Information Efficiency in Financial and Betting Markets

The Mouthbreather's Guide to the Galaxy

The Mouthbreather's Guide to the Galaxy
Alright CYKAS, Drill Sgt. Retarded TQQQ Burry is in the house. Listen up, I'm gonna train yo monkey asses to make some motherfucking money.

“Reeee can’t read, strike?” - random_wsb_autist
Bitch you better read if you want your Robinhood to look like this:
gainz, bitch


Why am I telling you this?
Because I like your dumb asses. Even dickbutts like cscqb4. And because I like seeing Wall St. fucking get rekt. Y’all did good until now, and Wall St. is salty af. Just google for “retail traders” news if you haven’t seen it, and you’ll see the salty tears of Wall Street assholes. And I like salty Wall St. assholes crying like bitches.
https://www.zerohedge.com/markets/retail-investors-are-crushing-hedge-funds-again

That said, some of you here are really motherfucking dense & the sheer influx of retardation has been driving away some of the more knowledgeable folks on this sub. In fact, in my last post, y'all somehow managed to downvote to shit the few guys that really understood the points I was making and tried to explain it to you poo-slinging apes. Stop that shit yo! A lot of you need to sit the fuck down, shut your fucking mouth and listen.
So I'm going to try and turn you rag-tag band of dimwits into a respectable army of peasants that can clap some motherfucking Wall Street cheeks. Then, I'm going to give you a mouthbreather-proof trade that I don't think even you knuckleheads can mess up (though I may be underestimating you).
If you keep PM-ing me about your stupid ass losses after this, I will find out where you live and personally, PERSONALLY, shit on your doorstep.
This is going to be a long ass post. Read the damned post. I don't care if you're dyslexic, use text-to-speech. Got ADHD? Pop your addys, rub one out, and focus! Are you 12? Make sure to go post in the paper trading contest thread first.

THE RULES:
  1. Understand that most of this sub has the critical reading skills of a 6 year old and the attention span of a goldfish. As such, my posts are usually written with a level of detail aimed at the lowest common denominator. A lot of details on the thesis are omitted, but that doesn't mean that the contents in the post are all there is to it. If I didn't do that, every post'd have to be longer than this one, and 98% of you fucks wouldn't read it anyway. Fuck that.
  2. Understand that my style of making plays is finding the >10+ baggers that are underpriced. As such, ALL THE GOD DAMN PLAYS I POST ARE HIGH-RISK / HIGH-REWARD. Only play what you can afford to risk. And stop PM-ing me the second the market goes the other way, god damn it! If you can't manage your own positions, I'm going to teach your ass the basics.
  3. Do you have no idea what you're doing and have a question? Google it first. Then google it again. Then Bing it, for good measure. Might as well check PornHub too, you never know. THEN, if you still didn't find the answer, you ask.
  4. This sub gives me Tourette's. If you got a problem with that, well fuck you.

This shit is targeted at the mouthbreathers, but maybe more knowledgeable folk’ll find some useful info, idk. How do you know if you’re in the mouthbreather category? If your answer to any of the following questions is yes, then you are:
  • Are you new to trading?
  • Are you unable to manage your own positions?
  • Did you score into the negatives on the SAT Critical Reading section?
  • Do you think Delta is just an airline?
  • Do you buy high & sell low?
  • Do you want to buy garbage like Hertz or American Airlines because it's cheap?
  • Did you buy USO at the bottom and are now proud of yourself for making $2?
  • Do you think stOnKs oNLy Go uP because Fed brrr?
  • Do you think I'm trying to sell you puts?
  • If you take a trade you see posted on this sub and are down, do you PM the guy posting it?
  • Do you generally PM people on this sub to ask them basic questions?
  • Is your mouth your primary breathing apparatus?
Well I have just the thing for you!


Table of Contents:
I. Maybe, just maybe, I know what I’m talking about
II. Post-mortem of the February - March 2020 Great Depression
III. Mouthbreather's bootcamp on managing a position – THE TECHNICALS
IV. Busting your retarded myths
V. LIQUIDITY NUKE INBOUND
VI. The mouthbreather-proof trade - The Akimbo
VII. Quick hints for non-mouthbreathers


Chapter I - Maybe, just maybe, I know what I’m talking about
I'm not here to rip you off. Every fucking time I post something, a bunch of dumbasses show up saying I'm selling you puts or whatever the fuck retarded thoughts come through their caveman brains.
"hurr durr OP retarded, OP sell puts" - random_wsb_autist
Sit down, Barney, I'm not here to scam you for your 3 cents on OTM puts. Do I always get it right? Of course not, dumbasses. Eurodollar play didn't work out (yet). Last TQQQ didn't work out (yet). That’s just how it goes. Papa Buffet got fucked on airlines. Plain retard Burry bought GME. What do you fucking expect?
Meanwhile, I keep giving y'all good motherfucking plays:
  1. 28/10/2019: "I'ma say this again, in case you haven't heard me the first time. BUY $JNK PUTS NOW!". Strike: "11/15, 1/17 and 6/19". "This thing can easily go below 50, so whatever floats your boat. Around $100 strike is a good entry point."
  2. 3/9/2020: "I mean it's a pretty obvious move, but $JNK puts."
  3. 3/19/2020, 12pm: "UVXY put FDs are free money." & “Buy $UVXY puts expiring tomorrow if we're still green at 3pm. Trust me.”
  4. 3/24/2020: “$UUP 3/27 puts at $27.5 or $27 should be 10-baggers once the bill passes. I'd expect it to go to around $26.”
And of course, the masterpiece that was the TQQQ put play.
Chapter II. Post-mortem of the February - March 2020 Great Depression
Do you really understand what happened? Let's go through it.
I got in puts on 2/19, right at the motherfucking top, TQQQ at $118. I told you on 2/24 TQQQ ($108) was going to shit, and to buy fucking puts, $90ps, $70ps, $50ps, all the way to 3/20 $30ps. You think I just pulled that out of my ass? You think I just keep getting lucky, punks? Do you have any idea how unlikely that is?
Well, let's take a look at what the fuckstick Kevin Cook from Zacks wrote on 3/5:
How Many Sigmas Was the Flash Correction Plunge?
"Did you know that last week's 14% plunge in the S&P 500 SPY was so rare, by statistical measures, that it shouldn't happen once but every 14,000 years?"
"By several measures, it was about a 5-sigma move, something that's not "supposed to" happen more than once in your lifetime -- or your prehistoric ancestors' lifetimes!
"According to general statistical principles, a 4-sigma event is to be expected about every 31,560 days, or about 1 trading day in 126 years. And a 5-sigma event is to be expected every 3,483,046 days, or about 1 day every 13,932 years."

On 3/5, TQQQ closed at $81. I just got lucky, right? You should buy after a 5-sigma move, right? That's what fuckstick says:
"Big sigma moves happen all the time in markets, more than any other field where we collect and analyze historical data, because markets are social beasts subject to "wild randomness" that is not found in the physical sciences.
This was the primary lesson of Nassim Taleb's 2007 book The Black Swan, written before the financial crisis that found Wall Street bankers completely ignorant of randomness and the risks of ruin."
I also took advantage of the extreme 5-sigma sell-off by grabbing a leveraged ETF on the Nasdaq 100, the ProShares UltraPro QQQ TQQQ. In my plan, while I might debate the merits of buying AAPL or MSFT for hours, I knew I could immediately buy them both with TQQQ and be rewarded very quickly after the 14% plunge."
Ahahaha, fuckstick bought TQQQ at $70, cuz that's what you do after a random 5-sigma move, right? How many of you dumbasses did the same thing? Don't lie, I see you buying 3/5 on this TQQQ chart:
https://preview.redd.it/9ks35zdla5151.png?width=915&format=png&auto=webp&s=2c90d08494c52a1b874575ee233624e61ac27620
Meanwhile, on 3/3, I answered the question "Where do you see this ending up at in the next couple weeks? I have 3/20s" with "under 30 imo".

Well good fucking job, because a week later on 3/11, TQQQ closed at $61, and it kept going.
Nomura: Market staring into the abyss
"The plunge in US equities yesterday (12 March) pushed weekly returns down to 7.7 standard deviations below the norm. In statistical science, the odds of a greater-than seven-sigma event of this kind are astronomical to the point of being comical (about one such event every 160 billion years).
Let's see what Stephen Mathai-Davis, CFA, CQF, WTF, BBQ, Founder and CEO of Q.ai - Investing Reimagined, a Forbes Company, and a major fucktard has to say at this point:

"Our AI models are telling us to buy SPY (the SPDR S&P500 ETF and a great proxy for US large-cap stocks) but since all models are based on past data, does it really make sense? "
"While it may or may not make sense to buy stocks, it definitely is a good time to sell “volatility.” And yes, you can do it in your brokerage account! Or, you can ask your personal finance advisor about it."
"So what is the takeaway? I don’t know if now is the right time to start buying stocks again but it sure looks like the probabilities are in your favor to say that we are not going to experience another 7 standard deviation move in U.S. Stocks. OTM (out-of-the-money) Put Spreads are a great way to get some bullish exposure to a rally in the SPY while also shorting such rich volatility levels."
Good job, fuckfaces. Y'all bought this one too, admit it. I see you buying on this chart:
https://preview.redd.it/s9344geza5151.png?width=915&format=png&auto=webp&s=ebaef4b1414d901e6dafe354206ba39eb03cb199
Well guess what, by 3/18, a week later, we did get another 5 standard deviation move. TQQQ bottomed on 3/18 at $32.73. Still think that was just luck, punk? You know how many sigmas that was? Over 12 god-damn sigmas. 12 standard deviations. I'd have a much better chance of guessing everyone's buttcoin private key, in a row, on the first try. That's how unlikely that is.
https://preview.redd.it/luz0s3kbb5151.png?width=587&format=png&auto=webp&s=7542973d56c42e13efd3502331ac6cc5aea42630
"Hurr durr you said it's going to 0, so you're retarded because it didn't go to 0" - random_wsb_autist
Yeah, fuckface, because the Fed bailed ‘em out. Remember the $150b “overnight repo” bazooka on 3/17? That’s what that was, a bailout. A bailout for shitty funds and market makers like Trump's handjob buddy Kenny Griffin from Citadel. Why do you think Jamie Dimon had a heart attack in early March? He saw all the dogshit that everyone put on his books.

https://preview.redd.it/8fqvt37ama151.png?width=3711&format=png&auto=webp&s=0b06ee5101685c5274c6641a62ee9eb1a2a3f3ee


Read:
https://dealbreaker.com/2020/01/griffin-no-show-at-white-house
https://www.cnbc.com/2020/03/11/bank-ceos-convene-in-washington-with-president-trump-on-coronavirus.html
https://www.proactiveinvestors.co.uk/companies/news/914736/market-makers--didn-t-show-up-for-work--macro-risk-ceo-says-914736.html
https://www.chicagobusiness.com/finance-banking/chicago-trading-firms-seek-more-capital
https://www.housingwire.com/articles/did-non-qm-just-disappear-from-the-market/
https://www.bloomberg.com/news/articles/2020-03-22/bruised-hedge-funds-ask-clients-for-fresh-cash-to-buy-the-dip
https://fin24.com/Markets/Bonds/rand-bonds-rally-after-reserve-bank-intervention-20200320

Yup, everyone got clapped on their stupidly leveraged derivatives books. It seems Citadel is “too big to fail”. On 3/18, the payout on 3/20 TQQQ puts alone if it went to 0 was $468m. And every single TQQQ put expiration would have had to be paid. Tens or hundreds of billions on TQQQ puts alone. I’d bet my ass Citadel was on the hook for a big chunk of those. And that’s just a drop in the bucket compared to all the other blown derivative trades out there.

https://preview.redd.it/9ww27p2qb5151.png?width=2485&format=png&auto=webp&s=78f24265f3ea08fdbb37a4325f15ad9b61b0c694
Y’all still did good, 3/20 closed at $35. That’s $161m/$468m payoff just there. I even called you the bottom on 3/17, when I saw that bailout:

"tinygiraffe21 1 point 2 months ago
Haha when? I’m loading up in 4/17 25 puts"
"dlkdev
Scratch that, helicopter money is here."
"AfgCric 1 point 2 months ago
What does that mean?"
"It means the Fed & Trump are printing trillions with no end in sight. If they go through with this, this was probably the bottom."

"hurr durr, it went lower on 3/18 so 3/17 wasn't the bottom" - random_wsb_autist
Idiot, I have no way of knowing that Billy boy Ackman was going to go on CNBC and cry like a little bitch to make everyone dump, so he can get out of his shorts. Just like I have no way of knowing when the Fed decides to do a bailout. But you react to that, when you see it.
Do you think "Oh no world's ending" and go sell everything? No, dumbass, you try to figure out what Billy's doing. And in this case it was pretty obvious, Billy saw the Fed train coming and wanted to close his shorts. So you give the dude a hand, quick short in and out, and position for Billy dumping his short bags.
Video of Billy & the Fed train

Here's what Billy boy says:
“But if they don’t, and the government takes the right steps, this hedge could be worth zero, and the stock market could go right back up to where it was. So we made the decision to exit.”
https://www.businessinsider.sg/bill-ackman-explains-coronavirus-trade-single-best-all-time-podcast-2020-5
Also, “the single best trade of all time.” my ass, it was only a 100-bagger. I gave y’all a 150-bagger.
So how could I catch that? Because it wasn't random, yo. And I'm here to teach your asses how to try to spot such potential moves. But first, the technical bootcamp.

Chapter III. Mouthbreather's bootcamp on managing a position – THE TECHNICALS

RULE 1. YOU NEVER BUY OPTIONS AT OPEN. You NEVER OVERPAY for an option. You never FOMO into buying too fast. You NEVER EVER NEVER pump the premium on a play.
I saw you fuckers buying over 4k TQQQ 5/22 $45 puts in the first minutes of trading. You pumped the premium to over $0.50 dudes. The play's never going to work if you do that, because you give the market maker free delta, and he's going to hedge that against you. Let me explain simply:

Let's say a put on ticker $X at strike $50 is worth $1, and a put at strike $51 is worth $2.
If you all fomo in at once into the same strike, the market maker algos will just pull the asks higher. If you overpay at $2 for the $50p, the market maker will just buy $51ps for $2 and sell you $50ps for 2$. Or he'll buy longer-dated $50ps and sell you shorter-dated $50ps. Max risk for him is now 0, max gain is $1. You just gave him free downside insurance, so of course he's going to start going long. And you just traded against yourself, congrats.

You need to get in with patience, especially if you see other autists here wanting to go in at the same time. Don't step on each other's toes. You put in an order, and you wait for it to fill for a couple of seconds. If it doesn't fill, AND the price of the option hasn't moved much recently, you can bump the bid $0.01. And you keep doing that a few times. Move your strikes, if needed. Only get a partial fill or don't get a fill at all? You cancel your bid. Don't fucking leave it hanging there, or you're going to put a floor on the price. Let the mm algos chill out and go again later.

RULE 2. WATCH THE TIME. Algos are especially active at x:00, x:02, x:08, x:12, x:30 and x:58. Try not to buy at those times.
RULE 3. YOU USE MULTIPLE BROKERS. Don't just roll with Robinhood, you're just gimping yourself. If you don't have another one, open up a tasty, IB, TD, Schwab, whatever. But for cheap faggy puts (or calls), Robinhood is the best. If you want to make a play for which the other side would think "That's free money!", Robinhood is the best. Because Citadel will snag that free money shit like no other. Seriously, if you don't have a RH account, open one. It's great for making meme plays.

RULE 4. YOU DON'T START A TRADE WITH BIG POSITIONS. Doesn't matter how big or small your bankroll is. If you go all-in, you're just gambling, and the odds are stacked against you. You need to have extra cash to manage your positions. Which leads to
RULE 5. MANAGING YOUR WINNERS: Your position going for you? Good job! Now POUND THAT SHIT! And again. Move your strikes to cheaper puts/calls, and pound again. And again. Snowball those gains.
RULE 6A. POUND THOSE $0.01 PUTS:
So you bought some puts and they’re going down? Well, the moment they reach $0.01, YOU POUND THOSE PUTS (assuming there’s enough time left on them, not shit expiring in 2h). $0.01 puts have amazing risk/return around the time they reach $0.01. This is not as valid for calls. Long explanation why, but the gist of it is this: you know how calls have unlimited upside while puts have limited upside? Well it’s the reverse of that.
RULE 6B. MANAGING YOUR LOSERS:
Your position going against you? Do you close the position, take your loss porn and post it on wsb? WRONG DUMBASS. You manage that by POUNDING THAT SHIT. Again and again. You don't manage losing positions by closing. That removes your gainz when the market turns around. You ever close a position, just to have it turn out it would have been a winner afterwards? Yeah, don't do that. You manage it by opening other positions. Got puts? Buy calls. Got calls? Buy puts. Turn positions into spreads. Buy spreads. Buy the VIX. Sell the VIX. They wanna pin for OPEX? Sell them options. Not enough bankroll to sell naked? Sell spreads. Make them fight you for your money, motherfuckers, don't just give it away for free. When you trade, YOU have the advantage of choosing when and where to engage. The market can only react. That's your edge, so USE IT! Like this:

Example 1:
Initial TQQQ 5/22 position = $5,000. Starts losing? You pound it.

https://preview.redd.it/gq938ty8e5151.png?width=944&format=png&auto=webp&s=734ab7ed517f0e6822bfaaed5765d1272de398d1
Total pounded in 5/22 TQQQ puts = $10,824. Unfortunately expired worthless (but also goes to show I'm not selling you puts, dickwads)
Then the autists show up:
"Hahaha you lost all your money nice job you fucking idiot why do you even live?" - cscqb4
Wrong fuckface. You see the max pain at SPX 2975 & OPEX pin coming? Sell them some calls or puts (or spreads).

https://preview.redd.it/7nv23fr41a151.jpg?width=750&format=pjpg&auto=webp&s=14a8879c975646ffbfe2942ca1982bfabfcf90df
Sold 9x5/20 SPX [email protected], bam +$6,390. Still wanna pin? Well have some 80x5/22 TQQQ $80cs, bam anotha +$14,700.

https://preview.redd.it/1iqtpmc71a151.jpg?width=750&format=pjpg&auto=webp&s=df9b954131b0877f4acc43038b4a5a4acf544237
+$21,090 - $10,824 = +$10,266 => Turned that shit into a +94.85% gain.

.cscqb4 rn

You have a downside position, but market going up or nowhere? You play that as well. At least make some money back, if not profit.

Example 2:

5/22, long weekend coming right? So you use your brain & try to predict what could happen over the 3-day weekend. Hmm, 3 day weekend, well you should expect either a shitty theta-burn or maybe the pajama traders will try to pooomp that shite on the low volume. Well make your play. I bet on the shitty theta burn, but could be the other, idk, so make a small play.

Sold some ES_F spreads (for those unaware, ES is a 50x multiplier, so 1 SPX = 2 ES = 10 SPY, approximately). -47x 2955/2960 bear call spreads for $2.5. Max gain is $2.5, max loss is 2960-2955 = $5. A double-or-nothing basically. That's $5,875 in premium, max loss = 2x premium = $11,750.
Well, today comes around and futures are pumping. Up to 3,014 now. Do you just roll over? You think I'm gonna sit and take it up the ass? Nah bros that's not how you trade, you fucking fight them. How?
I have:
47x 2960 calls
-47x 2955 calls

Pajama traders getting all up in my grill? Well then I buy back 1 of the 2955 calls. Did that shit yesterday when futures were a little over 2980, around 2982-ish. Paid $34.75, initially shorted at $16.95, so booked a -$892 loss, for now. But now what do I have?

46x 2955/2960 bear calls
1x 2960 long call

So the fuckers can pump it. In fact, the harder they pump it, the more I make. Each $2.5 move up in the futures covers the max loss for 1 spread. With SPX now at ~3015, that call is $55 ITM. Covers 24/46 contracts rn. If they wanna run it up, at 3070 it's break-even. Over that, it's profit. I'll sell them some bear call spreads over 3050 if they run it there too. They gonna dump it? well under 2960 it's profit time again. They wanna do a shitty pin at 3000 today? Well then I'll sell them some theta there.
Later edit: that was written yesterday. Got out with a loss of only $1.5k out of the max $5,875. Not bad.
And that, my dudes, is how you manage a position.

RULE 7 (ESPECIALLY FOR BEARS). YOU DON'T KEEP EXTRA CASH IN YOUR BROKER ACCOUNT. You don't do it with Robinhood, because it's a shitty dumpsterfire of a broker. But you don't do it with other brokers either. Pull that shit out. Preferably to a bank that doesn't play in the markets either, use a credit union or some shit. Why? Because you're giving the market free liquidity. Free margin loans. Squeeze that shit out, make them work for it. Your individual cash probably doesn't make a dent, but a million autists with an extra $1200 trumpbucks means $1.2b. That's starting to move the needle. You wanna make a play, use instant deposits. And that way you don't lose your shit when your crappy ass broker or bank gets its ass blown up on derivative trades. Even if it's FDIC or SIPC insured, it's gonna take time until you see that money again.


Chapter IV. BUSTING YOUR RETARDED MYTHS

MYTH 1 - STONKS ONLY GO UP

Do you think the market can go up forever? Do you think stOnKs oNLy Go uP because Fed brrr? Do you think SPX will be at 5000 by the end of the month? Do you think $1.5 trillion is a good entry point for stonks like AAPL or MSFT? Do you want to buy garbage like Hertz or American Airlines because it's cheap? Did you buy USO at the bottom and are now proud of yourself for making $2? Well, this section is for you!
Let's clear up the misconception that stonks only go up while Fed brrrs.

What's your target for the SPX top? Think 3500 by the end of the year? 3500 by September? 4000? 4500? 5000? Doesn't matter, you can plug in your own variables.

Let's say SPX only goes up, a moderate 0.5% each period as a compounded avg. (i.e. up a bit down a bit whatever, doesn't matter as long as at the end of your period, if you look back and do the math, you'll get that number). Let's call this variable BRRR = 0.005.

Can you do the basic math to calculate the value at the end of x periods? Or did you drop out in 5th grade? Doesn't matter if not, I'll teach you.


Let's say our period is one week. That is, SPX goes up on average 0.5% each week on Fed BRRR:
2950 * (1.005^x), where x is the number of periods (weeks in this case)

So, after 1 month, you have: 2950 * (1.005^4) = 3009
After 2 months: 2950 * (1.005^8) = 3070
End of the year? 2950 * (1.005^28) = 3392

Now clearly, we're already at 3015 on the futures, so we're moving way faster than that. More like at a speed of BRRR = 1%/wk

2950 * (1.01^4) = 3069
2950 * (1.01^8) = 3194
2950 * (1.01^28) = 3897


Better, but still slower than a lot of permabulls would expect. In fact, some legit fucks are seriously predicting SPX 4000-4500 by September. Like this dude, David Hunter, "Contrarian Macro Strategist w/40+ years on Wall Street". IDIOTIC.
https://twitter.com/DaveHcontrarian/status/1263066368414568448

That'd be 2950 * (BRRR^12) = 4000 => BRRR = 1.0257 and 2950 * (BRRR^12) = 4500 => BRRR = 1.0358, respectively.

Here's why that can't happen, no matter the amount of FED BRRR: Leverage. Compounded Leverage.

There's currently over $100b in leveraged etfs with a 2.5x avg. leverage. And that's just the ones I managed to tally, there's a lot of dogshit small ones on top of that. TQQQ alone is now at almost $6b in AUM (topped in Fed at a little over $7b).

Now, let's try to estimate what happens to TQQQ's AUM when BRRR = 1.0257. 3XBRRR = 1.0771. Take it at 3XBRRR = 1.07 to account for slippage in a medium-volatility environment and ignore the fact that the Nasdaq-100 would go up more than SPX anyway.

$6,000,000,000 * (1.07^4) = $7,864,776,060
$6,000,000,000 * (1.07^8) = $10,309,100,000
$6,000,000,000 * (1.07^12) = $13,513,100,000
$6,000,000,000 * (1.07^28) = $39,893,000,000.

What if BRRR = 1.0358? => 3XBRR = 1.1074. Take 3XBRRR = 1.10.
$6,000,000,000 * (1.1^4) = $8,784,600,000
$6,000,000,000 * (1.1^8) = $12,861,500,000
$6,000,000,000 * (1.1^12) = $18,830,600,000
$6,000,000,000 * (1.1^28) = $86,526,000,000

And this would have to get 3x leveraged every day. And this is just for TQQQ.

Let's do an estimation for all leveraged funds. $100b AUM, 2.5 avg. leverage factor, BRRR = 1.0257 => 2.5BRRR = 1.06425

$100b * (1.06^4) = $128.285b
$100b * (1.06^8) = $159.385b
$100b * (1.06^12) = $201.22b
$100b * (1.06^28) = $511.169b

That'd be $1.25 trillion sloshing around each day. And the market would have to lose each respective amount of cash into these leveraged funds. Think the market can do that? You can play around with your own variables. But understand that this is just a small part of the whole picture, many other factors go into this. It's a way to put a simple upper limit on an assumption, to check if it's reasonable.

In the long run, it doesn't matter if the Fed goes BRRR, if TQQQ takes in it's share of 3XBRRR. And the Fed can't go 3XBRRR, because then TQQQ would take in 9XBRRR. And on top of this, you have a whole pile of leveraged derivatives on top of these leveraged things. Watch (or rewatch) this: Selena Gomez & Richard H. Thaler Explaining Synthetic CDO through BLACKJACK

My general point, at the mouth-breather level, is that Fed BRRR cannot be infinite, because leverage.
And these leveraged ETFs are flawed instruments in the first place. It didn't matter when they started out. TQQQ and SQQQ started out at $8m each. For the banks providing the swaps, for the market providing the futures contracts, whatever counter-party to whatever instrument they would use, that was fine. Because it balanced out. When TQQQ made a million, SQQQ lost a million (minus a small spread, which was the bank's profit). Bank was happy, in the long run things would even out. Slippage and spreads and fees would make them money. But then something happened. Stonks only went up. And leveraged ETFs got bigger and more and more popular.
And so, TQQQ ended up being $6-7b, while SQQQ was at $1b. And the same goes for all the other ETFs. Long leveraged ETF AUM became disproportionate to short AUM. And it matters a whole fucking lot. Because if you think of the casino, TQQQ walks up every day and says "I'd like to put $18b on red", while SQQQ walks up and says "I'd only like to put $3b on black". And that, in turn, forces the banks providing the swaps to either eat shit with massive losses, or go out and hedge. Probably a mix of both. But it doesn't matter if the banks are hedged, someone else is on the other side of those hedges anyway. Someone's eating a loss. Can think of it as "The Market", in general, eating the loss. And there's only so much loss the market can eat before it craps itself.

If you were a time traveller, how much money do you think you could make by trading derivatives? Do you think you could make $20 trillion? You know the future prices after all... But no, you couldn't. There isn't enough money out there to pay you. So you'd move the markets by blowing them up. Call it the Time-travelling WSB Autist Paradox.

If you had a bucket with a hole in the bottom, even if you poured an infinite amount of water into it, it would never be full. Because there's a LIQUIDITY SINK, just like there is one in the markets.
And that, my mouth-breathing friends, is the reason why FED BRRR cannot be infinite. Or alternatively, "STONKS MUST GO BOTH UP AND DOWN".

MYTH 2 - YOU CAN'T TIME THE MARKET

On Jan 14, 2020, I predicted this: Assuming that corona doesn't become a problem, "AAPL: Jan 28 $328.3, Jan 31 $316.5, April 1 $365.7, May 1 $386, July 1 $429 December 31 $200."
Now take a look at the AAPL chart in January. After earnings AAPL peaked at $327.85. On 1/31, after the 1st hour of trading, when the big boys make moves, it was at $315.63. Closed 1/31 at $309.51. Ya think I pulled this one out of my ass too?
Yes you can time it. Flows, motherfucker, flows. Money flow moves everything. And these days, we have a whole lot of RETARDED FLOW. Can't even call it dumb flow, because it literally doesn't think. Stuff like:

  • ETF flows. If MSFT goes up and AAPL goes down, part of that flow is going to move from AAPL to MSFT. Even if MSFT flash-crashes up to $1000, the ETF will still "buy". Because it's passive.
  • Option settlement flows. Once options expire, money is going to flow from one side to another, and that my friends is accurately predictable from the data.
  • Index rebalancing flows
  • Buyback flows
  • 401k passive flows
  • Carry trade flows
  • Tax day flows
  • Flows of people front-running the flows

And many many others. Spot the flow, and you get an edge. How could I predict where AAPL would be after earnings within 50 cents and then reverse down to $316 2 days later? FLOWS MOTHERFUCKER FLOWS. The market was so quiet in that period, that is was possible to precisely figure out where it ended up. Why the dump after? Well, AAPL earnings (The 8-K) come out on a Wednesday. The next morning, after market opens the 10-Q comes out. And that 10-Q contains a very important nugget of information: the latest number of outstanding shares. But AAPL buybacks are regular as fuck. You can predict the outstanding shares before the market gets the 10-Q. And that gives you EDGE. Which leads to

MYTH 3 - BUYBACKS DON'T MATTER

Are you one of those mouthbreathers that parrots the phrase "buybacks are just a tax-efficient way to return capital to shareholders"? Well sit the fuck down, I have news for you. First bit of news, you're dumb as shit. Second bit:

On 1/28, AAPL's market cap is closing_price x free_float_outstanding_shares. But that's not the REAL MARKET CAP. Because the number of outstanding shares is OLD AS FUCK. When the latest number comes out, the market cap changes instantly. And ETFs start moving, and hedges start being changed, and so on.

"But ETFs won't change the number of shares they hold, they will still hold the same % of AAPL in the index" - random_wsb_autist

Oh my fucking god you're dumb as fuck. FLOWS change. And the next day, when TQQQ comes by and puts its massive $18b dong on the table, the market will hedge that differently. And THAT CAN BE PREDICTED. That's why AAPL was exactly at $316 1 hour after the market opened on 1/31.

So, what can you use to spot moves? Let me show you:
Market topped on 2/19. Here’s SPY. I even marked interesting dates for you with vertical lines.

https://preview.redd.it/7agm171eh5151.png?width=3713&format=png&auto=webp&s=d94b90dcd634c8dc688925585bf0a02c3299f71b
Nobody could have seen it coming, right? WRONG AGAIN. Here:

https://preview.redd.it/i1kdp3cgh5151.png?width=3713&format=png&auto=webp&s=7a1e086e9217846547efd3b6c5249f4a7ebe6d9e
In fact, JPYUSD gave you two whole days to see it. Those are NOT normal JPYUSD moves. But hey maybe it’s just a fluke? Wrong again.

https://preview.redd.it/fsyhenckh5151.png?width=3693&format=png&auto=webp&s=03200e10b008257ae15d40b474c4cf4d8c23670f
Forex showed you that all over the place. Why? FLOWS MOTHERFUCKER FLOWS. When everything moves like that, it means the market needs CASH. It doesn’t matter why, but remember people pulling cash out of ATMs all over the world? Companies drawing massive revolvers? Just understand what this flow means.
The reversal:
https://preview.redd.it/4xe97l0oh5151.png?width=1336&format=png&auto=webp&s=07aaa93f6b1d8f542101e40e431edccbc109918f
https://preview.redd.it/v6i0pdmoh5151.png?width=1338&format=png&auto=webp&s=74d5589961db2f978d4d582e6d7c58a85f6305f9
But it wasn’t just forex. Gold showed it to you as well. Bonds showed it to you as well.
https://preview.redd.it/40j53u8th5151.png?width=3711&format=png&auto=webp&s=fe39ab51321d0f98149d33e33253e69f96c48e23
Even god damn buttcoin showed it to you.
https://preview.redd.it/43lvafhvh5151.png?width=3705&format=png&auto=webp&s=1ef53283cbc0fb97f71c1ba935c0bd747809636e
And they all did it for 2 days before the move hit equities.

Chapter V. LIQUIDITY NUKE INBOUND
You see all these bankruptcies that happened so far, and all the ones that are going to follow? Do you think that’s just dogshit companies and it won’t have major effects on anything outside them? WRONG.
Because there’s a lot of leveraged instruments on top of those equities. When the stock goes to 0, all those outstanding puts across all expirations get instantly paid.
Understand that Feb-March was a liquidity MOAB. But this will end with a liquidity nuke.
Here’s just HTZ for example: $239,763,550 in outstanding puts. Just on a single dogshit small-cap company (this thing was like $400m mkt. cap last week).
And that’s just the options on the equity. There’s also instruments on etfs that hold HTZ, on the bonds, on the ETFs that hold their bonds, swaps, warrants, whatever. It’s a massive pile of leverage.
Then there’s also the ripple effects. Were you holding a lot of HTZ in your brokerage margin account? Well guess what big boi, when that gaps to 0 you get a margin call, and then you become a liquidity drain. Holding long calls? 0. Bonds 0. DOG SHIT!
And the market instantly goes from holding $x in assets (HTZ equity / bonds / calls) to holding many multiples of x in LIABILITIES (puts gone wrong, margin loans, derivatives books, revolvers, all that crap). And it doesn’t matter if the Fed buys crap like HTZ bonds. You short them some. Because when it hits 0, it’s no longer about supply and demand. You get paid full price, straight from Jerome’s printer. Is the Fed going to buy every blown up derivative too? Because that's what they'd have to do.
Think of liquidity as a car. The faster it goes, the harder it becomes to go even faster. At some point, you can only go faster by driving off a cliff. THE SQUEEZE. But you stop instantly when you hit the ground eventually. And that’s what shit’s doing all over the place right now.
Rewatch: https://www.youtube.com/watch?v=3hG4X5iTK8M
And just like that fucker, “I’m standing in front of a burning house, and I’m offering you fire insurance on it.”

Don’t baghold!
Now is not the time to baghold junk. Take your cash. Not the time to buy cheap crap. You don’t buy Hertz. You don’t buy USO. You don’t buy airlines, or cruises, or GE, or motherfucking Disney. And if you have it, dump that shit.
And the other dogshit that’s at ATH, congrats you’re in the green. Now you take your profits and fucking dump that shit. I’m talking shit like garbage SaaS, app shit, AI shit, etc. Garbage like MDB, OKTA, SNAP, TWLO, ZM, CHGG etc.
And you dump those garbage ass leveraged ETFs. SQQQ, TQQQ, whatever, they’re all dogshit now.
The leverage MUST unwind. And once that’s done, some of you will no longer be among us if you don’t listen. A lot of leveraged ETFs will be gone. Even some non-leveraged ETFs will be gone. Some brokers will be gone, some market makers will be gone, hell maybe even some big bank has to go under. I can’t know which ones will go poof, but I can guarantee you that some will. Another reason to diversify your shit. There’s a reason papa Warrant Buffet dumped his bags, don’t think you’re smarter than him. He may be senile, but he’s still a snake.
And once the unwind is done, THEN you buy whatever cheap dogshit’s still standing.
Got it? Good.
You feel ready to play yet? Alright, so you catch a move. Or I post a move and you wanna play it. You put on a small position. When it’s going your way, YOU POUND DAT SHIT. Still going? Well RUSH B CYKA BLYAT AND PLANT THE GOD DAMN 3/20 $30p BOMB.

Chapter VI - The mouthbreather-proof play - THE AKIMBO
Still a dumbass that can’t make a play? Still want to go long? Well then, I got a dumbass-proof trade for you. I present to you THE AKIMBO:

STEP 1. You play this full blast. You need some real Russian hardbass to get you in the right mood for trading, cyka.
STEP 2. Split your play money in 3. Remember to keep extra bankroll for POUNDING THAT SHIT.
STEP 3. Use 1/3 of your cash to buy SQQQ 9/18 $5p, pay $0.05. Not more than $0.10.
STEP 4. Use 1/3 of your cash to buy TQQQ 9/18 $20p, pay around $0.45. Alternatively, if you’re feeling adventurous, 7/17 $35p’s for around $0.5.
STEP 5. Use 1/3 of your cash to buy VIX PUT SPREADS 9/15 $21/$20 spread for around $0.15, no more than $0.25. That is, you BUY the 21p and SELL the 20p. Only using Robinhood and don’t have the VIX? What did I just tell you? Well fine, use UVXY then. Just make sure you don’t overpay.


Chapter VII - Quick hints for non-mouthbreathers
Quick tips, cuz apparently I'm out of space, there's a 40k character limit on reddit posts. Who knew?

  1. Proshares is dogshit. If you don't understand the point in my last post, do this: download https://accounts.profunds.com/etfdata/ByFund/SQQQ-historical_nav.csv and https://accounts.profunds.com/etfdata/ByFund/SQQQ-psdlyhld.csv. Easier to see than with TQQQ. AUM: 1,174,940,072. Add up the value of all the t-bills = 1,686,478,417.49 and "Net other assets / cash". It should equal the AUM, but you get 2,861,340,576. Why? Because that line should read: NET CASH = -$511,538,344.85
  2. Major index rebalancing June 22.
  3. Watch the violent forex moves.
  4. 6/25 will be red. Don't ask, play a spread, bag a 2x-er.
  5. 6/19 will be red.
  6. Not settled yet, but a good chance 5/28 is red.
  7. Front run the rebalance. Front-run the front-runners of the rebalance too. TQQQ puts.
  8. Major retard flow in financials yesterday. Downward pressure now. GS 180 next weeks looks good.
  9. Buy leaps puts on dogshit bond ETFs (check holdings for dogshit)
  10. Buy TLT 1/15/2021 $85ps for cheap, sell over $1 when the Fed stops the ass rape, rinse and repeat
  11. TQQQ flow looks good:
https://preview.redd.it/untvykuxea151.jpg?width=750&format=pjpg&auto=webp&s=a0a38c0acb088ebff689d043e48466eb76d38e2f

Good luck. Dr. Retard TQQQ Burry out.
submitted by dlkdev to wallstreetbets [link] [comments]

How SPACs worked and why they are more efficient than traditional IPO

Hey everyone! My first post on SPACs got a solid response, so I took some time yesterday to do an information video on how SPACs work, how they are more efficient, why the SPAC landscape has changed, and reasons to consider investing in one! I love to teach and talk about different financial topics, and am excited to see the SPAC thread growing.
Video: https://www.youtube.com/watch?v=6VFNO-ISd-8
Couple key points:
- SPACs are now focusing on innovative and exciting companies
- SPACs are not a sure-fire bet, buckle up for volatility
- SPACs get cash to companies and to public markets much quicker
- SPACs represent speculation given a pre-announcement SPAC does not give indications as to acquisition targets
Also, my channel is small and not monetized! Just sharing my thoughts!
Enjoy!
submitted by Dan-Spear to SPACs [link] [comments]

You asked me to look into the renewable energy sector, so here it is.

After my last post, I had multiple people asking if I could take a deeper look into the renewable energy industry. Since I’m also very interested and I feel it will become a very important sector, I took the time to review it. First of all, let me explain why investing now is a good time.
When you look at manufacturers, the biggest market cap is not even $5 billion. There is so much room for growth and there’s also a lot of competition. When you can point your finger at the best company, it might be the homerun for your portfolio in 10-15 years. Even if you don’t hit the right one, it’s still gonna be ok since the industry is only growing. To be clear, I only looked at manufacturers, not distributors. You won’t see any companies like NEE, DUK, BEP, etc.
Secondly, you all know Trump doesn’t believe in environmentally issues, renewable energy and that sort of stuff. With elections coming up, investments might stay the same or they might go up drastically when the democrats win. Either way, the sector will continue to grow and you can’t really go bad with investing in it.
Last argument, I feel like a lot of people don’t know the importance of solar energy yet. It goes beyond the industry, as it gets implemented more and more by other industries. It’s already a big item for giants like Google, Microsoft, Amazon,… to keep their cloud servers running for example.
— — — — — — — — — —
In this post, I will focus on solar energy the most, as it is the biggest and most important part of renewable energy. Based on market cap from the solar industry, we have 3 leaders and 7 others on a significant distance, but still able to get to the top for the next 5-10 years. From that top 10, RUN, SPWR and VSLR fall off based on financials.
ENPH Market leader on micro-inverters (the things that convert solar charge into electricity). Even their inverters get used by big competitors like SPWR. Investing more and more into energy storage. It’s focussing on the private market, which might be a short term problem, but their inverters are definitely their big win. Not only do they receive revenue from their own installations, but they have other companies using their products as well when installing other products, making ENPH techniques present in an enormous amount of solar installations. The financials are great, they have a decent amount of cash to get investing and they’re only profitable since last year, giving them a lot of room to grow. They’re bound to get number one position in solar tech and they didn’t even launch their best technology yet.
SEDG Great financials as well. Assets over double amount of liabilities, almost no long term debt and enough cash to get growing. Very big growth on revenue. They were planning to even double their production in 2020 and release some new products, but that’s gonna be delayed a bit. They are working with TSLA on batteries and charging stations. It all looks very positive, although I have to point out some people are calling SEDG ‘yesterday’s solution’. It might be up and keep growing a lot, but if you want the best 10 year investment, you should stick with ENPH.
FSLR Very inconsistent income, but a great balance sheet. Assets 3 times liabilities and loads of cash to get investing into the future. Their profit margins are pretty small though, in comparison to the industry. FSLR is the only company that works with utility companies to provide energy. To draw you a simple picture: if you get electric energy at home, it’s been delivered by utility companies and the energy itself is mostly created by FSLR. Over the past few years, utilities are losing market share because people are buying and setting up their own energy installations at home. Therefore utilities, and by extension FSLR, are losing market share. Because of the crisis, people will be less likely to install their own installations as unemployment numbers are rising. FSLR could be the better short term bet, but it’s hard to predict when it will turn around again and they will definitely lose long term.
JKS Very innovative techniques, one of the most efficient solar panels on the market. Therefore gaining a lot of advantage on their competitors, or ‘moat’ by Warren Buffett terms. If you feel like solar panels are the most important part of the industry, I would definitely suggest looking into JinkoSolar. They have a lot of cash to get investing, low on long term debt and I see them coming the closest to top 3 in the future.
CSIQ Looking for value, then this is the one. PEG ratio of only 0.19, the industrial average is 0.68. Have to point out as well that their growth rate isn’t that great and you might wait a long long time to get the gains going on this one. They also have a lawsuit running against them, claiming to steal Solaria’s patented module technology.
NOVA They might get hit hard by covid-19. Sunnova is a pretty young company, full on investing and expanding, thus having low cash reserves. They might need to be backed by bailout money, putting them even further behind the top 5 solar companies. When they get back in 1-2 years, I feel like the other companies will have too much of a head start.
AZRE They have experienced almost no impact from covid-19 as an Indian based company. Their projects have not been impacted and the plants are running full force. However there has been significant reduction in demand and they’ve been seeing delayed payments from customers. It operates like First Solar, selling energy to government utilities. Big profit margins as well, so they might get out of this crisis easily. That’s also the main reason why the stock didn’t drop that much. Growth will be limited, but a stable investment.
— — — — — — — — — —
Next, I’m gonna mention some other renewable energy resources. I took one of the best companies per industry as an example, but I’m not gonna go through those resources more deeply as I don’t believe in them.
VWDRY The wind energy industry is more inconsistent than solar energy, therefore not the most favorable kind of resource to invest in. It also doesn’t have real potential to expand to private use, but whoever wants to invest in it, I suggest VWDRY. It is the biggest company in the world in terms of wind power. Apart from having the most and biggest wind farms, they also offer their maintenance and knowledge to help optimizing other wind farm locations. Vestas also just signed a great contract with a Danish energy company for delivery in the upcoming next years. They have a lot of cash ready to invest and they also have decent value, so you can’t really go wrong with them.
REGI REGI produces and sells biofuels and renewable chemicals. It produces biomass-based diesel, using corn oil, used cooking oil and inedible animal fat amongst other things. The company might be in bad weather, as they are low on cash. They are operating in an investment needing industry, so it’s definitely not the right moment for a financial crisis like this.
As you can see, I didn’t include nuclear energy companies. Nuclear energy is a green energy solution and definitely isn’t bad. However it’s not growing like solar and wind because it has a lot of negative feedback and image. There is more waste, it’s more expensive and therefore also less investments. It’s easy math, the more volume, the lower price. No one is investing in nuclear, so pricing can’t compete with other resources.
— — — — — — — — — —
For me, this research was surprising. I was expecting to find more small companies with breaking innovative techniques, but it seems like the ones at the top are predicted to stay there and increase distance. If anyone has some valuable information on small companies, definitely share them in this thread.
To conclude, ENPH and SEDG are without a doubt the best investments right now. Depending on your timeline, you might want to sell SEDG in 5-10 years, while keeping ENPH for a lifetime. JKS is the higher risk, higher reward kinda bet here, with still decent coverage of risk.
There are of course way more other renewable energy resources, but I don’t know enough about them. If I would start researching them, I might be working like a professional brokeinvestor and I decided that I’ve put enough energy into stock research the past weeks. Right now, I’m gonna enjoy the weather, work a bit in the garden and passively buy some shares this week with all that info I’ve gathered over the past few months.
submitted by CapitalC5 to stocks [link] [comments]

I'm finalizing my portfolio for this year.

It's been a while since I made a big post. Lots of people are still messaging me about the energy sector post, especially for the ENPH tip, so I'm here to show my portfolio. I don't own all companies yet, this is partially hypothetical. I'm holding on to a reasonable cash position for a possible new downturn, but I have starting positions in most companies and will DCA.
I will try to keep it summarized, as I have done quite a lot of analysis on each of them. I'll draw the main picture and give the most important arguments for my choices, but I'm not expanding too much. If you're interested, you can DM me to talk about them more.
Let me start by saying I'm a growth investor. I always look for a combination of growth with a great track record, if possible at a reasonable price. There are exceptions as you will see below, but the main balance stays the same. I'm not a defensive investor, but no aggressive one either. My timeline is 2-5 years at least (due to a possible start of a small business), but I would gladly hold on to these companies 10+ years.
TLDR; For you guys not interested in my portfolio, I've added a short list of interesting smaller cap companies at the end, most of them trading at decent values.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
ADVANCED MICRO DEVICES - $AMD
This one is becoming a blue chip, but has more than enough growth potential to live up to those high valuations. Preferred by gamers and beating their biggest competitor in the CPU market hard. While AMD and INTC were close competitors at the beginning of the 21st century, INTC took the lead by a lot. Since 2017, they introduced 7nm CPU's and GPU's and they are closing the gap fast. Not only are their chips more performant, they are also cheaper. Market cap $60B vs $261b.
Those next generation chips lead them to new partnerships, often beating INTC. Microsoft, a long time Intel customer, began using AMD chips in their Surface laptops. Lenovo using AMD for their new servers. Nvidia started using the chips in their AI products. AMD is also used by Apple's high-end laptops, while Intel (used in the budget range) will probably get replaced by Apple chips made in-house. Apart from laptops, AMD has government contracts to deliver supercomputers in 2021/2023 and they are used in both PS and XBOX consoles, to give a few examples.
For the CPU market, AMD is destined to take over, but they're also taking on NVDA for their GPU's. They have been catching up for years and in 2019 they finally made a better performing GPU in the $350-400 price range. There is a possibility to gain GPU market cap since NVDA has been pushing their prices due to the lack of competition. Therefore, with AMD stepping up their game, they need to give up market share or lower their margins.
Financial
Assets over liabilities are x1.88. Cash to debt ratio well above industry average, debt to EBITDA well below IA. ROE 17.12% and ROIC 28.06%. Earnings were growing fast before Covid (125% in Q3, 78% in Q4). Yes they're overvalued, but with their future outlook, I would always buy below $49.
Doubts
Now that they are done catching up, the question is, will they outperform in the future. To gain more market share of Nvidia, they need to be better, not equally good. AMD also needs to control the heating better, as it is one of their long term problems.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
MASTERCARD - $MA
Fintech companies like SQ and PYPL are a great investment. However, a lot of big companies will (and already did) implement online financial services. MA is able to easily work with multiple of those companies and they're using their global presence pretty well, that's why they're my pick for the fintech industry.
They launched Mastercard Accelerate last year, implementing those online paying platforms and letting start-ups take advantage of their global presence to grow and transform very fast. Last year they acquired Ethoca (managing e-commerce fraud) and Vyze (platform to connect merchants with multiple renders, giving them the opportunity to get those financial needs for start-ups). MA is basically helping start-ups to grow faster, which will result in more financial transactions in the future.
Last but not least, they like to focus on expanding to countries where there isn't much competition yet. They are expanding their exposure to Middle East and Africa, working with local networks and e-commerce platforms. They are in a strong position to capitalize those regions in the future and take on market leader Visa even more.
They get compared a lot to Visa, so I'll expand on that subject a bit as well. While V is focussing on performance and speed, MA plays the cyber security card. They are already working on ways to implement cryptocurrency and Mastercard tend to have more growth potential vs stability from market leader Visa. While V is in the lead, MA is more widely used by fintech companies, which shows potential take-over in the future. Next to their credit services, they also own debit service Maestro, which is widely used in Europe.
Financial
Returns as high as 150% (ROE) and 60% (ROIC). Very large margins and perfectly stable balance sheet. High EPS growth YoY, 53% and 42% in the last two years. Quick ratio 1.87. V has more assets and even bigger margins, however MA wins in returns and cash. In terms of more growth, I like to focus on those last numbers more.
Doubts
It's a blue chip at a $300B market cap. Their growth potential might be limited, although I see them as one of the better picks between blue chips.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
ENPHASE ENERGY - $ENPH
I already talked about solar energy in another post, so I'm gonna skip the explanation. As some of you know my choices were ENPH and SEDG, so I'll explain a bit about why I choose ENPH here. Mainly it's because of their financials, so I'll dive that straight away.
Quick ratio - 2.35 vs 1.74
ROE - 142.94% vs 21.51%
ROIC - 85.51% vs 25.81%
Net margin - 25.81% vs 10.28%
However I think SEDG balance sheet is a lot better and safer, ENPH is working on their future more efficient. They are paving the way smoothly with bigger margins and return on investments. Although SEDG might be the better pick right now, ENPH will be the better one in a short while. ENPH is also a bit less overvalued and their PEG ratio is lower, which makes them the better pick to get in right now.
Diving into the products as well, ENPH just has the better and more efficient product. Their micro inverters are more durable (20 vs 12 years) and give the chance to increase or decrease the amount of solar panels easily, depending on your personal situation.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
GALAPAGOS - $GLPG
I'm not a big fan of biotech companies, but these guys have my attention. Not because they're working on Covid vaccines, but because of two reasons. First one is them getting back-up from Gilead Sciences. That's the push they needed to start operating worldwide, increasing their potential market cap. Now that they have the cash from GILD, they can keep on buying interesting divisions and increase their growth. While having almost no long term debt, they are set pretty well with about $4 billion extra in cash.
Second, they have multiple medicines in later trial phases, with Filgotinib as their biggest one. They had a setback on those results, but the company is very confident, giving an opportunity to get them at a decent price. I wouldn't be surprised if they partner up with another big pharmaceutical company in the metabolic disease section.
Financial
High PE (84 vs 44 average), but PEG ratio is 1.2. Quick ratio 9.28. ROIC 75.91% and ROE 7%. Became profitable this year with 16.25% net margin. 38.7% YoY EPS growth.
Doubts
Like all biotech players, there's a lot depending on medicines getting through phase trials and being commercialized. If Filgotinib will fail, their stock will obviously fall. However since they are backed by a big US giant, they can commercialize the product faster and on a bigger global scale if trials succeed. That's what gives them the advantage in comparison to other biotech companies for me.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
WALT DISNEY - $DIS
This one has got me doubting a lot. I've taken them off and put them back on my list multiple times, but eventually I decided to keep them at least 2 years to see how they will evolve into streaming.
Biggest advantage they have on their competitors is they basically have a monopoly on kids entertainment. Kids are growing up with electronic devices and content, so they're creating customers at a very young age. That's how Coca Cola used to work. They targeted 14-16 year olds, dumping loads of money into advertising which resulted in life long customers, as people didn't change cola brands often.
Disney+ is a big hit and they won't get so much competition from other streaming services as Netflix and Roku will. They have one of the strongest defined brands out there and they know perfectly how to build and maintain their company. It's also still unclear how sports with public will evolve, but it's certain streaming will become even bigger after Covid. Therefore their money-losing ESPN acquisition could even turn into a moneymaker.
Financial
I can't really say great things about their financials. ROE is 12.67%, above 10% is decent. Assets over liabilities are x1.85 and debt to equity is 0.61. You could apply the saying "too big to fail' here, but that's about it. The bad financials are mainly caused by their big investment to streaming of course and they're working on it hard. They doubled their cash position, increasing their quick ratio from 0.75 to 0.89.
Doubts
I would say financials are their weak point here. They still have to go through some bad weather this and next year I would say. Them doubling their cash position in Q1 was soothing, as I see it being the biggest issue for the future. It might be better to wait it out and keep an eye on them for next year, but I wanted to take a position already. Not higher than 8% of my portfolio though.
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MICROSOFT - $MSFT
They don't really an introduction I guess. 2nd biggest player for cloud services with Azure. Naming Satya Nadella as CEO and making the transition from hardware to software in 2014 were the best decisions they could've made. Acquired the government contract with Pentagon, however there's still uncertainty about it. In short, Amazon is claiming they were about to win the contract, but Trump criticizing the company would've lead to calling off the deal. For me, that's probably the main reason why MSFT didn't fly as high as their fellow cloud competitors yet.
Financial
Assets over liabilities x1.67. ROE and ROIC respectively at 43.82% and 28.88%. Quick ratio of 2.88, 0.65 debt to equity and 1.86 cash to debt. Decent financials, great returns. Talking about blue chips, I would say MSFT is still fairly valued with a PEG ratio just below industry average. Also paying a small dividend.
Doubts
The Pentagon contract allegations could be pretty negative for the company. They will probably not come back on their decision, cause if they do, MSFT will claim they already made big investments towards them and things will just keep on dragging on. Even without the contract, MSFT should be a 10 year hold while buying on dips.
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INNOVATIVE INDUSTRIAL PROPERTIES - $IIPR
Haven't read a lot about them here on Reddit, but they're a very decent investment. Basically, they buy properties from cannabis companies and leases them back to the sellers, giving them the cash they need to grow faster and IIPR keeps the long term advantage of renting out those properties. They need to buy about 6-8 properties a year to keep their growth rate going and they already bought 7 this year. They still have a lot of cash ready to take advantage of the crisis.
Not only are they 20% undervalued right now, they have a lot more growth potential after that and on top of it, they pay close to 5% dividend. I'm not a big fan of betting on the best cannabis company for the future, but IIPR is a great buy to have exposure in that industry. It doesn't happen very often I come across a company that combines growth potential with a high dividend, but IIPR does.
Financial
Quick ratio 6.75, cash to debt 2.8 (while REITs have an 0.07 average). Net margins 13% above average. Assets over liabilities x4.88. Annual EPS growing by more than 150% and about 41% in the last quarter before Covid. They just missed Q1 estimates, but it was only an 8% drop from Q4, performing way better than other REITs.
Doubts
IIPR has held a lot of new investment rounds, diluting shares. Of course extra capital will result in higher growth and will eventually be positive in the long run. There has been a drop in these last few days due to the announcement of selling 1 million more shares soon. I would look at it as an opportunity to get an even better price on them.
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TELADOC HEALTH - $TDOC
It's the only company I don't own yet. I can't force myself to invest more than $140 per share for them, although I really like their business model. A lot of people are skipping doctors visits these days, going straight away to get medicines and counting on the advice of pharmacists. A lot of times, there's more examination needed.
Not only do I see them succeeding in their field, I see them as an essential part of the automation of the pharmacy industry. It's a useful tool in emergencies, giving advice and deciding how serious the condition is, if (fast) medical care is needed. Teladoc will also play a role in insurance and giving the employers a checking tool. 98.9% of their shares are owned by institutions.
Financial
In terms of profitability and returns, not great of course. They are estimated to get profitable in 2023. Great balance sheet, assets over liabilities x2.66. Quick ratio 6.14, cash to debt 1.06, debt to equity 0.48.
Doubts
It's hard to see if a company is well managed before they are profitable. Their moat isn't very narrow, however I feel being one of the first ones gives you a big advantage in this field.
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DRAFTKINGS - $DKNG
Gonna keep this one pretty short, there has been enough posts about Donkey Kong. For me, the most important factor for choosing them in this industry is their fantasy sports section. They are widely popular and that division will only get more interesting while online gambling, and especially in-game betting, gets more and more legalized in the US.
Although they realized major revenue growth in 2019, they almost doubled their earnings loss. Main reason of course having to develop their platform and system. Good thing is, their technology is highly scalable, meaning they margin will grow massively while expanding in to more states and countries. Not many ratios available yet, so that's about the only financial information I own atm.
The only negative I see is their pretty wide moat, so this one should be monitored more closely in the future. But for now, they have the momentum and are one of the most popular choices, great investment.
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RAYTHEON TECHNOLOGIES - $RTX
As many of you know, two great companies (UTC and RTN) merged together in April. While United focussed on aircraft engines (Pratt & Whitney), Raytheon manufactured weapons, military and commercial electronics. They always delivered advanced technologies and them gaining multiple government contracts in the last decade is confirmation of their performant products.
Raytheon will continue to grow their leadership in different segments. Because of their diversity, they seem perfectly in place to grow even more into an aerospace & defense giant. Engines, aerostructures, avionics, sensors, cybersecurity and other software solutions are just a few examples of their working fields.
Financial
With a PE ratio of 13.58 and PB ratio of 1.41, this is probably the most undervalued stock in my portfolio. Assets over liabilities x1.43. The rest of their financials isn't that great. UTC was carrying a lot of debt, but because of the merger, it will be better balanced as RTN was only carrying $2 billion net debt. If they can decrease their debt and optimize their merger, they are set to be the new number one in defense.
Doubts
It's still unclear how the merger will work out financially and logistically. In theory, they should be very well armed (pun intended) to take on LMT as market leader. Their exposure to commercial aircrafts is also a big threat, but it's less of an issue because they can make up with their other practices.
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As you can see, I've tried to get the best blue chips with still some growth potential and stable growth companies together. Since a lot of companies already got mentioned on this forum, I'll include a bonus round of interesting companies I came across during my search for the best companies. I didn't include them in my portfolio mainly because I feel the chance of them succeeding and living up to their future potential is more risky than others. For you looking for higher risk, higher reward, check out these companies below.
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So, that's about all I have to share. This will also be my last big post a while. Analyzing stocks has been my main occupation for the last three months, but it's time to work on opening up the hotel and bar again. I hope some of you get something out of this. I'm not a professional so always check again for yourself. I'm gonna hold on to these companies for a while now. Will add some extra capital at the beginning of 2021, so you could expect another big post about my newest findings then. For now, I'm gonna take a break from following the market day in day out and enjoy the weather a bit more.
Have a good one!
submitted by CapitalC5 to stocks [link] [comments]

A thorough DD on $BDSI (BioDelivery Systems International)

What is BDSI & what do they do?
What are their two products?
BDSI’s Technology
Recent Q1 Financials/highlights
Corporate presentation
Risks/negatives of the business
Events to positively impact Q2-Q4
Very important upcoming date
Important SEC Filings & presentations
Target Price/Forecasts
Final thoughts/comments
Remember, as always, I urge that you please read every link I add to my post and always extend my DD by doing some of your own. I want you guys to be informed before making a decision which is why these DDs are long lol. Anyways, I hope I've been able to help out with this DD in any way possible. Hope you guys enjoyed it, Take care Everyone! :)
submitted by PradoMV96 to EducatedInvesting [link] [comments]

Alright, neoliberals. I've got a ton of notes from Joseph Stiglitz's "The Great Divide" and "Rewriting the Rules of the American Economy". What have the succs got wrong?

At the same time that I've been browsing this subreddit prolifically (because it's the only political subreddit I've found where something like this thread I've linked gets upvoted), I've done a lot of reading, specifically Joseph Stiglitz's books The Great Divide and Rewriting the Rules of the American Economy. Apparently you guys don't like Stiglitz, so I'm looking for whatever criticism you have to throw at the ideas presented in these two books. Stiglitz seems to agree with you all a lot, so I'm kinda confused. I read these books thinking your ideas and his are one of the same.

The Great Divide

Despite being longer than Rewriting the Rules of the American Economy, I took less notes on this one, since I didn't care as much about retaining my memories of what I read at the time. Anyways, here's everything you guys apparently don't agree with:

Rewriting the Rules of the American Economy

The Current Rules:

Rewriting the rules:

These proposals aim to reduce inequality and improve economic performance by restructuring the rules shaping the economy. It’s a twofold approach: the first move is to tame rent-seeking behaviors that unduly reward those at the top while raising costs for the rest and reducing the efficiency and stability of the U.S. economy. The second part of our agenda seeks to restore the rules and institutions that ensure security and opportunity for the middle class.

Taming the top

Make markets competitive
-We need a 21st century competition law that recognizes that we have moved from a manufacturing to a service and knowledge economy, where different principles of competition are relevant. Restore balance to global trade agreements -Trade agreements written behind closed doors with the active participation of firms but no other stakeholders are failing to deliver the rules we need to manage globalization in a way that benefits all. -Businesses wishing to trade with businesses in the US under the terms of an agreement should be audited and certified by a credible, independent third party such as the International Labor Organization; certification then buys the company a right to trade under the preferential treatment of a trade agreement.
Control health care costs by allowing government bargaining
-Firms from across the health care industry have been allowed to consolidate and expand, reducing competition and raising prices. -By bargaining with drug companies for bulk purchases, the VA pays 40 percent lower prices for prescription drugs than typical market prices. -The federal government should establish a national prescription drug formulary, establishing the cost effectiveness for all prescription purchases covered under all public health insurance plans, not just those for veterans.
Rebalance the rules for bankruptcy by expanding coverage to homeowners and students
-Removing the special protections for derivatives in bankruptcy, a feature that benefits Wall Street but actually makes firms more risky as they rely more on these exotic instruments, is essential in reducing the excessive financialization of the economy. -Removing some of the most burdensome elements designed to make filing for bankruptcy harder will help individuals move on from the misfortunes that can happen throughout life. -A homeowners’ chapter 11, analogous to corporate chapter 11, would keep families in homes and give a fresh start to families overburdened with debt.
Fix the Financial Sector
-The financial sector isn’t doing what it’s supposed to: managing risk, allocating capital efficiently, intermediating between savers and investors, providing funds for investments and job creation, and running an efficient 21st century payments mechanism.
End “too big to fail”
-Banks that are so big that their failure will cause the entire economy to contract don’t need to internalize the costs of their failures and can reap huge benefits from risky bets. They have a perverse incentive to take on excess risk, knowing that should a problem arise they will be bailed out, with losses being borne by others. -Even when banks aren’t too big to fail, they can be too interlinked to fail: with excessive linkages the failure of one institution can lead to a cascade of other failures - stoppable only with a government bailout. That is why interlinkages need to be transparent and regulated. -The Financial Stability Oversight Council should assess large, systemically risky financial firms with an additional capital surcharge above what regulators currently assess under the Basel Accords in order to make failure less likely and more manageable. A surcharge would force banks to internalize the true cost of their risks and improve economic efficiency, while insulating taxpayers from the costs of failed institutions.
Regulate the shadow banking sector and end offshore banking
-Shadow banks are nonbank financial institutions that engage in lending by trading bonds and securities, often by bundling them through a process called securitization. -The SEC should reevaluate and expand on its recent ruling on money market mutual funds, whose vulnerabilities in the 2008 financial crisis sparked a panic. -The Federal Reserve must write clear rules outlining the government’s role in back-stopping the shadow banks. -There needs to be a re-examination of the extent to which shadow banks and offshore financial centers are used to end-run the regulations designed to ensure a safe and sound financial system.
Bring transparency to all financial markets
-Congress should expand the SEC’s mission, and require private equity and hedge funds to disclose holdings, returns, and fee structures. The SEC should provide additional regulatory scrutiny and investor advice on these deals. This will formalize their regulation, making it similar to mutual fund regulations; the competition that will follow from this price transparency will help reduce financial rents.
Reduce credit and debit card fees
-High consumer fees on credit and debit card transactions are one clear symptom of abuse of market power in the financial sector. -These fees are a monopoly rent on the country’s networked payments infrastructure.
Enforce rules with stricter penalties
-In the past decade there’s been a shift away from strict criminal enforcement of financial regulation. Fewer, if any, cases go to court. Instead the SEC and the Justice Department settle with favorable conditions, such as deferred prosecution agreements. Under these agreements, the parties regularly don’t admit to any wrongdoing, or even pay penalties commensurate to their benefits. No individual is held directly accountable. The fines that are paid come from shareholders and are tax deductible; the perpetrators of the offenses aren’t necessarily punished or made to give back the compensation they received as a reward for the extra profits generated by their illegal activities. -Firms promise not to repeat their offenses, but they usually do. -The SEC and other regulatory agencies should instead focus on more strict enforcement, and Congress should hold the agencies accountable if no progress is made. No company should be able to enter into a deal like a deferred prosecution agreement if it is already operating under such an agreement. These agreements should face stricter judicial review and scrutiny, and compensation schemes should be designed so that perpetrators face significant consequences - for instance, a clawback of bonuses and a reduction in retirement benefits.
Incentivize long-term business growth -The rules governing corporations and taxes on capital and top incomes have changed to favor short-term shareholders and CEOs who chase short-term stock price gains above all else. -This has led to greater inequality and has undermined real investments that create long-term growth.
Restructure CEO pay
-Adjust the tax code, which privileges compensation of executives through equity-heavy compensation, particularly stock options. -Eliminate or curtail the performance-pay loophole (by which stock options and other excessive CEO pay receives favorable treatment). This will both address executive pay being too high and discourage CEOs from behaving like financial speculators. -Maintain the $1 million cap on the deductibility of executive compensation reform, eliminate the exception for so-called performance pay, and expand these limits on deductibility to the highest paid executives in a company overall. -The SEC should require corporations to state the value of compensation in simple, easy to understand language. -There should be mandatory shareholder votes on executive compensation on an annual basis(footnote: our current Say-on-Pay rule is non-binding). Enact a financial transactions tax -Short-term financial transactions can contribute to economic volatility without providing any larger benefit to the economy as a whole. -A variant of financial transaction taxes are currently employed without negative consequence in vibrant financial centers like London and Hong Kong. -Congress should pass a financial transaction tax designed to encourage productive investment. Empower long-term stakeholders -There should be a surtax on short-term capital gains given the negative externality of the trading behavior incentivized. -To improve long-term management of corporations, workers must be given a say in corporate governance, specifically by including a representative of employees on the corporate board. -Those managing retirement accounts should be obligated to avoid all conflicts of interest and, especially in the case of worker pensions, ensure the corporations in which they invest act in a responsible way, with good corporate governance, an eye to long-term value, good labor policies, and sound environmental policies.
Rebalance the tax and transfer system
-The United States ranks among the least redistributive countries in the OECD. -Taxes can improve incentives, encourage socially desirable economic behavior, and discourage undesirable behavior like short-termism. -Over the past 35 years, changes to the tax code have prioritized tax cuts and subsidies focused on those at the top, placing a greater tax burden on the rest and causing neglect of critical public investments.
Raise the top marginal rate
-Lower marginal tax rates at the top distort the economy by actively encouraging rent seeking. -A 5 percent increase on the top 1 percent’s current income tax rate would raise between $1 trillion and $1.5 trillion of additional revenue over 10 years. -For an extra $50,000 taxed on every $1 million of a wealthy individual’s income, the United States could make all public college education free and fund universal pre-K.
Enact a “fair tax”
-The preferential treatment of capital gains and dividends - income received almost entirely by the richest Americans - is one of the most important reasons that those at the top pay less than ordinary taxpayers. -Most Americans earn negligible capital income outside already tax-sheltered retirement savings accounts or on home sales - for which a large exemption exists. -Capital gains tax breaks do not spur investment. They reward speculation as opposed to work. -The US should tax capital gains income at the same rate as labor income. -Short-term capital gains should be taxed at an even higher rate to discourage volatile short investments. -The provision for step-up in basis at death needs to be eliminated. This provision allows all of the capital gains earned during an individual’s life to escape taxation when the asset is bequeathed, meaning a small number of wealthy families pass on wealth free from capital gains tax in perpetuity.
Encourage U.S. investment by taxing corporations on global income
-The current tax code allows corporations to defer paying U.S. taxes on profits earned abroad until the profits are repatriated, which has the perverse effect of encouraging corporations to keep profits abroad as opposed to using the funds for U.S. investment. -One option is to replace the transfer price system with a formulaic approach that would tax firms on their global income in a fair and comprehensive way, apportioning those profits to the U.S. on the basis of the economic activity - including sales, production, and research - that occurs here.
Enact pro-growth, pro-equality tax policies
-We should tax things that have an inelastic supply, like land, oil, or other natural resources. -We should tax pollution (including carbon emissions), a move that can raise revenue while improving economic efficiency. -Eliminating agricultural subsidies and noncompetitive bidding processes for the sale or lease of government-owned natural resources or for the purchase of armaments or prescription drugs under public programs would improve efficiency and reduce inequality.

Growing the middle

Make full employment the goal
-The Fed should emphasize full employment as the goal of monetary policy, and Congress should enact a large infrastructure investment to stimulate growth.
Reform monetary policy to prioritize full employment
-The Fed’s prioritization of price stability has caused labor markets to remain slack, kept wages growing slower than productivity, and has brought down workers’ share of economic output. -Contractionary monetary policy has much stronger unemployment effects for low-wage and often minority workers than for the highest earners. -The Fed should resist raising interest rates until wage growth makes up for the lost ground of the Great Recession, even if this means allowing inflation to temporarily overshoot the 2% target. -There is growing consensus that a higher inflation rate will lead to better economic performance, facilitating adjustments in our highly dynamic and ever-changing economy.
Reinvigorate public investment
-Critical public investments today lay the foundation for long-term economic performance and job growth. -Public investments in education, technology, and infrastructure are complements to private investment, raising returns and thus “crowding in” such investments.
Invest in large-scale infrastructure renovation
-America’s failure to keep up what infrastructure it has makes it more costly to do business and for people to go about their daily lives, and leads to more wasted time and more environmental degradation. -Public transit and broadband play a crucial role in connecting all Americans, regardless of income level, with the 21st century local and global job market. -Not only is infrastructure crumbling, it’s unevenly distributed, with distinct areas and communities segregated from the rest of society and without the opportunities that connecting affords. -A comprehensive plan would provide investments in air, rail, and road transportation; public transit; ports and inland waterways; water and energy; and telecommunications and the Internet. Some estimates put the cost of such a project on the order of $4 trillion - well beyond the small sums currently debated but within our means. The investment would yield dividends in the form of more productive businesses, millions of new jobs, and sustainable management of our energy and environmental resources. -Public infrastructure banks could be useful for financing large infrastructure projects.
Expand access to public transportation
-Decades of disinvestment in U.S. infrastructure have resulted in high commuting costs that fall disproportionately on low- and middle-income families and decrease access to jobs. -Only a little over half of Americans have access to public transit. -If more people have better access to jobs, productivity will increase and lives will improve.

Empower workers

Strengthen the right to bargain
-The National Labor Relations Act is flawed. -One flaw in the statute has allowed employers to delay workers’ votes to unionize by litigating each step of the process. Recent rule changes issued by the National Labor Relations Board have attempted to rebalance some of the power, and they provide a positive example of how the statutes can be updated to reflect current challenges. -Stricter penalties are needed to deter illegal intimidation tactics by employers. -Companies seeking to prevent unionization can retaliate by firing workers; if an NLRA violation is found, the employer merely has to reinstate the worker and pay back wages. A ruling like this can take more than three years. -The legal framework should be amended to adapt to the changing nature of the workplace. Today, few employers resemble the large manufacturers the creators of the NLRA had in mind. Corporations like Walmart employ people through outsourcing and subcontracting, bearing little responsibility for the employment relationship. Legal scholars have envisioned new models for defining the employer-employee relationship that would establish clear lines of responsibility within the modern fissured workplace.
Have government set the standards
-State, local, and municipal governments should grant public contracts only to corporations that meet high labor standards and possess strong antidiscrimination/pro-inclusionary hiring practices.
Increase funding for enforcement and raise penalties for violating labor standards
-Charged with enforcing the minimum wage and overtime protections, the Wage and Hour Division of the Department of Labor has seen a third of its inspectors disappear since 1980, despite a doubling of the country’s workforce. -Congress should increase the agency’s budget to reflect growth in the labor market, the low-wage workforce in particular, and recent evidence of systemic wage theft. -Penalties for minimum wage and overtime infractions are insufficient to deter bad behavior. -Minimum wage and overtime violation convictions should pose an existential threat to businesses so managers and owners will think twice before engaging in such behavior.
Raise the minimum wage
-Raising the minimum wage is unlikely to hurt jobs, unless taken to an extreme. -Given the present weakness in aggregate demand, higher wages would stimulate the economy. -Raising the minimum wage could help reduce working poverty and particularly improve prospects for women, their families, and other disadvantaged groups that are disproportionately represented among minimum wage earners. -The minimum wage for tipped workers should be raised to the same floor that applies for all other workers.
Raise the income threshold for mandatory overtime
-The New Deal’s Fair Labor Standards Act requires that workers who work more than 40 hours a week get overtime pay, at a rate of 150 percent of their regularly hourly wage. However, the act exempts some employers, executives, administration, and traveling salespeople, among others. To provide a base level of coverage, the Department of Labor has periodically issued a rule that establishes an income threshold under which any employee must be paid for overtime. -The current threshold of $455 a week, or $23,660 a year, was last updated in 2004, and covers just 11 percent of the salaried workforce. In 1975, 65 percent of salaried workers were covered by overtime rules; if the 1975 threshold had kept pace with inflation, 47 percent of workers in 2013, rather than just 11 percent, would have received overtime. -The Department of Labor should raise the threshold to restore this pillar of middle class income, ensuring that the majority of salaried workers are covered.

Expand access to labor markets and opportunities for advancement

Reform the criminal justice system to reduce incarceration rates
-The United States has the highest incarceration rate in the world. -In addition to incurring direct costs, mass incarceration reduces employment opportunities and wages, and increases dependency on public assistance for a large share of the population. -The total public cost of incarceration was more than $31,000 per inmate in 2010, according to a study by the Vera institute. -Those who have been locked up end up facing lower hourly wages, annual employment, and annual earnings. This burden falls disproportionately on men of color. -In 2008 the US economy lost the equivalent of 1.5 to 1.7 million workers, or roughly a 0.8 to 0.9 percentage-point reduction in the overall employment rate. -Congress should reduce the burden ex-felons face when searching for jobs by expunging certain records after a set amount of time. -Mandatory minimum sentencing particularly targets people of color. -African-Americans and Latinos accounted for 69.8 percent of mandatory minimum sentences in 2010; tackling this issue will effectively reduce part of the inequality inherent in the nation’s sentencing rules. -Congress should allow judges the ability to waive mandatory minimums. -The DoJ should focus on encouraging alternatives to incarceration. -Inaccessibility to quality attorneys results in disproportionately harsh sentencing for the poorest. According to a report from the Brennan Center of Justice, a concerted effort to reclassify nonjailable offenses, increase public defense funding, and improve effectiveness through regular attorney and social worker training would ensure more equitable access to representation. -Onerous fees at every level of the criminal justice system generate severe financial burdens for the poor and create further points of entry back into the incarceration system.
Reform immigration law by providing a pathway to citizenship
-More than 11 million undocumented immigrants live and work in the shadows of the U.S. economy, in every corner of the country and every sector of work. -The broken immigration system is costly to businesses, who face risks of an uncertain labor supply. -Exploitation of undocumented immigrants drives down wages and working conditions throughout the labor market. -The federal government must provide a pathway to citizenship for those already here and simplify the process by which new migrants can continue to come and contribute to America’s economic success. -We should cease the deportation and internment of all but violent criminals and to normalize the legal status of families working, learning, and serving in America. -We should better coordinate the efforts of different parts of government to enforce immigration laws in ways that don’t undermine the conditions for people working here. ICE should take a back seat to the Department of Labor to ensure that unscrupulous employers cannot easily threaten workers with the prospect of deportation by calling in worksite raids. -Congress should ensure that labor laws apply to everyone, regardless of their documentation status.

Expand economic security and opportunity

Invest in early childhood through child benefits, home visiting, and pre-K
-The state run Maternal, Infant, and Early Childhood Home Visiting Program is one of the most effective investments of taxpayer dollars. -One proposal that should be considered is a universal child benefit, a monthly tax-free stipend paid to families with children under 18 to help offset part of the cost of raising kids. -The U.K. recently cut its child poverty rate by more than half through a package of anti-poverty measures, including a universal child benefit. -Congress could immediately expand funding to provide pre-K childcare subsidies to all currently eligible children, expanding access to 12 million children at a cost of $66.5 billion.
Increase access to higher education through more public financing, restructuring student loans, and increasing scrutiny of for-profit schools
-The G.I. Bill helped create the middle-class society that we had aspired to partly by providing free education to returning soldiers. -It’s not true that we can’t afford similar programs, we cannot afford not to ensure that all young Americans get the best education for which they are qualified so they can live up to their potential. -The government should look to follow the lead of Australia and adopt universal income-based repayment, in which repayment consists of a set percentage of future income. Students could then repay their student debts more easily - at much lower transactions costs - through withholding. -Removing bankruptcy protection for those with student loans, particularly in the 2005 policy change under the Bankruptcy Abuse Prevention and Consumer Protection Act, has done nothing to reduce bankruptcy filings resulting in costly defaults. It has extracted money from poor students that goes into the coffers of the banks. The government should restore those protections. -One way to improve outcomes for graduates is to increase scrutiny of for-profit schools, which receive a large share of government-funded loans or government-guaranteed loans while failing to provide students with a quality education. Eighty-seven percent of revenues at for-profits come from federal or state sources, including student loans and Pell grants. Though they teach around 10 percent of students, they account for about 25 percent of total Department of Education student aid program funds. Studies show that those at for-profit schools do poorly compared to those at community colleges. Completion rates are poor, as is success in getting a job.
Make health care affordable and universal
-The health care system is rife with the kinds of market failures that economists have studied extensively, including information asymmetries and imperfections in competition. -Hospitals, physician networks, and health care insurers increasingly operate in conditions approaching monopolies. -Patients largely have neither the medical expertise to perform the cost-benefit analyses necessary for making optimizing choices about the care they need, nor the access to price information for comparison shopping, leaving providers to determine both the demand and supply of health care. -Medicare, with its record of controlling costs and delivering better outcomes, should be opened to everyone. Competition from Medicare’s entry into the insurance exchange would lower premiums for everyone; one study found increased competition on exchanges could lower fees by an estimated 11 percent.
Increase retirement security by reducing transactions costs and the exploitation of retirees, and expanding Social Security
-More people in America will face retirement with inadequate savings, driving down their consumption and/or diverting it from others, or relying more heavily on social transfers. -Expanding the Social Security system to include a “public option” for additional annuity benefits would enhance competition, driving down costs and increasing services. -Research shows that the average 401(k) participant could lose up to a third of future savings in fees. Requiring fund managers to adhere to a fiduciary standard would be an important move in the right direction. -We could require that any pension or retirement account eligible for preferential tax treatment not have excessive transactions costs. Fees on any account could not exceed those on the best-performing indexed funds, unless there were demonstrably higher risk-adjusted returns. -We should remove the payroll cap that limits the amount of revenue Social Security raises to help make Social Security self-sustaining, budget-wise.
Reform political inequality
-Policies favored by the wealthy receive attention, while policy preferences of poor and middle-income Americans are ignored. -People with higher incomes vote more frequently than those with lower incomes and election campaign finance is dominated by a relatively small number of large donors who wield outsize influence. -Voting should be made easy: we should establish a federal system of universal voting that includes automatic voter registration, accepted throughout the country without the need to reregister and without burdensome voter identification requirements; the ability to vote by mail or early in-person on multiple days; the establishment of weekend Election Days or a national election holiday; and online voting when cyber-security concerns are met. -A constitutional amendment could go a long way toward allowing Congress greater leeway to reform campaign finance laws to increase political equality. -We could require shareholders to vote in support of any political contributions before they can be made.
This post is almost as long as Reddit allows, so nice job reading all of this if you have. Now, what's all the disagreement about? How is Stiglitz wrong?
submitted by Skeeh to neoliberal [link] [comments]

[Book Summary] Delivering Happiness: A Path to Profits, Passion, and Purpose

Book name: Delivering Happiness: A Path to Profits, Passion, and Purpose
Author: Tony Hsieh
About: Delivering Happiness resembles an autobiography of Hsieh with business and life lessons sprinkled throughout the story.
This summary attempts to keep the plot and structure of the book while emphasizing the lessons.
Quick summary about the author: Tony Hsieh co-founded LinkExchange, which was later bought by Microsoft for $250 million. He then started an investing, playing poker, and a whole bunch of other things before the 2008 recession. During and after the recession, he doubled down on being the CEO of Zappos, an online shoe company. After Amazon acquired Zappos, Hsieh claims to have found the path to profits, passion, and purpose.
The structure of Delivering Happiness:
——————————————————
Introduction: Finding My Way
SECTION I: PROFITS
Chapter 1: In Search of Profits
Chapter 2: You Win Some, You Lose Some
Chapter 3: Diversify
SECTION II: PROFITS AND PASSION
Chapter 4: Concentrate Your Position
Chapter 5: Platform for Growth: Brand, Culture, Pipeline
SECTION III: PROFITS, PASSION, AND PURPOSE
Chapter 6: Taking It to the Next Level
Chapter 7: End Game
Epilogue
——————————————————
Introduction: Finding My Way

Section 1: Profits

In Search of Profits
You Win Some, You Lose Some
I made a list of the happiest periods in my life, and I realized that none of them involved money. I realized that building stuff and being creative and inventive made me happy.
Diversify
I realized that whether in poker, in business, or in life, it was easy to get caught up and engrossed in what I was currently doing, and that made it easy to forget that I always had the option to change tables. Psychologically, it’s hard because of all the inertia to overcome. Without conscious and deliberate effort, inertia always win.
They were expensive lessons, but I guess what I ended up learning was that it’s a bad idea to invest in industries you don’t understand, in companies you don’t have any control or influence over, or in people you don’t know or trust.

As our group grew, I realized that forming new friendships and deepening the connections within our burgeoning tribe was bringing both a sense of stability and a sense of excitement about the future for all of us. The connectedness we felt was making all of us happier, and we realized that it was something that we had all missed from our college days. It was something that, like many people, we had unwittingly lost upon graduating from college, and we didn’t realize how much we missed it until we accidentally re-created it for ourselves.

Section II: Profits and Passion

Concentrate Your Position
He talks about what separates the great companies from just the good ones over the long term. One of the things that he found from his research was that great companies have a greater purpose and bigger vision beyond just making money or being number one in a market. A lot of companies fall into the trap of just focusing on making money, and then they never become a great company.
Platform for Growth: Brand, Culture, Pipeline
Looking back, a big reason we hit our goal early was that we decided to invest our time, money, and resources into three key areas: customer service (which would build our brand and drive word of mouth), culture (which would lead to the formation of our core values), and employee training and development (which would eventually lead to the creation of our Pipeline Team). Even today, our belief is that our Brand, our culture, and our Pipeline (which we internally refer to as “BCP”) are the only competitive advantages that we will have in the long run. Everything else can and will eventually be copied.
note: The following is quite advanced:
Note: This summary is over 40000 characters long. The rest is continued in my comment below.

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Introduction to Financial Spread Betting How Spread Betting works Spread bet the financial markets with CMC Markets Next Generation trading platform The Efficient Market Hypothesis and Technical Analysis Financial Spread Betting Explained Forms of Market Efficiency  Portfolio Management (FINC201)

The degree to which markets incorporate information is one of the most important questions facing economists today. This book provides a fascinating study of the existence and extent of information efficiency in financial markets, with a special focus on betting markets. OZON предлагает выгодные цены и отличный сервис. Information Efficiency in Financial and Betting Markets - характеристики, фото и отзывы покупателей. Доставка по всей России. Information Efficiency in Financial and Betting Markets. Betting markets offer economists a fascinating case study of how information efficiency operates in a market. They incorporate features highly appropriate to a study of information efficiency, as each bet has a well-defined end point at which its value becomes certain. Information Efficiency in Financial and Betting Markets Betting markets offer economists a fascinating case study of how information efficiency operates in a market. They incorporate features highly appropriate to a studyofinformationefficiency,aseachbethasawell-definedendpointatwhichits The degree to which markets incorporate information is one of the most important questions facing economists today. This book provides a fascinating study of the existence and extent of information efficiency in financial markets, with a special focus on betting markets.

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Introduction to Financial Spread Betting How Spread Betting works

The efficient market hypothesis theory assumes every investor is rational and they act with clarity making logical decisions. I don't subscribe to that at least from a short-term perspective. What do you think of the efficient-market hypothesis? It's not the news which drives price trends; it's the behaviour of buyers and sellers and these cycle according to psychology. How true is ... CMC Markets is a global leader in online trading, offering spread betting and Contracts for Difference (“CFDs”). Learn how to spread bet and how to trade CFDs with our variety of educational ... Financial Spread Betting for a Living using IG Index, Cator,Capital Spreads,CMC, City Index - Duration: 8:09. Vince Stanzione Making Money From Trading 13,632 views 8:09 The efficient market hypothesis (EMH), alternatively known as the efficient market theory, is a hypothesis that states that share prices reflect all information and consistent alpha generation is ...