Overlords Investment Conclave [OIC] Recruitment Thread

Isgrimnur · Post by **Isgrimnur** » Fri Sep 11, 2015 1:16 pm

Goldman Sachs says the world has more oil than it had thought and expects prices to slip below $40 per barrel, and maybe lower, because the glut may linger deep into next year.

On the same day, the International Energy Agency said production outside OPEC countries will drop sharply in 2016 with prices so weak.

Goldman analyst Damien Courvalin says these cuts may not be enough. He lowered his forecast for 2016 to $45 per barrel from $57. He says prices could collapse to around $20 if production decreases too slowly.

Oil markets been unusually volatile, with the price of crude down 26 percent in three months. Prices have risen or fallen more than 3 percent on 14 trading days during that stretch.

PLW · Post by **PLW** » Fri Sep 11, 2015 1:31 pm

Carpet_pissr wrote:FYI for those thinking of holding, or buying oil related stocks:

Excerpt from a recent Morningstar's evaluation of BP:

"Further, our originally anticipated point of global supply and demand coming into balance continues to get pushed further into the future, and it appears increasingly likely that crude markets will not approach any semblance of normalcy until 2017. This, in turn, has led to a collapse in near-term investment that has unleashed cost and currency deflation exceeding our previous expectations, resulting in lower industry break-even levels across the board."

So think about it: Iran will likley be coming back online in terms of the intl market since sanctions will be lifted, US producers continue to knock it out of the park, regarding efficient production, so it will likely be a loooong time before oil gets even close to $100. Decade? Who knows.

If it's ever going to be politically feasible to seriously tax oil, might now be the time? Yet another reason to avoid oil companies.

Isgrimnur · Post by **Isgrimnur** » Tue Sep 15, 2015 2:50 pm

Anyone want to bargain-hunting in Brazil?

Brazil's financial markets fell on Thursday in the aftermath of credit agency Standard & Poor's downgrading the country's sovereign debt to "junk" status.

By the end of the day, the Brazilian real fell 1.34 percent to 3.85 per U.S. dollar. It would have dropped even further if the Central Bank hadn't intervened by selling some $1.5 billion on the spot market.

Isgrimnur · Post by **Isgrimnur** » Wed Sep 16, 2015 9:28 am

Rather than wait for the SPY price come back down so I could afford my share level, I decided to go a different direction and buy back in on Monday with RSP.

The balancing, the price, and therefore the number of shares are different, which will make it difficult to directly compare the positions and determine a regret level.

Carpet_pissr · Post by **Carpet_pissr** » Wed Sep 16, 2015 9:35 am

Isgrimnur wrote:Anyone want to bargain-hunting in Brazil?

Brazil's financial markets fell on Thursday in the aftermath of credit agency Standard & Poor's downgrading the country's sovereign debt to "junk" status.

By the end of the day, the Brazilian real fell 1.34 percent to 3.85 per U.S. dollar. It would have dropped even further if the Central Bank hadn't intervened by selling some $1.5 billion on the spot market.

Already there, unfortunately:
SID
BSBR

LawBeefaroni · Post by **LawBeefaroni** » Wed Sep 16, 2015 10:10 am

Isgrimnur wrote:Rather than wait for the SPY price come back down so I could afford my share level, I decided to go a different direction and buy back in on Monday with RSP.

The balancing, the price, and therefore the number of shares are different, which will make it difficult to directly compare the positions and determine a regret level.

Man, the Google finance summary is pretty wrong.

Guggenheim S&P 500 Equal Weight ETF, formerly Rydex S&P 500 Equal Weight ETF, seeks to replicate as closely as possible, the daily performance of the S&P 500 Equal Weight Index (the Index). The Index is a capitalization-weighted index covering 500 industrial, utility, transportation and financial companies of the United States markets (mostly NYSE Euronext issues).

Isgrimnur · Post by **Isgrimnur** » Wed Sep 16, 2015 10:29 am

ELI5, please.

Isgrimnur · Post by **Isgrimnur** » Mon Sep 21, 2015 2:12 pm

Volkswagen bargain?

Volkswagen AG lost almost a quarter of its market value after it admitted to cheating on U.S. air pollution tests for years, putting pressure on Chief Executive Officer Martin Winterkorn to repair the reputation of the world’s biggest carmaker.

Top supervisory board members will convene on Wednesday, according to two people with knowledge of the plans, who asked not to be named because the meeting is private. Volkswagen plunged as much as 23 percent to 125.40 euros in Frankfurt, wiping out about 15.6 billion euros ($17.6 billion) in market value. The stock closed at 132.2 euros, its lowest in more than three years.
...
Winterkorn, who has led VW since 2007, was forced to halt sales of the cars on Sunday and issue a public apology, saying he’s “deeply sorry” for breaking the public’s trust and that VW would do “everything necessary in order to reverse the damage this has caused.”

Winterkorn, whose contract renewal is scheduled for a supervisory board vote on Friday, now faces a serious challenge to his leadership, said Arndt Ellinghorst, a London-based analyst for Evercore ISI.

LawBeefaroni · Post by **LawBeefaroni** » Mon Sep 21, 2015 4:05 pm

Not sure. I think there's worry that they may face some stiff fines. IIRC in the recall thread it was something like up to $37K/car or $18B. It won't be that high but somewhere between $0 and $18B is a lot of uncertainty.

Also there's probably worry that the 450,000 cars named might not be the only ones. Either other models may be included or other countries may find similar violations.

And of course there's the question of public perception and how it might affect their sales. I would never have considered an Audi anyway, but VW is off the table for me now too.

It's a big gamble at this point and the price reflects this.

Isgrimnur · Post by **Isgrimnur** » Mon Sep 21, 2015 4:08 pm

I would say that it bears watching. Day 1 of the slide is no good indicator. If the hits keep on coming until the settlement is announced at least, if not the last earnings report where the fine is a line item, might be a better time to cherry-pick. But of course, I don't know enough to avoid using a stop loss to solidify my exposure to a market correction.

Zaxxon · Post by **Zaxxon** » Tue Sep 22, 2015 11:39 am

I'd lean toward not touching VAG with a 10-foot pole. The $0-$18B range is just from the EPA. They're facing investigations from Canada, Europe, CARB, and others and that's just what I've seen so far. Then once the cars are 'fixed' and either lose torque/performance or consume more fuel, there will likely be devaluation suits from owners. At least one US class-action suit already started over the weekend. They've set aside $7B to deal with this, but my guess is by the time all is said and done (2020?) the tally is much higher than $7B.

naednek · Post by **naednek** » Tue Sep 22, 2015 12:16 pm

This is the deflategate of the car industry

Isgrimnur · Post by **Isgrimnur** » Tue Sep 22, 2015 12:19 pm

Except here, someone important actually admitted fault.

LordMortis · Post by **LordMortis** » Wed Sep 23, 2015 12:59 pm

Thought I'd take a chance and spend a small amount on MVO today. Scottrade informed me that I had to a call my local branch and make the purchase through them. Rather than take a few minutes to pick up the phone and find out why, I just put the money I earmarked for MVO already depositied into scottrade into VTI

It was a very modest sum so maybe there will only be a very modest slide in the market this time.

I continue to take a beatdown. I figure I'm at about 15% less in value in the year I've been doing this.

The Meal · Post by **The Meal** » Mon Oct 19, 2015 11:15 am

As we transition from the baseball to the hockey/basketball season, I'm thinking it's probably time to unload my shares of RCI.

[edit 10/22/2015 9:09AM Mountain Time:] Glad I waited to find out whether the Jays made the WS or not. That Game 5 win transitioned me to RCI's earning report (last night) when they handily beat estimates:

Pyperkub · Post by **Pyperkub** » Thu Oct 22, 2015 6:03 pm

Pyperkub wrote:Amazon goes nuts:

Amazon (AMZN) shares zoomed higher in extended trading on Thursday after the online retailer posted second-quarter results that widely beat Wall Street's expectations.

The shares rallied more than 18%, adding to a gain of 55% this year, to an all-time high price of over $567...

...The Seattle, Washington-based company posted per-share earnings of 19 cents, compared to the consensus estimate of a loss of 15 cents a share. Sales of $23.2 billion, up 20% from last year, also topped expectations of $22.4 billion.

Revenue at the firm's Amazon Web Services unit hit $1.8 billion for the quarter, up from $1 billion in the same three months in 2014. That 81% increase was double the growth rate AWS experienced in the same quarter last year, signaling the growing strength of Amazon's cloud offering.

The acceleration of growth in Amazon comes just as competition is increasing.
AWS is almost 10% of the revenues now, and growing.

déjà vu all over again:

Amazon published third quarter financials after the bell on Thursday, and once again all eyes were on tech giant's hugely successful cloud juggernaut, Amazon Web Services.

Overall, the tech giant reported a surprise net income of $79 million, or 17 cents per share (statement), up from a net loss of $437 million in the same quarter a year ago.

Non-GAAP earnings were 17 cents per share with revenue of $25.4 billion, up 23 percent year-over-year.

Wall Street was bracing for a loss of 13 cents per share and $24.9 billion in revenue. A year ago, Amazon posted a loss of 95 cents per share with revenue of $20.6 billion.

Investors were apparently pleased by the results, as share prices jumped between 8 and 11 percent in after market trading.

$623/share last I checked in after hours trading.

LordMortis · Post by **LordMortis** » Thu Oct 22, 2015 6:54 pm

Everything was up big today. I'm almost back 0% earned/lost on my personal portfolio I stared just after this time last year. Almost... Everything is pretty close to 0 except Ferrell Gas, burnt me hardcore when they bought another company and released millions of shares to do it and the announcement came the day after I made a huge (for me) purchase of it. Nearly a 30% drop that day, it's going to take a long time/lot of dividends to recover from that timing.

LawBeefaroni · Post by **LawBeefaroni** » Thu Oct 22, 2015 9:54 pm

Alphabet (AKA Google) beat as well. Q3 EPS of $7.35 beat estimates by around $0.14. Good for around +10% in AH.

LordMortis · Post by **LordMortis** » Mon Oct 26, 2015 1:57 pm

Pyperkub wrote:$623/share last I checked in after hours trading.

Can someone explain Amazon to me? They earned $.70 per $600 share this quarter. How much more do we expect Amazon to grow?

LawBeefaroni · Post by **LawBeefaroni** » Mon Oct 26, 2015 2:30 pm

LordMortis wrote:
Pyperkub wrote:$623/share last I checked in after hours trading.
Can someone explain Amazon to me? They earned $.70 per $600 share this quarter. How much more do we expect Amazon to grow?

At an 800+ PE, probably until no competitors are left standing.
It's not really the PE that bothers me, though, it's the market cap. It's a $280B company with growth premium like it's a $50B company. I guess they're supposed to just stop spending one day and rake in all the profits from being huge.

Carpet_pissr · Post by **Carpet_pissr** » Mon Oct 26, 2015 2:59 pm

LordMortis wrote:
Pyperkub wrote:$623/share last I checked in after hours trading.
Can someone explain Amazon to me? They earned $.70 per $600 share this quarter. How much more do we expect Amazon to grow?

Well, if you believe Morningstar, quite a bit:

LawBeefaroni · Post by **LawBeefaroni** » Mon Oct 26, 2015 3:06 pm

Carpet_pissr wrote:
LordMortis wrote:
Pyperkub wrote:$623/share last I checked in after hours trading.
Can someone explain Amazon to me? They earned $.70 per $600 share this quarter. How much more do we expect Amazon to grow?
Well, if you believe Morningstar, quite a bit:

Credit Suisse: $777.00

Spoiler:

In other news, got back into POT today looking towards Thursday. FWIW, Credit Suisse hates it.

LordMortis · Post by **LordMortis** » Mon Oct 26, 2015 3:12 pm

Man I am dumb. I just don't get it.

Pyperkub · Post by **Pyperkub** » Mon Oct 26, 2015 7:00 pm

LordMortis wrote:Man I am dumb. I just don't get it.

For me it's fairly simple - Amazon has the best technology in the online shopping space currently, and only appears to be growing its business. It has already pretty much disrupted/consumed an entire industry (booksellers), has a large lock in on the ebook industry, and is the company best positioned to to the same thing to retail as a whole. Additionally, Amazon Web Services has been far ahead of the competition for quite a while now and doesn't show signs of stopping/slowing down, despite the entry of some major tech players into the space.

As to the P/E, in order to keep those technological leads, they roll the Profits back into R&D to keep those leads and grow those businesses, along with others. They also have the pre-eminent online membership program in Prime to keep steady cash flow which is outside of their selling margins. I think the reinvestment at the expense of profit is the best possible strategy to keep building those technological edges in the online shopping space, while also developing new revenue streams ala ebooks and other media.

In other words, Amazon's success is predicated upon current and future market share, not necessarily P/E ratios.

That said, my position is all of about 25 shares (as compared to 200 plus a few years of DRIP in Costco) in the retail space.

Pyperkub · Post by **Pyperkub** » Thu Oct 29, 2015 7:28 pm

Pyperkub wrote:Hmm... GoPro IPO bounces 30%:

However, GoPro's growth appears to be slowing.

While the company's 2013 revenue quadrupled to $986 million, its first-quarter sales dipped slightly. Profits declined year-over-year to $11 million from $23 million in the first quarter.

The biggest risk facing GoPro is the threat a deep-pocketed rival will develop technology that tops its imaging and memory capabilities. Tech giants like Google (GOOG) are increasingly moving into the wearable gadget space with products that have built-in cameras.

Still, Menlow said: "First into a market usually gets the largest market share."
Biggest risk? I'll be honest, I don't think GoPro will be around in 10 years. I think this is like being the only goldfish in the sink while the water is running out. They may be better, but I really believe that cell phone video is going to eat their lunch down the road and more likely sooner than later.

This almost strikes me as a pre-emptive "lets take the money while it's there" IPO. Another Zynga instead of Facebook, if you will.

And GoPro continues the downward spiral:

Shares of action-camera company GoPro continued to plummet Thursday morning in response to the company’s latest disappointing quarterly earnings report.

GoPro GPRO -15.52% stock was down more than 16%, falling below $25 per share in early trading. ..

...The company’s shares are now down nearly 60% since the start of the year, as the market’s fears over the company’s ability to grow revenue continue to mount.

LordMortis · Post by **LordMortis** » Fri Nov 13, 2015 1:34 pm

Thought this was interesting

http://www.zerohedge.com/news/2015-11-1 ... at-valuati

LawBeefaroni · Post by **LawBeefaroni** » Thu Nov 19, 2015 11:00 am

WSJ wrote:Square Inc. will have to give some investors additional shares valued at $93 million after its initial public offering priced well below a promised threshold.

The payments company’s IPO priced at $9, below an expected range of $11 to $13 and well under the $15.46 that investors including Rizvi Traverse and J.P. Morgan paid last fall. That $150 million funding round came with what’s called a “ratchet,” meaning the investors were guaranteed additional shares if the IPO price didn’t reach a certain level.

In this case, investors sought a 20% return on their investment, setting the IPO price in the ratchet at $18.56. Square missed that price by more than half, so it has to give the investors 10.3 million shares.

Nice work if you can get it.

Saar Gur, a general partner at venture-capital firm Charles River Ventures, said ratchets protect late-stage investors, but they come at the expense of employees and earlier investors who see their stakes diluted by the additional shares. This can reduce the momentum necessary to keep talented workers from jumping ship, he said.

Wesley Chan, a managing director of Felicis Ventures, says he counsels company founders to avoid accepting ratchets.

“The only folks that win on this are the later stage investors who get the benefit of the ratchet and they do so at the expense of many of the employees and early investors who helped to build the company, who get diluted, often significantly, when the ratchet triggers,” Mr. Chan said.

The best part, it could hit $15 once it trades and they still get the shares. Looks like it will go at $11.50 or so.

LordMortis · Post by **LordMortis** » Mon Dec 07, 2015 4:17 pm

Saw the market was down and had a few bucks laying around, so I thought I'd increase my already painfully poor showing in FGP, that was already down about 5% on the day to a new low for the year. Sorry. I broke the market again.

LawBeefaroni · Post by **LawBeefaroni** » Mon Dec 07, 2015 4:26 pm

LordMortis wrote:Saw the market was down and had a few bucks laying around, so I thought I'd increase my already painfully poor showing in FGP, that was already down about 5% on the day to a new low for the year. Sorry. I broke the market again.

I've been looking to buy DUK and was holding out for around $65. Today should have been the day but it's up 2%. But thanks for trying.

LordMortis · Post by **LordMortis** » Mon Dec 07, 2015 4:43 pm

LawBeefaroni wrote: But thanks for trying.

I can't make anyone happy.

Carpet_pissr · Post by **Carpet_pissr** » Mon Dec 07, 2015 5:02 pm

Not sure if the oil price tank, and the resulting market tank, is directly related to the Venezuelan elections outcome or not. Awfully big coincidence if not.

Isgrimnur · Post by **Isgrimnur** » Mon Dec 07, 2015 5:05 pm

Reuters

U.S. stocks fell on Monday with energy stocks suffering their worst day since August as oil prices fell to their lowest point in nearly seven years and materials stocks also falling sharply.

Brent crude LCOc1 and U.S. crude CLc1 fell more than 5 percent, after OPEC's meeting last week failed to address a growing supply glut.
...
Materials stocks were also being hurt by "an overhang from the continuing slowing of the Chinese economy," according to Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
...
Investors were also wary after Friday's November employment report showed that the economy was strong enough to absorb an interest rate hike, widely expected when the Federal Reserve meets on Dec. 15-16.

LordMortis · Post by **LordMortis** » Mon Dec 07, 2015 5:16 pm

I wish I had more money to throw, in general. This looks like an opportunity window opening.

I should have my IRA contribution for 2016 ready by the new year. I'm sure we'll see a temporary spike right before then. I also pretty much just dump my IRA money into SPY or VTI.

xwraith · Post by **xwraith** » Mon Dec 07, 2015 6:43 pm

LordMortis wrote:I wish I had more money to throw, in general. This looks like an opportunity window opening.

I should have my IRA contribution for 2016 ready by the new year. I'm sure we'll see a temporary spike right before then. I also pretty much just dump my IRA money into SPY or VTI.

Hmm,

I also have some cash on hand, tempted to grab some XLE, but I think it will go lower.

LawBeefaroni · Post by **LawBeefaroni** » Tue Dec 08, 2015 11:55 am

Another bad day. But ALXN is halted pending news, probably FDA approval.

LordMortis · Post by **LordMortis** » Tue Dec 08, 2015 12:01 pm

LawBeefaroni wrote:Another bad day.

Yalp. My purchase is turning out to be painful. At least it was a small purchase and I still have no intention of selling. But man, I swear to pancake, every time I buy something down, down, down the market goes and then it never recovers to where it was. I bought FGP at $18.68 down from $19 and 1/5 or more. Last I looked it was down to $17.90.

So be forewarned, my next purchase will likely be January 1st/2nd when I contribute my Roth IRA for 2016.

Carpet_pissr · Post by **Carpet_pissr** » Tue Dec 08, 2015 12:38 pm

LordMortis wrote:every time I buy something down, down, down the market goes and then it never recovers to where it was.

And by "never" you mean what time frame?

LordMortis · Post by **LordMortis** » Tue Dec 08, 2015 12:45 pm

Carpet_pissr wrote:
LordMortis wrote:every time I buy something down, down, down the market goes and then it never recovers to where it was.
And by "never" you mean what time frame?

In the 18ish months since I paid off my house and started a Roth IRA account and then personal account to but securities. I finally got the destruction of the housing market monkey off my back so I could usher in a new era of the destruction of the stock market.

LordMortis · Post by **LordMortis** » Fri Dec 18, 2015 5:33 pm

So, what, 13 days until I can contribute my 2016 Roth IRA contribution? I'm thinking about dumping half of it into VTI and half into an REIT, so

1) Pull all of your money out Real Estate. The market will crash after the after I make my contribution.

2) How do I go about finding out the proper REIT? I'm thinking safe. I don't want to babysit it. I want to dump money into it and not touch it for years. So I'm thinking like FRT, who have been in business for years and years and years. But then I see cheap stocks that have been around for like five or six year with huge returns like NCT or ORC and then I remember how dumb I am.

First invest your money so you can retire. Second diversify so you don't screwed. Third know everything you can about a business before you invest. How and when they heck are you supposed be both diverse and know everything about a business?

Isgrimnur · Post by **Isgrimnur** » Fri Dec 18, 2015 5:52 pm

MarketWatch

In my Dividend Growth model, about 25% of the portfolio is invested in equity REITs, so this is not a hypothetical question for me. As an outsized portfolio position, as go REITs, so goes my Dividend Growth model.
...
Bottom line, the big upward move across the yield curve that REIT investors dread is still several years away.

And the good news here is that, despite the run up in REIT prices last year, we still have a moderate margin of safety in place. The FTSE NAREIT All Equity REITs index, a broad benchmark used to track the REIT sector, sported a dividend yield of 3.41% as of the end of February.
...
Let's consider Realty Income O, +0.16% the blue chip of the triple-net REIT space and one of the Dividend Growth model's longest-held holdings.

Over the past 10 years, Realty Income has raised its dividend at a 5% annual clip. That's very solid for a company whose business model is about as exciting as watching an English cricket match on TV. But the consistency goes beyond that.

With its most recent dividend hike in January, Realty Income has boosted its monthly dividend 79 times in the past 20 years and in 70 consecutive quarters. And as a result, Realty Income was rewarded with membership in the exclusive S&P High Yield Dividend Aristocrats Index.

As much as I like Realty Income as a long-term holding, there is a price at which I would no longer be interested. If Realty Income's yield dropped below 4%, I would stop buying new shares, and if it dropped much below that I would consider selling and taking profits.

But at today's current yield — 4.5% — I still consider Realty Income an exceptionally attractive holding in a diversified income portfolio.