patrick.net

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See below. Einhorn says the market has very little value investing. This is being worsened by passive investors such as those just pouring money into a S&P 500 index fund as part of their 401k and / or IRA.

As far as value or valuation, the S&P 500 is still not as bad as 1999: https://www.multpl.com/s-p-500-pe-ratio

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https://www.marketwatch.com/story/markets-are-fundamentally-broken-due-to-passive-investing-says-david-einhorn-0e480247

‘I view the markets as fundamentally broken…Passive investors have no opinion about value. They’re going to assume everybody else has done the work.’

— David Einhorn, president, Greenlight Capital

That’s hedge-fund titan David Einhorn arguing it’s tough out there for active money managers thanks to the seemingly inexorable rise of passive investing. The remarks came in an interview with Ritholtz Wealth Management co-founder Barry Ritholtz in his “Masters in Business” podcast.

“Value is just not a consideration for most investment money that’s out there. There’s all the machine money and algorithmic money which doesn’t have an opinion about value it has an opinion about price: ‘What is the price going to be in 15 minutes and I want to be ahead of that,'” he explained.

Amid what’s left of active management, “the value industry has gotten completely annihilated,” he said.

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I differ with Einhorn (see above post) in that the companies that are rallying have been achieving earnings for an extended period, unlike in 1999 with a lot of companies that never were profitable. I would state the active investing is now a lot less speculative compared to 1999.

For example, Google has a P/E of 27 which is rather low for a relatively new company; it went public in 2004 and it has shown steady growth in sales and earnings. Also it is focused on diversifying.

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Dr Michael Burry just bought Google and Amazon stock in 4th quarter of 2023... may be part of reason those stocks rallied in the 4th quarter

Bezos recently sold about $4 billion of Amazon stock

https://www.cnbc.com/2024/02/14/michael-burry-of-the-big-short-fame-buys-amazon-alphabet-and-a-dozen-of-other-new-stocks.html

Burry is starting to look like a one hit wonder.

Nope he's just running a classic pump and dump scam.

How does the media know what trades he's made? ? ? - He is the one that leaks it to them.

Warren Buffett took more than 50% loss on Paramount Global. His buys of Occidental Petroleum and Chevron seem to be indicating that oil price will increase in several months. Burry and Marks are both in JD. Any thoughts on PayPal, value trap or an opportunity?

Paramount global seems to go go down a lot and up , if someone can find trend , or political impact, we can make great $

Misc says

Nope he's just running a classic pump and dump scam.

How does the media know what trades he's made? ? ? - He is the one that leaks it to them.

His holdings are published quarterly as part of his SEC 13F filings, same goes for Warren Buffett, Ray Dalio, Bruce Berkowitz, George Soros, etc.
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What you guys think of 3M MMM it's around 91 $ with 6% dividend? It gave profit warning for 2024 n stock already went down.

KgK one says

What you guys think of 3M MMM it's around 91 $ with 6% dividend? It gave profit warning for 2024 n stock already went down.

gabbar says

What you guys think of 3M MMM it's around 91 $ with 6% dividend? It gave profit warning for 2024 n stock already went down.

That has been on my watch list. I plan to buy if it falls to $90.

MMM or 3M's stock is at 2007 price level :-/

Headset, sell 2 or 3 Puts at strike $90 that expires next Friday.



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HeadSet says

gabbar says

What you guys think of 3M MMM it's around 91 $ with 6% dividend? It gave profit warning for 2024 n stock already went down.

That has been on my watch list. I plan to buy if it falls to $90.

Selling $90P is not a bad suggestion if you’re looking to buy it at $90. 45 cents credit for this Friday and 85 cents next Friday.

If you plan to straddle, buy half position at this price, sell $92C for 68 cents credit and sell $90P weeklies to generate income.

There is a $6 billion lawsuit against 3M for faulty earplugs issued to the Pentagon.

Net income was negative $7 billion for 2023 for 3M.

It says in the previous post about the $6 billion lawsuit claims being paid over 6 years. 2024 may not be as bad a year as 2023 for 3M.

https://www.lawsuit-information-center.com/13-million-3m-earplug-verdict.html

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i’m researching REO/Foreclosures, gonna try to do eman type of business here buying foreclosures, remodel and sell. everyone starts somewhere.

$32.7B in sales
EBITA of $7.7B
$17B debt
$6B cash
Dividend costs $3.3B/year
Say the $17B cash costs $1B/year in debt service.

If they lose the lawsuit, it will cost them $1B/year for the next 6 years.

It looks sustainable, but they need to get back to being profitable ASAP.

FortwayeAsFuckJoeBiden says

i’m researching REO/Foreclosures, gonna try to do eman type of business here buying foreclosures, remodel and sell. everyone starts somewhere.

REO is different with foreclosures aka trustee sales/auctions. Tread carefully with the latter. REO is straightforward and is guaranteed of clean title while trustee sales aren’t.

REO means Real Eatate Owned (by the bank), which means it has been foreclosed. When bank sells it to the end buyer, clean title is a must for escrow to insure the policy.

There are two types of states…judicial and non-judicial. Foreclosing procedures are different. Please do your due diligence.

AD says

Headset, sell 2 or 3 Puts at strike $90 that expires next Friday.

Interesting. But I am buying this in an IRA account and I am buying strictly for dividends. I figure the price will bottom out at $90, and at $90 the quarterly dividends will give me 6-7% APR. Any rise in stock price would be gravy.

Oh, wait, I see what you mean. Use the puts to acquire the stock if the price stays above $90. Unfortunately, I do not have enough free cash in that particular account to buy 100 shares. It is just a 1-year IRA contribution that I have fun with day trading.

HeadSet says

Use the puts to acquire the stock if the price stays above $90.

I understand as I thought you would have $9,000 to make the purchase of 3M if the price closes below $90 at contract expiration on Friday (i.e., $90 strike Put option contract is in the money and you get assigned the 100 shares).

...

Looks like MMM is sitting on a pretty good volume shelf/support here at $91.

PSA. Robinhood is paying you 3% to roll over your IRA or 401K to their platform. If into a tIRA the bonus is pre-tax. If into a Roth the bonus will be taxable.

There are posters on Bogleheads that have rollled over enough to get a bonus of $75k. If there's a limit no one has reported it yet.

You have to sign up for their "Gold" plan for one year at $5/ month and the offer expires on April 30th.

This leads me to a question because I'm in the middle of an old 401k rollover with them :

If you had to pick any combination of the following 3 ETF's, where would you invest this chunk right now?

1) IUSG iShares Core S&P US Growth
2) SCHB Schwab US Broad Market
3) SCHD Schwab US Dividend Equity

1 & 2 are almost identical in their top 10 holdings, the difference being that IUSG is much more concentrated at the top (ie .. Both # 1 is MicroSoft but IUSG is at 12% While SCHB is at 6%)
3 is definitely more defensive with a PE of 14 versus 26 and 24 for the other two respectively and sports a 3.4% divi while the others are around 1%.

I'm torn because IUSG has been on a tear while SCHD is plodding but I also read zerohedge so I'm inundated with doom porn as far as the market goes. SCHB might be a compromise?

The funny thing about investors is that they would rather lose money in the market than pay even 25% of that amount in taxes.

They've got a goofy way of looking at things.

https://finance.yahoo.com/news/13-5-yielding-dividend-stock-095000269.html

Mpw has 14% div yield, but since doctors n not getting paid, their landlords aren't either. This may be temporary.

Is the div yield too high, something coming up?

Misc says

So ballpark about $5.25 Trillion each and every year at an ever increasing amount. Puts it at about 19% of GDP. At this point the Wall Street folks aren't even trying.

People should really regard their financial statements from their financial institutions as they would any other Wall Street propaganda. The sheer amount of malinvestment in unfucking real.

What are you saying, this is impossible?

Misc says

The funny thing about investors is that they would rather lose money in the market than pay even 25% of that amount in taxes.

They've got a goofy way of looking at things.

My dad... 1031'd multiple properties into more. Housing crash hit and he lost his ass. That's why they call it paper assets. I think he was at $8-10M net worth on paper. He had to BK, but as an attorney played some tricks to swap the properties to my mom's name.

After he died in 2019 she slowly sold off what was left. Got roughly $1M net and she has a $90k COL increase pension and a paid off house. So yeah, she's a widow and basically rich. My sister has her issues, but she's an attorney and makes good money. She's a widow as well. So my mom doesn't need to do shit for us. She does take my sister on vacations. I don't care. Her dead husband was a piece of shit.

Real estate as an investment is pretty risky to be honest. Most talk a big game, but you don't see their tax returns. Most RE inventors that said they were doing well were just borrowing from the equity from preforming properties and are leveraged to the gills. It's your own self made pyramid scheme. Sure you can borrow tax free or avoid cap gains taxes, but at some point shit hits the fan. I saw it plenty of times in my 15 years, plus my own dad.

If I could turn back the clock I'd have done commercial RE. Not store fronts. Warehouse and manufacturing. Still thinking of doing it. Just have to build the most expensive house in town.... FML. We need a bigger house though.

My friend owns a commercial building in Fremont, California.
It's straddling the Hayward Fault; someday it will be torn in two like a piece of paper. When? Nobody knows.
During the "pandemic" California law prevented him from evicting anyone; he immediately had deadbeat tenants who just refused to pay him.
Did he still owe property tax? Of course he did.

To beat a dead horse; if you want capital appreciation, buy a stock mutual fund. If you want income, there are funds whose objective is income.
You can get income from real estate in an REIT and not have to seek tenants or fix toilets.

stfu says

If you had to pick any combination of the following 3 ETF's, where would you invest this chunk right now?

1) IUSG iShares Core S&P US Growth
2) SCHB Schwab US Broad Market
3) SCHD Schwab US Dividend Equity

Depends on how old you are. If nearing retirement or in retirement pick #3.

zzyzzx says

stfu says

If you had to pick any combination of the following 3 ETF's, where would you invest this chunk right now?

1) IUSG iShares Core S&P US Growth
2) SCHB Schwab US Broad Market
3) SCHD Schwab US Dividend Equity

Depends on how old you are. If nearing retirement or in retirement pick #3.

There's still a Dogs of the Dow ETF, DJD, where the top 10 Dow stocks are chosen by dividend yields and thus, provide income. And then, they add a few other div stocks to round out the portfolio.

based on valuation, seems like a lot of downside risk

https://www.multpl.com/shiller-pe

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Not to brag (ok I'm bragging a little) between paying down debt aggressively (mortgage), growth and contributions to my 401(k) and a bit of appreciation on said home (bogus number to be sure) I'm up 15% so far thus year. Last year I had 20% growth. Buy and hold index funds and a couple of market specific ETFs in a Roth 401(k).

The couple of times I've tried day trading / short term bets with my "casino" money I've lost bigly.

My goal is to be able to retire at 55... Even though I don't see myself hanging it up that early.

As for 2025 I expect the AI bubble to pop, consumer staples to do well, and depending on who wins in November, defense stocks will go either way

GreaterNYCDude says

As for 2025 I expect the AI bubble to pop

Which stocks ? Nvidia ?

Seems like Amzn and Googl are not as at much risk since they are a lot more diversified and also Googl already has been beaten down due to the recent lawsuit by the federal government against it for being an internet search engine monopoly.

Googl is a very large fixture just based on the language saying "Google it" as far as researching a topic online.

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S&P 500 total return was around 26% in 2023

Year to date, S&P 500 is up 19%

seems like a lot more downside risk now just going by valuations and slowing economic indicators

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AD says

Which stocks ? Nvidia ?

That was the one that came immediately to mind. But I think even in the news / ad space you'll see far less hype about AI powered widgets in general.

GreaterNYCDude says

That was the one that came immediately to mind. But I think even in the news / ad space you'll see far less hype about AI powered widgets in general.

very true, and Googl and Amzn both have their "AI widgets" and are also "AI companies"

but are very diversified , and I consider them the "major integrateds" as far as "Artificial Intel companies", just like Exxon and Chevron are the "major integrateds" to oil and gas

Googl: Google Assistant on Android devices, Google Gemini, Google Home and Google Nest (i.e., Google Mini device)

Amzn: Alexa on Android and Apple devices, and Amzn devices like Amzn Fire tablets and Echo Show

to channel our inner AF: yams and ammo!!!

FortwayeAsFuckJoeBiden says

to channel our inner AF: yams and ammo!!!

I hope it does not get to the point that we have to go into extreme homesteading or survivalist mode, like almost out of a Mad Max movie.

That means extreme collapse, and a lot worse than the early 1930s.

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AD says

FortwayeAsFuckJoeBiden says

to channel our inner AF: yams and ammo!!!

I hope it does not get to the point that we have to go into extreme homesteading or survivalist mode, like almost out of a Mad Max movie.

That means extreme collapse, and a lot worse than the early 1930s.

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i’m already homesteading lol. more for hobby reasons, i do enjoy it. it is completely unnecessary and more difficult than not doing it.

The day after the election, my stock portfolio shot up by over $50k. However, it has dropped back down now $40k from that high. I think the Fed decision has a little to do with that, but maybe the rest was just an exuberance reaction by the market.

Anyone else have a similar experience?

HeadSet says

The day after the election, my stock portfolio shot up by over $50k. However, it has dropped back down now $40k from that high. I think the Fed decision has a little to do with that, but maybe the rest was just an exuberance reaction by the market.

Anyone else have a similar experience?

I don't watch it. Causes too much stress. I dump and forget. I'm not in anything remotely risky. Still in 7 figure land. Not complaining for my age. So assuming insolvency doesn't happen with SS we'll have two maxed out accounts, plus savings and assets.

We'll have no problem with $10-15k/mo with no kids. We'll be closer to $2-4k in reality at retirement. We've been planning very well.

It might be safe soon to dump ammo and yams.