All things STOCKS

#1,304
#1,304
This looks a lot like 2008 . A few downs and some ups. It could get bad, although I doubt as bad as 2008.
2008 had crooks and lack of corporate regulation.
This one has a partial collapse of globalization.
 
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#1,306
#1,306
Thunder Good-Oil said:
MGPI also is a supplier to Diageo. Growing that relationship would be highly lucrative. There's probably some good stuff in their SEC filings.
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Thunder - since I first asked about MGPI in Jan, they are way down from around 45 to 28. Some of it was disappointing sales of bourbon, some coronavirus and some due to this:

Glancy Prongay & Murray LLP Announces the Filing of a Securities Class Action on Behalf of MGP Ingredients, Inc. (MGPI) Investors

What is your opinion on class action suits saying the company was misleading in regards to earnings? Do these things win? Personally, I am ready to buy because as you mentioned, sin is usually a good long term investment and I see no reason why coronavirus should long term affect sales of bourbon. In fact, I've been drinking more since coronavirus hit the fan!
 
#1,307
#1,307
OldandStillaVol said:
Thunder - since I first asked about MGPI in Jan, they are way down from around 45 to 28. Some of it was disappointing sales of bourbon, some coronavirus and some due to this:

Glancy Prongay & Murray LLP Announces the Filing of a Securities Class Action on Behalf of MGP Ingredients, Inc. (MGPI) Investors

What is your opinion on class action suits saying the company was misleading in regards to earnings? Do these things win? Personally, I am ready to buy because as you mentioned, sin is usually a good long term investment and I see no reason why coronavirus should long term affect sales of bourbon. In fact, I've been drinking more since coronavirus hit the fan!
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I think that those predatory law firms are a scourge. Investors will get squat if that. There might be more than a dozen of them already on the case using our legal system to profit on what's most likely baseless accusations. That being said, MGPI is pretty small with just a $500 million market cap. The legal costs if they fight could bankrupt them. But the price drop could be what the professional traders have calculated as the likely exposure that they'll probably have to pay the law firms to make them go away. I'd check to see how much debt they carry before jumping in. The CEO could be fired if he/she made unreasonable claims and those moves usually put even more pressure on the stock's price. Most important factor of all is: how are the (revised) revenues doing and is the stock price to revenue multiple reasonable for their industry?

It's the kind of situation that can make believers a lot of money, BUT getting good information on small cap companies can be challenging as well. Anybody making a big bet on it should do a lot of research. Analysts covering the company (if there are any) could offer well informed opinions. I see 13 news releases from law firms but no updates from analysts in the last 2 days on the news feed on my archaic phone.
 
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#1,321
#1,321
I've said it before, and I'll say it again. My exposure to gold and silver have prevented my portfolio from getting absolutely decimated. Now money is flowing into the treasuries markets, but just like precious metals, you're paying a very high premium at the moment. Being in cash is probably the best option at the moment.

I'm long Clorox and several speculative vaccine plays. Most of my plays however are short. Instead of buying expensive SPY puts, I bought SH calls and shares. SH is a non-leveraged ETF that you can hold overnight, unlike most of the Bear ETFs that are 2x or 3x leveraged. I'm also shorting travel stocks, RCL and AAL. Major opportunity to short the financial sector as well. I'll be keeping my eyes open for new shorting opportunities. There's still a ton of downside from a technical perspective. Your historical resistance on the SPX, that you're hoping acts as support if you're long, is right around 2800.
 
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#1,322
#1,322
GoVolsDR said:
I've said it before, and I'll say it again. My exposure to gold and silver have prevented my portfolio from getting absolutely decimated. Now money is flowing into the treasuries markets, but just like precious metals, you're paying a very high premium at the moment. Being in cash is probably the best option at the moment.

I'm long Clorox and several speculative vaccine plays. Most of my plays however are short. Instead of buying expensive SPY puts, I bought SH calls and shares. SH is a non-leveraged ETF that you can hold overnight, unlike most of the Bear ETFs that are 2x or 3x leveraged. I'm also shorting travel stocks, RCL and AAL. Major opportunity to short the financial sector as well. I'll be keeping my eyes open for new shorting opportunities. There's still a ton of downside from a technical perspective. Your historical resistance on the SPX, that you're hoping acts as support if you're long, is right around 2800.
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You're getting short travel stocks today, or you have been short?

CCL, for example, is down 68% from its most recent high. RCL 62%. AAL has been cut in half over the last 3 weeks. How much bad news do you suppose is already priced in? Now, I don't necessarily think those stocks are going to bounce right back, but how much more downside is there really? For me to get short at these prices, I'd have to think they were going near bankruptcy, if not bankrupt outright.

I do ultimately agree with you though that if we fall much further, there probably is too much technical damage done and people hoping for a quick snapback once the virus breaks will be disappointed.
 
#1,323
#1,323
05_never_again said:
You're getting short travel stocks today, or you have been short?

CCL, for example, is down 68% from its most recent high. RCL 62%. AAL has been cut in half over the last 3 weeks. How much bad news do you suppose is already priced in? Now, I don't necessarily think those stocks are going to bounce right back, but how much more downside is there really? For me to get short at these prices, I'd have to think they were going near bankruptcy, if not bankrupt outright.

I do ultimately agree with you though that if we fall much further, there probably is too much technical damage done and people hoping for a quick snapback once the virus breaks will be disappointed.
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I've been short travel stocks. That's one of the first sectors that suffers during broader economic downturns, and they're often loss leaders since vacations and travel are the first thing that consumers stop spending money on. Business travel has been dramatically affected as well, with most businesses having some level of both domestic and international travel restrictions. Corona is at the point now where as a black swan event, the market's inability to effectively price-in information is what leads to this massive volatility we've seen over the past several weeks. It's only a matter of time before the VIX hits triple digits. That's another market that traders can get in on if you're looking to play this market.

Ultimately, no one truly knows when the market is going to hit it's bottom. With the outflow of money into treasuries and other safe haven assets, that's not a good case for the bulls. I am not buying this dip, and I have a high level of risk tolerance. I'm waiting until the market has extremely oversold conditions, with there being some kind of bullish Japanese candlestick formation and/or some kind of bullish wave or harmonic pattern. There's not going to be some kind of V-shaped recovery. The macro is just too bearish to expect any kind of recovery that bring us back to SPX and DOW all time high's. If there's going to be some kind of recovery, it's going to be a U-shaped recovery that takes place over weeks or even months.
 
#1,324
#1,324
05_never_again said:
You're getting short travel stocks today, or you have been short?

CCL, for example, is down 68% from its most recent high. RCL 62%. AAL has been cut in half over the last 3 weeks. How much bad news do you suppose is already priced in? Now, I don't necessarily think those stocks are going to bounce right back, but how much more downside is there really? For me to get short at these prices, I'd have to think they were going near bankruptcy, if not bankrupt outright.

I do ultimately agree with you though that if we fall much further, there probably is too much technical damage done and people hoping for a quick snapback once the virus breaks will be disappointed.
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What's the best way to become a millionaire? Start off as a billionaire and buy stock in an airline.

I think the cruise lines might be a going concern now. Without looking at their BS, I dont know how they'll avoid BK.

The airlines should be good with low oil helping (Southwest should do well) but those carriers with intl/business traveler exposure may have more room to fall

At some point, I might look at Hilton, Marriott, or a casino stock that has been beaten up.
 
#1,325
#1,325
I don't know of a name, but if there's a public company that sells cancellation insurance for airlines that would be a prime short candidate. I don't know how that works though. Perhaps travel agencies and airlines offer that insurance as an add on fee rather than it being a true insurance product. I would imagine that there are a lot of travel plans being cancelled right now.

I would think that Live Nation is under pressure. Same with Churchhill Downs or any place that has big exposure through venues. Again, most likely they've all been under pressure. Not sure if they're still public, but Dover Downs, International Speedway... I think that Speedway Motorsports has already been taken private.

Hedge fund operators should be primed to exploit the carnage. SCU anybody? Private equities should also be finding robust shopping lists.

Something else virus related to consider:
Stericycle (SRCL). The coronavirus panic is surely creating a larger stream of medical waste. It helps if the procedure in HC facilities is to include all of the spent disposable masks into the red hazmat bags. But their contracts might not have much of a variable revenue component for the volume of materials removed. If they're flat rates any possible increase in volume might actually be expense side only.
 
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