Board 8 > Stock Topic 26

(+) Yeah! (+)

Jet Blue baby!

2 airlines down, 4 more to go.

Damn it, every time I think GME won't shoot up, they do.

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Hey guys, I have a massive amount of money now.

You know its a tough market when homie stock EVRI has failed you. Idk guys, I think the golden days are not only over but that were also in for some massive corrections.

Really have no plan now. Just want to put it in a blue chipper and be happy with a 5-10% steady gain over the next year. But everything is basically at an all-time high already.

I think KO is undervalued. Would invest in it except that I'm going after aggressive growth and am not that happy with a 10% gain per year.

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JPM and get some dividends maybe?

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red sox 777 posted...

I think KO is undervalued. Would invest in it except that I'm going after aggressive growth and am not that happy with a 10% gain per year.

I am happy with 10% because I do think there will be a dip to buy in the near future. Can't get too greedy after 2020.

@StartTheMachine you were right with IEA!

sounds like everyone in this topic needs to switch over to crypto tbh!

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ExThaNemesis posted...

sounds like everyone in this topic needs to switch over to crypto tbh!

I'm on the crypto train until January 2022 at least.

Definitely looking for an exit on BTC though. Less and less confident that it will break through $100k in the near future (or if at all).

Crypto doing great. I am really liking the negativity (about stocks) here actually....a sign that the correction may soon end.

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red sox 777 posted...

Crypto doing great. I am really liking the negativity (about stocks) here actually....a sign that the correction may soon end.

True. The time to be greedy is when everyone else is afraid.

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ChainLTTP posted...

Definitely looking for an exit on BTC though. Less and less confident that it will break through $100k in the near future (or if at all).

Really? I'm pretty bullish on BTC, ETH, and ADA after they basically tanked the dark month of March like champs.

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Wow, revival. Hopefully this keeps up. One more week of this and we should be back to even...

ExThaNemesis posted...

Really? I'm pretty bullish on BTC, ETH, and ADA after they basically tanked the dark month of March like champs.

I am bullish for the immediate cycle, but I'm not as confident that Bitcoin will be a six-figure token anymore. Ethereum is definitely a long-term hold though.

I feel like unfollowing WSB
90% of the posts for the last few months are about GME or GME related (like hate against CNBC, Jim Cramer, Mervian Capital) and it's just not fun anymore
It used to be my favorite subreddit and it's just sad now

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what I wanted to happen today: AMC goes up so I sell and IEAWW goes further down so I buy

what happens: AMC goes down IEAWW goes up

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Yeah, I misplayed EVRI / IEA too. Honestly though I cannot wait for Monday to come so I can sell PTON for a loss and be done with it.

Maybe I'll get in on Coinbase after all

TBH I'm not exactly sure what the goal with Crypto is. Is it just to have an asset holding in this new class for whatever reason because you believe in it or is it for gains?

Gains sound significant when you say Bitcoin went up $1k but if you are only investing much smaller amount than the value of one bitcoin, it's pretty minor growth in your portfolio

Unless you've been riding the bitcoin train for a long time and got in when it was mega low, does this really mean too much? I've seen users in here say they've been getting in and out of crypto, which sounds like the opposite

Whenever I see someone get excited about Ethe or whatever I look and the change is less than what I wouldn't blink at in a daily fluctuation on a stock price

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The play, to me, is this: Gold currently has a total market gap north of around 10 trillion. Bitcoin currently has a market cap of around 1 trillion. In the world where cryptocurrencies replace precious metals, you would expect to see BTC reach the market cap of gold and the total crypto market cap reach the total market cap of precious metals.

If we get a bubble, during the bubble peak the value of crypto can far exceed the current value of precious metals. There some additional positive considerations in that the value of precious metals would likely be rising but for the increased competition from crypto and that at least with BTC, there is probably a substantial percentage of it that has already been permanently lost, meaning the actual current market cap is lower than the apparent one and there is more room to grow. To the extent that cryptocurrency is more useful/scarce than gold and precious metals, the value could also be higher.

Finally, crypto provides some diversification. Assets within an asset class tend to move together, and truth be told, there are really only 2 asset classes that historically have been good investments - stocks and real estate. Precious metals and bonds have never really been good investments due to low returns. Crypto, at least for now, provides an opportunity to invest in a 3rd high return asset class that has little correlation to the other 2 (stocks and real estate).

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If I sell a put with an expiration date of next Friday, and it hits the strike price before Friday, what are the odds it executes? I am considering selling a Disney put at $185 which it is currently hovering around. I dont want it to hit.

CoolCly posted...

TBH I'm not exactly sure what the goal with Crypto is. Is it just to have an asset holding in this new class for whatever reason because you believe in it or is it for gains?

Gains sound significant when you say Bitcoin went up $1k but if you are only investing much smaller amount than the value of one bitcoin, it's pretty minor growth in your portfolio

Unless you've been riding the bitcoin train for a long time and got in when it was mega low, does this really mean too much? I've seen users in here say they've been getting in and out of crypto, which sounds like the opposite

Whenever I see someone get excited about Ethe or whatever I look and the change is less than what I wouldn't blink at in a daily fluctuation on a stock price

I am up 1000% on Bitcoin, 200% on Chainlink, and 150% on ETH. So the gains are definitely a thing.

The new investors are either hopeful that the dream of a $300,000 BTC will come to fruition or that one of the altcoins will become the next Bitcoin. If you think ETH grows even to $10k, that's 1000% return from where it was in January.

I've always said that "day trading" crypto is insane.

That's a good case for Crypto in general red sox.

The individual cases for each Crypto I guess are what it comes down to. Bullish cases are that BTC will go to $100k this year, which I guess is nice but not ground breaking. But I suppose if we think It might continue to shoot for the sky to $300k like ChainLTTP is saying then I guess it's still a nice dream.

I guess it's always a matter of how much runway you still think is left. I think the idea that crypto in general still has a lot of runway is probably solid, but I wonder just how big BTC can really go. But I guess I've been thinking that since 2011 and every year I didn't think it would go anywhere was a mistake.

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I see Bitcoin as digital gold except that you can't do anything with it; that is, at least gold is used in things like jewelry, electronics, and food if you're a weirdo that eats gold. Stocks are digital too, but ownership of them is still tied to ownership in actual companies. For Bitcoin, I think it's too volatile to be used as an actual currency unless you're talking about its equivalent value to a traditional currency.

Simply put? I see it as more of a speculative asset. It has merits, but when it comes to it as an investment, I've always seen it as speculative.

Doesn't mean that I won't consider investing in it. Doesn't mean that I don't think it has potential to be a more serious form of exchange. But not right now.

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CoolCly posted...

But I guess I've been thinking that since 2011 and every year I didn't think it would go anywhere was a mistake.

I still hate myself for selling my 0.11 BTC I mined in 2011 for a buck that Mt. Gox never even gave me. If I kept it, I'd have 6k now.

That will, hopefully, always be my biggest regret when it comes to investments.

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IEAWW killing it, glad youre in on that STM. I feel like its too late to get in now, I guess Ill wait for a possible dip.

Zachnorn posted...

I see Bitcoin as digital gold except that you can't do anything with it; that is, at least gold is used in things like jewelry, electronics, and food if you're a weirdo that eats gold. Stocks are digital too, but ownership of them is still tied to ownership in actual companies. For Bitcoin, I think it's too volatile to be used as an actual currency unless you're talking about its equivalent value to a traditional currency.

Bitcoin has more practical value as a currency than gold. It's going to be a very important method of exchange when private banks refuse to process payments to individuals or groups that they find objectionable.

ChainLTTP posted...

Bitcoin has more practical value as a currency than gold. It's going to be a very important method of exchange when private banks refuse to process payments to individuals or groups that they find objectionable.

... Like gold

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masterplum posted...

... Like gold

Yes because it is very simple to mail someone gold for an online purchase

It sounds like you should just invest in Paypal

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Crypto is much easier to divide than gold.

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And for people who think crypto is purely imaginary, let me explain something about Facebook and Google. Both of these companies have another class of stock which is held by the founders and has super voting rights, such that the founders retain majority voting power. Because the founders can never be outvoted, even by someone who purchases all of the common stock on the market, the common stock effectively has no meaningful voting power.

So what does the common stock entitle you to? Well - you have the right to be paid dividends when the board decides to pay dividends. That is, the board can't pay dividends to some shareholders and not others. But wait, these companies have never paid dividends. Because their boards have never voted to pay them. And the boards are selected by the founders, who have majority voting power, forever.

So I ask you, what exactly is the value of FB or GOOG (or GOOGL) stock? No voting, no dividends....it seems to me like the only value is the value we collectively impute to it. Just like crypto.

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Hmm.. Mind Medicine (MMEDF / MMED.TO) is getting a bit low. It's the darling of WSB for psychedelic drug research and was one of the most commonly touted tickers there before GME

Earnings came out, they had a loss of $35 million and spent $24 in cash in 2020, so they are losing money. They have $85million in assets but $80 mil of it is cash, meaning they have pretty much no assets besides cash, with nothing being fruitful enough to capitalize as an intangible asset yet.

They have $161mil of cash today so they are certainly solvent for a while, but depending how long psychedelic research takes they may need to do an offering eventually

If they interest you, I think the warrants are heading out of the money, which would make them pretty decent if the price bounces back.

MMEDF(USD): $2.27

Below are all in CAD:

MMED.TO: $2.85
MMED.WT.TO: $2.05 ($0.79 to exercise, so $2.84 combined cost)
MMED.WS.TO: $1.75 ($1.40 to exercise, so $3.15 combined cost) (can probably bid for less and get)
MMED.WR.TO: $1.05 ($5.75 to exercise, so $6.80 combined cost)

I bought MMED.WS.TO at $2.26 and have seen it go up to $3-4 and down to $2 or under a few times so it seems like that might be a decent play of buying whenever it's low and selling when it gets higher as it follows the MMED.TO price.

WR is mega out of the money so be real careful with that one. It's not moving unless MMED moons.

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red sox 777 posted...

And for people who think crypto is purely imaginary, let me explain something about Facebook and Google. Both of these companies have another class of stock which is held by the founders and has super voting rights, such that the founders retain majority voting power. Because the founders can never be outvoted, even by someone who purchases all of the common stock on the market, the common stock effectively has no meaningful voting power.

So what does the common stock entitle you to? Well - you have the right to be paid dividends when the board decides to pay dividends. That is, the board can't pay dividends to some shareholders and not others. But wait, these companies have never paid dividends. Because their boards have never voted to pay them. And the boards are selected by the founders, who have majority voting power, forever.

So I ask you, what exactly is the value of FB or GOOG (or GOOGL) stock? No voting, no dividends....it seems to me like the only value is the value we collectively impute to it. Just like crypto.

now this is a sobering view behind the curtain

I need to start coming up with a model to determine actual value owning a stock has other than the imaginary value we are hoping other people collectively agree to place on it. Dividend yielding stocks are by far the easiest to value in comparison to stock price but there's certainly more....

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Im going super speculative with my $97k. Going for broke. Im going to research small companies that have news coming out, that have a very low floor.

Sunroof posted...

Going for broke.

I'll say!

Well Crypto vs Google/Facebook is somewhat accurate. They're both somewhat speculative, but ultimately it's all about what you're speculating on.

So you have Crypto which is mostly grounded by an ideal of independent money/payment system. It could go up and down based on how much traction or perceived traction the system has.

Facebook and Google are grounded by actual companies (and could eventually pay dividends) which report numbers for their profits and have a tangible effect on day to day living for many people.

I would say it's disingenuous to compare Crypto to them outright because you've got a lot more grounding for the base value of the companies than you do for bitcoin. It's impossible for google to go to 10% value without google going out of business, and that's a hard thing to imagine. Crypto would be more like if I dunno a small company that doesn't do earnings calls and it's not 100% sure what they actually are going to achieve long term or their profit margin is going to be-- like if say AVCT had two types of stocks, the value of the non-voting one would be sorta like bitcoin.

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The reason to own bitcoin is cause you think it's going to go up.

The reason to own a stock is cause you think its going to go up.

The main difference is the reasons they go up. Bitcoin goes up because other people think it's going to go up and are willing to buy it in the hopes it goes up.

Stock also has that same aspect but can also go up because the underlying company becomes more valuable.

The argument on Google/Facebook is dumb because there is still an underlying company. Not having voting power doesn't really matter because the company still has inherent value. Just because you may not want to wait for an eventual dividend doesn't mean others won't. What do you think is going to happen, the founders just let their shares ride forever and never make a dollar off it? No eventually they are going to pay themselves and the expectation is what keeps a stock valuable.

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So bitcoin is gold

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Gold that can't be transferred without an internet connection which is likely to happen in the Doomsday scenario that people say bitcoin will save them from

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DoomTheGyarados posted...

So bitcoin is gold

Basically, in more ways than one. From a practicality purpose other physical commodities may have more use but be less valuable.

BTC is similar, other coins have more practical applications but are less valuable.

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The founders can indeed hold their shares forever. If they have any material wants, they can authorize officer loans from the company to themselves, secured by some of their shares. That's actually better than paying dividends as they don't incur taxes. Alternately, they can award themselves stock options for their work in regular common stock and sell those. There is no need to ever pay dividends.

I mean I am not saying that FB and GOOG are that similar to crypto, just that there is a reality that valuation is largely based on collective imagination. Nothing wrong with that. It's how humans do things and perfectly rational too.

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But the point is you're not actually imagining anything with GOOG.

It's a product you use every day and it reports profit numbers and the like. The underlying company not currently paying a dividend doesn't mean what you have isn't backed by something with an inherent tangible value to it.

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I kinda don't think you guys understand the implication of what red sox is saying....

If a Facebook share costs $288, what is it that you actually acquire? In the hamster wheel we are all running on, it gives you a speculative asset that goes up or down based on what other people also think it's worth. If other people think it's worth $300, you can sell for a profit, if other people worth it's $250, you can sell for a loss. That's the inherent game we are playing, sure.

But when you step out of this speculative mindset, what's the *actual* value to you of owning that stock? What is ANY tangible benefit you have of owning it?

If you buy an Altria stock for $51, you can expect a dividend of $3.44 per year, which is 6.5% return. That means you have inherent value just for owing the stock. There's cash flow coming your way. It can go up or down because of expectations, but there is an inherent value that the price is tied to.

But what if there's no dividend? Is there still inherent value in owning Altria stock? Well... yes! If you buy enough, you can exert influence on the company, giving you control! You can decide what the company will do with it's business, and increase or decrease dividends. Now, *you* aren't going to do this, but the fact that it's possible and that business do buy significant shares, whether 8-20% just for significant influence, or 50%+ more for full control, means that your share has value in relation to control.

But... what if your share actually doesn't have control? No dividend, no control, no nothing, what *actual* value does your "ownership" give you? Is there anything beyond expecting that other people are assigning value to owning the share just because? If people start to value these kinds of ownership less, then the share price will go down, and there's not really tangible value to hold on to.

When you say there's a real company behind it, what does owning a common stock actually entitle you to if there's no dividend and you cannot ever exert control on that company? How is it realistically different from if I just wrote a piece of paper saying I own 0.001% of Facebook?

Looking into what red sox said, it looks like Class A shares that we can buy don't have *no* control, but it's 1 share to 1 vote, with 2.8billion shares outstanding, and Class B shares that Zuck has have 1 share to 10 votes. I don't know how many Class B's are outstanding, but an article says that Zuck has 75% of them and he has 58% of the vote. So it seems like Class A's don't offer much?

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red sox 777 posted...

they can authorize officer loans from the company to themselves, secured by some of their shares

This is a loan not a payout and has a high level of scrutiny

red sox 777 posted...

Alternately, they can award themselves stock options for their work in regular common stock and sell those

This is reliant on the share price being high which is reliant on the company's underlying value. If the companies underlying value would go up by having a dividend and it makes sense long term for the company the controlling interest will want to do it. At the end of the day if the company becomes more valuable the stock is worth more, a controlling party doesn't change that because it is always in their interest to make the stock worth more (maybe not in the short term but in the long term it is)

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Colegreen, could you define what you mean by underlying value?

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Colegreen_c12 posted...

Stock also has that same aspect but can also go up because the underlying company becomes more valuable.

Gamestop?

CoolCly posted...

Colegreen, could you define what you mean by underlying value?

Theres a lot that goes into it
If you want to look purely at current value you can look at current assets, current liabilities, value of the brand.
If you want to look at what people actually consider you look at the above plus their revenue numbers as well as their gross profit.
If you want to look even further you look at other factors such as management team, expectations of growth/decline etc.

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