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$30,000 Millionaire
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In reply to aggiedaniel06 • 8:25p, 3/18/21
AG
aggiedaniel06 said:
$30,000 Millionaire said:
AggieDaniel!

Since you're posting. Thoughts please!


As I said a month ago, when the 10-2 spread is going parabolic, I would stay away from high beta stocks. Growth stocks will crushed in this environment. Because the risk:reward proposition for growth companies (aka ones that hemorrhage money today with promise of future cash flow) changes significantly when yields rise this rapidly.

The flash selling on Feb 22 of over 30% in some growth names was massive liquidation and not to have been ignored. If you compare any growth etf like arkk against SPX, you'll see how they have completely diverged that date onwards.


I listened to you if you can believe that. My beta exposure now on shares is predominantly weed stocks and crypto. I am selectively playing tradeable opportunities in tech, but largely condors and some verticals. Long oil and financials.
You don’t trade for money, you trade for freedom.
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$30,000 Millionaire
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8:27p, 3/18/21
AG
To ask a better question, what needs to happen to drive yields down besides YCC?
You don’t trade for money, you trade for freedom.
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ag94whoop
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In reply to aggiedaniel06 • 8:33p, 3/18/21
AG
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aggiedaniel06
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In reply to $30,000 Millionaire • 8:33p, 3/18/21
AG
The Fed has to start buying long term bonds bigly again. If you look at the auctions for the last few months, they have severely tapered long term bond purchases and have been mainly buying short term treasuries.

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ag94whoop
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In reply to $30,000 Millionaire • 8:35p, 3/18/21
AG
$30,000 Millionaire said:
aggiedaniel06 said:
$30,000 Millionaire said:
AggieDaniel!

Since you're posting. Thoughts please!


As I said a month ago, when the 10-2 spread is going parabolic, I would stay away from high beta stocks. Growth stocks will crushed in this environment. Because the risk:reward proposition for growth companies (aka ones that hemorrhage money today with promise of future cash flow) changes significantly when yields rise this rapidly.

The flash selling on Feb 22 of over 30% in some growth names was massive liquidation and not to have been ignored. If you compare any growth etf like arkk against SPX, you'll see how they have completely diverged that date onwards.


I listened to you if you can believe that. My beta exposure now on shares is predominantly weed stocks and crypto. I am selectively playing tradeable opportunities in tech, but largely condors and some verticals. Long oil and financials.


Definitely wish I had noticed that post or paid more attention to it. All I have is high beta so it may be a rough ride for a while. You live and you learn.
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Hendrix
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8:41p, 3/18/21
AG
Well I don't give a damn. Will be buying aapl AMZN pypl and a few other favorites to Valhalla. Interest rates aren't going anywhere. We can't afford it. Jerome will step in bigly if needed. He'll buy every ****ing 10 yr on the market.
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Rice and Fries
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8:44p, 3/18/21
We're seeing slowdowns in the agency lending realms the rates jump like this makes deals fall out left and right.
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jwhitlock3
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In reply to aggiedaniel06 • 8:45p, 3/18/21
aggiedaniel06 said:
This Mancini dude is showing his hand. His latest post says "people are saying higher yields are bad for stocks." WRONG! It's not bad for all stocks equally. It's bad for growth stocks only.

It's great for banks!!! It's great for stocks that pay a good dividend. Check out financials, stocks like DE, LMT since 22 Feb.

He needs to stick to eating crayons and drawing lines.


The way I'm reading Mancini's post he agrees with your sentiment. He's acknowledging most think higher yields are bad for stocks and refuting that by saying to pay attention to price action on whatever you hold or want to buy rather than trying to draw broad correlations. You don't seem to like him but it feels like you're both seeing similar things, just an outsiders perspective.
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aggiedaniel06
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In reply to jwhitlock3 • 9:08p, 3/18/21
AG
My only issue is, he states "the narrative is..." who's narrative? Some other fintwit shill?

There are two things going on simultaneously in the financial world. There is a clear sign of inflation which is good for assets including stocks. At the same time, the yield curve is spiking which is bad for a certain type of stocks.

Correlations are not that hard to understand or trade. And you absolutely adjust your portfolio weighting based on it.

As an ES trader, he doesn't have to worry about any of it. Just his price levels. You can't say the same about someone who holds a portfolio of stocks.
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Red Rover
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In reply to aggiedaniel06 • 9:13p, 3/18/21
AG
What would be the reason for them to buy mostly short term treasuries recently? I'm assuming there was some benefit to this or something they were trying to control, and this in part of the side effect?

When this happens do you or did you exist all beta investments? Or would you keep longer term shares of holdings like AAPL?
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jwhitlock3
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In reply to aggiedaniel06 • 9:15p, 3/18/21
Yeah I'm sure the narratives he's quoting it is likely fintwit schill, in general most headlines could probably be filed away under that category.

I agree with your points though, be mindful of the correlations and prepare to adjust accordingly, just wanted to throw out an alternate view.
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KT_Ag08
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In reply to Red Rover • 9:40p, 3/18/21
AG
Red Rover said:
What would be the reason for them to buy mostly short term treasuries recently? I'm assuming there was some benefit to this or something they were trying to control, and this in part of the side effect?

When this happens do you or did you exist all beta investments? Or would you keep longer term shares of holdings like AAPL?


If you're holding shares of AAPL there's literally no reason to exit that position unless you feel AAPL is going to zero at some point. Weeklies and short dated calls is a different story.

Playing something like PLTR, GEVO, DM, etc. with little in the way of revenue/sales to support their tremendous forward looking valuation is not a winning play right now especially since the play the last 6 or so months has been short dated calls.

Accumulating shares that are discounted and selling calls for names like the above though and waiting for what is likely going to be a huge rip in share price is still completely viable.
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Ornithopter
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In reply to ag94whoop • 9:45p, 3/18/21
AG
ag94whoop said:
$30,000 Millionaire said:
aggiedaniel06 said:
$30,000 Millionaire said:
AggieDaniel!

Since you're posting. Thoughts please!


As I said a month ago, when the 10-2 spread is going parabolic, I would stay away from high beta stocks. Growth stocks will crushed in this environment. Because the risk:reward proposition for growth companies (aka ones that hemorrhage money today with promise of future cash flow) changes significantly when yields rise this rapidly.

The flash selling on Feb 22 of over 30% in some growth names was massive liquidation and not to have been ignored. If you compare any growth etf like arkk against SPX, you'll see how they have completely diverged that date onwards.


I listened to you if you can believe that. My beta exposure now on shares is predominantly weed stocks and crypto. I am selectively playing tradeable opportunities in tech, but largely condors and some verticals. Long oil and financials.


Definitely wish I had noticed that post or paid more attention to it. All I have is high beta so it may be a rough ride for a while. You live and you learn.


You do have a choice to continue to be in them.
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$30,000 Millionaire
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9:47p, 3/18/21
AG
I'm going yolo on my Tesla flies tomorrow and I will take them down to 2:59 pm.
You don’t trade for money, you trade for freedom.
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aggiedaniel06
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In reply to Red Rover • 9:53p, 3/18/21
AG
Okay so your first question is a heavy one and I'll openly admit that I don't know the exact intentions of the Fed. That being said, the fed's most important prerogative is to maintain loose lending conditions.

Rising <5 yr UST yields come with tightening lending conditions. So they are always focused on keeping that low and that's why they buy a ton of short term treasuries.

Whereas, rising long term UST yields indicate inflation, but the Fed can easily assign that on improving economic conditions versus the reality that inflation may be spiralling out of control. But once it crosses a certain point, they can no longer hide it and then take up measures like maturity extension or operation twist, and I believe they will ultimately implement the unprecedented YCC.
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Bob Knights Paper Hands
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In reply to $30,000 Millionaire • 9:53p, 3/18/21
$30,000 Millionaire said:
I'm going yolo on my Tesla flies tomorrow and I will take them down to 2:59 pm.

We are likely fading each other tomorrow. I have relatively narrow flies pinned at 650 and 700. Did you get the wide one pinned at 685?
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McInnis 03
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In reply to $30,000 Millionaire • 9:55p, 3/18/21
AG
$30,000 Millionaire said:
I'm going yolo on my Tesla flies tomorrow and I will take them down to 2:59 pm.


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Bob Knights Paper Hands
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In reply to aggiedaniel06 • 10:11p, 3/18/21
Daniel needs to give a seminar! I'll supply the fancy booze from Third Coast's stash.

The twist operation would bring higher inflation, right? If they tried YCC what is the downside? That it would potentially fail and we'd be 90's Japan?
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austinAG90
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In reply to aggiedaniel06 • 10:15p, 3/18/21
AG
Very good information and thought. Coincides with my prior comment about the Fed only being focused on short term rates. Growth - IE tech stocks don't weather well in a fast rising rate environment but doesn't mean they won't recover. I will post more interest rate and market comment in the am.
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La Bamba
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10:50p, 3/18/21
AG
So what happens when OPEC decides to bring more production online in the summer (oil is already down almost 10 bucks from year high) and when flights and shipping opens back up and production of semis and lumber increases again? Is inflation a systemic issue that we will suffer from for a while or is it a short term problem caused by the pandemic that will fix itself once the world opens up again? and if it's the latter would we see the 10-yr self stabilize? Asking AggieDaniel and the bond guy that posted above me.
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irish pete ag06
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10:52p, 3/18/21
AG
Gosh I know this is such a stupid question, and I know I can google it (I have). But what are alpha stocks primarily? Non tech, non bio, non-pharma? Are they mainly just S&P 500 stocks? Is Tesla a beta stock? I really would like to know this thread's sentiment on this because I trust the opinions here over what I can read from a google search.
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Ragoo
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In reply to irish pete ag06 • 10:58p, 3/18/21
AG
irish pete ag06 said:
Gosh I know this is such a stupid question, and I know I can google it (I have). But what are alpha stocks primarily? Non tech, non bio, non-pharma? Are they mainly just S&P 500 stocks? Is Tesla a beta stock? I really would like to know this thread's sentiment on this because I trust the opinions here over what I can read from a google search.
beta is a measure of a stock relative to a benchmark usually the S&P 500. High alpha stocks overshoot S&P performance when the S&P is going up. The undershoot when trending down.

Alpha is a risk adjusted return. If you are alpha focus you have a diverse portfolio that has a predictable and understood rate of return relative to the risk of those positions.

Tech is high beta because they are super focused on growth. They are capital heavy companies trying to capture market share with innovative products that require a lot of debt.

Financials are low beta. As a business they want to generate a lot of cash and usually pay that out as a dividend.
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$30,000 Millionaire
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In reply to Bob Knights Paper Hands • 11:18p, 3/18/21
AG
Tomas Hermensa said:
$30,000 Millionaire said:
I'm going yolo on my Tesla flies tomorrow and I will take them down to 2:59 pm.

We are likely fading each other tomorrow. I have relatively narrow flies pinned at 650 and 700. Did you get the wide one pinned at 685?


670/700/730. Profit between 678 and 722
You don’t trade for money, you trade for freedom.
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Brewmaster
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In reply to $30,000 Millionaire • 11:22p, 3/18/21
AG
$30,000 Millionaire said:
I'm going yolo on my Tesla flies tomorrow and I will take them down to 2:59 pm.


I think you have a high likelihood of these paying. A little bounce tomorrow is all you need! Was 685 the pin?
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ag94whoop
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11:25p, 3/18/21
AG
I have been slowly trimming from 21 positions down to 10 but missed the ball on a couple this week simply because in my inexperience I thought the reaction to Powell would come Wednesday and not Tuesday so I let stuff run Monday hoping for continued runs Tuesday instead of taking profits.

There will be another opportunity. I just have to be patient .

And it's also a learning experience. Learning is always good, even when it isn't always fun.

In the meantime when I sell my shares I transfer the cash from YouInvest to TDA for better trading capabilities . In the process of starting to learn how to use TOS now
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austinAG90
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In reply to ag94whoop • 11:45p, 3/18/21
AG
Have you looked at FIDO at all?
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12:30a, 3/19/21
FJ43
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3:42a, 3/19/21

Morning gents!

Should be a fun day today. Things slightly green but I have no doubt a busy day ahead.

Maybe this is how you feel this morning?



Trade wisely!

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WhiskeyBusiness
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3:52a, 3/19/21
AG
Let's close out the week strong ! ....and smart !
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In reply to FJ43 • 5:13a, 3/19/21
fastgreens
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5:25a, 3/19/21
AG
Good morning to all and thanks as always to the OG contributors!

$FST ask and bid prices are very spread apart.... am I looking at some sort of glitch?
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Rice and Fries
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5:40a, 3/19/21
US and China talks got off to a heated exchange. Sounds like Biden might not be tissue paper soft on them

https://www.cnbc.com/2021/03/19/-first-us-china-meeting-under-biden-gets-off-to-a-rocky-start.html
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In reply to Rice and Fries • 5:41a, 3/19/21
Bob Knights Paper Hands
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In reply to Rice and Fries • 5:42a, 3/19/21
Already pulled the story?
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Rice and Fries
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In reply to Bob Knights Paper Hands • 5:43a, 3/19/21
Tomas Hermensa said:
Already pulled the story?


I fat fingered the link. It's working now.

https://www.cnbc.com/2021/03/19/-first-us-china-meeting-under-biden-gets-off-to-a-rocky-start.html
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