Traders and Investors

[JohnDB]

Tough flat day for the market...
I got caught up in some hinky stuff and lost a bit of yesterday's gains.

And I have a real problem selling off a stock that hasn't performed as well as I'd have hoped but is still moving up.
Wait a bit longer and I'll make more money...and it takes a bit for the money to settle out...so that money earns nothing while I'm waiting for it to settle.

I'm just about all in at the moment. And I keep reviewing my positions. All 8 of them.

Because the environment changes so rapidly...and keeping up with price targets and changing values is a lot to keep up with. I was trained to do two at a time.
Now I'm doing 8...

And as I reviewed my positions...I can't say as I'd change anything. I'm exactly positioned as I should be. But I'm wanting better returns always. I looked at each stock and knew why each one was the price it was and roughly what price it would be tomorrow barring any catastrophe. Even the duds I cut today still hit the price targets today I had for them. (That hurt)

So...kinda at a loss as to how to fix things.... limited resources and limited number of stocks I can buy.

I was told to try options. But I'm leary of them. I don't really understand them. They have been around for a while...but that doesn't mean that I have ever traded them.

 

[JohnDB]

and yet another relatively flat day...except for the nasdaq which still has some catching up to do.

And I finally decided to do something about the rising lumber prices. I've been watching them rise for weeks with occasional stops...but they continue to rise.
So I finally got me some of the lumber manufacturers...people who make plywood and construction/trim lumber products. Again...not a sexy set of stocks like Computer chip manufacturers in Taiwan who are under threat of drought and attack from the PRC...but solid gains because of a renewable but finite resource. (They replant trees harvested all the time) Both of these are American companies...and lo and behold...even the hedge funds don't know they exist. (for some relief away from those guys for a change of pace. )

KKR got me today with my sporting goods store stock...and another hedge fund with my toy maker...two massive losers that should have been winners. And I should have had a really up day today. But those two really cost me all of my gains...so only $5 up for the day.

So...maybe tomorrow will be a better day.

 

[JohnDB]

Well, the Nasdaq is just about flat to a touch down tonight.

Not really seeing anything to be concerned about. Except for looming war between PRC and Taiwan.

I'm still concerned about the small caps Russell 2000 though. That's all of the smaller businesses that usually provide the backbone for any real recovery. And they have been drug along instead of driving this time...and that really concerns me.

Also...the commercial real estate market.

Many people got sent home to work from home during the pandemic. And if a lot of people enjoy that sort of thing...then there's an overabundance of office space that no one wants to rent or renovate.

That could hurt. Because that's a ton of jobs. From the coffee cart to the mechanics and car manufacturers. Clothing, childcare, and restaurants. All decimated.

Just a 25% reduction in needed office space has an exponential effect on the economy surrounding those offices. From office supplies to catered lunches.

Telecom having to do more rural infrastructure instead of inner city infrastructure is exponentially more expensive. Just saying... meaning higher overhead and reduced returns.
Those who have cheaper, stable, broadband internet will win the workforce bodies.

New dynamics are always the game changer in business and the smaller, more mobile companies usually are the ones capable of changing faster than the larger ones. Capable of doing more with less is trademark of small companies. And they really haven't led a market resurgence this time...so I'm thinking that this is a fake recovery. Just like Bitcoin is fake money. It's a fad... boutique money that can be worthless tomorrow. Not like dollars that are legal tender. They have an legal right to be used as a medium of exchange. Bitcoin does not. And if the fad fades...dollars will still be used but cryptocurrency will fade. Pet rocks were a fad too... highly sought after like an advisor at E.F. Hutton's advice.

Not saying that the world is coming to an end. Just a 29% market correction that will be unpleasant. Banking earnings season is upon us. So watch the financial stocks. WFC is probably going to be ok (tight fisted) but I'm hesitant to see everyone's.

Lumber is up again...seems on a tear. Going to get really expensive soon. I was talking to a buyer and he was saying that it's almost impossible to find a load of hardwoods. Pine is still available but expensive. Too expensive... ridiculously expensive.

Because the wood used these days is all farm raised. It's not wild forests used to make the timber. But it still takes time to grow. And the home renovations and new construction is making metal studs much cheaper than ever before.
(And yes, I bought into a couple of companies that make OSB, plywood, and studs.)
It's just like buying an oil company before the cost of oil explodes sky high.

 

[JohnDB]

Red day yesterday...and for an unknown reason one of my stocks took a nosedive. So I dumped it. That nosedive ate up my gains for the day...and I had good gains too.
So I ended the day down $2.
(Yes, I don't mind admitting when I lose money and only crow when I make gains... because I'm not a gambler like so many others)

But commodities (lumber) and consumer cyclicals seem to be chugging along.

Fed Chairman Powell... uggghhhh.
Im thinking that they really don't know how to do this "QE" thing.
But we are trying to survive in this environment.

Housing is continuing to climb...do not expect it to drop. Median home prices rose 17% last year. Expected to rise again 7% this year. Suburban communities are getting more full.
Expected cost increases for new construction from the lumber alone is $24,000. Where sawmills are not sexy like oil companies...the money is definitely there.
And forestry products and jobs are renewable. Most trees are farm raised.

This is a basic supply vs demand issue. (Like toilet paper)
Increased demand and not enough supply.

They are working as fast as they can...(we aren't running out of trees) it's strictly a sawmill issue. But quarantine issues started it and a bad guess about needed supplies.

So finding the lumber to build with is difficult...and expensive.

 

[Josho]

Dogecoin peaked at about 14.5c in the last 24 hours, it's now down to 12.25c, it was hovering around 6c a few days ago.

 

[JohnDB]

Dogecoin peaked at about 14.5c in the last 24 hours, it's now down to 12.25c, it was hovering around 6c a few days ago.

Because more banks are accepting deposits. Coinbase goes public today too.

It's still a boutique money. It all gets lost in the wash. There's no legality or anything backing it up. It's only worth what someone else will give you for it. Tesla's coins are the exact same way... except his are backed by a new car. Which is better in some ways.

Then there's the IRS audit for owning it.

I'm hiding from my Government... trying to stay off their radar screen. Investing in bitcoin, ethereum, Dodgecoin or something else like that... nope. Too many smugglers and ne'er-do-wells use it for me to touch it.

It's not legal tender. So it's stability is on your computer. That used laptop you picked up for $50 at the pawn shop....or cell phone...

Nope...not going to do anything with that stuff. I don't do marijuana stocks, guns, gambling, or digital currency. I'll hunt with a gun...just not invest in their manufacturers.

Just the way I play it. YMMV...

Because all those thugs and terrorists who are holding bitcoin or whatever are now doubling their money and having a way to spend it. Not something that I want to be a part of. I know that no one snowflake feels responsibility for an avalanche. But this one will.

 

[JohnDB]

Well I'm guessing that people found out the difference between a DPO and an IPO today...
Those who jumped into Coinbase got taken to the cleaners. They lost about half of what they paid for it.
IPOs increase in value immediately and then drop due to the heavy shorting...DPOs lose money until there are earnings reported.

Then there's another curious thing that is disturbing.
Finviz is usually ok with their reports.
I follow lumber prices fairly closely as well as the VIX and other indexes. (Things are too unstable not to)

Lumber increased today from 1183 to 1212... almost 1213. But they are showing it as flat with the colors and in the daily. It's not...it's up another 2%.
Then they have the VIX as down...but it isn't down either...it's up and touching the 10 or 20 day line.

And if I wasn't scrutinizing it I wouldn't have noticed it at all.

And I say that because in my haste yesterday I didn't make the connection between FCX and the huge increase in copper. And due to my missing all the signs that I actually looked at I blew off a 9% increase on $1,000 dollars that I had available to invest (I did make 2%)
So all day today I scrutinized everything a bit closer.
It's a blunder I keep making. I need to slow down and stop trying to inhale everything. Because it's not registering until it's too late to do anything.

Oil went up and oil company stocks go right along with them.
Lumber goes up and lumberyard stocks go up too.
Copper goes up and the copper miners get more expensive too...
OJ goes up.... well you get the idea.
Wake up and smell that rising price of coffee.

So...it's getting crowded in the market. Too many people that don't know what they are doing. That's annoying. The sound advice coming from people who don't know what a Beta is on a stock or what it means when you see it. Or a low beta stock moves 1½% because the whole world is mad at them.

And the Coinbase DPO... kinda glad that people got burned...I don't like digital currency. Blockchain is hackable tech. It's not legal tender. It's still new tech that only criminals use.

Time to figure out the mysteries printed on the inside of my eyelids.

 

[JohnDB]

Well... decent day.
Risk is a definite part of playing in the market. And I got a full measure of that today.

Copper prices were going up and so since freeport moran is heavily positioned in copper I bought them. Then copper began to look soft as far as it's price increase and so did FCX so I dumped out with a very small profit. Unfortunately way too early and the stock climbed another three percent on top of the one it already had. (Banging head against brick wall here)

On top of this a high flying lumberyard (LPX) is making great gains as rough lumber climbs. Rough lumber climbed almost 3% today and the stock of the lumber mill should have reflected at least that. It didn't. Only 1½%.

And there you go...a 0.25% increase makes one stock rise 4% and a 3% rise makes the lumberyard rise 1½% .

Risk vs rewards. Doing everything exactly correct doesn't mean that you will have perfect results. That's the risks.

In other news the Massachusetts AG is looking to take away Robinhood's Brokerage license charging that Robinhood's targets clients "Aren't as bright as a burnt out lightbulb".
Robinhood defended by countersuit and stating that their clients "Were in fact every bit as bright as a burnt out lightbulb"
Let's just see what the judge has to say about this.

I will say that meme stock adherents have real issues understanding the mechanics of public sentiment and basic earnings and business models. The difference between an IPO vs DPO or why shorting stocks might look easier than long positions...but it is inherently much riskier than being long.
Met a man today online who was upset over a stock he was shorting (reasonably) and it had related news he was unaware of that was going to make it rise. He was playing options too... meaning that his risk/reward was much higher than my long position.
And he was visibly upset and hollering.
I'm guessing that money is personal for him.
And he likely can't really afford to lose what he had.

Risk is part of the market. Even though I do everything correctly and account for all possibilities I still don't win the way I should.
But I still pay for unintentional mistakes too. Just like that angry man and my early dumping of NVDA & FCX just before it took off like a rocket. (Banging head against wall again)
These are the problems with risk...and emotional drivers that can cause larger mistakes. It can put you in quicksand where every move puts you in a deeper and deeper hole. Or it can make you too skiddish...or it can make you second guess yourself and the research you have done.

It's not for everyone. Especially in this market. The Fall and Winter markets were easy to play. Everyone made at least 100% on just about any stock. Some made many multiples of that. 4000% increases are really fun.
But now it's time for difficult choices...hard hitting and thorough research. Understanding of market conditions and sentiment of seasoned professionals working against you at times.
Those desperate for success were buying Coinbase again today. Losing money the whole time.

FOMO...
Fear of missing out. Gotta be careful you don't have it.

 

[FHII]

Any thoughts on UIPath? I have read they will go public next week. Ive read some good things about them like they are consistently rated as a top 5 and even top 1-3 company. I have read some troubling things about them as well... They have been trying to raise some quick cash to tout being worth 35 billion... On report said that is over exaggerated and its closer to 23-25 billion.

I'm real green in trading. I have only been following the market since November and trading with Stash for about 6 weeks. I only invest $10-15 at a time (gotta start somewhere)... So if it tanks its not like I will be in financial ruins!

So any thoughts?

 

[FHII]

And the Coinbase DPO... kinda glad that people got burned...I don't like digital currency. Blockchain is hackable tech. It's not legal tender. It's still new tech that only criminals use.

Thats interesting... As new to the market that I am, I do research and try to learn and understand. I can't figure out what digital currency is. I don't see any goods, or services involved with it.

 

[JohnDB]

Any thoughts on UIPath? I have read they will go public next week. Ive read some good things about them like they are consistently rated as a top 5 and even top 1-3 company. I have read some troubling things about them as well... They have been trying to raise some quick cash to tout being worth 35 billion... On report said that is over exaggerated and its closer to 23-25 billion.

I'm real green in trading. I have only been following the market since November and trading with Stash for about 6 weeks. I only invest $10-15 at a time (gotta start somewhere)... So if it tanks its not like I will be in financial ruins!

So any thoughts?

Yes...IPOs and DPOs are for seasoned investors who have studied the characteristics of what is the customary action of a stock in these situations. Stay away from them until after their first earnings report.

Otherwise I really don't know anything about the stock. I might have looked at it before but unless it's business is in a sector I like and it's chart looked good I didn't study it further. And the stock symbol (UIP) is ringing a bell...just not sure why. Might have been running across the block trades window...but that would make it even more volatile... meaning higher level of scrutiny, research, and focus to play it exactly right.
Maybe I'm thinking about UPI...I'll look into it and get back to you on this.
There's been a ton of IPOs and DPOs this year and on top of this a bunch of SPACs as well...there's a fatigue with them in the market. Everyone who touched Coinbase lost money. Most SPACs are having trouble with their stock price too...0.05 for their profits after so much time and energy invested into them for questionable data results.

ASO is the last best IPO I know has happened. And KKR still holds power over the stock price by holding 49 million shares.
(Vs 9-12 million traded each week)
It's currently trading at 30+ after releasing a glowing earnings report that beat all the consensus.
Lots of hype surrounds all IPOs. Don't get caught up in it all. They are going to say exactly what you want to hear as an investor...groomed by the best to say exactly the right things within the confines of the law. Be very very careful with an IPO. Because after the second day of trading the hedge funds are coming en masse to tank the stock. Some don't even get that long.

 

[JohnDB]

Thats interesting... As new to the market that I am, I do research and try to learn and understand. I can't figure out what digital currency is. I don't see any goods, or services involved with it.

It's a finite medium of exchange. Outside any government manipulation. There are a limited number of the medium. There's more to mining these out of the internet than meets the eye. And eventually there won't be any left to mine.

 

[FHII]

Yes...IPOs and DPOs are for seasoned investors who have studied the characteristics of what is the customary action of a stock in these situations. Stay away from them until after their first earnings report.

Otherwise I really don't know anything about the stock. I might have looked at it before but unless it's business is in a sector I like and it's chart looked good I didn't study it further. And the stock symbol (UIP) is ringing a bell...just not sure why. Might have been running across the block trades window...but that would make it even more volatile... meaning higher level of scrutiny, research, and focus to play it exactly right.
Maybe I'm thinking about UPI...I'll look into it and get back to you on this.
There's been a ton of IPOs and DPOs this year and on top of this a bunch of SPACs as well...there's a fatigue with them in the market. Everyone who touched Coinbase lost money. Most SPACs are having trouble with their stock price too...0.05 for their profits after so much time and energy invested into them for questionable data results.

ASO is the last best IPO I know has happened. And KKR still holds power over the stock price by holding 49 million shares.
(Vs 9-12 million traded each week)
It's currently trading at 30+ after releasing a glowing earnings report that beat all the consensus.
Lots of hype surrounds all IPOs. Don't get caught up in it all. They are going to say exactly what you want to hear as an investor...groomed by the best to say exactly the right things within the confines of the law. Be very very careful with an IPO. Because after the second day of trading the hedge funds are coming en masse to tank the stock. Some don't even get that long.

Thanks for the info and advice. Even as a newbie, I do have a gameplan. Investing in it would not be part of the plan, so I think I will hold off, but watch it. I was about to engage in FOMO!

 

[JohnDB]

Thanks for the info and advice. Even as a newbie, I do have a gameplan. Investing in it would not be part of the plan, so I think I will hold off, but watch it. I was about to engage in FOMO!

Game plans rock!
I really don't use one. Well... somewhat of one. It changes fast and furiously according to market conditions because I do more swing trading (day trading) than long term holds.
The longest I will ever hold a stock ever is a month...and considering it as a long term investment the whole time.
Most of the positions I hold are dumped within two weeks. But if I make 10-20% on a position I'm happy. Even 5% gains are acceptable. Losses aren't and a 2% drop and I'm out and off to greener pastures. Except for high beta stocks where 8% drop offs are to be expected. (Some do and then climb 30% or more...or continue to drop another 10% .) Had that happen with Himax this week. It's actually a good company making good profits...but something was wrong and what I needed to know wasn't publicly available.

Pretty sunrise here this AM... gonna check out market conditions and go play.

 

[JohnDB]

Well...
Taking a break from studying and searching for the market pulse and various stocks...

A concept has begun to form....I'm going to need to look into this more.
Baby boomers are pulling out their retirement savings...at a rather fast clip. Not too fast...but substantial enough to notice.

Now this generation has invested heavily into mutual funds and bonds. And they are a great retirement tool for those who won't/can't do the research necessary to successfully themselves buy and sell stocks. (It is hours of work of boring reading and analysis) they get reduced but solid and very respectable returns.

But the next generation is coming along. And for whatever reason they are doing things differently. They are a bit more prideful and want to do it themselves. Meaning that after changing jobs so many times their Self Directed IRAs are larger and completely in their control vx the one at their jobs that are extremely limited in choices.

And they are playing stocks vs funds.

Now those who bought any stock since the election has probably doubled their money if they bought and held. But not all. Some have done extremely poorly. They kept changing their positions so fast and furious chasing growth that they bought high and sold low. Or they played options and lost more than they won and have lost some of their portfolios.

And it's beginning to show. But their pride is at stake here.

But in the meantime what is happening is big money is slowly shrinking.

This money is what drives the market in general. Retail investors vs institutional investors vs short sale investors.
Retail investors are like herding cats...so they are all over the place with what they buy and sell. Institutional investors and hedge funds are buy and holders long term of stocks. It takes a long time for them to move into a position, make a profit and then exit a position. Same thing with hedge funds.

But if the institutional investors don't have the capitol to invest....
And retail investors use Wall Street Bets...

Going to be a very different marketplace.

Meaning publicity is going to prevail over metrics and volatility is not going to be as clear as before.
Not that glamour stocks haven't been a rule of thumb...but now glamour can come from an unknown website blog and cause more upheaval than ever before.

Big money, AKA politicians, have noticed...and are angry because the cheese is moving and they didn't move it themselves. Hedge funds are angry too for the average person has outmaneuvered them by getting temporary cohesion amongst retail investors. (Herculean task)

Not saying that Wall Street Bets is a real good source of information. So many people have gotten burned by marijuana stocks and lost money in them that it's ridiculousness. But they keep doing it just the same.

Or they bought bitcoin or something else when it was high because someone started boasting about all the money they just made (but not realized) in electronic currency. (Which is really really low this morning)

SELL HIGH...buy low. If it's high...sell it whether you own it or not...when it's cheap you buy it and watch it go up.
You can buy expensive stocks and watch them get more expensive...but that's not a good idea for everyone to do... generally speaking and not specifically. It is heavily touted as THE thing to do...but again it's not for everyone as FOMO usually makes people lose money.
What was the opening price of Coinbase? ($400+)
What is it selling for now? ($342)
What did the SEC say it's price should be? ($250)
Who owns the bulk of the shares not being actively traded?
(Hedge funds)
Yeah...
Be my guest...jump all over that trap. Lose your money.

Just as an example...
KKR owns controlling interest in Academy Sports and Outdoors retail stores. Roughly 9million shares per week are traded since it's IPO on average. This past week, since the stock has doubled in price since the IPO, they sold off 9million shares in one day.
What do you think happened to the price of the stock? KKR still holds controlling interest with 49 million shares in their possession.

What do you think about what is going to happen in the future...what would you do if you were KKR... wanting every dollar you could get out of this stock?

Exactly.
Currently the stock is a Wall Street Bets darling. And that's the kind of advice they give. The company is actually a good retail company...good stores. Good, quality merchandise with discounted prices. Great profits and other metrics. They still sell firearms.
So...we shall see what happens. It might take years for the stock to really pop before someone takes profits. Otherwise it's going to march slowly...too slowly for most. But it will rise.

 

[JohnDB]

So far the futures are looking slightly down and the VIX is up a bit...let's see what happens during trading tomorrow. Gold isn't up...nor is copper and bitcoin is really tanking.

Lumber is probably going to continue to be up.

So... since nothing is up it's probably just a false flag. Because otherwise the safe havens would be up. Margin is running fairly high...but not to crisis levels yet.

Keep sharp...read the fine print.

 

[JohnDB]

Well...RED day... everyone was moaning and groaning about how horrible it was. Pfft.

I had a flat day...lost thirty cents.

But I'm not heavily invested into S&P stocks or Dow Jones stocks.
It's not like this stuff wasn't forecasted. Heavy run ups cause corrections.

But some stocks held steady or made gains that weren't some tiny unknown pharmaceutical research company.

Common household names that aren't glamorous but cranking out the wins lately...

Pepsi, Verizon and etc.

Gold didn't do well today...that's a clue that this wasn't serious. And when they let up on leveraged shorting hedge ETFs lo and behold the market jumped up.

Micron was my slug today. Dumped off some stocks after evaluating risk/rewards and took those profits off the playing table.

Probably will take more soon...but my stocks were rising today aside from Micron. But all chips were down today. And when they make the profit targets...they come off the table too. Tapestry, Haverty, Academy Sports, and others.

Sexy stocks are fun...but the quiet ones out of the limelight cranking out solid gains every day of the week are better. (But usually it's a week for gains)

But taking a few bucks and tossing it at s meme stock ain't gonna cost you anything. Might even make a little money. But I certainly wouldn't bet the farm on one.

But housing construction related stocks are doing well lumber mills are running high with no letup. So is Ethanol...it's really expensive lately.

So today I found a few bargains...when the market is down it's time to buy, not sell. Doing the opposite of what everyone else is doing is how you make money.

When the market is up and people are buying you are selling dispassionately and without emotion. Similarly when the market is down you are buying in the frenzied selling.

Not buy high and pray it goes higher... because that FOMO will steal your money every time.

 

[JohnDB]

Yesterday's bloodbath in the market was all about emotion. NOT reason and facts. It was all about fear and not truth.
Now a lot of a stock's price is about sentiment for the future. Value plays...where technical analysis has shown that the company is having good earnings and has solid reasons for increased earnings in the future. (such as no one else can build a production facility fast enough to give true competition while having increased demand) These will be the good stocks that come roaring back today. Things like housing construction will return to pricing higher. These contracts are out there for the long term and going higher into 2022. No chance of people not needing a place to live. The home office and a home to have an office in is here to stay. The downtown office? Might be a few too many of those in some locations.

God isn't making anymore land...we have to deal with what we have now. So buckle up buttercup...we are going to have a mixed but up day today. The Russel 2000 (which has led more true rallies in the market) is up this morning. Small businesses are always the reason big businesses grow. They are more nimble and able to redirect in new market conditions faster than huge giants. 200 employees are easier to deal with than 20,000. So...demand is still up for many products. It hasn't changed. People still gotta eat. Gotta have a place to live. Gotta have clothes to wear. A computer to do work on to earn a living so you can eat and have a place to live. (which takes memory chips) All these things matter. Haven't gone out of date. Still in demand. The lights are still burning in Walmart and Kohls and Taco Bell.
Gasoline and Petroleum demand might be down. Same with Natural gas and jet fuel. But...They will come back eventually. People will travel as soon as it is safe. They may not want to do so aboard a Cruise ship...but...they want to go somewhere and do something.

 

[JohnDB]

Well...
Things were going nicely today until SOMEONE decided to have another press conference to talk about himself.
It's as plain as day as to what time that happened.
Yesterday the substance of his speech must have been leaked to various rich people as the market tanked yesterday too. I seen a grab for bonds...and today that was the only market up. 5yr bonds went to "high yield" because of the influx.

What is also troubling is when companies have great earnings and revenue and even better forecasts into the future about their business environment and yet the stock price is not reflecting that. P/E ratios are falling like rocks because of earnings and dividends and yet...
Then there's a few "blue sky" stocks that are doing well...but it's hit or miss with them too.

Today, Marinemax posted stellar earnings and forward growth based on orders... and they were up almost 17% before Biden gave his speech...and then it all but evaporated.

UFPI reported 70% more earnings than forecasted and a dividend. Yet their stock is down from 5 days ago.

Micron had the same thing happen. They reported stellar earnings...about 30% more than forecasted. Also gave a great forecast of future sales and order contracts. They have lost over 15% in share price since WHILE everyone bemoans a chip shortage so bad that the automakers are on furlough because of the lack of chips.

The SEC chairman is on his way out...his replacement is coming in two months? So the current one is basically on vacation while drawing a salary. And the market is being manipulated in unheard of ways that makes no sense.

Every time Joe has given a press conference the market has tanked...
We, the people, pay a press secretary for him...he needs to use him more.
#StuffasockinitJoe is the new hashtag. Please feel free to use it freely.

 

[JohnDB]

One last thing...
Apparently a TON of money has been invested abroad instead of in the American stock market.

The Korean market reports trillions of dollars were poured into their market for an 11% return and a weaker dollar against the Won.
Companies like Samsung are there.
*Sigh*

Things are getting very scary around here.