All things STOCKS

#526
#526
The valuation is sky high (200+ multiple) because of anticipated subscriber growth. When it's slower than expected the panic ensues and the stock price tanks. The cycle will end at some point.

They're not too far from full penetration domestically. Lots of room for international sub growth, but the cost of programming in multiple languages and other challenges means that the added revenue with each additional sub won't drop to the bottom line. As I pointed out before, Netflix is different from broadcasters and webcasters like Spotify. Their cost of the programming rights is set. It won't escalate when more eyeballs are added. Spotify has to pay more to the licensors of the big 3 record companies as their revenues increase.

Netflix might see less of an embedded buyout premium now that the government is appealing the big CTV merger. Disney, Comcast, Google, Amazon, Facebook, CBS, and the internet providers might be less viable buyers if the government tries to block more M&A in the sector.
 
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#527
#527
Facebook is on sale. Down 20% after hours.

Buying opportunity or falling knife?

Netflix has had about a 15% pull back off of recent highs.

That's half of FANG.

Papa John's is off 50% from where it was a year and a half ago. $90 to $45. Not a bad pick for those that like to bottom feed.
 
#528
#528
Whirlpool has been getting a tariff induced haircut. It's off by about a third and half of that happened Monday after the markets closed and on Tuesday. They're getting battered by the threat of a trade war affecting their raw materials and retaliatory tariffs on it's exports. They might also be getting hit because they moved much of their manufacturing to Mexico with Clinton's NAFTA initiative. I assume that washers and dryers built in Mexico for US consumers get hit with US tariffs, but admittedly I haven't dug that deep into exactly what products are taxed by various governments as they are shipped across their borders. But Whirlpool is a good US company. The consumer durables ETFs might be a better investment if they've taken a similar thumping in the equity markets.

I'm surprised that railroads haven't tanked. Especially Canadian National and Canadian Pacific. UNP, NSC, KSU, and CSX all have pretty low multiples.
 
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#533
#533
Netflix is roaring back and a canadian marijuana stock, CRON, has over doubled in price since I bought in in May. Spotify also has been performing execptionally well!
 
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#534
#534
Having been a paying subscriber to Spotify for over 5 years, I might could end up kicking myself for not participating in the stock ownership.

They're not making a profit, but Amazon wasn't either.

They have a lot of competitors and potententual competitors. Sony, Amazon, Google/YouTube, Apple, Walmart, Microsoft, Netflix. But Netflix also has a lot of competition.

They are at the mercy of, I think, 4 huge music publishers. If they lose their agreement with just one of them the stock price would quickly be cut in half or more.

Musicians and composers are very upset with the tiny amounts that they receive in royalties.

Since they don't own the content or pay a flat fee to access it, their COGS rises in step with their revenue. The margins can't expand with growth.
 
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#535
#535
Sears is interesting. Was at 1.09 yesterday (the end is near). 1.22 today. Might go to zero but it can only go down so far. $1K yesterday would be $1120 today.

I bought Sirius at under a dollar and it's near 7 now. However, I only bought 9 shares with some left over cash in the portfolio so I'm winning but barely covering the trade commission :)
 
#536
#536
Sears is going to have to be recapitalized much like Delta Airlines and General Motors. Equities of many bricks and mortar retail has/is kind of establishing a base, but Sears Holdings has piled up too much debt to dig out. They've already sold off most of their assets. Sad thing is, Eddie Lampert has driven it nearly into bankruptcy, but he also owns a massive piece of the debt. He'll probably end up owning the brands and other unless they are sold off first in order to raise more cash.

Amazon should buy the stores (but the leases might soon be all that remains of the real estate) for distribution and pickup centers. I hate that such an iconic American brand has been destroyed. It wasn't long ago that their name was on the tallest building in the world. That building now has the name of the firm on it that planned the city of Oak Ridge.
 
#537
#537
Thunder Good-Oil said:
Sears is going to have to be recapitalized much like Delta Airlines and General Motors. Equities of many bricks and mortar retail has/is kind of establishing a base, but Sears Holdings has piled up too much debt to dig out. They've already sold off most of their assets. Sad thing is, Eddie Lampert has driven it nearly into bankruptcy, but he also owns a massive piece of the debt. He'll probably end up owning the brands and other unless they are sold off first in order to raise more cash.

Amazon should buy the stores (but the leases might soon be all that remains of the real estate) for distribution and pickup centers. I hate that such an iconic American brand has been destroyed. It wasn't long ago that their name was on the tallest building in the world. That building now has the name of the firm on it that planned the city of Oak Ridge.
Click to expand...
Which firm is that? When did they plan OR? Assuming you mean residential and commercial?
The old (young compared to other rtowns) part of the town is well planned. IMO.
 
#538
#538
Go aeiou said:
Which firm is that? When did they plan OR? Assuming you mean residential and commercial?
The old (young compared to other rtowns) part of the town is well planned. IMO.
Click to expand...

I think I saw that one of the companies that were absorbed by Willis Towers Watson planned the community. However WTW seems to be more of a financial institution that deals in insurance. The history of Oak Ridge and the names of the companies involved is fascinating. X-10 had the second reactor to ever go live, only preceded by the one under the stadium at the University of Chicago. One reason that Oak Rdige was selected was because the ridges would help contain the contamination in the event of an explosion.
 
#539
#539
I'm interested in sin. IGT and other gamblers and Constellation Brands, Diagio, maybe Canopy. CRON was hammered yesterday with a short announcement, but Constellation has pulled back despite the reefer run up in August.
 
#545
#545
Media and entertainment are sectors that I try to keep an eye on. With Facebook, Google, Amazon, Netflix, and Apple crushing most of the companies that I follow it hasn't been all that interesting lately. But Sirius XM taking over Pandora is an interesting twist. The biggest negative to me, from an investment standpoint, is John Malone. He controls Sirius XM. I can't stand the guy. The way that he manipulates capital structures with spin-offs, acquisitions, and other business combinations tend to screw over the small investor.
 
#546
#546
New leadership is on the way at GE and the stock popped yesterday. I might add some shares if the price pulls back over the next few weeks or months. Slashing the dividend might be the catalyst for me if it puts enough downward pressure on the price. A dividend cut would result in the fixed income owners rotating out and the share price should get hammered. But that's just one of many painful decisions that needs to be made to revive the company. GE held up fairly well despite getting booted out of the DJIA.
 
#547
#547
I have been selling AMZN puts all year. Ladder up and put a trailing stop on them. The majority have expired all year.

Love this thread.
 
#549
#549
bignewt said:
I have no idea what you just said.
Click to expand...

He's been selling options (put options) to somebody else... giving them the right to require him to buy Amazon stock (from them) at a predetermined price for a specified period of time. If the price of Amazon INCREASES, the value of the put option decreases in value... even frequently expiring worthless (which is great if you sold that put option). Since he sold the put option, he profits when the stock price rises. Buyers of puts expect stock prices to fall. Sellers of put options expect the price of the underlying stock to increase in value. If you buy a put and the underlying stock price DECREASES, you have the right to require the seller of the put to buy the stock from you at a price higher than the current value... therefore the put BUYER will profit when the stock price falls.

If you BUY a put, you can potentially force somebody to buy stock from you at a price above what it is worth. You own the right to sell the stock at a predetermined price.

If you SELL a put and the price of the stock INCREASES, the put buyer is not going to force you to buy the stock from them at a price below what it is worth.

There are 4 positions in stock options. There is a buyer and there is a seller. The option is either a PUT (the right to sell) or a CALL (the right to buy). The buyers of either type of option have the right, but not the obligation, to demand the buy or sell. The seller of the option pockets cash on the front end. The option seller wants that option to go down in value.

To me, selling puts is the most abstract concept of the 4 positions (somebody correct me if I said something incorrect above).

Option buyers own the right to force the sale (put) or purchase (call) of the stock.

Buying calls is the easiest concept. You own the right to buy a stock at a predetermined price. If the stock goes up in value, you have the right to buy that stock at the lower, earlier price.

Selling a CALL has unlimited risk (unless you already own the underlying shares, which is a "covered" CALL). If you sell a CALL with a strike price of $100 and the price of the stock zooms up to $1,000... you will have to sell somebody a stock worth $1,000 for $100. Where are you going to buy a $1,000 stock for $100? You are out $900.

Those are some of the "basic" concepts. It gets far more complicated than the 4 positions established by a buyer and a seller of each if the two types of options.

Laddering up is simply starting over with the whole selling if puts process as the underlying stock value rises.

Putting on a trailing stop is setting up an automatic closing of the position as the option value moves opposite of what you had hoped. It's cutting (stopping) your loss before it gets worse. Actually I'm not exactly sure what "trailing" means. I've bought a few options, but have never sold one. I've (foolishly) never entered a stop loss order. I've been interested in selling some covered calls if the bull market appears to be running out of gas. The spreads usually look too expensive when I've considered options. Most options expire worthless (therefore the sellers usually profit at the expense of the buyers) so I've avoided buying them. Buyers of call options on marijuana stocks (if the options exist) have been making a fortune.

Somebody please tell me if they spot any mistakes in all of that ^^^ narrative.
 
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#550
#550
Trading options is very risky. But buying them can be considered insurance for stock traders.

Owners of stock might buy puts to reduce or limit their losses in case the stock price were to fall.

Short sellers of stock might buy calls to reduce or limit their losses in case the stick price were to rise.

Returns on long positions in stocks, typically long term owners of a stock, can be enhanced by selling covered calls. It works if the calls are sold and there is little vol utility in the stock price or if it steadily drops in value.

Selling puts is the bizarro position of the 4. I think that it's pretty much pure speculation unless used in combination with other options positions.
 
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