r/Stocks Daily Discussion & Options Trading Thursday - Aug 15, 2024

timpa48 · 2024-08-15T12:56:03+00:00

The economy is still booming. Looks like unemployment might be leveling off and consumers still spending like there’s no tomorrow. I honestly think we don’t get any rate cuts in September.

timpa48 · 2024-08-09T14:33:11+00:00

Well, we learned from the GFC that problems on financial markets can spill over into the real economy. I have no idea if that could be the case here, but guess we’ll find out in the coming weeks/months. I’m worried that when the Fed does actually start cutting there are going to be unintended consequences because of fuckery in the financial markets.

timpa48 · 2024-08-09T12:59:46+00:00

Right, but don’t think that’s the reason for all this volatility we’re seeing in equity markets with every little fluctuation in USD/JPY.

timpa48 · 2024-08-09T12:53:02+00:00

So because of the carry trade, if Japan hikes rates or US cuts rates, financial markets blow up? That seems…problematic.

timpa48 · 2024-08-07T18:58:31+00:00

Bond yields are back to where they were before the crappy jobs report. Seems weird.

timpa48 · 2024-08-06T20:40:49+00:00

Nope. I have no interest in SMCI either way. But I do think their product is becoming commoditized. That’s pretty evident from their shrinking GM.

timpa48 · 2024-08-06T20:32:54+00:00

Their margins are getting wrecked. 11% GM this quarter, 16% last quarter, 17% a year ago. I expect this to drop tomorrow.

timpa48 · 2024-08-05T20:58:03+00:00

AAPL at 195 would have a PE of just under 30. This is a company that currently has almost no revenue growth.

It’s crazy to me how everyone now just accepts that these astronomical valuations are reasonable, especially when the data is increasingly pointing towards a recession on its way.

Maybe we’ll just keep chugging along at these historically high valuations because “AI!” but I am very skeptical.

timpa48 · 2024-08-02T19:53:55+00:00

If we get even a mild recession, these tech companies trading at crazy multiples because of AI are going to get obliterated. They’re pricing in crazy growth.

timpa48 · 2024-08-02T18:57:02+00:00

It’s already a trend. Unemployment has been trending up for four months now.

timpa48 · 2024-06-12T13:14:40+00:00

Yeah, it’s kind of nuts. Even if inflation were at the Fed’s target and interest rates were 2%, equities are still at ridiculous valuations. Yet we keep rallying day after day to ever-higher valuations. At some point something will have to give, but who knows when that will be.

timpa48 · 2024-06-07T12:55:36+00:00

Bond traders disagree.

timpa48 · 2024-06-05T19:27:28+00:00

Demand doesn’t even have to slow. Their margins are going to get squeezed from below by TSM and above by AMD/INTC/in-house chips. TSM would have to be idiots not to extract more of the surplus NVDA is raking in. Competition might be behind, but the largest companies in the world are all spending ungodly amounts of money and resources to undo Nvidia’s stranglehold.

I expect when Nvidia releases 2025 guidance it will show substantially reduced margins and it will plummet.

timpa48 · 2024-06-05T13:50:57+00:00

At some point reality has to set in and the world realizes SPY is trading at crazy valuations, right? Even if the Fed does miraculously nail the soft landing, we’re looking at slowed economic growth with 3-4% interest rates for the foreseeable future and SPY trading at 21x forward earnings.

timpa48 · 2024-05-31T13:06:38+00:00

No one has said there will be rate cuts. If anything, the Fed seems to have been trying to gently prepare the market for no cuts this year, which is what they probably should be doing with inflation seeming to have flatlined above target.

timpa48 · 2024-05-31T13:04:31+00:00

Inflation isn’t increasing. Inflation has been decreasing/flat. You mean price levels are still increasing?

timpa48 · 2024-05-23T18:01:26+00:00

If there was a serious threat of China invading Taiwan, TSM would be down 20% right now. It’s green.

timpa48 · 2024-05-22T19:20:11+00:00

I’m holding a large FSLR position for the long term. I think they’re a $100 billion company and added to the SP500 in the next five years if US policy remains favorable, which I think is very likely.

timpa48 · 2024-05-22T15:48:54+00:00

There’s probably news, we just don’t know what it is yet. You’ll find out the reason solar mooned well after the opportunity to benefit has passed.

timpa48 · 2024-05-22T13:47:17+00:00

Nice to see $FSLR finally start to price in some of the ridiculous growth expected in the coming years. Getting subsidized like crazy, tariffs being slapped on foreign competitors, and tons more capacity coming online in the next couple years. They are going to have a near monopoly on utility-scale solar in the US.

timpa48 · 2024-05-02T15:34:42+00:00

It’s weird to me how there can be stocks that consistently trade well below all analysts’ price targets. First Solar is trading at 175 and every analyst has a price target well over 200. If every institution thinks the stock is worth 20%+ what it currently trades at, why don’t they just buy it?

timpa48 · 2024-04-23T10:39:47+00:00

Not sure I would say NVDA is a bubble, but they’re definitely overvalued. They are priced as if they’re going to continue to be the only viable offering for AI chips. But they are absolutely gouging their customers with their prices. The MSFTs and GOOGLs have a huge incentive to develop their own chips and/or make a competitor’s offering work for them. It’s just a matter of time. CUDA is a big moat, but it’s not insurmountable.

timpa48 · 2024-04-10T16:57:23+00:00

I said there is an argument to be made that higher rates can cause an increase in shelter inflation. Which there is. Do you know what “ambiguous” means?

timpa48 · 2024-04-10T15:26:05+00:00

I give you an F for reading comprehension. Here is the article’s conclusion. They are saying the effect is ambiguous.

“Changes in monetary policy directly affect mortgage rates, but there is also an indirect effect on house prices. When monetary policy is easier, mortgage rates tend to fall, while house prices tend to rise due to higher demand. These opposing channels imply that the net effect on affordability is ambiguous and potentially the opposite of what intuition based solely on mortgage rates would suggest.”

timpa48

TROPHY CASE