All things STOCKS

[Thunder Good-Oil]

CrowdStrike and Palantir would make an interesting merger of equals. But founders’s egos probably prevents that from ever happening.

 

[Velo Vol]

Yes. Live out in the country. They are very handy for the occasional forgotten item.

I don't often shop there but it's something they can be so profitable with small stores.

 

[Velo Vol]

Hard to figure the next few months. The S&P is almost back to the last August high. If it were to surge beyond that, bullish?

On the other hand, technicals (especially the big tech) say we're quite overbought at the moment. And it's hard to believe there won't be a recession in the next 6-12 months.

 

[Thunder Good-Oil]

Hard to figure the next few months. The S&P is almost back to the last August high. If it were to surge beyond that, bullish?

On the other hand, technicals (especially the big tech) say we're quite overbought at the moment. And it's hard to believe there won't be a recession in the next 6-12 months.

Correct in the “big” tech. Take the biggest 5 of 8 out of the returns and the indexes are far less impressive.

Do like Buffett. Buy good companies with good management. Industry leaders. Look for good share prices but don’t let that be the overriding factor.

There are a lot of good names with PEs around 10x.

FOMO might be the dangerous approach to take for near term returns. NVDA? AAPL? MSFT? ASML? ORCL?

 

[Thunder Good-Oil]

NUE 5.55x
C 6.5x
MLI 6.55x
OXY 6.56x
XOM 7.16x
PXS 7.2x
USB 8.42x
BAC 8.6x
EMR 10.1x
JPM 10.2x
URI 11.6x
DE 12.2x
UPS 13.6x
CCK 16.3x
CAT 16.4x

 

[Jax_Vol]

I don't often shop there but it's something they can be so profitable with small stores.

Yes. They found a clever niche among the "hate to go to Wal-Mart because it is so big" crowd.

Wal-Mart has solved some of that with their self scanning systems.

But, in the smaller rural counties...we have like 14-15 Dollar General stores per county. They place them in the small little old traditional communities.

Mostly, very cheap products. Minimal building structure, low staffing, very few employees with benefits, tight aisles crammed with all the very basic items. They don't gouge you on prices for the convenance versus a traditional country mom and pop type store...now days owned mostly by families with either Asian or India roots.

 

[Thunder Good-Oil]

I think that Dollar General has benefited from Walmart. Walmart has forced thousands of small stores out of business. Then they’ll often move out of their massive buildings leaving a great opportunity for DG stores to fill in the area no longer being serviced by any stores.

They also aren’t as threatened being in proximity of the massive Walmart stores. When somebody needs ice, an extension chord, a can of bean dip, some Diet Rites, some Marlboro Lights, some celery, a bag of lemons, a can of fake snow, and a box of tampons and they don’t want to walk 3 miles inside of a Walmart they can instead park at the front door of the DG.

 

[Thunder Good-Oil]

Palantir (PLTR) has doubled in about a month. They could double again and still not reach their share price a little over 2 years ago. But they aren’t quite profitable and sell for almost 20x sales ($30B market cap). Sales are growing at 25% however and I wouldn’t think that their marginal cost as sales grow would be extensive.

 

[Thunder Good-Oil]

DG also sells stuff that might not be as threatened by Amazon competition. When you’re out of toilet paper or Cheese Whiz you may not want to or can’t wait on UPS to drop off the box.

 

[Jax_Vol]

Palantir (PLTR) has doubled in about a month. They could double again and still not reach their share price a little over 2 years ago. But they aren’t quite profitable and sell for almost 20x sales ($30B market cap). Sales are growing at 25% however and I wouldn’t think that their marginal cost as sales grow would be extensive.

Prior to the IPO, their CEO said that they may never be profitable.

They are interesting, and a very bright bunch. The work on Operation Warp Speed was good. Just a roller coaster of up and downs with stock. If u got the stomach for it, take the ride. Last time I played about caused me a heart-a-stroke.

 

[Thunder Good-Oil]

Prior to the IPO, their CEO said that they may never be profitable.

They are interesting, and a very bright bunch. The work on Operation Warp Speed was good. Just a roller coaster of up and downs with stock. If u got the stomach for it, take the ride. Last time I played about caused me a heart-a-stroke.

I’m being lured into selling covered PLTR calls. But (in general) I’ve been too late attempting to place those orders or too early and have had shares called away and missed run ups. Selling cash reserved puts has been much easier (other than occasionally missing owning shares that take off). You can make 5% plus selling late June PLTR options right now.

 

[Jax_Vol]

I’m being lured into selling covered PLTR calls. But (in general) I’ve been too late attempting to place those orders or too early and have had shares called away and missed run ups. Selling cash reserved puts has been much easier (other than occasionally missing owning shares that take off). You can make 5% plus selling late June PLTR options right now.

PLTR really moves. Good one to play, as long as you have the time to stay on top of it.

On a different front, LLY and NVO in a race to become first $1T med company.

Turns out, getting the weight off solves a lot of other issues.

 

[Thunder Good-Oil]

PLTR really moves. Good one to play, as long as you have the time to stay on top of it.

On a different front, LLY and NVO in a race to become first $1T med company.

Turns out, getting the weight off solves a lot of other issues.

Since I almost exclusively open with a short side position, I really don’t need to watch the session closely. I set buy limits well above the ask. I do have to check before markets open since the ask can quickly move well above my limit. But I usually set my limits and only check a few times per day.

 

[Thunder Good-Oil]

After I’m short I’ll typically set buy to close limits about 75% below my cost. If the expiration is only a couple of days out and the options are well out of the money, I might get greedy and cancel the buy limit order entirely.

I’ve been trading almost exclusively with 1-3 weeks left on contracts. I havent gone crazy with the order sizes either. I like to hold back some capital when shorting puts and prefer to hang on to at least half of my winners if selling covered calls.

 

[Thunder Good-Oil]

75% of the time, before I put on an order to short a cash reserved put or a covered call, my first decision is do I want to buy the shares at the current price (for the puts) and would I like to jettison the shares at the current price (with the covered calls).

The rest of the time it’s pure speculation and I’d prefer to not be assigned the shares or have them called away. If assigned, I’ll try to complete a wheel trade with the puts. With covered calls being called away, I’m only going to put the stock on a watch list as they rarely retreat to my selling price quickly.

If the economic environment improves significantly I might try to buy some calls to open positions. I’m not comfortable buying puts right now, but that might be the best trade until our public officials figure out how to not be idiots.

 

[Jax_Vol]

75% of the time, before I put on an order to short a cash reserved put or a covered call, my first decision is do I want to but the shares at the current price (for the puts) and would I like to jettison the shares at the current price (with the covered calls).

The rest of the time it’s pure speculation and I’d prefer to not be assigned the shares or have them called away. If assigned, I’ll try to complete a wheel trade with the puts. With covered calls being called away, I’m only going to put the stock on a watch list as they rarely retreat to my selling price quickly.

If the economic environment improves significantly I might try to buy some calls to open positions. I’m not comfortable buying puts right now, but that might be the best trade until our public officials figure out how to not be idiots.

That is a good strategy.

What brokerage firm do you use?

With Vanguard and/or Fidelity. the interest fees and such would simply carve me up if I tried that system. And, they also send nasty letter / call about being a day-trader. However, once I enter retirement, I might try another brokerage firm that doesn't suck the life out of you for having a margin account.

 

[mrorange211]

there is the most short exposure in the market today since 2007 apparently. Vix is also at a low. I think it might be a good time to bail for a bit.

 

[Thunder Good-Oil]

That is a good strategy.

What brokerage firm do you use?

With Vanguard and/or Fidelity. the interest fees and such would simply carve me up if I tried that system. And, they also send nasty letter / call about being a day-trader. However, once I enter retirement, I might try another brokerage firm that doesn't suck the life out of you for having a margin account.

Fidelity, Schwab, eTrade, and Ameritrade. I’m not close to being a pattern day trader. That would be about 20 trades a week.

I need to check to make sure that I’m still earning interest on cash set aside as collateral on cash reserves put sales. Some of the less established brokers don’t. I don’t think that RobinHood and maybe TastyWorks pay interest on the collateralized cash once you’re short the put.

I also haven’t noticed being charged interest on options I’ve sold. That’s something else I need to investigate.

 

[Velo Vol]

The lagging Russell 2000 (IWM) has made a nice little run. Rotation away from some of the big tech? Is there still upside?

I wish I knew.

IWM versus S&P this year.

 

[Velo Vol]

The Druck interviewed today.

 

[Velo Vol]

there is the most short exposure in the market today since 2007 apparently. Vix is also at a low. I think it might be a good time to bail for a bit.

It is?

 

[Firebirdparts]

I don't often shop there but it's something they can be so profitable with small stores.

I lived through the demise of country stores, and I think how they solved the problems of country stores was all on the supply side. 50 years ago, these old stores were on a supply route with generally a guy for each brand. So one guy for coca-cola, another guy for hershey's, and another guy for Toms, another for little debbie and another guy for Fla-vo-Rich and if they came down the road 3 days a week, you might have an order of $10 for each guy. Once people had sufficient mobility, you can no longer cover all that distribution expense. 30 or 40 years ago I saw Virgil McMurray in a grocery store 15 miles from his own store buying milk and bread to resell. It was cheaper for him to go get it. I think DG has a better supply chain and bigger stores, main differences.

I have to think that they'll continue to do well with existing stores, but it seems like the growth boom ought to be over. I did no research on them. I am an enthusiastic customer, but there's no way I'm going to buy more next year than I did last year from them unless I have to walk to the store. Given the stock was at $250-ish, you could take the view that it's "low" and cyclical, but I don't know that I'd take that view. "Fair value" gauges on the web show it about at fair value. Maybe they'll expand into China.

I was always scared of retail. I'd get into Fidelity's screener, it would say Fidelity Select Retail was really making bank. I'd just scratch my head. I guess they held a lot of amazon, I don't know. Just scares me. We mail order everything.

 

[Firebirdparts]

The lagging Russell 2000 (IWM) has made a nice little run. Rotation away from some of the big tech? Is there still upside?

I wish I knew.

IWM versus S&P this year.

View attachment 555491

I wish I could predict something. As you all probably know, semiconductors have about doubled in 6 months. Did anybody predict that? I didn't.

But in the meantime, I"ve rotated into a bunch of micro cap value stocks with my play money. They are crazy volatile. So my problem there is knowing when to sell. If they go up 20% and I sell them, they may go up 100% after that. The P/E's of the stuff I hold in my play money now is like 2.

For the real money, in my 401k and such, I have about 25% Midcap and "extended market" index. If they are cap weighted, these funds don't get affected by small caps. The midcap fund I have is actively managed.

 

[Thunder Good-Oil]

I lived through the demise of country stores, and I think how they solved the problems of country stores was all on the supply side. 50 years ago, these old stores were on a supply route with generally a guy for each brand. So one guy for coca-cola, another guy for hershey's, and another guy for Toms, another for little debbie and another guy for Fla-vo-Rich and if they came down the road 3 days a week, you might have an order of $10 for each guy. Once people had sufficient mobility, you can no longer cover all that distribution expense. 30 or 40 years ago I saw Virgil McMurray in a grocery store 15 miles from his own store buying milk and bread to resell. It was cheaper for him to go get it. I think DG has a better supply chain and bigger stores, main differences.

I have to think that they'll continue to do well with existing stores, but it seems like the growth boom ought to be over. I did no research on them. I am an enthusiastic customer, but there's no way I'm going to buy more next year than I did last year from them unless I have to walk to the store. Given the stock was at $250-ish, you could take the view that it's "low" and cyclical, but I don't know that I'd take that view. "Fair value" gauges on the web show it about at fair value. Maybe they'll expand into China.

I was always scared of retail. I'd get into Fidelity's screener, it would say Fidelity Select Retail was really making bank. I'd just scratch my head. I guess they held a lot of amazon, I don't know. Just scares me. We mail order everything.

DG has a massive distribution system. Maybe about 2 dozen centers.

I’d wonder how the stock compares to the consumer staples indexes and funds. Their inventory mix might be mainly must have items. Maybe not too much discretionary or durables.

Tractor Supply fills that void in the smaller markets like DG.

There’s a good sized moat around DG’s business. Serving areas that Walmart and Target don’t care about. They have the scale to be a tough negotiator with vendors. Their customer base is going to keep coming in good times and bad.

 

[Thunder Good-Oil]

I wish I could predict something. As you all probably know, semiconductors have about doubled in 6 months. Did anybody predict that? I didn't.

But in the meantime, I"ve rotated into a bunch of micro cap value stocks with my play money. They are crazy volatile. So my problem there is knowing when to sell. If they go up 20% and I sell them, they may go up 100% after that. The P/E's of the stuff I hold in my play money now is like 2.

For the real money, in my 401k and such, I have about 25% Midcap and "extended market" index. If they are cap weighted, these funds don't get affected by small caps. The midcap fund I have is actively managed.

I don’t like micro caps at all. They not only have to break out versus better capitalized competition, but when they do, when do the founding CEOs controlling the votes (and the boards) not enrich themselves first instead of the public shareholders? There doesn’t seem to be any enforcement of fiduciary laws at any level and the SEC certainly won’t put much effort into going after the entities that can’t deliver them substantial penalties.

I like to see high institutional ownership of public companies..