[chakalaka]

(07-18-2016 05:26 PM)El Chinito loco Wrote:  

(07-18-2016 01:30 PM)chakalaka Wrote:  

-10%= Correction
-20 %= Crash

Normally crashes implies a decline of 20%-30% or more of the stock market. When the stock market drops bellow 30% buy.

Buy after a crash, a decline of 30% or more of the stock market. It will go up.

If you did this in 2000 you would have likely gotten wiped out. This is not good advice at all. Even if you're "sure" about an individual stock's performance it's better to diversify into a basket of stocks from multiple sectors.

However, if you're going to go this route it would be much safer to buy the index during and after a major bear market. I pretty much stuffed all my cash into the index in late 2010 with minimal allocation to bonds and just rode the bull market up until recently.

You'll probably still catch the tail end of a falling knife doing it this way but at least the chances of recovery are much higher over the long term.

September 1929 to June 1932

S&P 500 high: 31.86
Low: 4.4
Loss: 86.1 percent
Duration: 34 months

May 1946 to June 1949

S&P 500 high: 19.25
Low: 13.55
Loss: 29.6 percent
Duration: 37 months

December 1961 to June 1962

S&P 500 high: 72.64
Low: 52.32
Loss: 28.0 percent
Duration: 6 months

November 1968 to May 1970

S&P 500 high: 108.37
Low: 69.29
S&P 500 loss: 36.1 percent
Duration: 18 months

January 1973 to October 1974

S&P 500 high: 119.87
Low: 62.28
Loss: 48.0 percent
Duration: 21 months

November 1980 to August 1982

Duration: 21 months
High: 140.52
Low: 101.44
S&P 500 loss: 27.8 percent

August 1987 to December 1987

S&P 500 high: 337.89
Low: 221.24
Loss: 33.5 percent
Duration: 3 months

March 2000 to October 2002

S&P 500 high: 1527.46
Low: 776.76
Loss: 49.1 percent
Duration: 30 months

October 2007 to March 2009

S&P 500 high: 1565.15, Oct. 9, 2007
Low: 682.55, March 5, 2009
S&P 500 loss: 56.4 percent
Duration: 17 months

As I said. The only question is how much time it will take for you to recover. But you will always recover. As for diversification or not. Even though I dond´t advise buying single stocks. It depends on the level of risk and knowledge of the investor. It´s pretty clear if the stock market crashes 30% and you buy an stock/index you will always recover. The stock market historically always recovered.

Even if you had bought at the peak of 1929. In 25 years you would have recovered. But who want´s to wait 25 years.

Buy when the stock market crashes at least 30%. You can wait till it crashes more. But 30% is a solid number. The nearest you are of the bottom less time it will take to recovery. If I buy today and the stock market crashes tomorrow I will still make money. But it will just TAKE MORE TIME.

If you don´t know what you´re doing buy an ETF (vanguard, etc) when the market crashes 30%. You will always recover your money.

You only loose if you don´t have patience to wait for the stocks to recover and sell.

[El Chinito loco]

(07-18-2016 06:55 PM)chakalaka Wrote:  

As I said. The only question is how much time it will take for you to recover. But you will always recover. As for diversification or not. Even though I dond´t advise buying single stocks. It depends on the level of risk and knowledge of the investor. It´s pretty clear if the stock market crashes 30% and you buy an stock/index you will always recover. The stock market historically always recovered.

I thought your prior post(s) was about buying individual stocks. Individual stocks don't always recover after a major bear market such was the case during the dot com crash when the P/E ratio was at a historic high. In fact a lot of investors did get wiped out from catching falling knives all the way down. There were some that were lucky with their picks but most people threw their money into the hot stocks and got their clock cleaned.

I'm a big proponent of long term index investing after a bear also but assuming past performance equals future success can be a trap too.

The index does eventually recover but there may come a time when the recovery cycle becomes extremely drawn out. Especially if a deflationary spiral does happen like it did with Japan. Japan's index has not recovered yet in 30+ years. The Nikkei was at 40,000 in 1984. Saying that a massive and long lasting bear like this could never happen in the U.S. or even globally is silly. It's always good to be aware of the risks and be prudent with investing.

There have been periods in the U.S. market where bear markets easily lasted for over 5 years.

Of course it's better not to expect the unexpected but it's always something to consider. That's why opportunity cost in investing and time horizons matter.

[SunW]

For recession years like chakalaka lists, consider gold mining stocks. From 1929 to 1935, Americans saw 60% of their DJ investments pop, while investors in a gold mining companies saw their money jump big. Gold does well most of the time during bad periods, so mining stocks tend to benefit. A few exceptions exist, but traders should consider this a good tactic for offsetting a bad period.

[chakalaka]

(07-18-2016 08:13 PM)El Chinito loco Wrote:  

(07-18-2016 06:55 PM)chakalaka Wrote:  

As I said. The only question is how much time it will take for you to recover. But you will always recover. As for diversification or not. Even though I dond´t advise buying single stocks. It depends on the level of risk and knowledge of the investor. It´s pretty clear if the stock market crashes 30% and you buy an stock/index you will always recover. The stock market historically always recovered.

I thought your prior post(s) was about buying individual stocks. Individual stocks don't always recover after a major bear market such was the case during the dot com crash when the P/E ratio was at a historic high. In fact a lot of investors did get wiped out from catching falling knives all the way down. There were some that were lucky with their picks but most people threw their money into the hot stocks and got their clock cleaned.

I'm a big proponent of long term index investing after a bear also but assuming past performance equals future success can be a trap too.

The index does eventually recover but there may come a time when the recovery cycle becomes extremely drawn out. Especially if a deflationary spiral does happen like it did with Japan. Japan's index has not recovered yet in 30+ years. The Nikkei was at 40,000 in 1984. Saying that a massive and long lasting bear like this could never happen in the U.S. or even globally is silly. It's always good to be aware of the risks and be prudent with investing.

There have been periods in the U.S. market where bear markets easily lasted for over 5 years.

Of course it's better not to expect the unexpected but it's always something to consider. That's why opportunity cost in investing and time horizons matter.

I actually thought about Japan when I wrote my post. The question was regarding american stock market. Japan is an example. And if you dig more you will probably find other stock markets which gave negative returns for long period of times. But that´s not the case for the S&P500. And this is the one we should look into. Of course pass results is not an indication of future gains. It´s in every fucking site of funds. Still this is the best we got.

Truth is you can buy the stock or preferably index whenever you want. Until now in the US stock market it has always gone up. Now if you buy it at it´s peak. You will take more time to breakeven. But according to past history. It will go up.

Japan is an exception, not the rule. And the exception proves the rule.

Actually Munger said in the Berkshire meeting: "we're starting to look like Japan, and that could be trouble".

Anyway until today and historically the S&P500 always gained more than it lost giving I believe a 7% average yeld.

When people talk about beating the market it´s not that the market gives you losses. Maybe some believe Mr. Market is a greedy bastard. No Mr. Market is quiet a nice guy. It gives around 7%. Beating the market is obtaining more yeld than this. I repeat. Beating the market is equivalent on getting more than 7% yeld.

Anyway has I have said. You need to control to get an understanding of a company. If you tell me you will have power to decide management. But investing from outside without any knowledge. It´s a gamble.

As for other poster you would be surprised at the level of some Roosh members. I´ve been around here since 2008 and met some of them. There was actually a retired Goldman Sachs. At the time he gave me some advises. Pretty good ones.

[robreke]

Currently on Buy: Market pullbacks from here probably contained to 2-4% (just below 5000 on naz)

The wind seems more at our back than in our face.

Could get a rapid rise to the old highs on the nasdaq…to around 5176.

It’s possible to stay overbought, since it appears we are in a new up leg. Healthy markets often stay "overbought" on the indicators for prolonged periods of time, many doubters waiting for a big pullback to happen, which doesn't.

I call this a "run away rally" because it leaves potential buyers stuck in cash waiting for that pullback to buy and the pullback doesn't come. We may be looking at this.

Some interesting facts:

Stock withdrawals are at the highest levels since 2008 crisis. YTD a record $85 Billion

Bond flows at $100 Billion increase. This leaves less investors to sell equities, hence the possible 'melt up'

Down this road this could portend an eventual bond bubble, which of course would affect the stock market, but that's a chapter later in the book.

In summary:

* On "Buy" signal
* Many doubters still out there - good thing from a contrarian standpoint
* Fed rate hike unlikely
* Run away rally possible
* If an individual stock buyer, wait for proper setups according to your criteria. Watch the stocks, not the market.
* Buy stocks from ideal (low risk) entry points.

[456]

General question for you guys:

Say I'm debt-free, decent self-employed income, and am maxing out my SEP IRA in a self-directed Vanguard Retirement account each year.

My pre-tax SEP IRA is 100% VTSAX. The yearly contribution limits are fairly high ~20% of my gross income after my business expenses.

After my emergency fund is filled up, and my pre-tax limits are hit -- my thought was to open a regular after-tax Vanguard investment account and also go into VTSAX.

Is it "dumb" to have the same "portfolio" pre- and post-tax? I'm not an expert, and want to keep in the passive indexes rather than attempt to pick individual stocks. I'm in my early 30s.

If I were to diversify my holdings (into several indices), how do I split that diversification between my pre- and post-tax accounts? Or can I mirror the portfolio on either side?

Any insight would be helpful and a springboard to further research. (I read a lot in Bogleheads about this but they seem to be coming at it from a later-in-life, more-commas perspective).

[jj90]

@456: No, it's not dumb. It's only dumb if it was a special vehicle that had to be inside a tax advantaged structure. If you had SPY in or out or a taxable account, it's still SPY. Yes, there are more efficient ways of structuring a portfolio but as you mentioned you are only doing passive indexing, it's a moot point. Asset allocation is your 1st priority. Just open up a taxable account and buy.

[fortysix]

(07-19-2016 09:55 AM)robreke Wrote:  

In summary:

* On "Buy" signal
* Many doubters still out there - good thing from a contrarian standpoint
* Fed rate hike unlikely
* Run away rally possible
* If an individual stock buyer, wait for proper setups according to your criteria. Watch the stocks, not the market.
* Buy stocks from ideal (low risk) entry points.

What are strategies to determine the bold (setups and entry points)? Are you referring to technical analysis or fundamental analysis used to price shares? What is your strategy? Could you point to some reading resources? Thank you very much in advance.

[robreke]

(07-19-2016 07:17 PM)se7en Wrote:  

(07-19-2016 09:55 AM)robreke Wrote:  

In summary:

* On "Buy" signal
* Many doubters still out there - good thing from a contrarian standpoint
* Fed rate hike unlikely
* Run away rally possible
* If an individual stock buyer, wait for proper setups according to your criteria. Watch the stocks, not the market.
* Buy stocks from ideal (low risk) entry points.

What are strategies to determine the bold (setups and entry points)? Are you referring to technical analysis or fundamental analysis used to price shares? What is your strategy? Could you point to some reading resources? Thank you very much in advance.

A combination of fundamental and technical. Fundamental tells you the companies to look at/screen. Technical analysis tells you when to buy them.

Find companies with good fundamentals, increasing earnings and revenues and then, use technical analysis to buy them as they emerge from properly formed bases.

Reading resources:

How to Make Money in Stocks by O'Neill

Trade Like a Stock Market Wizard by Minervini

[Kissinger2014]

So it has been almost five months since I recommended EZPW, a pawn shop broker, on this forum. Since then it has more than tripled, going from under $3 to over $9.

Obviously the easy money has been made. There is a chance, given its run that it will drop down a bit. But I still think this stock can go up another 30% in the next six months.

[fortysix]

Hey guys, I am currently looking at the company HTBX - it is a healthcare biotech focused on cancer treatment. The company's IP seems great (although I'm no healthcare expert), but after reading through some of the disclosures, it seems like the company's financial situation is not that great (at least for the time being). I think that in the far future, if some stars align, it could see exponential growth - to get there however, it needs to persevere through some tough times, so right now we need to figure out when the company will be ready for our investment. Until then, the company will likely go through wild price swings (and possibly even die).

I was wondering if you could help me analyze the effect that outstanding warrants have on stock price:

The company is currently trying to complete two ongoing Phase II drug studies, the results of which are due Q4 of this year. The co is heavily strapped for cash however, so it recently recently conducted a public offering of 9,100,000 shares of common stock, and warrants to purchase up to an aggregate of 6,825,000 shares of its common stock. The warrants are exercisable to purchase stock at a $1.00 per share. If you are interested, you read the offering filing here: https://www.bizpedia.net/d/heat-biologic...s/16132380
http://seekingalpha.com/filing/2798020


Currently, the stock is trading at ~75 cents per share.

My question is this - hypothetically, in the case that the stock ever hits $1.00 (I have doubts, but say it does), and the warrant holders chose to exercise the warrants, what effect are we going to see on stock price? How does the dilutive effect of warrant exercise affect stock price? Finally, is it possible that the $1.00 warrant price will create a ceiling for the share price, because current majority stockholders don't want the warrants to be exercised and have their stock diluted?

My thought is that if the company issues new shares per the warrant agreement, then the net asset value of the company is stretched thinner amongst more shares, thus the value of each individual share would be less - as a result, we should see an immediate decrease in share price. I've heard conflicting opinions, however.

Any thoughts?

[jj90]

Run don't walk from this company.

Company makes a public offering and then the very next day the company pulls it's offer. Reputable companies don't do that.

Large amount of resignations on a high level IMMEDIATELY after the closing of the offering on the 23rd of Mar.

Massive debt for a early stage company: most companies raise via equity at this stage, not debt.

Bank loan in 1st position. Shareholders will get nothing in Ch7 or 11.

If the company pays off it's current debt fully, it has 2 quarters of runway. This is a shitty binary bet on the Phase2 results in Q4.

BTW you are incorrect on the warrants: they are exercisable immediately. Holders of the warrants would just get stock at $1 vs the current mkt price. Yes, it would dilute.

[fortysix]

Thx for your comments - you are generally confirming my suspicions and I'm not planning to buy in the near future, but I'm watching the company to see what happens in the next few years, just to learn about the industry and how it moves.

I'm also looking at the stocks below in the same industry - you can see they have all been beat the f*** down, so I will be looking for possibility of growth / binary bets (I havent done any research on them yet, though, hope to get some out of the way this week). I will try to post my analysis once I take a look, if I see anything interesting (keeping in mind I am a n00b).

Evoke Pharma - EVOK

Fate Therapeutics - FATE

Gale Biopharma - GALE

Verastem, Inc. - VSTM

CorMedix Inc. - CRMD

Asterias Biotherapeutics - AST

[jj90]

Took a quick look at your picks: Jesus Christ bro, you like playing the lottery.

It's your money in the end, but I think you'll have a better time going to Vegas. At least the casinos will give you free drinks.

[Engineer]

What's the consensus on odd lot tenders?

I'm thinking of right now getting LMT, holding 3 weeks for when they spin off a subsidiary to LDOS, then selling. They offer 11% discount on the exchange, but only for <99 shares (LMT is at ~250). After the short term capital gains tax I'm still ahead ~7% in less than a month. Could be a quick $1700 after taxes and fees.

[jj90]

@Engineer, good find! From reading the documentation it doesn't seem to apply to only old lots, just that old lots don't get prorated(they will be filled). I'm gathering capital to allocate now.

[fortysix]

deleted

[Engineer]

(07-27-2016 02:45 PM)jj90 Wrote:  

@Engineer, good find! From reading the documentation it doesn't seem to apply to only old lots, just that old lots don't get prorated(they will be filled). I'm gathering capital to allocate now.

Thanks! Can you explain more the difference between prorating and not prorating in this tender? I'm very new to this.

My only other concern is perhaps they tried it before in January (see below) and it fell thru? The date of the current tender was July 11.

BETHESDA, Md., Jan. 26, 2016 – Lockheed Martin (NYSE: LMT) has entered into a definitive agreement to separate and combine its realigned Information Systems & Global Solutions (IS&GS) business segment with Leidos Holdings, Inc. (NYSE: LDOS) in a tax-efficient Reverse Morris Trust transaction, unlocking $5 billion in estimated enterprise value for Lockheed Martin stockholders.

[DonnyGately]

(07-18-2016 08:18 PM)SunW Wrote:  

For recession years like chakalaka lists, consider gold mining stocks. From 1929 to 1935, Americans saw 60% of their DJ investments pop, while investors in a gold mining companies saw their money jump big. Gold does well most of the time during bad periods, so mining stocks tend to benefit. A few exceptions exist, but traders should consider this a good tactic for offsetting a bad period.

Gold is often a quite terrible hedge, and dropped over 50% during the 2008 crash.

[DJ-Matt]

I bought LC (lending club) when it went in the shitter after the CEO left, still waiting for the bounceback. It's on the way up again so I have my fingers crossed.

[fortysix]

(07-27-2016 03:23 PM)Engineer Wrote:  

(07-27-2016 02:45 PM)jj90 Wrote:  

@Engineer, good find! From reading the documentation it doesn't seem to apply to only old lots, just that old lots don't get prorated(they will be filled). I'm gathering capital to allocate now.

Thanks! Can you explain more the difference between prorating and not prorating in this tender? I'm very new to this.

My only other concern is perhaps they tried it before in January (see below) and it fell thru? The date of the current tender was July 11.

BETHESDA, Md., Jan. 26, 2016 – Lockheed Martin (NYSE: LMT) has entered into a definitive agreement to separate and combine its realigned Information Systems & Global Solutions (IS&GS) business segment with Leidos Holdings, Inc. (NYSE: LDOS) in a tax-efficient Reverse Morris Trust transaction, unlocking $5 billion in estimated enterprise value for Lockheed Martin stockholders.

Are you concerned with a drop in LMT from now until the tender?

[chakalaka]

(07-27-2016 04:32 PM)DonnyGately Wrote:  

(07-18-2016 08:18 PM)SunW Wrote:  

For recession years like chakalaka lists, consider gold mining stocks. From 1929 to 1935, Americans saw 60% of their DJ investments pop, while investors in a gold mining companies saw their money jump big. Gold does well most of the time during bad periods, so mining stocks tend to benefit. A few exceptions exist, but traders should consider this a good tactic for offsetting a bad period.

Gold is often a quite terrible hedge, and dropped over 50% during the 2008 crash.

Dropped? If you had kept gold bought in 2008 and held it till today you would have made 30%. Needless to say if you sold in 2011 you would have doubled your money.

http://www.macrotrends.net/1333/historic...year-chart

Also in Europe there´s no capital gains taxes on physical gold. Your gains are completely tax free, since it´s legal tender. In US believe it´s taxed.

Besides real estate i´m only invested in gold. As a safe haven really. Not so much for capital gains.

NUGT already gave 500% this year.

http://finance.yahoo.com/chart/NUGT

Anyway I´m not a gold bug. But times are favorable for gold.

[jj90]

@Engineer: Prorating means you only get filled on your order depending on demand. If there's 1M shares to take and I offer to take all 1M, I might not get all if you come in and say I want some too.

Not prorating means you will get filled(or you didn't participate). It's a way to stop a large player from coming in and taking up all/most of the offer and squeezing everyone else out.

@se7en: You can hedge out the price in LMT via a few ways. Short LDOS, buy LMT puts, etc etc. All hedges have a cost though. Insurance eats into returns.

[Cavatine]

somebody who bought facebook 4 years ago for 38 $. Just see this morning how high they are now (116,40 $ right now)

[erikak]

I correctly called AMD 4 months back when it was two dollars, so I'll try again.

Ebay is going back to 60. Whatcha guys think? I'm not totally sure of this, but I dropped 5k into it...

Also I think AMD still has a lot of room to grow and might hit $20 in the future, 10$ is a near certainty, search Google Trends for 'PC gaming', a lot of people aren't aware that PC gaming is kinda making a huge resurgence, add to that how big VR is going to become, and all the new deals they have going on