://image.cnbcfm.com/api/v1/image/106547125-1590064408599-20200521_initial_claims_week_may_16.png?v=1590064455&w=740&h=451

    • 5
May 21, 2020

Yep, the govt is propping it up for the time being

Wait until the extra unemployment benefit ends, the Covid relief checks are no more, and Americans get their heads out of their asses and see what's actually going on

    • 1
May 22, 2020

From WSB a few weeks ago:

"Everyone's fucked in 3 months"

Everything's fine.

Maybe you got furloughed, that's ok. You're probably making more on unemployment now. Everything's fine.

Now you have time to learn how to bake, maybe finally sleep in and play some video games. Maybe start looking for a better job. You were thinking about quitting anyway. It's basically summer break with a pay raise. Everything's fine. We should do this pandemic thing every few years.

Maybe you're a small business owner, you're fine too. State is locked down, so no customers, but that's ok. The government is paying your entire payroll and rent. States are already opening up, soon you'll be back to normal. Everything's fine.

Big business? Government's got some loans for you too, low interest even. Fed is buying your junk bonds, so cash flow is no problem. And if you start to struggle, you'll even get some free government money too. Costs are down since you just furloughed half your workforce onto unemployment, hey they're probably making more unemployed anyway. Everything's fine.

Or maybe you're working from home. This pandemic isn't so bad; you get to wear pajamas all day. No commute so you can sleep in, and when you do drive you've never seen the traffic this light. Everything's fine. The stores are all closed, so maybe you'll buy some dumb shit on Amazon with your $1,200 stimulus. Everything's fine.

Fast Forward to Mid-June

PPP (Small Business Grants) lasts 8 weeks. We're 2-3 weeks in, so lets say PPP starts running out around mid-June. All those furloughed workers you brought back kicking and screaming (they were making more on unemployment) so you could pay your rent with the remaining 25% are getting laid off again, this time permanently. But that's ok, we've got the extra $600 unemployment on steroids, time for another pay raise.

By this time there'll be around a month-ish left on the PUA (Unemployment on Steroids) and being laid off from your shitty bartending job won't feel like a 4 month paid vacation with a little extra spending money, the clock is ticking. Maybe time to actually look for a new job this time...

Well everyone else is thinking the same thing. Small business jobs are evaporating, people actually starting to fear the $600/week going away, states are starting to enforce the job seeking requirements, so even the people who never got called back are sending out a flood of applications to keep their poverty $300/week going.

The government's spent, what, $4-7 Trillion by this point. Interest rates already at zero, but the only people borrowing are big businesses who are hemorrhaging money at this point. Remember, we were at the peak of a decade long bubble? Fuelled by corporate debt? Now those chickens are coming home to roost too. The Fed can't buy your junk bonds forever.

The government blew their load too early and it'll start looking like a real bone fide recession. State and municipal budgets are mega-fucked since they rely on sales tax revenue and unemployment checks come right out of their treasury. 50/50 on whether Trump decides to bail them out, if not then add a bunch of teachers, paramedics, construction workers, and paper pushers to the unemployed job seekers line.

The ride's over folks. By August it'll be "job musical chairs" and when the music stops you better hope you have one.

https://www.reddit.com/r/wallstreetbets/comments/g...

WSO's COO (Chief Operating Orangutan) | My Linkedin

    • 4
May 23, 2020
AndyLouis:

The Fed can't buy your junk bonds forever.

https://i.imgur.com/ohDKCIO.jpeg

May 23, 2020

I generally agree with your post but just wanted to present a different viewpoint. more of a gut instinct and I don't have data to back it up, but something to think about.

yes, unemployment numbers are insanely high, but the service industry / low skilled workers represents a disproportionate number of those unemployed. I would argue that unemployment isn't as erosive on human capital for these workers and because the current crisis is not really a structural one (rather it was caused by govt mandated shutdowns), as soon as states reopen these workers will be able to get back to work - even if not at their prior place of employment.

for example, let's look at a restaurant dishwasher that is unemployed because of covid. the training / skills that worker acquired can be applied interchangeably at a variety of restaurants/other businesses, so as soon as the state governments lift the lockdowns, that person can re-enter the workforce. this is in comparison to the financial crisis, where unemployment more broadly encompassed a variety of sectors, impacting a lot of types of labor where the erosion to human capital resulting from unemployment was huge and affected workers that couldn't really pivot to another line of work (e.g. mortgage brokers, construction workers, etc.)

with all this being said, I think the biggest problem moving forward will be a demand issue: even if states open up completely, I think residual fear of social events / living a "normal" life will prove time be a huge burden on the economy, really until a vaccine is developed. even if restaurants CAN open, if there is no demand because people don't want to eat out anymore, then the majority unemployed low-skilled workers will remain unemployed

Funniest
May 21, 2020

a few people I know started a group to discuss exactly this and it's actually grown pretty meaningfully over the past few weeks. not sure if anyone has heard of it but it's turned into a large-scale forum (similar to WSO) but it's focused solely on stock / public market investing.

it's on Reddit and the thread is called wallstreetbets, you should definitely check it out.

    • 13
May 21, 2020

Gazprom is interesting from a value perspective with a PE ratio under 4.

May 22, 2020

Glad you brought it up. Bought at around $4 and plan to hold it for the next few years.

May 21, 2020

I'd hold off for now, let your 401k keep rolling into it, but I'm personally going to wait a while until we actually figure out what's going on and then probably jump in on some index funds and maybe a good reit.

May 21, 2020

Im getting in on Lehman Brothers Calls

    • 1
    • 3
May 22, 2020

Gazprom, Ternium, Prologis. You will thank me five/ten years later.

May 22, 2020

rly interested, do you mind giving a quick explanation for why you think each would be a good investment?

Most Helpful
May 22, 2020

Gazprom - has about 20% of the world's total supply for natural gas and owns 35% of the European market. Recently signed a contract with China as well. The market hasn't been friendly to it in recent years because it's a Russian company. To be fair it is controlled by the Russian government so that is the biggest risk IMO. The market cap is $50bn what not while you go back ten years or so it was at $150bn while the competitiveness of Gazprom hasn't really changed much, I think the margin of safety is there.

Ternium - in my view it is a cyclical play (Peter Lynch mentioned it in his One Up on Wall Street) and is pretty undervalued right now (market price siginificant discount to book value). It is a South American steel company so that is the risk, but steel companies do well when the economy turns better, which is prbbly the biggest short-term risk right now. I personally don't mind holding it and ride the upturn in two to five years.

Prologis - largest logistics REIT in the U.S., second place is Blackstone's warehouse portfolio. Not rich enough to be an investor in Blackstone. Prologis is bigger than sum of all the public comps and the driver is pretty simple, e-commerce, which accounts for about 16% of the total spending in the U.S. (numbres vary but we're still early in e-commerce). I actually haven't bought any of Prologis because I think the valuation is slightly high for my own taste, but will definitely pull the trigger when the price is lower.

Just my opinion, and I'm more of a long-term investor rather than speculating on short-term noise.

    • 5
May 22, 2020

We need more strightforward posts like yours. Investment tehses that make sense. Bravo!

Will update my computer soon and leave Incognito so I will disappear forever. How did I achieve Neanderthal by trolling? Some people are after me so need to close account for safety.

    • 1
May 22, 2020

Hopefully, your investment strategy isn't relying on the advise of people on message boards. If you don't have experience, stick with managed fund or a market ETF.

May 22, 2020

Everyone has flocked into big tech like sheep. If you have a confident view of any company outside that space, there's probably still upside.

    • 1
    • 1
May 22, 2020

I still think there are many really good businesses totally discounted/undervalued b/c of expected corona implications. For example, a company that was planning massive expansion and postponed it b/c corona, you basically get option value on that construction at the moment (assuming it actually happens in the future). But then again, who tf knows what will happen

May 22, 2020
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  • Intern in PropTrad
Jun 13, 2020