OT - Dow plunges 1,175 - worst point decline in history

[bronk]

Originally Posted by oldguy00

....
We put about 200k into Suncor, CNQ, Exxon, and Canadian banks a couple months ago, and have made 25-30%, and I still think they will grow. Exxon was 70+ pre-covid, and they are still only back up to about 41 today, -and- they pay roughly 8-9% dividend just for holding the stock. Its a no brainer.

Regarding oil, I think there are a few additional things to consider before diving in with your kid's college fund. The world is awash in oil and this will likely continue for a long time -- true even before the pandemic. US fracking changed the dynamics of the oil industry over a decade ago and there is no turning back. OPEC has their handle on the spigot and can turn it up or down as they see fit -- as they did this week. At $40/bbl, most of the frackers and many of the big names won't survive. Today, many of the large multinationals find themselves heavily in debt and unable to support their historical dividends so they've been slashed or curtailed.

I would add that many younger investors view the oil industry as some of us (less younger) view the coal industry -- outdated and one we wouldn't dare think of investing in.

Were the oil stocks oversold? Yes. Will they continue to rise and reach 70-100% of where they were. Maybe but not a no-brainer imho.

[jimcav]

Originally Posted by froze

I do all my own management so there are no fees going into that sort of thing. I've had very little trouble with any of my renters. The places I bought were fixer-uppers, they weren't in horrible shape but not in excellent condition, I've since improved the properties a lot with about another $40,000 in improvements I have to do before I retire, so all the money I get now really goes into the repair savings, once that's done in the next 3 years which is when I'm retiring not only will I have a great income but the properties will be worth about twice what I paid for them.

I have a 403b as well and that's not doing too bad, the last I checked the last quarter I was averaging 13%. The problem with me is that I don't understand enough about stocks to where I can take a bunch of money and become a day trader and make a lot more money, I would probably lose it all! LOL!! so with rentals, I have an almost guaranteed income, even if the stocks crash people will still need places to live.

I personally think that rental property is a safer bet than the stock market is over the long haul even though I have a lot of money in my 403b, even though stocks have always gone up since the great depression, but I think now the US is far overextended, and I think war is going to happen with China which will completely destroy the US economy even IF we win that war, and with our economy destroyed then other western countries will be destroyed along with ours. Believe it or not, China actually wants a war with the US, I've seen reports to that effect, and some of you will say why when they rely on us and a war will hurt them too, in Chinas eyes they feel they can recover from a war in less than 10 years but the US may not ever recover leaving China to be the sole superpower which they believe is their destiny. So I'm not real bullish on America's financial future.

We always kept our condos/homes as we moved with the navy and rented them for awhile until needed to buy again. Over a 24 year span we came out ahead, but it had stresses, and some periods of no renters, some significant damage etc. all are opportunity costs. Unpredictable things like the mortgage crisis had us upside down, and of course there are areas hard hit by COVID where rents aren't being paid.

If I had the time, I'd sell most of my stocks and buy fixer uppers in an economic opportunity zone and hold them for 10 years, ensuring not only deferment (10% reduction of the capital gains owed now from selling stocks), but owing no tax at all on gains after 10 years. But I don't have the time.

As for China, they will accomplish their goals more likely through power, influence, and economies of scale. They have already taken advantage of our recent isolationism to extend their influence. A war isn't really needed.

For now the USD is still a top draw and key place for global capital. If we take the lead on the science of needed green energy and all the myriad issues that accompany climate change (Sea-rise, erosion, water tables, septic systems, agribusiness, etc ) as we did with aviation/space/computers, then we will be in a good position to maintain and develop strong global interconnectedness--a true rising tide (no pun intended)

[SPOKE]

Originally Posted by jimcav

“As for China, they will accomplish their goals more likely through power, influence, and economies of scale. They have already taken advantage of our recent isolationism to extend their influence. A war isn't really needed.

For now the USD is still a top draw and key place for global capital. If we take the lead on the science of needed green energy and all the myriad issues that accompany climate change (Sea-rise, erosion, water tables, septic systems, agribusiness, etc ) as we did with aviation/space/computers, then we will be in a good position to maintain and develop strong global interconnectedness--a true rising tide (no pun intended)

”


As a country we are very broke....as in deep debt and it’s only getting worse. Not sure if this is “fixable” without something drastic happening.....

[oldguy00]

Originally Posted by bronk

Regarding oil, I think there are a few additional things to consider before diving in with your kid's college fund. The world is awash in oil and this will likely continue for a long time -- true even before the pandemic. US fracking changed the dynamics of the oil industry over a decade ago and there is no turning back. OPEC has their handle on the spigot and can turn it up or down as they see fit -- as they did this week. At $40/bbl, most of the frackers and many of the big names won't survive. Today, many of the large multinationals find themselves heavily in debt and unable to support their historical dividends so they've been slashed or curtailed.

I would add that many younger investors view the oil industry as some of us (less younger) view the coal industry -- outdated and one we wouldn't dare think of investing in.

Were the oil stocks oversold? Yes. Will they continue to rise and reach 70-100% of where they were. Maybe but not a no-brainer imho.

Lol, the kids college funds are nice and safe.
I should clarify, when I say no brainer with regards to some of the oil stocks, I don't mean to necessarily hold for years, but I do think there is a lot of upside just in the upcoming months. Banks and oil have treated me extremely well over the past 6 months, and especially the past month or two. When they recover more, I could see myself leaving some in Exxon because of their great dividends. The others, at very least I might spread a lot over more of the Canadian banks, not sure what else. We've also had some good luck going into and out of, rinse repeat, WEED (Canopy).
Prob doesn't hurt I run every week with a couple of bankers who manage their own stocks as well, get good advice.
ANYWAY, I hope most people here who were affected by the crash in March have mostly recovered. I can see a lot of stocks and mutual funds are back up to 90+% of where they were in March.

Cheers

[oldpotatoe]

WEED (Canopy)

As in ‘demon weed’? MariJane, Ganja?
US House of Representatives just passed a bill ’decriminalizing ‘weed’....doubt it’ll even get off McConnell’s desk tho...but, maybe the next ‘growth’ stock??

[oldguy00]

Originally Posted by oldpotatoe

As in ‘demon weed’? MariJane, Ganja?
US House of Representatives just passed a bill ’decriminalizing ‘weed’....doubt it’ll even get off McConnell’s desk tho...but, maybe the next ‘growth’ stock??

lol, CANOPY CORP (ticker WEED).

Look at how it has traded over the past year or two, a lot of fluctuations. It had already taken a really big gain over the past two months, 50% up. I did think the news in the US would boost it even more but doesn't seem to have.

But, oil stocks were up 5-7% yesterday. . Again these are weird times, huge fluctuations and bargains to be had. Strictly IMHO.

[mg2ride]

Originally Posted by oldguy00

Lol, the kids college funds are nice and safe.
I should clarify, when I say no brainer with regards to some of the oil stocks, I don't mean to necessarily hold for years, but I do think there is a lot of upside just in the upcoming months. Banks and oil have treated me extremely well over the past 6 months, and especially the past month or two. When they recover more, I could see myself leaving some in Exxon because of their great dividends. The others, at very least I might spread a lot over more of the Canadian banks, not sure what else. We've also had some good luck going into and out of, rinse repeat, WEED (Canopy).
Prob doesn't hurt I run every week with a couple of bankers who manage their own stocks as well, get good advice.
ANYWAY, I hope most people here who were affected by the crash in March have mostly recovered. I can see a lot of stocks and mutual funds are back up to 90+% of where they were in March.

Cheers

+1 I blew through my boys college fund on bikes in the 1990s before I ever had them started. Somehow they managed and both have Federal Jobs (careers).

I made some good money on weed stocks since March but at the moment I have less faith in them then oil. I'm just not sure how that industry is going to shake out.

Airlines are another category I think still has some rebounds in. Been doing very well on Boeing but still I bit scared of the passenger airlines.

I will stay with being diversified in the market and hope for the best.

[KarlC]

Originally Posted by KarlC

What are the groups thoughts on the AIRBNB IPO ?

They are saying it would be in the $44 - $50 a share range

Part of the reason I ask is we can buy in thru Airbnb's Directed Share Program, tho I'm not sure that really benefits us in any way, but I'm considering it.

.

Any thoughts on this ?

.

[kppolich]

Originally Posted by KarlC

Any thoughts on this ?

.

Avoid the IPO for home sharing during a pandemic.

[KarlC]

Originally Posted by kppolich

Avoid the IPO for home sharing during a pandemic.

You could be right but everything I'm seeing points to home sharing and small hotels doing well.

.

[veloduffer]

Originally Posted by KarlC

You could be right but everything I'm seeing points to home sharing and small hotels doing well.

.

I would recommend getting the prospectus and reading what their projections are - are their projections rational or wildly aspirational? How does their forward P/E compare to the hotel industry?

You can also perform your own due diligence by talking to friends and family that have used AirBnB to get their experiences - what they liked and didn't like.

I don't know what the firm's long term competitive advantage is. Some key areas are not under their control - stock of available rooms and location, pricing dictated by owners (I think), no control over quality/cleanliness.

Hospitality is a highly competitive industry built on short term rentals (as opposed to multifamily housing). The large hotels have the advantage of uniformity of product (like McDonalds - you have a good idea of what to expect for a room), rewards programs, etc. They could also be more aggressive in pricing using algorithms to manage vacancy/load like the airlines.

Plus there are other competition like boutique hotels, timeshares, bed & breakfast, etc. These are generally located, though, in high tourist areas.

I just don't see how it becomes the next Amazon or Google.

[kppolich]

Originally Posted by KarlC

You could be right but everything I'm seeing points to home sharing and small hotels doing well.

.

I guess if you are OK with the risk of investing in people traveling here at the tail end (hopefully) of the pandemic go for it. I'm assuming the goal isn't to fund retirement with this investment but a smaller allocation with some available funds. Could be a nice addition to your portfolio, especially with the directed share program.

[KarlC]

Originally Posted by kppolich

I guess if you are OK with the risk of investing in people traveling here at the tail end (hopefully) of the pandemic go for it. I'm assuming the goal isn't to fund retirement with this investment but a smaller allocation with some available funds. Could be a nice addition to your portfolio, especially with the directed share program.

We are locked at the IPO price but don't have to buy for a few days, this seams odd but I'll take it.

Let's see what happens stating tomarrow.

[KarlC]

Originally Posted by veloduffer

I would recommend getting the prospectus and reading what their projections are - are their projections rational or wildly aspirational? How does their forward P/E compare to the hotel industry?

You can also perform your own due diligence by talking to friends and family that have used AirBnB to get their experiences - what they liked and didn't like.

I don't know what the firm's long term competitive advantage is. Some key areas are not under their control - stock of available rooms and location, pricing dictated by owners (I think), no control over quality/cleanliness.

Hospitality is a highly competitive industry built on short term rentals (as opposed to multifamily housing). The large hotels have the advantage of uniformity of product (like McDonalds - you have a good idea of what to expect for a room), rewards programs, etc. They could also be more aggressive in pricing using algorithms to manage vacancy/load like the airlines.

Plus there are other competition like boutique hotels, timeshares, bed & breakfast, etc. These are generally located, though, in high tourist areas.

I just don't see how it becomes the next Amazon or Google.

All good thoughts.
Thx

[oldguy00]

Originally Posted by bronk

Regarding oil, I think there are a few additional things to consider before diving in with your kid's college fund. The world is awash in oil and this will likely continue for a long time -- true even before the pandemic. US fracking changed the dynamics of the oil industry over a decade ago and there is no turning back. OPEC has their handle on the spigot and can turn it up or down as they see fit -- as they did this week. At $40/bbl, most of the frackers and many of the big names won't survive. Today, many of the large multinationals find themselves heavily in debt and unable to support their historical dividends so they've been slashed or curtailed.

I would add that many younger investors view the oil industry as some of us (less younger) view the coal industry -- outdated and one we wouldn't dare think of investing in.

Were the oil stocks oversold? Yes. Will they continue to rise and reach 70-100% of where they were. Maybe but not a no-brainer imho.

Since discussing this five days ago, including today's current performance, oil stocks are up about 5%. I still think they are a good investment even now. Strictly my opinion.