The Rokslide Stock Traders Thread

[MattB]

Correct but does help you achieve more coverage while primarily dealing with 1 bank.

Absolutely, we referred to that as a brokered CD program to keep it simpler for clients. But even that has limitations as only so many banks participate (~40 if memory serves, but that could just be the number my institution had agreements with).

 

[aftriathlete]

I've been adding, more today. Still in some for the long haul and some have been sold and bought back. No way oil isn't going to be relevant for quite some time and once the yahoo's get out of the way.......
Also: If oil was a loser why the heck would Buffet be in so deep and still be buying?

I don't disagree, I just question when will the yahoos get out of the way. The fundamentals are pitted against very powerful politics and geopolitics in my mind. I also pay attention somewhat to what Warren Buffett buys and sells, I was in OXY for a short bit last year for that reason. That man's a wizard. But I acknowledge the difference between Warren Buffett and I, the biggest being the modest money in my brokerage I need 2-4 years from right now for a home purchase when I finally retire from active duty. So everything I say is through that lens of my experience with things and the time horizon for my brokerage funds.

 

[MattB]

Since you directed this at me….
I realize you were part of the Silicon Valley banking in its heyday When making longshot bets with VC guys was a big payoff. Companies that had no earnings were doubling and tripling every year or more On pure speculation. money was being splashed on crazy speculative stuff and the stock market would just suck it up.

Those days are over.…or cut way back….at least for now. In fact many of those high flyers with no earnings are going to go under. My bet is that when the list of - Yes- Sketchy loans comes out that SVB is holding, it will be an eye opener.

We cannot just gloss over fundamentals…this is a bank…not some speculative high tech fund where folks realize their money is invested in higher risk assets. Depositors in banks use that money, many need it liquid and available …and they EXPECT to get their money back…not have it hanging out there.

The bank can’t hold a 30 year note paying +/-2% to maturity…they have to mark to market…those bonds dropped like a rock leaving them under capitalized….the regulators would have had to step in…though in this political environment…all bets are off.

If one is invested in a Cathie Woods ETF, they understand there will be risk. This bank was in deals with startup companies incurring huge losses that were far riskier than even her investments.

My bet- and call me if you want to make a friendly wager- grin….
Is that when the list of risk assets that SVB was carrying comes out, the legit finance publications like WSJ will essentially blast them for those Risky loans.

Maybe lunch at our half way point? I have to warn you I’m a big eater. Grin

I am sure WSJ and other might, but frankly I have stopped listening to what many pundits and analysts have to say on the matter. Just reading the news on the SVB debacle is enough to affirm few know what they were talking about. Too many want to sell theater and use it to make a political statement and aren’t really concerned with the facts.

One things that will come out is that the venture portfolio will make it very difficult for a big commercial bank to buy those assets. But that is not because they are money-bad deals, but due to the risk grading of the borrowers causing them to be special mention assets.

In my working days I managed the account of a non-bank venture debt lender whose largest competitor was SVB. We were the lead lender in its financing syndicate for two funds and participants in 2 others. This gave me access to the firm’s performance from before the ‘08 recession through ‘20 so I have some insight into how that market works and the historical returns venture debt portfolios yielded. There are undoubtedly losers in any fund/portfolio, but the equity component makes it so just a few winners can carry the whole lot. Not one fund had a negative return, even through’08-‘11.

I am pretty certain the same is true with SVB even up to now. My power and WiFi have been out and reading K’s and Q’s on a phone isn’t worth it, but I will post up some details of historical performance when nice we are back up and I can use my laptop. There is no reason to believe performance would have markedly degarded and very well may have improved with the increased discipline we saw from VC’s through the pandemic.

Edit: I did want to comment on the bolded. Customers should expect banks will preserve their deposits, but only neophytes would expect that banks should have all client’s funds liquid and available at all times. That simply isn’t how banks work - and it was that sophomoric expectation that broke SVB. That is one aspect to tech companies that I do not miss - lots of highly educated 20 and 30-somethings that had grand ideas but little grounding in reality. I often had to be the adult in the room - not a very fun balancing act.

 

[String&stick]

Absolutely, we referred to that as a brokered CD program to keep it simpler for clients. But even that has limitations as only so many banks participate (~40 if memory serves, but that could just be the number my institution had agreements with).

Probably the number your bank dealt with, or their preferred partners. There are something like 3000 banks registered to participate, but it narrows down pretty quickly when looking for certain rates, region, size, etc.

Good program but certainly still has limitations.

 

[Kilboars]

Yes basically, it’s there doing nothing but if you want it in cash form in a larger amount you might be waiting a bit.

I think that should be in an agreement if you put your money in there bank you need to be willing to allow that money to be invested and know it may not always be readily available.

Money I have out there I can’t touch that principal for two years.


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[Kilboars]

Yes basically, it’s there doing nothing but if you want it in cash form in a larger amount you might be waiting a bit.

I think that should be in an agreement if you put your money in there bank you need to be willing to allow that money to be invested and know it may not always be readily available.

Money I have out there I can’t touch that principal for two years.


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[Crowmangler]

Don't worry guys, according to JP Morgan, the Fed's emergency loan program said they'll inject up to
$2 TRILLION into the US banking system to ease the "liquidity crunch".
Oh yeah, you know that extra $2 T we had stashed in that Rubbermaid tub down in the basement..
everything is fine.

 

[aftriathlete]

So long QT, was nice to know ya.

Fed balance sheet balloons by almost $300 billion after SVB failure and effort to stop bank runs

www.morningstar.com

 

[svivian]

Banks have been paying into FDIC for years.... there should be sufficient funds to cover this event without having to use taxpayer funds.

 

[N.ID7803]

Can we move the bank stuff to its own thread and get back to

The Rokslide Stock Traders Thread​

 

[lifelister]

I agree with the cautious attitude. Although I don't think there's a really bad time for a younger working person to invest. But just make sure you are diversified in different sectors and avoid any tanking/penny stocks. Easy gain, easy lose. As Warren Buffet says, you find out who was swimming naked when the tide goes down

 

[2531usmc]

I agree with the cautious attitude. Although I don't think there's a really bad time for a younger working person to invest. But just make sure you are diversified in different sectors and avoid any tanking/penny stocks. Easy gain, easy lose. As Warren Buffet says, you find out who was swimming naked when the tide goes down

Hard to go wrong with a couple of decades worth of small monthly deposits into a SPY account

 

[BBob]

BTC running between resistance and support.

Breaking out!

 

[aftriathlete]

I agree with the cautious attitude. Although I don't think there's a really bad time for a younger working person to invest. But just make sure you are diversified in different sectors and avoid any tanking/penny stocks. Easy gain, easy lose. As Warren Buffet says, you find out who was swimming naked when the tide goes down

Yeah my retirement account contributions have continued all along, just making decisions on my mid-life money. I always remember Warren Buffet's Rule #1 above all else though: "Never lose money." I've read that what he meant when he said that was don't take risks you're not prepared to see play out in the worst way.

Hard to go wrong with a couple of decades worth of small monthly deposits into a SPY account

Agreed, that's what I want to get back to after all this chaos -- INVESTING. I've still been making my monthly contributions to my Roth and my TSP, but they're just going into government securities/MM funds until the dust settles.

 

[MattB]

Can we move the bank stuff to its own thread and get back to

The Rokslide Stock Traders Thread​

I bought a big stake in WFC at $38.01 and put some fun money on FRC at $31.90.

 

[stevewes2004]

Can we move the bank stuff to its own thread and get back to

The Rokslide Stock Traders Thread​

Yes please.

I increased my position in PR at opening this morning. Lookin for 14!


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[MountainTracker]

BTC running between resistance and support.
View attachment 531049

Breaking out!
View attachment 531120

I’m expecting it to breakup, don’t know if it will break past the $28k ceiling though.


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[Kilboars]

Question: at age 60 and still working at a higher tax bracket, if I want take money out of the market to invest in another business, Is it better to sell stocks out of an account I’d need to pay long term capital gains on or sell my Roth IRA and pay no taxes?

I’ll be making a much better return on this money and I’m not really planning on living on SS, stock and or dividends in the future.


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[eddielasvegas]

Stock and financial markets are tanking today. and Au is on fire....up 3+%.

Markets generally are good at predicting the future 6-12 months out so fasten your seatbelts, it's going to be a wild ride.


Eddie

P.S. Cash will be king for a good while IMHO.

 

[BBob]

Today is a quad witching day so volatility and chaos are usually expected.