MaverickTiger

Tiger Analyst, covers star companies.

    • MaverickTiger·09-23 15:06MaverickTiger

      Why COSTCO is the safest supermarket stock?

      tops same-store comparable salesbeats earnings agains, in-line with revenue means better cost controlall ther headwinds has been priced-in.$Costco(COST)$ released FQ4 financial earnings as of August. EPS beats and revenue in-line. A better cost control surprised the market, there's no plunge after close.Revenue $72.09 billion, up 15% year-on-year, slightly beat consensus of US $71.89 billion;Gross profit $8.53 billion, up 7.4% year-on-year, and the gross profit margin continued to drop to 11.84%. Diluted EPS $4.2, up 11.7% year-on-year, higher than the consensus of US $4.14.Profits growth can't keep up with revenue, especially the gross profit margin drops quickly.3 main factors: Natural gas price; Staff salary control; Foreign exchange losses.Since these three points are all known problems in the market, most institutions have already priced them.In terms of same-store sales, after declining for four consecutive quarters, it began to resume growth to 10.4, and the average same-store sales increased by 20.8 year-on-year in two years, among which the growth rate of Canadian and international business was higher than that of North America. Therefore, the change of foreign exchange, that is, the increasingly strong US dollar, has a greater impact on it.In terms of inventory, the inventory growth at the end of Q3 was 26%, while the figure at the end of Q4 was lower than 26%, which means that Q4 did not increase quarter on quarter. Among them, 10-11% is caused by inflation, while the growth of new inventory is 3%.COST inventory changeOverall, the performance is in line with expectations. COST is also a stock with concentrated positions of hedge funds and pensions, which has performed better than other supermarkets this year.
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    • MaverickTiger·09-21MaverickTiger

      Another Sign of Recession is Ford?

      Seldom did Dow Jones $DJIA(.DJI)$ decline more than Nasdaq Index $NASDAQ(.IXIC)$, but not in September 20th. $Ford(F)$ 's lowered its Q3 guidance unexpectedly made the whole manufacturing sector collapsed.Will it be a domino effect?The company disclosed the previous day ,Expects to have about 40,000 to 45,000 vehicles in inventory at end of third quarter lacking certain parts presently in short supplyTherefore, the EBIT of Q3 has been lowered to between $1.4 billion and $1.7 billion, verses the market consensus of $3 billion.In fact, Ford's supply chain management has done a good job since the pandemic, its gross profit margin of 22Q2 reached the highest 14% in recent years. Therefore, the current shortage of parts is indeed an important blow to its performance.Ford's performed fantastic last year, due to better expectation of electric vehicle business, especially its strong point-pickup truck, which is well received in North America, is expected to be deadline by the end of 2024, with seven electric vehicles on the market.However, E-Transit, which was originally expected to be listed in mid-2022, has not been listed, and was finally exposed to be listed in 2023. Its secondary market share price also experienced a decline in 2022, and almost halved in the middle of the year.It is necessary for investors to consider whether it is a problem at the "supply" or "demand".At the end of August, some media quoted the internal email sent by Ford to employees, saying that Ford planned to lay off about 3,000 employees, mainly affecting employees in the United States, Canada and India.Supply chain shortage needs redundancy? Doubt.The replacement of "oil cart o EV", should have caused problems at both ends of "supply" and "demand" to Ford.After all, this sign of Ford is also the same as last week$FedEx(FDX)$The "preliminary performance" warning is similar (Why FedEx's warning RECESSION again?), are lowering the performance guidance for the next quarter and the following fiscal year. This kind of uncertain practice at the company level is extremely damaging to market confidence.Yesterday, the entire manufacturing sector, except the aviation manufacturing industry, which has little to do with it, fell, such as$General Motors(GM)$$Rivian Automotive, Inc.(RIVN)$Wait. Ford, as a representative of the traditional manufacturing company, also has performance expectations, which further strengthens investors' expectation that the market will enter a "recession".Since the Q2 financial report season this year, from the retail industry $Wal-Mart(WMT)$ $Target(TGT)$, logistics $FedEx(FDX)$. Now, Ford, the auto industry, has pushed American policy makers step by step.Let's see what decision Jay Powell will make tonight.
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    • MaverickTiger·09-16MaverickTiger

      Why FedEx's warning RECESSION again?

      $FedEx(FDX)$ seldom has plunge 16% due to earnings, but it happened after close September 15th. The company was supposed to announce its 23Q1 report on September 22, but it announced the preliminary results ending August 31, 2022 one week in advance. Lower Q2 guidance,widely missed estimates and withdraw guidance for fiscal year23 makes the new CEO said, The weak global freight volume has led to the disappointing performance of FedEx. The company had expected demand to increase, but it actually declined.Is this another signal of "global ecession"?It is preliminarily estimated that the adjusted operating profit for the first quarter of fiscal year 2023 ended August 31 this year is $1.23 billion, far less than the analyst's expectation of $1.74 billion. At the same time, the adjusted EPS was $3.44, down from $4.37 in the same period last year, and far lower than the widely believed $5.14 in the market.The company specifically stated that the poor performance was mainly adversely affected by the accelerated global sales weakness in the last few weeks of the reporting period.FedEx's business is divided into three main parts: FedEx Express, FedEx Ground and FedEx Freight. This time, the management thinks that all businesses were affected at the end of the quarter. But we look at it from the perspective of the consensus expected by the market Some of FedEx Express was most affected.Macroeconomic weakness in Asia and challenges to European operations are the main factors affecting this part of the company's performance. After all, ground and freight services are mainly in the United States, and Global businesses are more vulnerable to the impact of a strong dollar.At the same time, it also cut the forecast of Q2: with the further weakening of business conditions, the adjusted EPS of Q2 was US $2.75, which was lower than the market expectation of US $5.46, and the revenue forecast was US $23.5-24 billion, which was lower than the expected consensus of US $24.87 billion.The CEO said:Global freight volumes declined as macroeconomic trends worsened significantly in both the international and the United States during the latter part of the reporting period. We are responding quickly to these negative factors, but given the speed of change, the results in the first quarter were lower than we expected.Although this performance is disappointing, we are actively accelerating our efforts to reduce costs and evaluating other measures to improve productivity, reduce variable costs and implement structural cost reduction measures. These efforts are aligned with the strategy we outlined in June, and I remain confident of meeting our financial targets for fiscal year 2025.So how does the company plan to respond?Cost cut.Cost cuts include reducing the frequency of flights, reducing number-related man-hours, consolidating sorting operations, canceling planned network capacity and other projects, delaying hiring and closing more than 90 FedEx offices. It also plans to close five company office facilities.As FedEx's performance actually reflects the intensity of supply chain activities, it is often used to observe the American economy, and the market often regards its performance as a barometer of the vitality of the American economy.Therefore, everything related to this has fallen.$Amazon.com(AMZN)$Down 1.5%,$United Parcel Service Inc(UPS)$It fell by 6%.It seems that the chill has also brought to the whole market.
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    • MaverickTiger·09-15MaverickTiger

      When will VIX be a Perfect Hedge?

      Many investors has heard about "Fear Index", which was corresponding to $S&P 500(.SPX)$ index, the $Cboe Volatility Index(VIX)$. It shows the trend of the market volatility, so it is widely used by investors as a hedging tool.Can VIX perfectly hedge market downturn?No.First, we must understand that what is a Volatility index.What is volatility?Volatility is a statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security. Volatility is often measured from either the standard deviation or variance between returns from that same security or market indexVIX is created and managed by $CBOE Holdings Inc(CBOE)$, It is an important index in the world of trading and investment because it provides a quantifiable measure of market risk and investors’ sentiments. It isInverse derivation from the price of SPX index options with recent maturity (Option pricing methods, such as Black-Scholes model), So it generates a 30-day forward-looking forecast of volatility.Volatility or the speed of price change is usually regarded as a way to measure market sentiment, especially the degree of fearness of market participants, so it is called "fear index".When will there be VIX and SPX move on the same side?We need to understand how VIX is calculated.VIX values are calculated using the Cboe-traded standard SPX options, which expire on the third Friday of each month, and the weekly SPX options, which expire on all other Fridays. Only SPX options are considered whose expiry period lies within more than 23 days and less than 37 daysIn most cases, the S&P 500 index and VIX move in opposite directions.However, when the plunge continues for more than a month, unless the volatility of each next day is greater than that of 30 days ago, the VIX will maintain a steady high level or drop impressively. For example, at the end of March 2020, because of the sharp drop for one month, it appearedThe S&P 500 Index and Fear Index were in "double kill".Following the popularity of the VIX, the Cboe now offers several other variants for measuring broad market volatility. Examples include the Cboe Short-Term Volatility Index (VIX9D), which reflects the nine-day expected volatility of the S&P 500 Index; the Cboe S&P 500 3-Month Volatility Index (VIX3M); and the Cboe S&P 500 6-Month Volatility Index (VIX6M). Products based on other market indexes include the Nasdaq-100 Volatility Index (VXN); the Cboe DJIA Volatility Index (VXD); and the Cboe Russell 2000 Volatility Index (RVX).What are the characteristics of volatility-related products?VIX is only a measurement index, not a trading underlying, its derivatives are tradable, like futures, options, ETN, ETF and other products.For example, $Barclays iPath Series B S&P 500 VIX Short-Term Futures(VXX)$,$ProShares VIX Short-Term Futures ETF(VIXY)$, and some legerage products, $VelocityShares Daily 2x VIX Short-Term ETN(TVIX)$$VIX Short-Term Futures 1.5X ETF(UVXY)$.The factors that determine these financial products are not just VIX index.UVXY, for example, has a backup of VIX futures contracts for the current month, VIX futures contracts for the next month, and a small amount of short-term government bonds.VIXY similarFutures have contago and backwardation, T-Bonds are sensitive to interest rate level, not to mention that a leveraged ETF . Therefore, the financial products related to VIX have considerable tracking errors.If you only want to hedge downturn risks in the short term, choosing ETF, ETN is favorable, because it is more convenient. However, if you want to "trade volatility", you need to choose futures, options and other products.You can refer to this post:"A sharp weapon used by hedge funds-volatility targeting"
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    • MaverickTiger·09-14MaverickTiger

      Why the market so scared of August CPI?

      August CPI surprised the market, indexes plunged with the risk-off mode on overnight.$DJIA(.DJI)$$NASDAQ(.IXIC)$$S&P 500(.SPX)$We believe there are three factors relevent to this inflation:Oil price. It's the beginning of the inflation. Although the decline in oil prices in August will drag down some upwards, the price of other items completely offset the decline and exceeded market expectations again in August.Wages. The non-farm payroll report released the previous week showed that the unemployment rate remained at a low level of 3.7%, the labor force participation rate was 62.4%, and the average hourly wage increased by 5.2% year-on-year. The rising wages increase disposable income, thereby increasing the demand for goods and leading to higher prices, and rising prices increase the demand for higher wages, which leads to higher production costs and further upward pressure on prices.Thereby forming a spiral of "wage-inflation". Enterprise Profits. Due to the higher concentration of industries, the monopoly position of large enterprises is getting higher and higher, so they have greater pricing power. the rising cost of raw materials and labor erodes the profits of enterprises. Therefore, while maintaining profit margins, enterprises can easily pass the inflationary pressure.Long-term inflation not only increases the possibility of economic recession, but also disable the monetary policy. Therefore, the current "substantial interest rate hike" by the Federal Reserve is also imminent and forced.What the market pays attention to is the path of raising interest rates. It can also be seen from CME's Federal Reserve Interest Rate Observer that after the CPI data was released in August,The market has risen from "23% of 50bps and 77% of 75bps" to "66% of by 75bps and 34% of 100bps" a week ago.This week, no Fed officials speaks, cause it is a quiet period. The Fed will hold a meeting on interest rates next week. Therefore, if the interest rate increase is as high as 100 basis points, the market will be more scared of recession.The plunge on September 13th priced this panic.For the Fed, there are two main routines of interest rate increasing.One is to raise interest rates violently, that is, there is no upper limit on raising interest rates, and inflation should be brought down first, which may eventually exceed the interest rate level of 6%. This will not only increase the unemployment rate and further increase the economic recession, but also raise the federal funds rate and increase the debt pressure of the US government (the interest rate on debt repayment increases), etc. When recession signals such as rising unemployment rate apprears, they start to cut interest rates.The other is to set the target of raising interest rates, such as stopping raising interest rates sharply when raising interest rates to 4-4.5%, and not rushing to cut interest rates, so as to keep a tight state for a long time, will sacrifice certain market liquidity while maintaining the strength of the US dollar, which may lengthen the cycle of inflation decline.It means returning to the long-term inflation target of less than 2% in 2024.Why is 2024 so important? It's an election year. Although the second method is much milder, it is easy to fail to achieve the long term inflation goal, the Biden gov will no dount blame them.Therefore,The market also began to price the "recession caused by the violent interest rate increase of the Federal Reserve.".The Federal Reserve has repeatedly stated in its previous release that it should make policies according to data. Whether 100 bps is necessary, there are other data needed, such as August retail sales data released on Thursday and September consumer inflation forecast released by the University of Michigan on Friday. If these data are "worse than expected", the possibility of 100 basis points will greatly increase.After all, 100 basis points itself accelerates some inflation items.Like shelters. In August, the rent of major residences increased by 0.7% month-on-month, which affected the CPI basket by more than 30%. If the interest rate rises again, the mortgage pressure will continue to increase, which will lead to greater demand in the rental market, but further push up expectations.Therefore, to be on the safe side, 75 basis points is already considerable, and we are more inclined for the Fed to raise interest rates in a moderate way.For the market, the plunge on September 13th means that market has taken into account 100 bps .Although in the remaining months of 2022, the market will continue to be under pressure in raising interest rates, and the overall situation is pessimistic. However, the expectation of more violent interest rate hikes may only be a manifestation of market sentiment, which is also a manifestation of investors'A good time to "trade volatility".PS: There are many common ways to trade market indexes. ETFs, futures, or corresponding option contracts can play the role of arbitrage, hedging or speculative profits. Of course, there are also trading methods specifically for VIX and other volatility indexes, such as "A sharp weapon used by hedge funds-volatility targeting"$SPDR S&P 500 ETF Trust(SPY)$$Invesco QQQ Trust(QQQ)$
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    • MaverickTiger·09-14MaverickTiger

      Why August CPI beat market consensus?

      The August CPI made the market focused since the beginning of the month, as the risk-on mode back again, investors wish the inflation peaked and slightly falling back. But it didn't...Over the last 12 months, the all items index increased 8.3% YoY in August on a seasonally adjusted basis, beat the market consensus of 8.1%, slightly less than July's 8.5%. From a MoM perspective, CPI increased 0.1% month-on-month, higher than the market consensus of -0.1%, and July's 0% too.The core CPI increased 6.3% YoY in August on a seasonally adjusted basis, higher than the market consensus of 6.1%, higher than July's 5.9%; From a MoM perspective, CPI increased 0.6% month-on-month, higher than the market consensus of 0.3%.US CPI YoYWhy the market expect inflation to slow down?Because oil prices fell in August.The inflation is mainly caused by high oil prices, than transmitted to the whole supply chain through raw materials. Then, Fed's interest rate increasing affect more industries.Also, Russia and Ukraine conflicts contributed to the oil prices. Since the market get used to it, the market has been pricing-in the end of the war.Anyway, a 9.1% CPI might be the peak, but it didn't decline as fast as we expected.Which segments contributes the surprised inflation?Let's take from segments.Increases in the shelter, food, and medical care indexes were the largest of many contributors to the broad-based monthly all items increase. These increases were mostly offset by a 10.6-percent decline in the gasoline index. The food index continued to rise, increasing 0.8 percent over the month as the food at home index rose 0.7 percent. The energy index fell 5.0 percent over the month as the gasoline index declined, but the electricity and natural gas indexes increased.The shelter index continued to rise, increasing 0.7 percent in August compared to 0.5 percent in July, mainly due to the rent. The rent index rose 0.7 percent in August as did the owners' equivalent rent index. The index for lodging away from home rose 0.1 percent over the month after declining in June and July mainly rent and house price changes. It is commonly believed that Fed's interest rate increasing has increased the mortgage rate, which makes more residents choose to rent. The food index increased 0.8 percent in August, the smallest monthly increase in that index since December 2021. In fact, it is still influenced by supply and demand, espcially the weather. The food away from home index rose 0.9 percent in August after rising 0.7 percent in July.The index for full service meals increased 0.8 percent and the index for limited service meals increased 0.7 percent over the month.The medical care index rose 0.7 percent in August after rising 0.4 percent in July as major medical care component indexes continued to increase. It was a bit surprised. The index for hospital services increased 0.7 percent over the month, while the index for prescription drugs increased 0.4 percent. The index for physicians' services rose 0.2 percent in August. We believe there are two reasons, One is the salary increase of medical staff, and the other is the price increase of medical equipment.In addition, natural gas and electricity services increased on a month-on-month basis, which beat the consensus. Since the United States suffering from ultimately hot this August, it is normal that the electricity more expensive.Generally speaking, increases were mostly offset by a 10.6-percent decline in the gasoline index, but the electricity and natural gas indexes increased has burdened the whole index. When CPI will slow down?According to historical chart, Last October has a ghigher base, it might show some easeness this one. In other words, September still suffers.$S&P 500(.SPX)$ $NASDAQ(.IXIC)$ $DJIA(.DJI)$ $iShares 20+ Year Treasury Bond ETF(TLT)$ $iShares TIPS Bond ETF(TIP)$
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    • MaverickTiger·09-08MaverickTiger

      BILI Miss Encore! How to reduce loss via options?

      Chinese Stocks suffers this year in secondary market, esp those growth technology stocks. Under pressure of strong dollar, global inflation and recession, it's not the growths' aage.$Bilibili Inc.(BILI)$ is a typical growth company. At the end of 2021, it still confirmed that "profit leaves, second, but growth is the most important". But under current environment, The decline of growth rate has also become a reality, and the secondary market has also severely punished the weak growth stocks.$BILIBILI-SW(09626)$Obviously, Q2 earnings miss, market is and will punish it.Q2 revenue was 4.908 billion yuan, up 9.2% year-on-year, which was the first time in Bilibili's history that it dropped to single digits, which was basically the same as the market expected consensus of 4.905 billion yuan.Among them, the game revenue was 1.046 billion yuan, down 15% year-on-year, which was the second decline after the first decline in the same period last year, and also lower than the market expected consensus of 1.079 billion yuan; The income from value-added services was 2.103 billion yuan, a year-on-year increase of 29%, slightly lower than the market expected consensus of 2.121 billion yuan; Advertising revenue was 1.158 billion yuan, a year-on-year increase of 10%, slightly higher than the market expected consensus of 1.136 billion yuan; Revenue from e-commerce and other businesses was 600 million yuan, up 4% year-on-year, which was slightly higher than the market expectation consensus of 583 million yuan.The cost was 4.17 billion yuan, a year-on-year increase of 19%, so it also made The overall gross profit margin fell to 15.04%, the lowest since Q2 2019.The sales expenses were 1.172 billion yuan, down 16% year-on-year, and the decline exceeded market expectations.However, the content cost, R&D expenses and management expenses all exceeded market expectations, so the overall operating loss was less than expected.The diluted loss per share was 4.98 yuan, which was worse than the market expected loss of 4.37 yuan.For Q3, company's revenue guidance is 5.6-5.8 billion yuan, while market consensus is 5.91 billion yuan.In a word, a huge miss.Users in Bilibili are "believers" , it has been recognized by a large number of investors. However, in the current environment, its growth has also changed, and there is no hope of profit at all.From the top lineCan active users or creators in Bilibili bring greater value?The MAU of Bilibili Q2 reaches, DAU is, the ratio of DAU/MAU is continuously maintained at about 27%, and the activity of users is still quite high. As paying users include value-added service users who buy games and members, the total number of paying users is 27.5 million, and the payment rate reaches 9.0%. Activity increases, But it didn't help the monetization, and ARPU dropped to 16.06 yuan, the lowest since Q3 2020.Of course, Q2 has some special reason. game serious numbern number is limited, and logistics is affected.Therefore, the game and e-commerce business have different degrees of distortion Among them, games have a greater impact, while e-commerce has exceeded market expectations to a certain extent. Since July, Bilibili has obtained the new version. It is expected that the game business will improve in the second half of the year, but the whole game business is unlikely to grow as before.Value-added services will bring more subscribers through more excellent content, especially OGV.Do you want to continue to insist on "user experience" and give up patch advertisements like Youtube??Live broadcast and value-added service is the content realization business of the company, and it is also the business with the largest contribution to the company's revenue at present. The revenue of Q2 business exceeded expectations. On the one hand, the company promoted the transformation of UPmaster into anchor and introduced more external anchors; On the other hand, more new dramas (new fans) attracted potential users.Bilibili's user-friendly strategy has always kept the whole community active enough, but it has also reduced the opportunity of monetization to a certain extent. The weakness of advertising business has been an industry fact. Although Bilibili has performed well among all advertising companies, whether it can open up more revenue methods has always been the concern of investors.If Q2's revenue is affected by special events, how can it explain that Q3's guidance still worse than market consensus?From the bottom lineWhere is the limitation of content support?The company said that it should spend all its money on the core "video content" and "user growth", but bilibili also began to adjust the support ratio for up main content. At present, creators below the middle waist are gradually looking for more ways to realize their cash, and the future content creation will focus on more specialized PUGV and OGV. This is the trend of short and medium video websites created by all users. Bilibili has also enhanced its monetization ability through Story-Mode. Because the advertising price of Story Mode is higher than that of other video scenes, it is possible to continue to reduce subsidies to video owners and further increase gross profit margin in the future.Of course, whether it admits it or not, Story is actually a mode in which bilibili succumbs to short videos, and the monetization efficiency of short videos is indeed high at this stage.When to focus on profitability?Similar to most other Internet companies, Bilibili also reduced its marketing expenses. However, the operating costs, R&D expenses and management expenses still exceeded market expectations this quarter. From Bilibili's own point of view, the user cost calculated by marketing cost has been reduced,However, from another angle, the user's "maintenance cost" (reflected in management, research and development, content cost) has increased. Therefore, how to "retain" customers at a lower cost has become an important issue for Bilibili to expand its customers.According to the management, the current goal is to reach 400 million MAU users by 2024. It means that considering profit is not the present thing.As for whether we are too obsessed with achieving the user growth target and give up too many other opportunities, this is one of the core differences between the perspectives of investors and management.One of the difficulties in investing in bilibili is that it is difficult to value.In fact, it is not impossible to value, or because the company is still in the stage of bold expansion, which makes it uncertain whether it is through peer comparison, discounted cash flow in the future, or especially forward-looking multiple comparison.If there is a big bull market in growth stocks, investors can buy them with their eyes closed. But not now. Once risk aversion begins to dominate the market, Investors demand the safety and efficiency of money.With the current situation in bilibili, bargain-hunting is not necessarily an efficient use of funds. Of course, if you want to rebound the performance of Q3, you can also consider it. In the case of a strong US dollar, shorting non-US dollar assets is also a hedging means used by many hedge funds.For many investors who hold bilibili but are still in "losses", "covered CALL" could be the most efficient method.While holding positions, selling the same amount of Sell Covered CALL is more suitable for BILI, a target with relatively high implied volatility. And how to choose the right CALL to Sell, there are also some tips.As we all know,The CALL on the day of soaring opening, will have premium;The time value of CALL with a maturity date of about 30 days decays the fastest.Therefore, for friends who have not yet opened a position, you canUse the "price reminder" function in the software when the price increase on a certain day exceeds a certain value (such as 5%)It's a good time to Sell covered CALL, and it's best to choose a 30-day (or longer) CALL.In addition, if you study the change of option price, you mayUsing the option price calculator in the trading software, you can manually set a limit order of the target priceChoose the selling price of CALL that you think is appropriate.In a word, for BILI, which can't see the hope of recovery for the time being, investors should learn to make use of the accumulation to increase their own profits.
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    • MaverickTiger·09-08MaverickTiger

      A prediction of Fed's Interest Rate Increasing Routine

      Lael Brainard, the Vice Chair of the Fed, vowed Wednesday to press the fight against inflation that she said is hurting lower-income Americans the most.It means more interest rate increases and keeping rates higher for longer. Brainard cushioned the comments with an acknowledgement that policymakers will be data dependent and conscious of overdoing tightening.Remember, it could be the last speech before its quiet period of the September meeting.Besides, Federal Reserve Bank of Cleveland President Loretta Mester said Wednesday that she doesn’t expect the economy to fall into recession, but risks of that happening are rising, in a speech in which she stressed that the U.S. central bank needs to press forward with increasing its short-term interest rate target.$Tesla Motors(TSLA)$ 's Elon Musk said the Inflation might hit the peak, while Mester said, In my view, it is far too soon to conclude that inflation has peaked, let alone that it is on a sustainable downward path to 2%.It is the routine that the Fed's need to focus.We believe there would be two situation that the Feds reach's the end of interest rate increasing,First, A severe Inflation continues. In this circumstances, the Feds will do whatever, including more unemplyment and deep recession, to raise the interest rate, to make inflation down to the target of 2%. Then, decrease the rate after the inflation. 2022-2024's inflation would be like 6.1%, 4.0% and 2.0%. It's an aggressive path, which would burden US Goverment's debt.Second, A compromise to Inflation, which means mild interest rate increasing. When the rate reached 4-4.5%, the Fed's will stop anyway. Which means, the Feds allows the inflation stay above 3% for some period, in exchange for less harm to the economy.According to the New Keynesian Philips Curve, the unemployment would be higher if A severe Inflation happens.In either case, the unemployment will rise above 5% at the end of 2023.BTW, the balance sheet off would accelerate the routine, if will make the real rate higher than what norminal rate is.Anyway, a tough work to do.$S&P 500(.SPX)$ $NASDAQ(.IXIC)$
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      A prediction of Fed's Interest Rate Increasing Routine
    • MaverickTiger·09-08MaverickTiger

      What if GME combines Cryptos?

      $GameStop(GME)$ released Q2 earnings after close of September 7th.Q2 Revenue decreased 4.0% YOY to 1.136 billion US dollars, miss market consensus of 1.279 billion US dollars;Hardware and accessories accounted for 52.5% of total revenue, slightly miss the consensus, Software sales were $316 million, which fell short of the market expectation of $439 million, while Collectible reaches 223 million, beat market consensus of 213 million.Marketing, general and administrative expenses fell 14.3% to $387.5 million in the quarter, as GME focused on adjusting costs after a period of significant investment in long-term plansAdjusted net loss narrowed to $107 million, beat the market consensus of lossing $125 million.Inventory stood at $735 million at the end of the quarter, up from $596 million a year earlier. The cash position at the end of the quarter was $908.9 million. There is no debt on the balance sheet except for low-interest unsecured term loans related to the French government's response to COVID-19.As a meme stock, what matters is not the performance, but whether there is news that makes investors "in faith".For example, GME announced the establishment of a partnership with FTX, aiming to introduce more GME customers into FTX's community and its digital currency market. In addition to partnering with FTX on new e-commerce and online marketing initiatives, GameStop will also start offering FTX gift cards in specific stores.Then, shares of GME jumped 11.06% in after-hours.Good for this.BTW, FTX is a digital asset spot and derivatives trading platform headquartered in Bahamas, ranking 4th in daily trading volume of global exchanges.Is it being more volitile?Let's see...
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      What if GME combines Cryptos?
    • MaverickTiger·09-06MaverickTiger

      Is Neftlix a buy opportunity Now?

      Having been outperforming the market, is Netflix offering the best chance to buy?A very interesting state from an analyst, who claims "FAANG" is out of date, and it is time to redefine the top Tech enterprises with "MATANA"."MATANA" means$Microsoft(MSFT)$(Microsoft), $Apple(AAPL)$(Apple), $Tesla Motors(TSLA)$(Tesla), $Alphabet(GOOG)$$Alphabet(GOOGL)$(Alphabet), $NVIDIA Corp(NVDA)$(Nvidia) and$Amazon.com(AMZN)$ Amazon. means the adjustment of the original$Meta Platforms, Inc.(META)$Facebook (Meta) and$Netflix(NFLX)$(Netflix), adding Microsoft, Tesla and Nvidia.Microsoft and Tesla have always been the tops in their industry, NVIDIA may face some semiconductor demand issues but still a hard technology company.Getting rid of Facebook (Meta) is smart too, because the dying communications company has not made any industrial changes with an illusinal "metaverse", which cannot be realized for long time.But controversy lies in removing Netflix seems controversial at present, Because it just announced in Q2 financial report that The new "advertising plan" is expected to become the second growth curve.The performance of the secondary proves it. Since the financial report on July 18, NFLX has increased by 13.82%, beat $S&P 500(.SPX)$'s 0.3% in the same period, which shows that NFLX has been recognized by a large number of institutional investors.Some New developments in the advertising businessFirst, the company is expected to implement it in early 2023, and carry out some soft starts before the end of 2022, and at the same time, it will serveThe new advertising support version is priced at $7-9 per month (user subscription cost), and offers a customer-friendly low ad load-4 minutes per hour, far less than the 10-20 minutes per hour for radio and cable TV. The company expects to get about 50 million subscribers firstSecond, Netflix's rival $Walt Disney(DIS)$, will also launch an ad support layer on December 8, with Disney+'s CPM charges $50, while Netflix aims at $60 or $80 later.Third, According to the statistics of the market share of Nielsen's two or more users watching movies,In July, Netflix remained at a high level of 8.0%, while competitor Disney dropped from 2% to 1.8%. And Netflix's Stranger Things is hereThe North American market in the summer file achieved the best results. Among the best-selling content of streaming media in August, Netflix still dominates the list.We believe Q3 performance in North America will be steady. Of course, the growth of Netflix's subscription data generally depends on overseas. Most overseas dramas are produced locally.Therefore, from the perspective of asset allocation, Netflix is one of the few technology companies that can see new growth points in the next six months. Although its share price has dropped by 62% in the case of two consecutive financial reports this year, it also means that the current valuation level is relatively safe.The company's EV/TTM EBITDA is 16 times, Disney 17 times, and the $Warner Bros. Discovery(WBD)$is 24 times.For investment strategy,The second half of 2022 may be the time when investors buy Netflix's advertising revenue expectations in 2022 ahead of schedule. However, the US stock market is still under pressure. Therefore, how to "invest in potential technology companies in weak markets" has become a difficult point.It is the simplest way to buy stocks and bargain-hunting, and we can also choose some trading strategies with different risk preferences.1. If you are relatively conservative,It is safe to choose the strategy of naked Sell PUT .The current price has been maintained at a certain level for a long time. It is a good strategy to choose PUT with a maturity date of about ONE MONTH.2. If you buy stocks directly, you can also Sell Covered Call with a slightly higher price to gain some extra money. The expiration date of options can generally be about one month.3.And more risk-on investors, choose call options (Buy CALL), However, in order to reduce the loss of time cost, it is recommended to choose forward options for more than one month.
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      Is Neftlix a buy opportunity Now?
       
       
       
       

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