Gregmal

Curious as Ive noticed and been perplexed by this for a long time, and it again seemed forefront and center after the META earnings(just as a prime recent example). We see it all the time when folks talk "macro" and "the market"....ticker ABC goes on multi year run, then regresses. The regression needs to be analyzed and theres often talk of whether or not "its warranted". Index pulls back 5-10% and "its been bad" for investors. Or "thats why its dangerous to be in stocks". COST falls 10% from ATHs and now its obviously because it was priced to perfection(rather than the entire two decades prior when it was also expensive)...Seems stupid and Im failing to understand why most investors arent agnostic to this sort of pointless fixation/type of analysis. Or if Im missing something and there is a huge benefit to this sort of stuff? If an instrument goes from $50 to $75 from January to September and then in Q4 from $75 to $60....my observation is that many investors, on December 31, would feel like they lost $15.

Funny thing with Disney is after bleeding for years, the only reason people started giving a shit again is Peltz. He started making noise again in October around $80/81. And then what do they do? Vote for the status quo LOL. Think the stock is already off about $10-12 since the elections. Would imagine this continues until...next proxy season.

Yea I grabbed a bit more Nintendo too. Really puzzling trader this one is. Fundamentals inflecting and stock drives to $15, and then sells off after a couple dumb hit pieces relating the the timing on new console, IE we are talking a few quarters, and now off $3+ from the highs.

Everyones gotta find their own process. And then the work begins refining it and evolving as an investors. In a world of "this is what youre taught"...everyone runs to the income statements. Personally, the first place I go when looking at an investment is the balance sheet. Why? Because Im not interested in crappy balance sheets. It only means...bad things. Poorly managed, declining profits, interest rate/refi risk...and many more derivative negatives. Whereas Ive made an absolute fortune, finding companies with pristine balance sheets, and "nothing really going on"....playing inflections or event driven stuff. CKX a good recent example. Nintendo falls into this bucket as well. When the balance sheet is a fortress, you have time to sit around and wait to see the cards turned. You can also employ your own leverage to put on the investment. Whereas some crapco with a huge debt burden, you sweat more and more with every tick of the clock.

Well why not base it on your own work?

Both are a waste of time. If Im concerned with the earnings power of something, I typically try to figure out what the next three years of earnings will look like. One year is such a small sample size; anything can happen in a year.

Bet the teachers are still getting paid though.

Sure there is. Look at all the spending packages being promoted as immediate and urgent. And all the other stuff they’re jamming in. War is always a great excuse to move money around

The amount of money and power available to the incestuous complex during times of “war” is too attractive to them. The complex includes military industrial but they’re just a piece of it. The powers that be love war. Look at how much freedom some were willing to give away to the government because of a bad flu strain a few years ago! Telling people they are in danger and in need of protection is the easiest snake oil to sell.

We need “wars” to excuse 2013s oil prices and inflation being a little higher than normal going into elections. Always have to have something to point a finger at…remember, Joe Biden told us the buck stops with him. Guess the dementia has taken its toll.

Think its very clearly in the interests of a lot of the establishment to keep this and Ukraine going.

Show of hands…who voted for this?

This really isn’t an issue for most companies. It’s only really related to investment managers and such, and those certainly don’t trade at a market multiple.

Conversely, Ill give you another...I earlier also wanted to hedge and the IWM has been money there the past few years. I wanted duration and there is plenty on the chain. But OTM and duration are tough. So I bought $220 Dec 2025 puts. Figured if we rip its ITM enough where I can take another stab while its still got some time to work out...IE 20% move from $205 Would still mean I can save the trade or size it up with a decent probability of it coming back in. So I could double down. Versus if I went for say $150 puts...its a hero trade kinda and a move to $250 more or less crushes the realistic odds I can ever salvage that strike. So in this case I like things where I can have the market be flat and not lose much, go down and make money, or go against me and trade it again.

Why go a week out? It’s funny you mentioned this because I got bored and saw a trade setup a couple weeks ago and just closed out pretty much this trade. TSLA at 175 looked good for a hedge. I didn’t want near dated stuff because I’d have to time it perfectly. I didn’t want to go too deep in the money because it’s a volatile stock and can quickly go against you…so less capital exposed was my goal. I settled on Sept $150 puts for $10.50 figuring the time value would buy me a few months to be right. But a quick move to about $150 would bet me 50-70%. Closed em out this morning for $16.5-17. So…what is your wager? Tesla gonna tank, fast. A timing call? Hedge you don’t care about not working out? Fundamental short…IE you need time for it to play out and just roll options? Most crucial thing with this stuff is how you structure it. Also keep in mind, VIX 20 vs VIX 14 matters too.