Hey guys, I haven't had room for new pins for quite some time, so I have an extra 50k in my account. I've never invested in stocks (I prefer real estate), but I'd like to try to capitalize on the downturn. I'm not a fan of long term as I don't trust the market in general. I think these bubbles and corrections are going to become more frequent, and after 2008, I don't trust corporate and government influence.

Anyway, here are my preliminary plans.

1. My theory is that the best time to get in will be when USA infections decrease for the first time. There will be false spikes that would be risky to play before this, so I'll be avoiding them.

2. My guess is that there will be two phases for capitalization. The first will be companies that are an immediate need when society starts up again, then the slower gainers. The plan: gain from phase one, pull cash, dump into phase 2. Pull cash, throw party.

3. My prediction is that the average schmuck (me) will miss the first spike because Insider speculators will create it. But there will still be a lot of room for profit.

Here are some tentative investments I'm considering:

Phase one:
Uber - people need to get around
Netflix - hopefully it will go down. Doubt it.
Starbucks - habit/addiction purchase

Phase two:
Telecoms - habit/needs
Airlines - habit - way of life - status
Banks - print money, mass debt holders
Tesla - ingenuity, adaptability.

I definitely need to do more research. Please tear apart my theory. I'm hungry to learn.

I think DNKN is a buy around these levels, but I would own SBUX first as the stronger company

Likely busy writing last minute calls that expire today. When you write calls that expire on the same day, don't they continue trading until 5:30 technically so you can get screwed after hours? Thanks.

I bought into DAL also before realizing how bad things were getting
Cut my losses and got out today.

I personally have 0 desire to fly anywhere that is not a necessity for at least the rest of the year

Are Russia and the Saudis really close to an oil production reduction agreement or is that just something that was said yesterday to boost the markets?

Welcome to the party. From my perspective, I am not the biggest fan of the phase 1 / phase 2 approach as you outlined it because market sectors are generally going to move up and down as a whole based upon the macro situation. Don't get me wrong, hospitality and travel are in a world of hurt and will be that way for a while compared to some sectors but things are going to move together for a while. If you try to phase 1/ phase 2 it you are going to miss out on the benefits for your phase 2 stocks. I would instead encourage you to pick better quality stocks from the get go (regardless of sector) and then you can always rotate out. That ensures that you are getting the best swings at bat.

Since you are looking at a short horizon from your perspective, airlines, banks, and the like do not make sense. They are in for a long recovery. Uber is interesting in that it is a need but I dont know the psychology of people getting in a stranger's car in the near term. Netflix is an expensive stock on a P/E ratio, but definitely has a user base. Starbucks is an excellently run company and might be a good pick. Telecoms do not normally show explosive growth, so tend to be a longer term play. Tesla is dependent upon how many vehicles that can produce, so could be tough in the near term.

If you are looking at shorter term plays with upside potential, your tech companies might be your best bet. Ultimately, your timeframe, goals, and risk tolerance should be your guidepost for this.

If you do that, hedge with SPY puts. Nothing WSB YOLO crazy, but get some insurance.

Get back down there SPY. I want in!

Well played Thing, you're really on the ball.

Thanks. For a while, I was right on the money. We will see what next week brings.

Did pretty good today on buying sqqq yesterday and selling 10% up. Bought STZ On Thursday at 124 before their earnings. Sold half at 133 right before close but I think it will go up more next week. Everyone have a great and safe weekend!

similarly i have a bunch of good till cancelled orders for VTI at 111.11 in my 401k, just off the previous lows.

Thanks for the advice guys. I've been doing a lot of research and learning a ton!

Thanks KPG.

Anyone doing some tax loss harvesting during this downturn? Never had to do this before, but this down market looks like an opportunity to do so for some of my non-retirement mutual funds and ETFs? Thanks

DOW futures are up about 450 so far, at levels higher than anything they reached on Friday. It'd be nice to see another run over 22k this week.

15 minutes later and they're up 700 points now. Market is liking lower COVID new cases in many countries today.

They also think NYC has peaked so cases will start going down.

One day of data is a bit soon to party, but yes it seems new cases are lower almost everywhere. Deaths won't peak for another 1-2 weeks though.

Yep, I agree but it was part of the article I read on why market is up even though oil prices are tumbling. It should be another interesting week

I would like to take about oil a little bit. But oil is political. There is no way it cannot be political. You are talking about oil, OPEC, Russia, and the US. There is no way to talk about the oil market without politics getting involved. And I do not know how to broach the subject of oil without the politics.

Any suggestions? Or is there even any interest?

https://www.cnn.com/2020/04/03/business/cathay-pacific-flights-coronavirus-covid-19/index.html

'Demand has disappeared': Cathay Pacific slashes more flights after flying just 582 people in one day.
---------------------------------

I read stuff like this and me thinks much more bad news to come. But then I toy with the idea that the market has discounted the bad news and the only way to go is up.

It is a traders' market, for sure. And whether you win or lose depends on how fast you get the information. I have visions of the big Wall Street guys looking over the shoulders on the news reporters and me left sucking hind teat.

It seems to me this should be worse than the housing crisis for the economy/markets. Entire industries have just gone poof overnight. We don't go back to normal until we have a vaccine, if then, and it will not be a snap of the fingers when we do. It's gonna take time...

The cases reported today were weird. Like from a bunch of states the numbers seemed way too low. I don't know if that's a Sunday effect or what (a lot of testing is being done by 3rd party labs). But it might lead to a big pop tomorrow early, and then if numbers seem higher again a fade later. Italy locked down on March 9th, and almost a month later their cases still haven't really gone down that much.

I still don't know what our endgame is here. We're at least 2 months from opening anything back up, and that seems optimistic. I've heard that the rescue packages from the government for the small businesses are a mess and are going to take longer than expected. But New York seems to be possibly 'stabilized' for now, I just don't know how they go from 'stable' to 'normal'.

I read that Warren Buffett sold off a bunch of airline stocks last Wednesday and Thursday but still retained like 50 million of one of the ones he sold off. Makes you think they do it intentionally to drive price down so they can rebuy those shares back, lower? If he had no faith, he would have sold them all. I don't see how the government would let the airlines fail. Somehow, someway, they are gonna be bailed/helped out and they will recover. Just my thoughts.

I don't think the market has taken the bad news into effect at all. I still think it's way too high. Current PE is 18.5, that's still 10% above historical averages, and that's not taking into account the horrible earnings in the 1st and 2nd quarter.

They think GDP is going to shrink like 15+ percent. Unemployment is probably going to be 15%. And the market is above average? It doesn't make sense mathematically. When first quarter numbers come out here, that PE is going to jump to like 25 probably, and that's if the market stays right where it's at.

That being said, I do agree that oil would be worth getting in on here at some point because it isn't going to stay depressed like that forever.

I went searching and found the Italy stock market for some comparison. It started out at 25000, dropped to 15000, bounced back to 175000, and has pulled back a bit. So even with all that Italy has experiences with this virus,

https://tradingeconomics.com/italy/stock-market

Here is a 5 year chart.

Sort of looks like the Dow. A little bit. For as much problem Italy is having I would have thought it would still be going down. But there is major support at this level.

Screen Shot 2020-04-05 at 9.53.00 PM (resized).png

Here is the next chart will ALL of the data. Nobody can say Italy's market recovered after 2008-2009. Some of these people who bought Italy in 2007 are still waiting to get their money back.

If Italy market can hold like this, can the Dow hold here , as well?

Screen Shot 2020-04-05 at 9.53.26 PM (resized).png

So, I’m not a doctor, but the more we know about it the more we can make educated decisions. If we devise an antibody test, and people can prove they’ve recovered or had it but never showed; we can allow some opening up. Peak infection stays peak for a while if we maintain distancing... which means our hospitals are running at full tilt for a long time, which ain’t great.

Best case scenario: we develop an antibody test and rules around it and slowly open back up in 3-6 months. Worst case scenario: vaccine candidates reveal flaws and get pushed back another 12 months, head of state of a g-7 nation dies of Covid; oil tensions or trade tensions lead to an embargo on selling medical equipment to the USA ... plenty of unknowns

It sounds as though Boris Johnson is not doing well with his battle with the virus.

If we could get testing in large numbers, then I think it would help a lot. But they've had a month, and we still can't even handle testing right now...we're backlogged 115k tests from just Quest. Only 1.7 million tests given. We'd need like 50 million tests and tests that could be done in 5 minutes, and that seems almost impossible from where we're at right now. But even with testing, we're going to be left with the reinfection problem. The second you let people move again, it's going to go everywhere all over again.

It also doesn't help that it appears like even our death stats are suspect now. They're not even testing people they suspect died from it to save tests. You can't even trust any of the stats that are given currently because they're way undershooting what the current number is.

A good treatment option though would instantly change my mind on everything, because it doesn't depend on people making good decisions (which they won't). Without a good treatment option, this could drag on for a long time. I saw some numbers from google that basically showed that our social distancing compared to Italy was very poor.

Shorts are going to roast Monday, which will propel the market up to 22,000.

I'm not knocking "peak". It has to be out there, but but people are talking like as soon as we hit the peak that we will be home free. Well, we will be going down hill, but it could take a long time to reach bottom.

Here is a normal distribution curve fo illustration. Curve can be tight or they can be loose. But unless we reach peak and just fall of a cliff, we are going to have to ride the peak down. I'm 68 and an ex-smoker so I am being cautious; I have no idea how long it will be before I feel safe leaving the house.

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Part of the rise in the futures seems to be related to Russia pushing back a meeting date to talk about oil prices.

https://www.cnn.com/2020/04/05/investing/global-stocks/index.html

" The drop in oil comes after OPEC and Russia on Saturday postponed a meeting to discuss supply cuts and an end to a price war that has driven oil prices to their lowest in decades. The meeting had been set for Monday, but is now scheduled for Thursday, an OPEC source told CNN.

I never thought I would see the day when the U.S. would be asking Saudi Arabia to cut production to raise oil prices. OPEC has been around for 40 years holding us hostage with its ability to pump oil by Turing a tap on. I never thought I would see the day.

The new wrinkle is U.S. shale production which was holding a lid on prices. SA and Russia are not going to cut their production unless the U.S. cuts its production, as well.

So now we will all are partners. I cannot imagine it.

Cannot discount the fact that "unlimited quantitative easement" is probably keeping us from Dow <10,000 right now. I see no other way to explain it.

Agreed!! Zero interest rates and the Fed pumping trillions into the market is what is keeping this market up. Sadly, investing has never been more pathetic. Valuations are way too high vs. historical norms........but where else are you going to put your money? We are forever #$@& because the federal govt. thinks it’s their job to keep the market propped up........This is no free market. Zero interest rates create the worst economic behaviors. The cost of borrowing Money should never be free!

"This is no free market"

Truer words have never been spoken.

You nailed it.
#fakemarkets

It was expected to some degree, but everything is being devalued: cash, real estate, salaries, mortgages, debt, stocks, 401ks, personal possessions, etc.

TINA (There is no alternative). When you create retirement vehicles that are designed to invest in the stock market, politically it becomes impossible for the stock market to fall. Which is why we have so many zombie companies that wouldn't exist other than for the crazy low interest rates created to try to levitate the stock market in the first place.

Anybody want some federal coronavirus bonds? What percent return would they provide? 1%?
The interest rates make it more attractive to just hold cash than to tie up money for a nothing return. This has been a problem since about 20 years ago.

https://finance.yahoo.com/news/white-house-considering-u-treasury-144316855.html

I wish I could give this post more than one thumbs up!

Jeez. Mr. Larry Kudlow, "we have an airtight, well almost airtight lock on this". No way would I want any of anything he is pumping. Cash is way better than 1%.

Nothing has been normal since Wall Street's CDOs and CMOs took the housing market for a ride that the taxpayers had to cover. Helicopter Ben took interest rate to zero so there would be no choice for your money except the stock market. Doug Kass used to call it screwflation but then Doug turned into a bull so I don't know what he called it now.

I just put on a short position. This is the first trade I have done for a long time so nothing fancy. I bought ETF symbol TZA. If the market backs off I make a little money. If it does not back off, I'll be sorry.

Any nationwide salon chain public? They might have a short lived spike once the country comes off lockdown?

Ulta is one of the bigger ones:

https://finance.yahoo.com/quote/ULTA?p=ULTA&.tsrc=fin-srch-v1

Seems like the market wants to take off like a rocket ship from here on the slightest bit of good news, but needs an atomic bomb to make it fall right now. I'm just trying to figure out who's right regarding the overall economy: It ranges from "full-blown depression" to happy days are here again in 3-4 months. It's hard to know what to do when respected people are so far apart in what they believe the future holds.

this is really key.. the movement from pensions to 401k seems to have tainted what the market can stand.. does anyone have the total dollar amount newly invested in the market per month from 401k/403b vehicles? sure that would be interesting (or sad if the number is low)