Stocks Mostly

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Maybe you could tell a little more about why you have bought these stocks.

I buy stocks because they are cheap on an absolute value basis, but occasionally relative to their peers.

Fannie Mae (FNMA) and Freddie Mac (FMCC) are two companies which were bailed out by the US government, the US government said that they would be released the private market. However somewhere between 2009 and 2012 the government became hostile to these two companies and threatened to close them. It is this threat of losing everything that they companies are cheap.

XOP is not a company. It is an EFT of companies working in the North American oil market. This was firstly a bet on the oil prices recovering and secondly a bet on American shale. Oil production cannot last long term at low prices, there isn't enough supply and there wouldn't be enough investment to even maintain current production levels. My belief is that Shale oil is the new swing producer in the market.

Twitter is a decent company managed very badly. Twitter's problem is not it's ability to make money, it is an problem with a ridiculous expenses that can and should be brought to a fraction of what they currently are. Investment is my expectations of a turnaround and / or buyout. See here for more http://brontecapital.blogspot.co.uk/...t-rumours.html

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Older buys

TNH - nitrogen company, cheap on a P/E basis. However US dollar strength is hurting profits and I had to let it go.

AAPL - when I bought Apple you were buying 100 billion in cash, plus the future earning power of the company. When you subtracted that 100 billion from the market cap, you were effectively buying the company at a PE of 7. Trouble with Apple is the dependency of iPhone. I sold Apple to soon, I should have doubled my money, big mistake.

VLKAY - bought it shortly after the emissions scandal because it was cheap. Sold very soon after because I couldn't make sense of the company structure, or the financials - combine an opaque company with management of questionable integrity and you have to stay away.

SLV - Silver position, more of a hedge than anything else.

Very interesting! Do you only use fundamental data or also technical analysis? If not how do you decide to get out of a trade?

I just heard that Berkshire Hathaway has taken a position in Apple, on the basis that all his grandchildren (and friends) have an iPhone and they replace them with new iPhones.

Elon Musk up to his old tricks with >$1 billion capital raise:
https://www.bloomberg.com/news/artic...se-to-cut-risk

Tesla only seems to function with repeated capital raises, typically at the shareholders expense through issuing new shares.
Here is the number of outstanding shares over time (monthly intervals). Note - this doesn't include the latest equity dilution.

Shares Outstanding

161.67M <- Jan 2017

161.56M

161.09M

149.89M

149.82M

148.69M

148.02M

133.94M

133.90M

133.86M

132.06M

131.42M

130.95M

130.90M

127.14M

127.10M

126.40M

126.39M

126.36M

125.76M

125.69M

125.38M

125.37M

124.63M

124.59M

124.09M

124.04M

124.04M

123.19M

123.09M

122.59M

122.57M

121.45M

121.43M

115.55M

115.32M

115.16M

114.52M

114.21M

113.78M

105.77M

105.43M

105.32M

105.21M

105.17M

105.16M

104.60M

104.53M

104.30M

104.19M <- Sep 2011

Translating this into reality... If you bought shares, equivalent to owning 3% of the entire company in September 2011, you would only own 2% of the company in January 2017. Your ownership, which is a contractual claim to company earnings is now 50% less than it was 6 years previous.

You won't hear too much moaning from shareholders when the share prices continues to go up, however the increase in Tesla's share price is detached from the fundamental earning power of the company. Remember Tesla as a matter of fact loses money most quarters.

The only saving grace of Tesla is its high share price:
-A $1 billion new equity issue is equivalent to 2.5% of the company, when the market cap is $40 billion.
-A $1 billion new equity issue is equivalent to 25% of the company, when the market cap is $4 billion.

...the current high share price of Tesla is not based on earnings power. It is based on the hope, and the promises of charismatic front man who has yet to build a company that is capable of actually making money.

Avoid as an investment.
Expectations is a massive share price adjustment back to reality at some ?(undefined) point in the future, and a shamed CEO potentially faces SEC charges for misleading investors.

Should have held onto my apple a bit longer lol

Buffet observers believe the Apple investment is actually the work of one of his proteges and not actually a Buffett pick - though he would have to OK it.

Apple have to much concentration in one product, but stellar company.

That's a shame ... up 20% this year

Owned it @$60-70, can't be sure on the exact price because I had it before the recent split.

Kicking myself over that one, but live and learn

New to stock trading. Can anyone share with me any strategies and indicators that work for you please?

I use fundamental analysis for stocks, and a for the market segment, and a look at who is running the company.

Same as Exodus, I only use fundamental analysis now.

Generally speaking much of the technical analysis is the same as it as it would be on forex. With one big exception, it makes far more sense to only ever go long: here is 100 years of US stock market history...
http://www.thedigeratilife.com/images/chartdjia.png

Why fight that? The vested interests of Wall Street, Main Street - nearly everyone wants stocks to move progressively higher.

Short selling is too dangerous on stocks. I dont recomment it.

Technical analysis is good for picking entries. It is also useful for identifying when you should have got-out....

I prefer fundamental to trade stock.

More on Tesla.

The article below tells the story of Tesla, how it started with a government loan and explains why SpaceX, Solar city and Tesla's business is reliant not on the economics of each business but simply because the Tesla shares are worth a lot. The Ponzi scheme continues for as long as the shares are a ready source of capital for the fraudster Musk:
http://www.zerohedge.com/news/2016-0...ce-play-us-all

As if the economics of Tesla wasn't bad enough, sales of Tesla in the US are boosted first by federal subsidies and then by state subsidies. These subsides can amount to more than 10,000$ per car in some instances, making Tesla cars more affordable thereby inflating the revenue.

SpaceX is making money, allegedly. Their reusable rocket technology is about to be tested with a real first re-use launch.
Also they deserve merit for actually landing a rocket on a solid surface in a controlled fashion ... something not done since the 60s.

As for investing ......

Allegedly is the key . The article says : 'He has 1 that makes money from prepayments for services yet to be given'.

I actually know very little about SpaceX, but if the above statement is correct it is simply an accounting profit. SpaceX could be profitable in the future, it might not be, hard to know until we know the expenses for delivering a service. SpaceX is a private company I can't just go look at the numbers.

Also because it is private they can choose their the accounting methods they want - the SEC only requires GAAP accounting for public companies. So SpaceX can say publicly whatever the frig they like and not get in trouble lol. SpaceX could be a big hit, right now we have simply no idea, all we have to go on is the track record of Musk.

I must admit, that rocket landing on the pad again was pretty cool . In time we might find out they played the video of the launch backwards haha...

A bit more on the man Musk.

He said in 2016 : "current financial plan does not require any capital raise for Model 3 at all."
CNBC headline a few months late : Tesla to raise $1.15 billion ahead of its Model 3 launch" http://www.cnbc.com/2017/03/15/tesla...0-million.html

He has a track record of lying to it's investors about capital raises.

The SEC has been asking a few questions of his accounting, conflicts of interest, and accurancy of disclosures:
https://www.sec.gov/Archives/edgar/d.../filename1.pdf
https://www.sec.gov/Archives/edgar/d.../filename1.pdf
https://www.sec.gov/Archives/edgar/d.../filename1.pdf

Can Musk turn it around - maybe.

Your favourite company steams ahead. Regardless of what you believe, the market disagrees with you.

I hate chasing stocks upwards, so I will just watch.

The market has disagreed with me for several years lol. The company is worth nearly $50 billion and makes no money - the market hasn't been rational for a very long time.

Does this makes sense?
1. Ford has ~150 billion in revenue, a ~3% profit margin, making ~5 billion in profit each year.
2. Tesla has ~7 billion in revenue, a negative 'profit margin' of ~10%, losing approx ~3/4 billion per year.
...both companies have roughly the same market cap.

The market has an obsession with revenue growth and the charismatic front man. Bottom line is that unless the costs are drastically reduced there will be no profit, businesses cannot run on free capital forever, they must as some point turn a profit.

I have no position in Tesla and never will, shorting is simply too hard to do and not worth the risk. If I could make money of it I would , but I can't so I'm just going to point out what is obvious (to me).

Courtesy of Digital Look

"Elon Musk’s privately-held SpaceX has successfully led the first relaunch of a used rocket from the Kennedy Space Center in Florida.

SpaceX initially launched the Falcon 9 rocket 11 months ago, and its reuse marks a major milestone for the space travel industry as a whole. Traditionally rockets will lose the majority of their parts during launches, but Musk’s company hopes to increase the ability of rockets to be recycled."

So I wonder what the cost savings are?