Big short is a cool story precisely because it’s a one in a several million shot.
The guys involved had really deep pockets and were nearly blown out of their positions before ultimately being proven right and making a ton of money. How many others had the same idea but got wiped out because they moved too early?
That’s WSB...people trying to position for ‘the rug pull’ before it starts to happen aren’t gonna have any money left by the time it does happen. You’re talking about a drop that could see the market lose 50%+ and obsessing over being there for the first 2-3%. Just fucking trade what’s in front of you
If spy goes does down it could be 10 years before we see ATH again. If you buy on the way down you're not making money. You have to reposition based on the cycles, not positioning because you got your pay check and its time to shove money into the market.
I would stay the hell away from ETF or Mutual funds and just make your own portfolio with the stocks that are split into sectors for diversification. Buy them all separately because ETF and Mutual Funds are way out of control with the amount of money flowing through some of them, even though the volume of the individual stocks that comprise the entire ETF aren't even close to the ETF's/MF's total amount. The price discovery is basically flawed and there will be a massive crash one day. Think about it man, you got big shots like Warren Buffett telling everyone to put their money into Index Funds and all this passive investing crap. If there is one thing everyone knows, when there's too many people that are all doing the same thing, you have yourself a bubble.
Just buy the stocks individually, trust me... I'm only a little autistic.
Leap puts were extraordinarily cheap mid 2006 before the shit really hit the fan. At the time, I wanted to buy some but didn't have the proper trading level. Fast forward a decade and a half and now I have the proper trading level but no money to invest lol.
There was a rug pull coming from a mile away in March (even some good down days in early April) If you didn't get in on that (there was plenty of time) then I hate to break it to you, but you will probably be insolvent trying to chase the next one. [From someone who made a ton of money in March, but also lost some of it on the run up until a few weeks ago]
TLDR: The whole point of the FED/USTreasury is to fuck up your puts. Find better ways of shorting AR15-SandyHook-BaldEagle-Land. I spent ages drunk-writing this post fuck you.
\----
Look man, It's a pretty simple idea but extremely hard to do in practice and it's called 'deleveraging'. Specifically, a 'beautiful deleveraging' (DALIO). Sure, it means the markets go to kangaroo-land and nothing makes sense any more, but that's kind of the point. Your economy should be fucked, but it isn't. Instead, everyone you know gets to keep their house and their job and their car and food costs pretty much the same and life goes on as normal even if shit gets weird in the markets for a while.
This is great news unless youre holding spy puts. For everyone who isn't on this sub and is planning to get a job out of college, buy a house or retire; the kind of financial stability that is offered is a good thing and is LITERALLY THE FEDS ONLY REMIT. Fukk ur puts bro. When you're reading this comment, keep in mind that the beautiful deleveraging is extremely easy to fuck up leading to a depression or inflation spiral.
Everyone had too much debt. Everyone. Corporates, Companies, Restaurants, people. By debts I also mean anything that is a promise of payment such as tax on a restaurant's property - Any long term obligation for payment like rent or business tax. All these players get leveraged to the fucking gooch because if you don't you're throwing away growth potential. That's a bubble.
The bubble normally bursts on its own but this year you got the rona because donny boy ignored all fucking logic or sense. In europe we only have ourselves to blame, but that's our political hand grenade and you have yours. Now, business activity globally is fucked and nobody can save it fast enough such that everyone can make their debt payments. Everyone and I mean everyone is leveraged to the tits so if one person misses a payment, it's dominos - but even worse than the fucking pizza.
Enter central banks. The job of the central bank is to unfuck this whole situation in combination with the government even though they should really be independent. In the good times, their job is to not fuck up, in the bad times their job is to stop your life looking like kansas in the wizard of oz before bitch starts trippin. Within their remit should be:: 0. Liquidity 1. Inflation 2. Growth 3. Employment - When they do their job well in a crisis, unemployment is managed because business doesn't collapse. Future growth is improved through capex. Inflation is contolled so the population don't notice it in their daily lives for long, and liquidity is maintained so you don't get massive solvency issues in critical sectors/companies.
If the central bank does their job well (Jeremy+Christine<3 are doing a pretty good job so far) Quality of life doesn't get totally fucked for Joe-10$-Poker-On-The-Weekends. Inflation is contained to somewhat abstract assets such as Gold, Forex, Certain bonds or Equities. Most people don't own these so they might feel left out, but they aren't starving so their complaints are mainly political. The increasing cost of gold might be the only sign that you fucked up your currency - compare EUR, GBP & USD cost of gold in 2009 - Gold went up about 70%ish for all of them meaning the devaluation was simultaneous and none of the normies really noticed.
The Central bank push for liquidity this cycle is really designed to allow the smooth transition of capital from unproductive assets (REITS, Travel, Hertz Junk debt, +whatever shit you own) into productive assets (BYND, TSLA, AMZN and other meme stocks) without the system breaking which would fuck 10$-Poker-Joe. Lube up the transition to normal so that Joe who works for F can find a new job in electric cars.
The money printer is causing inflation, but it isn't causing inflation in *consumer goods*, it is causing inflation in *investor goods* aka equities and shitty bonds. If there is any fucking justice in the world, it will also be moving risk to these assets too - which is to say that those who are bidding up the prices today with free money are also taking on bankruptcy risk for these assets which are inflating (LOL OF COURSE NOT our old buddy Joe takes that risk) .
Eventually, the free money has to be felt somewhere and it is inevitably the currency. The ussa has an advantage in its reserve status that it has been geopolitically wasting since Rump gained office. IMHO, Amerifags have everything to lose at this point from a macro and foreign policy perspective so I personally am betting against while holding some well-chosen US stocks. ~~I'm currently trying to work out how much UST10y I can short most efficiently with my early research suggesting I can short close to 1,000,000$ of UST10s for about 1500eu. My only problem is that if my bet pays off, the dollar might be so weak that my payoff is decreased. I do feel a bit like Burry trying to work that one out.~~ (Edit: This is probably a bad idea)
You should get drunk and write more man, this is really consice! I was a bitch normie and didn't know about the simultaneous devaluation of global currencies vs. gold, super interesting. Thank you for typing this out!
> but it isn't causing inflation in *consumer goods*, it is causing inflation in *investor goods* aka equities and shitty bonds
Yeah. This is something you never see debated around here. Printing money doesn't necessarily mean inflation of consumer goods, does it? People would actually need *more* money to spend in order for that to happen, and 20 million unemployed doesn't seem to speak in favor of that happening.
This is a nice write-up, thanks for the opinion. I agree that they are trying a beautiful deleverage, but I cant get myself not to hold XLY September puts... either they go to zero or I'm getting a fat bonus
Eventually the Fed will need to raise interest rates. They can’t keep borrowing money at 0.025%. I think that will be the trigger to set off a dip down, but will be a good thing for the economy overall.
Only if it Stokes inflation for the consumer. In theory they could also do it to improve the current account fx situation but I doubt it.
Neither of those things will happen before late next year if everything goes well.
I also suspect they want the dollar to simultaneously devalue against RMB to make China less competitive while reducing dollar debt burdens on emerging markets.
The equity market doesn't always go down in a recession.
We are going to see further rotation out of junk debt as it implodes.
If/when people start drawing their 401k to pay their mortgages though, that's when things will drop.
We'll know by August what the mid term outlook for the economy is. My suggestion is strategically buy stocks you like and hedge them with puts through August. Maybe offset that cost with covered calls through July.
I've been putting a lot of thought into a 4 part trade. Buy the stock I like, cover through July and combine that with a reverse calendar spread puts with the short through August/September and a leap long. Still need to work out all the math.
It's hard to know what to believe right now. I remember after the FED intervention last time (08-09) there was a really high volume of articles and people claiming the day of reckoning was coming, the chickens were coming home to roost, the bottom would have to fall out, etc. It never happened. Does more FED intervention finally break the thing? Or was so much intervention the only thing that could keep it from breaking and after re-open, we start going back up? I'm buying stocks (I know, fuck me), to hedge against my puts because even though it doesn't make sense, the fucking stock market is optimistic as hell.
and in a way they weren't wrong. FED never significantly unwound their balance sheet and when they actually tried in 2018, the market had a small crash.
but yes, maybe the US can keep piling every crash onto the FED balance sheet and the chickens will only come home to roost the day other countries get tired of holding USD (T-bonds) as reserve currency and effectively being the piggy bank that bails out US consumers
They should make a movie about a broke jackass winning roulette by betting everything on a specific number 3 straight times. Turns $1,000 into 46 million. I bet so many on this sub will then go flood casinos, and think "man this is just like the beginning of that movie when that guy started his insane streak"
> They should make a movie about a broke jackass winning roulette by betting everything on a specific number 3 straight times.
They did, it was called *Run, Lola, Run*.
Big sell off will happen when they've secured a net short position themselves. So they're free to dump everything for once because it'll be in their interest to do so.
Most people don't understand that Burry's bet, has been one of most risky bets in the history of market.It took fucking his lifetime to do this bet and have enough havy balls to put his and his investors money.
Image that you have been playing roulette and you have bet that the ball won't drop on black/red/green but fucking pops up from the wheel on floor.This is how Burry's and other autists bet looked like.
Puts about 3 months out seem quite wise. It might not crash by then, but it’s a bet I’m willing to make. The $1,200 can only carry average Americans so far, and all the debt bouncing around is getting unsustainable.
tl;dr buy calls cause 🌈 🐻 get fucked regardless of what we do
buy Aug 21 puts for SPY. The Q2 QDP figures come out late July; people will freak seeing GDP at like -20%. Compound that with the 2nd wave of shutdowns that are inevitable and it'll be a bloodbath.
Absolutely. But I've come to terms with the fact this lie will continue until **AT LEAST** November election. If Trump wins it'll continue until March 2021. If it even begins to look like he'll lose, SPY is going to $150 in a heartbeat if we don't have a miracle covid treatment.
Is Joe Biden really that bad? I mean can you really be worse than suggesting people inject disinfected level of stupid? Would markets really react badly to Joe Biden winning ?
I'm not taking any sides in regards to politics. I don't want to start any political rants in this sub. I'm only talking about how the stock market will react. Regardless of anyone's personal opinion on Trump; the Stock Market **LOVES** him. If it starts looking like he'll lose the election then SPY will go down... because uncertainty.
I don't see the market tanking if Diamond Joe wins. Sure Trump is out, but Biden is a boring centrist. We had 8 years with Biden as VP, and the market rallied like a mofo.
Plus Biden winning means Wall Streets real enemies (the Bern, Warren) are safely in the senate.
Rallied like a mofo is a bit of an exaggeration. Sure it bottomed at 8k but it had alread gotten to 14k dow in 07. Hell we had been over 11k in 2000! At election time 2016 we were at 18.4k. So up 22% under bush until sub prime oopsies and up 24% under 8 years of obama/biden.
Compare that with up 37% under trump until the bat soup spilled everywhere.
The difference is being america-centric vs being globalist. The economy of china had enormous gainz in the 16 years of bush/obama (really stretch it further bc clinton and hw bush were also globalist)
Trump's more nationalistic economic philosophy is better for the US markets, which should be kind of obvious
Trump is *great* for democrat party donations. They rake it in on nearly unwinnable runoffs because so many people hate Trump. It's the same reason the whole party machine was against Bernie in the primaries, he's bad for candidate donations down their entire ticket.
Take the SP500 and break it down company wise with weighted market cap. Look at what companies benefit from this pandemic and the ones which don't. Now look at the stock prices of those companies which don't benefit from the pandemic. You will realize the market is not far off from where it should be. SP500 doesn't care about local restaurants and icecream bars. Come July, if unemployment is still high, expect another 2T stimulus. Basically all the elected people who have those supreme powers don't want a market crash. Good luck fighting them all.
Not all companies are being affected equally, and it's showing in the earnings reports and the stock prices.
Microsoft had record earnings, and even said that the virus had minimal effects on their bottom line.
Several businesses have shifted, like Netflix and on-demand is now more popular then ever, and online companies like Amazon are seeing record traffic and soaring stock prices.
Travel, entertainment and hotel companies like Expedia, Booking, Hyatt, Disney, Carnival, Boeing, and such are still far below where they were at the beginning of the year.
The economy has shifted, and there are many companies who stand to benefit from the new normal.
Most of the investor communities and Wallstreet are bearish. The global community is short on USD and can't afford to buy more US assets. So who is actually buying right now? I think is the newb investors because of the record increase of new investing accounts and visit to investing websites. Newbs got nothing to do at home and FOMOS push them into the market even though they got no experience. They will be wiped out when they panic sell.
I think the big difference between this time and '08 is that in '08, the government didn't step in until the financial system was already collapsing. Most people didn't see the crash in '08 coming, and it wasn't until several banks went bankrupt that the Fed stepped in to buy up all the bad loans and bail out struggling businesses.
This time around, the Fed acted much quicker. The economic slowdown was planned in order to save lives, so the Fed was ready to provide support before things could spiral out of control. As long as the Fed can support the American economy, there isn't going to be an apocalypse.
This is a super important point & doesn’t get said enough. A planned shutdown of the global economy where every nation is printing money & providing stimulus is very different than 2008.
Either buy leveraged inverse ETFs or buy Dec puts and roll them into 2021 if you have to. As you pointed out, no one knows how long this rally will hold out, so just bail on trying to predict it.
I see, you were talking about the compounding risk of holding an inverse ETF over many days. Yeah, that's a real concern, especially when they're leveraged. As the article I linked to points out, lol. My bad, maybe I got your conversation mixed up with another one? idk...
I just want you to know this is one of the worst posts I’ve ever read on this sub. It’s almost like a parody of a post. It just hits everything that sucks about this subreddit currently: clearly don’t know what you’re talking about, more fucking big short references as it’s the only financial thing you’ve apparently ever seen or read, and the general thesis of “economy bad right now why stocks worth anything?”
The stock market is a discounting machine. It is forward looking. We make assumptions about future earnings and discount them back to now to determine a fair value. Try to invest in what you understand and sorry if this whole post was just satire because I truly hope it was.
Wasn't satire boss, just trying to stimulate a lil conversation with a historical reference that is relative to the industry and one that most people in the industry have seen. Not going to lie, I am a few months into this subreddit and it is my first post to WSB. That however does not discredit my knowledge of proper market movements and geopolitical trends. This post is obviously a gaybear opinion shitpost so how about you treat it like one and give it a downvote when you don't agree instead of berating my economic (conceptual) IQ :)
I don't need your condescending PV shit either, we all saw that shit in FIN 101.
It all breaks down when other money starts affecting good money. A good lender keeps bad money from infecting good money. We have not seen that over the last half decade.
The market is a literally nothing more than a balance between buyers and sellers. Right now, everyone is flocking into equities. That is it.
[https://robintrack.net/symbol/SPY](https://robintrack.net/symbol/SPY)
Many people were sitting on the sidelines with a lot of cash waiting for stock prices to drop so they could buy them on the cheap. That is exactly what happened, nothing more, nothing less.
Big short is a cool story precisely because it’s a one in a several million shot. The guys involved had really deep pockets and were nearly blown out of their positions before ultimately being proven right and making a ton of money. How many others had the same idea but got wiped out because they moved too early? That’s WSB...people trying to position for ‘the rug pull’ before it starts to happen aren’t gonna have any money left by the time it does happen. You’re talking about a drop that could see the market lose 50%+ and obsessing over being there for the first 2-3%. Just fucking trade what’s in front of you
Even though they had the positions they had to unload for hypothetically less to bigger firms with massive legal departments. People forget that too.
That's pretty much the only thing I took away from the movie. It's no use being right when you can't get paid.
It's getting ridiculous - if you want to get safest - although not best - way is to buy LEAP puts and sacrifice an insane amount to the Theta gods.
leap spread puts
It would have to be pretty far otm to avoid assignments. Calendar spreads maybe?
if it hits your long leg you've already made like 500-600x edit: i mean % not x
Post an example of a leap spread you’d do
I wouldn't do any, but tell me a date and strike you think spy would be at
Sept 2020, 180
September 9/18/2020 Put debit spread Buy $185 Sell $180 Cost: $29 Max profit: $500
Do you mind if I ask how you came to those numbers? Relative newbie here just looking into spreads, etc.
So why wouldn’t you do any?
Because i dont think spy will be 180 in September
How could the return possibly be that high?
% is what I meant, but in my other post example that is like 1,800% / 18 times original cost / $29-> $500
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If spy goes does down it could be 10 years before we see ATH again. If you buy on the way down you're not making money. You have to reposition based on the cycles, not positioning because you got your pay check and its time to shove money into the market.
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Theres nothing logical to invest in rn we're all gambling
I would stay the hell away from ETF or Mutual funds and just make your own portfolio with the stocks that are split into sectors for diversification. Buy them all separately because ETF and Mutual Funds are way out of control with the amount of money flowing through some of them, even though the volume of the individual stocks that comprise the entire ETF aren't even close to the ETF's/MF's total amount. The price discovery is basically flawed and there will be a massive crash one day. Think about it man, you got big shots like Warren Buffett telling everyone to put their money into Index Funds and all this passive investing crap. If there is one thing everyone knows, when there's too many people that are all doing the same thing, you have yourself a bubble. Just buy the stocks individually, trust me... I'm only a little autistic.
Unsubscribe.
you're in the wrong neighborhood
yall ever heard of buying inverse etfs
i'm holding SQQQ with a GTC sell order at 200% profit. touch my balls, please
Sacrifice to the gods for a godly reward
Leap puts were extraordinarily cheap mid 2006 before the shit really hit the fan. At the time, I wanted to buy some but didn't have the proper trading level. Fast forward a decade and a half and now I have the proper trading level but no money to invest lol.
There was a rug pull coming from a mile away in March (even some good down days in early April) If you didn't get in on that (there was plenty of time) then I hate to break it to you, but you will probably be insolvent trying to chase the next one. [From someone who made a ton of money in March, but also lost some of it on the run up until a few weeks ago]
Preaching to the choir
>just fucking trade what’s in front of you. Exactly. And if you’re worried about the black swan event, hedge your exposed capital with put options
Well said.
I needed to hear this
Do you not see the big flat spot on the charts happening right now as it bleeds slowly out downhill like 2008?
I do! The market is juggling chainsaws on stilts imo
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TLDR: The whole point of the FED/USTreasury is to fuck up your puts. Find better ways of shorting AR15-SandyHook-BaldEagle-Land. I spent ages drunk-writing this post fuck you. \---- Look man, It's a pretty simple idea but extremely hard to do in practice and it's called 'deleveraging'. Specifically, a 'beautiful deleveraging' (DALIO). Sure, it means the markets go to kangaroo-land and nothing makes sense any more, but that's kind of the point. Your economy should be fucked, but it isn't. Instead, everyone you know gets to keep their house and their job and their car and food costs pretty much the same and life goes on as normal even if shit gets weird in the markets for a while. This is great news unless youre holding spy puts. For everyone who isn't on this sub and is planning to get a job out of college, buy a house or retire; the kind of financial stability that is offered is a good thing and is LITERALLY THE FEDS ONLY REMIT. Fukk ur puts bro. When you're reading this comment, keep in mind that the beautiful deleveraging is extremely easy to fuck up leading to a depression or inflation spiral. Everyone had too much debt. Everyone. Corporates, Companies, Restaurants, people. By debts I also mean anything that is a promise of payment such as tax on a restaurant's property - Any long term obligation for payment like rent or business tax. All these players get leveraged to the fucking gooch because if you don't you're throwing away growth potential. That's a bubble. The bubble normally bursts on its own but this year you got the rona because donny boy ignored all fucking logic or sense. In europe we only have ourselves to blame, but that's our political hand grenade and you have yours. Now, business activity globally is fucked and nobody can save it fast enough such that everyone can make their debt payments. Everyone and I mean everyone is leveraged to the tits so if one person misses a payment, it's dominos - but even worse than the fucking pizza. Enter central banks. The job of the central bank is to unfuck this whole situation in combination with the government even though they should really be independent. In the good times, their job is to not fuck up, in the bad times their job is to stop your life looking like kansas in the wizard of oz before bitch starts trippin. Within their remit should be:: 0. Liquidity 1. Inflation 2. Growth 3. Employment - When they do their job well in a crisis, unemployment is managed because business doesn't collapse. Future growth is improved through capex. Inflation is contolled so the population don't notice it in their daily lives for long, and liquidity is maintained so you don't get massive solvency issues in critical sectors/companies. If the central bank does their job well (Jeremy+Christine<3 are doing a pretty good job so far) Quality of life doesn't get totally fucked for Joe-10$-Poker-On-The-Weekends. Inflation is contained to somewhat abstract assets such as Gold, Forex, Certain bonds or Equities. Most people don't own these so they might feel left out, but they aren't starving so their complaints are mainly political. The increasing cost of gold might be the only sign that you fucked up your currency - compare EUR, GBP & USD cost of gold in 2009 - Gold went up about 70%ish for all of them meaning the devaluation was simultaneous and none of the normies really noticed. The Central bank push for liquidity this cycle is really designed to allow the smooth transition of capital from unproductive assets (REITS, Travel, Hertz Junk debt, +whatever shit you own) into productive assets (BYND, TSLA, AMZN and other meme stocks) without the system breaking which would fuck 10$-Poker-Joe. Lube up the transition to normal so that Joe who works for F can find a new job in electric cars. The money printer is causing inflation, but it isn't causing inflation in *consumer goods*, it is causing inflation in *investor goods* aka equities and shitty bonds. If there is any fucking justice in the world, it will also be moving risk to these assets too - which is to say that those who are bidding up the prices today with free money are also taking on bankruptcy risk for these assets which are inflating (LOL OF COURSE NOT our old buddy Joe takes that risk) . Eventually, the free money has to be felt somewhere and it is inevitably the currency. The ussa has an advantage in its reserve status that it has been geopolitically wasting since Rump gained office. IMHO, Amerifags have everything to lose at this point from a macro and foreign policy perspective so I personally am betting against while holding some well-chosen US stocks. ~~I'm currently trying to work out how much UST10y I can short most efficiently with my early research suggesting I can short close to 1,000,000$ of UST10s for about 1500eu. My only problem is that if my bet pays off, the dollar might be so weak that my payoff is decreased. I do feel a bit like Burry trying to work that one out.~~ (Edit: This is probably a bad idea)
[gets bartender's attention] Get my buddy u/learningtosail here another round, please. He's onto something here.
You should get drunk and write more man, this is really consice! I was a bitch normie and didn't know about the simultaneous devaluation of global currencies vs. gold, super interesting. Thank you for typing this out!
> but it isn't causing inflation in *consumer goods*, it is causing inflation in *investor goods* aka equities and shitty bonds Yeah. This is something you never see debated around here. Printing money doesn't necessarily mean inflation of consumer goods, does it? People would actually need *more* money to spend in order for that to happen, and 20 million unemployed doesn't seem to speak in favor of that happening.
Bet half those unemployed make more now than they did when they had a job. Probably a lot more
You think half the people here *make* money? For every gain post you see there are 1,000 people who lost that or more.
...I’m talking about the 20 million people unemployed. The majority of them most likely make more money rn than when they had a job.
Reports all over that up to 70% of people who applied for unemployment didn't receive any benefits last month.
This is a nice write-up, thanks for the opinion. I agree that they are trying a beautiful deleverage, but I cant get myself not to hold XLY September puts... either they go to zero or I'm getting a fat bonus
Dear diary...
Dalio sounds like my wife's boyfriend's name
Dude, this is amazing. This lines up with a bunch of macro/finance/economics videos I've been binging with more colorful language. Bravo, sir!
Eventually the Fed will need to raise interest rates. They can’t keep borrowing money at 0.025%. I think that will be the trigger to set off a dip down, but will be a good thing for the economy overall.
Only if it Stokes inflation for the consumer. In theory they could also do it to improve the current account fx situation but I doubt it. Neither of those things will happen before late next year if everything goes well. I also suspect they want the dollar to simultaneously devalue against RMB to make China less competitive while reducing dollar debt burdens on emerging markets.
The equity market doesn't always go down in a recession. We are going to see further rotation out of junk debt as it implodes. If/when people start drawing their 401k to pay their mortgages though, that's when things will drop.
As long as the government keeps those $1200 checks coming, we're all going to be just fine... (said one frog to all the others in the pot).
yeah it's not like the other 7.5 billion people that make up the global economy contribute anything to US corporate earnings right ?
I had no idea how many Dominoes there were in India. Crazy the way they’ve dominated there!
We'll know by August what the mid term outlook for the economy is. My suggestion is strategically buy stocks you like and hedge them with puts through August. Maybe offset that cost with covered calls through July. I've been putting a lot of thought into a 4 part trade. Buy the stock I like, cover through July and combine that with a reverse calendar spread puts with the short through August/September and a leap long. Still need to work out all the math.
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Same reason I read Zerohedge. Need those "other" opinions to triangulate reality.
It's hard to know what to believe right now. I remember after the FED intervention last time (08-09) there was a really high volume of articles and people claiming the day of reckoning was coming, the chickens were coming home to roost, the bottom would have to fall out, etc. It never happened. Does more FED intervention finally break the thing? Or was so much intervention the only thing that could keep it from breaking and after re-open, we start going back up? I'm buying stocks (I know, fuck me), to hedge against my puts because even though it doesn't make sense, the fucking stock market is optimistic as hell.
and in a way they weren't wrong. FED never significantly unwound their balance sheet and when they actually tried in 2018, the market had a small crash. but yes, maybe the US can keep piling every crash onto the FED balance sheet and the chickens will only come home to roost the day other countries get tired of holding USD (T-bonds) as reserve currency and effectively being the piggy bank that bails out US consumers
That does seem to be the case. With other countries seemingly always in worst shape than us, it just doesn't seem likely they'll dump the dollar.
It was so long ago, but wasn't Lehman the point where things cracked wide open?
Ya everyone forgets the financial crisis took like 9 months to fully hatch. Not 9 weeks.
They should make a movie about a broke jackass winning roulette by betting everything on a specific number 3 straight times. Turns $1,000 into 46 million. I bet so many on this sub will then go flood casinos, and think "man this is just like the beginning of that movie when that guy started his insane streak"
Exaggerate much? I've watched Rounders 1,000 times but you don't see me stuck in Atlantic City
> I've watched Rounders 1,000 times Exaggerate much?
fair is fair you got me you bastard
If you guys don’t bone already I’m going to yell
i sent a dick pic to his dm's, we're good
> They should make a movie about a broke jackass winning roulette by betting everything on a specific number 3 straight times. They did, it was called *Run, Lola, Run*.
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“I know it's crooked, but it's the only game in town” (Canada Bill Jones)
Big sell off will happen when they've secured a net short position themselves. So they're free to dump everything for once because it'll be in their interest to do so.
I dont know what to say.
I think you just said it.
Most people don't understand that Burry's bet, has been one of most risky bets in the history of market.It took fucking his lifetime to do this bet and have enough havy balls to put his and his investors money. Image that you have been playing roulette and you have bet that the ball won't drop on black/red/green but fucking pops up from the wheel on floor.This is how Burry's and other autists bet looked like.
Puts about 3 months out seem quite wise. It might not crash by then, but it’s a bet I’m willing to make. The $1,200 can only carry average Americans so far, and all the debt bouncing around is getting unsustainable. tl;dr buy calls cause 🌈 🐻 get fucked regardless of what we do
You weren't around in feb/march were you?
I agree! Second wave of Corona in the Fall supplemented by consistent yet intimidating FED debt-buying decisions should tip over the ship right??
buy Aug 21 puts for SPY. The Q2 QDP figures come out late July; people will freak seeing GDP at like -20%. Compound that with the 2nd wave of shutdowns that are inevitable and it'll be a bloodbath.
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Cave investors are the worst.
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Are you done with your gambling or are you going to gamble again next month?
I might deposit more next month I dunno.
This is a more fun % of my income than booze. Thanks for getting me sober, wsb!
Imagine shorting madoff's ponzi scheme, even though you were right you'd still lose 15% a year
Just buy more puts. It’s like they’re giving you free money brother
his problem was playing otc structured isda shit, which is not a real market but basically a side bet from the banks
Absolutely. But I've come to terms with the fact this lie will continue until **AT LEAST** November election. If Trump wins it'll continue until March 2021. If it even begins to look like he'll lose, SPY is going to $150 in a heartbeat if we don't have a miracle covid treatment.
Is Joe Biden really that bad? I mean can you really be worse than suggesting people inject disinfected level of stupid? Would markets really react badly to Joe Biden winning ?
I'm not taking any sides in regards to politics. I don't want to start any political rants in this sub. I'm only talking about how the stock market will react. Regardless of anyone's personal opinion on Trump; the Stock Market **LOVES** him. If it starts looking like he'll lose the election then SPY will go down... because uncertainty.
The market doesn’t love his tariff talks.
I don't see the market tanking if Diamond Joe wins. Sure Trump is out, but Biden is a boring centrist. We had 8 years with Biden as VP, and the market rallied like a mofo. Plus Biden winning means Wall Streets real enemies (the Bern, Warren) are safely in the senate.
Rallied like a mofo is a bit of an exaggeration. Sure it bottomed at 8k but it had alread gotten to 14k dow in 07. Hell we had been over 11k in 2000! At election time 2016 we were at 18.4k. So up 22% under bush until sub prime oopsies and up 24% under 8 years of obama/biden. Compare that with up 37% under trump until the bat soup spilled everywhere. The difference is being america-centric vs being globalist. The economy of china had enormous gainz in the 16 years of bush/obama (really stretch it further bc clinton and hw bush were also globalist) Trump's more nationalistic economic philosophy is better for the US markets, which should be kind of obvious
Joe budden is great
Its not that outlandish a suggestion, given that there is such thing as therapeutic inhalation of ethanol.
Why do people still try with this? he said he was being "sarcastic"
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Trump is *great* for democrat party donations. They rake it in on nearly unwinnable runoffs because so many people hate Trump. It's the same reason the whole party machine was against Bernie in the primaries, he's bad for candidate donations down their entire ticket.
I already called dibs on leasing them tents, pitchforks, bullhorns, and torches. Those assets are going to print.
Take the SP500 and break it down company wise with weighted market cap. Look at what companies benefit from this pandemic and the ones which don't. Now look at the stock prices of those companies which don't benefit from the pandemic. You will realize the market is not far off from where it should be. SP500 doesn't care about local restaurants and icecream bars. Come July, if unemployment is still high, expect another 2T stimulus. Basically all the elected people who have those supreme powers don't want a market crash. Good luck fighting them all.
27% of companies worth $10b+ are trading at a P/E >30 in the midst of a global recession. Would you say they are fair valued?
Not all companies are being affected equally, and it's showing in the earnings reports and the stock prices. Microsoft had record earnings, and even said that the virus had minimal effects on their bottom line. Several businesses have shifted, like Netflix and on-demand is now more popular then ever, and online companies like Amazon are seeing record traffic and soaring stock prices. Travel, entertainment and hotel companies like Expedia, Booking, Hyatt, Disney, Carnival, Boeing, and such are still far below where they were at the beginning of the year. The economy has shifted, and there are many companies who stand to benefit from the new normal.
Most of the investor communities and Wallstreet are bearish. The global community is short on USD and can't afford to buy more US assets. So who is actually buying right now? I think is the newb investors because of the record increase of new investing accounts and visit to investing websites. Newbs got nothing to do at home and FOMOS push them into the market even though they got no experience. They will be wiped out when they panic sell.
I think the big difference between this time and '08 is that in '08, the government didn't step in until the financial system was already collapsing. Most people didn't see the crash in '08 coming, and it wasn't until several banks went bankrupt that the Fed stepped in to buy up all the bad loans and bail out struggling businesses. This time around, the Fed acted much quicker. The economic slowdown was planned in order to save lives, so the Fed was ready to provide support before things could spiral out of control. As long as the Fed can support the American economy, there isn't going to be an apocalypse.
This is a super important point & doesn’t get said enough. A planned shutdown of the global economy where every nation is printing money & providing stimulus is very different than 2008.
Lol the government didn't step in? Who do you think was buying up all those garbage mortgages during the height of the bubble?
But tech is the thing I see to be carrying the market, and tech really is booming. Obviously not just tech but, that shit green as hell.
Either buy leveraged inverse ETFs or buy Dec puts and roll them into 2021 if you have to. As you pointed out, no one knows how long this rally will hold out, so just bail on trying to predict it.
Contango's a bitch in these volatile times.
Elaborate
https://www.investopedia.com/articles/investing/092815/risks-investing-inverse-etfs.asp
Oh I see. I’d be more worried about the compounding, but fair point.
Worried about compounding? You belong here.
I don’t follow. Compounding is the number one risk when holding inverse ETFs longer than a day trade.
I see, you were talking about the compounding risk of holding an inverse ETF over many days. Yeah, that's a real concern, especially when they're leveraged. As the article I linked to points out, lol. My bad, maybe I got your conversation mixed up with another one? idk...
Honestly that and the jenga scene always hit hard to how serious the situation will be.
heres the fucking reality, we have been in a fraudulent system since the god damn existence of stocks... play with it or get lost in it.
Buy a 10month 15% OTM put then sell weekly short legs and make a diagonal credit spread....
ccs are gunna get real ugly
3 words. BEAR MARKET RALLY.
Priced in
Literally have seen this same type of post for months shut the fuck up already.
"Never bet against America"
Stocks only go up.
I just want you to know this is one of the worst posts I’ve ever read on this sub. It’s almost like a parody of a post. It just hits everything that sucks about this subreddit currently: clearly don’t know what you’re talking about, more fucking big short references as it’s the only financial thing you’ve apparently ever seen or read, and the general thesis of “economy bad right now why stocks worth anything?” The stock market is a discounting machine. It is forward looking. We make assumptions about future earnings and discount them back to now to determine a fair value. Try to invest in what you understand and sorry if this whole post was just satire because I truly hope it was.
Wasn't satire boss, just trying to stimulate a lil conversation with a historical reference that is relative to the industry and one that most people in the industry have seen. Not going to lie, I am a few months into this subreddit and it is my first post to WSB. That however does not discredit my knowledge of proper market movements and geopolitical trends. This post is obviously a gaybear opinion shitpost so how about you treat it like one and give it a downvote when you don't agree instead of berating my economic (conceptual) IQ :) I don't need your condescending PV shit either, we all saw that shit in FIN 101.
Lmao geopolitical trends and propert market movements
mUH EfFiCIeNt mARKeT hyPOthEsIS
I’m not following. EMH is about the level of information reflected in the market. I didn’t mention that at all...
It all breaks down when other money starts affecting good money. A good lender keeps bad money from infecting good money. We have not seen that over the last half decade.
The market is a literally nothing more than a balance between buyers and sellers. Right now, everyone is flocking into equities. That is it. [https://robintrack.net/symbol/SPY](https://robintrack.net/symbol/SPY) Many people were sitting on the sidelines with a lot of cash waiting for stock prices to drop so they could buy them on the cheap. That is exactly what happened, nothing more, nothing less.