The Buffett Indicator

[WaltzCee]

i have been unfortunate enough to have been envolved in a trading scenario , where the trader alledgedly ramped my money up to about 1 000 000 , when finally i wanted it transfered in to my bank , i was met with a lot of excuses for a long time , and eventualy it came to light through the newspaper , that unmentioned person , did the same to many many onthers , and the excuse was that they traded the money and lost it all .... something to that effect.

just be carefull if you go in to something like this , i think if i had to get in to it ever again i would only do so by doing everything myself instead.

I agree. I wouldn't trade anybody's money nor would I let anybody trade mine.

[WaltzCee]

It's a great single indicator. The other times were 2000, 2008, and 2018. Yikes. Bubblicious.
This time probably won't be any different. Market mood and volatility is usually ruled by certainty and uncertainty. Between the pandemic and the election there is going to be a lot of the latter.
Buffett's best advice is only invest in the business you understand.

It's Buffett's indicator but he recently picked up some Bank of America shares.

I think as a result of the shutdowns around the world, gross domestic products have
taken one hell of a hit. From what I've read the Chinese economy is doing splendid. Damn
Chicom bastards. I think there's going to be hell to pay, and the resolution of it's going to be
a war.

The point of depressed GDP's is there's a bit of a thumb on the scale of that indicator.

ETA:
In the book The Death of Google, there's an example of a Trading Company that uses
nothing but big data. They refuse to hire anybody that knows the market. If memory serves
me correctly they make about 30 to 40% monthly.

[WaltzCee]

The economy was put into a coma on purpose there was not a financial meltdown, so I am not so sure GDP is a good indicator yet. Will the consumer listen to panic driven Chicken Little media or will they resume life. Will governments become like deer caught in the headlights till their financial situations implode.

I kick myself for not buying Crypto Currencies when they first came out, but decided how can a bunch of heat put into a computer be worth anything?

I don’t think anything is super safe out there. Find stocks that got panic sold and haven’t fully recovered but will due to money funneling from the cancel culture. Where do you think the investment money is headed Walt there is no making money on interest in the money market?

A good book to read is The Death of Google.

• Pharmaceuticals
  IoT
  Autonomous cars
  5G technologies
  Buying puts on twtr might make a buck.
  Sometime in the near future I'm going to be selling a perpetual motion machine :-)

[Fletcher]

Use your PM machine to generate electricity in your basement. Where your computer banks are kept, processing blockchain transactions. And mine bitcoin for free !

n.b. electricity cost is the biggest cost to mining bitcoin IINM.

[eccentrically1]

https://www.marketwatch.com/story/warre ... 2020-05-21

BofA will eventually go up. Bank shares are correlated to interest rates. They can't stay down forever.

Renaissance has a good record.

https://en.wikipedia.org/wiki/Renaissance_Technologies

[WaltzCee]

Or start making carbon fiber.

I wanted to add some observations about this chart.


The last four trading days were around the dotted green line or the 20-day simple moving
average, slightly below it. It is possible it might bounce off that moving average and trend
down to the Blue Line. That's the 50-day simple moving average (SMA). It could pick up
trading around the lower Bollinger band. One of the components of that band is it is the second
standard deviation point, another is a volatility component. The more volatility the farther
the two green bands are apart. ($172.70 50 day SMA - $170.94 lower B band)

One thing to consider is the calls I've suggested buying don't expire for about a year. The
exit point is when GLD reaches $300. You can't get all excited about a little bit of downside.
What you can do if you're real risk-adverse is put in a stop loss order once you pick up the
position. The main problem with stop-loss orders is they're on the books. Anyone making
the market can see that order. What the Wall Street vultures do is a thing called running the
stops. When they're looking to pick up some positions, they drive the price down thru your
stop loss order, buy your position, then run it up. I'm not a big fan of stop-loss orders.

The more I look at that chart, the more I'm convinced it's going to bounce off that lower
Bollinger band. Bollinger Bands are one of many technical indicators. I have developed my
own technical indicator that's predictive of volatility more so than the VIX. What it requires
is for me to grab data and develop a little bit of History. I haven't been doing that with GLD.
It also points to levels of support and resistance.

It's going to take a couple 3 days for me to ACH some funds to my trading account so by
the time I get ready it may be bouncing off those bottom bands. If I already had the funds in
my account I already would have picked up a few contracts, and if it bounces off those
lower bands I would double down. :-)

I'm very optimistic about the upward trending of gold. Another thing I didn't mention was
that central banks around the world have been buying gold for several years now.

ETA:

BofA will eventually go up. Bank shares are correlated to interest rates. They can't stay down forever.

Warren also just recently trimmed back on his Wells Fargo shares. Not all banks are created equal.

[daanopperman]

If I could buy stock or invest in any company it would be in water techno or solar .

By the time 1/2 of the world have own power gens , it will be to expensive for big companies to run power plants , less they perfect fusion .

Water is already forcing China to dig into other countries resources

[WaltzCee]

8

https://www.marketwatch.com/story/warre ... 2020-05-21

You can't win them all. I wish I had a share of Berkshire Hathaway.

BofA will eventually go up. Bank shares are correlated to interest rates. They can't stay down forever.

You have to do your due diligence.



If you were going to buy one of these banks which one would you choose?
ETA: $30 calls expiring 18 June 2021 are going for $210 a contract.
I think BAC has some upside. Maybe $35-$37.

Renaissance has a good record.

https://en.wikipedia.org/wiki/Renaissance_Technologies

Yes, I think that's the company that was cited in the book The Death of Google.

[WaltzCee]

. . . Where do you think the investment money is headed Walt there is no making money on interest in the money market?

Warren Buffett’s Berkshire Hathaway sold bank stocks to buy a gold mining company, which will indirectly boost the price of Bitcoin, investors say.

Further strengthening the case for GLD.

https://cointelegraph-com.cdn.ampprojec ... estors-say

[MrTim]

Now if you want a quick and substantial return on an investment, buy up the liquor licenses of the bars/restaurants driven out of business by the virus, then resell them when the economy reopens. There will be a big demand... ;-)

[daxwc]

Hard to imagine the banks and lenders are going to get out unscathed. I wonder how shorted they are?

[WaltzCee]

I just looked at Bank of America. It seems that 10% of the float is short.

• .....81,980,000 Shares Short
  
  8,620,000,000 Float

ETA Opps, I mean 1%. :Face turns red:
http://shortsqueeze.com/shortinterest/stock/BAC.htm

One way to hedge is to hold a short position and a long position. You are effectively out of
the market. There are all sorts of sophisticated shenanigans if you have the money.

You can buy one strike price of calls and then sell another strike price above you. That's a
bull call spread. If you buy 50 contracts, and sell 25 contract, that's called a ratio spread.
Wall Street is just one sophisticated game. Credit spreads, debit spreads, . . . These days I
just keep it simple.

The ACH should hit my brokerage Monday. The market is definitely overvalued. TSLA @
$1621 a share is 839 times earnings. Good gravy. I never would have bought those calls.
That's outrageous.

A closing note, the DOW looks like it's forming a head and shoulders.

[WaltzCee]

The Dow chart from stockcharts.com.



The red line is the 200-day moving average and it seems to be trending down. I annotated
the left shoulder and the head, however it's a horrible picture. :-) You can go to stockcharts.com
and put the ticker $INDU and take a better look at the chart. Also you can
play around with some of the technical indicators.

[WaltzCee]

For the benefit of people that don't know what a short sale is I'll explain it. You borrow
stocks from your broker and then you sell them at market, expecting the market to drop so
you can buy them back at a cheaper price to return them to your broker. You have to
pay interest on the shares you borrow and that varies.

In short, rather than buying low then selling high, you sell high then buy low.

People have lost billions of dollars shorting tsla.

https://www.wsj.com/articles/investors- ... 1581284236

..11,950,000 Shares Short
148,250,000 Float
8.06 %

The only thing driving Tesla are short squeezes. It actually should be trading between 15 and $30 a share. It's crazy. I wish I could rely on the short squeeze.

[ME]

So basically in short: The business of gambling on losers.

• "You've got to ask yourself one question. Do I feel lucky?"
  :-)

Those billions of dollars just got redistributed among the lucky one(s), right?