JohnRoberts

buy low sell high
« on: June 16, 2020, 10:44:19 AM »
Apparently an unintended side effect of sheltering in place, and lack of sports betting has a new generation of day traders betting on stocks. This is what we affectionately call "dumb money" but apparently the massive stimulus has created a market that mostly goes up, and there is enough of this dumb money that some smart (?) money short term "traders" are following them into trades. Not all smart money Carl Icahn a well known deep value "investor" sold his large Hertz holdings for something like $0.60 a share.

One investment that the smart investor money will not follow is buying bankrupt (chapter 11) Hertz. In bankruptcy common stock are last on the list for divided up liquidation assets. Debt holders get paid first and Hertz bonds are trading around 40 cents to the dollar, so low probability of even them being made whole.

Who in their right mind would buy worthless stock? Apparently so many people that the bankruptcy judge has approved issuance of another $1B of new stock, as long as they include warnings. To the bankruptcy judge this is free money that will go to help pay off debt.

I'd rather see you buy bitcoin than hertz stock...  Of course what would I know?

JR

Don't only half-ass tune your drums. Visit https://circularscience.com to hear what properly "cleared" drums sound like.


JohnRoberts

Re: buy low sell high
« Reply #1 on: June 19, 2020, 09:43:32 AM »
good news, it looks like SEC is squashing bankrupt Hertz's $500M stock issue...  I believe in free markets but apparently some new traders need to be protected from themselves.

JR
Don't only half-ass tune your drums. Visit https://circularscience.com to hear what properly "cleared" drums sound like.

living sounds

Re: buy low sell high
« Reply #2 on: June 19, 2020, 12:10:26 PM »
good news, it looks like SEC is squashing bankrupt Hertz's $500M stock issue...  I believe in free markets but apparently some new traders need to be protected from themselves.

JR

Wow, first-time I think you admitted we need common-sense regulations. So we're on the same page now.  8)

JohnRoberts

Re: buy low sell high
« Reply #3 on: July 01, 2020, 04:03:10 PM »
Wow, first-time I think you admitted we need common-sense regulations. So we're on the same page now.  8)
I have long advocated sensible regulation, but I do not believe government is all knowing and wise. That said this new generation of robin hood day traders lack experience with markets that actually go down... markets always do and ignorant traders learn the hard way.  ::)

The markets and economy are horribly distorted by all the liquidity being thrown around. I wish I new a safe asset class to hide in but I can't find it.

The good news I don't have to worry about this for very long...  8)

JR

Don't only half-ass tune your drums. Visit https://circularscience.com to hear what properly "cleared" drums sound like.

Script

Re: buy low sell high
« Reply #4 on: July 02, 2020, 10:44:12 AM »
Quote
The markets and economy are horribly distorted by all the liquidity being thrown around. I wish I new a safe asset class to hide in but I can't find it.
Last time it had turned out to be TP  ;)

JohnRoberts

Re: buy low sell high
« Reply #5 on: July 02, 2020, 11:03:20 AM »
Last time it had turned out to be TP  ;)
already overweight TP and paper towels... maybe n95 masks, but once the supply chain fills these will drop back to <$2.

JR
Don't only half-ass tune your drums. Visit https://circularscience.com to hear what properly "cleared" drums sound like.

Script

Re: buy low sell high
« Reply #6 on: July 02, 2020, 11:08:32 PM »
Massive amount of bets on S&P 500 in June could be contra-indicative -- or not.

Pecan -- definitely accumulate.

Some compare current situation to 1999 (bad, H. Marks), others compare to 2009 (good). Taken together it means: they don't know.
« Last Edit: July 03, 2020, 02:26:37 AM by Script »

JohnRoberts

Re: buy low sell high
« Reply #7 on: July 03, 2020, 10:09:59 AM »


Pecan -- definitely accumulate.
I sprayed my pecan trees again last week... I've sprayed them more times this year than for the last 30....
Quote
Some compare current situation to 1999 (bad, H. Marks), others compare to 2009 (good). Taken together it means: they don't know.
yup... typical market metrics can't be trusted, but I don't see an obvious alternative asset class... maybe buy land? They aren't making any more of that. 

JR
Don't only half-ass tune your drums. Visit https://circularscience.com to hear what properly "cleared" drums sound like.

Gold

Re: buy low sell high
« Reply #8 on: July 03, 2020, 11:32:21 PM »
I don't see an obvious alternative asset class... maybe buy land? They aren't making any more of that. 

I want to learn more about forestry and whether owning forestland can make a profit.  Pulp wood for paper or hardwoods. I like the forest.

Script

Re: buy low sell high
« Reply #9 on: July 03, 2020, 11:35:07 PM »
Pecans, tried to buy them in my local specialities store, didn't have them. Will continue looking. Great nutritious value, full of vitamins, unsaturated fats. and antioxidants. --  Great for cycling prep and recovery, especially when pushing harder ;)
----
Just because something is overpriced doesn't mean its price will go down.

Land, hm, is ownership taxed in US?


JohnRoberts

Re: buy low sell high
« Reply #10 on: July 04, 2020, 10:58:39 AM »
Pecans, tried to buy them in my local specialities store, didn't have them. Will continue looking. Great nutritious value, full of vitamins, unsaturated fats. and antioxidants. --  Great for cycling prep and recovery, especially when pushing harder ;)
and they really taste good too.... Unfortunately the local squirrels like them too. Over the last few years I have killed a half dozen squirrels. The pecans won't be ready for a few more months. They drop from the trees and are collected from the ground, while the squirrels don't wait for them to drop.
Quote

----
Just because something is overpriced doesn't mean its price will go down.
In an efficient free market price will be influenced by supply and demand.... right now there is arguably an oversupply of money (liquidity) distorting asset prices upward. Another old stock market saying is "don't fight the fed".
Quote
Land, hm, is ownership taxed in US?
We do not have an overt wealth tax (yet), but land is taxed by local government to pay for local services, like schools, police, fire departments, sewers, etc....

Property like pine plantations are generally located in rural low population areas so relatively low property taxes, further farm land gets taxed at a lower rate to encourage farming and growing trees for commercial sale is a form of farming.

 I enjoy relatively low tax rates living in a small town in a poor region. This is a double edged sword as town services are not up to the standard of wealthy communities.

As I have shared before I never claimed a homesteading exclusion that could reduce my personal property taxes (I can afford to pay more than many of my neighbors and it's not that much). Lately I kick in an additional $5 a month to my town water bill to support the volunteer fire department (we can't afford professional fire fighters.).

JR
Don't only half-ass tune your drums. Visit https://circularscience.com to hear what properly "cleared" drums sound like.

Gold

Re: buy low sell high
« Reply #11 on: July 04, 2020, 12:15:29 PM »
I did a little research on fruit and nut trees native to North America. It turns out that the only fruits native to North America are grapes, avocados and paw paw’s which I had never heard of. They are native to the South East US and are not grown commercially.

There are many native nuts though. Pecan, Black Walnut, Beechnut, Acorn, Pine Nuts and about six more.


 

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