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(CNBC)   Recession's cancelled, bull out front should've told you   (cnbc.com) divider line
    More: Unlikely, Dow Jones Industrial Average, Nancy Pelosi, Donald Trump, Treasury Secretary Steven Mnuchin, President Donald Trump, S&P, broader market index, biggest one-day jump  
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1066 clicks; posted to Business » on 12 Aug 2020 at 5:05 PM (1 year ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



Voting Results (Smartest)
View Voting Results: Smartest and Funniest

 
2020-08-12 5:09:19 PM  
9 votes:
All of these brand new "COVID daytraders" that have been created from the stimulus funds are going to get their knees chopped off when this bubble pops.
This is the most epic dead cat bounce ever.
 
2020-08-12 8:36:18 PM  
8 votes:
Fark user imageView Full Size
 
2020-08-12 6:45:25 PM  
8 votes:
Can we stop pretending that the stock market reflects the state of America?
 
2020-08-12 6:01:53 PM  
7 votes:
preview.redd.itView Full Size
 
2020-08-12 5:11:19 PM  
7 votes:
Wait    for   it
 
2020-08-12 5:08:48 PM  
7 votes:
Don't rush to judgment on that one subby. The sugar rush is ending, and they probably will try to mainline a bit more sugar again. The problem being that it is becoming more difficult to maintain at this point. The downside being that the crash after mainlining this much sugar is probably going to be epic fail level.
 
2020-08-12 5:31:14 PM  
6 votes:
It's an election year. Stock market bravado is the norm rather than the exception, just try not to be the last guy to cash out when the hype eventually fades.
 
2020-08-12 9:45:03 PM  
4 votes:

Hyjamon: AsparagusFTW: I just got a call from my parents about buying Apple since they announced the stock split. they thought it was going to be 1/5th cheaper.

/that's not how any of this works

i thought that is how splits work, from a buyers perspective.

Day 1: one stock of company A = $100
Day 2: 4:1 split
Day 3: one stock of company A = $25

Or are you talking from a larger perspective of the fact that in the end you are still only investing $25 in the company.  Be it 0.25 share at the $100 price or 1.00 shares at the $25 price.

I am trying to learn all of this out of curiosity.  I am mostly an index and forget it guy.


The latter. The stock isn't cheaper.  It's a smaller share of the company.
 
2020-08-12 8:05:54 PM  
4 votes:

Rapmaster2000: Everyone is a genius day trader in a bull market.


Yeah... my dad wants to get into stocks. I told him this market scares the shiat out of me. The Fed is spending like a drunken Kardashian, tech stocks are farking insane, and the economy is in shambles. This is just a giant cash grab by the elite. When the big boys start pulling their cash out, it will have been too late for the little guy.
 
2020-08-12 7:08:51 PM  
3 votes:

theToadMan: All of these brand new "COVID daytraders" that have been created from the stimulus funds are going to get their knees chopped off when this bubble pops.
This is the most epic dead cat bounce ever.


odd you mention this.  My friend casually dropped that his wife started daytrading.  She is a SAHM and was a highschool spanish teacher.  So it seemed odd for her to embark on this.  No talk of training, studying how or anything.

Said she has been doing good so far.  reminded me of common advice on these type of threads "the market has been so good, so long, anyone can do well right now"
 
2020-08-12 10:48:26 PM  
2 votes:

Hyjamon: AsparagusFTW: Also, for this example, I'll say a share is $500, and it's earnings are $50/share.

It's price to earnings would be 10 (500/50)
Once the split happens, your share is now $100, but also those earnings are split. So your share would be $10 in earnings. So the PE stays the same. 100/10 = 10

The split only effected the price, all ratios stay the same. It did not change the PE ratio, so it is the same "price" of PE 10 that you are paying after the split.

gotcha, PE seems to be a more comparable unit measurement between stocks then for the same reason, it is normalizing, in effect, for return on investment.

Given three stocks with PE's of 2, 5 and 7.  all other things being equal,  I'd want to invest in the one with 2 PE.

PE feels like a bit counter-intuitive at first. i am sure there are other metrics, but interesting how the PE is a reciprocal of an ROI calculation.


Honestly, for me this is my main concern.

There are millions of things to look at. I dont even like looking at income personally. I do accounting for a living. Whatever you want the earnings to be, we can get you there. It's a puff number.

For mer personally, the biggest thing is cash flows and debt. The statement of cash flows is starting cash, what came in, and what left, and ending balance. How much cash does the company generate, and can they use that cash to pay debt, or easily service it. Earnings of a company does not equal cash in the bank. It's so full of estimates and accruals and stupid bullshiat. It is honestly a puff piece.

Cash is audited, and balances unless there is massive fraud. So do they have sufficient cash flows to operate the business and pay down debts, or fund new business, etc.

That's just my preference. Accounting earnings is ficticious. It's all on paper. Cash is real.
 
2020-08-12 9:53:05 PM  
2 votes:

Hyjamon: Rapmaster2000: Hyjamon: AsparagusFTW: I just got a call from my parents about buying Apple since they announced the stock split. they thought it was going to be 1/5th cheaper.

/that's not how any of this works

i thought that is how splits work, from a buyers perspective.

Day 1: one stock of company A = $100
Day 2: 4:1 split
Day 3: one stock of company A = $25

Or are you talking from a larger perspective of the fact that in the end you are still only investing $25 in the company.  Be it 0.25 share at the $100 price or 1.00 shares at the $25 price.

I am trying to learn all of this out of curiosity.  I am mostly an index and forget it guy.

The latter. The stock isn't cheaper.  It's a smaller share of the company.

thanks.  are fractional share purchases more common now on platforms for us plebs?

I know my dividends just get reinvested for the fraction they are worth.  Vanguard seems to only allow whole number of shares transactions when I buy.


Bad wording on my part. It is not 1/5 of a share. You get 1 full share. It's just there are now 5 times as many shares. So the value of shares is diluted. You would not receive .20 shares. You would receive 1 share, but 5x more outstanding shares now.

If you bought the share today @$452/ea, tomorrow you would own 5 shares @ $90.4. Still full shares. I am not sure how the fractional shares work as I do not use that model, so I cannot comment. I use etrade, so I dont use a specific fund, so I have to buy/sell full shares.
 
2020-08-12 7:51:32 PM  
2 votes:
Everyone is a genius day trader in a bull market.
 
2020-08-12 7:34:42 PM  
2 votes:

Hyjamon: theToadMan: All of these brand new "COVID daytraders" that have been created from the stimulus funds are going to get their knees chopped off when this bubble pops.
This is the most epic dead cat bounce ever.

odd you mention this.  My friend casually dropped that his wife started daytrading.  She is a SAHM and was a highschool spanish teacher.  So it seemed odd for her to embark on this.  No talk of training, studying how or anything.

Said she has been doing good so far.  reminded me of common advice on these type of threads "the market has been so good, so long, anyone can do well right now"


Just before the 1929 crash, a smart fellow overheard his shoe shine boy exchanging stock tips with another shoe shine boy. That was the day he got out of the market.
It was barely in time.
 
2020-08-12 7:16:44 PM  
2 votes:

Hyjamon: theToadMan: All of these brand new "COVID daytraders" that have been created from the stimulus funds are going to get their knees chopped off when this bubble pops.
This is the most epic dead cat bounce ever.

odd you mention this.  My friend casually dropped that his wife started daytrading.  She is a SAHM and was a highschool spanish teacher.  So it seemed odd for her to embark on this.  No talk of training, studying how or anything.

Said she has been doing good so far.  reminded me of common advice on these type of threads "the market has been so good, so long, anyone can do well right now"


One of my favorite musicians just started too.

They do not know of the impending bloodbath.
 
2020-08-12 6:17:37 PM  
2 votes:

Bennie Crabtree: On the other hand, if the economy grows now, stock markets will have a whole new plan. It will show that death and quarantine are profitable, and Wall Street will begin fighting the WHO and the UN, and they will try to claw back vaccines around the world. plague will become an asset instead of a cost.


The fark are you on about?
 
2020-08-12 5:49:33 PM  
2 votes:
Buy stock in things you use they said.  You can't lose they said. They forgot about having the money to do all this.  You see I can know the greatest stocks available but if I can't afford to eat...doesn't matter.  That's my problem.  Now multiply my problem times millions.  That's everyone's problem.

Give it 2 weeks when compromises aren't worked out, and they realize executive orders mean nothing without money to back them.
 
2020-08-12 11:20:03 PM  
1 vote:

MBZ321: We are past recession....we are headed towards Depression stage if we aren't realiticaly there already when fake stonks and money printers are pulled out of the picture.


That is my personal bet. In the last few weeks I have shifted as much as I could to a "shiat hit the fan" portfolio. Most bets I have now are for an economic implosion.

The $600 just ended, mass evictions, 30m on gov assistance, 25m people in homes having trouble with rent and mortgages...shiat is so ugly right now it is astonishingly bad.
 
2020-08-12 10:40:22 PM  
1 vote:

Hyjamon: AsparagusFTW: Also, for this example, I'll say a share is $500, and it's earnings are $50/share.

It's price to earnings would be 10 (500/50)
Once the split happens, your share is now $100, but also those earnings are split. So your share would be $10 in earnings. So the PE stays the same. 100/10 = 10

The split only effected the price, all ratios stay the same. It did not change the PE ratio, so it is the same "price" of PE 10 that you are paying after the split.

gotcha, PE seems to be a more comparable unit measurement between stocks then for the same reason, it is normalizing, in effect, for return on investment.

Given three stocks with PE's of 2, 5 and 7.  all other things being equal,  I'd want to invest in the one with 2 PE.

PE feels like a bit counter-intuitive at first. i am sure there are other metrics, but interesting how the PE is a reciprocal of an ROI calculation.


Long story short, PE is a barometer to use, but it is accounting earnings. Accounting is weird. But PE is so you can compare companies because share price literally means nothing.

That is the thing. A low PE can occur because the business fundamentally changed and the share price got dumped before the crappy earnings become realized. A low PE is most of the time a sign to stay away.

Example.

Company XYZ trades for $100, earns $10 currently. PE is 10. On their annual conference call they announce a major piece of legislation got passed that is going to dramatically kill earnings. Stock next day goes to $20. It is all looking backward. So you might search low PE stocks, and see this 2PE and go "GREAT!" But the business changed.

So the next year earnings come out after the legislation passed  and earnings are now $.10/share. The new PE is $20/$.10 = 200. Super expensive at that point, sells off again. Today's PE is using data looking back. It is your job to estimate future earnings. The news of the legislation caused the stock to sell off because year 1 they had great earnings, but year 2 not yet realized have gone to shiat.

So low PE stocks can be hell. Most of the time, it is a warning flag to stay the hell away because there was a fundamental change and the earnings have not caught up yet, and the stock sold off.
 
2020-08-12 10:19:01 PM  
1 vote:

Hyjamon: Rapmaster2000: Hyjamon: AsparagusFTW: I just got a call from my parents about buying Apple since they announced the stock split. they thought it was going to be 1/5th cheaper.

/that's not how any of this works

i thought that is how splits work, from a buyers perspective.

Day 1: one stock of company A = $100
Day 2: 4:1 split
Day 3: one stock of company A = $25

Or are you talking from a larger perspective of the fact that in the end you are still only investing $25 in the company.  Be it 0.25 share at the $100 price or 1.00 shares at the $25 price.

I am trying to learn all of this out of curiosity.  I am mostly an index and forget it guy.

The latter. The stock isn't cheaper.  It's a smaller share of the company.

thanks.  are fractional share purchases more common now on platforms for us plebs?

I know my dividends just get reinvested for the fraction they are worth.  Vanguard seems to only allow whole number of shares transactions when I buy.


Also, for this example, I'll say a share is $500, and it's earnings are $50/share.

It's price to earnings would be 10 (500/50)
Once the split happens, your share is now $100, but also those earnings are split. So your share would be $10 in earnings. So the PE stays the same. 100/10 = 10

The split only effected the price, all ratios stay the same. It did not change the PE ratio, so it is the same "price" of PE 10 that you are paying after the split.
 
2020-08-12 10:09:52 PM  
1 vote:

Hyjamon: Rapmaster2000: Hyjamon: AsparagusFTW: I just got a call from my parents about buying Apple since they announced the stock split. they thought it was going to be 1/5th cheaper.

/that's not how any of this works

i thought that is how splits work, from a buyers perspective.

Day 1: one stock of company A = $100
Day 2: 4:1 split
Day 3: one stock of company A = $25

Or are you talking from a larger perspective of the fact that in the end you are still only investing $25 in the company.  Be it 0.25 share at the $100 price or 1.00 shares at the $25 price.

I am trying to learn all of this out of curiosity.  I am mostly an index and forget it guy.

The latter. The stock isn't cheaper.  It's a smaller share of the company.

thanks.  are fractional share purchases more common now on platforms for us plebs?

I know my dividends just get reinvested for the fraction they are worth.  Vanguard seems to only allow whole number of shares transactions when I buy.


Robin Hood pioneered it, but I've heard more do it.

Technically, fractional shares have been offered for years as a part of DRIPs:  https://en.m.wikipedia.org/wiki/Divi​de​nd_reinvestment_plan

Basically, when Verizon gives me a dividend, it gets automatically invested by E*TRADE as whatever fraction of a share that cash dividend will buy. Vanguard will probably do the same. They do it with my Vanguard managed 401k.  Search for DRIP on the Vanguard page and enroll.
 
2020-08-12 9:21:46 PM  
1 vote:

strife: AsparagusFTW: Hyjamon: theToadMan: All of these brand new "COVID daytraders" that have been created from the stimulus funds are going to get their knees chopped off when this bubble pops.
This is the most epic dead cat bounce ever.

odd you mention this.  My friend casually dropped that his wife started daytrading.  She is a SAHM and was a highschool spanish teacher.  So it seemed odd for her to embark on this.  No talk of training, studying how or anything.

Said she has been doing good so far.  reminded me of common advice on these type of threads "the market has been so good, so long, anyone can do well right now"

One of my favorite musicians just started too.

They do not know of the impending bloodbath.

A buddy of mine mentioned that his co-worker wants to quit his 9-5 to day-trade.  I couldn't stress "Don't do it" enough, especially if you have dependents.

But then again, maybe stonks will just only go up forever after all, even under the worst conditions.  Who knows anymore.


I just got a call from my parents about buying Apple since they announced the stock split. they thought it was going to be 1/5th cheaper.

/that's not how any of this works
 
2020-08-12 9:12:49 PM  
1 vote:
In March I was down 20% from February, and now I'm up about 3% from February.  It makes no sense at all from a fundamental standpoint.  Everyone just keeps buying because money is cheap.
 
2020-08-12 8:07:00 PM  
1 vote:
Meh.

I never stopped buying up index funds. And when the market was down, my robo-advisor did a bunch of tax loss harvesting.

I'm going long, so I'll keep buying.
 
2020-08-12 6:36:08 PM  
1 vote:
Stock market is decoupled.
It has its own inertia now and won't pay attention to reality until it gets bit on the azz.
 
2020-08-12 6:27:57 PM  
1 vote:

Nadie_AZ: [preview.redd.it image 640x587]


This.

He pain is just starting.
 
2020-08-12 5:26:20 PM  
1 vote:
On the other hand, if the economy grows now, stock markets will have a whole new plan. It will show that death and quarantine are profitable, and Wall Street will begin fighting the WHO and the UN, and they will try to claw back vaccines around the world. plague will become an asset instead of a cost.
 
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