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2024
March 13th, 2020 at 9:48 am
Good morning!
We're off to the races and the horses are being held at the gate. We did exactly hit GS's -15% line so I guess someone is hitting the buy button this morning – it's just a question of how many sellers are left.
Volume yesterday was huge:
Unless volume is huge on the way back up, this move will be very suspect.
Big Chart – As StJ notes, the real indexes (NYSE and RUT) that are hard to manipulate are actually down over 3 years, Nas still has a long way to fall if things turn sour.
PE/StJ – This is like 2008, those earnings estimates are in fantasy land. 40% of Disney's revenues come from the parks and they'll lose 10% of that due to closures, minimum. If they can't cut costs to keep up then could know off about 30% of the bottom line ($3Bn). Movies not good either but at least they can be delayed and made up later.
I hope DIS pays the workers as that's my Nephew and his girlfriend.
ET/Tangled – Very cheap and a good deal at this price ($16Bn) with $3.5Bn in earnings last year. Their dividend is $1.22 and they should be able to service it so like 17%! They are already in our Dividend Portfolio.
SPY/Tangled – On the whole, you get about the same bang for your margin buck in SPY or the Futures but the Futures have less friction cost, which is why I prefer them for short-term trades. Not sure what you mean by 10,000/50 ES Futures as that seems extremely large but I think you mean $10,000 worth of $50 per point /ES contracts but it's the margin that matters and /ES contracts are $10,000 in margin (maybe that's what you meant?) so let's say you buy one /ES long at 2,600 and it goes up 10% to 2,860 and you make $13,000 vs buying 4 SPY April 260 calls at $25 ($10,000) and SPY goes to $290 and, since the $230s are now $45, you would make $8,000 so less and that's because the premiums are much higher than usual which is again, why I'm playing the Futures during this chaos and not the indexes.
DIS/Pstas – Total disaster for Orlando. Not sure if Universal is closed yet but that city can be killed if those parks are off-line for a month.
Remember, this is just the weak bounce line (up 6% – 20% of a 30% drop) – NOTHING to be excited about – especially as it's coming due to more stimulus.