Trading the stockmarket (NO Referrals)

regulus · 30 Mar 2020 at 21:16

Skeptic said:
Stocks up even though 200K+ deaths predicted! Money > People

Stocks ≠ the 'news'.

A cursory glance of NZ news would have you think the moment you step outside the door you'll be confronted with a world straight out of Days Gone, hordes of flesh eating zombies roaming around in groups and burnt out houses and cars everywhere. New York supposedly looks like a post apocalyptic planet despite people sharing photos of it still looking and pleasant as always.

I only know about my industry and we're about to ramp up our already massive recruitment drive, despite our senior management in Australia expecting the local isolation period to increase to 6+ weeks.

Yes, I agree when looking at the 'MURDER, DEATH, KILL!!, WAR!! WAR!!!!! KILLER VIRUS!!!! BILLIONS DYING IN THE STREETS!!!!' clown headlines it does seem strange, but I'm enjoying the low stock prices while it lasts.

I'm expecting to be back in the overall green on Thursday morning.

Minusorange · 30 Mar 2020 at 22:26

Oil value reached its lowest since 2002

https://www.bbc.co.uk/news/business-52089127

Yet oil company shares continue to rise

Go figure...

regulus · 30 Mar 2020 at 22:31

Well, wouldn't it be a good time to buy now, knowing the oil prices will eventually rise again and profits along with that?

Jimmyjam · 31 Mar 2020 at 01:34

regulus said:
Well, wouldn't it be a good time to buy now, knowing the oil prices will eventually rise again and profits along with that?

On 1st April the opec+ deal comes to an end, the Saudis have millions of barrels of oil on standby ready to flood the market, oil price will be coming down to single digits over the coming weeks, do not buy oil just yet.

Fusion · 31 Mar 2020 at 07:30

There’s very little change oil prices will stay this low long term. I’d be surprised if any major producing nation can balance the countries’ books at $20. Extremely low demand is going to be a very short term thing.

Theophany · 31 Mar 2020 at 08:38

dowie said:
Yeah they're basically bucket shops tbh..

Almost certainly they're not going to hedge most client trades - average trade size would likely be smaller than they can directly hedge anyway, probably more just concerned about their overall inventory risk. Various firms seem to have implemented some form of dealer surveillance tool - one of my mates was involved in developing one at a large SB firm years ago - just the process of flagging up a customer's orders to a dealer inherently slows them down significantly and of course a human dealer is prone to slipping prices when it suits and/or giving adverse fills instead if it goes against the customer etc..
One thing they used to be concerned about is scalpers - not random day trading idiots but people who might use their own price feed and spot where the SB/CFD firm is slow to update prices the try to pick them off - though easy enough to catch those people and things like dealer surveillance tools will instantly ruin their game. Not sure that is so feasible these days but years ago they'd not be on top of everything when trying to stream prices for hundreds of different products and just like a regular bookie someone paying attention could start picking off some of their quotes etc..

I always wondered if it would be possible to beat them at their own game if I had access to a Bloomberg terminal, now I know it wouldn't be

Minusorange said:
Oil value reached its lowest since 2002

https://www.bbc.co.uk/news/business-52089127

Yet oil company shares continue to rise

Go figure...

Don't forget a lot of those companies have also been investing aggressively in green energy for a long time, so whilst the core commodity and demand for it is down, a lot of the companies still have strong long-term fundamentals.

Minusorange · 31 Mar 2020 at 10:34

Theophany said:
Don't forget a lot of those companies have also been investing aggressively in green energy for a long time, so whilst the core commodity and demand for it is down, a lot of the companies still have strong long-term fundamentals.

Only the major companies and we're yet to see the fruits of their labour when it comes to green energy, demand for oil is going to be very very low for months and probably longer if airlines start going bust due to nobody being able to fly, the oil economy can't rely on just demand from cargo transport not at the rate they're pumping out barrels, the likes of Shell/BP will cut back on production but that means laying people off as well so they're no longer as profitable due to reduced production combined with the cost of oil, I know the market is going retarded at the moment but this really stands out as not making any sense at all, the future looks bleak for oil especially if Russia & Saudi continue their pumping war.

Fusion · 31 Mar 2020 at 10:55

Minusorange said:
the future looks bleak for oil especially if Russia & Saudi continue their pumping war.

And how long do you think they will want to sustain that for, given that their finances will be going increasingly pear shaped as these rock-bottom prices continue?

Minusorange · 31 Mar 2020 at 11:27

Fusion said:
And how long do you think they will want to sustain that for

Until their goals are met, this is Russia & Saudi, neither like to lose

StriderX · 31 Mar 2020 at 12:05

Fusion said:
And how long do you think they will want to sustain that for, given that their finances will be going increasingly pear shaped as these rock-bottom prices continue?

What finances? Just print more money, everyone else is doing it... (I know technically they aren't, but i'm sure there's a way)

Andrew_McP · 31 Mar 2020 at 12:13

Stock tip: invest in anyone that makes posh sheds. I confidently predict that millions of people are now realising they're cheaper than a lifetime of therapy.

Theophany · 31 Mar 2020 at 12:16

Minusorange said:
Only the major companies and we're yet to see the fruits of their labour when it comes to green energy, demand for oil is going to be very very low for months and probably longer if airlines start going bust due to nobody being able to fly, the oil economy can't rely on just demand from cargo transport not at the rate they're pumping out barrels, the likes of Shell/BP will cut back on production but that means laying people off as well so they're no longer as profitable due to reduced production combined with the cost of oil, I know the market is going retarded at the moment but this really stands out as not making any sense at all, the future looks bleak for oil especially if Russia & Saudi continue their pumping war.

Fair point. I think I read some analyst at Goldman Sachs was pitching the possibility of negative oil prices as producers will find it is cheaper to pay people to take it off their hands than it would otherwise be to shutdown production now and have to restart it in the future. Seems a bit pessimistic to me though as the spot prices price per barrel for has come back a bit in the last day or so for Brent and WTI.

Fusion said:
And how long do you think they will want to sustain that for, given that their finances will be going increasingly pear shaped as these rock-bottom prices continue?

Tough to say, they're both sitting on roughly the same amount of foreign currency deposits which will tide them over for the time being. The difference is that Russia needs an oil price of around $40-45 per barrel to balance its books, whilst the Saudis need it to be around $80-85 per barrel to balance their books. Don't forget there was nothing economically sensible about what happened; Russia was happy for oil to fall from the roughly $60-70 per barrel it was at the beginning of the year to hurt the US shale industry but the Saudis were committed to curbing production as tankers were being turned away from China, the biggest consumer of oil. Russia has quite literally cut its nose off to spite the US' face.

413x · 31 Mar 2020 at 12:34

Oil will be suppressed for a while.
If people carry on working more from home etc it's not gonna help the oil companies

Its great for environment however!

I was tempted by the big oil players, but think there are better companies

Certainly would be concerned about small players in oil.

md85 · 31 Mar 2020 at 15:44

Is everyone predicting a further drop and bottom still confident? That's 5 sessions out of the last 7 that have been positive (including today, still open).

StriderX · 31 Mar 2020 at 15:47

Well central banks are diarrhetically ******** out cheap money, so I doubt it.

mid_gen · 31 Mar 2020 at 16:38

Less confident given the astronomical sums of free money being given away. There's so much cash floating around at the moment, it has to go somewhere.

But, I think we are yet to see the really ugly scenes in London and New York, which will resume downward pressure, at least for a while.

BennyC · 31 Mar 2020 at 17:58

md85 said:
Is everyone predicting a further drop and bottom still confident? That's 5 sessions out of the last 7 that have been positive (including today, still open).

Take from this what you will.

You don’t have to look far to find an argument in favour of whatever you might be willing to happen.

https://www.ii.co.uk/analysis-commentary/chart-week-ftse-100-about-do-ii511088

Theophany · 31 Mar 2020 at 22:11

md85 said:
Is everyone predicting a further drop and bottom still confident? That's 5 sessions out of the last 7 that have been positive (including today, still open).

If you buy the market today, you're buying at a roughly 25% discount to the year-to-date peak. If you're a long term investor, that's quite an entry point. If you're looking at an individual stock selection level, well there does appear to be a rotation into value occurring rather than the growth-chasing we've seen over the last couple of years. Over that period just 5 companies have been responsible for the vast majority of the S&P500's growth and unsurprisingly they're all hypercap companies because it's a cap-weighted index.

Everybody and their aunt has an opinion on whether there will be a U-shaped recovery, a V-shaped recovery and all manner of dead animal bounces. Bottom line is you'll make 3/5ths of sod all in cash over the long term simply because sovereign debt levels are now at a point where Central Banks are essentially bound to interest rate levels that keep that debt serviceable, i.e. as low as possible.

Nobody knows what will happen tomorrow, but the information that is available today is sufficient to make long term investment decisions at a personal level in my experience.

Psycho Sonny · 31 Mar 2020 at 22:34

made 700% on my latest investment - completely serious too. maybe even higher as i've still got some to sell. made my initial investment times 7 so far. could break the 1000% barrier.

Trusty · 31 Mar 2020 at 22:52

md85 said:
Is everyone predicting a further drop and bottom still confident? That's 5 sessions out of the last 7 that have been positive (including today, still open).

Yes, end of this week or next week, some news might come out that'll kickstart it. Test 18k on the DOW, if that doesn't hold, then down to ~15k.
Definitely getting my shorts ready..