- - Page 9 of 23 The Finance Gourmet

Tesla Stock Buy or Sell?

January 5, 2021 by Finance Gourmet

Wall Street gave up giving honest buy and sell rankings years ago. Everyone knows “Hold” is code for sell, without making the company you are covering too mad to use your bank for future deals. But, even that wasn’t enough, with most firms adding a slew of not-so-easy to decode terms like overweight, moderate buy, underperform, underweight. All of this is to obfuscate the actual track record of these analysts which is often abysmal. The less accountability on Wall Street, the better. Is Tesla Stock a Good Buy? Traditionally, I don’t do buy/sell on stocks. It’s a slippery area, but when folks show up in my comments and email asking over and over again for the same thing, I at least consider it. Tesla and Bitcoin I’m writing about Tesla stock today, because I wrote about Bitcoin 20,000 last week (or was it the week before? — Holidays are tricky). Bitcoin and Tesla might sound unrelated, but their performance and trajectory as late are very similar. Bitcoin is a revolutionary idea in currency that is so new there is no real way to know how it will react or behave in the long term. Recently, however, all the naysayers have …

Bitcoin Hits 20,000

December 16, 2020 by Finance Gourmet

If you’re a bitcoin fan, or if you just follow along, you know that today bitcoin hit 20,000. Meaning you can turn one bitcoin into $20,000. Is Bitcoin A Good Investment? Bitcoin, like the dollar, and Google stock, has no intrinsic value beyond the fact that people decided it is worth something, and there is a limited supply of it. Unlike the dollar, gold, and Google stock, bitcoin doesn’t have a history, or set of like assets that it can be compared against to determine its theoretical value. In short, bitcoin is so new, nobody really knows what makes it tick, although there are many people out there who claim to know. So, is bitcoin a good investment? It depends on what you are investing for, and what money you are using. Some bitcoin analysts are calling for much higher bitcoin prices than 20,000. Before you get caught up in bitcoin euphoria, don’t forget the previous high for bitcoin was set three years ago in December of 2017. That green arrow is very real, but that red arrow is very real too. If you invested your kid’s college fun in bitcoin in September of 2017, you were a genius, provided …

DoorDash IPO Worse Than WeWork Disaster?

December 3, 2020 by Finance Gourmet

Yesterday in my December outlook for stocks, I alluded to the fact that the DoorDash IPO was perhaps overly optimistic about its profitability and the company’s ability to keep any semblance of that profitability in a post-pandemic world. MarketWatch Calls DoorDash IPO “Most Ridiculous” Someone over at MarketWatch isn’t waiting for investors to read between the lines with an opinion piece claiming that the DoorDash offering is the, “most ridiculous IPO of 2020.” The piece goes on to make the claim that the DoorDash IPO offering may even be worse than the WeWork IPO disaster that they previously proclaimed, the Most Ridiculous IPO of 2019. The article goes into the numbers in details, but the long and the short of it is this: DoorDash barely squeezed out a profit on $1.92 billion of revenue for the first nine months of 2020. That amount of revenue is 3x last year’s revenue due to a huge increase in the food delivery market thanks to the Covid pandemic. If you can’t squeeze out a profit in the very best possible market, how can you be profitable ever again. DoorDash can’t raise fees and expenses due to numerous competitors. In fact, its fees are …

7 Important Things To Look For From the December Stock Market

December 1, 2020 by Finance Gourmet

Here we go. December 1, 2020 is a Tuesday, so the markets already got started on this week yesterday. This December is packed with interesting scenarios, events, and reports for investors. Without further ado, let’s jump into the 7 most important things to look for from the December stock market. Tesla Joins the S&P 500 Over a long enough period, the FOMO (Fear Of Missing Out) at the SP500 and the Dow Jones Industrial Average drives some interesting decisions. Some of them prove to be remarkably prescient, others embarrassingly reversed. There is no denying that Tesla dominates news storylines in the automotive industry. Its market capitalization certainly qualifies for inclusion in the central S&P 500 index. On the other hand, Tesla stock is highly volatile, often tied to words its CEO blurts out on Twitter, or based on meeting tight-rope high production goals. More commonly missing those goals but getting credit for being kind of close. What is Rakuten? Joining the S&P 500 will give Tesla stock a new stability that comes from being part of all those market index mutual funds and market index ETFs. At the same time, the company may inject a bit of volatility back into …

7 Deeply Out of Favor Stocks?

November 5, 2020 by Finance Gourmet

Marketwatch is a finance website that survives by cranking out hundreds of articles per day. There isn’t hundreds of articles per day worth of actual financial news out there each day, so there is a bit of filler. Sometimes, I scroll right by. Sometimes, I wonder if a particular bit of financial analysis is legit. Analyzing Financial News Articles Check the person’s track record first Once you’ve been in the financial writing business for a while, you develop some contacts that you can go to for quotes and looks at finances and the stock market. If you have a big enough platform, financial gurus and analysts will come to you for some publicity. All you have to do is fill in the words around their quotes and fire up some graphs. Ironically, what is NOT part of the job is seeing how and when a particular analysts has fared in the past with their predictions. Accountability is not part of the finance writing world. A smart investor starts by seeing what, if anything the finance person has said in the past, and how right, or wrong they were, beyond the flattering, “He picked the last run up in technology stocks!” …

Real World Retirement Planning

March 3, 2021November 3, 2020 by Finance Gourmet

If you’ve read much in the personal finance world, or even just the occasional news story from the business section of your local paper, you are probably well aware of the non-stop stream of headlines about how people are not prepared to retire. Chances are you have visions of old people shut up in their homes clustered around a single candle for light and warmth. But, is this reality, or just great financial copy? A recent Marketwatch article reports on a survey where almost 80 percent of retirees found it easier than they thought to adjust their lifestyle and spending for retirement. This matches more closely with my experience as a financial advisor than the alarmist headlines do. Some real world retirement planning is all you really need. Retirement Crisis for All? As is so often the case, the reality of finances is very individual. As a result, generalizations are often inaccurate for large swaths of people, even while being correct for many others. When I was a Certified Financial Planner, the reality is that I had a lot more clients who were planning for retirement than those who were actually retired. I never did a financial plan for someone …

Covid Investing – Just 1 Tip

December 1, 2020October 22, 2020 by Finance Gourmet

People keep asking me about how to invest based on Covid. Covid investing would be the idea of investing in the potential vaccine manufacturers, distributors, the company that makes glass vials, and things like that. Those company’s stocks are already up on the hope that they’ll benefit. It’s unlikely they are underpriced relative to risk at this point. However, there is an easier way to make a Covid investment. Covid Vaccine To update the original post I must point out that the potential Covid vaccine has arrived faster than I thought it would. The economy is still on the bring thanks to Congress’ inaction on a stimulus package, but in the short-term, expect investors to focus on the vaccine and what might mean for companies, with or without a stimulus. Watch for a lot of over-optimism in the vaccine manufacturers such as Pfizer. If one of them comes out as the dominant winner, then that could really move the needle for them, but present a lot of risk for the others. In my opinion being the main vaccine provider is now priced into all three stocks with vaccines pending before the FDA. Unless they all get something like a third …

How Is The Economy Doing?

October 7, 2020October 6, 2020 by Finance Gourmet

When it comes to the U.S. economy there are a lot of opinions. Many of those opinions have motivations behind them that tend to skew their analysis. So, who should you listen to about the economy? Well, you could do a lot worse than the Chairman of the Federal Reserve. The Economy Is Weak The U.S. recovery is weak, very weak. Although jobs are recovering, they are still lower than they were when the pandemic started. The opinion of the Fed Chairman is that the economy needs more help in the form of government stimulus. Of course, the politicians in Washington care more about Dems vs. Repubs than they do about America, so we are caught in petty fights while the economy sputters. Why The Economy Needs Help While politicians, especially the President, love to point to the stock market as proof the economy is doing well, most investors are very skittish right now. Any bad news at all, and they’ll turn into sellers, and take the market with it. Stimulus in the form of extra unemployment benefits has proven particularly helpful to the economy. Why? Because people on unemployment spend that money, and that stimulates the economy. Save money …

New Home Sales Up During Covid

September 24, 2020 by Finance Gourmet

An interesting wrinkle in the new Covid economy showed up today. The U.S. Department of Commerce reported that new home sales in August rose by 4.8%, on top of a spike 13.9% in July. Buying New Homes Overall home sales are having difficulty in no small part because home buyers are reluctant to do several showings in a day in a Covid world. Those showings are what motivate buyers to purchase existing homes. Unlike existing home sales, new homes are typically sold via model homes. Model home are shiny, bright, and seem cleaner, even though more people may actually move through them each day. Furthermore, rather than having to see numerous homes to find the perfect one, buyers need only find a model they like. Builders then allow buyers to tweak that model. Low Mortgage Rates Record low mortgage rates are also helping drive sales for new construction. Unlike existing home sales that are dependent upon subjective appraisals, lenders can easily get a feel for the current value of the one of many new buildings a particular buyer looks to purchase. Is Zelle a scam? Finding a mortgage, however, even for new construction is getting harder. It turns out lenders …

How To Start Retirement Savings

January 26, 2021September 14, 2020 by Finance Gourmet

One of the things that comes up in financial planning is that getting all of the information and facts can be difficult. This, all too often, leads to financial paralysis where you don’t end up doing anything at all, because you don’t understand all the details. Ironically, a lot of the information that ends up being “too much,” is for edge cases that don’t affect the average American saving for retirement. How To Start Saving For Retirement Now Retirement savings, investing, and planning is one area where complicated topics can needlessly paralyze people from taking action. Occasionally, financial companies themselves accidentally cause this confusion. Not long ago, I was talking with someone about retirement savings. The issue, for this particular person was the commercial talking about “Your Number.” If you remember this commercial, the point was that you should know how much money you will need when you retire. The goal, was to get you to schedule an appointment with one of their financial advisors or brokers to find your number. Since the person I was talking to didn’t know his number, he was stuck on what to do for retirement. The ironic part is that you don’t need to …