The Nasdaq is in a 10% correction. What have you been buying? Long or Short

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dips are good, but buy companies that will exist in 10years.

Boring_Post

I’m getting some more QQQ. Can’t go wrong with that

layelaye419

DCAing MSFT

kaniyajo

SOXL

I have an abusive relationship with that ETF surely she won’t leave me this time

ChadKensingtonsCock

I bought 20k of VTI about 1 week ago so nothing for now

Banabak

Why this is not the tech bubble (1999-2000)

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“During the 1999 cycle, companies with no profit, no revenue, and sometimes even no product were receiving massive valuations from going public in the stock market.”

you literally described all of those ev start ups worth more than major car manufacturers

remiskai

I agree- I don’t think this is the same, but- what scares me is if this is truly an ‘everything’ bubble like some experts claim.

Recently, 1/3 to 1/2 (can’t remember the exact number) of Nasdaq stocks have lost 50% of their value. Yet some of the truly big names (Tesla, etc.) are still relatively close to their ATHs.

The issue that I’ve read about is passive investing- lots of folks continue to purchase ETFs which continue to invest in these companies regardless of valuations. The true question is what happens if the indexes start to fall- one argument is that prices could drop so fast that sellers won’t find buyers. The reality is TBD.

TLDR- I do think this is different from the tech bubble, but I do think there are some severely overvalued stock in the big indices that could be a sign of trouble brewing.

paint0906

It’s the inflation bubble pandemic bubble, irrational bubble, whatever you want to call it

Clearskies37

>S&P 500 P/E ratio was 29 with the 10 year yield bonds yielding close to 6-7%. The growth yield on the S&P 500 stocks was close to 3%. Today, the S&P 500 P/E ratio is at 21 with the 10 year yield bond at 1.8%. The growth yield on S&P is closer to 5% today.

A few things:

1. The quoted P/E ratio is only from the last year. CAPE ratio, which tends to be a better metric, is price over the average of the last ten years’ earnings. This metric recently peaked just above 40. The last time it did so was just prior to the crash of 2000.
2. The Market-to-GDP ratio is over 200%, where the nominal ratio of market price tends to be 120% of GDP.
3. Excluding the false impression of earnings growth in the 2010s created by the 2008 global financial crisis (it tanked, then recovered), the earnings growth of companies in the S&P remains about 3% annualized for the past five decades.
4. Interest rates are scheduled to rise. This will have an adverse impact on earnings of stocks that are highly dependent on long term debt to sustain their earnings growth targets. It will also draw capital out of securities and into fixed yields, further depressing the shareholders equity of companies whose prices have significantly grown out of pace with fair value.
5. Portfolio managers from Vanguard, Fidelity, Blackrock, JP Morgan and Morningstar, are all expecting lower returns in equities in the next decade (ranging from 1.6% to 6.7%). Morningstar in particular is expecting yields to perform about equally with equities.

With these considerations in mind, institutional investors, who still comprise about 80 to 90 percent of the total market volume, are well aware of the risks in the market ahead. The aforementioned forecasts from portfolio managers are factoring in a substantive correction in the foreseeable future.

(Sources: Except where otherwise stated, Morningstar Investor Conference and 2022 forecast summary of Stock and Bond Returns)

th3cr1t1c

Is this Cathie Woods burner account? Hi Cathie, I’m a big fan on how you can stay bullish on national TV while trending down back to 2020 preccovid levels.

lib3rty47

I’m very worried about investing at all time highs.

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Your best asset is time , stop reading financial news, there is nothing there for you when your timeframe is 35+ years

Banabak

Fun fact: every time stocks are at an all-time high, that means all previous all-time highs have been passed.

irresponsible_owl

An ATH now will be unheard of bargains in 3-5 years.

big_tronson

DCA, you’ll make your money back in no time if you don’t stop investing after the crash and have picked solid investments. Just throw some money in at regular intervals and you’ll come back from any crash

buttstuff_magoo

Time in the market beats timing the market. 2 years ago all time highs would be all time lows right now. Plus we just took a haircut. Nows a good time to get in anyways.

1ess_than_zer0

Xi Jinping warns Fed against hiking interest rates

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I have locked this post since 95% of the comments were not even relevant in any way to investing

SirGlass

Raise it you cowards.

b_whiqq

I don’t know what he’s worried about. Unlike China, we can’t just suddenly slap a huge fine/fee/tax on rich companies to raid their savings when we get low on funds.

What else are we expected to do? Let it run out of control?

Metron_Seijin

I say raise it

Swedish-chimp

This sub is always the last to know about anything

Ackilles

When did you start “feeling” your retirement accounts?

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The first time you make more in a day of gains than you made at work that day.

The first time you make more in a day of gains that you make in a month at work.

The first time your paper losses are more than your month’s salary.

The first time your net worth goes down month-to-month due to market movements.

The first time the 4% rule passes your monthly expenses. To me, that’s the last milestone I care about.

mpbh

If 8% is $1500 for you, you have $18,750…

If you are 23, retire at 60, you have 37 years until you need this money.

If it grows at 8% per year until then, and you make no more contributions ever you will have $323,355.48.

If you then move all of that to boring dividend paying banks, you can probably bet somewhere around 4% yield.

This would be $12,934 in dividend payments which wouldn’t deplete your capital.

Is that a better feeling?

Edit to add: if you keep contributing the $6000 every year until then you will have $1.5M. Taking 4% dividends on that number is $60,000 per year in dividends. $5000 per month, $166 per day. And that’s not even dipping into the capital!

fake-name-here1

Investing is a long game my friend. You’ve started at a great age but don’t expect 100% returns. Keep investing, keep dollar cost averaging, and the stay the course. Personally I didn’t start to ‘feel’ like I was making a dent until about 10 years of investing. That’s when my salary doubled and I maintained a similar cost of living while being able to save/invest around 40% of my earnings. Just keep at it.

Roth is a great starting point but it’s only one vehicle. I’d explore 401k contributions if that’s an option or simply invest in long term funds like VTI.
Best of luck

Whyamihere5069

It’s frustratingly slow and at your age it takes an appreciable chunk away from your spending cash.

But those contributions are worth far more today than they will be in 2032. It’s a very long game that compounds every year and results in you both being rich and retiring when you want to.

eatmyopinions

Dude, you’re doing awesome. You’re a student who is not only not in debt, but actually investing already. By the time you get into your career, your investing habits will really pay off. The intuitive feeling of despair you seem to be feeling is an accurate reflection of the reality that you need more income to develop a proper savings.

But take some BIG solace in the fact that income is only half the story: the other half is having the mindset to live below your means, so that you can invest a high % of disposable income. This trait is MUCH rarer than you realize it is. Rest assured, it will eventually pay big dividends (pun intended).

himmat776

Microsoft to buy Activision Blizzard

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Microsoft continues to grab up some great IPs. They’re really making a push to secure a big corner of the gaming market. We’ll have to see how it plays out, but snapping up exclusive titles makes me confident in their ability to maintain growth in their gaming sector.

Uncle_Sam_Bot

What a win for both companies. ATVI shareholders get to cash out while MSFT obtains popular IP’s that are profitable.

If anyone’s bullish on ATVI, now imagine ATVI without the toxic culture if MSFT could acquire it and actually change the company culture.

I see this a win for sure. PC Game pass is growing to become gaming Netflix and while I’m too lazy to look up numbers to justify it, I think MSFT is on the right track.

SelfAwareIncel

Noob question: what happens to my Activision shares if I just keep holding?

dasoxarechamps2005

Why is the share price not reflecting the bid? Are people unsure of the passing of this deal?

throwwayhubu

What else can MSFT do with billions in cash? They can’t just invest it in the S&P500 without buying out smaller companies by owning too many of their shares.

With inflation going up they need to spend cash now

AccFan

Controversial opinion: Technical analysis is just astrology

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Locking comments as the comments and replies are descending into a meaningless pissing match without any meaningful debate/discussion about the merits or flaws of Technical Analysis.

th3cr1t1c

This isn’t controversial in the industry lol. At least the way retailers do “””technical””” analysis.

Actual real analysis of technicals done by algorithms written by people with PhDs does happen.

But when some smoothbrain draws lines on a chart and pretends it means something, no it shouldn’t be controversial to call them out on it.

You’ll note that people who peddle this crap aren’t actually doing “technical” analysis. They aren’t defining things in a technical way. A “channel” is never defined in a technical way, such as “a stock is in a channel when it remains within 5% of it’s 50-day MA for 10 trading sessions”. Know why? Because if you actually define your analysis in such a manner it becomes easy to show it means nothing. Someone could run a quick and dirty back test and see — huh, this pattern doesn’t have predictive power.

The general refusal of people who claim
TA works to provide a single technical that can actually be tested is damning. They claim it’s an “art form”. Well if they can’t actually define, in a purely *technical manner* what their buy and sell signals are, they aren’t really doing technical analysis.

cristiano-potato

I think it’s a self fulfilling prophecy, because a bunch of people are looking at the same thing and are taking predictable action based on those same numbers.

not_creative1

>The only question I have is: why do so many people try to use it and why
are there so many fake YouTubers and scammers who try to sell you on
this stuff?

My theory is they are selling a dream. I mean how awesome would it be to look at a few stocks, draw some lines and day trade, work from anywhere with an internet connection , be your own boss and rake in a lot of money?

Plus drawing lines on a graph is fun, it beats fundamental analysis what is pouring over numbers, doing DFC analysis and WACC calculations pouring over financial statements , also studying the industry to get a firm understanding of the industry , then investing and hoping you make a few extra percentage points then the S&P500 index , and it taking years to pay off? That shit is hard, complicated , requires math and basic finance skills

Also realize lets just say in theory I found some signal through charting that could be exploited , I would either

A. Not tell anyone about it and exploit it(once you tell people about it , it becomes a race and is no longer exploitable)

B. Try to sell it to some propitiatory trading firm for millions of dollars

I wouldn’t sell it to random people for $200 bucks a pop

SirGlass

The most important aspect of TA isn’t charting like you think. It’s making a plan. When to enter and when exit.

It’s more about discipline. With the right discipline you can be wrong more than right and still make money.

FiveHole23

Investing in a Roth for your children inheritance.

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I can’t believe the responses to this. Absolutely absurd. Obviously this is a smart thing for the parents to do. It’s not always about the kids needing money or funding the kid’s retirement. It’s not about entitlement either. It’s about doing a nice thing as a parent for your kids. And the money is likely better put to work growing tax free in the Child’s ROTH than it is in the parent’s taxable account. It gives the children a chance to learn about investing too. So it’s a net positive for the family. It also won’t be subject to estate taxes since it was passed as gifts long before death. If the parents don’t need the money, this is literally the smartest thing they can do with it.

The average parents look after their kids and want their kids to succeed. I can only imagine this is part of it and it’s something I’ll do when I’m a parent. Judging the comments here, most redditor’s parents hate them and/or they hate their kids.

churnchurnchurning

I did the same. I had planned on putting money back for my teenager until he turned 18 and could open his own Roth. I’m still fairly new to investing outside of just having a 401k and only learned about the Roth for minors in Oct. We sat down and went over strategies and came up with a plan on how he could invest his money that he earned working as well as some extra we put back for him. showed him the benefits of starting early and what the potential gains could be once he’s ready to retire. For me, this is not only a way to help provide an education to my children about investing but changing the perception of money in my family.

It is interesting how some people view parenthood and children in general. Just because my kids grow up and become adults, doesn’t mean they stop being my children. It will always be my responsibility to look after my children until the day I leave this world, I won’t baby them but if I can help create wealth for them and my grandchildren I would be an idiot not to

ramdaniels

Love this idea. We have custodial accounts for our kids (ages 9 and 13) that we contribute to regularly and will probably do this for their Roths once they are working. The kids are very interested in investing and now our 13 yo puts half of all the money he is gifted/earns from odd jobs into the investment account.

geo-jake

Good parent

helloadam42

I saw in a money guy video that approximately 11k as a lump sum investment at age 20 will grow to approximately 1 million by age 65. So, giving your kid a leg up can be really simple and cost effective.

Yeah yeah I know 1 million in the future won’t be worth as much as today, but you get the point

arparris

Unilever Shares Fall 6% as it Defends £50bn Approach for GSK’s Aquafresh to Panadol Consumer Arm

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I have Unilever shares and I’m p*ssed! Classic CEO move, will pay out for him I’m sure. Countless examples of why these deals are always a terrible deal for the buyer.

I bet GSK can’t believe their luck, and clearly now successfully managing to string Unilever along and get them to bid even higher. As soon as it becomes a “strategic” acquisition you can name your price. And now it’s out in the press Unilever can’t back down.

obb223

Piss poor leadership trying to hide poor performance by bolt on acquisitions, ladening the company with unsustainable debt. They need to focus on organic growth for the already strong brands ULVR has. Plus keep their political views to themselves and especially not let them impact company performance.

SqouzeTheSqueeze

As a shareholder, this is shit! They had poor performance overall, and now they are farting around with the GSK healthcare business as to “boost” sales so that we dont see that they are not growing their own line of products.

I personally do not see a lot of super synergies, as one is a consumer business while the other is a consumer OTC but still based in a regulated GXP environment. Unless they want all their SAP systems to now be a validated system as to build on the synergies.

I guess I find out soon enough if the deal goes through on the system consulting side, as I consulted for both and they want to do a multi year project for consolidation work.

KL_boy

not good

Vast_Cricket

Unilever has been under a lot of criticism for prioritising resources and time on pivoting their brands towards “purpose” at the cost of building brand equity.

Greedy-Locksmith-801

Buying stocks vs LEAPS contracts?

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Stocks are much safer than LEAPs.

Look at the fed doing quantitative tightening, this could flatten the market which would destroy your LEAPs and stocks. With stocks you can hold past the tightening period, with LEAPs you would lose everything.

jwonz_

you choose the risk. OTM, ATM, ITM, and you pull the trigger when you want to (high iv, low iv). Do your own research then follow your plan then evaluate. There’s no actual answer to this question of “excessively risky”

hawkeye443

If the LEAPS expire OTM, then your investment goes to 0. And yes, this is possible even for SPY and QQQ. Look at tech bust and GFC where there were prolonged bear markets, when even a 3-year option contract bought at the top (ATM) would expire worthless.

I leverage with LEAPS too. I keep it to 15% of my portfolio, which is already quite large. 85% is in safe-ish income producing investments to try to make up some of the option premium I spent.

TehDeann

Someone can correct me here, but I generally view LEAPs as highly leveraging yourself on a particular asset.

Whether it’s worth it regarding risk/reward probably depends on the specific contract you buy, and what you calculate it would net you over just holding the shares + tolerance for volatility and the chance you might be out of the money.

foolsgold345

You can use deep ITM leaps with a .70 delta or greater to mimick the movement of a stock price while still using leverage to your advantage. Ofcourse there is more risk, but if you’re bullish on a stock and have time and the risk tolerance, it’s not a bad strategy.

zfromvan