Spring Banter

[bch2014]

44 minutes ago, SouthCoastMA said:

Plus it's post tax. Any contributions to it are already considered as taxed.  After 59 you can deduct any earnings tax free. 

Depending on one's income situation, a traditional IRA rather than a Roth IRA might make sense. 

There are some caveats to this, but generally speaking, if you believe your effective tax rate today > your effective tax rate in retirement, you should be plowing money into a traditional IRA rather than a Roth.

 

[SouthCoastMA]

21 minutes ago, bch2014 said:

Depending on one's income situation, a traditional IRA rather than a Roth IRA might make sense. 

There are some caveats to this, but generally speaking, if you believe your effective tax rate today > your effective tax rate in retirement, you should be plowing money into a traditional IRA rather than a Roth.

 

I thought you can only open a traditional Roth if you're current employer doesn't already offer something similar (401k, profit sharing plan, etc) but I could be wrong

[bch2014]

10 minutes ago, SouthCoastMA said:

I thought you can only open a traditional Roth if you're current employer doesn't already offer something similar (401k, profit sharing plan, etc) but I could be wrong

I assume you meant "traditional" not "traditional Roth." 

With a traditional IRA, whether or not you can contribute while also having a 401k offered through your employer depends on your income and marital status.

Here's a good chart:

Traditional IRA Income Limits
If your filing status is…	And your modified AGI is…	Then you can take…
Single, head of household, qualifying widow(er), married filing jointly or separately and neither spouse is covered by a plan at work	Any amount	A full deduction up to the amount of your contribution limit
Married filing jointly or qualifying widow(er) and you're covered by a plan at work	$103,000 or less	A full deduction up to the amount of your contribution limit
	More than $103,000 but less than $123,000	A partial deduction
	$123,000 or more	No deduction
Married filing jointly and your spouse is covered by a plan at work	$193,000 or less	A full deduction up to the amount of your contribution limit
	More than $193,000 but less than $203,000	A partial deduction
	$203,000 or more	No deduction
Single or head of household and you're covered by a plan at work	$64,000 or less	A full deduction up to the amount of your contribution limit
	More than $64,000 but less than $74,000	A partial deduction
	$74,000 or more	No deduction
Married filing separately and either spouse is covered by a plan at work	Less than $10,000	A partial deduction
	$10,000 or more	No deduction

[STILL N OF PIKE]

3 hours ago, mreaves said:

So I have a very, very limited knowledge of high level economics but, do you think the Fed is trying to let some of the air out of the markets while counting on a strong recovery as we move out of the pandemic?  The thinking being that the recovery will dull the pain.

I honestly am over my head.  The market has so much liquidity sloshing around that you are seeing tremendous move in different directions daily almost. Buffet described "Mr Market" as a bi polar individual who moves day to day confidently in one direction till he stops on a dime and moves confidently in another...this behavior is being amplified. 

What you said certainly is possible and would make sense.  The market levels of speculation were getting ridiculous...but it would seem there would be better word choices Powell could have used to accomplish this or at least it left the Fed very vulnerable to needing to reverse course and likely doing so "late" and re actively but that is very possible as other chairman have done this and been more direct about it at times (Bernanke) 

. A CNBC clip i watched (linked below) showed the FED is looking at more than the 10 year thou ...but also Credit spreads in high yield and investment grade debt and won't act till this spills over into those credit markets. Thus there is pain potential and if you want relief it won't be coming from the Fed soon (best shot is European Central bank)  They will also probably be forced to move goal posts if the market moves violently downward. Net positioning in Long dated bond moved to net short 99K  last friday after being net long  3k the week before. Money last week piled  in to increase Bonds yields higher primarily in the US. 

The Euro Central bank is Talking more aggressively about action but they didn't show it last week in their buying so when they meet Mid week they could act aggressively to stop the bleeding ...their meeting will be closely watched. You could also see money flowing into foreign equities. Japan Central bank owns 2/3 of all the Japanese Gov't Debt lol and they have a very easy time controlling long rates and they have come out and said they won't let them move....i.e that market looks less risky. 

You can also see as the market is partying this morning.  Mostly cyclical and value stocks (reopening plays along with banks) that high yield debt is not having it and there is a negative divergence developing. You generally want to see HYG (high yield) move in line with stocks.  You maybe starting to see the turmoil spill into credit spreads which the equity markets tend to follow ...so that ticker is worth watching.

How ever Dow Jones Transports index has made a new all time high Today , so the liquidity is flowing there , cyclicals, and Shorting long bonds. 

https://www.marketwatch.com/investing/fund/hyg?mod=over_search

[dendrite]

Hopefully Dom held onto those GME shares he picked up a few weeks. ago.

[STILL N OF PIKE]

2 hours ago, dendrite said:

Hopefully Dom held onto those GME shares he picked up a few weeks. ago.

up to 202  46% gain today....

Option on various strike prices  increased about 400- 500% today

Dow Transports and industrials made new ALL time highs this am... mean while Nasdaq and it's bloated Valuations still falling on a otherwise up day. Cyclical stocks and reopening plays shining today....JAY-DIS up 5% about 15% higher than the panic lows of a day ago. 

High yield debt continues to fall and this negative divergence with equities is sometimes the canary in the coal mine as the rising interest rates maybe spilling over and widening credit spreads ..this usually takes a day or so to spill over into stocks.

[Lava Rock]

1 hour ago, STILL N OF PIKE said:

up to 202  46% gain today....

Option on various strike prices  increased about 400- 500% today

Dow Transports and industrials made new ALL time highs this am... mean while Nasdaq and it's bloated Valuations still falling on a otherwise up day. Cyclical stocks and reopening plays shining today....JAY-DIS up 5% about 15% higher than the panic lows of a day ago. 

High yield debt continues to fall and this negative divergence with equities is sometimes the canary in the coal mine as the rising interest rates maybe spilling over and widening credit spreads ..this usually takes a day or so to spill over into stocks.

why are electrics down? TSLA and one of my ETFs (ICLN). I know some techs are down recently, but I thought clean energy was on the way up, especially with biden's policies.

[STILL N OF PIKE]

17 minutes ago, Lava Rock said:

why are electrics down? TSLA and one of my ETFs (ICLN). I know some techs are down recently, but I thought clean energy was on the way up, especially with biden's policies.

Those stocks were basically priced as thou they were already success stories ...although they may very well succeed that is still ..some time in the future and their future financing costs just got more expensive as interest rates rose. 

To be direct...their valuation metrics  were ridiculous and are no longer supported by Historically low long term interest rates which then... rising long rates compresses the valuation metrics of all those clean energy play that tripled in about 3 months after November election (they were massively overbought) especially those that don't have much in the way of current revenues. There success as future business has not changed.  Basically what i said to watch at 8:13 in the video i posted last page with the Ben Melkman Bloomberg interview from this summer. 

Basically anything Cathy Wood owned is getting slaughtered.....these are not bad companies but all these new innovative future leaders rose to the levels they did due to long run rates that were tiny (10 year at 1% and 30 year at 2%) which allows valuations to reach levels they just hardly ever do. Basically you pull forward many years of future returns to the present when you take the long run discount factor (30 year interest rate to 2%) and when rates move the other way you see valuations compress and stock prices move accordingly downward like Cory's accordion  (shrinking)  regardless of earnings. 

Anyone who invested in Interest rate sensitive stocks, especially after they already went up 300% is getting taken to the wood shed and there is no indication of that stopping unless maybe the European Central bank says at their meeting Wednesday that they are going to move to reduce long term rates. Fed isn't really close to acting...i mean the Dow Transports and Industrials just made all time highs today (although even the dow has seen very high volatility) 

 

[Lava Rock]

20 minutes ago, STILL N OF PIKE said:

Those stocks were basically priced as thou they were already success stories ...although they may very well succeed that is still ..some time in the future and their future financing costs just got more expensive as interest rates rose. 

To be direct...their valuation metrics  were ridiculous and are no longer supported by Historically low long term interest rates which then... rising long rates compresses the valuation metrics of all those clean energy play that tripled in about 3 months after November election (they were massively overbought) especially those that don't have much in the way of current revenues. There success as future business has not changed.  Basically what i said to watch at 8:13 in the video i posted last page with the Ben Melkman Bloomberg interview from this summer. 

Basically anything Cathy Wood owned is getting slaughtered.....these are not bad companies but all these new innovative future leaders rose to the levels they did due to long run rates that were tiny (10 year at 1% and 30 year at 2%) which allows valuations to reach levels they just hardly ever do. Basically you pull forward many years of future returns to the present when you take the long run discount factor (30 year interest rate to 2%) and when rates move the other way you see valuations compress and stock prices move accordingly downward like Cory's accordion  (shrinking)  regardless of earnings. 

Anyone who invested in Interest rate sensitive stocks, especially after they already went up 300% is getting taken to the wood shed and there is no indication of that stopping unless maybe the European Central bank says at their meeting Wednesday that they are going to move to reduce long term rates. Fed isn't really close to acting...i mean the Dow Transports and Industrials just made all time highs today (although even the dow has seen very high volatility) 

 

thanks. so you think the two stocks I posted will continue to fall? Guess Elon lost his 1st place as the richest man.

[PhineasC]

I asked the question I did because it is interesting to see the responses to a realistic question about how you would invest that much cash.

I have noticed that there is a class of "stock nerd" out there that is similar to the sports stat nerds who track every single stat for fantasy team purposes, but never played the sport themselves and barely even watch it on TV. They are just obsessed with the numbers and the mechanics. I'm sure you all know people like that.

Anyway, it's just a question I ask people sometimes when they are ranting about "the Fed this" and "interest rates that." It is interesting to see the response when they are confronted with a real-world scenario with actual risk involved.

[DomNH]

7 hours ago, dendrite said:

Hopefully Dom held onto those GME shares he picked up a few weeks. ago.

[TalcottWx]

20 hours ago, STILL N OF PIKE said:

It's really based on the Guy i have followed for 12 years that i commented about and linked his archives in the response to Hippy, i mean i don't just follow him like a puppy but overall it checks out with what a lot of the smart minds seem to be saying regarding where huge growth is and will continue to be taking place. They aren't speculative stocks that are gonna tank ...they are billion dollar beasts that are leaders in their field.

I will say ... I believe almost all stock investing is more risky than what most professional will admit to since the returns they have presided over have not seen a financial system this dependent on fed intervention

The Fed is going to let a ton more pain occur based on what they have said , the biggest hope would be the ECB acting aggressively to stem bond yields (they have at least tried to talk them down but the market wants action) . They release KEY data today on wether they increased bond buying last week (which will show their level of effort/concern) and the market will react, they also meet this week to go over current policies , so if this sell off is going to end this week , it’s gonna need a aggressive increase in QE from Euro Central Bank , I just don’t know if they can do the heavy lifting required.

Tesla is highly speculative. A tesla fanatic would tell you anyone who says it is, is a moron. What do you make of that stock? I am looking at this dip, and it looks like a massive buying opportunity to me. 

[TalcottWx]

6 hours ago, STILL N OF PIKE said:

up to 202  46% gain today....

Option on various strike prices  increased about 400- 500% today

Dow Transports and industrials made new ALL time highs this am... mean while Nasdaq and it's bloated Valuations still falling on a otherwise up day. Cyclical stocks and reopening plays shining today....JAY-DIS up 5% about 15% higher than the panic lows of a day ago. 

High yield debt continues to fall and this negative divergence with equities is sometimes the canary in the coal mine as the rising interest rates maybe spilling over and widening credit spreads ..this usually takes a day or so to spill over into stocks.

What a great day it was. Have to think that stock is underpriced. If Netflix is worth what it is, Disney + is on its heels, and parks are going to open up, I just don't see any downside to owning Disney in 2021.

[HoarfrostHubb]

2 minutes ago, DotRat_Wx said:

What a great day it was. Have to think that stock is underpriced. If Netflix is worth what it is, Disney + is on its heels, and parks are going to open up, I just don't see any downside to owning Disney in 2021.

Cruise line is still not operating.  Films are not in theaters very much yet.  
but it should get better.  Their current CEO is a bit of a bonehead 

[TalcottWx]

29 minutes ago, HoarfrostHubb said:

Cruise line is still not operating.  Films are not in theaters very much yet.  
but it should get better.  Their current CEO is a bit of a bonehead 

Hype alone should get it to 225 I think 

[mreaves]

2 hours ago, PhineasC said:

I asked the question I did because it is interesting to see the responses to a realistic question about how you would invest that much cash.

I have noticed that there is a class of "stock nerd" out there that is similar to the sports stat nerds who track every single stat for fantasy team purposes, but never played the sport themselves and barely even watch it on TV. They are just obsessed with the numbers and the mechanics. I'm sure you all know people like that.

Anyway, it's just a question I ask people sometimes when they are ranting about "the Fed this" and "interest rates that." It is interesting to see the response when they are confronted with a real-world scenario with actual risk involved.

Hookers and blow is the only way to invest $500K.  That will give you true satisfaction.

[TalcottWx]

14 minutes ago, mreaves said:

Hookers and blow is the only way to invest $500K.  That will give you true satisfaction.

It's true honestly 

[Hoth]

6 hours ago, Lava Rock said:

why are electrics down? TSLA and one of my ETFs (ICLN). I know some techs are down recently, but I thought clean energy was on the way up, especially with biden's policies.

Bubbles are their own catalyst and EVs generally appear to be about as bubbly as anything other than crypto in this market. Tesla is still a good $2500 on a pre-split basis, this for a business that was already very expensive at $250. It speaks to the irrationality of the times that a car company that has never put up a year of positive cash flow, has a CEO who can't deny committing securities fraud, can only show a profit by accounting gimmickry, and is hemorrhaging market share to established makers, trades at a market cap bigger than the next eight biggest auto makers combined. Whether favored by government policies or not, at some point people will remember that car manufacturing, solar panels, and green tech in general, are low margin, ruthlessly competitive businesses.

[HIPPYVALLEY]

Cryptocurrency market capitalization is over $1.6 trillion now.  That’s nuts.  
 

[bch2014]

Yeah, I’ll stay away from TSLA... People are acting like the bottom fell out on it but it’s quite literally trading at late November levels.

The one stock that’s in the AARK/Growth sphere that I like is BMBL. I think it’s an underrated “reopening” trade, but I also think MTCH is ripe to get some market share stolen from them. 
 

Another stock that IPO’ed via SPAC within the year that I like is UTZ. It’s still a little pricy at 24/share but if it drops below 20, I’ll be a buyer again (held from 19 to 26 earlier this year). It’s a pure market share play on salty snacks. If you look at similar CPG categories, salty is by far the outlier in the amount of market share held by one company (PEP/Frito-Lay with greater than 60%). UTZ has always been a strong regional player but they’ve made some acquisitions that will really give them a good national footprint. Using a “sum of parts” valuation, most analysts value PEP’s Frito-Lay division at ~$70-80B. UTZ’s current market cap: $2.1B.

[Hoth]

32 minutes ago, bch2014 said:

Yeah, I’ll stay away from TSLA... People are acting like the bottom fell out on it but it’s quite literally trading at late November levels.

The one stock that’s in the AARK/Growth sphere that I like is BMBL. I think it’s an underrated “reopening” trade, but I also think MTCH is ripe to get some market share stolen from them. 
 

Another stock that IPO’ed via SPAC within the year that I like is UTZ. It’s still a little pricy at 24/share but if it drops below 20, I’ll be a buyer again (held from 19 to 26 earlier this year). It’s a pure market share play on salty snacks. If you look at similar CPG categories, salty is by far the outlier in the amount of market share held by one company (PEP/Frito-Lay with greater than 60%). UTZ has always been a strong regional player but they’ve made some acquisitions that will really give them a good national footprint. Using a “sum of parts” valuation, most analysts value PEP’s Frito-Lay division at ~$70-80B. UTZ’s current market cap: $2.1B.

I'd value their crab chip division alone at a 2.1 billion, mainly owing to my personal consumption. It's a big addressable market lol.

[STILL N OF PIKE]

Yields down overnite to 1.53’ish and Nasdaq futures up 2%, day traders market currently .

ECB releases any policy changes to their bond buying program and their thoughts on Thursday ..if they don’t increase purchases of long end debt the yield response will be key to watch Thursday for a tantrum . Anyone who wants or was short the long bond further  ( drive 10 year yield up ) is probably temporarily  hesitant  till ECB response is known  And will probably see no ECB Thursday action as a big fat green light for weeks to short bond prices (spike yields)

That would be the ECB joining the Fed saying : Go ahead hedge funds and investment banks, we will not defend the 10 year yield , use all your money and market liquidity and short the long bond we are not getting involved ...and they will big time and  then you will be on watch to see valuations in Nasdaq and some SP names compressed quite nicely .

[Lava Rock]

13 minutes ago, STILL N OF PIKE said:

Yields down overnite to 1.53’ish and Nasdaq futures up 2%, day traders market currently .

ECB releases any policy changes to their bond buying program and their thoughts on Thursday ..if they don’t increase purchases of long end debt the yield response will be key to watch Thursday for a tantrum . Anyone who wants to short the long bond ( drive 10 year yield up ) will probably see no ECB Thursday action as a big fat green light for weeks to short bond prices (spike yields) and then you will be on watch to see valuations in Nasdaq and some SP names compressed quite nicely .

GME. just keeps going again.

[STILL N OF PIKE]

Just now, Lava Rock said:

GME. just keeps going again.

It does , but that is a side show to me . I wonder what others are seeing that reddit push , I would guess reopening plays w big short interest ..maybe malls ? 

[DomNH]

Shoulda bought more. 

[STILL N OF PIKE]

Nasdaq with a very impressive rally today . People smarter than me say if it closes above 13010 then it’s bearish short term trend is neutralized.  You are seeing the quality tech names rally big today (FAANG’s plus AMD/NVDA and the semi conductor’s while the revenue free spacs and other dreamers who are all hype and no revenue to 2023 or whatever  are still left behind 

NIO is up 16%

XPEV 14.5% two ev companies whose sales are rising fast but whose valuations got way ahead of themselves before they just fell 50-55%

[Typhoon Tip]

Just think... without humanity ...money doesn't exist -

Ever consider that, just how much of a delusion it really is?

It's a social construct that assigns value based purely upon perception - perception goes away... money has no meaning.  That philosophical truism has always interested me.. 

Yet, it is purported that people have "tried their hand at aeronautics from the perch of their elevated office windows"  over money -

So what does that say about their value system - hm

[512high]

20 hours ago, DotRat_Wx said:

Tesla is highly speculative. A tesla fanatic would tell you anyone who says it is, is a moron. What do you make of that stock? I am looking at this dip, and it looks like a massive buying opportunity to me. 

Well my personal car is a BMW, I bought Tesla about one year ago, $600.25 per share, some people on this site made fun and that's ok saying "way over priced etc". to let you know is  doesn't pay a dividend ,its a growth stock, I also bought CAT the same day and consider my self a long term holder(I'm 58), I invested $15,000 in Tesla, I got just about 25 shares, BUT, over the summer , Tesla declared a 5 for 1 split, so  now I had 125 shares!!!!, I can't remember , after the split the stock was down to ? anyways, story short, Tesla hit a high of almost $901.00 per share so on paper my $15,000 investment  was now worth $112,625.00, I sold 50 shares at $900.00, Tesla to me, made me a lot of money, the remaining 75 shares I will ride out for now.......I would say not bad of a return for 11 months or so.

[Hoth]

57 minutes ago, Typhoon Tip said:

Just think... without humanity ...money doesn't exist -

Ever consider that, just how much of a delusion it really is?

It's a social construct that assigns value based purely upon perception - perception goes away... money has no meaning.  That philosophical truism has always interested me.. 

Yet, it is purported that people have "tried their hand at aeronautics from the perch of their elevated office windows"  over money -

So what does that say about their value system - hm

Without humanity, this thought doesn't exist...or perhaps even a consciousness to perceive the existence of the greater universe....oooooooooh.

[tamarack]

1 hour ago, Typhoon Tip said:

Just think... without humanity ...money doesn't exist -

Ever consider that, just how much of a delusion it really is?

It's a social construct that assigns value based purely upon perception - perception goes away... money has no meaning.  That philosophical truism has always interested me.. 

Yet, it is purported that people have "tried their hand at aeronautics from the perch of their elevated office windows"  over money -

So what does that say about their value system - hm

At its simplest, money is merely a convenient way to trade one's time and effort for the product of someone else's time and effort.  Not all that different from bartering (except for taxes).