by Travis Johnson, Stock Gumshoe | February 7, 2020 4:43 pm
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Travis,
THANK YOU very much for your insight and analysis and all that you do to save all of us members boatloads of money on these newsletters that just want to rob us of our hard earned dollars, that continue to depreciate, on stocks which usually don’t perform as they saw they will . Your response to the new member is sincere, thorough, and thoughtful. OH! Thank You to the Thinkolator as well. 🙂
I concur with Mike. Thanks for all you do. The valuation of the entire market is insane and it’s impossible to predict when the collapse will occur and by how much. Last year I sold a portion of my tech ETF and only watch it going up another 30% since the sale. The higher the market goes the harder it is to get back in, worrying about the potential crash.
Having said that, do you have any REIT you like beside COR?
The ones I own right now are CCI, IIPR, MPW and PW, with KW as kind of an honorary REIT. They’re all probably really at “hold” valuations at these prices, given the huge run so many REITs have had. Generally these yield-focused investments get more appealing when there’s a little panic over raising rates or inflation, but haven’t seen much of that recently so investors continue really pushing for yield.
Yes they all have gone up quite a bit. I might have to just buy a little bit. Thank you.
Hello , Although there will be pullbacks (less than 10%) and corrections (more than 10%0 which is normal, the market will continue to advance to 2023 with the Dow reaching 40,000+/-. What you are about to see is what is referred to as a “‘meltup.” The market will advance in leaps and bounds. When the party is over, the market will not crash. Rather there will be a slow decline over many years taking us into a bear market that will las for some time. Do not sell stocks. Buy more!
I like your 40000 mark but how do you know the market will go steady down after that? The market is not trading based on fundamentals anymore. It is driven by F. O. M. O and greed and partially based on companies’ earnings potential, which may or may not materialize. I am unable to project the market based on rational thinking.
I admire your confident forecasting.
Thank you for the great explanation on the warrants for virgin galactic. I got in at $2.40 so your examples were quite helpful.
Hey Travis,
Speaking of all-time-highs for the stock market, how much do you recommend in cash holdings for retirement and non-retirement accounts?
I held 10% for awhile in cash until ~3 years ago when I upped it to 15 percent.
Curious as to your input.
I’m not a financial advisor, and everyone’s situation is different… but I’ve been usually keeping cash around 10-15% for the past few years because I persist in thinking we’ll have good buying opportunities in some future dip. So far, that’s been a drag on my portfolio. Right now I’m slightly below that since I’ve put on a few new little positions.
Simulations Plus in my opinion is a very good company.
I bought it on 5/28/10 for $2.45 and sold it on 7/11/19 at $30.74 .
My reason to sell-age and owning too many atocks.
It was a recommendation of The Bowser Report.
Value Line Special Situations recommended it on 12/18 at 19.36.
They have a stop loss at 27.
I don’t buy stocks based on take over basis, but I think this could be candidate.
Good luck, Travis.
Simulation Plus has definitely great and useful technology for the Pharma (human and vet) industry.
The problem I see is that they serve a very limited market and many of its customers might be tempted to develop the technology inhouse (things would have been different if the tools provided by SLP would have had a generic and a specialized layer – allowing Pharma to add their proprietary components). While looking at the Health Care another company is mentioned often Accelerated Diagnostics (AXDX) – It addresses a larger market a has seen a lot of volatility. Do you have an insight on it?
Nope, but thanks for the feedback — I’ll add that to my list as I keep researching.
What is the Netflix Killer mentioned by Motley Fool?
Generally those teases are about The Trade Desk, mostly because of their exposure to streaming video advertising — with streaming ads providing funding for all the Netflix competitors who, unlike Netflix, offer free or lower-cost ad-supported video.
thx
Trade Note:
MGM Resorts (MGM) reported earnings, which missed by a bit, largely because of weakness in Asian visitors to Las Vegas and the slowdown in baccarat in that area (which predated the coronavirus, that’s been a challenge throughout Las Vegas recently). That jibes with what I saw in Vegas in early January — the city is crowded, but the gambling floors in the casinos are not… and if the high roller rooms of slot machines and baccarat aren’t full, the casinos aren’t making as much money as they’d like.
So is it time to sell? Las Vegas is a little disappointing, Massachusetts is well below expectations, China is closed, and it’s almost certainly going to be a bad year overall. It will certainly be an unpredictable year, since the Macau casino reopening and the slowdown in global travel are certainly temporary but aren’t on a preset schedule, and MGM pulled their 2020 revenue and earnings guidance.
Investors may look past that to good years ahead, and there’s something to be said for MGM’s strategy of de-levering and shifting the business model to being a hotel operator instead of a property owner (it worked great for Marriott, though that’s a different story and relies more on franchisees than on just offloading real estate), but unless they really try to leverage their brand more aggressively, are able to build out their US sports betting business a lot faster than I suspect will be the case (sports betting is going to rapidly go almost entirely online, I expect), or they get a meaningful deal going for expansion into Japan, all of which are possible as they transition to a new CEO, things will probably be pretty moribund at least for this year. This is a small position, and I don’t have a lot of conviction about the long term strength of the company, so I’ll take my profits and leave the table instead of sitting around for a few more watered-down whiskys while the pile of chips erodes.
I originally invested in MGM because of the transition to selling off real estate and the participation by Starboard Value a year ago that helped to “shake up” management, but I conclude that the easy “close the gap on valuation” money has now been made, I’m cashing it out for about a 22% gain in a little over a year. I didn’t hit the top, but I don’t have any certainty that we’re near the bottom in this one either — I do like the brand and their leadership in Las Vegas, but with Vegas also disappointing and the stock still trading at a premium to the broader market, with all of their huge real estate deals now done, I’ll wait until pessimism settles in again to consider buying back into MGM Resorts.
FYI Stansberry just issued a buy on MGM.
Ha! I guess that’s why we’ve got a market. If memory serves, Porter has been a big fan of MGM for years, so I imagine this isn’t the first time they’ve recommended it.
I wanted to be smart and tell you that MGM should be good to hold during a recession as a casino stock but then I saw the chart form 07-08 when it became a pennystock, so no worries, you are all good.
Travis, You mentioned Sports betting, beside PDYPY, any others you feel worth looking at?
Thanks.
Draftkings (currently merging with the blank check stock DEAC, assuming the deal goes through) is interesting, but I haven’t invested in any of them.