Stock Market Discussion, Chat About the Latest Market Action

[ZF Lee]

RIP Hang Seng index

Hang Seng Index slumps below 20,000 as tech stocks routed

HONG KONG: Hong Kong stocks plunged today as technology firms were hit by news that the country's tech hub Shenzhen was put into lockdown, compounding...

www.thesundaily.my

2016 lows gonna get breached. Shenzhen, the tech capital of HK of China got locked down as well as a couple of other cities. The China techs like BABA also looking to lay off staff heavily. HSI put warrants were printing like crazy.

Generally though, Hang Seng has been in a really, really long downtrend. So the puts would have printed anyways?
Started some put warrants on HSI today for an overnight trade as the volume and queues is still good (and HSI still reeling back). But the futures are trading till 3am at my place...so we might get some small reprieve.

Well...it seems the Chinese Plunge Protection Team sprang into action:

HSI punches through 20,000 after vow of support

The Hang Seng Index soared 1,672 points, or over 9 percent, to above 20,000 points yesterday after China's State Council vowed to keep stock markets stable amid a rout that erased HK$4.68 trillion...

www.thestandard.com.hk

China authorities announced they would work on easing the markets and even sitting down with the US on discussing how to go about with the overseas China stocks. They still want global capital.

BABA on the Chinese market blew up like 20% in one day...HSI call warrants printed 80-90% overnight at my Bursa market. I got in on the chase much later (yesterday) and scalped 14% on the morning rebound after retracement.

HSI futures are still going on a mad tear up:


Something tells me everybody is going on a mania onto the HSI warrants since most Malaysian stocks are largely illiquid lol. The tricky part is picking the right warrants...and your strategy. I'm just gonna do intraday scalps...HSI futures (HS1!) trade over till 3am...and I think HK50 also does longer than that.

 

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[Guest-5ty5s4]

History question, looking to learn something from someone older or who has read about this...

In the past (40-100 years ago), banks paid a lot more interest and this interest was enough to be considered a real return, right? What kind of person was investing in the stock market and why? Was it mostly speculation or were the returns actually superior? Obviously today bank interest is effectively zero, or negative accounting for inflation.

Real curious as to the 1910s through 1960s because that seems to be before stocks went mainstream.

Hmm, this article was interesting. It says 1920s spurred stock growth because it was the first sign for Americans that their savings were not safe from inflation:

Why Did People Buy Stocks In The 1920s?

Because the dollar got wobbly.

www.forbes.com

 

[WJK]

History question, looking to learn something from someone older or who has read about this...

In the past (40-100 years ago), banks paid a lot more interest and this interest was enough to be considered a real return, right? What kind of person was investing in the stock market and why? Was it mostly speculation or were the returns actually superior? Obviously today bank interest is effectively zero, or negative accounting for inflation.

Real curious as to the 1910s through 1960s because that seems to be before stocks went mainstream.

Hmm, this article was interesting. It says 1920s spurred stock growth because it was the first sign for Americans that their savings were not safe from inflation:

Why Did People Buy Stocks In The 1920s?

Because the dollar got wobbly.

www.forbes.com

The interest rates used to be a lot higher. It actually went on a lot longer than the 1960s. When I bought my first house in 1976, the interest rates on mortgages were 9.5%. The savings world and real estate mortgage business were controlled by privately owned banks, saving & loans, and thrifts. Only about 20% of mortgages were sold to the secondary market. Most mortgages were held in the banking system portfolios. Only very rich people invested in stocks when I was young. We all had passbook savings accounts. And investing in savings bonds was common. (I still have a couple of those small bonds in my safe from those days. I just haven't cashed them in.) Interest rates made the return reasonable since it was all based on private money.

Then the 1990s crash came and it broke the backs of the banking industry. The stock market monetized the banking industry and the mortgage business. Now, 80% of mortgages are sold on the secondary market. The commercial real estate market became funded by Wall Street bonds. And all kinds of new security instruments were created.

I could write a book on how and what happened in the commercial/office/warehouse real estate market during that time. A lot of it was in response to business changes that were spurred by computerization and the move to on-time delivery. Also, Japan's manufacturing industries failed and their stock market crashed. The consumers in the US turned against Japanese goods like turning off a light switch. The Japanese were heavily invested in the downtown office/commercial in Los Angeles. They sold everything off at steep discounts or they walked away leaving the banking community on the hook. And it all happened at the same time. Our saying in the RE business was "Stay alive until 95." 1995 came and went with no relief. The deep recession lingered on until close to the end of the decade.

The old banking community was further cut down to size by lower and lower interest rates as Wall Street took over. Those low-interest rates were used to suck any remaining money in the banking businesses. It redirected those funds into the stock market. SO many people were financially ruined in that crash. At times, I was hired by RTC, the government corporation, that went in and took over the whole Savings and Loan industry and the Thrifts. I was on some of the audit teams that the government sent in to seize those businesses. I had a front-row seat to the carnage. Private investors went from owning banking entities that managed huge portfolios of mortgages that were supported by everyone's saving accounts. These men were the titans of banking. Most ended up being deal broke. and unemployed.

Does that help answer your question?

 

[Guest-5ty5s4]

The interest rates used to be a lot higher. It actually went on a lot longer than the 1960s. When I bought my first house in 1976, the interest rates on mortgages were 9.5%. The savings world and real estate mortgage business were controlled by privately owned banks, saving & loans, and thrifts. Only about 20% of mortgages were sold to the secondary market. Most mortgages were held in the banking system portfolios. Only very rich people invested in stocks when I was young. We all had passbook savings accounts. And investing in savings bonds was common. (I still have a couple of those small bonds in my safe from those days. I just haven't cashed them in.) Interest rates made the return reasonable since it was all based on private money.

Then the 1990s crash came and it broke the backs of the banking industry. The stock market monetized the banking industry and the mortgage business. Now, 80% of mortgages are sold on the secondary market. The commercial real estate market became funded by Wall Street bonds. And all kinds of new security instruments were created.

I could write a book on how and what happened in the commercial/office/warehouse real estate market during that time. A lot of it was in response to business changes that were spurred by computerization and the move to on-time delivery. Also, Japan's manufacturing industries failed and their stock market crashed. The consumers in the US turned against Japanese goods like turning off a light switch. The Japanese were heavily invested in the downtown office/commercial in Los Angeles. They sold everything off at steep discounts or they walked away leaving the banking community on the hook. And it all happened at the same time. Our saying in the RE business was "Stay alive until 95." 1995 came and went with no relief. The deep recession lingered on until close to the end of the decade.

The old banking community was further cut down to size by lower and lower interest rates as Wall Street took over. Those low-interest rates were used to suck any remaining money in the banking businesses. It redirected those funds into the stock market. SO many people were financially ruined in that crash. At times, I was hired by RTC, the government corporation, that went in and took over the whole Savings and Loan industry and the Thrifts. I was on some of the audit teams that the government sent in to seize those businesses. I had a front-row seat to the carnage. Private investors went from owning banking entities that managed huge portfolios of mortgages that were supported by everyone's saving accounts. These men were the titans of banking. Most ended up being deal broke. and unemployed.

Does that help answer your question?

Yes it does, wow.

Very few people I’ve heard of had stocks prior to the 60’s or 70’s when companies started pushing everyone into them for retirement plans.

Now almost everyone is.

Seeing commercials on TV like QQQ being the “official ETF of the NCAA” just screams bubble to me. What the...?

 

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[MJ DeMarco]

The brainiacs in DC want to tax billionaires on unrealized gains. Nothing like forcing trillions of dollars in wealth to seek liquidation all at once to pay tax bills. What possibly could go wrong?

 

[Guest-5ty5s4]

The brainiacs in DC want to tax billionaires on unrealized gains. Nothing like forcing trillions of dollars in wealth to seek liquidation all at once to pay tax bills. What possibly could go wrong?

would be a perfect storm for a massive recession and then government saying the only solution is for the socialization / public purchase of many private companies and assets.

Inflate on purpose, trigger the mother of all crashes, then take it all.

Great Reset into Communism. Lol, just a whacky conspiracy theory, maybe.

 

[MoneyDoc]

The brainiacs in DC want to tax billionaires on unrealized gains. Nothing like forcing trillions of dollars in wealth to seek liquidation all at once to pay tax bills. What possibly could go wrong?

Just read about this...

Any idea how long something like this takes to implement? I'm sure it needs to get passed, no? I just don't see how this can get passed when I'm sure the billionaires this would affect have a major influence in congress.

With that said, the fact the admin is even thinking this way is scary. China might become the go-to after all...

 

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[Guest-5ty5s4]

Just read about this...

Any idea how long something like this takes to implement? I'm sure it needs to get passed, no? I just don't see how this can get passed when I'm sure the billionaires this would affect have a major influence in congress.

With that said, the fact the admin is even thinking this way is scary. China might become the go-to after all...

We've been saying it for so long...

It's so obvious what they want to do and what a giant frikkin' disaster it would be.

And not just for economics, but for human rights and your liberty. They affect each other, the economic rules and the political system. They aren't exclusive of each other.

 

[MJ DeMarco]

Netflix taking a bath post earnings, down 25%. Perhaps too much woke bullshit.

After worst quarter for shares in nearly a decade, Netflix executives say that loss of 200,000 subscribers in first quarter will grow to a loss of 2 million in the second quarter, and 'revenue growth has slowed considerably'


Netflix Inc. disclosed Tuesday that it lost streaming subscribers overall for the first time since the service was in its infancy, and executives expect the same to happen this quarter on a wider scale, news that sent the stock plunging again in extended trading.


Netflix (NFLX) reported a net loss of 200,000 paid subscribers in the first quarter, while analysts on average were forecasting 2.5 million net additions, according to FactSet, which was what Netflix executives had forecast. The decline arrived after a price increase in the U.S. and Canada, and executives guided Tuesday for a loss of 2 million subscribers in the current quarter, while analysts were expecting net adds of 2.55 million.

 

[WJK]

Netflix taking a bath post earnings, down 25%. Perhaps too much woke bullshit.

Go woke, go broke!

 

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[biophase]

Netflix taking a bath post earnings, down 25%. Perhaps too much woke bullshit.

Just so much competition now. I just counted the number of streaming accounts I have and it's crazy.

Netflix, Amazon, HBO Max, Hulu, Disney+, Apple+, Paramount+, AMC+, YoutubeTV, Youtube Premium & Showtime.

What I noticed myself is that Netflix used to be my goto app when I was bored and needed to find something new to watch. Now, I actually go to Youtube first and then to the others. Netflix is now lumped in with HBOMax and Disney for me. Paramount+ is starting to climb up my ranks. The last app I check is Hulu. If I needed to cancel the first 3 to go would be Hulu, AMC and Apple for me.

It would be interesting to know if you could only have 3, which is everyone's can't cancel.

 

[Andy Black]

Just so much competition now. I just counted the number of streaming accounts I have and it's crazy.

Netflix, Amazon, HBO Max, Hulu, Disney+, Apple+, Paramount+, AMC+, YoutubeTV, Youtube Premium & Showtime.

What I noticed myself is that Netflix used to be my goto app when I was bored and needed to find something new to watch. Now, I actually go to Youtube first and then to the others. Netflix is now lumped in with HBOMax and Disney for me. Paramount+ is starting to climb up my ranks. The last app I check is Hulu. If I needed to cancel the first 3 to go would be Hulu, AMC and Apple for me.

It would be interesting to know if you could only have 3, which is everyone's can't cancel.

Same. I go to YouTube before Netflix now. I can spend an hour wandering around Netflix trying to find something to watch, giving up, and then heading to bed. And I don’t like the way they change the thumbnails for movies.

 

[WJK]

Just so much competition now. I just counted the number of streaming accounts I have and it's crazy.

Netflix, Amazon, HBO Max, Hulu, Disney+, Apple+, Paramount+, AMC+, YoutubeTV, Youtube Premium & Showtime.

What I noticed myself is that Netflix used to be my goto app when I was bored and needed to find something new to watch. Now, I actually go to Youtube first and then to the others. Netflix is now lumped in with HBOMax and Disney for me. Paramount+ is starting to climb up my ranks. The last app I check is Hulu. If I needed to cancel the first 3 to go would be Hulu, AMC and Apple for me.

It would be interesting to know if you could only have 3, which is everyone's can't cancel.

I think that a lot of these big tech companies are going to be diluted by competition. It's already happened to the mainstream media. Look at CNN with its 10K of streaming viewers. Twitter should take Musk's offer and feel glad for it. But, Musk did come yesterday and said he would pay the board members 0 rather than millions. No wonder they said no.

 

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[Velo]

There's a little known large cap company called Antero Resources (AR). They dropped below $1 per share at the depth of the C-19 pandemic (or "scamdemic" depending on your view - this is a highly controversial subject so I'll let you decide).

I noticed this company too late for my liking...I bought some at $7 in late 2020 and then more at $8 and then again @ $13 in early 2021.

If you bought Antero Resources at its very bottom, around 77 cents, you'd be sitting on over 46x gains in approximately 2 years worth of time. To put it in perspective, that's ~ Bitcoin's level of return from 2015 - 2017.

To anyone who laments missing out on Bitcoin's massive run in the past decade...fear not, these investment opportunities still exist.

But you MUST pay attention to what is going on around you and don't be afraid to listen to people who have unorthodox opinions. Don't be afraid to look in "weird" places. These "weird" notions are what generate the strongest returns...instead of just fleeting/ephemeral Wall-St-Bets style profits that come just as easily as they go.

While everyone was trumping ARKK style stocks like Docusign, Tesla, Shopify, Solaredge, etc. back in 2020, I was busy investigating commodities, as I knew commodities suffered a terrible bear market from ~2014 to 2020, and that their time to shine was overdue.

Antero Resources, for example, lost 98% of its value from its peak to bottom. Meanwhile, a stock like DOCU has returned to its 2020 values after surging in 2020 and 2021. (DOCU was around $100 in April 2020, it's back to $100 in April 2022 and here's the kicker...the "startup" tech bear market is far from over. DOCU should be trading at its IPO price around $40 by the time this is over)

Commodities are still undervalued compared to stocks (using historical norms/averages) and commodities are typically the last asset class to go up before the entire market goes through a deflationary period. You can expect a depression similar to the one suffered by the UK, US, and continental Europe from the 1870s to 1890~ within 10 years.

When that happens, expect everything (Real estate, stocks, bonds, crypto, PMs, paintings/other weird/misc assets, privately owned businesses, etc.) to crash.

 

[YanC]

Netflix taking a bath post earnings, down 25%. Perhaps too much woke bullshit.

Wow, -63% since November. Would you sell a put here or avoid risking catching the falling knife ?

 

[MJ DeMarco]

Wow, -63% since November. Would you sell a put here or avoid risking catching the falling knife ?

I usually sell puts on drops like this, but I'm not sure this is a fight I want to stick my neck in. Stock is currently down 112 points, or 32%. I've been trading options for years and I haven't quite seem a drop like this in a "bellweather" name.

 

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[YanC]

I usually sell puts on drops like this, but I'm not sure this is a fight I want to stick my neck in. Stock is currently down 112 points, or 32%. I've been trading options for years and I haven't quite seem a drop like this in a "bellweather" name.

Yeah, the stock is in a complete freefall right now, hasn't had an uptick so far. I decided against opening a position as well. It would have been defined risk anyway, at 220 it stills requires too much BP for my account.

 

[fastlanedoll]

I usually sell puts on drops like this, but I'm not sure this is a fight I want to stick my neck in. Stock is currently down 112 points, or 32%. I've been trading options for years and I haven't quite seem a drop like this in a "bellweather" name.

I think its ok if you sell far enough OTM and it's a stock / etf you'd want to keep in the long run anyway.

I've mentioned before my favourite to trade is TQQQ. I can't believe you guys aren't on this like bees on honey.

 

[YanC]

I think its ok if you sell far enough OTM and it's a stock / etf you'd want to keep in the long run anyway.

I've mentioned before my favourite to trade is TQQQ. I can't believe you guys aren't on this like bees on honey.

Well, the 220 strike certainly felt like it was far enough OTM yesterday And the stock had already dumped almost 50% before this.

Just checked TQQQ, QQQ seems to make more sense from an options selling perspective (better premium to BPR ratio). I use XLK as a proxy to trade QQQ since it is still a little bit too big given my account size.

 

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[socaldude]

Doubled my money on NFLX Puts LOL. Normally don’t do that but had to rent some short deltas. LOL

 

[fastlanedoll]

Well, the 220 strike certainly felt like it was far enough OTM yesterday And the stock had already dumped almost 50% before this.

Just checked TQQQ, QQQ seems to make more sense from an options selling perspective (better premium to BPR ratio). I use XLK as a proxy to trade QQQ since it is still a little bit too big given my account size.

I think you can get rich on TQQQ and just forget about the rest of the stock market.

its leveraged so options premiums are relatively high. they split they shares recently so that just means I can sell more contracts

it's excellent for going long as well- look at the damn chart! if you want to avoid the 'dips', just sell when it dips below 175 DMA.

besides, QQQ will never go to zero, unlike *cough* individual stocks. to me, it's just far, far riskier to trade individual stocks. and the vast, vast majority does not give returns like TQQQ.

 

[MJ DeMarco]

FaceBook is tanking along side of Netflix. Oh the joy watching that turd of a company lose billions in market cap.

 

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[socaldude]

Latest release of Luckbox magazine talking about energy. Imagine if ENERGY was decentralized like how the money supply needs to be decentralized.

 

[DougRMR]

There's a little known large cap company called Antero Resources (AR). They dropped below $1 per share at the depth of the C-19 pandemic (or "scamdemic" depending on your view - this is a highly controversial subject so I'll let you decide).

I noticed this company too late for my liking...I bought some at $7 in late 2020 and then more at $8 and then again @ $13 in early 2021.

If you bought Antero Resources at its very bottom, around 77 cents, you'd be sitting on over 46x gains in approximately 2 years worth of time. To put it in perspective, that's ~ Bitcoin's level of return from 2015 - 2017.

To anyone who laments missing out on Bitcoin's massive run in the past decade...fear not, these investment opportunities still exist.

But you MUST pay attention to what is going on around you and don't be afraid to listen to people who have unorthodox opinions. Don't be afraid to look in "weird" places. These "weird" notions are what generate the strongest returns...instead of just fleeting/ephemeral Wall-St-Bets style profits that come just as easily as they go.

While everyone was trumping ARKK style stocks like Docusign, Tesla, Shopify, Solaredge, etc. back in 2020, I was busy investigating commodities, as I knew commodities suffered a terrible bear market from ~2014 to 2020, and that their time to shine was overdue.

Antero Resources, for example, lost 98% of its value from its peak to bottom. Meanwhile, a stock like DOCU has returned to its 2020 values after surging in 2020 and 2021. (DOCU was around $100 in April 2020, it's back to $100 in April 2022 and here's the kicker...the "startup" tech bear market is far from over. DOCU should be trading at its IPO price around $40 by the time this is over)

Commodities are still undervalued compared to stocks (using historical norms/averages) and commodities are typically the last asset class to go up before the entire market goes through a deflationary period. You can expect a depression similar to the one suffered by the UK, US, and continental Europe from the 1870s to 1890~ within 10 years.

When that happens, expect everything (Real estate, stocks, bonds, crypto, PMs, paintings/other weird/misc assets, privately owned businesses, etc.) to crash.

I've been looking at commodities as well. Have invested heavily in oil mining companies and a little into silver. Those stocks in particular have increased 300% or so since 2020. Any recommendations in regards to spotting good stocks for this?

 

[YanC]

I've been looking at commodities as well. Have invested heavily in oil mining companies and a little into silver. Those stocks in particular have increased 300% or so since 2020. Any recommendations in regards to spotting good stocks for this?

I believe MJ mentioned he's invested in DBC, which is an index that tracks commodities, and he has done well with it.

 

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[DougRMR]

I believe MJ mentioned he's invested in DBC, which is an index that tracks commodities, and he has done well with it.

Thanks. XOP is a good index to get into as well. It 2x'd in about a year, which isn't crazy but it's pretty good for an index.

 

[MJ DeMarco]

I believe MJ mentioned he's invested in DBC, which is an index that tracks commodities, and he has done well with it.

Yes, but ya'll might be late to that party. The index is already up a good 60% and seems to have started to lose momentum.

 

[Andreas Thiel]

I think I wrote about this when I first saw the projection. Today I saw a follow-up video. Have not fact checked any of it, just repeating what I just watched:


Based on the situation In the top left corner, based on his conviction that rising rates are a geopolitical play of the US and on the inflation projections at the time, Dirk Müller (German market observer) predicted that the rates for bonds will rise quickly. He calculated that with the given earnings projection at the time, the only way for stocks to get back to an acceptable return-on-invest difference around 3% (because of the higher risk) would be by falling around 25%. Some of that has played out, as the top right corner shows. As economic headwinds lead to earning projection adjustments, stocks have to get even cheaper for a similar ROI.

This can explain the situation that the markets are currently in, and I think it is an interesting lense to look through.
Obviously the yields of stocks and bonds are relatively close now, which should mean downward pressure on stock prices.
Some market participants might be expecting a course correction by the FED anytime soon.

But rising rates don't hurt the US relative to other countries. Many central banks are in a tough situation. They have insane levels of debt. Japan will probably in the news in a big way, soon. Their national debt relative to GDP puts them in 3rd place globally and they can only afford this at around 0% interest rates.
Now that is no longer an option. Carry trades put pressure on the currencies of these countries (declines in Japan's currency in the bottom left - 5 year chart) and inflation gets worse.
Japan already asked the FED if they could discuss a way to address the issue creatively and the FED simply declined.

This mechanism is probably primarily meant to get the chinese bubble to burst (their currency is in the bottom right - 1 year chart), but getting every other country into debt is a plus. Will be interesting to see how this story develops.

 

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[DougRMR]

I think I wrote about this when I first saw the projection. Today I saw a follow-up video. Have not fact checked any of it, just repeating what I just watched:

View attachment 43154
Based on the situation In the top left corner, based on his conviction that rising rates are a geopolitical play of the US and on the inflation projections at the time, Dirk Müller (German market observer) predicted that the rates for bonds will rise quickly. He calculated that with the given earnings projection at the time, the only way for stocks to get back to an acceptable return-on-invest difference around 3% (because of the higher risk) would be by falling around 25%. Some of that has played out, as the top right corner shows. As economic headwinds lead to earning projection adjustments, stocks have to get even cheaper for a similar ROI.

This can explain the situation that the markets are currently in, and I think it is an interesting lense to look through.
Obviously the yields of stocks and bonds are relatively close now, which should mean downward pressure on stock prices.
Some market participants might be expecting a course correction by the FED anytime soon.

But rising rates don't hurt the US relative to other countries. Many central banks are in a tough situation. They have insane levels of debt. Japan will probably in the news in a big way, soon. Their national debt relative to GDP puts them in 3rd place globally and they can only afford this at around 0% interest rates.
Now that is no longer an option. Carry trades put pressure on the currencies of these countries (declines in Japan's currency in the bottom left - 5 year chart) and inflation gets worse.
Japan already asked the FED if they could discuss a way to address the issue creatively and the FED simply declined.

This mechanism is probably primarily meant to get the chinese bubble to burst (their currency is in the bottom right - 1 year chart), but getting every other country into debt is a plus. Will be interesting to see how this story develops.

Damn, it's like a bizarre game of chess.

 

[socaldude]

Well, the last time the market was at this level the VIX was higher(38). So my guess is that this is probably a market bottom(for now). We will probably see a big reflex rally(again). VIX futures were in backwardation although that’s not always a bad thing. So, I mean sell your puts or buy your calls.