It is Friday. I would like to invite all the Tiger Foodies to participate in a fun activity to describe your portfolios with dishes. You will win Tiger coins and get a chance to win a Surprising Tiger Gift. I hope you enjoy it！The stock and food may seem unrelated. But Tigers often link them together.For example, it is common to use the phrase "winner winner chicken dinner" when referring to a large stock profit.The exact origin of the phrase winner winner chicken dinneris disputed, but it may have come from gamblers. The most popular origin story of the term is that a chicken dinner at a Las Vegas casino used to cost $2, the same amount as a standard bet. So, if you won a bet, you won a chicken dinner.As well as chicken dinner, the Tigers enjoy pineapple because it symbolizes fortune.I would like to invite all the Tiger Foodies to participate in a fun activity to describe your portfolios with dishes.💡How to participateFind proper food to describe your portfolios.Take a photo of it.Upload it in the comments section of this post.Photos by copying and pasting from others are not valid.There are tons of coins awaiting you!🎁Event PrizesAll Tigers who leave your photos in this post will receive 50 Tiger Coins.Tigers whose comments have the most likes or are very creative will receive 188 or 666 Tiger Coins.In addition, you get a chance to win a Tiger Gift🐯🐯🐯🐯.$Tiger Brokers(TIGR)$⏰ Event Duration23 Sept, 2022- 8 Sept, 2022 SGT
Short selling is a concept that many friends have heard of, but few people are able to make profits through short selling during bear markets. This article will discuss short-selling, including its risks and benefits. I hope you will have a better understanding of short-selling after reading this article.1. What is short selling？Short selling is a trading strategy that speculates on the decline in a stock or other security's price.According to the image from Motley Fool's website, short selling is to borrow shares of a stock or other asset that the investor believes will decrease in value. You borrow the stock from the brokers with a certain amount of funds as a guarantee to sell, and when the stock falls, you purchase the same number of stocks at a lower price and return them to the brokers.For exampleImagine a trader who believes that ABC stock—currently trading at $100—will go down in the next months. He can borrow 100 shares from the brokers and sell them to another investor.A week later, the stock falls to $50. The trader decides to close the short position and buys 100 shares at $50. The trader’s profit on the short selling, excluding commissions and interest on the margin account, is $5,000 ( ($100 - $50 ) x 100 shares = $5,000).2. Why short selling？There are two main motivations to short:1. To speculateThe most obvious reason to short is to profit from an overpriced stock or market. The most famous example of this is when George Soros broke the Bank of England in 1992. His profit from short selling eventually reached almost $2 billion.2. To hedgeMost investors use short positions as a hedge. This means they are protecting their long positions by shorting other similar stocks.3. How to short selling？In order to use a short-selling strategy, you have to go through a step-by-step process:Identify the stock that you want to short.Click the "Trade" button and then the "Sell" button. (Make sure you do not hold long positions in the same stock)Enter your short order to choose the appropriate number of shares.At some point, you'll need to close out your short position by buying back the stock that you initially sold.4. Pros and Cons of Short SellingPros1 Possibility of high profitsIt has been mentioned before that short selling can be beneficial in a bear market.Furthermore,when companies are involved in financial scandals or crises, their stock prices tend to fall rapidly.For example, Luckin's stock fell 75% in April 2020 after its Chief Operating Officer admitted to fabricating a significant portion of the company's sales. Short sellers can make a fortune from shorting.2 Hedge against other long positionsSome investors use short positions to protect (hedge) against the risk of a declining asset/stock price in the future.Cons1 Potentially unlimited lossesShort selling can be costly if the seller guesses wrong about the price movement. A trader who has bought stock can only lose 100% of their investment when the stock decline to zero.However, a trader who has shorted stock can lose much more than 100% of their original investment since the equity prices can continue to go up, and the risk of "short" is theoretically unlimited.2 Margin callShorting is known as margin trading. When short selling, you open a margin account, which allows you to borrow money from the brokers using your investment as collateral.If the value of the collateral in your margin account drops below the minimum requirement, the broker may require you to deposit more cash or be forced to close it by buying back the stock to cover the difference immediately.3 Margin fees incurredThere are a number of fees associated with short selling in addition to commissions, such as margin interest and dividend fees.Margin interest can be a significant expense when trading stocks on margin. Short positions can accrue interest over time if held for an extended period of time.In addition, short sellers need to pay dividends on shares that they have borrowed. The dividend will be deducted from the short seller's account on the payment date and delivered to the stock owner.4 Recall riskIn certain situations, a short position may be covered without being directed by the position holder.When a stock has a high percentage of short positions, there are no more securities available in the short pool, and the lenders who originally held these stocks are seeking to close out their positions. The brokers may recall the shorted stocks from the holders and return them to the lenders.The Tiger Trade app provides key information about shorting pools, short interest, and other metrics which are key to short selling.
Big loss and big gain? You need to understand the inertia of the market
A break in the USD index above $112 should theoretically have caused a pullback, but it did not; In theory Treasuries should pull back above 4%, but they haven't.Like Tesla last year, at $900 everyone was looking for a pullback to $1000, but it didn't, and the stock went straight to $1200.It makes sense to be bullish and bearish at this point, just like Tesla last year. Do you think it's wrong to be bearish? Then it fell. But you say long is not money? How can 900 go to 1,200 and not make money.But currencies can stay at the top for longer than stocks, and the greater the magnitude of capital, the greater the inertia.The same is true of crude oil this year, with the top price much higher than the expected short price.The market is completely following the dollar trend. After FOMC, I said that the bottom would be reached. Judging from the dollar situation, the dollar will not reach the top, and the bottom will be further broken in June. From yesterday's options to look at the large single stock began to have a bullish order, but the ETF generally biased down.$SPDR S&P 500 ETF Trust(SPY)$ The largest volume was in the put spread and straddle$SPY 20230317 310.0 PUT$$SPY 20230317 350.0 PUT$and$SPY 20221021 335.0 PUT$$SPY 20221021 335.0 CALL$The PUT spread is extremely bearish, the option expiration date is very far, which is a broad trend bearish; The straddle of a call, while a call is deep inside, often means that even a bullish call is a limited rally.The common feature of both strategies is the attempt to avoid the opposite direction of volatility, one strategy is the use of time, the other is the use of in-the-money options.$iShares Russell 2000 ETF(IWM)$ The biggest volume was in the PUT and PUT spreads$IWM 20231215 165.0 PUT$and$IWM 20221021 168.0 PUT$$IWM 20221021 163.0 PUT$The directivity of the two orders is obvious, especially the spread is expected to fall below 168 and above 163 in the near future.$Invesco QQQ Trust(QQQ)$ Call spreads and straddle strategies$QQQ 20220926 290.0 CALL$$QQQ 20220926 285.0 CALL$and$QQQ 20230317 240.0 PUT$$QQQ 20230317 340.0 CALL$The CALL spread believes that QQQ will not rise above 285 before September 26.The spread covers the likely direction of future volatility in both directions.$Technology Select Sector SPDR Fund(XLK)$$XLK 20221118 120.0 PUT$$XLK 20221118 105.0 PUT$As a weighted technology ETF, some traders think the XLK will continue to fall, below 120 and above 105.It's important to note that both Apple and Google had big calls yesterday,$GOOGL 20221118 105.0 CALL$$AAPL 20221021 152.5 CALL$This contradicts the above trade, as a look at the XLK components suggests that for the XLK to continue its decline, Apple must fall. Currently, only Apple has not fallen below its June low.DIS also has big Call orders: $DIS 20221216 95.0 CALL$Tesla has the most mixed views, though it's worth noting that the bullish large order expiration date selection has been pushed back again.$TSLA 20230915 366.67 CALL$ & $TSLA 20230915 383.33 CALL$Before the FOMC, the call was generally scheduled to expire in January or March next year. Now the call is scheduled to expire in June through September, consistent with the impact of the Fed delaying and raising the end point of interest rate hikes on the timing of stock market rallies.At present, the most stable money making in the market is the Sell put (ATVI, KNBE, VMW) of the acquisition company.Thanks to tiger friends support. If you are interested in options, you can join my discord：Options YYDSalso tiger options group：Tiger Options Club
[Rewards] What impact will climate change have on you?
Hey Aussie,I would like to invite you to take part in a discussion about the impacts that climate change will have on you. You will win Tiger coins for your participation.Parts of Australia’s east coast could be hit by ongoing flooding within days, just a week after the official declaration of a rare third La Niña.A low-pressure system is forecast to cause widespread rain and storms across much of the inland south-east from Wednesday and possible major flooding from already full waterways across southern Queensland, inland New South Wales and northern Victoria.Climate change has severely impacted Australia in recent years, resulting in floods, searing temperatures, changes in fire and rainfall patterns, sea level rise, and ocean acidification.Climate issues are becoming increasingly important to Australians, with topics such as decarbonization, renewable energy, and electric vehicles becoming common topics of conversation.I would like to invite you to take part in a discussion about the impacts that climate change will have on you. You will win Tiger coins for your participation.💡Share Your InsightsPlease leave a message in the comments section of this post, and share your insights about climate change 💸💸💸How does climate change affect you?Are you concerned about electric vehicles and renewable energy?Would you recommend any stocks that are related to climate change?🎁PrizesAll Tigers who comment on the following post will receive 10 Tiger Coins.In addition, you have the chance of winning 100 Tiger Coins.⏰Activity Duration22 september, 2022-29 september, 2022
Global REITs Map: Best REITs Can Still Grow Despite Higher Interest Rates
With the 60 years of development of the global REITs market to date, more than 40 countries and regions around the world have adopted the US REITs approach to real estate investment, providing all investors with a global income-generating real estate portfolio.While the U.S. remains the largest listed real estate market, the listed real estate market is increasingly becoming global. The growth is being driven by the appeal of the U.S. REIT approach to real estate investment. Today more than forty countries and regions have REITs, including all G7 countries.Source: www.reit.comRecommend to Read:Quick Learning of REITs' Keypoints & 8 Benefits of Holding REITs?1. How Many REITs Are There in the World?A total of 865 listed REITs with a combined equity market capitalization of approximately $2.5 trillion (as of December 2021) are in operation around the world. As the following charts show, REITs have grown dramatically in both number and equity market capitalization over the past 30 years going from 120 listed REITs in two countries to 865 listed REITs in more than 40 countries and regions.Source: www.reit.comAmong them, Asia has a high absorption rate of REITs, growing from 31 REITs in 6 countries and regions in 2005 to 216 REITs in 11 countries and regions in 2021.Singapore established the operation system of REITs as early as 1999, which is one of the earliest and most mature markets in Asian countries. India and China will join the market in 2014 and 2021 respectively. Since 2015, the Middle East has also seen significant growth with the addition of REITs in Saudi Arabia and Oman. Note: Asia REITs with higher-interest rates, and Asian REITs payouts are more attractive.2. How about REITs‘ Return？Comparison of REITS and stock index and bond returns From the current issuance of REITs, companies and investors have achieved a win-win situation. The former has revitalized assets and the latter has obtained excess returns.According to Wanhe Securities’ statistics on U.S. infrastructure REITs in March 2021, the U.S. infrastructure REITs index has grown at a compound annual growth rate of 12.11% since 2010, slightly higher than the S&P 500’s 11.67% over the same period.According to research by investment consultancy Wilshire Associates, real estate allocation in listed markets around the world can help improve returns on a diversified portfolio. REITs play a key role in enhancing investment returns and reducing risk in target date funds (TDFs), popular investment products.Source: www.reit.comThe Best REITs Can Still Grow Despite Higher Interest RatesIt’s important to note that REIT share prices aren’t just affected by interest rates but can and do trade on other factors, including a REIT’s fundamentals, long-term growth prospects, and dividend growth history.The chart below, courtesy of REIT.com, plots the 12-month return of REITson the y-axis, and the change in the 10-year Treasury yield on the x-axis from 1992 through 2017. The blue dots represent periods when REITs earned a positive total return during each of those periods. The red dots signal that REITs lost money.While an investment in REITs made money in 87% of rising rate periods observed, it is clear that REITs have been positively and negatively correlated with interest rates during different periods of time, indicating that there are other factors influencing their returns.Have you ever invested in any REIT? Please share with tigers.
Warren Buffett on Market Corrections: When to Keep, Sell or Buy?
Source: Gerald Miller | CNBCDuring a market correction or market crash, the first thing you have to do is stay calm. You have to stay objective and detach yourself temperamentally from the crowd to be a good investor. It does not take brains, it takes temperament.As Warren Buffett wrote in his 2017 Berkshire Hathaway ($Berkshire Hathaway(BRK.A)$, $Berkshire Hathaway(BRK.B)$) shareholder letter:“If you can keep your head when all about you are losing theirs, If you can wait and not be tired by waiting, If you can think and not make thoughts your aim, If you can trust yourself when all men doubt you, Yours is the Earth and everything that’s in it.”Do not panic and avoid selling good businessesIn general, people panic in a correction because they do not know why they bought a stock in the first place. They do not know the business well enough to evaluate its value and therefore focus only on the price and the fact that it is going down.However, the fact that a stock is going up or down should not influence your decision to buy or sell.If you were to buy a house for $200,000 and someone offered you $150,000 to buy it off you when the housing market was in a downturn, you would not rush to sell at that price just because the market value has gone down. The same goes for stocks; if you own a piece of a great business, why should you sell it only because someone is offering you less for it?According to Warren Buffett, some people are just not emotionally and psychologically fit to own stocks. Volatility is your friend according to him, but you can transform it into your enemy if you get scared about the market. Indeed, the stock market is the only place where investors run out of the store during a sale.In a 2015 interview, Buffett discusses why you should not worry about corrections. He said:“If you are worried about corrections you shouldn’t own stocks, I mean if you can’t take your stock going down. It is going to go down sometimes if you own a stock so why worry about it. The point is that you buy something that you like at a price you like and then hold it for twenty years. You should not look at it day to day. If you bought a farm or an apartment house you would not get a quote on it every day or every week or every month. So it is a terrible mistake to think at stocks as something that bob up and down and that you should pay attention to all those bobs up and down."During a correction, you do not have to be that person that is worried about the next week or next month.Focus on the long termand invest only money that you know is going to be in the market for the next ten years. If you can do that, then investing during corrections or crashes becomes a lot easier.When should you sell a stock?According to Buffett, there are three possible circumstances when you should sell a business.One is when something better shows up. Sometimes you may be forced to sell something that you like for something that is even more terrific, especially if you have limited funds to invest. Early in his career, Buffett would often sell stocks just to be able to buy better stocks. Remember the opportunity cost and the fact that If you put money in one company, you cannot put the same money in another company. It is also worth highlighting that if you sell a stock to buy something else, you will probably incur taxes and transaction fees. Therefore, if you factor these extra costs, there is a gap between the sell area and the buy area in which it might be better to do nothing all and just keep your original stock.The second reason to sell a stock is when the economic characteristics of a business change in a big way. An example of this is when Buffett sold his positions in the airline businesses in 2020, stating that the world had changed for airlines due to the pandemic and he no longer understood the sector.However, fundamental changes happen quite rarely. In fact, in an annual report to Berkshire Hathaway shareholders in 1997, Buffett states that selling fine businesses on scary news is usually a bad decision.The third reason to sell is when a single holding gets too big. In general, Buffett prefers having a concentrated portfolio, with Apple (AAPL,Financial) being by far his biggest position, but there are certain situations in which he reduces a position when it gets too big.When should you buy more of a stock?Corrections do not happen very often, and big drops from 20% to 50% are even rarer. Therefore, investors should not miss the opportunity to buy great stocks when they are trading at rare discounts.However, no one should buy a stock only because the price has gone down. Lehman Brothers looked incredibly cheap in 2007 but that would not have been a very good investing decision. Many stocks are cheap for good reason.Corrections provide a great opportunity to find bargains and buy more of your favorite stocks. However, as Ben Graham taught Warren Buffett, “Price is what you pay, Value is what you get."Therefore, as always, it's best to stay in your circle of competence and invest only in companies that you understand. Understand the economics of the business and how it will look like in 10 or 20 years from now, otherwise you can't determine the value you are getting.Make sure to define your circle of competence and stay inside it, because if you get all excited about a stock that your neighbors are talking about and wander out of your circle, you will at the end “get creamed and you should,” as Buffett puts it.Have a look at your portfolio, and if you have not done so before, verify if your stocks are really inside your circle of competence. If they are, you should then be able to rather easily assess if they are really great businesses, with big moats, strong brands, low Capex and great management.Once you have identified the companies in your portfolio that are great businesses and that you would be willing to keep for the next 10 years, evaluate if thanks to the correction the stock is undervalued and has a good margin of safety.Top 10 HoldingsSource: whalewisdom$Apple(AAPL)$, $Bank of America(BAC)$, $Coca-Cola(KO)$, $Chevron(CVX)$, $American Express(AXP)$$Occidental(OXY)$, $The Kraft Heinz Company(KHC)$, $Moody's(MCO)$, $U.S. Bancorp(USB)$, $Activision Blizzard(ATVI)$ Source: https://www.gurufocus.com/news/1864749/warren-buffett-on-market-corrections
Why Dollar Cost Averaging Is The Best Investment Strategy
Many people don’t know what dollar cost averaging is, how it works or why they might want to do it. In this article we’ll discuss the basics of dollar cost averaging and explain how it helps investors avoid big losses during market downturns as well as providing stable returns long term.Photo byLive RicheronUnsplashTime In The Market Beats. Timing the marketMarket timing is a strategy where investors attempt to predict future stock prices. This is done by looking at historical data and trying to determine what the next trend might be. If you think the economy is about to turn around, for example, you could buy stocks that are expected to do well once the economy picks up steam. On the flip side, if you believe the economy is headed south, you could sell off shares of companies whose sales are likely to decline.The problem with market timing is that it doesn’t always make sense. Markets don’t always behave predictably, and determining whether an asset is under valued or over priced is extremely difficult. As a result, you may decide to “wait for the dip” on an asset but instead the asset rises rapidly and you miss out on gains.Or on the other hand, you may sell a stock you think will go up in the long term because you think it may go down in the short term and you might be able to make a quick profit. Well that may happen. But the stock may also continue to run up and if you have to buy back in at higher prices, then you have just missed out on some more profit.The whole idea behind dollar cost averaging is that you don’t care about the price at the time you buy. You just consistently buy the same asset over a long period of time in regular intervals. Historically this has shown to be more consistent for investors then trying to trade on short term moves.How Does Dollar Cost Averaging Work?When it comes to investing, one of the most common ways people try to save money is dollar cost averaging. In fact, according to Investopedia, about half of investors use this method. But what exactly does dollar cost averaging mean? And how does it work?To understand how dollar cost averaging works, let’s start with an example. Imagine that you want to purchase 10 shares of company X. Instead of purchasing all of these shares in one go, you may instead decide to purchase 1 share each month for 10 months.Or (the way I do it), each month after getting my pay from my fulltime job. I add whatever money I have to invest that month into all of my favourite stocks. I don’t care about the share price that particular day because many of my stocks are long term plays. I don’t expect to sell for 10+ years, unless my conviction changes.Rewards of Dollar-Cost AveragingThe key to dollar-cost averaging is to stick with it long enough to see a difference. On a day-to-day basis anything can happen. The advantages and disadvantages below are in line with what to expect if you stick to this strategy long term.Advantages of dollar cost averagingThe concept behind dollar cost averaging is simple: you buy shares of a stock over time rather than paying full price for it all at once. This method helps to keep emotions out of the equation because there are no big decisions to make about whether or not to invest.This strategy allows people to purchase items over time without having a lot of money available. For example, let’s say you want to start investing in stocks. You can start with very little money, even £10 per month to get started.You can set up recurring payments through your bank account or credit card so that you never need to worry about running out of funds. Dollar cost averaging can become very automated so you don’t even need to think about it. Especially when picking something like an index fund with a diversified basket of stocks.Disadvantages of dollar cost averagingDollar cost averaging isn’t right for everyone. If you’re looking to make a large investment, you’ll probably want to consider buying everything at once. Also, if you’re new to investing, you should wait until you’ve built up a bit of experience before diving headfirst into dollar cost averaging.If you’re a novice investor who wants to learn about investing, you might also find it difficult to stay disciplined. When you’re learning, it’s easy to get distracted by other things.It’s important to note that dollar cost averaging doesn’t guarantee success. There are plenty of examples where people have still failed at dollar cost averaging due to making the wrong stock picks.Does Dollar Cost Averaging Really Work?There are two main reasons why dollar cost averaging works. First, it gives you more control over your investments. By choosing to invest small amounts every month, you can avoid being swept away by emotion and impulse purchases.Second, dollar cost averaging makes sure that you always have some money invested. Even if you only put £1 per month, you will eventually end up with a fair amount in your portfolioA Long-Term StrategyThe stock market tends to go up and down over short periods of time. But it doesn’t always move in one direction. There are times when the market goes up and there are times when it goes down. This is called volatility. In fact, the average investor loses money during a bear market.Over the long term, the overall market tends to trend upwards. This means if you could average out your purchases over time you should be able to match the average returns of the stock. In fact, this is exactly what happens.Gaining this average price of the share over time helps smooth out any volatility along the way. If the stock does tank in share price then this means the next time you’re due to buy, you will be lowering your average cost in the long term which is a good thing. On the other hand, if the stock goes up now then you are in profit which to no surprise… is also a good thing.SummaryDollar cost averaging is a great long-term strategy because it ensures you always have some money in the market. It also helps you gain an average return on your shares over time. However, it may not work for all investors that want a more fast paced investing approach.$DJIA(.DJI)$$NASDAQ(.IXIC)$$S&P 500(.SPX)$ Follow me to learn more about analysis!!
All the fixed tenure yields have broken above their four decades of downtrend.To note, the shorter end rate, the fixed 2 year tenure yield is climbing faster than the longer end, the U.S. fixed 30 year tenure government bond yield.How it is going to close in 2022 in this yearly chart, it will be crucial to determine the trend transition; from this long-term downtend to uptrend.$Micro 10-Year Yield - main 2209(10Ymain)$$Micro 2-Year Yield - main 2209(2YYmain)$ Follow me to learn more about analysis!!
[TOPIC] What Grief Stage Are You At: Denial or Acceptance?
The stock market opened another downturn as Powell warned that the economy and households will experience some pain as the Fed takes more aggressive steps to curb inflation.Casey of FBB Capital Partners said of the five stages of grief: denial, anger, bargainin, depressionand acceptance, investor sentiment has gone through the first four stages and is now entering the last one.What are the 5 Stages?The market psychology of bear markets generally follows a five stages of grief - denial, anger, bargaining, frustration, and acceptance --by Elisabeth Kubler-Ross.Denial: At this initial stage, the prevailing view is that stock market weakness is nothing more than a buying opportunity. Far from being angry (see next phase), investors are rather optimistic. Anger: Denial is getting harder to sustain as the market correction becomes too severe. Investor sentiment eventually turned into anger, who complained about the unfairness of the pullback.Bargaining: At this stage, investors redirect their energies to figuring out if they can maintain their lifestyle while their portfolios take a hit; retirees recalibrate their financial plans.Depression: As the market continues to slide, people realize that spending cuts aren't enough. There will be major changes in lifestyle.Acceptance: In the final stage, investors throw in the towel. They surrendered to the bear market and stopped even imagining when it would end. They see any sign of a stronger market as a "fool's rally".Analysts says investors entered the last one?Casey said: Investors budded during several previous stock market rallies, especially $S&P 500(.SPX)$ rebounded strongly from the June lows by about 17%.Investors are now approaching the stage of 'acceptance', especially as the Fed acknowledges that a soft landing is less likely and even allows the economy to fall into recession.Do you agree with him?What stage are you at?Join our topic and post to win hundreds of tiger coins~
Part 2 Good Technical Analysis This Week #SPX #NIO #AMZN [#ANALYSIS WITH @MillionaireTiger]
Find out more about me here (YouTube/Discord/Telegram): https://www.linktr.ee/keeleytanIf you find my post helpful, I’ll be grateful and appreciate it if you could leave me a like on this post, and follow me for future posts like this.I'm thinking of trying out to provide free signal services on discord. If you're interested, DM me for a role there!$NIO Inc.(NIO)$ An 18.90% drop in price since my last analysis on 12 Sep, and a 3.34% drop in price since my previous analysis.BeforeAfter$Amazon.com(AMZN)$ A 9.90% drop in price since my last analysis on 15 Sep, and a 3.94% drop since my previous analysis.BeforeAfter$S&P 500(.SPX)$ A 5.33% drop in price since my last analysis on 15 Sep, and a 1.72% drop since my previous analysis.BeforeAfterHope you've taken advantage of my analysis this week. Like, share, and comment if you're in profit! I'm thinking of trying out to provide free signal services on discord.Let me know if you have any tickers you want me to analyze.Do check me out on other social platforms too, I post content on trading, analysis, and psychology. Check me out here: https://www.linktr.ee/keeleytan@CaptainTiger@TigerStars #ANALYSIS WITH @MillionaireTiger
Further pressure points on Kiwi dollar in months ahead
(The story is written by Jonathan Mitchell on Fri, 23 Sep 2022 at https://www.nbr.co.nz/) The Kiwi dollar is expected to experience further downside pressures as investors retreat to safety, as the US Federal Reserve hikes interest rates, as well as fears of a global recession.The New Zealand dollar touched a 2.5-year low against its US counterpart this week at 58c, after the Fed hiked again by an expected 75 basis points.It also put the Kiwi under pressure with the Australian dollar, below 88c.Tiger Brokers chief executive Greg Boland told NBR there was a further chance of the Fed raising rates by another 75bp in November.He said the Kiwi was feeling the heat from aggressive monetary policies around the world, as well as weaker commodity prices. “Things like higher oil prices and freight costs have definitely affected the Kiwi.” Exporters feeling the benefits Boland said exporters were feeling the benefits of a lower dollar because many were being paid in US dollars. However, he said those same exporters were facing rising costs, including fertiliser and oil prices. Add to the mix rising wage inflation as well, he said. “It’s good news at the moment for exporters and bad news for importers.” Further downside risks Boland said there was likely to be further pressure on the Kiwi because of further rate hikes, as well as US inflation pressures. He said US inflation was only 1.4% at the beginning of last year, hitting 5.4% in mid-2021, before reaching 9.1% earlier this year and then 8.3% in August.“The stubborn inflation rate globally and in New Zealand, that’s going to be around for longer, so I think there could be further weakness in the Kiwi.” Devon Funds head of retail Greg Smith said the US dollar had been on an uphill climb for months, driven by ongoing hawkish comments from Fed officials.He said the weaker NZD was not necessarily reflecting a lack of confidence in the New Zealand economy, and reiterated it was positive for exporters and the tourism sector. However, consumer and business confidence remained in the doldrums, with further pressure on household budgets because of rising interest rates and stubbornly high inflation.UK recession Overnight, the Bank of England raised its base interest rate to 2.25% from 1.75%, lower than forecast. It marked the seventh consecutive rise and takes UK interest rates to a level last seen in 2008. The reason for confounding expectations was that the bank believes the UK economy is already in recession, with GDP forecast to contract by 0.1% in the third quarter, as opposed to growth of 0.4% previously forecast. That would follow a 0.1% decline in the second quarter. Inflation in the UK dipped slightly in August but, at 9.9% year-on-year, is still well above the bank’s 2% target. Core inflation – stripping out energy and food components, which are the biggest gainers – is at 6.3% on an annual basis. The BoE now expected inflation to peak at just under 11% in October, down from a previous forecast of 13%.The bank’s decision comes against a backdrop of an increasingly weak British pound, the European energy crisis, and a set of economic policies from new Prime Minister Liz Truss.OCR at 4.75%?Back home, ANZ chief economist Sharon Zollner now expectedthe official cash rate to peak at 4.75%, up from a previous prediction of 4%. She expected two further 50bp hikes this year, with three 25bp hikes in February, April and May next year. “The economy is not rolling over, with the tight labour market and strong wage growth partially offsetting the impact of higher interest rates. The low NZD is also a meaningful offset to current monetary conditions.” Zollner said the RBNZ wanted to see slower growth – and a higher OCR would be needed to do the job.“Monetary policy acts with long and variable lags, and there absolutely is a plausible scenario where a 4% OCR is all it will take to squeeze households enough to drive inflation lower.“Conversely, if wage inflation remains stronger for longer, the OCR may need to go higher than 4.75%.” She said ANZ’s updated OCR expectations better balanced the risks. (Jonathan MitchellFri, 23 Sep 2022)
Selling calls on spyd 20% return after buying 100 shares at same price at 6 months Say now $SPDR Portfolio S&P 500 High Dividend ETF(SPYD)$ is around 37 sell the call at 38 for 6 months and get a $5 call option and then only need to pay $32 for the 100 shares which is 17% return Plus the 2 divindend before the excerise date which is around 18-19 % within the period it also covers the potential 20% downside for next year Selling a covered call means opening a contract that gives you the obligation to sell shares of a stock you already own, at a certain price (the “strike price”) up until a set date (“expiration date”). In exchange, you receive an upfront amount (the “premium”) for selling this contract. A typical short call option entails the obligation to sell 100 shares of the underlying stock, and the call is “covered” because you already own the shares you might have to sell.Because you have this obligation and hold the stock, in general it is beneficial for the stock price to stay relatively flat or increase moderately, and undesirable for the stock price to fall significantly. Your maximum potential profit is limited, but your potential losses are limited too.Here’s some lingo to describe how your short covered call option is performing relative to the stock price:In-the-money: The stock price is above the strike priceAt-the-money: The stock price is at the strike priceOut-of-the-money: The stock price is below the strike priceWhen might I use this strategy?You might consider selling a covered call if you think a stock price will stay relatively stable or rise somewhat in the near future (i.e., you have a neutral-to-bullish outlook). You can only do this on Robinhood if you own enough shares in the underlying stock to cover the short call if it’s assigned.One reason to use this strategy is to earn additional income on stocks you own. If you’re planning to hold the underlying shares anyway, selling covered calls can be a way to help generate income from the premiums you receive (aka to “monetize” your holdings). But there’s a tradeoff — You give up the potential to profit if the stock price soars above the strike price. When this happens, the call has the potential to be assigned. (Note: Calls are usually assigned at expiration, but can happen at any time beforehand.) Remember, you’re obligated to sell your shares at the strike price if the buyer chooses to exercise the option.Selling a covered call can also be a way to help protect yourself if the stock price declines. The premium you received for the call can slightly offset your losses. Still, selling a call can’t protect you from losing money if the stock price falls below the breakeven price.@TigerEvents @TigerStars @Daily_Discussion do feature my article for peopleto learn how to hedge potential losses and want a safer 10% gain
Arriving at first supportThe markets $DJIA(.DJI)$ , $NASDAQ(.IXIC)$ and $S&P 500(.SPX)$ closed lower again yesterday amidst growing recession fears with the Feds and global central banks raising rates in tandem. Where investors had hoped for a Fed pivot which had in turn supported the market, that notion has now been put in the rear view mirror. Now most have bought into the Fed's drumming that they are not putting on the brakes any time soon. In fact, they look like race car drivers going full speed ahead. However, the fear is that they hit the brakes too late. And many fear that the race car that the economy symbolises might crash instead of slowing down niceley to make the necessary turn. Lets hope that this Feds have the necessary proper calculation and driver to pilot the economy safely. Technical wise, the broad market index acted spot on, touching the 3750 support level mentioned in the previous article before bouncing up to close at 3759. In fact it was so textbook, it touched 3749.45 and settled just above it. Now we are at the upper limit of the support between 3700-3750, I am being a bit more optimistic and starting to layer into positions. If this level gives way, we will be attempting a double bottom and support will be around the 3635 region which I believe has very firm support.Hence, I am happy with the risk reward at these levels. At the same time, I am still cautious as a break of the 3635 level might see a market flush so at these levels, a good level of cash is still prudent.Stay safe 😊
6 Risks in September: Expecting a Bear Rebound May be Disappointed
Hawkish rate hike storm, Davis double kill, high inflation, economic recession, repurchase flameout, pension fund sales, quantitative to short... U.S. stocks are still not good, agencies warn that even if there is a small bear market rebound, and don't hold your hopes up.Below are some of the factors that still affect the development of US stocks:1. Hawkish Fed's Rate HikesThe market expects that the Fed will raise interest rates by 75 bps on Wendesday, also the expectation of raising by 100 bps has also increased. Meanwhile, the expectation on next two interest rate meetings this year will maintain the pace of rapid interest rate hikes.Goldman Sachs’ forecast is more aggressive.The bank raised its final interest rate forecast by the end of 2022 to a range of 4%-4.25%. Specifically, the interest rate will be raised by 75 bps in September and 50 basis points in November and December.According to the latest survey of economists released by the media, most economists expect the ceiling of the federal funds rate to hit 4% by the end of 2022, to maintain this position in 2023, and to cut interest rates in early 2024.You may know that raising interest rates will cause asset prices to fall, but don't understand the process clearly. The impact of interest rate hikes is mainly divided into two parts, namely valuation and performance, also known as Davis Double Play.The first play is that the rise in interest rates will lead to the revaluation of assets, the stock price-earnings ratio will drop sharply, and the fall in asset prices often occurs in an instant (usually within a month);The second play is the decline of the macro economy and business operations. This kind of market generally has a long cycle and will be accompanied by large fluctuations in asset prices (not necessarily falling). For like the central bank's interest rate hike will first pass on the deposit and loan interest rates of commercial banks, and then affect commercial activities and consumption habits.Davis’s financial life had three phases: learn, earn, and return. The learn phase lasted into his early forties, and the earn phase stretched from his forties into his late seventies. At that point, he tackled the return phase.” Return phase = philanthropy. Davis died in 1994 leaving $900 million to personal cause.www.amazon.comOn Monday's trading, the US 30-year mortgage rate soared to 6%, the highest since November 2008. The dollar was unchanged after the news, but all asset prices fell. This shows that the rise in risk-free interest rates is gradually eroding the real demand for assets.2. High Inflation and RecessionLast week, the economic barometer $FedEx(FDX)$ issued a profit warning, the CEO even directly warned that "we are entering a global recession, and the company data is not a good omen."Global inflation is highThe Monetary Authority of Singapore said that in the medium term, global inflation is likely to remain at higher levels for longer than the low levels of benign inflation seen over the past decade.The U.S. CPI data rose more than expected in August and the number of initial jobless claims released a signal that inflation was entrenched, reinforcing the importance of accelerating interest rate hikes.Overall, high inflation and economic recession are still the main factors under pressure on US stocks. At present, the actual interest rate hike action has not been fully transmitted to the demand side, and reducing inflation not only depends on the strength of interest rate hikes, but also takes time to ferment.Bank of America's global fund manager survey for September shows fund managers believes recession is likely has increased further in September to 68%, the highest since May '20 ,and 79% of the global fund manager survey participants see slower inflation over the next 12 months than today, hinting that inflation may have peaked last month.Goldman Sachs also sharply lowered its GDP growth rate forecast for the U.S. economy this year to 0 from 4% a year ago, and lowering its economic forecast for next year to 1.1% from an earlier 1.5%.3. Companies Buyback StalledThis week, repurchase, an important engine of U.S. stocks, stalled. Beginning last Friday, 50% of S&P 500 listed companies entered a silent period for repurchase for one month. During the period of silence, Goldman's repurchase unit has turned back to its usual busy state, with the 10b-5.1 program kicking in, reducing average daily trading volume by 30-35%, or about 0.7 times the average daily volume in 2021. The slowdown is crucial and means stocks could be even worse.https://www.zerohedge.com/, BY TYLER DURDEN4. Month-end and Quarter-end Rebalancing of Pensions FundsAccording to Goldman Sachs calculations, there will be more selling pressure by the end of September - pension fund monthly and quarter-end rebalancing.Goldman Sachs models estimate that pensions could sell $18 billion in equities. From the perspective of the past three years, in terms of absolute dollar value, the $18 billion sell-off ranked 58th; in terms of net value, the $18 billion sell-off ranked 33rd, and the scale is not small.While Last two weeks of quarter could see rally due topension fundrebalancing in a similar manner to March and June. This is counter to strong seasonal tendencies and up to 84 billion dollars of debt securities maturing on Fed's balance sheet in last two weeks.5. CTA Strategy funds May Turn to ShortEarlier, UBS strategist Nicolas Le Roux pointed out that CTA will turn bearish again in September, and recently US stocks may face some selling pressure from CTA in the next two weeks.JPMorgan analyst John Schlegel said, if the economy ends up heading for a recession, U.S. stocks could even fall below their mid-June lows, at which point the CTA strategy fund could be shorting stocks further.Goldman Sachs expects to buy $7.7 billion in stocks in the coming week and reduce its holdings of $614 million in the next month as the stock market rebounds.https://www.zerohedge.com/, BY TYLER DURDEN6. Fund's Cash Balance A 20 Years HighAnother statistic to watch is that fund managers have now raised their cash balances to 6.1%, the highest level in 20 years. Rising interest rates have made cash investing equally attractive, both positive and negative.Bank of America's global fund manager survey for September shows sentiment among money managers is 'super-bearish'. ET takes a look at the key highlights of the brokerage's survey based on responses from 212 participants with $616 billion in assets under management (AUM). The findings reflect the mood among global fund managers.Fund managers' average cash balance has risen to 6.1% in September - the highest since October 2001 after the 9/11 shock, and well above the long-term average of 4.8% as recession concerns rise, the survey said.The bad news doesn't stop there, US stocks are hardly optimistic this week, and Goldman Sachs warned that anyone expecting a "bear market rebound" may be disappointed.$S&P 500(.SPX)$, $SPDR S&P 500 ETF Trust(SPY)$ ,$ProShares Short QQQ(PSQ)$ ,$NASDAQ(.IXIC)$ ,$Nasdaq100 Bear 3X ETF(SQQQ)$ ,$iShares Russell 2000 ETF(IWM)$ ,$DJIA(.DJI)$ ,$Dow30 Bear 3X ETF(SDOW)$Want to join other topics as well to win more coins? [Markets Related]:Fed Meeting(21 Sept): 75bps rate hike, or 100bps?
Unusual Whales has submitted a proposal to list two ETFs that would track the activity of lawmakers and their related parties.The ETFs drew inspiration from the successful trading of Nancy Pelosi and Ted Cruz.One ETF would track the activity of Democrats, while the other would track the activity of Republicans.Speaker of the House Nancy Pelosi is well-known for making profitable and timely trades. However, it isn’t just Pelosi who has made unusually profitable trades in the past few years. Quiver Quant’s U.S. House Long-Short strategy has returned 12.75% in the past year, outperforming the S&P 500’s one-year loss of almost 12%. The strategy takes a long position in stocks that have been sold by members of the House and a short position in stocks that have been sold. Meanwhile, the Congress Long-Short strategy has returned 17.5% in the past year and operates in a similar fashion as the House strategy.Now, investors may soon be able to invest in an exchange-traded fund (ETF) that follows the trading activity of lawmakers, their spouses, and their dependent children. The Unusual Whales Subversive Democratic Trading ETF seeks to follow the trades of Democratic lawmakers, while the Unusual Whales Subversive Republican Trading ETF seeks to follow the activity of Republican lawmakers. Let’s get into the details.Seven Things to Know About the NANC and KRUZ ETFThe Democratic ETF tracker would have the ticker NANC, while the Republican ETF would have the ticker KRUZ. These tickers reflect Pelosi and Texas Senator Ted Cruz.According to Unusual Whales, Pelosi currently owns 15 companies in her portfolio, including Tesla and Visa Last year, the Speaker made an estimated $12 million in purchases.On the other hand, Cruz has only made an estimated two trades in the past three years and has considered introducing a bill that would ban Congressional trading.A ban on Congressional trading is “not going to happen” before November’s midterm elections, according to Oregon Senator Jeff Merkley.In total, Congress transacted about $355 million of trades last year. Members of Congress are required to disclose any trade over $1,000 within 45 days of the trade.The two ETFs would each have between 500 and 600 positions. If a politician sells out a position, the ETFs would follow along. Furthermore, the ETFs will have an expense ratio of 1%.Still, a study conducted in 2020 showed that Senators are just as bad as picking stocks as retail traders. Another study showed that House members and Senators have “mediocre” stock picking skills.source：InvestorPlace
[TOPIC] Fed Crushed Market; But SPX. Up Even With 20% Rate?
US stocks experienced roller coaster last night. Chart from Tiger Trade app$NASDAQ(.IXIC)$ closed down 1.79% at 11220.19, a new low since July 1;$S&P 500 (.SPX)$ was down 1.71% at 3789.93, a new low since June 30;$Dow Jones (.DJI)$ was down 1.7% at 30183.78, a new low since June 17.1. Dot Plot Shows More Rate Hikes Than ExpectedPowell's rhetoric was very hawkish, showing a determination to lower inflation.I wish there were a painless way to get inflation down, but there isn't.According to the latest dot plot, after the 75bps increase in September as expected, the benchmark rate is expected to reach 4%-4.5% at the end of the year, much higher than the 3.4% expected in June. Dot plot from cnbcBased on this plot, Fed will have to raise rates by another 125bps by the end of the year, with the first rate cut to wait until 2024. Let's look at analyst's expectations:Chart made by Tiger Trade2. More Rate Hikes Necessarily Means Market Crash? The market plunged mainly because the benchmark rate increased, and the expectation of a rate cut next year was crushed. So how will US stocks perform when more rate hikes are ahead?Let's look at the historical performance during the Great Inflation when Volcker, the Fed chairman, raised the fund rate to 20% (compared to the current 4.5% expectations).Chart from cnbc1) Generally speaking, $S&P 500(.SPX)$ did fall into a bear market during this decade.chart from real investment advice2) But the greatest decline was not in the period when interest rates peaked (20%), but during the previous cycle of rate hikes. After all, the stock market is about expectations. The market crashed when the rate was raised to around 15%, but continued upward momentum when the rate was increased to 20%.chart from real investment adviceBut the question is we don't know we are in the 1st or the 2nd cycle. It's hard to predict the market.Do you think the stock market will rebound after the fear sentiment passed?How do you comment on Volcker's aggressive rate hikes?Will we repeat the Great Inflation?Join our topic and post to win hundreds of tiger coins~
The US market has been on a losing streak lately since the latest rate hike by the increasingly hawkish Fed determined to rein in the surging inflation at all costs.The S&P 500 started the last trading session of the week in red as expected. As the ETF $Vanguard S&P 500 ETF(VOO)$ tracking the S&P 500 index was still trading above my target price, I decided to go to bed as I had a busy day preparing and performing presentation at work. I did not want to exchange SGD to USD to enter a buy order, as I reckoned that I would be far off in the queue based on my buy price, and did not want to subject myself to unnecessary Forex risks and loss of saving interests in my SGD funds if my order was not executed.In the middle of the night, I felt thirsty and woke up to get some water, after which I thought I might as well check on the stock market.Lo and behold, VOO had dropped over 1.7% to trade below $340! While still above my target price, I decided to enter a buy order on the spot and it was executed in a short time. As the market started to trend sideway, I returned to bed to catch my sleep.As I had drank a full glass of water earlier, I woke up again around 3am to visit the washroom, after which I decided to check on Mr Market again.Oh dear! VOO had sank by almost 3% to fall below $336, which had been my original target price. I sobered up and quickly entered another buy order which again was filled quickly.While the index continued to fall, feeling a little disappointed with my fast fingers, I decided to call it a day, or rather a night, to catch my beauty sleep instead.I woke up to a pleasant surprise this morning to find that during the last hour of trading, the oversold market recovered from heavy selling to end above both my trades.While tired as I am now from insufficient sleep, I feel happy with my overnight trades, at least for the time being.@TigerEvents @Daily_Discussion @MillionaireTiger @TigerStars @TigerWire
Digital Core REIT: Analysis of its maiden acquisition
$DigiCore Reit USD(DCRU.SI)$ Digital Core REIT (DCREIT) announced an acquisition of two Data Center in Frankfurt and Dallas. The final effective stake in the two Data Center will depend if DCREIT is able to raise equity funding to partially finance the transaction.In the case where there is no equity fund raising, DCREIT will only acquire 25% stake in the Frankfurt facility at agreed price for US$558m (100% basis, 4.3% annualized 1H22 NPI). Total purchase consideration would be US$140m fully funded by debt, which is approximately. In this debt-funded scenario, the DPU accretion would be 2% to 1H22 pro-forma DPU, assuming a 3.5% financing cost. In my opinion, this is the best scenario where DCREIT can make use of its large debt headroom to leverage up and squeeze the extra yield from the relatively lower Euro interest rate.In the case where there is equity fund raising, DCREIT will acquire 89.9% stake in the Frankfurt facility and 90.0% stake in the Dallas data center (US$199m agreed price for 100% basis, 5.0% annualized 1H22 NPI yield). Total purchase consideration would be US$681m. DCREIT expects its DPU accretion to be 3.1% (based on 1H22 DPU pro-forma) assuming 60/40% debt/equity funding split with US$416m of new debt (3.5% interest cost) and at illustrative issue price of 83 US cents per unit.This is the scenario where I disagree with the equity funding illustration from DCREIT. Currently, the trading price for DCREIT is 76 US cents, far below the illustrative price of 83 US cents. Factoring a 9% discount to the trading price for the issued price, which is typical for private placements, the final issued price could be ~70 US cents. The Manager revealed that DPU accretion goes down by 20bps for every 1 US cent decrease. Hence, putting all these considerations together, the DPU accretion could only be 0.5% instead of 3.1%. Take note: once the issued price goes below 67.5 cents the deal will be DPU dilutive. Also, under this scenario, the gearing will shoot up from 25.7% to 37.5%, using up quite a bit of debt headroom.Given the current macro environment, investors will be more cautious on yield products such as REITs as investors typically look at the yield spread, esp. for lower-yield REIT such as DCREIT. Investors will also probably factor in a spike in interest cost as well and discount the bottom-line DPU, especially DCREIT has a 50% floating rate exposure. As such, I don’t think there will strong interest for private placement from both institution investors or investment bank underwriters, and the most probable scenario would be DCREIT purchasing a 25% stake in Frankfurt facilities fully funded by debt. As retail investors, it also important for us to review the REIT’s fundamentals in its entirety, not just the acquisition itself. Personally, given the Fed rate is projected to go 4.6% by 2023, I find it hard to stomach REIT with less than 5% yield now.@TigerStars @Daily_Discussion