Opportunity is knocking!

Looks like closing down - lol I was holding shorts these few days so not ideal (some did ok but mainly travel rebounded). Had to hedge out with a bunch of longs halfway some of which I closed this morning. Added sell warrants on hot stocks like APT this morning.

We’re 5% behind the S&P 500 (ie we are down 27% vs 22%). But perhaps should be looking at the accumulation index, and we’ll be down more like 24% on a like for like currency basis.

 

Huge swings today (APT included!! - now negative 2%) from $23.80 to $19.00

Anybody care to speculate on what has lead to downward swing?

 

Historically speaking, the wild swings show that the bottom has yet to be found. Next week will be very interesting.

 

Negative sentiment/panic/the fact that a couple days buying does not a bull market make.

 

Heard Julia Lee mention this recently also. She remarked that usually/historically, the spread and width of volatility swings narrows down at the bottom before a true change in direction takes place.

 

This wins the stupid rally award. The US will be lucky to get out of this with 5m cases and -4% GDP growth. They're at 80k now. They've been clocking 25%+ day on day increases...they're rising faster than Italy. Actually not a Trump critic, but he's living in some sort of dream world where 500k US citizens don't die. Yes the world will bounce back, it always does, but this rally don't make sense to me...

 

Just see a lot of dislocation happening here. Like someone doesn't do something for me we've previously agreed, now I'm going to want to default on my own obligations. If we can we're going to the Govt expecting them to pay, otherwise we're just generally ****** off and probably looking to short-change others. That attitude could also be infectious!

 

I think you will be surprised, there has been a back flip

Watching this daily, expect the peak in 2 weeks
Its quite staggering how big private business’ are involved in this process, throwing everything at it, its a new ball game now.

its looking very bad for US atm, but I am going on a limb and predict a strong comeback. I hope so

 

Yeah I am surprised with the speed at which things are happening and the belief in stimulus. I think I'll start dripping money in now, tonight. Surprised I am saying that yes. I think you never see it go straight down then just recover like this, without a second and third wind where it goes back at the previous lows. The US is above where it was at the beginning of 2019! How is the world not in a far worse position than then??

 

No-body knows where to price it , or where to class it ( a credit provider or service provider ) a large range of possible outcomes and revenue possiblities. Will it come out stronger after competetion is whacked, increase in amount of bad credit ? or increase in use and in customers preferring pay later. Any-one who has tried pricing it seems to get it wrong. Ultimately it doesnt matter, choose your weighting it will either be worth buying or it wont,

 

Any advice on what to invest in ? I have quite abit of money saved up
I dont know much about shares etc but im thinking soon once the shate prices get lower to buy in Australias economy- so index funds etc ?

 

If you want super safe stuff, try find companies where the cash minus debt minus obligations is more than the market cap. Few of them around now.

 

Can you name a few to help us on our way?

 

I second that , can you elaborate please on those sorts of companies and give a few examples so i can look them up
Thanks

 

How are people's sentiments at the moment? There was talk of another drop in the next 2 weeks, but it seems like overall the market has been recovering for the past 2 weeks. I'm a rank amateur so I don't know what to make of it.

 

The unknown is what the market has priced in.

 

Question, Cochlear is doing a capital raising and the price is so low compared to the current price. ($140 vs. $191) Why should they offer it at such a big discount?

 

To entice the money to come. Not good for current shareholders though IMO. Dilution will affect the price anyway. But might rally thereafter......

 

Well.

The simplest answer is they’re pricing it cheap enough that they think they can attract the capital. If you price it at $180, maybe no one comes in. Also Cochlear was the first raising in this crash... so naturally they had to price it steeper to get funds in.

Think of it this way. The investment bank is the real estate agent (the job I used to do). He wants to get as low a price as possible, because he knows he can fill the book if it’s cheap. The seller (the company) is on the opposite side as the fundies topping up.

As I mentioned in another thread, the winning trades now are getting in these raisings (10-50% gain every trade these two weeks). Today we have Reece, Auckland Airports, Paradigm, Flight Centre. Tomorrow Oil Search. Last week some were even more ridiculous like Webjet at 50% discount... and there were all these others like Next DC, IDP Education, Kathmandu etc. On Web even now it’s around a 40% profit.

Every now and then the media and regulator gets angry that retail shareholders don’t get to participate on the same basis... but it’s hard to fault it. The companies may go up after the raise because big funds have backed it.

 

Banks been told by APRA to hold more capital.
Dividends to be cut!