Board 8 > Stock Topic

(+) Yeah! (+)

If that is an issue then you are putting too much into the market.

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The issue is more so a mental security blanket than anything else. I have three pools of money:

• Retirement (not touching until I retire)
• Spending (day-to-day expenditures like food, rent, bills, etc.). I try to keep this around $20k just in case I ever need something last minute, like a major surgery or car.
• Extra (this is the money Ive been using for stocks). I wanted this to gain interest so I put it on a Vanguard market fund, but the interest is significantly less than what I could be getting with stocks. I liked the low risk though, but once corona decimated the stock market, I changed my tune

What Im trying to say is, I dont NEED that money for anything other than down the road when I want a down payment on a house or something. I need to mentally understand that so I can start letting that money work for me.

You should give your money to me (or a less smart financial person I guess) and not worry about it. I only get paid if you win!!

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I was doing some more research and trying to figure out why the travel and casino stocks have been doing so well lately despite the overall market crashing. I found out that its because lot of these stocks tanked out or went down so much that it doesnt properly reflect their actual value. Therefore, they go up.

So...maybe you should invest in airlines after all now? And the other companies within those related fields?

When people get those government stimulus checks they are going straight into gambling
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Jakyl25 posted...

When people get those government stimulus checks they are going straight into gambling

If you mean the stock market, that's exactly the point! More money in = more demand = stocks go up = Trump gets reelected.

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Moonroof posted...

I was doing some more research and trying to figure out why the travel and casino stocks have been doing so well lately despite the overall market crashing. I found out that its because lot of these stocks tanked out or went down so much that it doesnt properly reflect their actual value. Therefore, they go up.

So...maybe you should invest in airlines after all now? And the other companies within those related fields?

You should invest in things that have hit rock bottom but have no chance of going under, yes.

But again don't put all your eggs in one basket.

FANG and EVRI seem to currently. be two of the best stocks to invest long-term in. Both are 3-4x away from their pre-crash value. If I was going to throw my 31k into a stock, Im leaning toward FANG as it has a higher ceiling, but both stocks seem like winners. Thoughts?

I thought this was kind of funny. Caesars has their current stock price listed on their Coronavirus Guest Information page, almost as if to say, you can't bet at our casinos right now, but you can still bet on our stock. And given that the stock was going up/down 30% a day last week, it's probably about as risky.

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Moonroof posted...

FANG and EVRI seem to currently. be two of the best stocks to invest long-term in. Both are 3-4x away from their pre-crash value. If I was going to throw my 31k into a stock, Im leaning toward FANG as it has a higher ceiling, but both stocks seem like winners. Thoughts?

If I was you atm I'd split your stocks into the following:

5K into Fang
5k into EVRI
5k into SAVE
5K into ERI
5k into RCCL
5k into CCL

then give me 1k for making you a shit ton of money


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^^ I will look into those and let you know what I do

All resorts / airline / cruise lines, eh? Presumably because they bottomed out and also are poised for rebounds to their previous status?

They know how to lobby. Governments of the world are going to be forced to throw money at them. People who don't really need extra money to get by are going to get extra money, they will take vacations after being cooped up and their current vacations refunded.

Trust that lobbyists aren't going to miss out on a meal.

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If you are incredibly risk averse and don't mind forgetting this money exists for a few years you could also just put it all on Disney or Microsoft. Those things aren't going anywhere. Way less upside, but also you like almost literally know you aren't losing your money there.

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Why not put all 31k into just one or two of the group you mentioned? I know they say diversifying is prudent, but whats the benefit in this case?

While chris' all in on the downside is nice, there is a chance it takes a few years for those industries to see large recoveries as we move through what is likely going to be a recession period. Travel goes up after the economy turns around, so a broader strategy of finding other sectors(Energy?, safer bets like Microsoft, the auto industry, etc) to invest in looking at the shorter term is probably ideal. Diversify a little bit so that while you are betting on these companies you keep making sure your money is doing something for you.

Personally right now, I have a saved pile of money in an annuity that was offering a good bonus(10%, I saw a recession coming figured 10% was good value) that I will slowly drain over the years but will still be there as a low risk investment and put profits from that into other higher risk investments of varying degrees(The goal is a decent chunk in an ETF/MF, and then a bit into stocks I expect to recover hard).

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Well in your case it is psychological. You aren't seeing your 31,000 rise and fall at the cruel fate of a single stock. Instead you've made 6k little boats and are seeing them gently rock in the ocean. I can slit the money up even more, too! Basically once I know someone I am very good at manipulating them to conclusion.

In your case, I am determined to make you money and to do that you have to diversify. Someone like me could put all 31k on a single stock and not give a fuck at all because I am cold blooded, you... not so much!

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Moonroof posted...

Why not put all 31k into just one or two of the group you mentioned? I know they say diversifying is prudent, but whats the benefit in this case?

This is not a case of diversifying btw. Diversification means spreading your money out into various sectors so that when one goes down the others will pick up the slack and keep your money rolling. All these casinos and touristy things will likely all see a fall and growth period at the same time, so its not really diversifying anything.

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red13n posted...

While chris' all in on the downside is nice, there is a chance it takes a few years for those industries to see large recoveries as we move through what is likely going to be a recession period. Travel goes up after the economy turns around, so a broader strategy of finding other sectors(Energy?, safer bets like Microsoft, the auto industry, etc) to invest in looking at the shorter term is probably ideal. Diversify a little bit so that while you are betting on these companies you keep making sure your money is doing something for you.

Personally right now, I have a saved pile of money in an annuity that was offering a good bonus(10%, I saw a recession coming figured 10% was good value) that I will slowly drain over the years but will still be there as a low risk investment and put profits from that into other higher risk investments of varying degrees(The goal is a decent chunk in an ETF/MF, and then a bit into stocks I expect to recover hard).

Mind you, Red, he keeps saying he does not need this money at all. Not retirement, but also not immediate. They may not fully recover in 2-3 years but they are going to be well ahead of where they are at now.


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DoomTheGyarados posted...

Well in your case it is psychological. You aren't seeing your 31,000 rise and fall at the cruel fate of a single stock. Instead you've made 6k little boats and are seeing them gently rock in the ocean. I can slit the money up even more, too! Basically once I know someone I am very good at manipulating them to conclusion.

In your case, I am determined to make you money and to do that you have to diversify. Someone like me could put all 31k on a single stock and not give a fuck at all because I am cold blooded, you... not so much!

Lmao. Im going to some research and actually might do just what you suggested. Im starting to accept that looking at this $31k as anything but a long-term financial vessel is detrimental both to my psyche and potential profits.

Moonroof posted...

Why not put all 31k into just one or two of the group you mentioned? I know they say diversifying is prudent, but whats the benefit in this case?

There is some diversifying here. The risk is that some of these companies will go bankrupt in the near future. That's why the prices are down so much - if they don't go bankrupt they pretty much have to go up.

That said, the companies most in danger of going under are usually the ones that rise the most if they survive the crisis.

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short term stocks are for fun, long term stocks are an investment.

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I consulted with someone in the finance industry:

Ok.... I went over evri, fang ... my thoughts:
Evri and the rest of the gaming industry are totally dependent on consumer spending. That will recover but certainly not in the short term. The company has 1 billion in debt and needs cash flow to pay it it off. It's a speculative play so I would not recommend it.
Fang is in the energy field which has totally cratered. While that sector is likely to recover , it will not do so short to medium term for sure. There is still a oil price war going on between Saudi Arabia and Russia. Also many companies have suspended drilling in the Permian basin where this company operates. Again, another speculative investment I'd stay away from.

If you want to buy individual stocks likely to recover here are three:
Exc--- excel in produces nuclear power, pays a dividend and will certainly recover... it is A good buy at the current price.

PRU and MET... both are insurance companies. They have been hammered due to low interest rates and the fact that they have to pay out claims as needed. They are solid companies and will also recover.
These three companies are solid and will recover. No one knows the future... my suggestion is for you guys to do your own research.. If I had to invest... either of those companies would be on my list.

Thoughts?

Exc I don't see the upside tbh. Guess that depends on the dividend.

Pru is a good buy yeah for sure. Met is ok

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So many options. Stocks can be really fun. I wish they taught more of this in college.

Yeah, for that you have to major in finance or take an elective course that focuses specifically on investments. I actually started teaching finance part-time at my local university, but my class covers managerial finance - budgeting, cost of capital, time value of money, ways to finance. We don't specifically talk about all the sexy "make me money now" topics people usually want to learn about.

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I think it's generally better to buy companies whose business you know yourself. Of course the riskier something is the bigger the upside is.

As far as the casino industry, my long run thoughts (on a timeframe of many years) about it in the US is that it is slowly killing itself. Nevada gaming revenues, even before this crisis, at the top of the longest bull market in history, still had not recovered to their record highs of 2007. And Atlantic City closed half its casinos and still can't get people in the door of the remaining ones. Young people just don't see gambling as a good form of entertainment/vacations. There is also increased competition from tribal casinos opening all over the country. The one big area of growth in destination gaming has been super high rollers from Asia, which makes the natural demand from the American market look even worse.

And this has been in the face of casinos making odds worse for players in order to chase short term profit. Nowadays in Vegas you have to bet pretty high to get the odds/treatment that used to be part and parcel of the experience. The problem is fleecing low rollers with bad odds is a recipe for disaster long term, because new gamblers tend to be young and not comfortable betting large amounts at first. The old model was get people in the door, some of them will win, and then they keep coming back, and bringing more money with them. The new model is get people in the door and fleece them for as much as you can get now.

15 years ago the standard house edge in Vegas for blackjack was 0.26%. That means if you bet $100, on average you lose 26 cents. Now if you want to play for less than $25 a hand at a touristy casino, it's probably going to be around 1.8%. Well, it's entirely possible for play for hours or days at a 0.26% house edge and go home a winner. At 1.8%, past a few hours you have virtually no chance of winning. So you lose, and conclude gambling is stupid, and don't come back.

The industry has supported itself by deriving an ever greater share of their revenue from non-gambling stuff, like hotel room charges, resort fees, shows, and restaurants. But why exactly do people need to go to Vegas for that? I feel like this isn't a good business model in the long run because they're replicable elsewhere.

The big players fall into two camps - WYNN and LVS have made a fortune from developing their operations into Asia which is such a big share of their revenue that I don't think they care that much about their US operations anymore. MGM and CZR are basically drowning in debt and are worried only about how to not go bankrupt in the short run. So no one is really thinking about the long term growth of Vegas.

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I recommend you read The Intelligent Investor by Benjamin Graham

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Ulti never told me how to become rich. So I will listen to Chris, he is always right.

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are You looking at what the price used to be vs what it is due to Covid? Or more? I dont think many people would recommend FANG based on other financials and issues.

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I actually can admit to not looking at FANG very closely, but he seemed to like it a lot so I just suggested he keep some of it in that since he was interested.

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Yes, vs whatnot was before covid. It seems to be steadily have been in the 70-80 range. Whats up with it?

EVRI looking like its passing $4 today. I cant reinvest my $31k until the money settles, which takes one business day. Knowing my luck though, itll start going down tomorrow.

meanwhile, in chris land

:D :D :D

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Nice man, and you started way lower than I did.

Chris, every stock you recommended yesterday is up massively at the moment.

it's almost as if I am very smart :O

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Are these stocks destined to go back down though? Looks like the market overall is surging today (so far) so are these stocks an indication of crash immunity?

maybe short term yeah, but none of these were meant to be super super short term!

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Well once I have access to my funds again (tomorrow), Ill have some decisions to make. This time, with the long-term mentality. Ideally one stock though. Hopefully EVRIs most massive gains arent behind it. ERI looks like it has a high ceiling.

Yeah I bought some of ERI today and its dropped a bit but, like, I wasn't buying it for today so I am fine with that. If you want 'sit it and forget' it just do a smattering of cruise lines my man. their lobbyists are too good, they aren't going under <_<

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Lets see how the day ends. Hopefully this stimulus bill gets passed so people spend more on mindless things.

Actually cruise lines are mostly old people. Their money is fine. You just want old people to live.

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So if I was going to start a long-term investment tomorrow, which stock would you recommend and how long are you thinking?

Microsoft and Disney are two of my favorites tbh. Not as high of a crazy upside as some of the ones that are incredibly low right now but you just 100% know your money is safe with them given their current price points and they offer dividends.

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So those two would be examples of 99% guarantee to make around 40% profit within a year or two, whereas the casino / travel / resort ones would be about a 75% chance to make around 100% profit within a year. Would you agree?

I'd say you are looking a bit longer term than a year or two for that 40% number to be assured but something like that. I don't know like I have already given you my suggestions, in actuality I think the travel stuff is a surer bet than red said for example because its perception more than anything and also these companies are very savvy. Like when bailouts are announced I expect cruise lines to skyrocket for a bit.

But you seem nervous in general, and if you are betting on the mouse and big daddy gates you should be calm.

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Got it. I just want to ensure I dont miss this rare opportunity to gain significantly.

I mean in fairness you did that already a bit with EVRI when I was like "hey buy at 3.20, you won't regret it" <____<.


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