Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[lewdog]

Originally Posted by Munson

Thinking about buying a few thousand bucks worth of Game Stop (GME). Good decision or not?

What do you like about it?

That's risky from what I can tell. I don't see investing much in Brick and Motor stores where many of these things they sell can be purchased so easily online. It's a dying type of business plan, IMO. Their model seems outdated.

But some like it's current buy value as it's been hammered hard over 5 years. Does it's low value make it a good buy or a continuing sinking train?

https://seekingalpha.com/article/412...-dying-company

https://seekingalpha.com/article/412...toward-success

[Hog's Gone Fishin]

The RSI on Gamestop is at 25. Typically when the RSI gets below 30 it's in a buy range. That stock has been hammered but it might be at the bottom and a good time to buy. Avg price target I see is from 20-28 with an avg of $24. It's at 17.42 right now. For some reason interest expense doubled in 2017 and revenue went down. Lowest in 5 years. It's gone down every year since 2014. Not very liquid company and no growth.

[Hog's Gone Fishin]

Anybody got any thoughts on (TCEHY) ? Chinese company as big as Facebook and has Billions in Free cash Flow. Heavy into the gaming industry.

[Hog's Gone Fishin]

(ESIO) up 393% in 12 months,
124% 3 months
67% in 1 month

[ChiliConCarnage]

Originally Posted by Hog's Gone Fishin

Anybody got any thoughts on (TCEHY) ? Chinese company as big as Facebook and has Billions in Free cash Flow. Heavy into the gaming industry.

I'm not sure they'll see much success expanding their core business (Wechat/wepay & QQ) outside of China. As a social media it can't exist without sharing with the gov. That said, probably solid growth still just in China.

As far as games, it's fine. A lot via acquisition. Like Alibaba, they've been tossing money everywhere. Tesla, Snapchat, German flying cars, moon drones, bitauto. It's hard to keep track of

[Buehler445]

Originally Posted by Hog's Gone Fishin

The RSI on Gamestop is at 25. Typically when the RSI gets below 30 it's in a buy range. That stock has been hammered but it might be at the bottom and a good time to buy. Avg price target I see is from 20-28 with an avg of $24. It's at 17.42 right now. For some reason interest expense doubled in 2017 and revenue went down. Lowest in 5 years. It's gone down every year since 2014. Not very liquid company and no growth.

Both stochastic and Relative strength will get run if there is fundemental pressure. At least in the commodity markets anyway.

[Hog's Gone Fishin]

Originally Posted by ChiliConCarnage

I'm not sure they'll see much success expanding their core business (Wechat/wepay & QQ) outside of China. As a social media it can't exist without sharing with the gov. That said, probably solid growth still just in China.

As far as games, it's fine. A lot via acquisition. Like Alibaba, they've been tossing money everywhere. Tesla, Snapchat, German flying cars, moon drones, bitauto. It's hard to keep track of

The world's best-performing large-cap stock this year?

It's not a FANG name, but rather Shenzhen-based Tencent Holdings (ticker: 0700.Hong Kong), which trades on the pink sheets in the U.S. ( TCEHY). With a market capitalization exceeding $529 billion, Tencent is now the globe's fifth-largest listed company, bigger than Facebook (FB), and closing in on No. 4 Amazon.com (AMZN). And its stock still looks good.

Tencent is up 125% this year, 732% over the past five years, 4,323% over 10 years, and a split-adjusted 570-fold since its initial public offering in June 2004. A mere $1,764 investment on the day of its IPO would be worth $1 million today.

"It is a stock that everybody loves," says Chelsey Tam, an Internet analyst for Morningstar in Hong Kong. And a gift that keeps on giving. For the past two years, analysts have kept raising their price target, yet no sooner do they hike it, than investors chase it to well above their most optimistic targets. Tam's current target is 492 Hong Kong dollars (US$62.99), or 18% upside after Friday's comeback by the Chinese markets, which had swooned by 3% on Thursday.

How long can the world's most loved stock of the past decade keep surging? "As long as it can continue to deliver on earnings and widen its moat," Tam tells Barron's. She expects Tencent's revenue to grow 60% this year and 53% next year, up from 47% last year. And she sees earnings rising more than 50.4% this year and nearly 40% in 2018. And, unlike Chinese counterparts Alibaba (BABA) and Baidu (BIDU) or global peers Alphabet (GOOGL), Facebook, and Amazon, Tencent pays a small dividend.

Think of Tencent as a sprawling tech conglomerate in the mold of Berkshire Hathaway (BRK.A), which is 15% smaller. Tencent is the world's largest interactive gaming company, with titles like League of Legends. It operates China's biggest social network. Tencent Music is China's dominant music-streaming player. Tencent Video looks like YouTube and Netflix (NFLX) rolled into one. And WeChat messenger's billion users make it a tad bigger than Facebook's WhatsApp. Tencent is also boosting its advertising business, taking share from Baidu. Bhavtosh Vajpayee of Sanford C. Bernstein in Hong Kong estimates that Tencent, which had $1.1 billion in ad revenue last year, will have $7 billion by 2019.

The jewel in Tencent's crown is its growing financial-technology business, which includes the WeChat Pay payment system, wealth management products, and insurance and small-business lending operations. And, oh, it has a 5% stake in Tesla (TSLA), owns more than 12% of Snap (SNAP), and reportedly has considered buying a small piece of Twitter (TWTR).

Tencent wants to use Snapchat's platform to expand its gaming business in the developed world, says Morningstar's Tam. It is also interested in teaming up with Tesla to help in its own driverless-car ambitions in China.

WeChat Pay recently got a license to operate a payment and fintech business in Malaysia and wants to do so across the region. The WeChat messaging service is being rolled out aggressively in the United Kingdom, a prequel to expanding the ecosystem to payments and other services there.

Global investors are way underexposed to Tencent, says Catherine Tan, a portfolio manager with Excel Funds in Toronto. Excel, which bought Tencent stock years ago and has had a great ride, isn't about to sell. "Tencent has a solid competitive moat that is illustrative of the strong secular New China growth theme," says Tan, adding that it still has plenty of room to grow.

ASSIF SHAMEEN reports on Asian markets from Singapore.

[lewdog]

Steel Stock (X) closed above $30 today. I'm up 42% on this and debating when I sell it all. It's only been above $40 once in the last 5 years and for only a few months.

[scho63]

Originally Posted by lewdog

Steel Stock (X) closed above $30 today. I'm up 42% on this and debating when I sell it all. It's only been above $40 once in the last 5 years and for only a few months.

Follow Hog Farmer now retired....he was the first I think to get in at $20.

I knew and said at the time in a post it was a good investment but I had no free investment capital.

Why not sell covered calls?

For every 100 shares you can sell one call. Sell a call 4 months out-collect about $245 for every 100 shares, giving you equal protection all the way down to $27.40 and max upside of $34.45

X 32 Strike Calls
Exp Apr 20, 2018 BID 2.38 ASK 2.60

[Hog's Gone Fishin]

Originally Posted by scho63

Follow Hog Farmer now retired....he was the first I think to get in at $20.

I knew and said at the time in a post it was a good investment but I had no free investment capital.

Why not sell covered calls?

For every 100 shares you can sell one call. Sell a call 4 months out-collect about $245 for every 100 shares, giving you equal protection all the way down to $27.40 and max upside of $34.45

X 32 Strike Calls
Exp Apr 20, 2018 BID 2.38 ASK 2.60

Follow me but don't follow me close. I'd let X ride a while longer even though my gut feeling is the whole stock market is getting closer every day for a big correction. X may take a hit but it will give opportunity to buy more.

Here's something thats just so god damn funny : I've really ,really been trying to learn about analyzing stocks. Sectors,fundamentals,momentum,chart analysis ,all of it.

So I picked out about 30 stocks that have made HUGE runs for more than 12 months ,I mean 100 to 400 % up with no dips. Then I nailed down the fundamentals looking at cash flow, debt, growth ,institutional ownership,and ended up with 6 or so that I said ,MAN, this is a no brainer, Going to be easy. I should at least get 30-60 days of really good profit and I'll just watch them daily and move out when it turns.

So I put in 10K. I figure this is my gambling money. well, those stocks are all involved in the tech sector. 2 ****ing days after I put in the tech sector takes the biggest decline since 2009. Well, go **** me , I'm down $2000.

So now I'm in bitcoin stocks and making it back at the same time but it looks like the Feds are going to get into Bitcoin and **** it all up.

I think i'll just go fishin.

[Hog's Gone Fishin]

By the way there were 3 different X company directors that bought company stock in September at the 24-27 dollar range. Thats a good sign for X.

[lewdog]

Originally Posted by scho63

Follow Hog Farmer now retired....he was the first I think to get in at $20.

I knew and said at the time in a post it was a good investment but I had no free investment capital.

Why not sell covered calls?

For every 100 shares you can sell one call. Sell a call 4 months out-collect about $245 for every 100 shares, giving you equal protection all the way down to $27.40 and max upside of $34.45

X 32 Strike Calls
Exp Apr 20, 2018 BID 2.38 ASK 2.60

I first want to thank you for your always very diligent responses and bascially teaching me about options trading from your posts here and in PM's. It's truly been helpful.

So I do understand what a covered call is and let's use this example for my final questions. The downside to writing covered calls is when a stock blows past your strike point. Yes, you get profits from the gains up to your strike point + the premium, but you missed out if that stock price goes through the roof on future gains. Fair enough, and likely worth the risk if you are planning to sell for profits in the near future anyway.

So in your example, if Stock X never gets to the $32 strike point (option not exercised), do I keep the premium ($245) and the option just expires (I keep my 100 shares)? What's to stop a person from just trying to make income off options that expire this way? Say placing this $32 strike point in a covered call, but actually speculating that the stock takes a dip. I collect the premium when this option expires ($245) and then also decide to buy more stock on the dip?

Am I thinking correctly here?

[scho63]

Originally Posted by lewdog

I first want to thank you for your always very diligent responses and bascially teaching me about options trading from your posts here and in PM's. It's truly been helpful.

So I do understand what a covered call is and let's use this example for my final questions. The downside to writing covered calls is when a stock blows past your strike point. Yes, you get profits from the gains up to your strike point + the premium, but you missed out if that stock price goes through the roof on future gains. Fair enough, and likely worth the risk if you are planning to sell for profits in the near future anyway.

So in your example, if Stock X never gets to the $32 strike point (option not exercised), do I keep the premium ($245) and the option just expires (I keep my 100 shares)? What's to stop a person from just trying to make income off options that expire this way? Say placing this $32 strike point in a covered call, but actually speculating that the stock takes a dip. I collect the premium when this option expires ($245) and then also decide to buy more stock on the dip?

Am I thinking correctly here?

You nailed it! You are correct

If a stock goes nowhere and you keep writing calls that expire, you keep collecting the premium until the option expires. You will only be allowed to write calls on covered positions. Most brokerage firms don't allow naked call writing for individual investors.

[lewdog]

Originally Posted by scho63

You nailed it! You are correct

If a stock goes nowhere and you keep writing calls that expire, you keep collecting the premium until the option expires. You will only be allowed to write calls on covered positions. Most brokerage firms don't allow naked call writing for individual investors.

I think the light bulb finally clicked fully today. Thanks!

So naked call writing is so dangerous because you own nothing to start. If you placed a strike on X at let's say $32, but the stock actually hits $40, you'd have to go and purchase the stock at $40 on the open market and sell it for $32 right? Thus taking a huge hit because your gains/losses cannot be capped like a covered call on stocks you actually own?

[petegz28]

You will always make money when selling a covered call. On the option trade itself. Now, if the stock you own drops, well.....you made money on your option trade but you still lose, net-net. Also, if you don't own several hundred shares, you aren't going to really make anything worth a shit writing 1-2 even 3 calls once you account for spread, commissions, etc. And if you get exercised you will pay a fee for that as well. I love the idea of writing options but to me, it's a big $ game. It's like being the "House" in casino terms. You'll make your money little by little by consistently.