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2019 Ideas

Pixel > iPhone.

*warms popcorn

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Yea I’m really amazed with pixels voice activation. It’s amazing how googles tech is far more advanced even though they are there for a shorter time.

I love my cheese. I got to have my cheddar.

Wonder if PA is still short vol…

PA where you at?

WSJ article from 2 days ago pointed out how Samsung was the #1 smart phone maker in China 5 years ago. However, today they have less than 1% market share. What? The factors were some kind of national pride/anti Korean wave, and also some really bad PR from the time Samsung’s batteries exploded. The point overall is that any company can very quickly change from a market leader to also-ran. 

Apple is in a better position than Samsung was, since their software platform is not completely generic and they have better brand recognition in general. However, both of these advantages are tenuous. China’s users use mostly shared platform apps, and a wave of anti-US sentiment could quickly erode Apple’s brand desirability. I don’t know how useful valuation metrics are to Apple when their sales projections, and therefore their valuation model inputs, can suddenly drop 10% like they did last week. 

I’m not saying China is the only important market to Apple or the company’s only potential location for future growth. This country was, however, central to Apple’s original growth plan. China currently provides 20% of Apple’s revenue. I’m sure Apple planned for this to be 40% or more at some point in the future. 

I am not an expert in fundamental analysis. So maybe I’m wrong, but lots of people are getting concerned about Apple’s business prospects for these reasons. 

Regarding “returning cash to shareholders”, Apple used to be a hoarder, but is now starting to aggressively reduce their cash balance. Last year, they had like $250 billion - now they have like $135 billion, and Tim Cook just said he wants to bring it to near zero. They’re just using the cash to buy back shares, rather than issue dividends. Once Apple is “cash neutral”, I don’t know what the implications will be in terms of capital buffering or other things, if any. 

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

I’m only 24, and don’t know where I can buy stocks or short them. Do I need to buy them from certain companies? Or financial apps like Robinhood? And how can I start building my performance history (want to start with my own money)?

dasstienn wrote:

I’m only 24, and don’t know where I can buy stocks or short them. Do I need to buy them from certain companies? Or financial apps like Robinhood? And how can I start building my performance history (want to start with my own money)?

Lol, oh man.

#FreeCVM #FreeTurd #2007-2017

Galli wrote:
PA where you at?

Banned from AnalystForum.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams
http://financialexamhelp123.com/

Black Swan why would you be bullish on basic materials and chemicals when there is a reasonable case that the global economies may be slowing/weakening?   Have they been clobbered of late or otherwise undervalued.  

JohnyMac wrote:

Black Swan why would you be bullish on basic materials and chemicals when there is a reasonable case that the global economies may be slowing/weakening?   Have they been clobbered of late or otherwise undervalued.  

Yeah most of those names are down bigly YTD, many of them down >20%, some well over 30% down.  Supply for the most part is rational, plants are all refurbished and running at low cost reliably and cash flows are solid.  Because of the basic materials meltdown during the last China scare in 2016, a lot of these guys cut their debt levels to extremely low levels, rationalized inefficient capacity and streamlined organizations, invested to improve plants to run lower cost and more reliably and now are under leveraged with good  cash positions and still throwing off free cash flow yields >10% that has to go somewhere.  M&A and expansion appetite remains minimal.  All of the headlines have run ahead of the reality on the ground with good cash outflows and shareholder returns.  The key is to buy quality names with good cost positions.

#FreeCVM #FreeTurd #2007-2017

I mean, these aren’t fire sale prices so if you’re inclined to wait, that would make sense, I tend to be early.  But I feel these prices are pretty good.  Additionally, I think China is making moves to increase stimulus as it exits this seasonally restrained part of the year with curtailed construction and manufacturing through winter on pollution grounds.  I think what’s increasingly baked in are concerns over a China hard landing or bumpy slow down, which I don’t think is a base case.  I think we’re well past global minor slowdown levels and there are areas like Brazil that are showing signs of recovery.  I think we’re entering a new era where a belated consumer lead recovery will bring a second wind.

#FreeCVM #FreeTurd #2007-2017

Seriously, I’ve never traded stocks. 

Black Swan wrote:

I mean, these aren’t fire sale prices so if you’re inclined to wait, that would make sense, I tend to be early.  But I feel these prices are pretty good.  Additionally, I think China is making moves to increase stimulus as it exits this seasonally restrained part of the year with curtailed construction and manufacturing through winter on pollution grounds.  I think what’s increasingly baked in are concerns over a China hard landing or bumpy slow down, which I don’t think is a base case.  I think we’re well past global minor slowdown levels and there are areas like Brazil that are showing signs of recovery.  I think we’re entering a new era where a belated consumer lead recovery will bring a second wind.

last time china injected this much stimulus was March 2016, one month after market bottom at the time. might bode well for the December 2018 lows being the lows for now.

Black Swan wrote:

Agree with Ohai’s view verbatim.

Additionally, I like Basic Materials.  Paper / Pulp / Lumber: IP, WY, MERC.  Chemicals: DWDP, NTR, ETN, SHW, ECO.  Metals/Mining: NUE, TECK, BHP.

Industrials neutral on the sector, but like ERJ, GE, ROP. 

Ok, I’ll admit that one was luck, but oh man.  Still recommend a buy though, PT is ~$20 although I might wait until some of this current technical fades.

#FreeCVM #FreeTurd #2007-2017

dasstienn wrote:

Seriously, I’ve never traded stocks. 

Visit www.reddit.com/r/wallstreetbets and ask for their advice. Be sure to take their advice seriously. They basically print money over there.

thats the dumbest thread ive seen in a while

"You want a quote? Haven’t I written enough already???"

RIP

S2000magician wrote:

Galli wrote:
PA where you at?

Banned from AnalystForum.

Makes sense, thanks.

From Black Swan

I mean, these aren’t fire sale prices so if you’re inclined to wait, that would make sense, I tend to be early.  But I feel these prices are pretty good.  Additionally, I think China is making moves to increase stimulus as it exits this seasonally restrained part of the year with curtailed construction and manufacturing through winter on pollution grounds.  I think what’s increasingly baked in are concerns over a China hard landing or bumpy slow down, which I don’t think is a base case.  I think we’re well past global minor slowdown levels and there are areas like Brazil that are showing signs of recovery.  I think we’re entering a new era where a belated consumer lead recovery will bring a second wind.

JohnyMac

Black Swan thanks for that background so any rebound should be quite elastic in terms of profitability and value……I may wait a bit on acting on that I find the whole picture very muddled at this point

Just went from 80% invested in equities (70/30 US and exUS) to 20 % invested in equities (what remains is high dividend blue chip etfs) as I am currently very spooked about what the next 6 to 12 months holds.  While I believe in the buy and hold inevitability of superior returns in stocks if there is a possibility of bypassing substantial downside performance I love what that can do as well to returns over time.

Not suggesting that I or anyone can time the market but just need to catch my breath on the sidelines for a bit and see what the apparent cyclical and fiscal/monetary and slowing growth state and global dysfunction is about to bring.

Now to find someplace to park the money :)  Leaning toward liquid floating rate debt debt instruments.

Any thoughts on mining stocks/ commodities, that are to remain strong through the cycle? Watching Jupiter mining jms.ax at the moment. Strong projected dividend yield, strong cost based performance, well above b/e and zero debt. Strong correlation with the commodity prices / sentiment. They held an public offering last year at 40ct after being taken of the market for a while, now well down to 25 ct. Imo a fair risk reward investment in which the firm projects the asset i.e. the mine to have a working life of 100 ys. 

Shoot it.

Lncognito wrote:

Any thoughts on mining stocks/ commodities, that are to remain strong through the cycle? Watching Jupiter mining jms.ax at the moment. Strong projected dividend yield, strong cost based performance, well above b/e and zero debt. Strong correlation with the commodity prices / sentiment. They held an public offering last year at 40ct after being taken of the market for a while, now well down to 25 ct. Imo a fair risk reward investment in which the firm projects the asset i.e. the mine to have a working life of 100 ys. 

Shoot it.

I personally don’t touch those sort of things and I don’t know how you can relate this company with “strong through the cycle”. They paid two dividends in seven years, don’t appear to have any scheduled and have an erratic price history and weak disclosures.  I’m not saying it is a terrible investment, I’m just saying it’s a microcap that I know very little about (I don’t do microcaps) and that it looks like a terrible investment, again, knowing nothing about it other than high level stats.

#FreeCVM #FreeTurd #2007-2017

I do agree, I meant to phrase that differently. That sentence did not refer specifically to this stock, but was a more general remark, to gauge what the general opinion is w.r.t. commodities stocks further in the cycle, especially mining. Regarding the dividend, thats correct though they have been private for some period and have now been relisted. Managements has committed on paying the full income from their 50% equity ownership to shareholders in coming years. The unilateral disclosure that you mention is also the matter that bothers me.. :) The thing cheering me up is the fact that dutch pension funds own a 13% stake in the firm. 

I don’t mind commodity stocks late cycle, I think they can be a good investment.  I think late cycle though it pays to own the high quality, low leverage, low cost base names (RIO, BHP, AAL (Anglo), NEM, GLEN)… those sorts of things.

#FreeCVM #FreeTurd #2007-2017

Actually, instead of the names I just listed, I’d look at the ones I mentioned earlier in this thread.

#FreeCVM #FreeTurd #2007-2017

MLA,

im pretty upset you didnt hook us up with the intel on this baby. 

https://www.bloomberg.com/news/articles/2019-02-14/rally-in-canadian-ele...

"You want a quote? Haven’t I written enough already???"

RIP

DPBass88 wrote:

I’d like to see how the esports industry grows. I’m leaning towards Activision (ATVI) because of Blizzard but EA and TTWO aren’t bad either. They’ve taken huge hits recently bringing P/E to 20ish which seems ok. A drop below 15 and it’ll look really good

I’m staying clear of ATVI. Their player base got hammered due to Fortnite, and other rivals like league of legends and DotA2 consistently get higher game volumes than ATVI’s stale products (WoW, Diablo). Overwatch is doing okay, but not enough. They’ll need to come up with something groundbreaking like RPGs were 20 years ago.

Plus, it’s a high beta stock. Without any momentum and market-wide headwind, it might set camp in the mid-high $30s before a longer term recovery (which I believe can only come with better games). 

Galli wrote:

Wonder if PA is still short vol…

PA where you at?

Perma-short, to emerge in a few years when a big correction finally happens just to say I told you so.

Tactics wrote:

DPBass88 wrote:

I’d like to see how the esports industry grows. I’m leaning towards Activision (ATVI) because of Blizzard but EA and TTWO aren’t bad either. They’ve taken huge hits recently bringing P/E to 20ish which seems ok. A drop below 15 and it’ll look really good

I’m staying clear of ATVI. Their player base got hammered due to Fortnite, and other rivals like league of legends and DotA2 consistently get higher game volumes than ATVI’s stale products (WoW, Diablo). Overwatch is doing okay, but not enough. They’ll need to come up with something groundbreaking like RPGs were 20 years ago.

Plus, it’s a high beta stock. Without any momentum and market-wide headwind, it might set camp in the mid-high $30s before a longer term recovery (which I believe can only come with better games). 

ea just came up apex legends and it is growing way faster than tencent’s epic games’ fortnite, when compared by their release dates. feb 4 2019 vs july 25, 2017.  within 7 days apex had 25m players vs 1m for fornite. there are curently 200m fornite players. so its a long way for them still to be comparable.

ea is the maker of your sports games like fifa/nba live/ madden, sims, battlefield, need for speed, battle front.

currently ea trades at 18x cash flow/net income. net cash pos of 4b. ea has been profitable since 2012 but i would actually just focus on 2015 cuz 2012 to 2014 were really ****ty years. It’s even worse from 2006 to 2011, they had huge losses. jana partners and duquesene just sold out of them too as of 12/31/18.

tencent’s trades at 27/32x. neutral net cash. obvi expensive, but they are a growing profitable cash cow since inception around 2010. and this is not just on a yoy basis, but qoq. about 32% of rev is from online games vs 60% in 2015. 23% in social. 20% in online ads. and 25% in others. they also have investmentsd in other cos prolyl worth 50b repping about 15% of takeover value.

https://www.businessinsider.com/apex-legends-player-count-2019-2

I love my cheese. I got to have my cheddar.

igor555 wrote:

MLA,

im pretty upset you didnt hook us up with the intel on this baby. 

https://www.bloomberg.com/news/articles/2019-02-14/rally-in-canadian-ele...

i thought the product in question was far too cool for AF

Dropped $10K in to PG&E Corp. about a month ago. I honestly got really lucky as it was probably the riskiest play I’ve ever done.