Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Buehler445]

Originally Posted by KCUnited

Is there more to PayPal Holdings than just the PayPal transaction service?

Because of all the fintech platforms it seems like the biggest piece of shit in my experience

I get more PayPal attempted scam emails than anything else, which I guess is probably a sign that you've made it (PayPal, not me), but I rarely use it compared to Zelle, Shop, or Venmo. Matter of fact, I should probably just shut it down

Wondering if I'm off on it as a product?

Well paypal owns Venmo.

It also owns Braintrust which is I think a clearinghouse.

They also have zettle which I believe is a POS system.

Originally Posted by Rain Man

PYPL is in my doghouse bad. It's one of my worst three stocks in my portfolio. When I bought it, I thought it was pretty safe, and it's done nothing but go down ever since.

I just did my weekly summary and I'm in a really foul mood right now. My invested assets are down 9 percent since July 31st and my total net worth is down 7 percent.

I poked around on this stock rather than doing shit I should have been doing. I'm guessing going from 4+ billion in Net Income to 2.4 billion is a big driver. Their debt is increasing, but not alarmingly so.

They also have an activist investor. Elliot Investment Management got a seat on their board.

[lewdog]

Originally Posted by Rain Man

PYPL is in my doghouse bad. It's one of my worst three stocks in my portfolio. When I bought it, I thought it was pretty safe, and it's done nothing but go down ever since.

I just did my weekly summary and I'm in a really foul mood right now. My invested assets are down 9 percent since July 31st and my total net worth is down 7 percent.

It's pretty surprising given their financial numbers. They are a stock that is severely undervalued and seems to be beaten down more than most. PE ratio of 14.


https://finance.yahoo.com/quote/PYPL/

[ghak99]

Originally Posted by Rain Man

PYPL is in my doghouse bad. It's one of my worst three stocks in my portfolio. When I bought it, I thought it was pretty safe, and it's done nothing but go down ever since.

I just did my weekly summary and I'm in a really foul mood right now. My invested assets are down 9 percent since July 31st and my total net worth is down 7 percent.

My mom made the mistake of opening hers last week and it took several days for that mood to wear off. I almost felt sorry for dad.

I'm sure it was only a small part of it, but there is an auction house clone of eBay where you can buy firearms, parts, accessories, ammo etc. PayPal was basically it's only quick and easy version of payment for years because all three parties involved and .gov liked it's ease of use and trust throughout the background check process. Once some background on the company got out it's use was basically eliminated in that sector. That business is never coming back.

For me, it was all the email scams and their "the customer is always right" stance. Once people figured out how to play the system, sellers were getting ****ed left and right to the point many stopped accepting PayPal.

[Buehler445]

Originally Posted by lewdog

It's pretty surprising given their financial numbers. They are a stock that is severely undervalued and seems to be beaten down more than most. PE ratio of 14.


https://finance.yahoo.com/quote/PYPL/

Eh, maybe. Their margins are shrinking substantially. They grew Gross revenue by 8% in 2022 but their Net Income fell 42%.. 2.4B is still a nice tidy profit, but is staggering compared to the 4.2 they'd been pulling in the last 2 FY. Their debt also rose by 8% and was roughly the same amount as the increase in gross revenue. A good chunk of that is long term debt, which may have been shifting operating debt to long term debt (which I wish I would have done before the interest rate went clear to ****).

It seems to me that companies that were riding the cheap money wave to achieve stock price improvement by growth at the sake of everything else are paying the piper. I don't know if Paypal is one of those, but it appears to me the pullback is growth related. And since the prices were irrationally inflated for tech companies (IMO), it's hard to tell where wall street sentiment will think it needs to be.

DISCLAIMER: REDDIT FINANCIAL ANALYSIS AHEAD

https://www.reddit.com/r/ValueInvest...ng_pypl_stock/

There is some interesting discussion on it in a recent reddit thread. These assbags who may know less that nothing suggest otherwise. 15 is fine for a PE which shows growth, while their gross revenue did grow 8% (which they'd consistentlly grown 18-20%), their net income declined 41%. That suggests that there is not much more growth to be had outside of M&A.

These assbags who may know nothing suggest that a PE without growth should be around 8.

These assbags who may know nothing also linked a pretty decent read, though dated.

https://valueinvestorsclub.com/idea/...INC/4614694159

[Rain Man]

Originally Posted by ghak99

My mom made the mistake of opening hers last week and it took several days for that mood to wear off. I almost felt sorry for dad.

I'm sure it was only a small part of it, but there is an auction house clone of eBay where you can buy firearms, parts, accessories, ammo etc. PayPal was basically it's only quick and easy version of payment for years because all three parties involved and .gov liked it's ease of use and trust throughout the background check process. Once some background on the company got out it's use was basically eliminated in that sector. That business is never coming back.

For me, it was all the email scams and their "the customer is always right" stance. Once people figured out how to play the system, sellers were getting ****ed left and right to the point many stopped accepting PayPal.

I'd never thought about this, but I wonder if all of the hackers and scammers go after a particular company while shorting the stock. That sounds like a very North Korea or China thing to do.

[ReynardMuldrake]

Well, NVDA killed it in earnings. Again.

[Rain Man]

Originally Posted by ReynardMuldrake

Well, NVDA killed it in earnings. Again.

I thought I was going to be rich, but I guess the market looked at the astounding growth and success and is now pushing the stock lower because it might not happen as much in the future.

I really hate the gambling element of owning stocks.

[lewdog]

End of the year should be a time to reflect and calculate if you're on track to meet retirement goals, no matter how long or short your timeline.

I like this calculator from nerd wallet for determining investment returns. I tend to choose 6% as my rate of return because I can plan to achieve my retirement investment number with something conservative and if I end up doing better, maybe I could retire earlier!

Number 1 rule that most people struggle with when investing is "pay yourself first" and learn how to live off the rest of your take home. You must be consistent with investing for retirement, it can't just be "when you have extra money." 6 years ago we started saving 25% of our income to investments and made it work to live off the rest. It's not always easy but it's the only way to make it work when planning for the future. And my plan is not to work forever!

https://www.nerdwallet.com/calculato...ent-calculator

I think I've mentioned before but I use TBIL in a brokerage account to keep the small amount of money actually labeled as an "emergency fund" in something that is liquid but generates 5.3% interest. There is no reason to have any substantial amount of money in a savings account today unless it's a high interest savings account. I like the ease of TBIL compared to a savings account, however, and just parking it there for an easy 5% annualized return with interest paid out monthly.

[scho63]

Do you see more uptrend or possible correction?

I'm conflicted but see upside more than downside.

[Rain Man]

Originally Posted by scho63

Do you see more uptrend or possible correction?

I'm conflicted but see upside more than downside.

I'm optimistic. The market went down when interest rates went up, so it seems logical that the opposite should happen next year. And we've essentially been at a 0 percent return on average for the past couple of years, so at some point it'll go positive.

[lewdog]

Originally Posted by scho63

Do you see more uptrend or possible correction?

I'm conflicted but see upside more than downside.

I see a short term uptrend with plenty that could put us into more downside risk/return to bear market territory. But I also know I'm just one douche and I try not to let noise freak me out and continually invest as the long term trend is almost always your friend!

If I was older, I'd definitely be more cautious right now. There are some out there predicting a true bear market and possible 2008 crash sometime in the next 2-5 years. I think if you saw housing crash again, followed by some banking issues those could be a catalyst. Probably lots of conjecture in that though from those predicting it.

Here's a good reminder using the monthly chart of the S&P for the past 10 years. Pretty incredible isn't it? Staying consistent will get you much farther ahead, especially if you can get consistent when you're younger.

[scho63]

Originally Posted by Rain Man

I'm optimistic. The market went down when interest rates went up, so it seems logical that the opposite should happen next year. And we've essentially been at a 0 percent return on average for the past couple of years, so at some point it'll go positive.

That's my thought. Market is 6-9 months ahead of what is happening.

[lewdog]

Originally Posted by Rain Man

I'm optimistic. The market went down when interest rates went up, so it seems logical that the opposite should happen next year. And we've essentially been at a 0 percent return on average for the past couple of years, so at some point it'll go positive.

Do you remember the lost decade of stocks from 2000-2009? The market basically made no gains for those years. Many are predicting that but there's always a bull to follow too.

"So, now consider total returns — price movement plus dividends: since 1925, only 7 per cent of rolling 10-year S&P 500 total returns were flat or negative."

https://www.thenationalnews.com/busi...ually-bullish/

[Rain Man]

Originally Posted by lewdog

Do you remember the lost decade of stocks from 2000-2009? The market basically made no gains for those years. Many are predicting that but there's always a bull to follow too.

"So, now consider total returns — price movement plus dividends: since 1925, only 7 per cent of rolling 10-year S&P 500 total returns were flat or negative."

https://www.thenationalnews.com/busi...ually-bullish/

I just calculated our most recent ten-year average (assuming no change in December), and it comes out to 8.6 percent per year, which is kind of average. I was curious what it would be given the volatility of the last few years.

[Buehler445]

Originally Posted by Rain Man

I'm optimistic. The market went down when interest rates went up, so it seems logical that the opposite should happen next year. And we've essentially been at a 0 percent return on average for the past couple of years, so at some point it'll go positive.

I think there is still a fair amount of risk in the market. I've seen some rather troubling statistics on consumer debt, especially in the lower income individuals in the country that is pretty horrifying. Maybe it's nothing, maybe it's something that can cascade. I'm not educated enough to know.

I think there are major structural issues in real estate. I know there has been a lot of real estate bought on leverage, REITs, commercial, side hustles pushed by YouTube Finance bros, etc, and the numbers just don't work at 9% interest. Anywhere. Maybe it's no more than normal, maybe it's a swath of commercial real estate that is vastly under capitalized.

The other thing that is worrisome, and will remain for awhile is that I'm concerned that our society isn't good for high interest mortgages. Mortgages rates haven't been in the same universe as this since 9/11. That means there is 20 years of rates half this. I think I read it was 1995 since rates were this high. That means that nobody under 50 has ever even had the opportunity to be in the housing market in this kind of environment. And the world was far different then than now. That is a major structural change that was quite abrupt and we may not have seen all the repercussions yet.

The other thing that could make this thing get real ugly real fast is if the labor market softens. Every talking head couldn't help but crow about how the labor market was strong and there couldn't be a recession with a strong labor market. I think we've seen in Silicon Valley it doesn't take a load of layoffs to soften a labor market. That thing falls out of bed, even a little bit, I think it could have tremendous cascading results.

Obviously I hope none of that comes to pass, but those are the risks I see.