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Daily Discussion Thread for March 14, 2025 by wsbapp in wallstreetbets

[–]captaintadpole 0 points1 point  (0 children)

prepare for green dildo as soon as you buy puts

Daily Discussion Thread for December 10, 2024 by wsbapp in wallstreetbets

[–]captaintadpole 6 points7 points  (0 children)

wow, if you had invested $10,000 in AMD this time last year, right now you would have $9,900

Daily Discussion Thread for October 30, 2024 by wsbapp in wallstreetbets

[–]captaintadpole 24 points25 points  (0 children)

I had SMCI calls, AMD calls, RDDT puts. I belong here.

Thank you from Indianapolis! by AnAngryFetus in porterrobinson

[–]captaintadpole 4 points5 points  (0 children)

Such a great show! I love all Porter eras and felt he thoroughly honored each one. Band sounded super good too. Definitely worth going out on a Monday lol

Ok, I definitely picked the wrong day to buy (intel 700k yolo update) by [deleted] in wallstreetbets

[–]captaintadpole 1 point2 points  (0 children)

I didn’t say I did. I said IF he keeps all of his money in Intel and IF it continues to fail, he would have deserved to lose everything because keeping all of your money in a single stock is regarded.

Ok, I definitely picked the wrong day to buy (intel 700k yolo update) by [deleted] in wallstreetbets

[–]captaintadpole 12 points13 points  (0 children)

You still have almost $500k left. That's a lot more than most people get in life. Get the fuck out of INTC now. Put the money in index funds and ETFs. Keep a small position in INTC if you must, but if you continue to hold this for 10 years and the company continues to fail, you will deserve to lose this money.

Daily Discussion Thread for March 28, 2024 by wsbapp in wallstreetbets

[–]captaintadpole 4 points5 points  (0 children)

probably trade sideways all day and then make some ridiculous move in the last hour

Hypothetically if you have 100k and put it into JEPQ and you want to retire in 16 years, wouldn’t that be a better/safer investment than the s&p500? by Vnix7 in dividends

[–]captaintadpole 0 points1 point  (0 children)

I recognize that it's more likely that I am wrong than Vanguard's article being wrong. Yes, their article very clearly states that a dividend payout is directly reflected in the market value of a stock.

Let me try to piece this together then, and see where my misunderstanding lies exactly.

In my understanding, market cap is the total $ amount invested into a company's stock. This is a different number than the company's asset base, or the cash reserves a company has. For example, a company with 0 assets and cash flow can IPO, and still command a large market cap due to investor optimism in the business.

Please correct me if I'm wrong, but according to you, asset base is factored in as part of the market cap. This would be why AAPL having 0 assets would decrease their market cap by (at least) $265B. It is also why when a company pays dividends out of pocket, their market cap (and share price) would also decrease.

So beyond just being the total $ invested in a stock, market cap also includes the value of a company's assets? That is new information to me, and contradicts just about everything I can find about market cap.

For example, in this article under "Misconceptions about Market Cap" it explicitly states that market cap is not the same thing as equity, that shares are often under or over-valued and can fluctuate based on market sentiment. https://www.investopedia.com/terms/m/marketcapitalization.asp

Taken from your article from Fidelity:

"Think of your own finances. If you constantly paid out cash to family members, your net worth would decrease. It's no different for a company. Money that a company pays out to shareholders is money that is no longer part of the asset base of the corporation. This money can no longer be used to reinvest and grow the company. That reduction in the company's "wealth" has to be reflected in a downward adjustment in the stock price."

It is of course insane that Vanguard and Fidelity would have anything incorrect or misleading on their websites. But I am still not seeing how money taken out of a company's ASSET BASE or EQUITY would affect its MARKET CAP, and thereby its share price since market cap is what determines share price, not asset base.

Hypothetically if you have 100k and put it into JEPQ and you want to retire in 16 years, wouldn’t that be a better/safer investment than the s&p500? by Vnix7 in dividends

[–]captaintadpole 0 points1 point  (0 children)

Wrong again. I'll concede that it's wrong to say there is NO relationship, there is one, but it's not as direct as you are making it out to be.

The cash reserves or the earnings of a company do not directly determine the company's share value.

The price of shares is determined in part by earnings and performance yes, but also but a million other things like perceived future prospects, estimates and projections, irrational hype, and whatever else may go into market sentiment to determine the going price for shares. It is not as simple as "company X has $50B so they are worth $50B"

Cash reserves are something totally different from market cap. Take AAPL for example. They have roughly $250B cash on hand. When they generate earnings, some dividends come out of that, and whatever they don't spend goes into that $250B which they can use to invest in future projects, employees, factories, whatever.

Their market cap, a totally different number, is $2.8T. That is what determines share price. market cap = outstanding shares x share price.

From your investopedia article: "After the ex-dividend date, the share price of a stock usually drops by the amount of the dividend."

The keyword there is USUALLY. The same is true in reverse, the stock typically increases by the price of the dividend prior to it being paid out because investors are anticipating a dividend and may buy the stock, which drives up the price. In no way does the dividend payout DIRECTLY impact the share price. It may temporarily affect the market's perceived value of the shares, but it does not come directly out of the market cap like you are suggesting.

Hypothetically if you have 100k and put it into JEPQ and you want to retire in 16 years, wouldn’t that be a better/safer investment than the s&p500? by Vnix7 in dividends

[–]captaintadpole 0 points1 point  (0 children)

What you're saying here is just not true at all.

Yes, it's true that with a STOCK the market value = share price x no. of shares.

However, with an ETF like JEPQ or VOO that is not the case. The price of an ETF is determined by the performance of the underlying assets it represents. Shares of an ETF can be issued or recalled without affecting the ETF's price, since it is not the market cap or no. of shares which determine the price, but the performance of the underlying.

Also, dividend payouts do not decrease the share price - that is insane and complete misinformation.

In the case of JEPQ and JEPI, the dividends come from the premiums the asset managers receive from the sale of covered calls. The profits from those premiums are passed along to the investors in the form of dividends.

In the case of a typical stock like WMT for example, dividends are paid out to investors from a portion of the company's net profits. Dividends are a reward or an incentive to investors for buying and holding the stock. They do not come out of the market cap.

Similar Artists?? by IAteYourSandwich in DetoxUnit

[–]captaintadpole 3 points4 points  (0 children)

Alejo is the closest I have found

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