ChatGPT seconds Warren Buffett's and Michael Burry's tips on what it takes to be a good investor - the bot lists patience and discipline among 6 must-have traits
ChatGPT's tips about values of a good investor Source: https://markets.businessinsider.com/news/stocks/chatgpt-warren-buffett-michael-burry-stocks-successful-investor-traits-2023-2 ChatGPT seconds Warren Buffett's and Michael Burry's tips on what it takes to be a good investor - the bot lists patience and discipline among 6 must-have traits Zahra Tayeb Feb 4, 2023, 6:00 PM The buzzy AI bot chucked out 6 virtues that lead to investor success, including patience and discipline. Its advice mirrored that of top investors like Warren Buffett, but failed to identify other key traits vital to investor success. ChatGPT, the new buzzy chatbot developed by artificial intelligence company OpenAI, is the world's latest obsession for its human-like responses. The bot, which bagged a $10 billion investment from Microsoft, has shown a capacity for a range of tasks such as writing stock stories, layoff emails, and even dating-app messages. The craze around it has even boosted investor appetite for AI stocks, sending shares in names like Nvidia and Ambarella soaring. Earlier this week, I put the human mimic-like tool to the test to see what all the fuss was about. I enjoyed its conversational tone and was grabbed by the ease at which it churned out content, but its lack of empathy or decision-making skills ultimately made it easy for me to remember it's just a robot. As a frequent writer on the US equities market, I sought out to ask the AI tool what character traits make for a good stock investor. Here's what it chucked at me. ChatGPT's 6-part tip on traits that make for a successful stock investor Patience: Investing in the stock market often requires a long-term perspective and the ability to withstand short-term volatility. Discipline: Developing and sticking to a well-thought-out investment strategy can help investors avoid impulsive decisions based on emotions. Objectivity: Being able to separate personal opinions and emotions from investment decisions can lead to more rational and informed investment choices. Perseverance: Investing in the stock market can be a challenging and sometimes frustrating experience, but having the determination to stay the course and stick to a strategy can lead to long-term success. Open-mindedness: Keeping an open mind to new information and being willing to adjust your investment strategy in light of new developments can help you stay ahead of the curve. Attention to detail: Careful research and attention to detail can help investors identify the best investment opportunities and avoid costly mistakes. ChatGPT then cautioned none of its advice can guarantee success. "Having these traits does not guarantee success in the stock market, but they can help investors make better decisions and navigate the ups and downs of the market more effectively," it said. My thoughts Having followed several (value) investors like Charlie Munger, Peter Lynch, Michael Burry, Warren Buffett & Mohnish Pabrai, this is good list of values. In fact, the inputs above appears sound and from a learned source. Over time, we can expect the AI to function even better. What is interesting would be the "frontier" of Google Search Engine. There will be value when ChatGPT is able to lend a hand in Microsoft's Bing search engine. I think that the search empire has found a worthy foe, one to be respected and look out for. From the initial experience, the inputs from ChatGPT has been "good". With ads playing a role in the search results of Google, will the competitive advantge surrender to the new AI opponent. It is too early to call the winner but it is due time that Google has worthy competition after the failures of Yahoo and Bing. Let us monitor closely. For a start, this is a good list of attributes that investors should possess. @TigerStars$Alphabet(GOOG)$$Microsoft(MSFT)$
【Thursday Special】Which is Your Most Bullish Stock in 2023?
Hey Tigers!Welcome to this week's Thursday Special! I see so many of you pick aunt Cathie as your portfolio manager in the last game. She made a lot in January. Hope you too!Let's play a game today~Introduce to us ONE of your most bullish stocks in 2023 and why in one sentenceHow to participate:1. Leave your answer in the comment. Introduce one stock is enough~2. Do not pick the company that has already appeared in the comments section, only the first comment for the company has rewards.
🌈🌈🌈I am a Big Fan of Dividend Income especially from ETFs. When the markets are down, I draw comfort from my dividend income and suddenly everything is right in the world again. My 3 Favourite ETFs are doing well so far this year and on top of that I am getting good dividend income from them. $Energy Select Sector SPDR Fund(XLE)$ is my best performing ETF, up at 48%. XLE gives me exposure to the US Energy Giants like Exxon Mobil, Chevron Corp, Occidental Petroleum and many more. These US companies have been having a bumper year of profits due to the Ukrainian war and the ban of Russian Oil by US and its allies. The expense ratio is only 0.10%. The current dividend yield is 3.55%, paid every 3 months. $ES3(ES3.SI)$ is Singapore Oldest and Largest ETF. It tracks the Top 30 Biggest and Strongest Companies in Singapore. With our 3 local banks doing so well this year due to increasing interest rates, STI ETF have certainly benefited. The expense ratio is 0.30% with dividends paid half yearly. The current dividend yield is 3.25%. $SPDR Portfolio S&P 500 High Dividend ETF(SPYD)$ tracks the performance of 80 highest yielding stocks selected from S&P500. The Stocks are equally weighted. I have gained 11% this year from SPYD. The expense ratio is 0.07%. The current dividend yield is 4.83% paid every 3 months. I prefer to focus on dividends instead of share price because it gives me positive reinforcements during the good times and soothing comfort during bad times. Dividends are a great source of passive income for me and the more shares I own, the bigger my dividends. Investing in these 3 ETFs also gives me diversification in my portfolio and minimises my risks in individual stocks. Last year was not a great year for me but I still receive my dividends every quarter. This allows me to sit back, relax and not panic. So that is why $Energy Select Sector SPDR Fund(XLE)$ $ES3(ES3.SI)$ and $SPDR Portfolio S&P 500 High Dividend ETF(SPYD)$ are my favourite ETFs to hold long term. @Daily_Discussion @MillionaireTiger @TigerStars @CaptainTiger
In this series, I plan to perform quick checks on some popular stocks. It will be a quick glance into the financial statements of the companies. This is how I screen for companies as part of my fundamental analysis and prequalification. I hope that this is helpful to better qualify companies for investing. I have done one on NIO the Chinese EV maker in one of my earlier posts. $NIO Inc.(NIO)$ Now, let us look at Palantir: Income Statement of PLTR from recent years (2018 to TTM) Observations: There is a good trend of increasing revenue. There is a good trend of increasing gross profits. Unfortunately, this fails to translate into profitability though the EPS is at a recent low of -$0.28 (TTM). EPS is improving but it is still at a loss. However, the company continues to make losses (net income) since 2018. While the losses average at $500+ million per year (except for 2020 where the annual loss reached $1.166B), there is a concern about business profitability. The increase in revenue is matched by an increase in operating expenses (R&D, Sales, General & Administrative). Shares continued to be diluted over time. Palantir has not been making money since its incorporation in 2003 (almost 20 years). At this juncture, I would not proceed to analyze the other financial statements. My investing muse Palantir is one of the darlings in the world of data science and its ability to aid in planning and decision-making. I love the business solutions that they offer. Alex Karp (CEO) remains a patriot and has chosen to serve only USA and their allies. This means that there is a cap on how much the business can grow. They have offered solutions to governments and have made good inroads into non-government (commercial) industries. With a high-security clearance, they are poised to bid for more governmental projects in the coming years. Customer spotlight from their corporate website Yet, the bottom line remains that Palantir needs to become profitable. From the recent earnings, I have concerns about their employee stock-based expenses and they “may” have issues with scalability. This is non-conclusive but their expenses grow in tandem with the sales that they brought in. Almost 20 years later, they have yet to make a profit. I am not sure if there are fundamental management issues or if they are yet to achieve critical mass for breakeven. This remains a stock on my watchlist. For now, I am a spectator as I hold my positions. These were previously bought when I do not include financial analysis in my prequalifying. I would not be adding to my current positions as I look forward to a turnaround. I look forward to their earnings convincing me to invest in them again. @TigerStars$Palantir Technologies Inc.(PLTR)$
What Bull Flag? The bull flag is a clear technical pattern that has three distinct components: the flag pole, the flag, and the break of the price channel. Respectively, they show a strong directional trend, a period of consolidation, and a clear breakout structure. When put together, it can be a strong predictor of future price action. Identify The Pattern The most important part of the flag pattern is to identify a strong trend (in either direction, as the Flag may be inverted, triggering a bearish move!) Take a look at the higher time frames when you find a flag pole, to ensure the price is not simply ranging. It could be meeting a large area of resistance! Protection No trade should be entered without knowing its exit conditions, whether this is in the trade’s favor or against it. The stop loss is often placed at the breakout of the flag’s price channel. As traders wait for a candle close to enter the trade, this forms a slightly higher probability that the market will continue in your favor. Confirm Or Not? It may be tempting to try and guess the bottom of the price channel, and time the last bottom before the next impulsive jump. However, the market may simply continue the flag price channel for one more leg, or many more than one. This is why traders wait for the breakout in the flag pattern, rather than jumping in and making trades based on hope. Not 100% Even with a proper breakout of the price channel, this may cause the price to be exhausted and simply continue the immediate downtrend. (Possibly retesting the previous high before falling further). No matter how reliable a pattern in history, no strategy offers 100% confidence, and the markets will eventually break every rule, at some point. So How? The flag pattern is a frequent occurrence in the price action of all securities and can aid any trader who missed out on the initial move, letting them still capitalize on its bigger trend. Further, waiting for the end of the flag’s trend allows a greater risk-to-reward ratio and a greater probability of profit. Levels trading using support and resistance is another good indicator to consider as well. We can see the area marked out in yellow as no interest zone. If the price action breaks down below 410.80, it willbe a good opportunity to consider put as the strong area of support is broken temporarily. Calls can be taken above 413 towards 415 before confirming the bull flag breakout indicated in the first chart. As profitable traders know, it is important to consider various indicators or combine them for a bigger picture to lower the risk and maximise reward over time. @TigerStars @CaptainTiger @MillionaireTiger @Daily_Discussion @Tiger_SG @TigerPM
Find out more about me here (YouTube/Instagram/Telegram): https://www.linktr.ee/keeleytan If 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. If you have any comments/feedback, feel free to use the link above to Google form. Free signal service on discord is officially up. If you’re interested, head to my discord to check it out! Added a new line for headline news that could be important which are extracted from TV itself. $Walt Disney(DIS)$ As analyzed last week, the price action was unclear back then, and similar now. Price has consolidated after mitigating the bearish POI at 109.88. On the lower timeframe, we see both buy-side and sell-side liquidity being built right now and price will be deciding to push either direction. Headline news: Walt Disney Could Reportedly Lose Control Over Reedy Creek Under Proposed Florida Bill Disney shareholders set to vote on Peltz at April 3 annual meeting https://www.tradingview.com/chart/DIS/g81EDNUi-DIS-Analysis/ $S&P 500(.SPX)$ Price invalidated the bearish POI at 3933.04. Following the bullish order flow, I'm expecting price to continue higher and the target of this move should be the bearish POI at 4201.41. https://www.tradingview.com/chart/SPX/bON6aYaC-SPX-Analysis/ $Microsoft(MSFT)$ Price playing out nicely as analyzed last week. Price has invalidated the bearish POI at 253.07 and has broken market structure to the upside. I'm expecting price to follow the bullish order flow into the bearish POI at 286.51 next. Headline news: Microsoft Will Make ChatGPT Tech Available For Other Companies To Customize - CNBC https://www.tradingview.com/chart/MSFT/cxyZJlhJ-MSFT-Analysis/ Like, share, and comment if you're holding any one of these companies! Let me know on discord/telegram 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 @MillionaireTiger@CaptainTiger@TigerStars
Chipotle Mex Grill ($CMG) : Good Price, Good Company ?
My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ? "Why not both" I asked myself ? Wouldn't there be more upsides comparatively speaking ? Having put the theory to test on different company types (see below for details); time to try it on another fast food stock ? Testing $Chipotle Mexican Grill(CMG)$ & see if it fits the bill. Sidetrack: Below are stocks that I have covered. Interested ? Click to read. Please "Like" to show some love okie ? Thanks ! McDonalds IncUnited Parcel Service (UPS)Spotify IncApple Inc Meta Platform (Facebook)AMD Inc Snap Inc An American chain offast casua / restaurants Founded in 13 Jul 1993 (a barely 30 years old company) Founder was Steve Ells who was a graduate from The Culinary Institute of America and worked as a line chef prior to venturing out on his own In 1993, he opened the first Chipotle Mexican Grill in Denver, Colorado with a $85,000 loan from his father Needless to say it broke even in a relatively short time frame In 1995, the 2nd restaurant was opened, soon followed by a 3rd etc.. all within Colorado In 1998, the 1st inter-state restaurant (outside of Colorado) opened in Kansas City, Missouri. In the same year, $McDonald's(MCD)$ made an initial minority investment in Chipotle Flushed with cash, Chipotle expanded from 16 restaurants (1998) to over 500 by 2005. On 26 Jan 2006, Chipotle made its initial public offering (IPO) at $22 per share In Oct 2006, McDonald fully divested from Chipotle (its non-core business) as part of its internal strategy. Along with it $1.5 Billion from its $360 Million investment. As of 31 Dec 2021, Chipotle Mexican Grill has 44 international stores. Chipotle has a placed ranking in Forune's 500 companies In 2022, a year where US market has been hammered by extreme volatility and ease of covid pandemic restrictions - how did Chipotle fare ? Current sotck price > 08 Feb 2022 stock price by +17.98% - Impressive ! Chipotle - Summary Revenue came in at $2.2 Billion vs $2.0 Billion (Q4 2021); thats a gain of +10% gain Net Income came in at $223.7 Million vs $133.5 Million (Q4 2021); thats a +67.57% gain Earnings per share (GAAP) was $8.02 vs $4.69 (Q4 2021); thats a +71% gain Earnings per share (non GAAP) was $8.29 vs $5.58 (Q4 2021); thats a +48.57% gain Chipotle - Operating Statistics In the face of the covid pandemic adversity, could it be concluded that Chipotle as a whole fared rather well ? For starters, it managed to grow its number of restaurants Statesside from 2,966 (Q4 2021) to 3,187 (Q4 2022); thats a whooping 215 restaurants; given the persistent high labour crunch and costs And in terms of sales (average) every restaurant generates - it has also valued added from $2.64 (Q4 2021) to $2.82 (Q4 2022); thats a +6.82% gain Also is it justified to "discount" or "disregard" year 2021 sales as being out of the ordinary when that was the year where lockdowns, takeaways (permitted) and work from home was the norm ? Chipotle - Other Highlights The operating margin gain of +24% is consistent with the Revenue and Net income announced Like the other US listed companies especially in the Tech and Financial services that are "labour" intensive as well, Chipotle has registered a +5% increased in operating expenses. Chipotle's CEO on Q4 2022 Results Our continued focus on recruiting and retaining the best people, delivering Chipotle's operational standards with delicious food prepared fresh daily uniquely positions Chipotle to successfully expand to 7,000 restaurants over the long term... Chipotle, CEO, Brian Niccol... Is Chipotle Mex Grill A Good Price and Good Company ? Chipotle - Market Cap from 2013 to 2022 Looking at this company's market capitalisation makes you realized that this is a Food company that mean business and its good at what it does Ignoring year 2021 capitalisation record due to the year's abnormally in the US stock market (due to easy liquidity), Chipotle has capped off year 2022 with a credible results For 2023, it plans to open between 255 & 285 new locations. Including relocating 10 to 15 restaurants to add a drive-thru lane. Its looking to hire15,000 workers by spring ahead of its busiest time of the year. The increased in food item pricing (for the first time after many years) should help Chipotle to weather the overall price increases experienced by all businesses; as a result of 2022 & 203 interest hikes Do you think there is still upside potential to Chipotle in 2023 ? Do you think it offers a better value compared to McDonalds ? Its stock price is not exactly "cheap". Please "LIKe" this post ok. Thanks. The rating is important to me !! @TigerStars@CaptainTiger@MillionaireTiger@Daily_Discussion@Tiger_SG@TigerPM
With the market rallying hard in 2023, is it really this time is different?
It has been a good start to 2023 for the stock market, with the S&P 500 and Nasdaq up 8.9% and 16.6% respectively. The price movement seems to indicate that we have won the fight against inflation and have a high chance of avoiding a recession. Is it really this time is different? Let's take a look. 10-2 yield curve remains inverted by the most since the 1980s When the 10-2 yield curve inverts, it signals that investors expect the economy to slow down or enter into a recession. Which leads to a decrease in demand for long-term bonds and an increase in demand for short-term bonds, causing yields on long-term bonds to decrease and short term bonds to increase This is considered a strong indicator of an upcoming recession, as it suggests that investors have become pessimistic about the short-term economic outlook. It is good to know the 10-2 yield curve inversion is a very early indicator and it might take a year or two after the inversion for recession to take place. Do not fight the FED During the last FOMC meeting, Jerome Powell reiterated their stance that the inflation fight is not over. The federal terminal fund rate target is expected to be 5% and they do not see any chance of a rate cut in 2023 and we will remain in tighten monetary environment throughout Which ultimately leads to the next issue Big tech layoffs Google, Microsoft, Meta, Amazon have all conducted layoff exercises and given below expectations guidance, all these are efforts by the big tech to emphasize the need to cut cost in the face of an economic slowdown and the consistent high inflationary environment. Signs might be showing with Apple posting their first revenue decline since 2019 Even though recent jobs report still comes in strong, we might yet to see the actual impart of the recent mass layoffs. Thoughts The markets are rallying as we are winning the fight against inflation, even the FED told us they could see that deflationary process has begun, coupled with a strong labour market, the likelihood of a soft landing greatly increases. Never have the FED raise rates so aggressively and did not end up hurting the economy oravoid a recession. We have to ask ourselves is it really different this time? Only time will tell as we continue to welcome each new inflation, jobs and economy report the months ahead. $Microsoft(MSFT)$ $Alphabet(GOOGL)$ $Tesla Motors(TSLA)$ @TigerStars @CaptainTiger @MillionaireTiger @TigerTalks @MaverickTiger
3/2:Strong Job Data Reduced Gains & 🇺🇸Market-Stocks Overview🕵🏻♀️🕵🏻♂️
3/2(Fri ) ➡️ The VIX climbed dropped 2.14% to close at 18.33 but the indexes still ended lower after surprisingly strong jobs data sparked concerns about aggressive Fed action, while investors digested a mixed bag of megacap company earnings reports. The DJIA, S&P 500 & Nasdaq dropped 0.38%, 1.04%, & 1.59% respectively 👍 The S&P 500 still posted a gain for the week, which included a string of major market events, & stood not far from 5-month highs. 👍 The Nasdaq tallied its 5th straight weekly rise, its longest such streak since late 2021. ⭐️ Job growth in 🇺🇸 accelerated sharply in Jan with nonfarm payrolls surging by 517,000 jobs, well above an estimate of 185,000. The unemployment rate hit a more than 53-1/2-year low of 3.4%. ⭐️ In another sign of economic strength, services industry activity rebounded strongly in January. 🤔💭 My Thoughts: Fed slowed rate hikes even further with just a 25bps increase & Powell has already acknowledged that the "disinflationary" process may have begun. Hence, the sell-off is unlikely due to investors being fearful of what Fed might do (as supported by the lower VIX) but rather investors wanting to securing profits after a stellar Jan rally. 🔎Sector-Stock Trend Analysis: (1) Except for AAPL that gained 2.44%, popular tech stocks all 0.27%-8.43% with AMZN being the biggest loser due to an earnings miss 🙈🙉🙊 $Apple(AAPL)$ (2) Popular chip stocks dropped 0.27%-2.81% (3) Popular 🇨🇳 stocks all dropped 1.85%-5.29% as HKEX sell-off🐻$Bilibili Inc.(BILI)$ $Pinduoduo Inc.(PDD)$ $Alibaba(BABA)$ $JD.com(JD)$ (4) On the EV front, GOEV & TSLA gained while the rest declined. Please help to click on the “Like” & “Share/Repost” buttons at the bottom right corner so that more 🐯🐯🐯 can access this information, many thanks🤗🥰 As usual-🤔💭 Consider POV & Actions of investors + 👩🏻💻👨🏻💻 Research + 🗑FOMO & Greed = Investing Wisely 🤓🤗 + Accumulating Wealth 💵💰 @TigerStars @CaptainTiger @MillionaireTiger @Daily_Discussion
Amazon ($AMZN) - Good Price & Good Company ? Best of FAANG ?
My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ? "Why not both" I asked myself ? Wouldn't there be more upsides comparatively speaking ? Having put the theory to test on (1) Meta Platform, Snap, (2) Visa & Mastercard (3) Tesla, General Motors (4) Netflix (5) AMD, Lam Research, Intel and (6) Spotify; time to try it on another FAANG stock ! Let's put to the test & see if it fits the bill. Sidetrack: Below are stocks that I have covered. Interested ? Click to read. Please "Like" to show some love okie ? Thanks ! United Parcel ServiceSpotify IncApple IncMeta Platform (Facebook)AMD IncSnap IncLam Research (semicon)General MotorsVisa Inc An American multi-national technology company Founded on 05 Jul 1994 (28 years young company) Founder was Jeff Bezos Initially it was purely anonline marketplacefor books. However it grew into a multitude of product categories Earning it the moniker The Everything Store. It was listed on Nasdaq in15 May 1997at $18 per share In 2021, it surpassed Walmart as the world's largest retailer outside of China As of 2023, it is the world's largest online retailer & market place, as measured by revenue & market share. Its core businesses are eCommerce, subscription services, brick & mortar business, 3rd party seller services and technology services via Amazon Web Services (AWS). In 2022, a year where US market has been hammered by extreme volatility and ease of covid pandemic restrictions - how did AMAZON fare ? Current stock price < 08 Feb 2022 stock price by -35.95% Amazon - Summary Net Sales (revenue ?) came in at $149.2 Billion vs $137.4 Billion (Q4 2021); thats a +8.59% gain. Net Income came in at $278 Million vs $14.32 Billion (Q4 2021); thats a -98.06% decline Earnings per share (diluted) was $0.03 vs $1.39 (Q4 2021); thats a -97.84% decline. Operating Income came in at $2.73 Billion vs $3.46 Billion (Q4 2021); thats a -21% decline Amazon - Revenue by Quarters Quarter for quarter comparison, Amazon has managed to deliver on its top line. Amazon - Revenue breakdown analysis As could be seen, North America still accounts for the bulk of Amazon's revenue / net sales at 62.6%. In Q4 2022, it managed to grow the business by +13%. This is followed by International segment that accounts for 23.1% of top line. However due to persistent pandemic restrictions worldwide (particularly in China), growth dipped by-7% to $34.4 Billion. Amazon's technology service - Amazon Web Services launched only in 2002 (mere 10 years ago) completes the Sales Mix at 14.3%. In Q4 2022, it managed a +20% growth. Amazon - AWS ranking worldwide FYI - Amazon Web Services (AWS) is ranked #1 when it comes to Cloud computing servicing with a leading worldwide market share of 34%. Amazon - Key Business Metrics Amazon - AWS's sales & operating income breakdown Above are Amazon's 5 Key Businesses & its Q4 2022 results All 5 businesses have registered growth of various degrees except for AWS's Operating Income that was $5.2 Billion vs $5.3 Billion (Q4 2021); that's a -1.88% decline. Amazon - Other Highlights During 2022, most companies operating expenses have ballooned in an unsustainable manner - eg. Meta (+22%), AMD (+100%), General Motors (+26%) etc.. Amazon was no exceptions. Its operational costs have swelled by +9%. For a labour intensive company, this needs to be managed to prevent a galloping expenses. Amazon 's CEO on Q4 2022 Results We're also encouraged by the continued progress we're making in reducing our costs to serve in the oprations part of our Stores business. In the short term, we face an uncertain economy, but we remain quite optimistic about the long term opportunities for Amazon...Amazon, CEO, Andy Jassy Is Amazon Still A Good Price and Good Company ? For 2022, Amazon noted a -$12.7 Billion pre-tax valuation loss due to its investment in EV company Rivian; that's still in the red. To keep operating expenses under control, it has also planned to layoff 18,000 staff in 2023 On eCommerce, it will continue to focus on providing the broadest selection, exceptional value, and fast delivery of merchandise to customers; which had underpinned it Q4 top line Not to mention enhanced the shopping experience by partnering Snapchat to launch a 3D augmented reality shopping experience Amazon's latest investments & innovations in its new ventures (eg. streaming entertainment, customer-first healthcare (Amazon Clinic), broadband satellite connectivity for more communities globally), are beginning to bear fruits As for AWS core business, Amazon is growing at a healthy rate as customers selected to be hosted by AWS eg. Yahoo Ad Tech, Descartes Labs, Brookfield Asset Management, American Family Insurance, Duke Energy, Wallbox etc... As of end 2022, AWS has 96 Availability Zones within 30 Geographic regions globally, with announced plans to launch 15 more Availability Zones and five more AWS Regions all through 2023. Do you think 2023 will be the turning point for Amazon ? Do you foresee Amazon's stock price rising in tandem with market sentiments ? Please "LIKe" this post ok. Thanks. The rating is very important to me. @TigerStars@CaptainTiger@MillionaireTiger@Daily_Discussion@Tiger_SG@TigerPM
ASML: Is it too late to buy this top semiconductor equipment manufacturer?
For those who are unaware, ASML $ASML Holding NV(ASML)$ is undoubtedly one of the most important companies in the world, one whose product the world cannot do without. ASML is a company that operates in the semiconductor industry, one of the hottest industries in terms of price performance on a YTD 2023 basis. I have recently written an article on the best-performing industries in 2023. While the semiconductor industry wasn’t featured in the Top 5 best-performing industries as of 1 Feb 2023, this industry has continued to outperform peers and is currently ranked #6 in the list (do check out the latest ranking list in the segment below). However, unlike semiconductor household names such as Nvidia, Intel, AMD, and TSMC, etc, investors might not have heard of this Dutch company, one which has gained the reputation of being the top semiconductor equipment manufacturer in the world. What is so special about ASML that the world cannot do without it? For one, the company is a key semiconductor equipment supplier to THE largest chip manufacturer in the world, TSMC. TSMC relies on ASML’s lithography machines to produce some of the most advanced chips that are currently deployed in our daily products, such as the iPhone 14. And ASML is the ONLY company that has the technology to produce high-end EUV lithography systems at present. That is why the company is so special, one which the ever-changing tech world cannot do without if it wishes to progress. Strong 4Q22 Quarterly Performance The company beat the street’s expectations in its recent 4Q22 earnings announcement. Of more importance is management’s 2023 sales guidance, where they expect the company to see a 25% sales rise in 2023, despite export curbs to China. Source: ASML The company has been growing its sales steadily since 2018 and the relatively rosy 2023 sales forecast is backed by a strong order backlog of about $45bn, which is about 2 years of sales. Order backlog has been strong because key chip manufacturers such as TSMC, Intel, Samsung, etc are all dependent on ASML’s complex lithography machines to produce their advanced chips. And those customers are not willing to cut back on their orders, given that the wait time (for new orders) right now could stretch beyond 2 years, a duration longer than the expected length of the “widely-expected” 2023 recession. Hence, these chip manufacturers need to ensure that they have the equipment machines in place for the subsequent economic rebound. Impact of the export ban on China Recent news has reinforced the possible ban on exports of key advanced semiconductor equipment from ASML to China. However, this export ban is likely limited to some of the most advanced lithography equipment, while less advanced tools can still be sold to China. This is why ASML has guided that the overall impact on its backlog is limited to approx. 5%, on the assumption that the Chinese are willing to import its lower-end DUV tools. However, there might be other implications stemming from this export ban to China. For example, Samsung has recently highlighted that if the China export ban is to take effect, its factories operating out of China might no longer have access to ASML’s EUV lithography machines and that would directly impact ASML’s sales (not just to Chinese entities). ASML’sValuations Source: Stock Rover With a current trailing Price to Earnings ratio of 43x, ASML is trading at approx. its 10-year average level. However, as compared to its peers’ average in the 20-25x P/E multiples region, it is still trading at a premium, which the counter has always been doing so. Source: Stock Rover One of the strongest industries in 2023 The semiconductor equipment manufacturers industry has been one of the strongest industries in 2023, with YTD returns of approx. +25.2% (as of 6 Feb 2023). The table below shows the Top 20 strongest-performing industries in 2023 on a YTD basis (exclude industries with < 5 names) Source: market chameleon While the overall chip industry is not yet out of the woods, it is heading in the right direction with the reopening of China and the recent buzz over artificial intelligence (AI) with everyone talking about the wonders of ChatGPT. So, does it make sense to be buying into one of the most important companies in the world today? Too late to buy this top semiconductor equipment manufacturer? I have brought this counter to my Stock Alpha Blueprint (SAB) Students’ attention back in October 2022 when the counter appeared on my screening list as a high-quality stock that has fallen into value territory. When everyone was feeling fearful of buying semiconductor stocks at that instance, I was all ready to pounce on the opportunity to buy into this high-quality blue-chip name, trading them at a discount. I subsequently average up two more times on this counter to capitalize on the counter’s positive price momentum. With the counter currently trading at US$670/share, it is up 77% from my initial purchase back in October 2022 and up approx. 48% of my average cost. ASML, unfortunately, is no longer what I deem as a value purchase at its current price level, after taking into consideration the stock’s fundamentals. That is, however, not to say that its price cannot continue appreciating. In a bull market, a strong stock like ASML can continue to show price appreciation and become temporarily overvalued (not to say that it is at that level now). A premature exit because of the stock no longer being a “value counter” could result in a loss of “opportunity costs” when the stock maintains its upward price trajectory. Hence, I will be waiting for the signal showing a loss in price momentum as the trigger point to exit and lock in my profits in ASML. Should you be buying ASML now? The short answer is NO. While the company remains a high-quality counter with strong revenue/earnings visibility over the next 2 years, it is no longer trading in what I deemed as value territory. Investors/traders who wish to enter now need to be extremely nimble in managing their position, ie be quick to cut loss when the price momentum dies off. On the other hand, there is another top blue-chip semiconductor stock that is currently worth a closer look, that my Alpha Blueprint students have been alerted to, a couple of weeks back. While the counter has already appreciated by 9% (over just 2 weeks), this Warren Buffett stock could just be at the start of a multi-year bull run. To read more of such articles, do head over to New Academy of Finance. @Tigerstars @CaptainTiger @MillionaireTiger
🌟🌟🌟UOB - The 3rd Largest Bank In South East Asia🌟🌟🌟
🌈🌈🌈$UNITED OVERSEAS BANK LIMITED(U11.SI)$ made headlines in January 2022 when it agreed to acquire Citigroup's consumer banking business in Malaysia, Indonesia, Thailand and Vietnam for SGD 4.915 billion. This acquisition, its first major takeover in 16 years, is expected to position UOB as a leading banking group in South East Asia. This will accelerate its growth targets by 5 years according to UOB CEO, Wee Ee Cheong. UOB is due to report its full year financial results on February 23 2023. In assessing how well UOB is performing, the key metrics are its Net Interest Margin (NIM) , Net Profit, Return on Equity (ROE) and Non Performing Loan. In 3Q22, UOB's NIM rose to 1.95%. Its Net Profit climbed 34% year on year in Q3 to SGD 1.4 billion, driven by higher net interest income and customer related treasury income. UOB ROE was 14% in 3Q22 compared to 3Q21 of 11%. UOB's Non Performing Loan ratio came to 1.5%, lower than previous quarter of 1.7%. Analysts are also bullish on UOB with a Buy rating, Target Price of SGD 33.00 to SGD 35.70. With rising interest rates, UOB is set to benefit further in 2023. UOB ticks all the core fundamentals of a quality stock. It is profitable, has a rock solid balance sheet and a wide moat position due to its extensive network. UOB also has an excellent management team too. What I love best about UOB is its steady and regular dividends. At the current yield of 4%, it is a great source of passive income for me while waiting for capital growth. Go Long Go Strong Go UOB!🚀🚀🚀🌛🌛🌛🌈🌈🌈💰💰💰 @Daily_Discussion @MillionaireTiger @TigerStars @CaptainTiger
Is Spotify ($SPOT) - Good Price Or Good Company Or No ?
My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ? "Why not both" I asked myself ? Wouldn't there be more upsides comparatively speaking ? Having put the theory to test on (1) Meta Platform, Snap, (2) Visa & Mastercard (3) Tesla, General Motors (4) Netflix (5) AMD, Lam Research, Intel and (6) Apple; time to try it on an Online Music stock no ? Gonna put $Spotify Technology S.A.(SPOT)$ to the test & see if it fits the bill. Sidetrack: Below are stocks that I have covered. Interested ? Click to read. Please "Like" to show some love okie ? Thanks ! Apple IncMeta Platform (Facebook)AMD IncSnap IncLam Research (semicon)General MotorsVisa Inc A Swedish proprietary audio streaming & media services provider Founded on 23 Apr 2006 Founders were Daniel Ek & Martin Lorentzon. Listed on NYSE on 03 Apr 2018 at $132 per share It is one of the largest music streaming service providers It has > 100 Million songs & 5 Million podcasts, from record labels & media companies. As a "freemium" service, basic features are free with advertisements & limited control, Additional features eg offline listening, commercial-free listening, are offered via paid subscriptions. It is available in most of Europe, Africa, Americas, Asia and Oceania, with a total availability in 184 markets. It has no presence in Mainland China, dominated by QQ Music. In 2022, a year where US market has been hammered by extreme volatility and ease of covid pandemic restrictions - how did SPOTIFY fare ? Current stock price < 07 Feb 2022 stock price by -29.35%. Mmm... Spotify - Summary Revenue came in at EUR$3.17 Billion vs EUR$3.16 Billion (expected by Refinitiv analysts) vs EUR$2.69 Billion (Q4 2021) thats a +17.84% gain, according to Refinitiv Net loss stood at -EUR$270 Million vs -EUR$39 Million (Q4 2021) Loss per share was -EUR$1.40 vs -EUR$0.21 (Q4 2021); thats a -666.67% decline. Operating loss was -EUR231 Million vs -EUR7 Million (Q4 2021); thats a -3,300% decline Spotify - Revenue by Component type and Revenue mix As could be seen, Spotify's main revenue source is from its Premium Service offering; contributing the lion's share of revenue at 85.8% Secondarily, remaining revenue is from Advertisement support For Q4 2022, both revenue source grew at +18% and +14% respectively Spotify - Revenue Component breakdown Above diagram is another look at Revenue Components (Premium & Ad Supported) based on its constituent quarters from 2020 to 2022 Spotify - Monthly Active users (MAU) vs Premium subscribers As with any company providing apps services online, one of company's assets / cash cow would be its users' base. In terms of Monthly Active users at 489 Million vs 406 (Q4 2021); thats a +20.44% gain As for paid subscribers at 205 Million vs 180 Million (Q4 2021); thats a +13.88YoY gain Ability to grow its customers' base both organically or inorganically is good news to investors and Wall St analysts whose price forecasts are based on future earnings / prospects Spotify - Other highlights Spotify - Gross Margin breakdown by quarters Spotify's Gross Margin came in at 25.4% vs 27% (Q4 2021); thats a -1.6% decline The decline could be attributed to both of Spotify's revenue components of (a) Premium services and (b) Ad-supported service. Free Cash Flow (FCF) was -EUR$73 million, a decrease Y/Y as a result of lower Net Income adjusted for non-cash items and reduced favorability in net working capital. Spotify's CEO on Q4 2022 Results Looking back on 2022 in its entirety, we are pleased with our overall results. Each year presents certain challenges and opportunities and, over the past 12 months, we largely delivered on our internal goals and we are excited about the momentum we are building heading into 2023... Spotify, CEO, Daniel Ek . Is Spotify - Both A Good Price and Good Company ? For starters, (1) its revenue beat forecast & Q4 2021 results, (2) its MAU is uppped +20% and (3) its paid subscribers of 205 Million is upped +14% from a year ago. Just to note, its Q4 2022's MAU of 33 Million net additions to monthly active users during the quarter, marking a record high for the company Like other US Tech firms, Spotify's workforce has seen a reduction too. It announced plans to cut 6% (approx. 600 staff) of its global workforceas The "gloomy" economic environment (worldwide) has caused consumers & advertisers to limit their spending. One of Spotify's continual investment would be its podcasts, where it has spent > $1 Billion over the past 4 years Spotify - Activities in 2023 Spotify is certainly on the right path & direction in its continuous effort to enthrall and entrench its customers whether when (a) using the App or (b) listening to its podcasts Do you think Spotify is both a good company and at a good price now ? Do you think Spotify would be able to reach out and grow its customers' base in 2023 ? Please "Like" the post ok. Thanks. The rating is very important to me. @TigerStars@CaptainTiger@MillionaireTiger@Daily_Discussion@Tiger_SG@Tiger_chat@TigerPM
Get to know C3.AI by Q&A!It took only 2 months for ChatGPT to achieve 100 million users, which made market insane on AI. Since OpenAI, parent company of ChatGPT has not been listed, investors are persuing C3. AI whose ticker is simply "AI" .How did C3.AI get this AI code?Generally, companies will apply for "symbol reservation" with the exchange in advance under the conditions of listing, spin-off, SPAC listing, code change, etc. Managed by National Market System Symbology Plan for the selection and use of 1-5 character root symbols, as governed by ISRA, the Intermarket Symbols Reservation Authority. The issuer must reasonably expect to use the symbol within 24 months of reservation.C3. ai obviously made a clever chose.What kind of company is C3. AI?C3. AI is an enterprise AI application software company, providing a series of fully integrated products. Its C3 AI application platform is an end-to-end platform for developing, deploying and operating enterprise AI applications. Its C3 AI application is an industry-specific SaaS enterprise AI application portfolio, which enables the digital transformation of global organizations.What are the customers of C3. AI?At present, the company has built a series of 42 enterprise applications to provide predictive analysis for natural gas, utilities, health care manufacturing, aerospace, defense intelligence and other industries.The reason why customers are concentrated in these industries instead of software and consumer industries is that companies (customers) in these industries prefer to use off-the-shelf applications instead of building their own AI applications.In other words, Service provided by C3. AI are not universally unique. Big techs tend to self-research, while other companies more efficient to buy from others.What is the relationship between C3. AI's new products and ChatGPT?The C3 Generative AI product suite launched by the company at the end of January includes C3 Generative AI for Enterprise Search for Enterprise Search. The C3 Generative AI Product Suite integrates the latest AI capabilities from organizations such as Open AI, Google, and academia, and the most advanced models, such as ChatGPT and GPT-3 into C3 AI’s enterprise AI productsIn other words, C3. AI plays an "intermediary" role to these cores products.Of course, the embedded suite of these AI applications will inevitably accelerate the ability of customers to utilize these models in their value chain.How does C3 AI make money?C3. ai was founded in 2009, firstly by selling software, and then, like other software companies, turned to "subscription" aka, SaaS mode.In addition to the basic services of direct subscription, the company also has Professional Service for non-users, which accounts for about one sixth to one fifth of the revenue.How's C3. AI's performance?C3. AI has changed its income mode from subscription-based mode to consumption-based mode, so needs to provide more pilots to satisfy users, which is also the key to future performance. In 23FQ2 ended in October 31st, the company added 13 new pilots, beats the previous expectation of 5.In terms of the number of customers, 23Q2 added 8 customers, reaching 236.At the same time, the gross profit of previous trials and pilot combinations has been declining for 22 years, and the cost of ensuring customers' success in the early participation stage is higher.Operating margins have also gone up in recent quarters, as well as a shift in pricing models, sales staff spending is also key. Due to the transition of consumption-based pricing model, the short-term situation of the company is complicated, and the performance in the next few quarters will be unstable. This trend is expected to end in mid-2024.C3. Gross profit margin of AIWhat are the weaknesses of C3. AI?1. Huge operating losses, and no hope of profit at presentThe explosive growth of most SaaS companies before 2021 has been recognized by the market and is popular. Although the vast majority of companies have recorded large operating losses, this is acceptable as long as it can effectively generate potentially sticky revenue growth.However, the monthly revenue growth rate of C3. AI has been declining since 2022. The revenue of 23FQ2 has increased by only 7% year-on-year, and it is expected to be-8% in the next quarter.The operating profit rate of 23Q2 is-118%, of which R&D expenditure accounts for about 80%, and stock compensation accounts for a high proportion, so even if the stock price rises in the future, shareholders' equity is likely to be diluted.Whether it is due to the change of income structure or the blow of macro environment, this growth rate obviously cannot meet the market expectation of an AI SaaS company, so the company's share price has dropped from the highest $200 after IPO to the lowest $10 by the end of 2022.2. Revenue depends on big customersC3. AI has a high customer concentration, and about 32% of subscription revenue comes from related parties, most of which comes from $Baker Hughes(BKR)$ . At the same time, customers in many industries have close relations with the government.C3.ai’s sales teams are currently actively co-selling to over 300 accounts globally. Bookings diversity continues to improve, with the Federal, aerospace and defense sectors performing well.What is the valuation of C3. AI?Within the surge, the trailing 12 months of PS reached 13.2 times, far beyond peers average of 5.1If the annual revenue in fiscal year 2023 is finally US $260 million (corresponding to a year-on-year growth rate of 5%), the growth rate in 2024 will reach 30%, and the revenue will be US $340 million. current market value is $3.03 billion, which means the PS is still as much as 10 times.It is overvalued now.What does surge of C3. AI mean?Obviously, the theme of hype AI is capital interest, which is the same as metaverse, blockchain and NFT before. Compared with them, C3. AI has more specific business and corresponding technology support.However, it is inevitable that it will eventually become a meme stock, and going through a wave of madness. After that, performance decides.
Part 1 Good Technical Analysis This Week #AMD #AAPL #MSFT
Find out more about me here (YouTube/Discord/Telegram): https://www.linktr.ee/keeleytan If 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. Free signal service on discord is officially up. If you’re interested, head to my discord to check it out! $Advanced Micro Devices(AMD)$ A 14.18% change in price since my last analysis. Before (https://www.tradingview.com/chart/AMD/Y3ioeyiL-AMD-Analysis) After $Apple(AAPL)$ A 8.16% change in price since my last analysis Before (https://www.tradingview.com/chart/AAPL/MMxSaETh-AAPL-Analysis/) After $Microsoft(MSFT)$ A 4.25% change in price since my last analysis Before (https://www.tradingview.com/chart/MSFT/fBCZyasz-MSFT-Analysis) After Hope you've taken advantage of my analysis this week. Like, share, and comment if you're in profit! 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 @MillionaireTiger@CaptainTiger@TigerStars
I think the price cut of $Apple(AAPL)$ Apple products is to seize more market share. At present, the competition in China's mobile phone market is fierce, and different brands of mobile phones are also selling points with affordable prices and multi-functions as their selling points, and compete with Apple. In the fourth quarter of last year, Apple's iPhone shipped 73.2 million units in the global market, a year-on-year decrease of 11%; in the Chinese market, Apple's iPhone shipments were 16.4 million units, a year-on-year decrease of 24%. And affected by factors such as supply chain assembly during the epidemic, revenue from the iPhone business in the fourth quarter of last year fell. Apple's latest financial report showed that the iPhone business revenue in the fourth quarter of last year was US$65.775 billion, a year-on-year decrease of 8%. Apple's Greater China revenue was $23.905 billion, down 7% year-on-year. However, Apple is expected to restore the growth momentum of iPhone performance in the future, mainly due to the increase in the proportion of the high-end model iPhone 14 Pro/Pro Max version, thereby driving the increase in the average price of the product. In addition, the production and operation of Foxconn Zhengzhou Park has gradually returned to normal in December last year. Foxconn Zhengzhou Science and Technology Park recently announced that after the Spring Festival, Foxconn's employees' rework rate has approached 100%, with about 200,000 people. This is the first time to resume production after the epidemic, and it is expected that Apple's main supply chain is stable, thereby launching more products. In the first quarter, Apple has a certain order correction for headphones, watches and Mac product lines; the mobile phone product line has been adjusted in the fourth quarter of last year, and the iPhone 14 Pro product line has been affected by a certain supply, so there is no latest adjustment. Based on the current macro environment at home and abroad, Apple's orders are still significantly better than other consumer electronics customer supply chains. In the medium and long term, Apple's AirPods, Apple Watch and other products have a low penetration rate, and the penetration rate is expected to continue to increase in the future, which will drive the continuous growth of product sales. This time, Apple's price reduction action may be to start its good brand and beer, so as to make customers love and loyalty to Apple products. Prepare for the price increase of new products in the future. So I think Apple's performance will be bright this year. $Nasdaq100 Bear 3X ETF(SQQQ)$ $Nasdaq100 Bull 3X ETF(TQQQ)$ $Semiconductor Bull 3X Shares(SOXL)$ @Daily_Discussion @TigerStars @Tiger_chat @MillionaireTiger
$Ascott Trust(HMN.SI)$ Basic Profile & Key Statistics Main Sector(s): Hospitality Country(s) with Assets: Australia, United States, Japan, England, Singapore, France, China, Vietnam, Philippines, Germany, Indonesia, Belgium, Spain, South Korea, Malaysia No. of Properties (exclude development/associate/fund): 103 Key Indicators Performance Highlight Revenue, gross profit, distribution and DPU improved yoy mainly due to stronger operating performance of the existing portfolio and contributions from newly acquired properties. Revenue per Available Unit REVPAU has improved in which properties from Australia, Singapore, UK and US performed at pre-Covid RevPAU levels. Acquisition In 2H 2022, CLAS completed the acquisition of 9 properties In France, Japan, Vietnam, US And Australia as well as 2 rental housing properties in Japan. There are 2 properties in Japan target to complete the acquisition in 1H 2023 and 1 rental housing property in 2024. Development 2 developments are ongoing where Somerset serviced residence is expected to complete in 2H 2025 and the U.S. student accommodation is expected to complete in 2Q 2023. Asset Enhancement Initiative AEIs for multiple properties are to be commence in by 2Q 2023. AEIs for Riverside Hotel Robertson Quay and Citadines Kurfürstendamm Berlin are expected to complete by end 2023, while for Citadines Holborn-Covent Garden London and Citadines Les Halles Paris are expected to complete by 1Q 2024. Distribution Breakdown Distributable Income Breakdown: 88.5% from Operation 11.5% from Fees Payable/Paid in Units Distribution = 100% of Distributable Income Distribution to Perpetual Securities Holder = 7.1% of Distributable Income Related Parties Shareholding REIT Sponsor's Shareholding: Above median for more than 10% REIT Manager's Shareholding: Above median for more than 20% Directors of REIT Manager's Shareholding: Below median for more than 20% Lease Profile Income in SGD/Major Currencies: Below median for more than 10% WALE: Above median for more than 20% Highest Lease Expiry within 5 Years: Above median for more than 20%; Falls in 2027 and beyond, without breakdown Weighted Average Land Lease Expiry: Above median for more than 10% Debt Profile Gearing Ratio: ± 10% from median Gearing including Perps: ± 10% from median Cost of Debt: Below median for more than 20% Fixed Rate Debt %: ± 10% from median Unsecured Debt %: Below median for more than 20% WADM: Above median for more than 10% Highest Debt Maturity within 5 Years: Below median for more than 10%; Falls in 2027 and beyond, without breakdown Interest Coverage Ratio: ± 10% from median Diversification Profile Top Geographical Contribution: Below median for more than 20% Top Property Contribution: Below median for more than 20% Top 5 Properties' Contribution: Below median for more than 20% Top Tenant Contribution: ± 10% from median Top 10 Tenants' Contribution: Below median for more than 20% Key Financial Metrics Property Yield: Below median for more than 20% Management Fees over Distribution: ± 10% from median; $6.25 distribution for every dollar paid Distribution on Capital: Below median for more than 20% Distribution Margin: Below median for more than 20% Trends Slight Downtrend: NAV per Unit Downtrend: DPU, Property Yield, Interest Coverage Ratio, Distribution on Capital, Distribution Margin Relative Valuation P/NAV - Above average for 1y & 5y; Above +1SD for 3y Dividend Yield - Average for 1y, 3y & 5y Author's Opinion Performance has improved a lot from the gradual recovery of travel. Cited from the presentation, UNWTO (World Tourism Barometer, World Tourism Organization, Jan 2023) expects the international arrivals to reach 80% to 95% of pre-pandemic levels in 2023, a significant improvement from 63% of pre-pandemic levels as in 2022. Coupled with the China border opening and recent acquisitions, ART performance is expected to improved moving forward. The gradual recovery of travel has greatly contributed to improved performance. From the presentation, UNWTO (World Tourism Barometer, World Tourism Organization, Jan 2023) experts international arrivals to reach 80-95% of pre-pandemic levels in 2023, improve significantly from 63% in 2022. Coupled with the opening of China's borders and recent acquisitions, the performance should seen improvement going forward. You could also refer below for more information: SREITs Dashboard- Detailed information on individual Singapore REIT SREITs Data - Overview and Detail of Singapore REIT REIT Review - List of previous REIT analysis posts *Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage due to the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.
Oh Jane! What trouble have you gotten yourself into? Recall Jane bought the 150 APPL straddle recently with all her profits from writing options hoping for AAPL to make an ‘explosive’ move (either up or down) post earnings: Jane's original AAPL Straddle bought for close to USD1K Unfortunately for Jane, the net move post earnings was anything but ‘explosive’: AAPL hourly candles. AAPL fell post earnings but recovered thereafter Instead she got to experience her first ‘IV crush’ when Implied Volatility (purple line) fell along with her straddle premium: IV crush after earnings like clockwork Fortunately for Jane, this was mitigated by the subsequent recovery of AAPL. However to make money on her Straddle, AAPL would either need to crash below 140 or rally above 160. Her position is down by more than $400 by this time & she is staring at the prospect of losing nearly all her option writing profits if AAPL trades in a range from hereon till expiration. AAPL Long Straddle Adjustment Jane called me last Sunday to help salvage the situation. I told her this can be a bit tricky as the options are expiring in a few days! Notwithstanding, I asked her a few questions including “Do you think AAPL will close above 160 or crash below 140 by next Friday? If there is a pullback, what price do you think AAPL will likely fall to? What do you think of AAPL’s prospect in the long term? Do you have the capital to hold AAPL shares? Is AAPL overvalued at current prices?” & more. Based on her answers, I suggested 3 options: Cut loss or Flip the long straddle into a short straddle or even an Iron Condor or adjust the straddle into a vertical spread: Straddle morphed into a vertical spread Breakeven moved down from 160 to 152.38. In other words, as long as AAPL stays above 152.38 on Friday, she will come out from this whole fiasco with just a bruised ego. On the downside, risk has gone up significantly but is still limited; furthermore she is prepared to pick up AAPL shares if assigned. As always, I leave it to Jane to make her own decision. Lessons Learnt More importantly, Jane learnt 4 valuable lessons from this whole episode: Its better to stick with writing options. Yes, its a ‘turtle’ way of making money but ‘slow and steady’ turtle eventually beats the ‘bouncy’ hare. Before entering an option trade, we have to think a few steps ahead and plan for all contingencies. Never deploy a strategy with just a cursory understanding of how the trade might pan out. Always think of risk first, then profits. If the trade goes against us, do not panic, even long option strategies can be adjusted. JIAMU OWL Sharing Stories, Not Recommendations @TigerStars$Apple(AAPL)$