I hit the highs yesterday and sold deep in the money calls. This will protect my stocks while I still draw dividends. Anyone else hedging their stocks. Inflation and other factors are very high that things are heading down a bad road. With 30 percent of all us money printed in just the last year and president house plant wanting to print more its insane. Inflation is coming fast and hard and the Fed is lying and saying there is nothing to see here.
Anyone else selling stocks?
by mickbobcat 11 Replies latest social current
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mickbobcat
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pistolpete
I'm not an investor per say in stocks, but I do swing and day trade. I bought Comcast on Friday and sold before close, On Monday I shorted the same stock and sold before closing. I have a margin account so I can trade every day but normally I only have about 6 good trades a month. I bought 4,000 shares on Friday and shorted 4500 shares on Monday. For some reason I had a hard time getting the stock to short but eventually I did. Not sure why. But not bad for two days of work.
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Simon
Overall a lot of the money the US and others are printing will go into the stock market one way or another so I don't think there will be a crash unless they do something silly to cause it.
If you are concerned about high inflation you need to have assets that grow at around that rate or more to protect your wealth and the markets are one of the few places you can find that. The booming housing market is a sign that people are using that as an investment to store their wealth too. If you take it out and hold it as cash then you are accepting the devaluation rate.
The usual hedges, gold and bonds, don't look like the protection bet they once were.
Maybe DOGE coin is the answer after all - wouldn't that be a plot twist! But some crypto of some form that has actual utility (BTC, ETH, ADA, DOT) is probably one of the better options right now as an insurance policy.
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mickbobcat
I don't believe in Crypto. I think its like Tesla a house of cards. Can go a long time but in time I bet it will fail. There is a crash coming all the indicators point to it. Micheal Burry who predicted the 08 collapse said the market is dancing on a knifes edge and that a crash is immanent in the next couple years. Warren Buffet is selling a lot of stocks as are others. Stocks are way high. Most are running very high PE at 20 to 40 and up. All the red flags are there but people put their head in the sand and think this time will be different.
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Simon
I don't believe in Crypto.
I take it you mean as a worthwhile investment, not like "santa" or "the tooth fairy" ...
Yeah, I was very bearish on Crypto for a long time but there is so much institutional buying now from big, BIG financial companies, that the chance of it going to zero is probably zero.
In the meantime, the returns it provides and the potential hedge against inflation long-term are hard to ignore.
It's well worth putting some time in to learn about it, how it works and why it works, to better understand it properly. Your opinion of it may change when you do.
But you have to wade through the "to the moon!" crowd of shills to find those who really know there stuff. I can recommend watching talks by Andreas Antonopoulos which are very informative (aantonop on YouTube)
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Simon
BTW: If anyone has a decent powered graphics card from the last few years, you can actually earn money mining crypto (usually Etherium). Even on an old RX580 I'm getting $8 a day. If you have one of those fancy RTX 30 series Nvidia cards you can double or triple that (which is why you can't find them in stores for love nor money).
If you do get into crypto and are in Canada, we have lots of ETF options for both BTC and ETH that can grow tax-free in a TFSA. There's also things like WealthSimple where you don't have to manage your own keys. You'll hear things like "not your keys, not your coins" but as long as you're dealing with a reputable company such as WS, or Coinbase or Binance (not some crappy little exchange, see "Quadriga") then you're probably at much greater risk from losing your own keys than them being hacked (and they are usually insured).
I actually just managed to crack a 9 year old blockchain wallet that a friend had, which they'd forgotten the password to in all that time. Unfortunately, they also mis-remembered there being much in it, LOL, but I was quite pleased that I managed to write an app to brute-force it in a few days (there was an open source tool but a bug in it meant it failed to work on old wallets).
BTC was first priced at 1,000 for $1, later 10,000 for 2 pizzas, and is now nearly $60k. Non-inflationary money for the first time in history.
Whether you want to ignore it or not, it's likely that central banks will issue their own digital currencies in the near future so you'll likely be using some form of it at some point. Although I expect the central bank versions to allow for the same unlimited money-printing that their fiat currency does.
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hoser
I’m playing the long game. If anything I’d be buying if the market drops significantly. Stocks, real estate, metals, hockey cards, even the old camper in your back yard are all a hedge against currency devaluation(inflation)
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mickbobcat
I don't like Fiat currency. I don't like it in the USA even with the full faith and trust of the US government backing it and I like it a whole lot less in cryptos where there is nothing backing it and could be derailed by any of the G20 shutting it down. Governments don't like competition in their criminal enterprises. There is also a bubble in the cryptos. Bubbles can last many years. I am a net buyer in stocks if they crash like last year. Heck I was a buyer. I put in almost every extra dime I had into the market buying up stocks. My wife we so nervous and I told her I have no crystal ball but this is just panic stupid selling. I have since sold off a good portion of that bought stock to lock in the profit. Of my portfolio I have only 30 percent of my money into it the rest is the banks. My goal is to only have the banks money into stocks.
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hoser
If I print copious amounts of money it’s called counterfeiting. If the government prints copious amounts of money it’s called quantitative easing. -
fulltimestudent
What DOES the future hold financially?
Who knows, but I follow the writings of a guy called David P. Goldman, a former N.Y. Financier who know owns a newspaper called, The Asia Times' in Hongkong (Goldman bought it from a Thai billionaire) I'll post Goldman's biography in a second post. Just one addition from me - he claims to have voted for Trump in 2016 and I'd think of him as a Republican.
His P.O.V. being close to both the USA and Asian interests is interesting - he has the view that inflation is going to be a huge problem and that changes in the way the world trades may see the USA lose all the free loans they have been getting from world trade being based on the US dollar,
On May 12, the AT published his article:
Few places to hide from the inflation train wreck
Everything that could go wrong has gone wrongLink: https://asiatimes.com/2021/05/few-places-to-hide-from-the-inflation-train-wreck/
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US fiscal profligacy and the impending crisis
Gold man writes - Massive demand-side stimulus combined with constraints on the supply-side in the form of higher taxes is a sure recipe for inflation and eventual recession. "It is hard to avoid the conclusion that the Biden administration’s fiscal irresponsibility arises from a cynical political calculation."
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I've been telling friends (in Aust) who have recently borrowed money at historically low interest rates to prepare for much higher rates. Biden has stated (as reported in Aust. news) that he will implement a plan to spend 2 trillion dollars to repair the USA's infrastructure. The only way he can get that sort of money is to borrow. What do you think that will do to interest rates?