securitiesNfinances - mostly equity/bonds/Taxes/Investments talk
Hey wanted to make another thread in contrast to the futuresNoptions thread for discussing more broad portfolio plannings/allocation, taxes, overall investment direction/goals and equity market interactive long term trading.
Short version; Talk in here about long term investment goals and how not to get fucked less hard through taxes on your aggressive futures churning and intraday puts/calls and where you believe the safest and most ideal place to put your gains from aggressive moves.
I'm a US trader so this isn't going to be applicable to everyone, but here are a few things I've picked up over the years on tax minimization:
Regardless honestly didnt even know that at all or HSAs at all either so appreciate the post
Honestly just surprised this thread got any discussion since most people want to talk only active trading and less goal-related stuff.
Investment pitch 1
Covid 19, the Saudia and Russian price war took it's toll on the energy market and is still far from over. Effecting both supply and demand the situation has created the perfect storm for a downfall in Energy. I don't know long it will last but eventually we will print higher numbers. As always timing is crucial with these type of investments.
Long term investment ideas:
Equity OIL Mayors
The Good: High dividend yield
The Bad: Energy transition, stock buy back programs are being halted and dividend might be lowered
Returns: if bought at low price 20% YTD for a few years
Short term investment ideas:
NG or Natural Gas is a byproduct from pumping oil. We all know when oil hit low prices wells get shutdown -> limiting production = less supply (https://www.energyexch.com/showthrea...0#post12843310).
Compared to OIL the demand for Natural Gas hasn't much been effected by Covid19 as people still need it (https://seekingalpha.com/article/433...avirus-concern).
OIL has been hit hard with the Covid19 were several countries are in lockdown (India for example were 1/6 of the world population lives) smashing global demand. On top of that the OPEC+ fell apart starting a price war giving huge discounts on their premium brands. The OPEC+ agreement (regarding quotas) is still respected as far as i know but will eventually stop at the end of this month. Starting of April 1 (not a joke ) OPEC+ members are not bound to their quotas and will likely start pumping oil (like Russia and Saudi Arabia mentioned) creating a massive glut of supply.
In my personal believe the price of WTI will eventually go below $20 a barrel if nothing will happen. This situation creates an opportunity for traders like us. Eventually these low prices aren't sustainable and production will be cut down further creating more balance between supply and demand resulting in higher prices.
Buy Low Sell High
In practice, I'm not sure how to actually take advantage of this. It seems too risky to bet on an oil company that may or may not survive. Betting on a distant CL contract might work depending on what contango is like.
The same goes for a few others sectors. I think we'll still see abit more red on spx, but in my opinion there are many sectors are that are extremely discount.
For liquidity and active trading though CL futures is the best for risk-reward I think atleast.
I cant time /es for shit anymore since fed started printing, some commodities have been nice trading. But yeah, considering looking to treasury futures as well but in smaller amounts since I never got too deep into trading treasury futures
Most people are chasing that catalyst movement and prefer discussing that topic because its the faster opportunity maker.
But wanted to atleast try to start some discussion about longterm in terms of general market predictions and what the best course of action would be
The more data I look at the more I consider the idea that we are currently in 1-2 possibilities and would love to hear in each scenario what everyone would be speculating on.
1. 08 Was the start of a global depression that we are currently still in.
I would cite unemployment, social and political division. Unemployment, standards of living, birth rates, alcohol/drugs related mortality rates, wealth gaps mainly between 60%/40% households.
These are all standards of a depression, and while so many people cling to the idea that "its gonna be like that"
Few people realize that its never an overnight event, times progressively get worse and worse. And with all the advancements in technology and standards of living, just like the depressions before the 1930s had been much more extreme. This is the face of a depression currently.
In this scenario; I would hedge extremely allocated positions on essential sectors that have above average p/e
Certain sectors would be considered a obvious bubble in retrospect years later, sectors where the p/e is more tame would in theory if im not mistaken?
Equity/Assets are senior to currency.
2. 08's bear market was fucking crazy and future bear market predictions cannot be properly weighted to 08
When I think back to around 08 it absolutely blows my mind how bearish some of those drops on a grand scale were in retrospect.
- Interest rates hitting 0
- SPX bottoms at -50% value on a DXY at 88
- Home foreclosures, bankruptcy filings, the list goes on and on
I wasnt trading around that time frequently, so its hard to say how I would react to some of that. Because I cant honestly say but even making that same prediction argument on these next few months would seem like level 15 - gold bug fear mongering.
This scenario would have bears in for red since 08 would leave peoples target disproportionate as many people still cite 08 as main data for speculating bottoms.
Which makes sense since the further back you go the less relevant data becomes with modern means and globalization
Doomsayers would get crumbs as large cap that brings international revenue recover much faster than pessimism speculated on
In this event, the people citing old data wouldnt prove to much use since alot of historical data is weighted with currencies that didn't have the same values as the dollar.
Currency is senior to equity/assets.
2. 2008 seems to be the best historical model since the price moves were somewhat similar, the economy was damaged (unlike 1987), and there was competent leadership then (unlike 1929.) Its not a good fit, but its about the best we've got right now.
I was trading back then and I'll tell you this time doesn't seem remotely similar, yet. In March 2009 the prices were just unbelievably low. There were companies I followed that were trading down over 90% so to see something that was at $50 now trading at $5 was just crazy. Its not like it was one stock either, there were a long list of them like that. You could say we're kind of like that now with hospitality, oil, or even bonds, but realistically the same amount of pain just hasn't been inflicted. At our 2020 low, the S&P was trading at prices not seen since... 2017. Not that long ago. In 2009 the market was trading at 1996 levels by comparison. I would walk outside after the Dow was down 700pts (used to be a lot) and be like, "Why's the sky still blue? Don't those birds chirping know the world is coming to an end?" I'm still writing off losses from that year, but I was fairly new to trading back then and the education we get in the markets isn't free!
Still just planning on doing what I pm'd you with awhile back
Wild market, goodluck!
21 was amazing buying range, wish I went deeper.
Well enjoy your weekend everyone, im gonna do absolutely nothing at all
All work and no play? No social life? Who knows who cares, weekends fucking suck
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