Talking stocks, trading, and investing in general

[jbarwick]

I just read this blog on semiconductors this morning: http://allstarcharts.com/head-shoulders-top-semiconductors/

 

[MSchapiro]

Anyone have thoughts on a couple of industries...?


1. Commodities - At one point I was holding Alcoa (AA) and Caterpillar (CAT) since both seemed more or less blue chip and beaten down, but my sense is that these are going to take years to recover and I'm more of a day trader. Are these good buys here, or lower, or is the whole industry just in bad shape and to be avoided etc?

2. Microchips - Currently holding Micron (MU) and Qualcomm (QCOMM) and down quite a bit on both... is this industry speculative like biotech? I mean these are both pretty big companies but I've been surprised how far down they've come. I mean MU was at 30 at one point and then 20 and now is floating around 10-11. QComm seems to have come back up, I was buying it mid 40's and its not just past 50. But basically again, is this an industry on an overall downcycle, have I chosen two bad players, is the whole business just volatile so these swings are normal, is there huge projections built in so in an overall down market these guys get pulled first, etc...? I'm nearly ready to get out of QCOMM but MU is down hard and I have no sense of when it'll come back up to somewhere reasonably where I can sell and break even.

1. Very long term. But there are big daily swings if you're a skilled trader.

2. They are essentially a commodity, not speculative. It is about understanding one cost structure vs another. Im holding MU long term.

 

[chogall]

Commodities. China is rebalancing its investments from real estate into domestic demand while trying to delevering. Global demand is in a rout.

MU. Boils down to DRAM pricing. Managements talked about 2H recovery, in line with TSM saying 2Q recovery and channel inventory being lean. But it's really difficult to say as enterprise spending notches down on hardware/software and especially storage. However the barrier to entry to its market is gargantuan compare to any of the new "tech" companies.

QCOM. Biggest cell phone makers are moving away from QCOM chips as they realize the biggest differentiator between them are the software stacks and hardware. Apple designs their own chips/OS. Samsung designs and manufacturers its own chips at the high end. Xiaomi is moving towards that direction as well and they could very well be using Spreadtrum chips for their value phones. Huawei recruited heavily from M Star and MediaTek so it's obvious they want their own chips. So QCOM market share will continue to be eroded at the very high end and very low end. It still has great patent portfolio although dimishing since 3G. In other words, barrier to entry drifting lower especially when national interests in China and Korea steps in.

 

[MSchapiro]

Commodities. China is rebalancing its investments from real estate into domestic demand while trying to delevering. Global demand is in a rout.

MU. Boils down to DRAM pricing. Managements talked about 2H recovery, in line with TSM saying 2Q recovery and channel inventory being lean. But it's really difficult to say as enterprise spending notches down on hardware/software and especially storage. However the barrier to entry to its market is gargantuan compare to any of the new "tech" companies.

QCOM. Biggest cell phone makers are moving away from QCOM chips as they realize the biggest differentiator between them are the software stacks and hardware. Apple designs their own chips/OS. Samsung designs and manufacturers its own chips at the high end. Xiaomi is moving towards that direction as well and they could very well be using Spreadtrum chips for their value phones. Huawei recruited heavily from M Star and MediaTek so it's obvious they want their own chips. So QCOM market share will continue to be eroded at the very high end and very low end. It still has great patent portfolio although dimishing since 3G. In other words, barrier to entry drifting lower especially when national interests in China and Korea steps in.

I always take away a lot from your posts.

 

[the shah]



QCOM. Biggest cell phone makers are moving away from QCOM chips as they realize the biggest differentiator between them are the software stacks and hardware. Apple designs their own chips/OS. Samsung designs and manufacturers its own chips at the high end. Xiaomi is moving towards that direction as well and they could very well be using Spreadtrum chips for their value phones. Huawei recruited heavily from M Star and MediaTek so it's obvious they want their own chips. So QCOM market share will continue to be eroded at the very high end and very low end. It still has great patent portfolio although dimishing since 3G. In other words, barrier to entry drifting lower especially when national interests in China and Korea steps in.

does apple have its own RF chips ? I thought they do use their own digital chips or processors but not RF ... ? snapdragon 820 LTE chip is supposedly the most advanced RF modem in the market right now

 

[chogall]



does apple have its own RF chips ? I thought they do use their own digital chips or processors but not RF ... ? snapdragon 820 LTE chip is supposedly the most advanced RF modem in the market right now

Snapdragon is application processor with modem integration. It also has a baseband only SKU. Modem/baseband is RF backend not RF/PA front end, which are made by analog chip companies.

Apple uses its own app processor in conjunction with Qualcomm modem (used to be Infineon, now part of Intel).

Apple beat Qualcomm and everyone else to 64bit ARM core migration couple years ago with A7. Took Qualcomm 2 iterations and 2 years to catch up. The last Snapdragon had heat issues AFAIK and was a disaster. The current one (830?) seems to fixed those.

Apple started with app processor. And then they integrated fingerprint and touch processors. The next natural SoC integration progression should be the cellular baseband/modem or the WiFi/BT baseband/modem.

Don't think Apple has any chance of getting analog components right without buying a company. Analog has huge barrier to entry.

 

[GreenFrog]

Chogall, thoughts on NVDA for the autonomous vehicle play?

Might as well consider the VR play as well.

 

[suited]

I sold my Smith & Wesson this morning at open for $25.83. I didn't have a huge position, but I think the stock has peaked for the time being, based on my prediction that Trump will be the next president, however horrible that might sound. I did pretty well - I bought in at the mid $6 range.

 

[chogall]

Chogall, thoughts on NVDA for the autonomous vehicle play?

Might as well consider the VR play as well.

Car sales ~ 17M
PC sales ~ 260M
Phone sales ~ 2B

Auto replacement cycle ~ ??? years
PC replacement cycle ~ 5 years
phone replacement cycle ~3 years

 

[Texasmade]

Former CEO of Chesapeake, Aubrey McClendon died about 30 min ago in a car accident driving into a wall one day after being indicted for bid rigging for leases.

 

[MSchapiro]

Former CEO of Chesapeake, Aubrey McClendon died about 30 min ago in a car accident driving into a wall one day after being indicted for bid rigging for leases.

Sad news, I feel for him a bit. Has to have been hard to fall so much.

 

[GreenFrog]



Former CEO of Chesapeake, Aubrey McClendon died about 30 min ago in a car accident driving into a wall one day after being indicted for bid rigging for leases.

Holy **** I thought this post was in jest. He actually died.

 

[GreenFrog]

I have a roughly 16% gain on my FCX position. Not bad for holding it for a week or so. I wanted to sell it AH at around 7:58 PM, but my ******* computer lagged and I didn't get my order placed in time.



In b4 16% drop tomorrow.

 

[GreenFrog]



FCX is down 42% (cost basis approximately $6.50)

Time horizon is long. 

How you doin' now?!

 

[Master-Classter]

Yeah, came here to post about CHK. Wow, what a shame, just on a human level. From what I gather, yesterday it was announced he'd been indicted, the stock dropped 6% post market, then the company stated that even though he was a former CEO and huge part of their development that it basically had nothing to do with him. The stock started out a bit up and next thing you know it's up 20-30% or something, which at first I wasn't sure why but someone else said it might be a short squeeze so I guess a bunch of people shorted it thinking this was really bad news and turns out it was nothing so they were covering ?, and then midday I saw on SeekingAlpha an announcement that there had been a card 'accident' where he drove his car into a wall at high speed. Comments speculated that there may have been a lot to uncover or he assumed that there was going to be a sentence and jailtime etc...

Anyway, a few of my preset sell orders popped off and I sold a little chunk at $3.5 and have still have orders to buy more if/when it comes back down. Regardless of the stock movement, it's also just a shame to hear the sad news.




I hear plenty of speculation that SCTY is on the edge of imploding, and while I won't comment on that, I will say that as a stock it seems to bounce around quite a bit, or at least enough that if you're looking to do quick flips and trade over a day or even 2-3 days, I find this one has a lot of movement to work with. I keep buying some at 18 or so and selling it for 19-19.5, which isn't huge but it's a nice clean little profit over and over again. Same thing with TWTR. Again, not necessarily a company I think will go anywhere but seems to have decent movement over a week or two.


And a third point, which is about the idea of dividends and buying and holding versus flipping a stock. I'm holding some REITS in my RRSP and while I've enjoyed collecting the dividends, all of them have preset sell orders on them and some have already triggered. I enjoy getting a 7-8% yield but it takes months to get those and if I can flip it at some point and get a clean 10-15% return just on the stock itself, I'm happy to sell the position and buy back in and downward when it's at a point i like. That might mean missing a dividend payment, or it goes higher after I sell, but I'm willing to lose the dividend and there's always something else beaten down to invest in... Thoughts?