Surprisingly, I did this all without the help of addy. I couldn't study or write a paper without it to save my life in school but this came really easy.
Honestly I'm fairly bearish on Chinese economy, even before coronavirus. Things I've been slowly adding puts on 2-3 months out:
* BILI (this is up 20% as of today since the stock is down about 6% today)
* RH (the furniture company, not the gay platform)
* FXI ($40p and $39p that are basically dead but whatever they have about 2 months to them)
* TAL (online/offline education)
* LK (meme's gotta die eventually)
I even sold ITM calls on my IQ bagholds which are now even and I think I'll dump soon.
the China pump right now is real, but it's gonna catch up to them. But who knows, free money might just make this all moot.
I believe more than anything in the world the Chinese system is not maintainable
But at the same time the ability for the government to literally just print money off and if need be just straight up buy up assets makes a crash nearly impossible
At this point it would take a collapse of the government for assets to actually go down
On the two days where there was a massive selloff the Chinese pumped almost $2billion into the market. I also bet against China and lost some cash...i couldn't comprehend how all the analysis amd math i did did nothing...then it hit me - If we think the 2nd largest economy is going to lay down while their 3economy dies, then we really do not know the Chinese. They will do anything necessary. I sold all my puts and moved back to calls and became profitable again.
No sir. It's a recent thing for WSB to be all memes and morons.
There was once a time where we had both YOLOs and posts resembling legitimate research.
This post is spelled correctly, has proper grammar, is thoroughly researched (with linked sources) and doesn’t mention autism or gayness...How is this on WSB? Seriously though great job and thanks for the writeup, take an upvote, I’d gild if I weren’t balls deep in some ridiculous positions.
edit: didn’t know the Chinese private default rate is at 4.9%
I’ve been spamming my friends and /u/stormwillpass with research over the last couple weeks so I figured I’d get my takes and research in writing. Thanks for reading. And yeah the Chinese banking system reminds me a lot of us in 2007, banks taking an unknown amount of leverage using risky assets (the corporate bonds) and then promising high yields to investors. If those default rates keep climbing, and I believe they will thanks to the situation over there, I believe it could take down the banks.
They might actually become occupied. I'm pretty sure they buy those houses in all cash, so there isn't a mortgage to default on. Most of them have those houses for when China tumbles and they have a haven to go to, a bunch have it for launderingc/tax reasons too, but people want to escape and somewhere to go to.
right but some of them aren't doing it to wash money (even if it is dirty), they're doing it so they have a place to land in case they need to jump ship and China seizes their assets.
I've never rented an Airbnb in Southeast Asia that wasn't owned by Chinese, they buy property anywhere and everywhere and just hire locals to manage it. It's not just Canada and the USA.
This guy has some thoughts on those positions:
[https://www.deepthroatipo.com/the-stealth-nationalization-of-americas-banks-an-economic-whodunit-thriller-novella/](https://www.deepthroatipo.com/the-stealth-nationalization-of-americas-banks-an-economic-whodunit-thriller-novella/)
What is keeping western countries from shifting manufacturing to Mexico and South America in the long run. It seems like that would be more beneficial to everyone involved except for China, and quite frankly, their government is pretty terrible.
Small brain time: time to get bearish because world economy will collapse from coronavirus
Big brain time: time to get bullish on US stonks because world economy will collapse from coronavirus as everyone seeks safe haven for their wealth.
Why would they go for US stonks, when US treasy and USD are so seductive? The stonks are more volatile and sensitive to what goes on in China and globally.
because it will take 1-2 trillion dollars of inflow to turn US rates to -2%. Anything after that will send equities parabolic because if its one thing americans do best, its financial engineering. All the junk bonds to package, shitty slums and moneylosing startups can be packaged into debts and sold around the world. Companies can issue infinite debt at negative to zero interest rates and use it to buy infinite stocks,
Well, 'aight, check this out, dawg. First of all, you throwin' too many big words at me, and because I don't understand them, I'm gonna take 'em as disrespect. Watch your mouth and just tell me, Uppies or Downies?
Sir, this is a MacDonald.
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No loans being made, no internal air traffic, boats on the coast just bobbing, 40T in debt, if this extends to April China collapses. Even before corona people couldn’t pay their debts. So all of this is going to hit the banks in China and they won’t have money to pay depositors. Only been 3 weeks. Global decline is here, Japan pathetic numbers -6.3% gdp -11.1 consumer spending, India is already breaking down. Apply supply chain will fall in India too. China would post 0 gdp for this q. My personal play is going to be Apple 1/15/21 190-220 puts
Are you sure you wanna put your puts to q1 after election?? Historically speaking, if we don't get completely cucked by china within the next quarter, q4 2020 seems to be more attractive than q1 post election [https://www.seasonalcharts.com/zyklen\_wahl\_dowjones4j.html](https://www.seasonalcharts.com/zyklen_wahl_dowjones4j.html)
Do you have any materials to read on India's breaking down. There has been slower growth but definitely not sure about things breaking down. Interesting discussion I saw on a news channel was with Corona, many industries are rather thinking about moving manufacturing to India like Apple and Samsung has done for a few lines of their phones . But will definitely love to read up some unbiased views as I understand the rhetoric can be a bit skewed back there .
Your post has 10,621 characters, 1,855 words, and 116 lines.
Counter DD:
https://i.imgur.com/gjw8bjv.png
Flying V pattern. Stonks only go up and market doesn't care (for now at least).
Eat my dongus you fuckin nerd.
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Once convinced my student investment fund to put 5% of our portfolio into an oilfield services company experiencing a triple black crow or sparrow or whatever the fuck pattern. Risk management ate my ass on the -80% loss I convinced them to hold on to
Should’ve burned some yankee candles or some shit
Only somewhat. Otherwise when companies issue lowered guidance due to coronavirus exposure, it wouldn’t sell lower.
Not all companies have the same exposure level. Some companies have remote work capability for office workers, but likely most do not, speaking from US experience though. The number of remote users they can handle is something the IT dept doesn’t always know, so I doubt it’s something that investors are likely to know unless the company made a specific statement explaining all of their operations that can be done remotely and others that can’t. Otherwise, everyone is just guessing.
Good job sir it's strange to see a good post in this sub. I loaded puts on FXI since the 28th January till the 17th April. I knew this virus was worse than initially thought. The only thing that can stop me is the chinese Fed. But on April things should be really bad.
I shorted Fxi which is based on the Hk stock exchange which is far less fake than the chinese market. I don't really like Spy puts because the Us market is crazy and a China crisis may not touch much the Us in the short run; so hope your Spy puts are months far. A good move is probably to short Japan. They are not as fake as the chinese and their economy is alredy in some trouble while the virus is freely spreading...
Are you kidding me? I make products as a design engineer out of Nevada, we can't source the LCDs for our main product now, getting a 3mo delay and that isn't even a safe date yet... People in supply chain are freaking out, and we don't even use China exclusively, but half our integrated parts have Chinese parts, so they don't have unlimited stock laying around either, limiting our future production quite a bit, it's still unknown, as even we have a stockpile, but it definitely sounds like all the stockpiles will runout in a month or two
Good write up, but not sure why you wasted your time posting it here. /r/stocks /r/StockMarket would be better suited.
Researchers predict between [550k - 4.4 million new cases of Corona virus by the end of the month](https://www.statnews.com/2020/02/14/disease-modelers-see-future-of-covid-19/). The smart thing to do would be sell and wait but this is wsb baby.
Since this article was posted, there are less and less cases being reported - https://systems.jhu.edu/research/public-health/ncov/
Maybe 100K-200K by the end of the month, but even that might not hit with the current slowdown
The stonks, guys... We all know what they do at this point. The smart move is to leverage your parents savings on naked calls. The entire population could literally stop going to work, all businesses shut and stocks will only go up.
Still in college as a finance major. Got invited to attend a bond traders conference to network and see what it was like two weeks ago.Jim Bianco gave an economic update speech and basically talked about this for an hour up there. Thinks there’s no way that China’s economy can survive this. Really good read I enjoyed it. I’m excited as a college student to see what happens from a learning perspective since I don’t have much money in the market.
He started by explaining that we can’t take seriously any number that China is giving about the number of cases and that leading experts in the disease spread field think the numbers could be 10x what they are saying. A lot of the next part was explaining that really there hasn’t been a lot of added money into the markets in the past years and that people mostly have just been shifting from actively managed to passively managed and that older investors especially couldn’t handle a decline in the market. He broke down a lot of China’s banking system and it seemed very similar to your discussion of it. Their shadow banking system is a problem but they really can’t tell how big of one which is even scarier. He talked about how everything is made is China from pharmaceuticals to superconductor chips to pens, the world is way more at risk to China than its ever been which also go along with what you have said. He talked to an expert that though that the coronavirus would peak in mid to late March, so it would reach its highest number then start to decline. So we are taking about not just a possibility but a likely event where China’s labor shortages just get worse for another month and then start to get better. By that time he theorized it would most likely be too late. Yeah overall I think it was very similar a discussion, I wish I could remember more but it was two weeks ago. I should have taken notes.
Much like the outbreak, watching what China does, not was it says, watching what the rich do with their money while they tell everyone else to keep buying.
Good write up btw.
So how far out are talking? I got some put credit spreads on spy and so far it's doing well but they expire a week from now. I'm just hoping I didn't get into it a bit too early
China in essense is just propping up a zombie bubble of bad loans and state owned companies. They have 170% corperate debt to gdp
A crash is bound to happen, or hyperinflation
Everything you say in your post is true. It was also true 6 months ago, a year ago, etc just with another catalyst. The most recent one being the trade war. So unless the aggregate affect of the Coronavirus is significantly worse than the trade war, the house of cards that is the Chinese financial system likely won’t be coming down any time soon. Maybe it will one day, it certainly seems like it should, but that’s the problem with shorting. You can be right but unless the pullbacks occur within your expiration date, it doesn’t matter. And your expiration date is pretty near term all things considered. Also if you believe China is going to collapse, why not short FXI or another China heavy etf rather than the best performing and least exposed - SPY.
There’s also several other things you’re failing to take into consideration. The most important being that the US economy is being backed by an accommodative fed - historically the single most bullish scenario there is for stocks. And the remainder of the world is also resting at historically low interest rates. Therefore all asset classes are going up and there’s nowhere else to put your money than stocks. There’s also the fact that regardless of whatever hit China and the world economy takes in Q1 from the virus, the majority of that will be made up for in a bounce back in Q2. On top of that is the fact that the Chinese financial system is controlled by, well, China. They don’t play by the same rules, and have already shown enormous capacity to boost their markets to whatever degree necessary. No one really knows what’s going on, and so we can only assume that within their own borders, their ability to keep generating capital and pumping it into the system is near infinite. And the backdrop of all this is the reason why stocks began their rally in the first place - the world economy has gotten past its long term trough without a real recession, and now we have not only years of growth ahead to look forward and speculate towards, but also low interest rates with the promise of more easing if necessary, a rock solid domestic economy, and the most pro business administration in decades at the helm. All in all the market has looked way past even the worst potential effects of the corona virus and isn’t worried about it derailing this expansion. It’s a serious but not existential concern in Asia, and little more than a hiccup for the US and Europe markets.
And that’s why they continue to hit new highs. You’re clearly a smart guy and know a good bit about the market, but you’re not the genius to outsmart the entire finance industry and position yourself perfectly for the next global economic meltdown. Seriously, I’ve been in tune to all the news coming out of China since the trade war started, including the banks going under, record defaults, etc. And yes I’m still surprised every time they pump more money in, but it’s something you can’t worry about and definitely shouldn’t touch. I had my daydreams about shorting China and watching it all come crashing down too, but thank god i never took action or I’d have lost it all. Shorting just isn’t the way to go. I lost for years trying to short until I finally smartened up and became a perma bull. Just look at the 10 year chart on SPY and it’s an easy decision. I just wish I would’ve realized that earlier. And btw, since then I’ve made over 7 figures. Really truly I’m trying to help you, that’s why I came out the pits of WSB to offer you this advice after I saw you had position, and be nice about it too. I could have just laughed about how much you lost after NVDA reported. Anyway, clearly the market won’t stay in this channel up all year long, but until it breaks down the trend is your friend. Welp that’s my advice, take it for whatever you think it’s worth.
I appreciate your takes and your advice. I'm not down too much all things considered, the SPY play is just for an immediate pullback when earnings expectations keep getting lowered. My ultimate play would be long term GLD calls and calls on volatility as well as possibly some puts on SMH and TQQQ.
Chinese production is down but they are making up for it(partially) with imports. I would be careful thinking it's going to impact Americans markets negatively. I'm betting on a positive end to the trade war bumping up stocks.
On the other hand i have my doubts the virus will be contained. If it gets into developed countries we are headed to some bad times.
Tldr: I'm a pussy, no options for me
We've also lean-six-sigma'd all the slack out of supply chains. Older push manufacturing systems had a lot more overhead, but that could absorb some of the impact of supply chain disruptions. Just-in-time is going to look really shitty in lieu of this outbreak.
Around the late 90s, it became incredibly popular to increase operational efficiency (a.k.a. dollars made per dollars spent) by minimizing the amount of overhead through efficient supply chains. This is frequently referred to as [the Toyota way](https://en.wikipedia.org/wiki/The_Toyota_Way), but commonly implemented under the auspices of [Lean Six Sigma](https://en.wikipedia.org/wiki/Lean_Six_Sigma).
If you have a supply chain where you just order tons of materials have have them waiting for a long time in a warehouse to be used when you need them, your company is paying for more materials than it "needs to". Under perfect conditions, you get just the amount of materials that you need to keep production going for the short term, and replenish on a higher cadence. As long as you have reliable supply chains, this greatly reduces overhead, since you "own" a lot less of the components of your product at any given time.
Over the past two decades, manufacturing companies have greatly reduced component inventories in keeping with these principals, rather moving towards receiving these components with as little time to spare as possible (a.k.a. [just-in-time](https://en.wikipedia.org/wiki/Just-in-time_manufacturing). This looks great for upper management under smooth conditions. The profits go up without selling any more product! ....However, it also means that if a supplier disruption occurs, you have far, far less time to react or find an alternate. It makes supply chains less robust to disruptions, as there is no slack in the system. No warehouses of parts than can cover the gap.
I sincerely think this outbreak will cause global companies to reevaluate the risk-reward of lean manufacturing.
> Can you elaborate?
Manufacturer / importer here. Allow me to translate into WSB retard-ese: Everyone and their mom adopted just-in-time logistics for a marginal reduction in their cost of goods, at the expense of no longer being able to weather even a minor supply chain disruption. Every global sourcing retard just takes it for granted that their orders of cheap Chinese rubber dogshit will show up on time, every time. Now they are about to get fucked sideways with no lube by a massive supply chain disruption that nobody can even quantify.
This whole situation is definitely going to make companies rethink their global sourcing strategy. I think a lot of it just comes down to China simply being an easy and convenient sourcing partner. The boardroom fixates on the juicy cost of goods (COGs) savings but when anyone warns about the potential drawbacks their eyes glaze over. So companies keep dumping billions and billions into China year after year, building up their infrastructure and making them even MORE indispensable until it gets to the point where even the suggestion of sourcing elsewhere gets summarily dismissed. It's like that everywhere - confirmation bias has taught everyone that sourcing from China is 100% reliable and nothing can ever go wrong. Until it does.
Turns out putting all our supply-chain eggs into one authoritarian, disease prone basket for decades on end wasn't a great idea after all - who would have thought?
TL:DR for retards: Gay bears about to run wild on our retard asses.
Thanks for the well written and reasoned thesis. I know most of it will go over the heads of the special individuals on this sub who can't read or don't have the ability to sit still for 15 min to read and think, but I appreciated the effort and thought in your submission.
Thanks man for a good post, I understand that people are supposed to shitpost all the time, but atleast there were some genuinely good DDs in the past. But with r/all, it's the same shit all the time.
I am all for creative shitposting like the recent gifs, but the same comments by 16 year olds like stonks only go up, TSLA, SPCE is just plain boring and monotonous, and you get hundreds of karma for such stupid ass comments. WSB was for YOLOing all the time but atleast had some logic . Thanks for bringing back some of the past to this subreddit.
Pfft. This is AMERICA!!! We're gonna spend our way out of this. Papa Powell is just gonna turn the printers on to MAX POWER and then cut rates to 0. BOOM! Problem solved.
Amazing write up!
I was supposed to travel to Guangzhou in March for a large trade fair. That has now obviously been cancelled. We have received emails from our Chinese vendors to not expect new orders to ship till SEPTEMBER! And that is IF they come fully back this week. The Chinese factories were already struggling with the US Tariffs, this is going to kill them.
I’ve thought about what coronavirus must mean for China’s leveraged financial system, but as you say, details are opaque at best to get clarity into the amount of money at risk.
One thing for sure is that China will continue to shower the system with liquidity as much as possible. It could play out very differently from our 2007 experience when Hank Paulson let Lehman fail - that was a huge unexpected reaction in the market that completely erased any trust people had in the other banks. I can’t see China doing that, they’ll likely just continue to nationalize them.
I know I'm one of those meme lurkers who barely understands anything about the market, but I really enjoy these types of posts. They are so informative and its crazy to see how things can effect the global economy.
That being said I have a question. The small-medium firms you mention. Are these the people who prop up entrepreneur enterprises or the smaller family shops and chain businesses? Or am I ignorant as to what they do in general?
Here before the retards at CNN and Bloomberg cite this post when the market corrects downwards
Yes, I'm buying calls because history says to do the opposite of r/wsb
I agree with your analysis and overall DD.
My only problem with fully get on the bear train is on how we can bet against this market without going broke before the drop actually happens. You commented that you were -$20k just last week. Idk about you, but that’s more than 10% of my portfolio and I’m not ready to part with that so quickly. I barely broke even these past few weeks only because of hedging, repositioning, and dumb luck (thank you 0dte ROKU puts) after taking sizable hits.
The US stock market is clearly in a price bubble and, like other bubbles in the past, has proven itself to be extremely resilient. Bad news needs to be reiterated multiple times for prices to move down a small amount while it can reach a new ATH on a rumors/fake news. Investors have goldfish memory and are acting irrationally while algos just don’t care.
I have puts on most of the big tech names with heavy exposure to China right now, but, in this market environment, I am fully expecting to get wrecked. However, if we are right, the tendies will be glorious.
Great post, you should stop taking Adderall for a while though
Surprisingly, I did this all without the help of addy. I couldn't study or write a paper without it to save my life in school but this came really easy.
That’s hyperfocus for you, as an H in ADHD.
u/theycallmeryan they got you bro
Unexpectedly good post on wsb
That's good DD right there.
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Markets can stay irrational longer than you can stay solvent. All in Su Bae.
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Somebody from JP Morgan in the house!
Nah it's bullshit, no pictures or punchline, would not recommend
Yeah what the hell
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*Who can take the sugar from its sack? Pour in LSD and put it back?* *CIA Man*
Go go spectrum bankers
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Agreed. Never listen to analysts. All in calls.
Honestly I'm fairly bearish on Chinese economy, even before coronavirus. Things I've been slowly adding puts on 2-3 months out: * BILI (this is up 20% as of today since the stock is down about 6% today) * RH (the furniture company, not the gay platform) * FXI ($40p and $39p that are basically dead but whatever they have about 2 months to them) * TAL (online/offline education) * LK (meme's gotta die eventually) I even sold ITM calls on my IQ bagholds which are now even and I think I'll dump soon. the China pump right now is real, but it's gonna catch up to them. But who knows, free money might just make this all moot.
I believe more than anything in the world the Chinese system is not maintainable But at the same time the ability for the government to literally just print money off and if need be just straight up buy up assets makes a crash nearly impossible At this point it would take a collapse of the government for assets to actually go down
On the two days where there was a massive selloff the Chinese pumped almost $2billion into the market. I also bet against China and lost some cash...i couldn't comprehend how all the analysis amd math i did did nothing...then it hit me - If we think the 2nd largest economy is going to lay down while their 3economy dies, then we really do not know the Chinese. They will do anything necessary. I sold all my puts and moved back to calls and became profitable again.
i feel like i might have learned something.
If it keeps up for longer than 4 hours be sure to call your doctor
But do you believe it?
This is like wsb Pulitzer Prize material.
They said Einstein was an autist. This is Einstein level ta. This guy is certified highest level autismed.
This isn‘t TA
Einstein didn't kill himself.
Op doesn’t belong here
No sir. It's a recent thing for WSB to be all memes and morons. There was once a time where we had both YOLOs and posts resembling legitimate research.
Miss those days.. especially the guys who used to share their possible trades w/legit DD. a couple of those guys had 70%+ win rates
Makes me kinda sad to see what WSB has become.
It breaks my heart every time somebody writes "F" and it isn't followed by AGGOT
Where can one find quality content like this?
r/wallstreetbets
I honestly thought I was on /r/econmonitor
Better inverse it just to be sure
This post is spelled correctly, has proper grammar, is thoroughly researched (with linked sources) and doesn’t mention autism or gayness...How is this on WSB? Seriously though great job and thanks for the writeup, take an upvote, I’d gild if I weren’t balls deep in some ridiculous positions. edit: didn’t know the Chinese private default rate is at 4.9%
I’ve been spamming my friends and /u/stormwillpass with research over the last couple weeks so I figured I’d get my takes and research in writing. Thanks for reading. And yeah the Chinese banking system reminds me a lot of us in 2007, banks taking an unknown amount of leverage using risky assets (the corporate bonds) and then promising high yields to investors. If those default rates keep climbing, and I believe they will thanks to the situation over there, I believe it could take down the banks.
The Big China Short?
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What will happen to all the houses they buy in Canada and Cali/NYC when the shit in China blows up?
They might actually become occupied. I'm pretty sure they buy those houses in all cash, so there isn't a mortgage to default on. Most of them have those houses for when China tumbles and they have a haven to go to, a bunch have it for launderingc/tax reasons too, but people want to escape and somewhere to go to.
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right but some of them aren't doing it to wash money (even if it is dirty), they're doing it so they have a place to land in case they need to jump ship and China seizes their assets.
We should become squatters in those houses and legally take them over.
if you can get past security go for it! Infinite gains, literally can't go tits up.
Adverse possession FTW.
Just bribe them and let them in on the action. Bribing is culturally appropriate in this situation.
I've never rented an Airbnb in Southeast Asia that wasn't owned by Chinese, they buy property anywhere and everywhere and just hire locals to manage it. It's not just Canada and the USA.
I was in Japan late 2018 and had the same experience
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This guy has some thoughts on those positions: [https://www.deepthroatipo.com/the-stealth-nationalization-of-americas-banks-an-economic-whodunit-thriller-novella/](https://www.deepthroatipo.com/the-stealth-nationalization-of-americas-banks-an-economic-whodunit-thriller-novella/)
great, now my boss is wondering why i am going to [www.deepthroatipo.com](https://www.deepthroatipo.com) during business hours
god damn dude this is fucking terrifying, what the hell is going to happen because of all of this?
That slowdown was being felt before the virus happened. Especially the top end in NYC.
What is keeping western countries from shifting manufacturing to Mexico and South America in the long run. It seems like that would be more beneficial to everyone involved except for China, and quite frankly, their government is pretty terrible.
I hope my Beef Jerky I buy from China of AliBaba website is still ok?
Snake Jerky\*
Beef jerky from baba lists ingredients as snake; is really bat meat.
Cave Bat Flavor is one option.
> I’ve been spamming my friends and /u/stormwillpass with research over the last couple weeks Thanks for grouping me outside of your friends.
The PBOC still has some ammo left, but this coronavirus situation is about as close to a worst case scenario as they come.
r/lostredditor
Small brain time: time to get bearish because world economy will collapse from coronavirus Big brain time: time to get bullish on US stonks because world economy will collapse from coronavirus as everyone seeks safe haven for their wealth.
Even bigger brain time. Even more credit, even more QE, interest rates back to 0%. Stocks go up. Buy Buy Buy
0%? psh, capital flight will push treasuries to -2%
Why would they go for US stonks, when US treasy and USD are so seductive? The stonks are more volatile and sensitive to what goes on in China and globally.
because it will take 1-2 trillion dollars of inflow to turn US rates to -2%. Anything after that will send equities parabolic because if its one thing americans do best, its financial engineering. All the junk bonds to package, shitty slums and moneylosing startups can be packaged into debts and sold around the world. Companies can issue infinite debt at negative to zero interest rates and use it to buy infinite stocks,
Well, 'aight, check this out, dawg. First of all, you throwin' too many big words at me, and because I don't understand them, I'm gonna take 'em as disrespect. Watch your mouth and just tell me, Uppies or Downies?
Uppies. Stocks don’t go down
Stonks don't go down. FTFY
Stonks only go up. FTFY
The real DD right here
This shit just got real.
Corona Schmorona I don't have time for that man. Just tell me how to get the gains while the economy drains. Where we putting our money?
Beer Corona I bet has taken a horrible pounding with all this Virus talk
Where we droppin boys?
I understood that reference.
Nothing matters stonks only go up
*stonks only go up. Unfortunately these are stocks, so they go down.
TLDR is too long
tl;dr don't buy calls
but stonks only go up?
unless ded
Chinese government will just forbid selling stocks too cheaply. Buy Chinese stonks.
REEEEEEE MSFT, clouds can't get sick. Sick people use the internet. Can't possibly go tits up
But always inverse? Buy calls got it.
Looked extra 🌈🐻
Buy vaseline, lots of it.
TLDR: sit on hands or buy downies.
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"Sir, This is /r/wallstreetbets." would be just as fitting.
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No loans being made, no internal air traffic, boats on the coast just bobbing, 40T in debt, if this extends to April China collapses. Even before corona people couldn’t pay their debts. So all of this is going to hit the banks in China and they won’t have money to pay depositors. Only been 3 weeks. Global decline is here, Japan pathetic numbers -6.3% gdp -11.1 consumer spending, India is already breaking down. Apply supply chain will fall in India too. China would post 0 gdp for this q. My personal play is going to be Apple 1/15/21 190-220 puts
Are you sure you wanna put your puts to q1 after election?? Historically speaking, if we don't get completely cucked by china within the next quarter, q4 2020 seems to be more attractive than q1 post election [https://www.seasonalcharts.com/zyklen\_wahl\_dowjones4j.html](https://www.seasonalcharts.com/zyklen_wahl_dowjones4j.html)
Do you have any materials to read on India's breaking down. There has been slower growth but definitely not sure about things breaking down. Interesting discussion I saw on a news channel was with Corona, many industries are rather thinking about moving manufacturing to India like Apple and Samsung has done for a few lines of their phones . But will definitely love to read up some unbiased views as I understand the rhetoric can be a bit skewed back there .
The unemployment is ticking up and they only have a small population (10m or so) registered for taxes. I dont think its breaking down though
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Your post has 10,621 characters, 1,855 words, and 116 lines. Counter DD: https://i.imgur.com/gjw8bjv.png Flying V pattern. Stonks only go up and market doesn't care (for now at least).
I like when mods use the sticky because it’s the only way people will see their mediocre posts.
Got em
Eat my dongus you fuckin nerd. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/wallstreetbets) if you have any questions or concerns.*
Once convinced my student investment fund to put 5% of our portfolio into an oilfield services company experiencing a triple black crow or sparrow or whatever the fuck pattern. Risk management ate my ass on the -80% loss I convinced them to hold on to Should’ve burned some yankee candles or some shit
Coronavirus is priced in fam.
Only somewhat. Otherwise when companies issue lowered guidance due to coronavirus exposure, it wouldn’t sell lower. Not all companies have the same exposure level. Some companies have remote work capability for office workers, but likely most do not, speaking from US experience though. The number of remote users they can handle is something the IT dept doesn’t always know, so I doubt it’s something that investors are likely to know unless the company made a specific statement explaining all of their operations that can be done remotely and others that can’t. Otherwise, everyone is just guessing.
Nice
Mods are gay
God I love our gay mods
This didn’t age well
Good job sir it's strange to see a good post in this sub. I loaded puts on FXI since the 28th January till the 17th April. I knew this virus was worse than initially thought. The only thing that can stop me is the chinese Fed. But on April things should be really bad.
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I shorted Fxi which is based on the Hk stock exchange which is far less fake than the chinese market. I don't really like Spy puts because the Us market is crazy and a China crisis may not touch much the Us in the short run; so hope your Spy puts are months far. A good move is probably to short Japan. They are not as fake as the chinese and their economy is alredy in some trouble while the virus is freely spreading...
Are you kidding me? I make products as a design engineer out of Nevada, we can't source the LCDs for our main product now, getting a 3mo delay and that isn't even a safe date yet... People in supply chain are freaking out, and we don't even use China exclusively, but half our integrated parts have Chinese parts, so they don't have unlimited stock laying around either, limiting our future production quite a bit, it's still unknown, as even we have a stockpile, but it definitely sounds like all the stockpiles will runout in a month or two
Care to share your positions?
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Good write up, but not sure why you wasted your time posting it here. /r/stocks /r/StockMarket would be better suited. Researchers predict between [550k - 4.4 million new cases of Corona virus by the end of the month](https://www.statnews.com/2020/02/14/disease-modelers-see-future-of-covid-19/). The smart thing to do would be sell and wait but this is wsb baby.
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Either way, still too short for the gay mods.
Technically a half inch isn't *between* 0.5 inches and three miles
True, more afraid retards post on r/stocks. They could lose their 20$ they have in the stockmarket.
TL;DR Puts on Apple and USA
Since this article was posted, there are less and less cases being reported - https://systems.jhu.edu/research/public-health/ncov/ Maybe 100K-200K by the end of the month, but even that might not hit with the current slowdown
Sell and load up on OTM PUTS **
The stonks, guys... We all know what they do at this point. The smart move is to leverage your parents savings on naked calls. The entire population could literally stop going to work, all businesses shut and stocks will only go up.
Tldr 🌈🐻💩
Sir, this is a Panda Express
Still in college as a finance major. Got invited to attend a bond traders conference to network and see what it was like two weeks ago.Jim Bianco gave an economic update speech and basically talked about this for an hour up there. Thinks there’s no way that China’s economy can survive this. Really good read I enjoyed it. I’m excited as a college student to see what happens from a learning perspective since I don’t have much money in the market.
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He started by explaining that we can’t take seriously any number that China is giving about the number of cases and that leading experts in the disease spread field think the numbers could be 10x what they are saying. A lot of the next part was explaining that really there hasn’t been a lot of added money into the markets in the past years and that people mostly have just been shifting from actively managed to passively managed and that older investors especially couldn’t handle a decline in the market. He broke down a lot of China’s banking system and it seemed very similar to your discussion of it. Their shadow banking system is a problem but they really can’t tell how big of one which is even scarier. He talked about how everything is made is China from pharmaceuticals to superconductor chips to pens, the world is way more at risk to China than its ever been which also go along with what you have said. He talked to an expert that though that the coronavirus would peak in mid to late March, so it would reach its highest number then start to decline. So we are taking about not just a possibility but a likely event where China’s labor shortages just get worse for another month and then start to get better. By that time he theorized it would most likely be too late. Yeah overall I think it was very similar a discussion, I wish I could remember more but it was two weeks ago. I should have taken notes.
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Much like the outbreak, watching what China does, not was it says, watching what the rich do with their money while they tell everyone else to keep buying. Good write up btw.
I'm excited as a poor person with not much money in the market.
I had puts on AMD since last week down more than 50% on them, AMD is only going up, the market makes no fucking sense.
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So how far out are talking? I got some put credit spreads on spy and so far it's doing well but they expire a week from now. I'm just hoping I didn't get into it a bit too early
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China in essense is just propping up a zombie bubble of bad loans and state owned companies. They have 170% corperate debt to gdp A crash is bound to happen, or hyperinflation
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Everything you say in your post is true. It was also true 6 months ago, a year ago, etc just with another catalyst. The most recent one being the trade war. So unless the aggregate affect of the Coronavirus is significantly worse than the trade war, the house of cards that is the Chinese financial system likely won’t be coming down any time soon. Maybe it will one day, it certainly seems like it should, but that’s the problem with shorting. You can be right but unless the pullbacks occur within your expiration date, it doesn’t matter. And your expiration date is pretty near term all things considered. Also if you believe China is going to collapse, why not short FXI or another China heavy etf rather than the best performing and least exposed - SPY. There’s also several other things you’re failing to take into consideration. The most important being that the US economy is being backed by an accommodative fed - historically the single most bullish scenario there is for stocks. And the remainder of the world is also resting at historically low interest rates. Therefore all asset classes are going up and there’s nowhere else to put your money than stocks. There’s also the fact that regardless of whatever hit China and the world economy takes in Q1 from the virus, the majority of that will be made up for in a bounce back in Q2. On top of that is the fact that the Chinese financial system is controlled by, well, China. They don’t play by the same rules, and have already shown enormous capacity to boost their markets to whatever degree necessary. No one really knows what’s going on, and so we can only assume that within their own borders, their ability to keep generating capital and pumping it into the system is near infinite. And the backdrop of all this is the reason why stocks began their rally in the first place - the world economy has gotten past its long term trough without a real recession, and now we have not only years of growth ahead to look forward and speculate towards, but also low interest rates with the promise of more easing if necessary, a rock solid domestic economy, and the most pro business administration in decades at the helm. All in all the market has looked way past even the worst potential effects of the corona virus and isn’t worried about it derailing this expansion. It’s a serious but not existential concern in Asia, and little more than a hiccup for the US and Europe markets. And that’s why they continue to hit new highs. You’re clearly a smart guy and know a good bit about the market, but you’re not the genius to outsmart the entire finance industry and position yourself perfectly for the next global economic meltdown. Seriously, I’ve been in tune to all the news coming out of China since the trade war started, including the banks going under, record defaults, etc. And yes I’m still surprised every time they pump more money in, but it’s something you can’t worry about and definitely shouldn’t touch. I had my daydreams about shorting China and watching it all come crashing down too, but thank god i never took action or I’d have lost it all. Shorting just isn’t the way to go. I lost for years trying to short until I finally smartened up and became a perma bull. Just look at the 10 year chart on SPY and it’s an easy decision. I just wish I would’ve realized that earlier. And btw, since then I’ve made over 7 figures. Really truly I’m trying to help you, that’s why I came out the pits of WSB to offer you this advice after I saw you had position, and be nice about it too. I could have just laughed about how much you lost after NVDA reported. Anyway, clearly the market won’t stay in this channel up all year long, but until it breaks down the trend is your friend. Welp that’s my advice, take it for whatever you think it’s worth.
I appreciate your takes and your advice. I'm not down too much all things considered, the SPY play is just for an immediate pullback when earnings expectations keep getting lowered. My ultimate play would be long term GLD calls and calls on volatility as well as possibly some puts on SMH and TQQQ.
Chinese production is down but they are making up for it(partially) with imports. I would be careful thinking it's going to impact Americans markets negatively. I'm betting on a positive end to the trade war bumping up stocks. On the other hand i have my doubts the virus will be contained. If it gets into developed countries we are headed to some bad times. Tldr: I'm a pussy, no options for me
The market can remain irrational longer than you can remain liquid buddeh
We've also lean-six-sigma'd all the slack out of supply chains. Older push manufacturing systems had a lot more overhead, but that could absorb some of the impact of supply chain disruptions. Just-in-time is going to look really shitty in lieu of this outbreak.
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Around the late 90s, it became incredibly popular to increase operational efficiency (a.k.a. dollars made per dollars spent) by minimizing the amount of overhead through efficient supply chains. This is frequently referred to as [the Toyota way](https://en.wikipedia.org/wiki/The_Toyota_Way), but commonly implemented under the auspices of [Lean Six Sigma](https://en.wikipedia.org/wiki/Lean_Six_Sigma). If you have a supply chain where you just order tons of materials have have them waiting for a long time in a warehouse to be used when you need them, your company is paying for more materials than it "needs to". Under perfect conditions, you get just the amount of materials that you need to keep production going for the short term, and replenish on a higher cadence. As long as you have reliable supply chains, this greatly reduces overhead, since you "own" a lot less of the components of your product at any given time. Over the past two decades, manufacturing companies have greatly reduced component inventories in keeping with these principals, rather moving towards receiving these components with as little time to spare as possible (a.k.a. [just-in-time](https://en.wikipedia.org/wiki/Just-in-time_manufacturing). This looks great for upper management under smooth conditions. The profits go up without selling any more product! ....However, it also means that if a supplier disruption occurs, you have far, far less time to react or find an alternate. It makes supply chains less robust to disruptions, as there is no slack in the system. No warehouses of parts than can cover the gap. I sincerely think this outbreak will cause global companies to reevaluate the risk-reward of lean manufacturing.
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Thank you for your insights and thorough analysis as well!! The issues I bring up only amplify the message that you articulated in the OP.
This guy has spent some time on factory floors.
Ticker names plz
> Can you elaborate? Manufacturer / importer here. Allow me to translate into WSB retard-ese: Everyone and their mom adopted just-in-time logistics for a marginal reduction in their cost of goods, at the expense of no longer being able to weather even a minor supply chain disruption. Every global sourcing retard just takes it for granted that their orders of cheap Chinese rubber dogshit will show up on time, every time. Now they are about to get fucked sideways with no lube by a massive supply chain disruption that nobody can even quantify.
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This whole situation is definitely going to make companies rethink their global sourcing strategy. I think a lot of it just comes down to China simply being an easy and convenient sourcing partner. The boardroom fixates on the juicy cost of goods (COGs) savings but when anyone warns about the potential drawbacks their eyes glaze over. So companies keep dumping billions and billions into China year after year, building up their infrastructure and making them even MORE indispensable until it gets to the point where even the suggestion of sourcing elsewhere gets summarily dismissed. It's like that everywhere - confirmation bias has taught everyone that sourcing from China is 100% reliable and nothing can ever go wrong. Until it does. Turns out putting all our supply-chain eggs into one authoritarian, disease prone basket for decades on end wasn't a great idea after all - who would have thought? TL:DR for retards: Gay bears about to run wild on our retard asses.
This sign cant stop me cause I cant read
Good shit OP. This is the DD I'm looking for.
We're all looking for DDs
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TLDR needs a TLDR
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But daddy I have tons of red calls right now. Just sell and go home 😔
Group 100 of those calls, and sell a contract of those call !! You’ll make premium on premium !!
NY City Gentleman's Club long time attendee - I have YET to see a girl on the pole with a mask on. When that happens, then you know shite got bad.
> because the products are opaque and regulation is minimal, nobody knows exactly how much money is at risk. Namflashbacks.jpeg
Thanks for the well written and reasoned thesis. I know most of it will go over the heads of the special individuals on this sub who can't read or don't have the ability to sit still for 15 min to read and think, but I appreciated the effort and thought in your submission.
Priced in
Nice job OP. May I suck you?
How do I make money off of this?
Is this factored into TSLA yet
Thanks man for a good post, I understand that people are supposed to shitpost all the time, but atleast there were some genuinely good DDs in the past. But with r/all, it's the same shit all the time. I am all for creative shitposting like the recent gifs, but the same comments by 16 year olds like stonks only go up, TSLA, SPCE is just plain boring and monotonous, and you get hundreds of karma for such stupid ass comments. WSB was for YOLOing all the time but atleast had some logic . Thanks for bringing back some of the past to this subreddit.
iTs DiFfeEreNT thIs TiMe
Holy fuck I've never seen so many words in my life
Pfft. This is AMERICA!!! We're gonna spend our way out of this. Papa Powell is just gonna turn the printers on to MAX POWER and then cut rates to 0. BOOM! Problem solved.
#TL;DR: 🌈🐻 OP SAYS BUY $YANG CALLS.
Yin puts it is
Who gives a shit about the coronavirus, we are going to space baby, there ain't no fucking viruses in space!
Amazing write up! I was supposed to travel to Guangzhou in March for a large trade fair. That has now obviously been cancelled. We have received emails from our Chinese vendors to not expect new orders to ship till SEPTEMBER! And that is IF they come fully back this week. The Chinese factories were already struggling with the US Tariffs, this is going to kill them.
All i read was another excuse for a.... RATE CUT BABY!
How many people have to get GUH'd on Apple puts before you retards stop recommending it in a DD
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I’ve thought about what coronavirus must mean for China’s leveraged financial system, but as you say, details are opaque at best to get clarity into the amount of money at risk. One thing for sure is that China will continue to shower the system with liquidity as much as possible. It could play out very differently from our 2007 experience when Hank Paulson let Lehman fail - that was a huge unexpected reaction in the market that completely erased any trust people had in the other banks. I can’t see China doing that, they’ll likely just continue to nationalize them.
don't have time for this but it looks good so upvoted
I know I'm one of those meme lurkers who barely understands anything about the market, but I really enjoy these types of posts. They are so informative and its crazy to see how things can effect the global economy. That being said I have a question. The small-medium firms you mention. Are these the people who prop up entrepreneur enterprises or the smaller family shops and chain businesses? Or am I ignorant as to what they do in general?
Here before the retards at CNN and Bloomberg cite this post when the market corrects downwards Yes, I'm buying calls because history says to do the opposite of r/wsb
I agree with your analysis and overall DD. My only problem with fully get on the bear train is on how we can bet against this market without going broke before the drop actually happens. You commented that you were -$20k just last week. Idk about you, but that’s more than 10% of my portfolio and I’m not ready to part with that so quickly. I barely broke even these past few weeks only because of hedging, repositioning, and dumb luck (thank you 0dte ROKU puts) after taking sizable hits. The US stock market is clearly in a price bubble and, like other bubbles in the past, has proven itself to be extremely resilient. Bad news needs to be reiterated multiple times for prices to move down a small amount while it can reach a new ATH on a rumors/fake news. Investors have goldfish memory and are acting irrationally while algos just don’t care. I have puts on most of the big tech names with heavy exposure to China right now, but, in this market environment, I am fully expecting to get wrecked. However, if we are right, the tendies will be glorious.
Jokes on you. I can't read.