Sell

User Forum Topic
Submitted by davelj on June 2, 2020 - 5:27pm

In my view...

You should pretty much sell every risk asset that you can - pretty much. This recent rally is a gift from the market gods to de-risk in the face of financial armageddon.

Amazingly, incredibly, beyond all reason... the S&P500 is down just 10% from it's (significantly overvalued) February all-time high. Despite what's likely to be 15%+ peak-to-trough decline in GDP, 15%+ unemployment, profit decimation, overwhelming corporate and personal bankruptcies, myriad bank failures... and no bullets left in the Fed's gun where rates are concerned... stocks levitate. I would argue that this stock market is the most overvalued US market I've ever seen - possibly including 1999/2000.

And it's all a trade - just like all of the classic sucker rallies. Only the big liquid names are moving and driving the indices higher. No one wants to actually "hold" anything. Everyone thinks they'll be the first ones out the door.

The good news is that the banks are *much* better capitalized than they were going into the Financial Crisis. The bad news is that they're going to need every dime of that capital to stave off a crushing wave of bad commercial and CRE loans. Drive down whatever street near you has a lot of strip malls. I live in Mexico now but I drove down Broadway in Chula Vista the other day and just looked on either side of the street - restaurants, nail/hair salons, small hotels, miscellaneous services and retail... at least 1/3 of these businesses will fail by year-end. They simply do not have the wherewithall to survive. And the others will limp along for years afterward. Virtually all restaurants are fvcked. Even if they can seat using social distancing guidelines, only a small percentage can break even. It could be 18 months before there's a "normal" restaurant business. Hospitality (resorts, hotels, vacation rentals)... fvcked. Total wipeout. Airlines and other human transportation... fvcked. Energy... fvcked. I could go on and on and on. And then think about the employees of all of these businesses... there could be 10 million jobs that simply don't return to the US economy for several years - even after there's a vaccine.

Yeah, there will be a bump in economic activity after we hit bottom and then followed by the vaccine (whenever that becomes available). But that bump will ultimately leave the economy (still) in a pretty big hole and, to add insult to injury, there will be a certain, albeit modest, percentage of folks whose behavior is going to semi-permanently change even after things normalize. They're going out less, traveling less, spending less, saving more. When you have a highly-leveraged tanker like the US economy that grows 2-3% in a good year and all of a sudden you have a modest percentage of folks that change behavior like that... you have a long-term disaster on your hands. As the saying goes, "everything important happens at the margin"... and at the margin, things are going to he11 in a handbasket.

Another piece of good news is that the bank regulators are trying to get ahead of things and using forebearance tools - as opposed to capital tools - to try to right the ship. I think that's smart - they should've done more of that during the Financial Crisis (as opposed to cramming capital down everyone's throat) - but... it's still going to get very, very ugly. There are so many permanently damaged businesses out there - eg, think about all of the commercial real estate and how these owners are going to deal with massive waves of bankrupt leasees. Yes, there are regulatory tools that can help but when you see these being pulled out, you'll know the Powers That Be are panicking. This freight train is going to level pretty much everything in its path - I'll be very surprised if it's not worse than the Financial Crisis.

Drive around your town or city. Look around. Think about the businesses that aren't coming back. Think about the folks whose jobs aren't coming back for a long time. Think about how behavior is going to change even after things begin to normalize. Think about the leverage and how the banks are going to cope with all of this. Think about what this means for corporate profitability - short-term and long-term and then what that means for nosebleed-level stock valuations.

Meanwhile, our fair-haired Nero fiddles while Rome burns.

Discretion is the better part of valor. Sell.

I could be wrong. But I doubt it.

Submitted by Coronita on June 5, 2020 - 4:56pm.

gzz wrote:
"Please don't get a crazy idea to short Tesla"

Too late for me :-(

I think it will be a very profitable short in the end and I am very liquid and patient. But so far... :-(

I'm sorry. Hopefully, you consider some protective call options. Sometimes you win sometimes you lose.

Submitted by outtamojo on June 6, 2020 - 6:43am.

The stock indices gnaw at me like housing prices in the early 2000's. So that means markets will go to new highs while my gut blows up telling me how bad things are.

Submitted by The-Shoveler on June 6, 2020 - 7:33am.

outtamojo wrote:
The stock indices gnaw at me like housing prices in the early 2000's. So that means markets will go to new highs while my gut blows up telling me how bad things are.

Probably a bad Idea, but I am thinking of shorting the S&P-500 by buying a little 'sh' (less than .05% so no real commitment, just enough to keep me interested).

Which is a good indicator that markets will go to new highs LOL.

Submitted by scaredyclassic on June 6, 2020 - 8:14am.

The-Shoveler wrote:
outtamojo wrote:
The stock indices gnaw at me like housing prices in the early 2000's. So that means markets will go to new highs while my gut blows up telling me how bad things are.

Probably a bad Idea, but I am thinking of shorting the S&P-500 by buying a little 'sh' (less than .05% so no real commitment, just enough to keep me interested).

Which is a good indicator that markets will go to new highs LOL.

Gambling is morally wrong, in the same way that drug abuse is morally wrong. And i believe this is gambling.

Submitted by The-Shoveler on June 6, 2020 - 8:57am.

investing is gambling, farming is gambling, buying a house is gambling.

Life is a gamble.

Go ahead throw the first stone.

Submitted by scaredyclassic on June 6, 2020 - 9:37am.

The-Shoveler wrote:
investing is gambling, farming is gambling, buying a house is gambling.

Life is a gamble.

Go ahead throw the first stone.

Those arent games of chance.

Roulette has zero social utility.

Investing, homes and farming do.

Just because something is risky does not mean it is gambling.

That is why gambling houses are generally illegal and should be morally repugnant everywhere. The lottery should not exist. Im not sure the exact date gambling became acceptable but when i was a kid in nyc, local criminals ran numbers games and degenerates hung out at off track betting.
.gambling was not normal.

It was not part of lifes fabric.

I recall 3 card monte games on nyc streets!

Crazy how life was in the 70s

I despise it. It shouldnt be criminalized but statistics should be taught better in grade school

Money is way too hard to earn for people to lose it thinking thryre lucky and for crooks to take it from them with flashy games

Now marriage, kids, that is a gamble. And nowadays, etrade.

Submitted by The-Shoveler on June 6, 2020 - 9:39am.

Jeez LOL,

Next time I think about doing something I will be sure to consult "he who is holy than thou" LOL.

Submitted by barnaby33 on June 6, 2020 - 11:09am.

I'm somewhere in the middle on my observations, but agree with DaveLJ as to our macro direction. What I've seen in my hood, Mission Valley, is that places that cater to an older wealthier crowd are doing ok. People are itching to get out, but that segment still has disposable income. Places in the rougher part of town say, Lemon Grove and Spring Valley seemed much less likely to be open. Most of my observations were made on long bike rides. I often head to the border and back via varying routes which take me through a broad range of neighborhoods.

One signal that startled me was how fast gas shot back up to almost $3 a gallon.
Josh

Submitted by scaredyclassic on June 6, 2020 - 1:33pm.

The-Shoveler wrote:
Jeez LOL,

Next time I think about doing something I will be sure to consult "he who is holy than thou" LOL.

No gambling.
No extramarital sex.
No cruises.

I just saved u a ton of $

Submitted by Coronita on June 6, 2020 - 2:26pm.

scaredyclassic wrote:
The-Shoveler wrote:
Jeez LOL,

Next time I think about doing something I will be sure to consult "he who is holy than thou" LOL.

No gambling.
No extramarital sex.
No cruises.

I just saved u a ton of $

Phew! Cars aren't on that list.

C8 Stingray is an absolute must for happiness at Thunder Hill.
(Thunder Hill is a great track)
https://youtu.be/nUHNATBzFjE?t=188

Submitted by scaredyclassic on June 6, 2020 - 4:57pm.

Coronita wrote:
scaredyclassic wrote:
The-Shoveler wrote:
Jeez LOL,

Next time I think about doing something I will be sure to consult "he who is holy than thou" LOL.

No gambling.
No extramarital sex.
No cruises.

I just saved u a ton of $

Phew! Cars aren't on that list.

C8 Stingray is an absolute must for happiness at Thunder Hill.
(Thunder Hill is a great track)
https://youtu.be/nUHNATBzFjE?t=188

Cars have social utility.

Cruises do too, sort of, but because they have used quasi slave employees, they make the list

Submitted by ltsddd on June 6, 2020 - 5:55pm.

"Misclassification error" on jobs report. Monday will be interesting:

https://www.stamfordadvocate.com/busines...

The revised numbers for April is closer to 20% and May is 16%.

Submitted by scaredyclassic on June 7, 2020 - 11:13am.

ltsddd wrote:
"Misclassification error" on jobs report. Monday will be interesting:

https://www.stamfordadvocate.com/busines...

The revised numbers for April is closer to 20% and May is 16%.

Oh, sad. George floyd is now frowning in heaven.

Submitted by gzz on June 7, 2020 - 2:44pm.

“ I'm sorry. Hopefully, you consider some protective call options. Sometimes you win sometimes you lose.”

My total shorts amount to about 4% of my “long” position in real estate and are about equal to my long position in stocks.

So hedging a hedge isn’t needed. I’ll do great overall if the irrational tech bubble continues.

Tesla’s market share of the EV market in Norway, Spain and Holland is not even in the top 5 anymore when it used to be consistently 1 or 2.

It has never made any money, solar roof was a dud with years of declining sales, and in the most competitive markets for EVs it is losing. The Mustang Mach-E to me at least looks cooler than the model Y, has similar specs and price, but comes with the 7500 tax credit that Tesla doesn’t qualify for anymore.

https://www.ford.com/suvs/mach-e/2021/

What’s killing Tesla in Europe is the Audi etron on the high end and Hyundai Kona and Kia Niro and VW eGolf on the low end.

Tesla’s market cap is $164B. Kia and Hyundai combined are under 30B. But they both are beating Tesla at its own game.

Submitted by svelte on June 7, 2020 - 3:26pm.

scaredyclassic wrote:

but statistics should be taught better in grade school

Probably true, but there is still a slice of the population that would do it anyway.

I used to think that better education would solve the world's problems. Now I really doubt it. I guess I've become cynical. You can lead a man to knowledge but you can't make him think.

Submitted by FlyerInHi on June 7, 2020 - 5:00pm.

scaredyclassic wrote:
ltsddd wrote:
"Misclassification error" on jobs report. Monday will be interesting:

https://www.stamfordadvocate.com/busines...

The revised numbers for April is closer to 20% and May is 16%.

Oh, sad. George floyd is now frowning in heaven.

Haha, scaredy. I love your sense of humor.

Submitted by PCinSD on June 7, 2020 - 5:17pm.

FlyerInHi wrote:
scaredyclassic wrote:
ltsddd wrote:
"Misclassification error" on jobs report. Monday will be interesting:

https://www.stamfordadvocate.com/busines...

The revised numbers for April is closer to 20% and May is 16%.

Oh, sad. George floyd is now frowning in heaven.

Haha, scaredy. I love your sense of humor.

This is getting adorable. He has swept many members off their feet. I have pics.

Submitted by scaredyclassic on June 7, 2020 - 6:15pm.

FlyerInHi wrote:
scaredyclassic wrote:
ltsddd wrote:
"Misclassification error" on jobs report. Monday will be interesting:

https://www.stamfordadvocate.com/busines...

The revised numbers for April is closer to 20% and May is 16%.

Oh, sad. George floyd is now frowning in heaven.

Haha, scaredy. I love your sense of humor.

Hell is listening to CNN for eternity.

Submitted by saiine on June 7, 2020 - 9:08pm.

Was buying puts on the way down through March, and now calls. This market is insane. I don't think we're going to see a "crash" before Nov, and it wouldn't surprise me if we slid into November at an ATH. Nothing is more important to Trump than the stock market.

Thank you j-pow and your printer.

Submitted by Coronita on June 8, 2020 - 6:11am.

saiine wrote:
Was buying puts on the way down through March, and now calls. This market is insane. I don't think we're going to see a "crash" before Nov, and it wouldn't surprise me if we slid into November at an ATH. Nothing is more important to Trump than the stock market.

Thank you j-pow and your printer.

J-pow making it rain...lol

Musical chairs is fun...until the music stops playing.

Markets going beserk again today. Maybe it's time to take money off the table and buy another property in MM. YTD is approaching 20% and even if I buy a condo and price falls 20%, im no worse off than than before. Plus it there would be no mortgage. Rent supposedly is going to fall between 5-10% but who knows, who cares. This summer could be brutal to trying to buy a house. People will probably forget about covid during the summer.

Submitted by The-Shoveler on June 8, 2020 - 8:25am.

I Wonder if the market is looking at the possibility of a Biden presidency yet?

Submitted by Coronita on June 8, 2020 - 9:51am.

Tesla sales is recovering in China.

https://finance.yahoo.com/news/tesla-ral...

Submitted by svelte on June 8, 2020 - 10:50am.

Coronita wrote:

C8 Stingray is an absolute must for happiness at Thunder Hill.

Got your C8 for you right here. Only $48K over sticker.

https://www.autoblog.com/2020/06/08/2020...

Submitted by Coronita on June 8, 2020 - 11:00am.

svelte wrote:
Coronita wrote:

C8 Stingray is an absolute must for happiness at Thunder Hill.

Got your C8 for you right here. Only $48K over sticker.

https://www.autoblog.com/2020/06/08/2020-c8-chevy-corvette-wrecked-valued-over-new-car/

Ah, it's already looking the way it would look after I track it ....

I think I'll wait until the Z06 comes out then I'll get the regular one with the Z51 package. I can't imagine I would actually need the Z06. and by then, prices should return back to normal.

Submitted by Coronita on June 8, 2020 - 11:07am.

lol. officially, we are in a recession https://finance.yahoo.com/news/us-econom...

and Dow is up 300 pts today.

Crazy times.

Submitted by ltsddd on June 8, 2020 - 5:01pm.

I give up. I am moving all my money back in tomorrow.
(The market ought to tank now).

Submitted by gzz on June 8, 2020 - 7:23pm.

Tesla just cut prices a whole bunch in China to get sales that are still below covid. 11k a month are 132k a year. The VW Lavida, by itself, sold more than 500k units in 2019 in China.

Tesla sales tend to spike when a model hits the market for the first time due to pre-sale reservations, and then stay up another few months as people who are interested but don't want to reserve buy. Then they fall hard.

Seems like we're at the Full Retard stage of the rally now. Multiple bankrupt companies saw their stock more than double today, such as Hertz, JC Penney and Chesapeake. Nikola, which is a pretend electric car company that IPO'd via a reverse merger and has never sold a single vehicle, now has a market capitalization higher than Tata, Renault, Nissan, and Subaru.

Submitted by saiine on June 8, 2020 - 7:45pm.

ltsddd, please hold off until next week so my MGM calls live - thanks in advance.

Submitted by saiine on June 8, 2020 - 7:46pm.

Bro, we were at full retard a month ago. This is plaid retard now.

Bought Macy's calls this morning and returned 100% in 1 trading session - wtf.

gzz wrote:
Tesla just cut prices a whole bunch in China to get sales that are still below covid. 11k a month are 132k a year. The VW Lavida, by itself, sold more than 500k units in 2019 in China.

Tesla sales tend to spike when a model hits the market for the first time due to pre-sale reservations, and then stay up another few months as people who are interested but don't want to reserve buy. Then they fall hard.

Seems like we're at the Full Retard stage of the rally now. Multiple bankrupt companies saw their stock more than double today, such as Hertz, JC Penney and Chesapeake. Nikola, which is a pretend electric car company that IPO'd via a reverse merger and has never sold a single vehicle, now has a market capitalization higher than Tata, Renault, Nissan, and Subaru.

Submitted by Coronita on June 8, 2020 - 9:27pm.

I think it's about time to start reeling things in..Would rather buy property versus stock at this point.

Carnvial Cruises was $12 when I bought it. I thought it was good to sell at $16. It's $25 today.

Doesn't make sense

Doh

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