Talking stocks, trading, and investing in general

[jbarwick]

So my wife’s company furloughed half their staff and the rest had to take a slight reduction in pay to weather the storm. She was saved. PE backed mostly elective medical services company. No one wants you touching their face when you could spread covid

 

[Omega Male]

I was talking on Zoom yesterday with a college buddy who has got quite far up the greasy pole on Wall St. His bank sees the economic disruption lasting well into 2021 and has a already swung to big cost cuts (inevitably, mostly from headcount reduction) across the board, in what was originally supposed to be a growth and consolidation year for them. Sucks.

 

[venividivicibj]

That’s not a lay-off announcement.

They signed the collective airline note saying they won't lay off workers until Aug 31, so of course they can't officially say it yet.

 

[SkinnyGoomba]

I understand how the statement reads.

Most likely the industry will suffer fairly long consequences of this situation so realistic expectations are probably for the best. My hope is that people will go back to traveling as normal once the fear subsides but I know that probably will not be the case.

The statements made were completely different than announcing layoffs which is typically written very plainly.

 

[otc]

I'm with skinny here.

Super disingenuous to caption an article (that you know most of your readers won't actually click on) with "announces layoffs" when the company has done nothing of the sort and is actually doing the opposite in the present term.

Also, aren't layoff announcements a semi-formal thing? Mass layoffs often have legal notice requirements. Unless they actually have taken those steps, you should say things like "considering layoffs" at the maximum.

 

[UnFacconable]

I have a hard time seeing how the economy isn't going to take another big step down at the end of the summer once the stimulus disincentives to layoffs fall away.

I'm not selling my equities but I'm having a hard time seeing this as a good entry point when we are likely to have 1m Americans with COVID in the near-term (call it a month) with the associated negative outcomes and longer-term economic damage still yet to be fully understood. I've talked to people across a variety of industries and I don't think it's possible to have a firm grasp of the true economic damage from the lockdowns. The idea that this stimulus will keep everything ticking along until we are past the pandemic seems, to me, to be pie in the sky wishful thinking.

I've been in contact with a number of investment bankers lately (it's a job hazard) from banks large and small and have received a number of market perspectives from these guys and there is no real evidence based consensus. The perspectives they circulate also differ from the quotes you hear from their chief economists in the news.

 

[otc]

My parent company had an all staff call that I listened in to (generally we operate pretty autonomously but they still own my company so I was curious).

They were pretty optimistic... But that's partly because they do a ton of bankruptcy, restructuring, and litigation work which means they are going to get a ton of business (did will coming out of the financial crisis too). They are running corporate finance training modules for like 400 staff in business segments that are slowing down so they can help take on tasks from the restructuring practice which is getting multiple calls a day.

So...I guess that's a bad sign for the general market?

 

[Omega Male]

Yup. My wife's investment company just put all partners through a crash course on navigating US corporate bankruptcy proceedings. Anything that is consumer-facing is in the ****. The good news (from their point of view) is that lending standards have been super lax over the last decade -- most of the debt structures have no covenants -- so the banks can't just walk in and shut you down like they did in '08/'09. I suspect a lot of people are going to start playing the game the oil funds have been in since 2016 or so -- keep the investor cash, collect your management fees to keep the lights on, assets marked at 1x, no real prospect of exiting anything. This is colloquially known as "Extend and Pretend".

 

[lawyerdad]

Yup. My wife's investment company just put all partners through a crash course on navigating US corporate bankruptcy proceedings. Anything that is consumer-facing is in the ****. The good news (from their point of view) is that lending standards have been super lax over the last decade -- most of the debt structures have no covenants -- so the banks can't just walk in and shut you down like they did in '08/'09. I suspect a lot of people are going to start playing the game the oil funds have been in since 2016 or so -- keep the investor cash, collect your management fees to keep the lights on, assets marked at 1x, no real prospect of exiting anything. This is colloquially known as "Extend and Pretend".

Aka Ponzi scheme

 

[jbarwick]

Yea I don’t see where this freak out ends. For instance, a lot of clothing retail like Nike and Lululemon expect to write off store traffic through April. Then the Safer in Place ordinances do nothing. I drove by Home Depot yesterday and it was packed. People will get sick for quite some time and it will linger for who knows how long.

Cash to shore up personal finances is the first step then leftover for investing as who knows how long this lasts. Q2 seems like not much is going to happen

 

[Piobaire]

You can never really know what exactly would have happened when analyzing how your plans would have worked in a meltdown until they actually get implemented in a meltdown, but all indications are that if this had happened at the time we would have been ready to pull the rip-cord, my fixation with SORR would have served us well. The main impact it would have had on us is that we'd not spend six months of our first year traveling (which is a moot point with something like COVID) but otherwise lived as we're accustomed to off our fixed income cash flows and any dip into our cash reserves would have been discretionary or for an emergent capital expense, i.e. HVAC, etc.

Now fingers crossed the markets are not down to flat for the next decade.

 

[Omega Male]

Amen.

 

[venividivicibj]

Yea I don’t see where this freak out ends. For instance, a lot of clothing retail like Nike and Lululemon expect to write off store traffic through April.

Wife’s birthday if coming up, would really appreciate Lululemon actually having a sale

 

[beargonefishing]

Wife’s birthday if coming up, would really appreciate Lululemon actually having a sale

It seems very dangerous to give yo wife workout clothes for her birthday.

 

[jbarwick]

Wife’s birthday if coming up, would really appreciate Lululemon actually having a sale

I love their running shorts so me too. This morning has me worried I need to hoard cash though.