£3000 in stock market?

[Kman]

This guy makes some persuasive arguments 

 

 

[Kman]

Are all the sell positions on indexes reflecting a feeling of an imdepending crash? or is that usual 

[HawkHybrid]

4 minutes ago, Kman said:

Are all the sell positions on indexes reflecting a feeling of an imdepending crash? or is that usual 

 

what did it look like a month ago? two months ago?

 

HH

[Bullionaire]

11 minutes ago, Kman said:

This guy makes some persuasive arguments 

 

 

I enjoy his videos, but I do find him a tad too sure of himself

[Kman]

33 minutes ago, HawkHybrid said:

 

what did it look like a month ago? two months ago?

 

HH

Unsure, I would guess it was very high around March but would people have kept sell positions since then? would have lost a lot in the meantime 

 

[HawkHybrid]

4 minutes ago, Kman said:

Unsure, I would guess it was very high around March but would people have kept sell positions since then? would have lost a lot in the meantime 

 

 

apparently the put to call ratio is approaching similar levels to late feb 2020.

https://www.youtube.com/watch?v=Da2cMBFt3es&t=606s

 

HH

[Kman]

23 minutes ago, HawkHybrid said:

 

apparently the put to call ratio is approaching similar levels to late feb 2020.

https://www.youtube.com/watch?v=Da2cMBFt3es&t=606s

 

HH

i didn't really understand the video, but I did find this article from April 19th

https://www.wsj.com/articles/bets-against-the-stock-market-rise-to-highest-level-in-years-11587288601

"Short sellers have revived their wagers against the stock market in recent weeks, taking their most aggressive positions in years.

Bets against the SPDR S&P 500 Trust, the biggest exchange-traded fund tracking the broad index, rose to $68.1 billion last week, the highest level in data going back to January 2016"

[HawkHybrid]

1 hour ago, Kman said:

i didn't really understand the video,

 

 

my over simplistic way is the put to call is currently at 0.54(or 54 puts to every 100 calls).

last time when it was at 0.51 feb 2020, stock market fell soon afterwards ie put to call

ratio did not go below 0.51. when the put to call ratio was at 1.28 in late march 2020, it

turned out to the highest it got for months. stock market rallied from late march.

history may or may not repeat but there is a historic chance that a put to call below 0.6

would result in the stock market turning down and a put to call ratio of above 1.2 result

in the stock market turning back up.

 

HH

[vand]

 ^^ FWIW I think the put/call ratio is a pretty useless ratio just looked at by itself.

The trend of the markets is still very clearly UP since the market bottomed on 23rd March. 

Short sellers aren't getting much change in this market, and mainly being forced to cover their bets at a loss or take profits very quickly.

We may run into more selling pressure as we approach the 200dma, but it's still going to be hard work to make significant profit on the short side until upward momentum has faded.

 

 

[JunkBond]

I had been considering a passive FTSE tracker fund but after reading this thread a couple of times I have been inspired by @Kman so I have opened an account with Trading 212.

I am obviously itching to get going just have to decide what to buy and when? 🤔

[Kman]

45 minutes ago, JunkBond said:

I had been considering a passive FTSE tracker fund but after reading this thread a couple of times I have been inspired by @Kman so I have opened an account with Trading 212.

I am obviously itching to get going just have to decide what to buy and when? 🤔

I still feel like there's an impending crash so personally I'm holding off doing anything meaningful

Currently I like Shell, Exxon, enterprise product partners LP in oil

I like Canadian Solar for solar energy

Risky but rewards long term Delta, IAG  and Carnival Cruises

If there is a crash I'd like all the big boys Google, Tesla, Amazon, Ali Baba, Visa, Microsoft etc but then maybe better to do a vanguard etf

 

 

[Kman]

Can someone explain the vanguard debt etfs? like the UK gilt one and why they're good/bad?

Surely betting on UK and US government going into more debt is the safest bet in the world? especially if we go into a recession and they need to stimulate the economy as best they can

 

[Bullionaire]

14 minutes ago, Kman said:

Can someone explain the vanguard debt etfs? like the UK gilt one and why they're good/bad?

Surely betting on UK and US government going into more debt is the safest bet in the world? especially if we go into a recession and they need to stimulate the economy as best they can

 

Gilts are just safe bonds. Basically that vanguard fund lends the UK government money and the government pays a coupon every month/year etc until the end of the loan period where it pays the principle back to the vanguard fund.  

 

You're not betting the UK will go into more debt when you invest in one of these. You're lending the Gov money (and not getting a great return from it as they're so safe - the government is very unlikely to default on loans as it can just print money to pay the debts back)

[Martlet]

54 minutes ago, Kman said:

If there is a crash I'd like all the big boys Google, Tesla, Amazon, Ali Baba, Visa, Microsoft etc but then maybe better to do a vanguard etf

Would avoid Tesla, bubble has reinflated. Its irrational to be valued more than Volkswagen and BMW combined.  

[Kman]

21 minutes ago, Martlet said:

Would avoid Tesla, bubble has reinflated. Its irrational to be valued more than Volkswagen and BMW combined.  

I did start that sentence "if there was a crash" 😛 

 I do like Tesla long term but yes not at current prices 

[KDave]

39 minutes ago, Kman said:

I still feel like there's an impending crash so personally I'm holding off doing anything meaningful

Currently I like Shell, Exxon, enterprise product partners LP in oil

I am with you on Shell and Exxon, Enterprise product partners LP is a new one thank you for sharing this. I also have BP, Chevron and Repsol in oil, but DYOR.

I am less keen on Shell over the short term and am not adding any more unless it falls below £10 again, long term should be decent returns. I listened to the first quarter webcast where the CEO called the dividend cut a "resetting" (not going back up), it is not justified. They are maintaining current debt levels. They will only get away with ending a 70 year record now if other majors cut as well, otherwise shareholders will likely force some changes at CEO and board level. It would normally be a good decision for returns but only if they use the funds to either reduce debt or buy upstream now, I get the impression they wish to waste the opportunities now in favour of the climate change agenda. They have recently sold producing gas assets at a time they should be buying. I am not too worried but have enough invested in them now. 

For my purposes Exxon and Chevron are a more comfortable fit for trying to benefit from long term oil prices, I am still buying those as they are focused on the business and not the climate, though Chevron is heavily involved with US shale so might struggle over the short term. Chevrons board always tell shareholders to vote against any climate related proposals.

[Kman]

1 hour ago, Bullionaire said:

Gilts are just safe bonds. Basically that vanguard fund lends the UK government money and the government pays a coupon every month/year etc until the end of the loan period where it pays the principle back to the vanguard fund. 

How does it jump up so much?

Like in the past year it's up 17%

[Bullionaire]

2 minutes ago, Kman said:

How does it jump up so much?

Like in the past year it's up 17%

Usually when equities are volatile, people head for safe havens like gilts and gold etc. 

Because you don't own the bonds directly (the fund does), the price of the fund is more to do with people's demand for the fund, rather than being driven solely by the underlying asset.

If you bought a gilt directly from the government (no idea how you do this) for e.g. 10 years, you would get a regular coupon payment and then get your principle back at the end.

It's only when people start trading them and trying to guess whether inflation will go up or down (and in turn whether future gilts will yield more or less than the current ones) that lead to people trading bonds at a premium or discount. 

[Martlet]

29 minutes ago, Kman said:

I did start that sentence "if there was a crash" 😛 

 I do like Tesla long term but yes not at current prices 

Probably should have put it better, my point being even in a crash its not good value, it was overpriced compared to peers before its run up this last year. 

[Kman]

 

7 minutes ago, Martlet said:

Probably should have put it better, my point being even in a crash its not good value, it was overpriced compared to peers before its run up this last year. 

Aren't some big stocks just like that? permanently overvalued, like Amazon, but they keep on rising regardless 

 

[freefall]

57 minutes ago, Bullionaire said:

Gilts are just safe bonds. Basically that vanguard fund lends the UK government money and the government pays a coupon every month/year etc until the end of the loan period where it pays the principle back to the vanguard fund.  

 

You're not betting the UK will go into more debt when you invest in one of these. You're lending the Gov money (and not getting a great return from it as they're so safe - the government is very unlikely to default on loans as it can just print money to pay the debts back)

UK gilts are issued by the treasury. They are IOU's with varying degrees of maturity from say 3 months to 50 years. They have a "coupon or yield" attached which an amount of say 3%that they pay every month or year to the holder. For example a £1000 50 year bond that pays 3% annually to the holder. At the end of the 50 years  the holder cashes in the bond at the treasury and gets the £1000 back. The £1000 and 3% never changes. 

They are actively traded and their market value goes up and down depending on the economic outlook, inflation and interest rates. If you bought 10 year bond today with coupon of 1% and tomorrow the bank of England raised its base rate to 10% your bond would drop in value significantly. Likewise if inflation was starting to pick up your bond would drop in value as your initial £1000 that would be returned in 10 years time would have its value eroded faster. Conversely if interest rates went to -1% or deflation had occurred your bond would increase in value. The face value and the coupon attached never change but what somebody is willing to pay for it does. The value of longer maturity bonds can change substantially due to the compounding effects of inflation and interest rates but short maturity bonds are much less risky.

So who buys these bonds and what happens to them? Pension funds, mutual funds, hedge funds, individuals and other institutions buy the bonds in effect loaning the government money. A lot are packaged into ETF's or mutual funds for investors to buy usually in baskets of varying maturity dates and coupons. One of the biggest buyers of UK gilts in recent times has been the Bank of England. They've been creating money out of thin air to buy gilts. They also buy gilts to manipulate the market by inflating the value of traded bonds and supressing the interest rates (lowering the coupon) at which the government can issue new ones. In effect letting the government borrow money cheaper thank it really should.

So what are the risks of buying bonds or baskets of them? Countries like Argentina and Lebanon have recently defaulted so the holders of the bonds only got a proportion of their initial capital they loaned to the government back. It's possible the UK government could too but I view it a low risk. We could just print more money to repay the bond holders.

The risk you could be paying too much for your bonds is a pretty high. Central bank intervention in buying bonds has created a total disconnect between the risks and return of holding bonds. The values are so distorted a lot of people think the bond market is in a much bigger bubble than the stock market.

Then there is the risk of currency debasement. If the pound drops in value due to reckless central bank or government policy ,the real value of the bond drops in terms of purchasing power.

IMO long maturity bonds are very risky investments at the moment. So if you are going to buy an ETF or index fund of bonds make sure you understand that if there is a lot of long maturity bonds in the basket you could lose a lot of money. They are in no way safe. If inflation, currency debasement or interest rates pick up substantially you could lose nearly all of your investment. I wouldn't touch them with a bargepole right now. 

[Martlet]

1 hour ago, Kman said:

 

Aren't some big stocks just like that? permanently overvalued, like Amazon, but they keep on rising regardless 

 

True for some, at some stages in the life of them and their industry.  Amazon a good example, its pretty much selling anything to anyone and growth only contained by the world economy.  Tesla though has product in mature market with many competitors, who we can compare with. 

Example BMW has produces ~2.5m, very established brand, smooth production and distribution operations.  Value ~32bn. Tesla, hopes to make 400k this year, start up brand, questionable production and ropey distribution.  Value 154bn.    Nothing against the product itself, its very good by all accounts, looking at the numbers that's not right.  

I've gone a bit deep end, the analysis applies to any company though.  To me it looks like a dot com, promise of massive growth priced in, now inflated another few multiples.  Where can the price go when it actually grows, where is it likely to go when it doesnt?   

[TheApe]

Anyone get into any oil stocks?

[KDave]

People pay too much for a slice of the action that is what Tesla and the other tech stock valuations are about. They might be the best companies in the world but if you pay too much for anything you won't see much return. 

[Bigcheesy123]

Hi I used to do my research on trading 212 but can't get the app no more on my Samsung anyone no a easy to understand training app for research?