All things STOCKS

[@1RBFjr]

So LOT is actually the EV division of LOTUS, which went public back in Feb. When I bought in late March, it seemed like it was discounted fairly well from it's IPO so I took a chance on it. I was up about 35% before the price hit my the new SL I had just entered that morning. Obviously I missed the rest of the run up though which irks me, but considering it's a penny stock I wasn't taking any chances.

I’m glad you had a profit.

I also didn’t realize it’s EVs.
British car + electrics = probable reliability issues
or the old joke, Lots Of Trouble Usually Serious

Again, I’m glad you made some money. I’m just getting a chuckle out of a British EV car stock.

 

[Carp]

I’m glad you had a profit.

I also didn’t realize it’s EVs.
British car + electrics = probable reliability issues
or the old joke, Lots Of Trouble Usually Serious

Again, I’m glad you made some money. I’m just getting a chuckle out of a British EV car stock.

Technically, it's a company in China that is manufacturing these under the Lotus brand.

 

[Firebirdparts]

Yikes. I guess you can manufacture anything if you have enough money, but making things at a profit hasn't worked out well in the UK. Even without the current "Labour" government.

 

[Go aeiou]

I’m glad you had a profit.

I also didn’t realize it’s EVs.
British car + electrics = probable reliability issues
or the old joke, Lots Of Trouble Usually Serious

Again, I’m glad you made some money. I’m just getting a chuckle out of a British EV car stock.

Yep had an Austin Healy 3000(1961) in 1969. The electric fuel pump would go out while driving it. It was easily accessible from the interior of the car by lifting a cover between the seats. you could also see the drive shaft and the road. Just give it a couple of taps with a small hammer, and it would start clicking(pumping) fuel again.

 

[@1RBFjr]

Yep had an Austin Healy 3000(1961) in 1969. The electric fuel pump would go out while driving it. It was easily accessible from the interior of the car by lifting a cover between the seats. you could also see the drive shaft and the road. Just give it a couple of taps with a small hammer, and it would start clicking(pumping) fuel again.

Within the past two weeks I have felt that exact pain in a British car

 

[Go aeiou]

Within the past two weeks I have felt that exact pain in a British car

Ha, I guess some things never change.

 

[InVOLuntary]

If you have more than 10-25% of your investment capital in NVDA (or any single stock) don’t pour in more. Too much risk.

Home - Unique ETFs that divide the S&P 500 into 11 sectors | Select Sector SPDRs

www.sectorspdrs.com

XLV, XLE, XLI, and XLB should do well no matter which party is elected.

VOO by Vanguard is a very efficient ETF that is tracking the S&P 500. The Vanguard VTI adds equities smaller than those in the S&P 500 and is another great option. Vanguard has very low management fees and those investments can be bought through any broker (Schwab, Fidelity, E-trade, etc).

Trading is an entirely different animal. Those ETFs outlined above are good to buy and hold. For the short term, GEHC was knocked down today and the demographics work really well in the healthcare sector for long term as well.

UPS is way off of their highs and looks like it might have bottomed out. Their trucks drive by my house EVERY day. AMZN is a game changer that won’t be going anywhere.

AI still has great long term prospects, but with such a huge move equities might struggle to outperform the averages over the next several years. NVDA. MSFT. FB. AAPL has been taking their time getting highly involved.

I think that AAPL is a great stock and company. So is HD. And AMZN. GOOGL isn’t a slam dunk like it used to be. TSLA is pricey, but is still worth buying on pullbacks. UBER as well. The Boomers are a huge demo and can extend their independence in their old age with AVs. Plus a whole lot of millenials and Zoomers have embraced embraced autonomous vehicles.

Defense (military), especially of the high tech type, have a lot of business that isn’t going to slow down as long as the world is going nuts. RTX, LMT, PLTR.

Thanks for this. I do have a large percentage of my holdings in a stock. It's DOV. I worked for them back many moons ago and they matched dollar for dollar with their stock. It's always been a decent stock and had periods of growth. Split several times. They've even split off companies they've owned and gave me stock in those companies (which have been average at best). I never had them reinvest dividens and had them placed in cash. When I built up a few thousand id but something else. I'll look at your suggestions and probably make a purchase soon. Thanks again.

 

[Thunder Good-Oil]

Thanks for this. I do have a large percentage of my holdings in a stock. It's DOV. I worked for them back many moons ago and they matched dollar for dollar with their stock. It's always been a decent stock and had periods of growth. Split several times. They've even split off companies they've owned and gave me stock in those companies (which have been average at best). I never had them reinvest dividens and had them placed in cash. When I built up a few thousand id but something else. I'll look at your suggestions and probably make a purchase soon. Thanks again.

The ETFs that follow the major stock averages seem like your best options if you want to be in equities. VTI or VOO are especially good choices. Or a couple of those SPDR ETFs in the above link if you feel good about a specific sector. Healthcare for example has lagged a bit but has really good long term prospects (assuming that the government doesn’t get overly involved with more regulations or HC reform). With interest rates still expected to fall the XLE and XLU (energy and utilities) sectors could do well.

The gains in the S&P 500 has been overweighted to the very largest company components. Like NVDA and the other 6 in the Magnificent 7. The Invesco S&P 500 Equal Weight ETF (symbol RSP) might be appropriate until the other 493 stocks in the S&P catch up a bit to the NVDAs, AMZNs, MSFTs, FBs, etc. RSP is equal weighted and has a very good 0.2% expense ratio and it is a good sized fund ($54 billion). Then switch from RSP to VTI or VOO in a year or 2 if those smaller components do in fact outperform the bigger components for several quarters or a year or two. RSP: Invesco S&P 500 Equal Weight ETF.

The large ETFs with billions of assets under management are easier to get out of (less risky) without the bottom falling out of the securities. Thinly traded small funds can be difficult to sell without taking big losses in down markets.

If you are overweighted in NVDA but want to stay exposed to that type of newer, tech-ish industry then switching some of your investment capital over to the QQQ ETF is a reasonable approach. But taxes that would be owed if capital gains were harvested when selling a winning stock need to be considered.

It’s a little more sophisticated investment strategy, but selling covered CALL options on a highly appreciated holding is way way to pull out some cash. You’re basically selling off potential upside in the underlying security (the shares that you own) and the risk is that if the stock pops a lot higher you’ll miss out on participating. A caveat is that when selling covered call contracts on stocks/ETFs that you own, your holdings need to been in round lots of 100 shares. So if it’s a $500/share stock you’d have to have $50,000 already invested in that single stock. But if somebody held 100 shares of a $10 stock, selling each covered call contract only requires having a $1,000 investment in those shares. Ford (F) for example is around that $10/share threshold.

 

[InVOLuntary]

I've got about 8% in NVDA and 9% in Netflix.

I've actually got an inherited IRA from when my dad passed a couple of years ago. It wasn't much, about $32,000. I decided to defer the tax in hopes to investing to offset the taxes. I moved it into my self directed brokerage account. I purchased about $10K in NVDA and $10K of Netflix this past summer. The account has about $35000 in it now. It's my understanding I have 10 years to pull it out. Maybe you can offer an answer. I'm waiting on my accountant to get back with me. Do I have to pull some out every year can I wait until the end of the 10 year period? Did the clock start when my dad passed or when I took possession?

 

[Thunder Good-Oil]

I've got about 8% in NVDA and 9% in Netflix.

I've actually got an inherited IRA from when my dad passed a couple of years ago. It wasn't much, about $32,000. I decided to defer the tax in hopes to investing to offset the taxes. I moved it into my self directed brokerage account. I purchased about $10K in NVDA and $10K of Netflix this past summer. The account has about $35000 in it now. It's my understanding I have 10 years to pull it out. Maybe you can offer an answer. I'm waiting on my accountant to get back with me. Do I have to pull some out every year can I wait until the end of the 10 year period? Did the clock start when my dad passed or when I took possession?

I don’t know the tax answer but @BigOrangeMojo would know and maybe @Go aeiou would as well. The underlying IRS rule would be the required minimum distribution and if you delay or not withdraw enough they will hit you with their penalties. I inherited an annuity and had to begin withdrawing immediately. I take out the minimum and hope it continues to grow faster than my draw downs reduce the account’s value.

I wouldn’t add to anything that is 10% or more of a portfolio and would look hard at selling some of an investment that has grown to 20-25% or more of a portfolio’s total value. Speculators on the other hand will often take on the risk of being overly concentrated in just a few investments.

 

[BigOrangeMojo]

I've got about 8% in NVDA and 9% in Netflix.

I've actually got an inherited IRA from when my dad passed a couple of years ago. It wasn't much, about $32,000. I decided to defer the tax in hopes to investing to offset the taxes. I moved it into my self directed brokerage account. I purchased about $10K in NVDA and $10K of Netflix this past summer. The account has about $35000 in it now. It's my understanding I have 10 years to pull it out. Maybe you can offer an answer. I'm waiting on my accountant to get back with me. Do I have to pull some out every year can I wait until the end of the 10 year period? Did the clock start when my dad passed or when I took possession?

Assuming that it is a Traditional IRA, that you are not disabled, and that your dad died after 2019, that he was old enough to take RMDs, you are technically supposed to take RMDs based on his life expectancy in Y1-9 after his death and drain any remaining amount in Y10. (I.e., if he died on June 1, 2024, you would take RMDS in 2025-2033 and drain rest by 12/31/34)

With all that being said, the IRS under the Biden admin has been extremely slow in issuing final guidance and they havent forced RMDs for inherited IRAs for those who died in 2020 or later since they have granted waivers. I expect you will have to start taking RMDs by 2025. Nothing is stopping you from taking now if you want to.

I do not know your exact plans, retirement age, etc so Id strongly recommend speaking with your CPA who knows your facts better than me. Rates may go up in 2026 as well.

I included this from Schwab and you can refer to 2024-35 for RMD waiver info for 2024

Charles Schwab

 

[InVOLuntary]

Assuming that it is a Traditional IRA, that you are not disabled, and that your dad died after 2019, that he was old enough to take RMDs, you are technically supposed to take RMDs based on his life expectancy in Y1-9 after his death and drain any remaining amount in Y10. (I.e., if he died on June 1, 2024, you would take RMDS in 2025-2033 and drain rest by 12/31/34)

With all that being said, the IRS under the Biden admin has been extremely slow in issuing final guidance and they havent forced RMDs for inherited IRAs for those who died in 2020 or later since they have granted waivers. I expect you will have to start taking RMDs by 2025. Nothing is stopping you from taking now if you want to.

I do not know your exact plans, retirement age, etc so Id strongly recommend speaking with your CPA who knows your facts better than me. Rates may go up in 2026 as well.

I included this from Schwab and you can refer to 2024-35 for RMD waiver info for 2024

Charles Schwab

Thanks for this. I'm 61. My dad died in January 2022. It was with MetLife. I didn't take possession of my 1/3 (2 siblings) until January 2024. I rolled it into a Schwab account. I've not taken any withdrawals but I have invested about 2/3 and it's made me about 10% ytd. If I had my choice I would leave it until I retired. I'm waiting for a call from my accountant to get some direction.

 

[BigOrangeMojo]

Thanks for this. I'm 61. My dad died in January 2022. It was with MetLife. I didn't take possession of my 1/3 (2 siblings) until January 2024. I rolled it into a Schwab account. I've not taken any withdrawals but I have invested about 2/3 and it's made me about 10% ytd. If I had my choice I would leave it until I retired. I'm waiting for a call from my accountant to get some direction.

My gut would be to leave it as much as possible (after taking RMDs) until retired to take advantage of lower tax rates at retirement.

If you are not maxing out your personal IRAs now, you can always use the proceeds from the RMD to max out a traditional or Roth IRA (Depends on income limits, which your CPA should be aware of).

 

[Thunder Good-Oil]

Thanks for this. I'm 61. My dad died in January 2022. It was with MetLife. I didn't take possession of my 1/3 (2 siblings) until January 2024. I rolled it into a Schwab account. I've not taken any withdrawals but I have invested about 2/3 and it's made me about 10% ytd. If I had my choice I would leave it until I retired. I'm waiting for a call from my accountant to get some direction.

Schwab won’t give you tax advice, but they can help you determine what your RMD should be and you ought to make that withdrawal before the 2024 window closes unless your CPA has differing advice.

 

[Go aeiou]

I don’t know the tax answer but @BigOrangeMojo would know and maybe @Go aeiou would as well. The underlying IRS rule would be the required minimum distribution and if you delay or not withdraw enough they will hit you with their penalties. I inherited an annuity and had to begin withdrawing immediately. I take out the minimum and hope it continues to grow faster than my draw downs reduce the account’s value.

I wouldn’t add to anything that is 10% or more of a portfolio and would look hard at selling some of an investment that has grown to 20-25% or more of a portfolio’s total value. Speculators on the other hand will often take on the risk of being overly concentrated in just a few investments.

Sorry, not my field, and I've been retired for 10 years.

 

[BigOrangeMojo]

A red flag is operating income per income statement for 2024 thru Q3 (922M of income) far deviates from cash flows from operating activities (1.85 billion loss)....

Its not a bad valuation if their financials are accurate as TGO pointed out. I just have major concerns on accuracy.

And SCMI's auditor quit today......

Down 35%

 

[Thunder Good-Oil]

And SCMI's auditor quit today......

Down 35%

Ouch! It’s never a good look when the outside accountants bail out.

But maybe it’s capitulation or close to it. It would almost take a massive fraud to pull it down much more. I don’t know how much of a stranglehold the insiders have over governance, but shares could rally hard if they are replaced.

Unless their sloppiness has also infected the mfg/design/engineering side as well, they still sell a product that is in extremely high demand.

I’m putting it back on my radar. I haven’t thought about them for several weeks now.

 

[Thunder Good-Oil]

Sorry, not my field, and I've been retired for 10 years.

My bad. I thought that you were an accountant. I was a CPA in a previous life but didn’t practice so I’m not a tax or audit type.

 

[BigOrangeMojo]

Ouch! It’s never a good look when the outside accountants bail out.

But maybe it’s capitulation or close to it. It would almost take a massive fraud to pull it down much more. I don’t know how much of a stranglehold the insiders have over governance, but shares could rally hard if they are replaced.

Unless their sloppiness has also infected the mfg/design/engineering side as well, they still sell a product that is in extremely high demand.

I’m putting it back on my radar. I haven’t thought about them for several weeks now.

The question is how bad are the financials. No doubt they are fraudulent, its just a question of how fraudulent they are. It's never a good sign when you let go of a 20 year auditor and the new firm quits the first year.

My gut is they have overrecorded revenue to show more growth than exists in reality because of stale (relative to competitors) inventory.

My gut is Deloitte wouldnt let them be aggressive in recording revenue, they auditor shopped, and EY came in and caught SCMI trying to pull the wool over their eyes.

There is a floor here since it does generate operating cash flow. I dont know if it is $32 or $20....

 

[Go aeiou]

My bad. I thought that you were an accountant. I was a CPA in a previous life but didn’t practice so I’m not a tax or audit type.

I was also a CPA. Practice was limited to auditing manufacturing companies(mostly tax). I think I have seen it all there. Quit that to develop real estate, and do the needed earthwork to build the roads, lakes, etc. Also did that for other developers. Quit that to help start a bank. Was a board member. Bank is 25 years old now.
I get bored easily and move on. Haven't moved on from retirement. Ha, Next is---.

 

[Thunder Good-Oil]

The question is how bad are the financials. No doubt they are fraudulent, its just a question of how fraudulent they are. It's never a good sign when you let go of a 20 year auditor and the new firm quits the first year.

My gut is they have overrecorded revenue to show more growth than exists in reality because of stale (relative to competitors) inventory.

My gut is Deloitte wouldnt let them be aggressive in recording revenue, they auditor shopped, and EY came in and caught SCMI trying to pull the wool over their eyes.

There is a floor here since it does generate operating cash flow. I dont know if it is $32 or $20....

Yes. “Massive” fraud could indicate a deeply misrepresented balance sheet and could result in wiping out all of the shareholder equity. But I think the executives would already have been taken out by the DOJ if it was tgat extreme..

The best scenario could be that there’s enough there to get new management in place. A bad outcome would be a protracted legal battle using company resources while further damaging Super Micro’s reputation.

There’s probably no need to rush in to avoid missing buying the bottom. But it will be interesting if there’s the bounce after today or if the drop holds. Since there’s a history here it might not bounce very much. But you can never tell how the algorithms will direct the program trading trend.

 

[Thunder Good-Oil]

I was also a CPA. Practice was limited to auditing manufacturing companies(mostly tax). I think I have seen it all there. Quit that to develop real estate, and do the needed earthwork to build the roads, lakes, etc. Also did that for other developers. Quit that to help start a bank. Was a board member. Bank is 25 years old now.
I get bored easily and move on. Haven't moved on from retirement. Ha, Next is---.

Sarbanes-Oxley really disrupted things. It made the work even less interesting for me. I was mostly into systems and developing processes. Budgets and projections. Variance analysis. Cash management. Internal stuff. I always enjoyed the couple of weeks when the outside auditors would come in and sniff around. I hated fighting with GMs and sales/marketing over the ethical aspects. Had one GM once tell me he didn’t give a **** about IRS rules. Promo people would get upset when we’d add on sales/use taxes to their purchases and their budgets would get blown up.

 

[BigOrangeMojo]

Yes. “Massive” fraud could indicate a deeply misrepresented balance sheet and could result in wiping out all of the shareholder equity. But I think the executives would already have been taken out by the DOJ if it was tgat extreme..

The best scenario could be that there’s enough there to get new management in place. A bad outcome would be a protracted legal battle using company resources while further damaging Super Micro’s reputation.

There’s probably no need to rush in to avoid missing buying the bottom. But it will be interesting if there’s the bounce after today or if the drop holds. Since there’s a history here it might not bounce very much. But you can never tell how the algorithms will direct the program trading trend.

I dont see a Worldcom type outcome here. Cash + AR > AP +LT Debt. Positive operating cash flow. There's a definite non-zero floor here. I just dont have any idea where it is....

I do expect shareholder lawsuits and mgmt change.

 

[Thunder Good-Oil]

I dont see a Worldcom type outcome here. Cash + AR > AP +LT Debt. Positive operating cash flow.

I do expect shareholder lawsuits and mgmt change.

The press releases from law firms are probably already dominating the Super Micro news feed. I hate the preditory frenzy, but they can serve a purpose of keeping bad players in check without the need for more government regulation and involvement. But they don’t discriminate and create a lot of chaos with collateral damage. Sad that many innocent targets have to pay them off just so they’ll go away.

 

[Go aeiou]

Sarbanes-Oxley really disrupted things. It made the work even less interesting for me. I was mostly into systems and developing processes. Budgets and projections. Variance analysis. Cash management. Internal stuff. I always enjoyed the couple of weeks when the outside auditors would come in and sniff around. I hated fighting with GMs and sales/marketing over the ethical aspects. Had one GM once tell me he didn’t give a **** about IRS rules. Promo people would get upset when we’d add on sales/use taxes to their purchases and their budgets would get blown up.

Wow, nothing worse than working for people who don't want to do things correctly. I ran into a few like that, and it made me wonder if the attitude came from upper mgt. I looked at a large manufacturer that intentionally failed to pay or accrue a substantial number of invoices for expense items late in the year. They were trying show more/improved profit to get a better year end bonus/raise. Stupid.
I've also seen Management say we better not owe money for a tax audit, and the person in charge materially over pay taxes. failing to question the taxability of some things. Thing is the tax examiners/auditors often don't quest items were tax has been paid so overpayments are gone forever.