The Long Term Investor

Some good points Syynik. We dont see much said about the non-meat companies lately......at least in my reading. These products do seem to be very mainstream and available in ALL the supermarkets now. Same with the Organic products....they are in every store now.

 

HERE is a pretty good little article that kind of summarizes the EXPECTATIONS for TESLA going into earnings this coming week.

Tesla earnings: Can sales growth match stock’s rise?

https://www.marketwatch.com/story/t...th-quarter-earnings-11611341513?siteid=yhoof2

(BOLD is my opinion OR what I consider important content)

"Tesla Inc. is expected to report fourth-quarter results after the bell on Wednesday, with all eyes on the Silicon Valley electric-car maker’s sales goals for 2021.

On a call in October to discuss Tesla’s third-quarter earnings, one analyst estimated 2021 sales between 840,000 to 1 million vehicles, and Chief Executive Elon Musk responded that it likely would be “in that vicinity,” and that the analyst was “not far off.”

Chief Financial Officer Zach Kirkhorn then added that Tesla TSLA, +0.20% would provide official 2021 guidance when it reports fourth-quarter results, seemingly preventing Musk from saying more.

All through last year, despite factory closures and other pandemic-related snags, Tesla kept its 2020 sales guidance intact, and the company ended the year a hair’s breath from it, earning praise from Wall Street.

Tesla earlier this month said it had produced more than half a million vehicles and delivered 499,550 in 2020. Deliveries are a proxy for Tesla sales. Before the start of the pandemic, the company set a goal of delivering more than 500,000 vehicles in the year.

Wall Street analysts expect a deliveries guidance to come in around 825,000 and 875,000 vehicles.

Here’s what else to expect:

Earnings: Consensus from 37 Wall Street analysts polled by FactSet calls for GAAP earnings of 65 cents a share, which would compare with GAAP earnings of 12 cents a share in the fourth quarter of 2019.

The analysts expect an adjusted profit of $1.04 a share, which would compare with an adjusted profit of 43 cents a share a year ago. A fourth-quarter profit would be Tesla’s sixth straight quarterly GAAP and adjusted earnings.

Estimize, a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, company executives, academics and others, is expecting an adjusted profit of $1.02 a share.

Revenue: The analysts surveyed by FactSet expect sales of $10.53 billion for Tesla, up from $7.38 billion a year ago. Estimize sees revenue of $10.61 billion for the company.

Stock movement: Tesla stock greeted 2021 just about the same way it ended 2020: Scoring closing and intraday records highs. Earlier this month, the stock went on its longest-ever winning run.

Tesla shares are up 635% in the past 12 months, compared with gains around 16% for the S&P 500 index SPX, -0.30% in the same period.

What else to expect: Full-year results will provide the clearest yet picture of the coronavirus pandemic impact on the company.

Besides an official 2021 sales guidance, Wall Street is looking for more commentary on the Model Y, the newest addition to the Tesla lineup, and on upcoming models, such as the Cybertruck and a cheaper vehicle that has been only hinted at and that has been dubbed the “Model 2.”

Analysts at JPMorgan said Friday they remained “highly cautious” on Tesla due to its stock valuation, but they raised their price target on the stock to $125 from $105, the lowest among FactSet-surveyed analysts.

“While still suggestive of large downside, we do not regard our price target as ungenerous as it actually values Tesla as the world’s second largest automaker by market capitalization, behind Toyota and ahead of Volkswagen despite these automakers each currently selling on the order of magnitude of 20x as many vehicles annually as Tesla,” the JPMorgan analysts, led by Ryan Brinkman, said in their note.

RBC analysts, led by Joseph Spak, said in a recent note they expect Tesla to reiterate its recently raised capex 2021 outlook, which calls for between $4.5 billion and $6 billion.

Tesla historically has issued guidance for free cash flow and GAAP net income, the RBC analysts said, but could hold off on it beyond calling for “significant” on-year improvement.

Deutsche Bank analysts said they expect a “solid” quarter for Tesla, raising their delivery forecast to 825,000 vehicles from 800,000, “given
continued strong sales of Model 3 and fast ramp-up of (made-in-China) Model Y.”

The Deutsche Bank analysts, led by Emmanuel Rosner, also raised their price target on Tesla shares to $890 from 705 to $890, based on expectations of higher sales and profits through 2021 and the next few years.

On average, Tesla analysts polled by FactSet have a price target of $525 on Tesla, with 12 out of the 37 with a buy rating on the stock, 15 rating it a hold, and the remaining 10 rating it a sell. The $525 average represents a 37% downside from Friday prices."

MY COMMENT

I ACTUALLY do believe that there is SIGNIFICANT down side potential to the share price of this stock. I think it is interesting that JP Morgan putting a value on the shares of $125........is still.....pricing in the company as the second largest auto company in the world.

KEEP IN MIND.......the above is just speculation......the REAL numbers will be known next week. For.......better or worse......we have not heard much at all from Elon lately. Of course.....he has been busy with his move to Texas and his rocket company.......and the new factory quickly taking shape in Austin......but he is not exactly shy about making comments. His silence could be interpreted a number of ways.......as mentioned it could be that he does not want to get in the way of official guidance and get in hot water. One thing is sure.....he is a very smart guy and a visionary.

 

If I was a short term trader or investor.....I think ALL the UNBRIDLED positivity would be making me a little nervous:

Bullish stock bets explode as major indexes repeatedly set records

https://www.foxbusiness.com/markets...plode-as-major-indexes-repeatedly-set-records

(BOLD is my opinion OR what I consider important content)

"Investors are piling into bets that will profit if stocks continue their record run.

Options activity is continuing at a breakneck pace in January, building on 2020's record volumes. It is the latest sign of optimism cresting through markets as individual and institutional investors pick up bullish options to profit from stock gains and abandon bearish wagers.

More than half a trillion dollars worth of options on individual stocks traded on Jan. 8 alone, the highest single-day level on record, according to Goldman Sachs Group Inc. analysts in a Jan. 13 note.

Among the most popular bets were those tied to Tesla Inc., Amazon.com Inc., Apple Inc. and Nvidia Corp. And bullish call-options trading surged to a high on Jan. 14, with about 32 million contracts changing hands, according to data provider Trade Alert.

Options are contracts that give investors the right to buy (a call option) or sell (a put option) shares, at specific prices, later in time. They are typically used to bet on stocks' direction or hedge portfolios. Although they can be risky to trade for amateur investors, activity has exploded in recent months. The interest has stemmed in part from investors looking to magnify gains in the stock market, since options allow them to put down a relatively small sum for the chance at an outsize return.

Many of these investors have flocked to online brokerages that have made it easier than ever to trade. Smaller options trades of just one contract -- typically thought to stem from individual investors -- recently made up almost a tenth of activity, up from 2% three years ago, according to Trade Alert data.

The robust trading comes as U.S. stocks have jumped to fresh highs. Earnings results have poured in over the past week, with companies such as Netflix Inc. and Goldman Sachs posting strong results. In the coming week, traders will be monitoring a slate of releases from big tech companies, with Microsoft Corp., Apple, Facebook Inc. and Tesla on deck.

Investors have also looked ahead to the prospect of fresh stimulus that would help the struggling economic recovery. In January, stocks have built on their big, and perhaps unexpected, gains of 2020: The S&P 500 has gained 2.3%, setting four closing highs, after rallying 16% last year. The stock-market rally has also broadened, lifting laggard sectors like financials and energy.

Ben Austin, a 21-year-old student at Syracuse University, said he has increased his positions in stocks such as American Express Co. and Citigroup Inc., in part because of the chance for more fiscal stimulus, which he thinks could boost spending.

"For the next couple months, I'm still kind of bullish on the market," Mr. Austin said. "I think we're going to see another giant stimulus package."

He started trading options in November and primarily trades calls to position for big events that have the potential to lift stocks, shying away from put options. He acknowledges that options can be riskier than stocks but relishes trading.

"There's somewhat of a thrill to the more risk aspect of it," Mr. Austin said. "There's way more potential for higher gains in a shorter amount of time."

As stocks have continued their ascent and bullish positions have flourished, many have ditched bearish bets on the market.

Short interest in one of the biggest exchange-traded funds tied to the S&P 500 recently hit the lowest level since March 2020, according to data from IHS Markit. Investors that short shares typically borrow stocks and sell them, in the hopes of buying them back later at a lower price before returning them to the lender. These positions profit when stocks tumble. And bearish put options outstanding tied to the gauge recently fell to the lowest level in at least four years, Trade Alert data show.

"This is the most popular I've seen call buying in my career," said Jon Cherry, global head of options at Northern Trust Capital Markets, who has been in the industry for more than two decades. "Where I think that is really driving from is kind of the melt-up that we've seen in broader markets."

Mr. Cherry said he has noticed interest in bullish positions as well as a desire to sell bearish options to juice income. Investors don't want to miss out on any potential stock-market gains to come and want to stay in positions that will profit if stocks keep soaring, he said.

Hayden Cole, 22, a student at the College of the Canyons in California, waded into stocks and options after he lost his job during the coronavirus pandemic. He started chatting with his father about the stock market.

"He told me the stock market always recovers. It'll always go back up," Mr. Cole said.

He said he bought shares of fuel-cell company Plug Power Inc., an exchange-traded fund tied to the S&P 500 and the ARK Innovation Exchange-Traded Fund, which tracks shares of companies such as Tesla and Roku Inc., in May. Lately, he has placed bullish options trades on companies like Advanced Micro Devices Inc. and Apple.

The S&P 500 has soared 36% since May, while the ARK fund has jumped 179%.

To some, the current environment is reminiscent of August, when stocks such as Tesla and Apple soared after their stock splits and a seemingly insatiable enthusiasm for stocks and options swept through the market, helping drive stocks to highs. The summer euphoria was followed by a 7.2% drop in the Nasdaq Composite in September.

JPMorgan Chase & Co. analysts said in a Jan. 8 note that call-option buying was prominent among individual investors, based on an analysis of trading activity made up of fewer than 10 options contracts. This call buying could lead to a rise in volatility, driven by options hedging, they said.

And at times, overwhelming momentum in individual stocks such as GameStop Corp. has coincided with a surge in options activity. As the stock skyrocketed 51% on Friday, options activity tied to the company jumped to the highest level ever.

Options traders appear to be positioning for bigger gains for some of the sector's star performers ahead of their earnings reports this week. An options measure called skew, which measures the cost of bullish options relative to bearish ones, is near the lowest levels of the past year on stocks such as Apple, Advanced Micro Devices and Facebook, Trade Alert data show.

"People are always looking in the rearview mirror," said Joanne Hill, chief adviser for research at Cboe Vest, which oversees options-based strategies. "They're looking at the returns that had been achieved if they bought a call option on a stock six months ago."

MY COMMENT

It is ACTUALLY frightening to see the college students in this article options trading. We are.....at the moment.....seeing the options market taken over by amateur....young male......gamblers.

What will happen.......as usual.......will be some fast or slow black swan event. Of course a black swan by definition can not be predicted......but......I am guessing a couple of possibilities will be related to CHINA and RUSSIA grabbing territory. I would not be surprised to see China grab Taiwan or some of the disputed islands with Japan. I would not be surprised by another Russian land grab. I ALSO do not discount the potential for Iran to cause some event.

Whatever it is.......it ALWAYS happens.....sooner or later........so.......dont bet your college tuition money on stock options.

 

How is the house search going ZUKODANY?

I notice that we are starting to see a few more listings in my little 3000 home area. For the past weeks there have been ZERO homes for sale. There are now 9 active listings ranging from $485.000 to $2,600,000. I think our general area is the HOTTEST market in the country......at the moment. From listing to going PENDING seems to take about a day or two lately.

We continue to be BOOM here with recent news that Samsung is reportedly considering adding a $10BILLION chip plant to their ALREADY substantial facilities here.

Report: Samsung could be planning $10B chipmaking plant in Austin

https://www.bizjournals.com/austin/news/2021/01/22/austin-could-be-home-to-10b-samsung-plant.html

It is INSANE around here already.......this type of future growth is going to push prices to JUPITER.....they are already to the MOON. I hear a lot of anecdotal stories about entire neighborhoods having ZERO homes for sale and buyers having to bid on 10-20 homes to try to get a house......often because they can not win out over all the cash buyers.

I PITY the poor realtors........they could make a fortune if there were any homes to sell. As it is.....many are probably at risk of going out of business because they have no way to make money since there is no inventory. How IRONIC......the greatest local real estate BOOM in history......and.....as a realtor, you go broke.

 

ZUKODANY

BUILDING......yeah, that is a good idea. Find the perfect piece of land in the perfect location and than build EXACTLY what you want. Probably a pretty good option where you are. Here it is not an option since there is not much available land anywhere close in.

It is so crazy around here that I expect that the extreme sellers market will continue for at least another 2-4 years. Of course......interest rates cold be the BIG WILDCARD. If mortgage rates went back up to 5-7% that could make a big difference. Although......it is unbelievable how many cash buyers there are here.........including us when we bought. We have been cash buyers for the past 30 years. When I was in business.....we did not want a house payment with all the personal money that we had tied up in the business for overhead every month. When I retired in 1999....we did not want a payment since we were going to be on our retirement budget and a house payment was NOT part of the plan.

My kids have both bought......move up......homes over the past few years. My sister likes to be the family banker so she has financed two mortgages for one kid and one mortgage for the other kid. This has allowed them to.....essentially be cash buyers. it works for her to get the interest and monthly income from them. It works for them since she was willing to put up the funds for them to buy the new home before the old one was sold.

It worked out well the three times we have done this.....they buy the new house for cash with a mortgage to my sister........she agrees to defer the payments till their old house is sold.......she gets paid off on the old house when it sells and than starts the payments on the new house. This works well in our small family since EVERYONE is totally responsible and trustworthy.

 

Even though we have owned our past 4 homes free and clear......this is probably NOT the best way for many young....under age 50..... buyers to operate. Even if you can pay cash......the EXTREME low interest rates just about GUARANTEE that you can make more on your money if you are investing in stocks and funds in a REALISTIC manor.

It is a good thing to use available CHEAP credit for many people.....even if you can pay cash. Of course......you need to ACTUALLY invest the cash and NOT just be tempted spend the money and have nothing to show for it. YOU also have to be VERY REALISTIC in projecting your investment returns AND your ability to make the house payment.

If my memory is right IsuCyclones did this......probably a smart move for someone in his particular financial situation.

 

I have owned BOTH Coke and Pepsi at various time in the past. I dont own either now and dont anticipate owning either. For the past 10-15 years I have considered Pepsi to be the better investment due to their snack food portfolio. HERE is a little article to get YOU started if you are considering buying one of these companies and you are trying to decide which one to buy.

Stock Wars: Coca-Cola Vs. Pepsi

https://finance.yahoo.com/news/stock-wars-coca-cola-vs-124804219.html

(BOLD is my opinion OR what I consider important content)

"Comb through the annual reports of Coca-Cola and Pepsi, and you will see the two rivals list one another as their main competition. White both are giants in the beverage field, there is one key difference, which could be the reason to pick one over the other.

About Coca-Cola: Sparkling soft drink brands for Coca-Cola Co (NYSE: KO) include Coca-Cola, Diet Coke, Sprite and Fanta. The company also has a growing portfolio of non-sparkling soft drinks that includes Powerade, Vitaminwater, Minute Maid, Costa Coffee, Fuse and Gold Peak.

Coca-Cola also owns a stake in energy drink maker Monster Beverage (NASDAQ: MNST) and helps distribute the brand. The company owns a stake in growing sports drink company BodyArmor.

Sparkling soft drinks made up 69% of unit case volume for Coca-Cola in fiscal 2019. The company’s portfolio includes four of the top five non-alcoholic sparkling beverages with Coke, Diet Coke, Fanta and Sprite.

About Pepsi: Sparkling soft drink brands for PepsiCo Inc (NASDAQ: PEP) include Pepsi, Diet Pepsi, Mountain Dew and Mug Root Beer. The company’s portfolio of non-sparkling soft drinks includes Gatorade, bubbly, Pure Leaf and Tropicana.

The Key Difference: The big difference between the two beverage giants is the huge portfolio of food brands owned by PepsiCo.

Under its Frito-Lay and Quaker Oats divisions, Pepsi owns brands like Lay’s, Doritos, Quaker Oats, Sabra, Cheetos, Fritos, Tostitos, Cap’N Crunch and Aunt Jemima.

Pepsi got 54% of its revenue from food in fiscal 2019, making its beverage division the smaller segment. The Frito-Lay North America and Quaker Foods North America segments made up 25% and 4% of overall fiscal 2019 revenue, respectively.

Frito-Lay North America made up 45% of the operating profit for PepsiCo in fiscal 2019. This high margin segment has been a key to the financial success of the company over the years.

Related Link: Stock Wars: General Mills Vs. Kellogg Vs. Post

Financials: Coca-Cola has products in more than 200 countries. The company got 18% of its unit volume from the United States in fiscal 2019, with the rest coming from international markets.

Sales for Coca-Cola rose in fiscal 2019, but that came after three straight years of declining sales. Revenue was $37.3 billion in fiscal 2019. Net income for the company hit a five-year high of $8.9 billion in fiscal 2019.

Coca-Cola reported third-quarter revenue declined 9% year-over-year to $8.7 billion. Coca-Cola lost value share in the non-alcoholic ready-to-drink segment.

Coca-Cola presently pays dividends of $1.60 per year, equal to a 3.4% dividend yield. The company has raised its dividend 58 consecutive years.

Pepsi got 58% of its revenue from the United States in fiscal 2019 and 42% from international territories. Revenue for PepsiCo was $67.2 billion in fiscal 2019 and was up year over year for the fourth consecutive year.

PepsiCo had revenue growth of 5.3% year over year in the third quarter to $18.09 billion.

The dividend yield for shares of Pepsi is 2.9%. Pepsi has raised its dividend 48 consecutive years.

Stock Action: Shares of Coca-Cola have fallen 14% over the last year. The stock is up 18% in the last five years and up 56% in the last 10 years.

Shares of Pepsi are down 2% over the last year. Shares are up 48% over the last five years and up 112% over the last 10 years.

What’s Next: Coca-Cola has made several acquisitions over the years to grow its non-sparkling soft drink segment. This could be a continued focus by the company.

Coca-Cola is also phasing out underperforming brands like Zico and Tab. A national launch of the company’s Topo Chico hard seltzer is happening in the first half of 2021 with distribution partner Molson Coors Beverage (NYSE: TAP).

Pepsi has been acquiring food brands to boost its more profitable business segment. Acquisitions of Pioneer Foods and Be & Cheery will help strengthen the company in Africa and China, respectively.

Benzinga's Take: Coca-Cola has a strong brand and international presence. The company has the higher dividend yield of the two beverage giants.

But the growing food portfolio of PepsiCo and the consecutive years of revenue growth could make the food and beverage giant the winner in this battle.

MY COMMENT

BOTH companies are considerations for more conservative long term dividend investors. I like the fact that PEPSI has BUCKED the recent trend in business for companies to simplify their business segments by becoming less and less product diverse. PEPSI has made a fortune from all the various food brands and products they have picked up here and there over the years. They have created a food and drink CONGLOMERATE. The PEPSI dividend is a little less than KO......but......their five and ten year gains in share price tells the story.....at least for me if I was going to buy one of these two companies.

 

Yeah.....if someone is in a job where they can move.........and they are willing to do so.....there are actually lots of smaller towns and cities in various states where you can STILL find a decent house in a decent neighborhood for $120,000 to $200,000. Many Southern states, the Midwest, Eastern Oregon and Eastern Washington state, etc, etc.

 

I posted a little bit on this topic a while back. I like this little article on the current earnings that are coming in.

Earnings are beating expectations by a massive margin: Morning Brief

https://finance.yahoo.com/news/q4-2...-historic-margin-morning-brief-111240817.html

(BOLD is my opinion OR what I consider important content)

"It’s early days in the Q4 earnings season, with about 13% of the S&P 500 (^GSPC) having reported results through Friday.

But so far, companies are blowing away expectations by historic margins.

“In aggregate, companies are reporting earnings that are 22.4% above the estimates, which is also above the 5-year average of 6.3%,” FactSet’s John Butters observed on Friday. “If 22.4% is the final percentage for the quarter, it will mark the second-largest earnings surprise percentage reported by the index since FactSet began tracking this metric in 2008.”

Most of the beats are so far being driven by the big banks like JPMorgan (JPM) and Goldman Sachs (GS), which reported blowout numbers last week.

"Thus far, 59% of the earnings announced are Financials,” Credit Suisse’s Jonathan Golub wrote on Friday. “This group has surpassed expectations by 30% while the rest of the companies that have reported have delivered an aggregate beat of 15%."

Before earnings season kicked off with the big banks, some market watchers noticed that analysts were slow to make adjustments to earnings despite better-than-expected economic data.

“[E]arnings are still being revised up in the past four weeks and analysts are still increasing their target prices – an unchanged scene from 3 months ago,” Jefferies’ Sean Darby wrote in a report dated January 17. Though we’d note the banking sector was among a small handful of industries that did see upward revisions to earnings estimates.

And as we head into one of the busiest weeks of earnings season, analysts continue to believe the bar for companies is far too low.

"Our Global Equity strategists believe that consensus earnings expectations are too conservative for Q4 results,” JPMorgan’s John Normand said on Friday. And while investors’ fears about the future tend to be biased toward downside risks, businesses are reminding us that they often surprise to the upside.

Better than feared
Analysts do expect, however, that Q4 earnings will reflect a year-over-year decline, led by sharp drops in the energy and industrials sectors. Seen this way, Q4 earnings might also be described as “better than feared” rather than “better than expected.”

“If -4.7% is the actual decline for the quarter, it will mark the fifth-largest (year-over-year) decline in earnings reported by the index since Q3 2009,” Butters said. “It will also mark the fourth straight quarter and the seventh time in the past eight quarters in which the index has reported a year-over-year decline in earnings.”

It’s also worth noting that the record for aggregate beats in one quarter is 23.1%, which happened for Q2 2020 results. A reminder that analysts continue to struggle to make forecasts accurately as the unprecedented nature of the COVID-19 pandemic means the past won’t help outline the future.

But considering that stocks are trading at record highs with valuations far above their long-term averages, it seems that investors and traders are already pricing in these surprises and perhaps looking forward to a time where things are expected to be growing again.

"If you’re long the S&P 500 today, you’re essentially long meaningful upside earnings revisions,” DataTrek Research’s Nicholas Colas said on Thursday. “We’re OK with that because we believe there is still real and unappreciated operating leverage available to corporate America as the domestic and global economy recovers.""

MY COMMENT

AS USUAL......the analysts continue to be WRONG. They are NOW scrambling to update their......GUESSES......to match the actual reality. It makes you wonder what in the world is wrong with the.......so called.....investing professionals. I SUSPECT that what is wrong.......is the FACT that NO ONE.....especially these "professionals".....can predict the short term when it comes to stocks and the general markets.

It would be interesting if each ANALYST was REQUIRED to post their ACTUAL personal investing results. I think we ALL know what that would show. On one hand they are now saying the bar was TOO LOW for earnings......on the other hand they "WERE SLOW" to adjust THEIR own projections for improving economic data and conditions.

MEANWHILE.....the common investor....with a long term horizon continues to make nice money in this OBVIOUSLY quickly improving business environment. ONE thing is sure.....this will be an interesting week for investors.

 

STRONG....strong....open today. Except for the poor DOW. My accounts have ALL jumped to new highs.....so far. I "feel" like there was a lot of.....pent up.....excitement at the open today based on many of the glowing articles that were circulating over the weekend regarding earnings. It will be interesting to see what the market averages do over the.....EAST COAST lunch hour.....12:00 to 1:30.

 

THIS should be a CAUTIONARY TALE for those that are LONG or SHORT. I have.....NO COMMENT.....on this particular stock since I do NOT follow it. BUT.......BE CAREFUL OUT THERE.......playing these sorts of short term games can be dangerous to your financial health.

GameStop shares soar to record highs as massive short squeeze forges ahead

https://finance.yahoo.com/news/game...ive-short-squeeze-forges-ahead-133819632.html

The strange but true reason why GameStop's stock keeps surging

https://www.cnn.com/2021/01/25/investing/gamestop-stock-reddit-wsb/index.html

MY COMMENT

As I said I dont follow this stock.....so I have NO OPINION of it as an investment. BUT......long or short......watch out if you are playing these sorts of short term games. Blackberry, Bed Bath & Beyond.......and a few other stocks are EXHIBITING massive one day gains lately.

Being a LONG TERM INVESTOR.......the HUGE gains that these sorts of stocks are showing over such a short time makes them totally unattractive to me. For OTHERS........that believe in these companies......and.....understand the risks.....OK, go for it.

On a side note......I DO understand the PASSION that gamers and collectors have for this type of stock. I am a collector myself. PASSION in life is a good thing. PASSION.....in your financial life....can ALSO be a good thing......OR......it can be a BAD thing. So......do your own research and NEVER invest more than you can afford to LOSE.

 

WOW.....today was an EPIC battle between the UP forces......and.....the DOWN forces.....in the markets. It was a VERY erratic and frothy day. I dont think I was ever negative for the day.....but....my account had some BIG swings through the day. In the end......I was nicely green. PLUS....beat the SP500 by .47%.

MOST of my positions ended up for the day. The exceptions.....NIKE, COSTCO, HONEYWELL and NVIDIA. I suspect that today is one of those days that the results are VERY stock specific.....probably.....some people ended in the red....it just depended on what is in your account.

In spite of the erratic action......I see today as a positive indicator.....for the rest of the week. With 20% of the SP500 reporting this week......on top of about 13% previously....we will have one third or more of earnings locked in by the end of this week. The poor DOW....never could turn positive today.....but.....ending down by ONLY 36.98 points is a MAJOR VICTORY for the day. Another good indicator.....the strength into the close.

All in all.....for me....a very nice start to the week with a new.....ALL TIME HIGH....in my various accounts.

 

The GameStop action today was FASCINATING. Nice to watch from the sidelines......here is what is happening:

Analyst on GameStop volatility: 'If you want to gamble, go to the casino'

https://finance.yahoo.com/news/anal...ant-to-gamble-go-to-the-casino-191750672.html

(BOLD is my opinion OR what I consider important content)

"“If you want to gamble, go to the casinos. This is not what the markets are for,” Loop Capital analyst Anthony Chukumba warned retail investors playing GameStop (GME).

“This is not investing,” he told Yahoo Finance Live during Monday’s trading session.

The video game retailer’s shares soared than 130% before coming back down and briefly going negative during a wild trading session on Monday. Shares were temporarily halted for trading throughout the morning following a crush on short-sellers.

“I've been on Wall Street for over 20 years, and I cannot think of anything that I've seen that is nearly as insane as what's going on with GameStop right now,” said Chukumba. The analyst dropped coverage of the stock on January 11.

Last week, shares spiked more than 100% as a clash between short-sellers and Reddit WallStreetBets caused a massive short squeeze on the stock. A short squeeze forces those who bet against the shares to buy in order to forestall bigger losses, sending the stock price much higher.

‘The first line of troops goes down in a rain of musket fire ...’
What’s happening with GameStop is a “unique situation on the short-side” according to Ihor Dusaniwsky of S3 Partners.

The data company has been seeing a short-squeeze on older shorts who have incurred massive mark-to-market losses on their positions. However new shorts coming in use “any stock borrows that become available to initiate new short positions in hopes of an eventual pullback from this stratospheric stock price move.”

“Much like the Revolutionary War, the first line of troops goes down in a rain of musket fire but is replaced by the troops next in line,” said Dusaniwsky.

‘A perpetual short squeeze machine’
On Friday veteran trader Brian Shannon warned short-sellers against trying go against a stock like GameStop when it’s up too much.

“They’ll try to go in and short the stock, and then the stock rallies 10%, and they cover. And then what happens is it becomes a perpetual short squeeze machine,” Shannon told Yahoo Finance.

“If you look at short interest numbers, they’re rotating extremely fast right now. It’s a game of musical chairs. If you’re involved in it, if you’re looking to short it, wait for it to break down. There’s no such thing as up too much, “ said Shannon.

On Monday the stock was stripped of its only Outperform rating by Telsey Advisory Group. Analyst Joseph Feldman double-downgraded the stock to Underperform with a price target of $33 — currently the highest street price prediction.

The lowest price target on the stock is $3.50 by Credit Suisse analyst Seth Sigman. GameStop shares now have 4 Holds and 4 Sell ratings.

The story behind last week’s massive spike involves a response to short seller Citron Research’s recent prediction that shares of the video game retailer will drop to $20 a piece. Last Tuesday Citron’s managing partner Andrew Left announced he would list five reasons why the shares will plunge.

Reddit users dubbed WallStreetBets (WSB), a forum on the message board platform, pushed back on Left’s call and apparently helped create a massive short squeeze on the stock.

“I’ve never seen such an exchange of ideas of people so angry about someone joining the other side of a trade,” said Left in a YouTube clip last Thursday. He went on to list the reasons why he thinks the stock will go down to $20/share.

The reaction from reddit users and other retail investors sent the stock up more than 100% last week. On Friday, Reddit WSB users were celebrating the stock’s squeeze to record highs.

Also on Friday, Left said he would stop commenting on the stock.

“We are investors who put safety and family first, and when we believe this has been compromised, it is our duty to walk away from a stock,” Left wrote in a letter posted on Twitter.

The stock had been trending higher prior to last week. On January 12, shares were trading around $20/each after GameStop announced Ryan Cohen was joining the board of directors. Cohen is an activist investor and co-founder of pet retailer Chewy Inc (GME ).

In July of 2020, the stock was trading at around $4 a share.

MY COMMENT

YES......a very dangerous game. PLEASE.....I do not advocate buying this stock

BUT....I think it is interesting how the.......so called.......professionals are acting. Their response.....I will just take my ball and go home..........."I wont comment on the stock anymore". They are NOT used to losing.....especially to the RABBLE. They are used to driving and controlling the markets......and......they do not like it one bit when regular young guys....kick them right out of their trades with a LOSS.

This may just be the start of something.........the taking over of the trading markets by the masses. I love ALL the talk from the "professionals"....that......"this is not investing"......."this is gambling". YEAH....says the big bank and hedge fund day traders. They dont like it one bit when THEY are the one being SKEWERED......like they usually do to the little guy. A bunch of whining crybaby's.

"The insurrection of the trading masses"......that should be the headline........or....."the day the markets stood still"........or...."the revenge of the nerds". The LIBERTARIAN in me says.....BRAVO.