by Travis Johnson, Stock Gumshoe | May 8, 2020 5:51 pm
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I was reading on my mobile and never saw the name of Oxford Club’s $3 stock from the last newsletter. What is it?
That’s their long-running tease of Hin Hai/Foxconn
Alex Green, of the Oxford Club, has been hyping this stock for well over a year now (Foxconn is the commonly used name for the company; but it trades under Hon Hai Precision Industry Co. Ltd.) It’s been touted as “The Single-Stock Retirement Plan.” Haven’t followed how it’s been doing, price-wise, but my impression is that it hasn’t gone up much since it was recommended by Alex.
I invested 6k a long time ago on Alex reco on Foxconn.after whatever happened I’m down 15 %. I don’t know how Alex says he is up. But I’m gonna let it sit. It does not seem the company knows how to make the stock price go up. I’ll hold it as long as I hold Apple . I guess.
Great as always mate…Love your work . Also G’day from Australia .
Was there anything in particular behind SAND dropping 6.66% today?
That’s not such a big move for them lately, I’d say the word of an equity offering and a weak day for gold could be the reason.
Thanks for your thoughts & wisdom Travis ~ Your time is appreciated.
From LA
Lower Alabama…
Hi Travis quick quesion on my GAN shares, they went to zero in my brokerage account on the day of conversion but haven’t re-appeared as the new Nasdaq listing. I havent had a response from the broker but i was under the impression that this should have happened automatically the next day. Is this correct?
Did you hold shares in London or OTC? The London shares transferred quickly for me, though it did take a day or two for my account to reflect the change properly. I’ve seen cases where it has certainly taken brokers a few days to handle an odd change like this, so it will probably shake out just fine given a few more days, but it’s not impossible for brokers to make mistakes or neglect a little thing like this where there are very few shareholders involved. I’d give them a call if you’re concerned.
Thanks Travis, i held the UK shares.
I am sharing the point of view of someone I do not know at all but got me to become even more concerned about the market. It was posted following a Youtube video. The content of the video is not necessarily the point of my post. The author of the video gets a lot of flak in the comments below his vid from people who do not agree with his assessment. But, this is not what got me to consider putting info on this post. It’s a point of view. We all know that “we shouldn’t take advice “from the Internet” “, but I must admit that the person that posted the first comment under that Youtube video put a lot of thought into his/her comment.
This makes it a long post so I hope I am not breaching any rules about this forum. It can be found at: https://www.youtube.com/watch?v=SWqjrd0c4Cs .
Here is what the person posted :
—
“Why stocks will go down much more:
1) 330 Trillion dollars of very poor credit market debt that needs to be
deleveraged and the Fed’s 1 Trillion farts can’t do anything to stop this.
Japan has been doing for 30 years what the Fed is trying to do now. Guess what: it won’t work when the world has 330 Trillion dollars to deleverage by at least 50%. We’re in a deflationary trap and spiral.
2) Corporate share buyback Ponzi model has come to an end as public
pension funds (states, municipalities, cities, etc.) have no tax revenues
presently to buy corporate bond issuances to fund corporations who use that very money to buy and drive up their own stock to stuff management’s pockets with bonuses.
3) 90 cents of every dollar S&P 500 companies earned in the last 5 years
also went towards corporate buybacks combined with an unprecedented issuance of corporate debt and equity dilution helping this endless Ponzi scheme.
4) Economy for over a decade barely growing at 1% average despite all the
above Endless rounds of QE for 12 years now, interest rates pushed to zero punishing savers and tax cuts that were really not necessary.
5) Consumer debt to income ratio at unsustainable all time high levels
(175 debt to income ratio and climbing higher as well as 12 times debt to savings ratio and climbing higher) with real unemployment (unemployed, underemployed and not counted in workforce) at 50% plus and the remaining workforce seeing their hours and salaries cut.
6) All stock market indicators at all time high levels. P/E over 30,
Price to Sales Ratio over 2.5, Enterprise Value to EBITDA over 25, Buffet Indicator (Market Cap / GDP) over 135%, Shiller P/E over 27, Q factor (the market value divided by its assets’ replacement cost) at 1.76.
7) Bond market has been screaming major recession/depression and
deflation for almost a year with yield curve inverting three times and the
30-year T trading almost at 1% (totally crazy).
8) M3 essentially at zero with consumer (70% of economy traditionally and 90% in 2019) tapped out on debt and 50% unemployed/underemployed.
9) Corporations (30% of economy) already in recession since the start of
2019.
10) The corporate bond/debt market in the mother of all bubbles with 90% of bonds trading at one notch above junk status.
11) The IMF has stated that this year, the global economy will experience
the worst recession since the great depression. It has also stated that for
the first time since the great depression, both advanced economies and emerging markets are in recession with growth in advanced economies at -6.1% with income per capita projected to shrink for over 170 countries.
12) Debt to GDP of all developed countries in the 150-300% range…who would have thought.
13) The stock markets now are comprised of 5 companies representing 25% of the S&P and 40% of the Nasdaq. These percentages are beyond alarming and this never ends well.
14) Healthy stock markets don’t go down 35% and swing back up 30% in a
matter of a month. This type of volatility always signals lower prices
ahead. We’re in fact in horrible company…this is the fastest 35% downward move in the stock market. And only two other times the stock markets have gone up 30% this fast: the first leg up of the Great Depression and the first leg up of the Great Recession. We all know what happened afterwards…lower lows over the next year to two years.
15) Bear markets last on average 15 months. We’re not even in the second
month of this bear market.
16) Retired baby boomers pulling money out of the stock market like no
tomorrow, while millennials have no money to invest.
17) For those who are screaming inflation, they are dead wrong. Go study history and study it well: inflation only happens when demand overwhelmingly exceeds supply (which is not even remotely the case, it’s actually the total opposite i.e. there is so much supply of everything, we don’t even know what to do with it) or when a country prints money over money to serve its debt and has to keep doing that as they can’t print fast enough. We have none of those presently as it relates to the USA or the US$.
We are a two tiered system comprised of crony capitalism combined with the
worst part of socialism. Large corporations are benefiting during the good times and during the bad times when these same companies who should be going bankrupt or getting bought pennies on the dollar by more responsible corporations or getting merged with competitors are getting selectively bailed out by the Federal Reserve who is picking the winners and losers by their size and too big to fail criteria. Crony capitalism on the way up, socialism on the way down. This my friends is a broken corrupt system.
The stock markets are now trading in swings like penny stocks with all free
market price discovery destroyed and not an ounce of sound monetary policy left. You have a bunch of douchebag academics (who think they know best) not only fighting mother nature but also fighting the principles of economics where boom and bust cycles need to be normal occurrences left to their own
devices for productivity to improve over time. But the Federal Reserve
doesn’t give a hoot about the principle of economics and they have become
the real virus infecting the world because they have us play the game with one set of rules yet those rules are constantly broken by them to be the buyer/lender and owner of last resort and implement their grand scheme of becoming the world’s central bank and having the entire world as their slaved. If common folks had this behavior, they would end up in jail. And this is a virus we won’t be able to get rid of. Who wants to invest in a rigged market where prices are not based one bit on sound economics like reasonable P/E ratios, earnings, free cashflow growth and dividends where earnings are cratering.
The very timely Coronavirus is the medium that is exposing the fragility of this corrupt, selfish, self-centered astronomically over indebted over leveraged system.”
gsrider, I scanned the video but still couldn’t determine the author. My initial reaction would be that old cliche, “other than that Mrs. Lincoln, how did you like the play”? This person does not appear to be one who is long the market, but it would be very interesting to see where he is short. I would be very interested in discovering his strategy and what his investments are. This guy reminds me of Joe Granville who used to claim that the market was going to crash at any moment. Fortunately, for most investors that didn’t happen until 1987 and he had been forecasting crashes during the 70’s and the 80’s.
Regards,
Frank
Understood. This youtube vid was pointed out to me by a friend. I watched it and like you say, it is clear that the position reflected was for a Bear mkt direction. What got my attention was not the content of the video itself, but the series of points I cut and pasted from one of the person who contributed a comment. Some of those points I believe are things to track on our investment radar. Cheers.
Thanks for another well reasoned, well written review… my question is more of a macro nature… One of my Maudlin Economics family of newsletters opined that we are possibly in a “bull trap” time and that Marty Armstrong might be right that a correction to a March 23rd low (or worse) is possible… thoughts?
There doesn’t seem to be much discussion of the fact that gold royalty companies derive a lot of revenue from foreign countries that need dollars, and some of those countries have no swap lines, and mines will look like possible sources of dollars. I suggest that those with exposure to gold royalty companies look at https://www.youtube.com/watch?v=QPFl7X9R2VY
I don’t know how big the risk is. Maybe some people can comment.
I wouldn’t worry specifically about swap lines, but resource nationalism is certainly a constant risk in the mining sector — which is why little mines in unstable countries are not valued nearly as richly as similar-quality mines in North America or other historically “safe” jurisdictions. The royalty companies are all different on that front, but all the big ones are quite diversified across the globe — most royalty companies have anywhere from one to five or six mines that are of outsize importance to their results, so the risk in those can be imagined a little more clearly. For Sandstorm, most of their assets are in North and South America but clearly the biggest risk is Hod Maden in Turkey when it comes ot future growth hopes. Their riskiest current area is probably Burkina Faso, which suffered a dramatic surge in jihadist violence late last year and is home to two pretty large Sandstorm royalties on Endeavour’s Karma and Houndé mines.
Very good read, I enjoyed it. I hope everyone has great MOTHERS DAY
Thanks for a great Friday Report, as always, Travis, and specifically getting into a little more detail about the options.
Leap Options: Travis, Your options positions are very useful and made hefty profit by replicating your buys and sells. Thanks.
Hi Vadivel,
Where can you trade the #AMZN LEAPs, please? I can’t find them on French or EU stockbrokers platforms.
Options trading is much more restricted in different markets, so I’m not sure what options trading might be available in Europe. From my recollection, I think options work differently in Europe as well. Don’t know if US-listed stocks have options trading on non-US exchanges, sorry.
Thanks for the response, Travis! US-listed stocks being the lead for most of the “old world” SEs, options trading is available for US equities and products. I usually go for the simplest for me to understand and follow at this point in leverage products: turbos unlimited BEST. I’ll ask locally what an equivalent of LEAPs would be.
Thanks — the LEAPs term isn’t used all that much anymore now that those long-dated options are more widely available, there are some minor distinctions but the only real difference for most investors is that LEAPs are only available for January expiration and they go out much further — the maximum is about three years, depending on when you’re looking though 2 or 2-1/2 years is more common. Once you get within 6-9 months of expiration they’re identical to other options contracts.
Thanks for the added comment, it helps!
Hi Travis. I can see how portfolio specific options advisory might not work, but if you had the chance to provide general, beginner level options trading articles, I bet there would be many in the Gumshoe world who would find it informative. Your articles are easy to understand especially for the not-so-savvy investors like myself, so I’m certain you’ll do a great job explaining Options 101. Do consider!
Bill…. I agree . Options 101 is a greatly needed resource. I have tried to
follow using Etrades and got overwhelmed by lingo.
Best Regards and Great suggestion!
I trade options quite often but I keep it simple and only buy calls and puts. They probably gave you too much ‘lingo’ all at once. Like selling calls and puts, naked calls and puts, put spread, call spread, condor option strategy, iron condor, butterfly, iron butterfly. Maybe it’s me, but it doesn’t turn me on; it just seems like too much work. My advice would be to start simple by buying calls and/or puts. It can be quite exciting when you get it right; the percentage gains far exceed those of the underlying stock. And then if you decide you would like to expand the strategy, gradually explore the other techniques.
Thanks Bill, good suggestion.
I’ll sit in the front row!
Me too!
Travis, wasn’t there an “options thread” open on StockGumshoe a few years ago? Whatever happened to it?
Regards,
Frank
Wow Travis, you must be pinching yourself everyday. Now it’s #IIVI up 20% in after hours trading. Last week it was #FSLY with a similar move. To go along with all your other momentum stocks, #TDOC up 8% today, #SHOP up almost 6%, #NVDA up 3 1/4% , and quite a few others. It’s unbelievable!
I hope some big investment house doesn’t steel you away.
Ha! I actually stopped out of IIVI earlier this year, so I may be pinching myself with a few successes, but I can always find a reason to kick myself as well. Thanks for the kind words.
Words of wisdom from a twitter blog
Pressure is a privilege. Don’t run from it.
Don’t cling to a mistake just because you spent a lot of time making it.
No one’s good at everything. Find your niche and excel.
Trade Note:
Not a lot of detail here, but I did some selling and buying so I’ve got a little updating to share with you — I sold another chunk of my Power REIT (PW) shares as that shot to new highs for no apparently reason, and also took profits on the balance of my DraftKings Warrants (DKNGW) since I think the exuberance has gotten a little heated of late (I may get back into DKNG when it calms down a bit). I also added to my hedges with some additional S&P put options, and bought a little more Markel (MKL) when that dipped below 1.1X book value today.
More details tomorrow in the Friday File, stay tuned… it’s been a pretty busy week 🙂