Hello everyone,
It’s been a while but let’s breakdown what’s been going down in the market this week. The heaviest influencer of the market right now is the election and everything that comes with it. Both parties need a win so they’re looking for the corona relief bill to pass. News of breaking gridlock today is great for the market. I expect Pelosi to compromise at some point this week and the market does too which is why Amazon and Apple were trading so high at the close. FYI, Biden is up in the polls by a large margin. A winner this week from my portfolio is called Cloudflare which is providing cybersecurity during this election time. A few months ago I bought a bundle of cybersecurity stocks genuinely not knowing what they do. The only thing I looked at was their finance statements from the past years and got lucky with a winner. Remember if anyone else wants to get started with something like this, just reach out to me and I’d be happy to help. From, Joshua So
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Hello gamers,
As you may have noticed, tech stocks rebounded today which is good news for everyone riding the Tesla train. For most people, you don’t need to pay any attention to they daily ups and downs. Just having money in the market will multiply it. Remember, in the history of the stock market, there is no case where the market never recovered. Speaking of recovery, the market continues to rise despite the widespread shutdown of economic activity. Why? During government mandated shut downs right now, consumers pull spending from small businesses and spend on large businesses. Walmart and Amazon are convenient, accessible, and they can afford to have the lowest prices because of their logistics. Furthermore, larger companies such as Boeing, which will not be making profits anytime soon, can secure funding because of their sheer size while small businesses who either started underwater or were just barely making a profit, will go out of business. During the small business massacre, guess which companies take up the market share. Hope you guys are less bored than I am right now. From, Joshua So Hello Zoomers,
You may be wondering, “What the heck happened to my 2000 dollar Tesla stock today!?!?” Well, fear not, because no, it did not drop 1500 dollars. Both Apple and Tesla split their stock price today. That means that the value of their total shares did not change, but it’s distributed over more shares. A good example from an article I read was that if you cut a 4 slice pizza into 16 slices, it’s still the same pizza. One of the main reasons companies do this is so that average investors like your middle class household can afford to invest in your company. Dad isn’t going to put 2000 dollars into one Tesla stock, but if he buys two Tesla stocks for 500 each, then it’s much more affordable. Another reason is that the stocks become easier to track. Watching Amazon rise from 3000 to 3450 is mindless for people. But watching Apple go from 100 to 125 and all of a sudden its very apparent to everyone who can do basic math that their share price rose 25%. In other, possible more practical, advice, let’s talk about how to get rich. The first way, and default way, is to get rich through income. The highest salaries in this country go to the doctors, lawyers, engineers, bankers, and politicians. These people go through school, get out, and immediately they are making 1-3 hundred thousand dollars a year. For these people, going to college is 100% worth it, even if they graduate with 100k in student loans. Apparently, the rule of thumb is to graduate with a debt less than your starting salary. Yet, there’s another way to get rich that a lot more people use. You guess it, it’s investing. For evidence, look no further than our market watch game where people have doubled, tripled, quadrupled their money within a few months. When you look at the “risks” associated with the stock market, people tend to look at the companies that lose value or go bankrupt during times like these. Sure, sometimes the market has a bad day or bad month, but a look at history tells us that the stock market has NEVER FAILED TO RECOVER. A 10% annual return on a few dollars invested a day will make you rich. Stocks will make you rich. For your sake, remember this when you get your first job. Good luck, Joshua So Hello investing intellectuals,
As you may already know, the economy for most people right now is not so good. The traditional jobs economy has shrunk. The unemployment numbers that are going down means people are finding more part-time jobs and jobs in the gig economy that still don’t exactly support them. Yet, somehow the stock market is reaching record highs in our time of crisis and the people who have a piece of that market are thus also reaching record highs. This is called privilege. It is a privilege for those with money but even more so for those with knowledge. Anyways, my latest stock picks are Apple and Walmart (Though in hindsight I could’ve doubled down on Netflix instead of Walmart). The reasons I picked these two companies: Apple has historically outperformed the market and has been one of my biggest winners. Is there a lot of FOMO that I didn’t get in earlier? Of course, but Apple isn’t getting smaller anytime soon. Furthermore, by making their own chips, they will cut costs significantly (Vertical integration). Walmart has been expanding during quarantine because as the largest cheap grocery store chain in the country/world, they are getting all the income from people on a budget. Before quarantine, they expanded online operations to challenge Amazon’s supremacy and were thus prepared for the new mass of online shopping during COVID. Unfortunately, without more government stimulus handouts right now, people are spending less there. Still, I am optimistic about Walmart’s future. Now, take some unsolicited advice about budgeting. A solid target goal for anyone is the 50/30/20 goal. 50 percent goes into needs like housing, food, gas, electric. 30 percent goes into “wants” such as eating out, entertainment, cars. 20 percent goes into savings or investments. Now, that doesn’t necessarily mean stocks. It could be in real estate or put away for a rainy day fund. However, the first thing to do is ALWAYS pay down high interest debt. Credit card debt is a killer in America. Never carry it. Stuff like student loan debt and mortgages you should take your time because your money can be used for other stuff. Auto loans depend on your credit score but their interest rates are still pretty horrendous. Have fun living life, Joshua So This is just an overview of the current market with additional information. NYSE and the DOW may be DOWn this week, but the NASDAQ certainly isn’t, for one reason and one acronym: FAANG. FAANG stands for Facebook, Apple, Amazon, Netflix, and Google. These tech stocks are all apart of the NASDAQ index (an index is a collection of stocks, it’s not one GIANT stock. It shows you how the market is doing). Tech stocks have been seeing huge gains in the past week that are not limited to FAANG stocks, even though analysts did just raise the target stock price for quite a few of those stocks. Within NASDAQ, Tesla jumped for reasons previously mentioned along with cybersecurity stocks such as Zscalar, Crowdstrike, and Cloudflare (not in NASDAQ). Personally, I put real cash into those 3 this week. Those are long term investments since two of those companies are startups. Even at a 22 billion dollar valuation, there’s the potential they go bankrupt. However, I’m confident that in the age of even faster world digitalization, their companies will grow to meet demand and will be huge companies say 5 years from now. Let’s look into the long term. I was able to watch and analyze an environmental forum talking about the global trading structure and apparently its imminent demise. If you’re interested the link and my simple condensed notes are included. If you have any questions you can email or message me,
Joshua So By Joshua So Happy July Fourth weekend, a time to celebrate jobs report, promising vaccine news, government spending, and Kanye West running for president in 2020, all of which will affect the market in some way or another. In the last four days, the DOW is up 800 points. A large part of that is investors' optimism about vaccine development news and the jobs report which is showing the “roaring back” economy. Another significant factor has been Tesla’s insane stock price change, breaking 1200 after shattering expectations. Since many people hold Tesla in the MarketWatch game, I’ll explain more. Tesla right now is the highest valued car company in the world, more than Toyota. Last year Tesla sold 300,000 cars while Toyota sold 11 MILLION. The reason why Tesla is “more valuable” is because its stock price doesn’t reflect what the company is, rather than what it could be. There was a time Tesla could’ve gone bankrupt easily, but now they’re at a size where fears of bankruptcy have subsided and optimism about its future value is high. This is one massive factor to consider when investing in stocks. Is the company trading at its current value or is it trading at its future value?
On the political side, the federal government decided from the start they were going to spend their way to mitigate the COVID crisis. The continuing debate is how far into oblivion are they willing to spend on stimulus money. The more stimulus money spent now, the better the economy, but keep in mind it WILL come back to bite our generation Z. Finally, you all have probably heard Kanye West says he’s running for president, which is… hilarious because he has no campaign set up, the election is 4 months away, and yet there’s a certain type of cynicism in me that keeps in mind the possibility that this isn’t just a joke. If he ran as a third-party candidate, would he take right-wing votes from Trump as a Christian icon? Would he take some of the Black votes from Democrats? Would he mobilize young voters to start voting early? I may be reading too far into this. Perhaps not though, since a strong independent or third-party candidate still has the power to swing an election which WILL directly affect the market. Hope this finds you well, Joshua So |
Where we update others about current events and how they may affect the economy and market.
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October 2020
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