UK
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Posts posted by UK
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“Risk managers at big institutional firms are saying, ‘Look, the markets are going up, and you can’t sit around and do nothing, you have to participate,’” said Quincy Krosby, chief global strategist at LPL Financial. “The cost of missing out may be just too high. There’s this optimism that the Fed is either finished or almost done with its rate-hiking cycle, then there’s the notion that the recession could be pushed out.”
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9 hours ago, LC said:
What was your sell rationale on UMG?
Nothing really specific re UMG (or GOOGL), just wanted to derisk portfolio (went into some leverage last year) and choose these two and some META to sell. Recently I also saw some discusion of the posible negative impact by AI on UMG, but I have no opinion myself on this.
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BRKB, META, FFH, AMZN, JOE. Since year end exited GOOGL and UMG and reduced some META to derisk portfolio vs 2022 end.
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https://www.reuters.com/world/europe/wagners-prigozhin-accuses-russian-top-brass-treason-2023-02-21/
Apparently angry, and speaking at times with a raised voice, Prigozhin blamed Russia's Defence Minister Sergei Shoigu and Valery Gerasimov, the country's most senior soldier, of deliberately causing the arms shortages, which he said were causing heightened losses among Wagner troops fighting around Bakhmut. "The chief of the general staff and the defence minister are giving orders right and left not just not to give Wagner PMC ammunition, but not to help it with air transport," Prigozhin said. Prigozhin has for months criticised senior commanders for what he has called their incompetence. Prigozhin has said that the defence ministry is trying to take credit for Wagner successes around the Donetsk region town of Bakhmut.
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18 hours ago, changegonnacome said:
Disney to Cut 7,000 Jobs as Bob Iger Seeks $5.5 Billion in Savings
Might be easier/quicker to start listing the companies that haven't done job cuts at this stage!
As I've said before - this is playing out as the inflation fixing playbook would suggest.........and again the problem with job cuts done in corporate unison as are being done now to restore underlying earnings that are deteriorating..........is that nobody gets to "save" anything with their cost cutting measures........if EVERYBODY is basically doing it at the same time.......your laid off employee is someone else's customer.......and your customer is somebody else's laid off employee....I should add that recessions of course arent driven by just folks who've lost their job.....they are driven fundamentally by people becoming aware of somebody in their network, friends or family losing their job....which drives changes in spending patterns.......the household sector attempts to "save" too by reducing aggregate spending but doing it unison has issues as per the corporate sector.
Ultimately this reduced aggregate demand/spending brings prices in the non-housing services category back to 2%.........the overarching adjustment however the more I think about is that corporates/capital's share of profits as % GDP gets reduced.....margins/earnings effectively......such that labor can enjoy at first a restoration of its pre-pandemic purchasing power from the 2020-2022 period and then as any growing economy should labor gets to expand its purchasing power over time.
https://www.wsj.com/articles/jobs-hiring-boom-layoffs-employment-11675947399?mod=hp_lead_pos7
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2 hours ago, Charlie said:
Any good guesses what Buffett bought in Q4 2022?
My guesses would be Occidental, Apple and some share repurchases.
More TSM?
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https://www.wsj.com/articles/jobs-market-parties-like-its-1969-11675443737
Second, the annual revisions included in Friday’s report suggest the economy has more capacity to add workers. December’s count of the noninstitutionalized population aged 16 and higher was revised up by 954,000, and the labor force—people who are either working or looking for work—was revised up by 871,000. Last year the Labor Department revised up its December 2021 population estimate by 973,000 and its labor-force estimate by about 1.5 million. These upward revisions are likely largely the result of increases in immigration, which plummeted in the first year of the pandemic and then came back—the Census Bureau in December reported that net immigration to the U.S. rebounded over the 12 months ended July 1, 2022, to the highest level since 2017. One thing the population gains might mean is that employment can grow more quickly without exhausting the supply of available workers.
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Citi:
"Given that we go into recession, historically SPX has never bottomed before the start of the recession. Typically, there are even several months between the start of Fed easing and the bottom in U.S. equities," they wrote in a client note. On the other hand, the S&P 500 has now crossed above the 200 daily moving average, which is "an important technical level." "Technicals related to SPX 200dma are indicating that the bottom may already be in. Equity markets broke more than 3.5% above the 200dma, a level at that we have never seen SPX make a new low from during a bear market," the strategists note.
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The upshot for ordinary investors is faintly reassuring, though, according to Mr. Spitznagel. Rather than trying to replicate a Universa-style safe haven strategy or moving into some “safe” asset class like gold bars, the least-bad alternative might be to just to buy and hold stocks passively through the cycle, as Warren Buffett and others have advised. He has suggested that, absent the opportunities he has as a mathematically-sophisticated hedge-fund manager, that is probably the least bad course of action to preserve wealth in the conflagration that he foresees.
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2 hours ago, dealraker said:
Also have a very small investment in NIO, one I've had since the stock was a tad over $2 per share. I don't much even think about it.
Is very small something like 0.2 or 1-2 per cent? Sometimes I too make 1-2 per cent speculative or leveraged bets and also have a basket of very small, like 0.2 per cent positions, which for me is kind of version of wachlist of companies I just want to follow for some good or strange reasons:)
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On 1/27/2023 at 2:24 PM, dealraker said:
I've thought that maybe I shouldn't post this, I'll be possibly considered off-my-rocker plum lunatic, but...
TO HELL WITH BITCOIN! I've got something far more logical! ??????????? Or not.
This week for the third time I bought $5k of something symboled CWEB. LOL! I can afford to lose this $15k but there again I don't think I will.
Hell, if you are going "China" then go with some ****ing GUSTO! I'd watch CWEB during the China run-up years ago and decided if there was any plunge in the future I'd wait till some uptrend began and step into some CWEB.
I've bought three times...this will be one exciting ride.
Interesing! But isnt this thing is full of cloud, saas and similar businesses:)? And isnt most of them (except for Alibaba, Tencent and maybe a few other) is very similar to ARKK type of holdings?
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1 hour ago, dealraker said:
So let's do another story...seriously LOL. Our builder's supply we refer to as "the lumber company", Lexington, NC...the only private one left there. We put $20k into EMC in 1994-1995 or so, data storage. By 2000-2001 or so the stock had gone from our $20k to $1.2 mil. Yep, and our investment club had $600k of it.
Data storage...the chant within the club was: The Internet is just beginning! The Internet is just beginning! Now this isn't the present club I'm fleeing from, this is a sophisticated bunch in the club, average age probably 78 and all had done well in both business and the markets.
So, and I'm just right-brained guessing here, the stock at some point had gone from our $1 to $1.50 split adjusted price to $105 per share. Along the way, in the club, I just mentioned at a meeting, "Maybe given no one wants to step up and say "sell" ---- that we should simply just begin to sell like a percentage on a quarterly basis. The club sold a tad in the $90 range, yes we voted to do "program" quarterly selling. But I was told, from older members of the club, "Charlie, you just can't buy and sell stocks you know...there's no way to know when this is all done." But the members voted, just barely, to sell some - again - each quarter. We also owned Cisco, Intel, Microsoft, we'd bought them all at reasonable prices- but of course none were selling reasonable by then and the growth in their industries was simply astounding.
At the lumber company? We met and finally someone said, "Enough is enough don't you think?" A sigh of relief came from all of us other 3 who all really wanted to sell but not be 'the one' who made the decisions, we sold all our EMC for about $900k some 6 years after investing $20k.
The club? After selling a tad at $90-something, we held the stock. When EMC had fallen from $105 to $35" there was a motion made to "put all the club's money into EMC". Yep, that's how "cloudish" the era was UK, the Internet and data storage was "forever" thus endless profitable growth...right?
In the end the club made 15% annual on EMC stock. We sold the majority of it at $7, some 7 times or so what we paid. Data storage? Oh yea, it continued to grow exponentially. Along the way EMC fell from $105 to $7.
So my view is very biased. Yesterday while working a crossword puzzle I listened to John Chambers on CNBC. Chambers was on more magazine covers (this is before the web had destroyed most magazines) than any person in history, he was a business GOD at the time. Chambers said, "Yea technology will continue to grow. Some of the big co's will thrive and some won't." Then he says, "At Cisco we had 40% sales growth for 15 years...and then it stopped...and then it went in reverse."
That will NEVER happen to the cloud. Never-ever.
Thanks for sharing!
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11 minutes ago, dealraker said:
UK my guess is that like storage of the 1990's and early 2000's at some point pricing/growth rate/competition makes it literally stop on a dime...
...and reverse. Yep, that's my guess.
But my oh my does cloud sell well. Reminds me of the Buffett story:
Fisherman walks into a tackle shop and sees an eight colored lure with eight hooks. Fisherman asks the clerk, "Does this thing catch fish?" Clerk replies, "I don't sell to fish."
Like everyone else on earth the mystical thought of cloud and cloud growth, just like data storage, makes me want to put everything I have into it. It must have endless growth! It must! It must!
Thanks, yes very good story:). Not sure cloud is just commodity storage though. Everything might as well develope into nice oligopoly market, controled by few players. It remainds me IBM 360 of old era more than just storage. Only my guess of course.
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26 minutes ago, dealraker said:
The cloud is perceived an eternally astronomical PE sector. I disagree with this idea 100%, the same with cyber security.
Astronomical PE is dangerous for any sector, but dont you agree, that cloud is a growing (not necessarily by 40 per cent) market for a long term?
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1 hour ago, mattee2264 said:
If tech stocks get into value territory (i.e. 10x earnings etc) which happened with Microsoft about a decade ago and Apple several years ago and Facebook last year then there is definitely a lot of money to be made. But the mispricing usually occurs because they are under a cloud e.g. Microsoft's PC business was dying, Apple was thought to be at risk from cheaper smartphones, Facebook was losing out to Tik Tok and wasting tons of money on the metaverse. And there are contrary examples of famous and mature tech companies that got cheap and turned out to be value traps so it is not always as obvious and it can be with the benefits of hindsight.
Also you have to put a 50% decline in the context of crazy high market caps and stock prices that have increased five to ten fold over the last decade or so.
As for the relatively unblemished mega tech stocks like Microsoft, Apple, Google etc you still have the law of large numbers. Cloud growth and services growth is going to be a lot more subdued going forward and there is no guarantee new avenues for growth will be discovered. And when you combine slower growth with higher interest rates that can result in a considerable hit to valuation multiples.
And while obviously even more money can be made picking through the rubble of the unseasoned tech stocks that exploded in value during the pandemic only to crash back to earth and identifying which companies are going to be long term successes. But isn't an easy game easy or else everyone would have bought Amazon, eBay, Priceline etc in 2002.
Also during the pandemic mega tech stocks gained a reputation as a safe haven and now that the market is far less worried about aggressive rate hikes and starting to get a little more worried about a possible recession they may be reprising that role. Of course the shock might be that the mega tech stocks are more cyclical than people realize especially as they now represent a large part of the economy and are close to market saturation.
I agree with most of your observations. Just wanted to say, that between tech stocks, especially after they finaly went down much more than the market, just like between other stocks, there could also be good oportunities, just like value traps. I myself never owned any US tech stock in large allocation untill last autumn, except for IBM (at the same time, when MSFT was at almost single digit multiple, dont ask why), so I understand my limitations on circle of competence with tech company and what a value trap is:). I think you have to be more open minded and be able to change your mind with these.
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On 1/25/2023 at 7:43 PM, Gregmal said:
Everyone is talking about the $30T debt ceiling or whatever. Then theres AAPL and MSFT at $2T. AMZN at $1T. How freaking arrogant/lazy do you have to be to think that you're gonna get any sort of worthwhile longer term returns out of those things at those numbers if the go forward numbers are driven by real earnings power/growth? Even Google I struggle with but with regulation and a few spinoffs, you can get a better reset figure on the base. But seriously...TF are people thinking?
I agree that tech stocks carries some additional risk for buy and forget type, but also think what you call arrogant ant lazy in sometimes could be just smart and easy. Large cap tech, just as any large cap or small cap, can be also mispriced. Just look at APPL, when WB bought it. So called law of large numbers not so obvious also sometimes (same was said about APPL size like 10 years ago), not sure it applies to AMZN today at all, considering its business TAM. Then if you look at META, which is btw already like +50 from autumn low, it was very and still is cheap, like value stock. I think somebody even put it in value index last year:). TSM is another interesting case. Then of course there is TSLA and similar things, but most of this kind of growth or non for profit tech already went down 2000 style, like at least 80 per cent:). So I am not sure lumping all tech stocks together serves any better than dealing with the market on the SNP level.
Is The Bottom Almost Here?
in General Discussion
Posted
From: https://www.bloomberg.com/opinion/articles/2023-05-30/wework-s-woes-show-return-to-office-is-no-party