Hi, tigers~Today is the first day of column "Learn US financial reports for beginners".In this article, I will introduce 2 practical methods of how to judge whether a company has competitive advantage.Total revenueGross profit1. Total revenueYou might think, company A with tens of billions of dollars in annual total revenue is much better than Company B with billions of dollars in annual revenue, but is that true? Let me give you an example:Jack and Rose run separate companies. Jack's company generates $9,000 in revenue per month, while Rose's company generates only $6,000.From a revenue point of view, you would definitely think that Jack's company is better developed and more competitive.But if we do a careful analysis and take into account the cost of sales each month, the results may change.As can be seen from the picture, although Jack company has a high revenue, its monthly cost of revenue is also high, and its final gross profit is only $2,850.However, although the revenue of Rose company is behind that of Jack, the cost of revenue is well managed and the monthly gross profit can be $3,810 dollars.It can be seen that Rose has more profit funds than Jack in the company every month.At this point, we get to the first conclusion: you can't judge a company by its revenue alone. You may ask, So what should we pay attention to?This brings us to the second point: gross profit.2.Gross profitWarren Buffett, the investment guru, is very good at picking companies.He once said that gross profit is the key metric of long-term profitability. Only companies with sustainable competitive advantages can maintain profitability over the long term.What is this gross profit that Buffett takes so seriously? Why does Buffett focus on this number?Gross profit = revenue-cost of revenue. Cost of revenue is the total cost of manufacturing and delivering a product or service to consumers.However, high gross profit doesn't mean everything.Buffett said:" Firms with excellent long-term economics tend to have consistently higher margins." In short, there are two key words: "high gross margin" and "consistency".Let's look at the first key word: -- "higher gross margin".How to calculate gross margin? The basic equation is: Gross margin = gross profit/revenue.As we have learned that: gross profit = revenue-cost of revenue. Therefore, gross margin = (revenue-cost of revenue)/revenue.Then it becomes a simple math problem.We just need to find companies in an industry, count their gross profits, then we can find the top companies.I would like to remind you that gross margin varies greatly in different industries.For example, the software industry has a median gross margin of 59% by the end of 2021. The top 10 companies in this table all have a gross margin over 91%.The industry leader Microsoft only has a gross margin of 65%.While in the traditional manufacturing industries like auto and auto components industries, the median gross margin is only 16%.You can tell from this table that the average of gross margin is only 35%, even for the top 10 companies.So different industries have different gross margins, and we must treat them separately.Let's look at the second key word: "consistency."If the company can't sustain its high gross margin, its competitive advantage is not consistent. When many companies are facing a crisis, they may also break out a high gross margin for a period of time through some means of financial fraud.Therefore, it's necessary to identify the feature of "growth" in the income statements. If the growth is not sustainable, the company doesn't have long-term competitive advantage. We need to look at gross margins for the past 5 years or more.So, Let's summarize what we've learned today :First, we have learned that we can't simply look at "revenue" to judge whether one company has good profitability or not.Secondly, we need to focus on the gross profit and gross margin of the company.Thirdly, gross margin is a key indicator to assess companies' sustainable competitive advantage. Within an industry, companies who have higher gross margin means these companies have higher competitive advantage.Fourthly, we have learned how to calculate gross profit = revenue-cost of revenue, and gross margin = (revenue-cost of revenue)/revenue.Okay, have you learned the content of today? I hope it can help you to understand the US financial reports quickly.Share your thoughts with me and other Tigers, You can get cions~😎
Weekly Stocks Technical Analysis #DIS #ADBE #SPX [#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.Let me know in the comments if you agree and what you think. I'm thinking of trying out to provide free signal services on discord. If you're interested, join us there!$Adobe(ADBE)$ (Requested by @LesterTan) Price is currently mitigating the bullish POI created in Q1 2020 after a significant drop from their earnings call. There is a huge gap to be filled and a bullish retracement is expected from here after mitigation. First target is the gap at 305.00, and subsequently at 329.00.https://www.tradingview.com/chart/ADBE/u5v8caFX-ADBE-Analysis/$S&P 500(.SPX)$ Price is playing out nicely from my previous analysis. Right now, I'm expecting price to continue lower into the bullish POI at 3549.85. Price could still potentially bounce off the bullish POI at 3707.71 into the bearish POI at 3837.08 for mitigation.https://www.tradingview.com/chart/SPX/TcA6mtWf-SPX-Analysis/$Walt Disney(DIS)$ Price is playing out exactly as analyze over the past few weeks. Price is currently mitigating the bullish POI at 104.57. I'm expecting a bullish retracement into the bearish POI at 109.88, and continue lower following the bearish order flow.https://www.tradingview.com/chart/DIS/jPvyR5cX-DIS-Analysis/Like, share, and comment if you're holding any one of these companies!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
What happens when you hold your options into expiration on Tiger Platform?
Ever wondered what happened when you hold option trades into expiration on Tiger Platform?
I executed the following multi-legs option trade sometime in August on IWM & held it to expiration on 16th September 2022:Long 1 x 175 Put Short 2 x 185 PutsLong 1 x 188 PutIWM closed at 178.99 at the end of last Friday’s (16th Sep) trading session.So what happened subsequently?On Sunday after 3pm, the option trades were settled in my Tiger account as follows: 1 x 175 Put - OTM & Expired worthless & closed. 2 x 185 Puts - ITM & I was assigned 200 shares at 185 each 1 x 188 Put - ITM & exercised on my behalf and resulted in short 100 shares at 188Now you know.A word of caution: It is almost always prudent to close option trades before expiration. However there are situations where it makes more sense to hold it into expiration and let the broker do the needful. $iShares Russell 2000 ETF(IWM)$@TigerStars #Options Hub
[PREDICTION] How will SPY close on Wednesday 21 Sept?
Click to vote. Guess How will$SPDR S&P 500 ETF Trust(SPY)$ close on Wednesday 21 Sept? If you get correct answers, you can get 10 Tiger coins.Stock futures pointed to more losses Monday — following the major averages’ worst week since June — as interest rates surged ahead of the Federal Reserve’s two-day meeting this week. Stocks had been falling following last Tuesday's report on consumer inflation for August. The consumer price index for August was up 0.1% instead of falling 0.1%, as expected by economists. As a result, expectations have increased for interest rate hikes by the Federal Reserve in its fight against inflation.On Wednesday, all eyes will be on the Federal Reserve meeting Tuesday and Wednesday. The Fed is expected to raise its target fed funds rate by another 75 basis points Wednesday and also provide new forecasts on the economy, inflation and interest rates.I would like to invite you to share your thoughts about$SPDR S&P 500 ETF Trust(SPY)$ and your prediction of its closing price.💰Activity DetailsClick to vote. Guess How will$SPDR S&P 500 ETF Trust(SPY)$ close on Wednesday 21 Sept? If you get correct answers, you can get 10 Tiger coins.You have the chance of winning 100 Tiger coins by expressing your views in the comment section.The event will last until 23:00 on Wednesday 21 Sept SGT?Welcome to participate!
$Daiwa Hse Log Tr(DHLU.SI)$ Last night, Daiwa House Logistic Trust (“DHLT”) announced its intention to acquire 2 freehold properties and a freehold land where the existing warehouse is already sitting from its Sponsor. The total purchase consideration is ~S$47.7million and it’s intended to be funded by cheap JPY borrowings and partial payment in units to its Sponsor. The acquisition is projected to deliver ~1.3% DPU accretion based on pro-forma numbers.The NPI entry yield is pretty decent at 6.5%. One of the new warehouses, DPL Iwakuni 1 & 2, is newly built and pretty modern, but there is no information if this is a ramp-up or cargo-lift installed warehouse. Moreover, D Project Matsuyama S is a relatively older and smaller warehouse completed in 1994 that is built-to-suit.The good thing about this acquisition is that the Sponsor is willing to support the fund raising by accepting the new units for payment at higher of NAV or 10 Day VWAP. This issued price is 15% higher than the current trading price of DHLT. This demonstrates the Sponsor’s confidence as it invests a portion of the proceeds back into the REIT to show its skin in the game. I believe this is the reason why the share price rise in the midst of the red sea after Fed’s hike last night.However, what I dislike about the Sponsor is how cunning they are to sell the property (with limited land tenure) and the freehold land separately for D Project Iruma S Land to unitholders. This feels like the Sponsor is out to milk unitholders by purposely engineering such transactions. I believe DHLT will be forced to buy more of such “freehold land” in the future. Mind you, D Project Iruma S’s freehold land is more than 2 times the price of D Project Matsuyam a S’s properties + freehold land.Moreover, after last night Fed’s third 75bps rate hike with an ultra-hawkish tone, Yen’s depreciation hit record low of 145 to Dollar. This means that unitholders of DHLT will receive significantly less DPU in terms of SGD as illustrated in IPO. This may or may not be attractive to unitholders at the current moment.Currently, I have mixed feeling for Daiwa as a Sponsor, and at the same time due to the macro environment, I prefer to wait and see first before investing in DHLT.Above analysis is purely my opinion and does not constitute as trade advice.@TigerStars @Daily_Discussion
Bitcoin Falls Below $19,000; Will You Avoid Crypto/Buy The Dip?
Bitcoin fell again to its lowest point in three months, dropping below the support level of $19,000. The bitcoin price is down about 70% from its record high of $69,044.77 on Nov. 10, 2021.The digital currency has been falling since this year because of the strong dollar due to interest rate hikes. Recently, SEC claimed all of Ethereum falls under US jurisdiction, which also triggered panic among investors.1. Why is $19,000 important?Mati Greenspan, founder of Quantum Economics, has pointed out that the $20,000 is a key point for Bitcoin. $20,000 was the high hit by Bitcoin during its last bull cycle in late 2017 and has acted as support and pressure levels many times during Bitcoin's price gains since then.Katie Stockton of Fairlead Strategies sees long-term support for bitcoin between $18,300 and $19,500.Analysts believe that cryptocurrencies generally open a continued downward path after falling below technical-level support levels.2. Bitcoin Will Drop To...Let's look at analysts' take.Data from tradingview and analysts' takeawaya: Mark Newton, a strategist at Fundstrat Global Advisors, said:a "really significant area" at around $17,500, close to the June lows.b: DailyFX analyst Legan Tang saidTechnically, last week's pullback was the start of a new downtrend, and a short-term break below 18,500 would open up a decline towards the June low of $15,000.c: Sam Callahan, a bitcoin analyst at bitcoin exchange Swan, also believes that bitcoin could fall more than 80% from its all-time highs, based on the experience of previous bear markets. This means bitcoin will fall to $13,800.d: Goldman Sachs warned thatbitcoin is at risk of a collapse to $12,000.In addition to analysts' opinions, data also revealed information.Bitcoin options contracts that will expire at the end of 2022 show that most traders are betting that the price of bitcoin will fall to the $10,000-$12,000 range.Have you invested in bitcoin or other crptocurrencies?Do you think bitcoin has reached the bottom?Share your opinions in the comment section and win tiger coins~
Fed raised 0.75% as expected but markets slumped. Why?
The Fed raised the interest rate by 0.75% which was expected but the S&P 500 reversed course and closed down 2% for the day.Shouldn't the market have already priced in this rate hike?Yes, the market has priced in the current rate hike but it has not priced in the future rate hikes.There was a shift in the expected rate hikes after the last Fed meeting. So the market adjusted for the new piece of information.Markets are forward looking.This is where we look at the Fed's dot plot - a chart that records each Fed official's projection for the central bank's key short-term interest rate.In June, the median 2022 year-end projection was 3.4% while for end-2023 was 3.8%.The dot plot released yesterday showed that the expectation has risen. End-2022 projection rose to 4 - 4.5% while end-2023 saw 4.5 - 5% estimates.There's also no easing of interest rate until 2024.A very quick escalation considering only 3 months have passed.While the accuracy of the dot plot is a suspect, it does signal how increasingly hawkish the Fed has become which brings about more recessionary fears to the markets.It doesn't help when the Fed chairman's language was harsher than previous speeches. The term 'soft landing' has been ditched and Powell replaced it with 'some pain'.He said, "higher interest rates, slower growth and a softening labor market are all painful for the public that we serve, but they're not as painful as failing to restore price stability."It is also going to be painful for growth stocks for the next few years too.PS: I will be doing a live webinar on Tiger platform on 27 Sep 2022 - register here https://live.byteoc.com/9999/6253271
$Coinbase Global, Inc.(COIN)$ Coinbase Global Inc. has been searching for new ways to make money. One business it flirted with was controversial: using its own money to speculate on cryptocurrencies.Last year, Coinbase—which operates a large cryptocurrency exchange that handles bitcoin and other digital coins—hired at least four senior Wall Street traders and launched a group to generate profit, in part, by using the company’s cash to trade and “stake,” or lock up, cryptocurrencies, according to people close to the matter. The activity was described as “proprietary” trading by the people at the company.Earlier this year, the team completed a $100 million transaction that the group viewed as a test trade of the new effort, according to the people. The transaction came after Coinbase executives testified to members of Congress last year that the company didn’t buy and sell digital currencies for its own account.The monthslong effort to launch the Coinbase Risk Solutions group underscores how Coinbase, which has seen its shares tumble about 70% over the past year, has entertained more aggressive strategies as it tries to develop new businesses.Coinbase says some at the company examined pursuing proprietary trading but decided against it.“Our statements to Congress accurately reflect our actual business activities,” a Coinbase spokeswoman said. “Coinbase does not, and has never, had a proprietary trading business. Any insinuation that we misled Congress is a willful misrepresentation of the facts.”The Coinbase spokeswoman added that“Coinbase Risk Solutions was established to facilitate client-driven crypto transactions,” and “conflict of interest mitigation tools and policies” were in place in the group.There are no regulations preventing firms like Coinbase from trading digital currencies alongside their clients.In the past, investment banks operated proprietary trading groups that were active in stock and bond markets, while also doing “agency” trading, or trading solely on behalf of customers.Rules on banks restricting speculative trading imposed in 2010 were eased somewhat a few years ago, and Coinbase was never subject to these restrictions. Still, regulators and politicians have long worried that speculative activity by firms like Coinbase in nascent crypto markets could harm clients. When a financial firm invests money for its clients at the same time it invests its own money in the market, it can lead to risks and potential conflicts of interest with clients. For example, a firm buying or selling the same investments could drive up or down the price of these investments, hurting the clients.In July of last year, Coinbase established the Risk Solutions unit to trade crypto for clients. The group also made plans to begin making trades with Coinbase’s cash, among other strategies, according to the people close to the matter.The team built sophisticated trading systems to enable this trading, according to the people.Coinbase Chief Financial Officer Alesia Haas was involved in creation of the unit, which was led by Brett Tejpaul, Coinbase’s head of institutional sales, trading, custody and prime services, the people said. Employees were discouraged from sharing information about the new trading business or discussing it in internal communications, the people said.
Just as the world is trying to put the worst of Covid behind, Hang Seng Index (HSI), the barometer for the Hong Kong stock market, has gone below its Covid low in March 2022.In fact, it is currently 15% below the Covid low. You would have lost money if you have held the Tracker Fund of Hong Kong (which tracks the performance of HSI) for 10 years. Not many investors can still keep the faith after so long.According to Bloomberg, HSI is trading at a PE of 6.7. The entire index is like a bunch of value stocks - indices usually trade in the teens or even in the 20s.Correspondingly, Straits Times Index (STI)'s PE of 12.2 is almost 2 times of HSI's. Even if you ask a technical analyst, he will say that HSI has broken every possible long term trend lines and support levels.HSI is also one of the worst performing indices this year, down 24% year-to-date. What is going on with Hong Kong stocks? Why are they valued so lowly?#1 Strengthening USDThe USD has been strengthening as the Fed has been raising interest rates. This makes USD and its yield-bearing investments more attractive. HKD is pegged to USD and the Hong Kong Monetary Authority (HKMA) has been raising interest rates and buying HKD to keep up. Although the HKMA has been able to defend the peg in the past, the fear of breaking the peg resurfaces from time to time. This lowers investors' confidence and some might have pulled out their funds from Hong Kong.#2 Strict Covid policyHong Kong is still one of the few places that require travellers to quarantine. It has been going on for 2.5 years. It is expected to be lifted today though.The prolonged restrictions has resulted Hong Kong to be in a technical recession, after suffering two consecutive quarters of negative GDP growth. It is projected to end 2022 with a GDP growth between -0.5% and 0.5%. In contrast, Singapore is forecasting a GDP growth of 3 to 4%.#3 Major HSI overhaulIn 2020, HSI went through a revamp. With closer connection to mainland China as well as the burgeoning tech trend, HSI began to include China's tech giants that are listed in Hong Kong - Alibaba, Tencent, JD.com, Meituan etc.It was ill-timed as the China began its regulatory crackdown on these powerful tech companies not long after, which caused their share prices to spiral down, dragging the index with them.The recovery of these tech stocks are not in sight yet and they represent 30% weight in the HSI today.There are probably more reasons but we think these are the 3 major ones.It seems like a perfect storm has struck Hong Kong - it is taking on the problems in China and US alike. The feng shui hasn't been good.The stocks are very cheap but investors are even more worried about their ability to recover. Few buyers and more sellers don't bode well for stock prices.
Third time is not the charm with the Fed raising interest rate by yet another 75bps last night, sending markets whipsawing lower with S&P down 1.7% and Nasdaq down 1.8%. The Fed’s signaled its resolve to bring inflation down which implies that this may not be the last time we witness jumbo rate hikes heading into the last two policy meetings of the year and projections are that we may see Fed Fund rate to end the year at 4.25%-4.50%. Equity market rose in volatility with higher beta cyclical sectors such as consumer discretionary, communication services and materials sector leading decline in the market.The dollar surged to new highs against a basket of key currencies; the Yen in particularly have hit fresh lows as Bank of Japan bucks the trend of other central banks as it maintained negative interest rates.European equities were surprisingly resilient up by 0.7% yesterday. Bank of England is also expected to follow the Fed’s footstep in its rate hike action by 50bps to 75bps in its Thursday meeting.Oil prices were firm after Russia announced mobilization of additional troops and raised nuclear threats, which sparked worries on potential escalation in the ongoing conflict that have lasted for about seven months.$NVIDIA Corp(NVDA)$ bucked the trend against the market fall, as Jensen Huang gave an upbeat view about the China market’s growth opportunities despite recent US government restriction of exports of its high end A100 and H100 artificial intelligence chip, a space which Nvidia has a commanding share of the market. This is expected to result in a $400m decline in sales for the quarter which the company is working with China to mitigate the risks with alternatives. Despite concerns of weak demand and fallings GPU prices with a miss in 2Q, Nvidia’s new line of Ada Lovelace pricing has been unexpectedly higher than its predecessor, with a “monumental” boost to performance according to Nvidia. Nvidia has fallen by some 55% YTD, and it remains to be seen whether current valuations amid the new product cycle will hold with curtailment in consumer and enterprise spending. Nvidia trades at 38.2x/29.4x of FY23/24 consensus PE ratio.$Coty(COTY)$ is revitalizing its brand with skincare ranges with brands such as Lancaster, Orveda, Philosophy, SKKN and Kylie focused on research and emphasis on digital marketing. It is optimistic to double its skincare segment sales towards $500-600m by FY25. Coty is seeing broad-based growth for its prestige and consumer beauty products across Europe, America, and Global Travel channels. As a group the company is looking at sales growth of 6% to 8% for FY23-25 and EPS growth of 20%. Despite higher costs, Coty have defended margins with price increase and premiumization, especially with normalization of covid in Asia Pacific. Amid improving concerns of its leverage profile, Coty trades at 24.9x/20.3x of FY23/24 consensus PE ratio.
Mark Zuckerberg, No Longer One of the 20 Richest People in the World
Source: celebritynetworthMeta CEO Mark Zuckerberg's obsession with the "metaverse" has led to a rather tragic loss of wealth in the "real world. 2022 is going to be a tough year for all of America's tech giants. And among the industry's biggest names, Zuckerberg's loss of wealth stands out.His fortune has been cut in half and then some, dropping by $71 billion so far this year, the most among the ultra-rich tracked by the Bloomberg Billionaires Index. At $55.9 billion, his net worth ranks 20th among global billionaires, his lowest spot since 2014 and behind three Waltons and two members of the Koch family.Two years ago, Zuckerberg at the age of 38 became a member of the world's super-elite rich club with a personal fortune of $106 billion, placing him just behind Amazon founder Bezos and Microsoft co-founder Gates. In September 2021, Zuckerberg's fortune soared to $142 billion, setting a personal all-time peak, behind the rise of Facebook Inc. shares to a high of $382 at the time.In October 2021, Zuckerberg launched the metaverse concept and changed the company's name to "Meta". After that, $Meta Platforms, Inc.(META)$'s stock price started to go down, and the company seemed to be struggling to find its new position in the tech industry.EarningsMeta's earnings reports in recent quarters have been disappointing. In February, the company reported its fourth-quarter results last year, showing no growth in monthly active users on its Facebook platform. The bad news sent Meta's stock plummeting, costing Zuckerberg $31 billion in net worth in one day, almost the worst one-day loss of wealth in the world's history.Meta's problem is not only Facebook, but also Instagram, which is owned by Meta, launched a short video service "Reels" to fight against the growing short video platform TikTok, a big bet that did not go well. Fearing a future economic downturn, many companies have cut back on their online advertising spending, affecting Meta's short-form video plans.Meta Burns MoneyLaura Martin, a veteran Internet industry analyst in the U.S., said another major drag on Meta's stock price is the company's investment in the metaverse, which Martin predicts will burn through Meta's cash in the next three to five years.Martin said that Zuckerberg is betting heavily on the meta-universe on one hand, and has to get back the lost social tool users from TikTok on the other. In addition, Meta is also facing excessive government regulatory pressure and intervention.Worst Performance Among Tech StocksSource: TradingviewAmong the top five tech "FAANG" stocks, Meta's performance this year has been worse than the others. $Meta Platforms, Inc.(META)$ shares are down 59% this year, compared to $Apple(AAPL)$'s 15% drop, $Amazon.com(AMZN)$'s 27% drop and $Alphabet(GOOG)$ parent Alphabet's 28% drop. Video giant $Netflix(NFLX)$ is down about 60% this year, and Meta is "catching up" to NFLX in terms of declines.Singh believes that if Meta could spin off social tools like WhatsApp or Instagram, it could avoid the negative impact of the entire company's market cap being dragged down by the meta-universe plan.Currently, almost all of Zuckerberg's wealth comes from Meta's stock. According to the company's latest report, Zuckerberg holds 3.5 million shares, and Meta's share price was recently at the level of about $146.Notably, in addition to the company's name change, Zuckerberg is also mulling a personal role repositioning. In a three-hour conversation on the audio show of celebrity media personality Joe Rogan, Zuckerberg repeatedly referred to himself as a "product designer".
If Your Portfolio Is Crap, Know That We're In A Bear Market
My portfolio is down in the range of 35-40% in the last two years and it hasn’t been easy for me as it has been for anyone.
A bear market can take an extreme psychological mental toll not only on new but also some experienced investors. In a bear market, no one is immune (unless you are taking an opposite direction by shorting the market) so it is common to feel lousy when you look at your portfolio and think why hasn’t it grown over the past couple of months.
Many folks today will feel somewhere in the line of “I should have sold off my positions last week and buy them at lower price today”. Unfortunately, things don’t always turn out to be that obvious. Because many things are so obvious to the eyes of millions of people (for example with Fed raising rates in response to rising inflation), markets may move depending on the magnitude of the expectations.
Fortunately, bear market isn’t forever, or at least it doesn’t usually last a long time based on historical evidence. In an inflationary period, assets tend to be a better hedge performer than cash and bonds, so the mid to longer term outlook is still bright despite the bearish environment we are in today.
Unless you are in a drawdown retirement period, these strategies may hopefully help you psychologically.
Don’t Stop Contributing To Your Portfolio During A Bear Market
Keep buying good companies at lower levels over a period of time pans out relatively well over time.
Since bear market tends to last across from as fast as 6 months and as far as 24 or 36 months, we should have ample time to add to our positions over a period of time.
As a case in practice, my portfolio networth today is about the same as my networth last year in Sep 2021. While the portfolio returns is deeply in red, I ended up with a lot more units in the portfolio (for instance I only have 900 units of Tencent back in Sep 2021 but I have 2300 units of Tencent today).
Accumulating during a bear market makes sense only if you are confident that you will see better times ahead both for the economy (this goes in a cycle) and the company itself. In my case for Tencent, I am quite confident that we will see better times for the company.
Receiving Dividends or Selling Covered Calls Save The Day
If you can accumulate 100 shares (for US stocks) of anything, then you can technically sell covered calls to minimize your losses while waiting.
This works to be the same way as dividends.
While waiting for the economy to recover, you receive dividends to alleviate and reduce your losses and you may even use this additional cash in hand to purchase even more shares.
Some may argue that the amount of dividends or selling covered calls premium may not be worth as much as the fall in the share price but we are not looking at this in a 1-2 year timeframe. We are looking at this for a longer period of time.
Don’t Look At The Market
If you are affected deep enough by the volatility of the market and do not have anymore cash position to add to your positions, perhaps the best way to overcome this is simply by not looking at the market itself.
Give yourself a break over a few months and come back when you are ready to do so.
The market will always be there and it will not realize or miss your absence while you are not there.
Taking a break from the market and focusing on other things in your life will also give you a new fresh of air much needed than simply doing nothing looking at the market every day.
If you have not followed my social channels, you may want to do so as I frequently post ideas and thoughts in those channels so if you are interested, you may follow me at my Facebook, Instagram or Twitter profile here.
Quick Learning of REITs' Keypoints & 8 Benefits of Holding REITs?
What are REITs? Why Configure REITs?Recommend to Read:Weekly Focus on Logistics/Industrial S-Reits: M44U.SI & BUOU.SI5 SG Reits With The Lowest Gear Ratio To Watch: DCRU, CRPU, BUOU, SK6U & UD1USource: https://passiveinvestingaustralia.com/6 Keypoints of REITs:1. Definition: REITs is Real Estate Investment Trusts Funds. It is an investment vehicle similar to a closed-end mutual fund, but the investment object is real estate.2. Origin: The investment trust was created by the U.S. Congress in 1960, mainly through the securitization of real estate and the fundraising of many investors. Investors without huge capital can participate in the real estate market with a lower threshold and obtain real estate market transaction rents and profit from value added. Investors do not need to substantially hold real estate targets, and can trade in the securities market, and the market liquidity is better than real estate.3. Source of income: The characteristic of real estate investment trusts is that the main income of the trust comes from rent, so the income is relatively stable, and the trust must also use most of the future surplus as dividends. Because of this, REITs pay much higher dividends than average stocks in the market. 1) Dividend 90% of rental income distributed to investors 2) Management and maintenance costs of the property 3) Capital gains. Shares rose. The price of real estate itself can be anti-inflation, and the acquisition and acquisition make it more valuable, and the real estate leverage ratio is high4. Types of Reits: Includes industry, data center, commercial real estate, logistics, infrastructure, highway, sewage treatment, etc. You can do only one section at a time, or you can do all of them. Logistics sector: high barriers: because the government grants land.5. REITs Funds:Refers to mutual funds that use real estate securitization commodities as investment targets, including REITs, commercial real estate mortgage-backed securities, and commercial real estate secured debt certificates.6. Net Worth Performance: Can direclty check on Tiger App or Yahoo Finance.8 Benefits of Configuring REITs?1. Comparison between Reits, Stocks and Bonds: REITs have stable quarterly/half-yearly dividends, the rental income is mainly used as dividends or coupons. Some stocks have dividends, but the long cycle or unstable dividends are related to other factors such as profitability. Bonds’ dividends come from the coupon rate, and the average payout ratio lower than REITs.2. Steady total returns: According to general observation, the risks and rewards of REITs are about between stocks and public bonds. One reason is because that REITs have the value-added income of the underlying assets (stock attribute); the other is that REITs have mandatory dividend income (bond attribute),3. Low volatility 4. High dividend payout：As Rent-to-sales ratio is associated with first-tier cities.5. Risk diversification: REITs invest in multiple real estate targets at the same time, which can diversify risks.6. Anti-inflation: Due to the characteristics of its real estate, real estate investment trusts are particularly advantageous in fighting inflation.7. Small proportion of capital: Invest smaller compare to invest a house in first-tier cities directly.8. Professional property management: Compared with buying a house by yourself, it saves time and worry with concentrates professional management.
$S&P 500(.SPX)$ Party Pooper!Just when everyone was enjoying July and August rally, in came Sep and potentially Oct to spoil the fun.After last night's confirmation of 75bp hike, the expected relief was short lived. Markets tumbled further and closed red, with SPX hanging on to 3790 support. RSI-14 is at 33.74 now. See first plot.If it dips under 30, then index might be considered oversold. We need to watch next few days for this signal. The NASDAQ RSI is slightly higher at 34.93. If the index dips below 30 but crosses back the 30 mark subsequently, it might be a bullish signal to buy in for a rally. However, there's one more impending consideration - midterm elections happening 8 Nov.Second and third plots show average SPX returns are flat or negative, right up to end Oct. There's also higher volatility for daily returns of individual months in mid term election years. Once mid term elections are over, the SPX generally rises till year end. This is because uncertainty in terms of governance is removed. Towards year end, we will also have more CPI data and stronger indication from the Fed in terms of rate hike targets. With more certainty, we might be able to get the party started again. 🥳🎊🎉@TigerStars @MillionaireTiger @Tiger_chat
After watching the news all day today, I would like to sum up tonight with one sentence: it is not important to raise interest rate by 75 or 100 points. The main issue that the market cares about is the terminal interest rate, 4.5% or 5%.Institutions differ widely on this, as reflected in the contradictory nature of indicators. Only 16% of its constituents are trading just above their 200-day moving averages. The 20-day moving average of the CBOE Index put/call ratio has been falling until recently, while a similar measure of stocks has risen to near April 2020 levels.The extreme mismatch between the volatility of stocks and the broader market has intensified.This long-short contradiction leads to two other phenomena:1. ETF holdings are minimal in long-term contracts and hedges are concentrated in short-term options within the last week.2. Institutional cash holdings reached new highs, with many institutions closing short and long positions recently.Although from the previous FOMC after the market trend, the rise in the majority, but still recommended to buy straddle, the likely volatility expectations for the straddle is still cheap.Many of you may not like two-way bets, but there is one way to bet on extreme reversals: Treasury bonds: $iShares 20+ Year Treasury Bond ETF(TLT)$Some traders have started to bet on an extreme terminal rate of 5%. The prevailing view is 4.5%. In other words, if there is no extreme expectation of a rate hike tonight, Treasury bonds are likely to fall in anticipation of a landing, and TLT will rally accordingly. Treasuries are one of the most extreme bets at the moment, so there are a lot of big calls under TLT at the moment because the odds are right.$TLT 20221021 110.0 CALL$Anyway, two things to note when you look at the FOMC summary tomorrow:1. Terminal interest rate is 4-4.5%? Or 5%? The market is now fully expecting 4.5%, with further valuation adjustments expected if it is 5%.2. At present, most traders expect that interest rate cuts may start in 2023, but the actual situation may not be optimistic, if the Fed does not relax the idea of tightening in 2023, then it may become a big thunder.Thanks to tiger friends support. If you are interested in options, you can join my discord：Options YYDSalso tiger options group：Tiger Options Club
$BYD COMPANY(01211)$ $BYD Co., Ltd.(BYDDY)$ $Byd Company Limited(002594)$ Bearish PennantStock make a dive initially back in Jul 2022 with a gap down on heavy volumeWent into lower volume consolidation before the next sell down in Aug 2022Another small pennant build up along the way and another slump with gap down on heavy volumeShare price have since consolidating on low volume but potentially forming yet another bearish pennant (as drawn)Failing to hold onto $213 would send the stock way back to $180Resist : $230Support : $180 (closed to Low back in Mar 2022)
Major U.S. indexes fell again on Friday, capping a dreadful week for equities in the wake of rising interest rates around the world.The Dow Jones Industrial Average fell 486 points, or 1.6%, on Friday to close at its lowest level since Nov. 20, 2020. The index avoided closing in bearish territory by about 150 points. $DJIA(.DJI)$ The S&P 500 fell 1.7% to fall 4.7% on the week. The benchmark has fallen for five of the past six weeks. $S&P 500(.SPX)$ The Nasdaq Composite fell 1.8% to cap a weekly decline of 5.1%. This is the worst two-week period for the tech-heavy index since the week ending March 20, 2020. $NASDAQ(.IXIC)$ Oil prices also fell below $80 a barrel, the lowest since January... The yield of the 2-year Treasury close to 4% and that of the 10 years above 3.5%...Overall, rising rates would scare the stock market. We now fear that the economy is entering a recession.From a technical point of view:S&P 500 would threaten its June 17 low. Level that would be considered support. The first resistance would be at 3800.From a slightly more complex point of view, in which I study the market:We have a pronounced short gamma context.The demand for puts is strong and would be at an "extreme" level.Without going into details, we could have a bunch of ITM puts on the 3600-3700 levels.
This is my interpretation, not a buy/sell recommendation.
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Adobe ( $Adobe(ADBE)$ ) plunged almost 17% on Thursday when it reported its earnings. This was in addition to the market's reaction on its $20 billion deal on acquiring Figma, a collaborative design platform developer, in a half cash, half stock in which Figma's employees would receive 6 million additional Adobe restricted stock units that will vest over four years from closure of the deal.Adobe expects Figma to add to the company's earnings by the third year of the after the deal's completion, and it suggests that Adobe's earnings would see a negative impact for two years.Additionally, Adobe guided their fourth quarterfiscal 2022 revenue to $4.52 billion and EPS of $3.50 per share, while analysts had expected$4.6 billion and $3.47 EPS.
In terms of earnings estimates from analysts, they expect Adobe to continue to grow its revenue in the low teens six to eight quarters.Adobe consensus revenue estima (Source: Seeking Alpha)What the chart saysADBE WeeklyADBE during March 2020The stock had plunged so much that we have to go to the weekly chart to find the levels of support. Looking at the chart, the current price sits around levels back in March 2020 during the covid 19 plunge. The likely support areasare around $290, although anything south of $275 could mean more pain. Ratios and ValuationAdobe's current price to earnings GAAP (TTM)is now at a 3 year low of 30, while price to sales is at 8.78. Adobe price to earnings (Source: Seeking Alpha)Adobe's price to sales (Source: Seeking Alpha)In terms of its intrinsic value, Morningstar rates Adobe as a 5-star with fair value at $500. That is a significant discount of 38% with hugemargin of safety, and Adobe has a wide economic moat, with medium uncertainty of hitting its fair value target.Given the attractive ratios and discount from its fair value, Adobe looks attractive at its price after the plunge. However, if you are lookingfor a bigger margin of safety, anything less than $290 will be very attractive. Investors might also wait after the next Federal Open MarketCommittee meeting on September 20-21 before committing capital in this stock.
$Alphabet(GOOGL)$ At a companywide all-hands meeting this week, Alphabet Inc chief Sundar Pichai juggled tough questions from employees regarding cuts to travel and entertainment budgets, managing productivity, and potential layoffs.Employees questioned why Google is "nickel-and-diming employees" by cutting travel and swag budgets despite record profits and substantial cash reserves as it did after the pandemic. Pichai emphasized acting responsibly to tide through such critical situations, CNBC reports.