🗞️ The Wrap: Infinity
We’ve hit records highs! As the S&P500 dances around 3000, we have a look at a space-age IPO, the future of balance sheets and what’s big in Japan. Read on for more.
5 best performing stocks in October
- Xunlei Ltd (XNET) +97.5% in October
- Achillion Pharma (ACHN) +70.8%
- Teekay Tankers (TNK) +68.5%
- Arrowhead Pharma (ARWR) +45.6%
- YRC Worldwide (YRCW) +55.8%
Big in Japan
How would you like to be long stocks that you knew your government was buying, buying and buying. Seems like an arbitrage. It’s pretty much what’s been happening in Japan since 2010, with the Bank of Japan actively buying stocks and ETFs in the local market and is set to be the biggest owner of shares in the market by the middle of next year.
According to ZeroHedge, it’s not turned out to be the arbitrage it appears with the market falling due to the reported earnings from listed companies. Adding to the concern is the liquidity issues, with retail investors leaving the market and the BOJ holding 80% of all ETFs.
This issue was so pronounced in 2015, that the liquidity in the index futures could not match the demand of buying in the ETFs, creating chaos in the market with excessive price swings as the market closed. This situation emerged because when an ETF is created, the issuer needs to buy the “basket” of stocks or futures and the liquidity in the futures could not match the demand for the ETFs.
It’s now got to the point that the BOJ is considering lending out its ETFs to short sellers who will sell it back to them…wrap your head around that one!
It’s like Uber but for money
Uber Money. The latest expansion by the ride-sharing giant is changing the way workers get paid. While Uber users won’t be able to flex with an Uber Centurion card just yet, this is a pretty big development in upping their worker welfare.
By setting up their own debit cards, drivers and couriers have instant access to their earnings. No more waiting for weekly pay day. But that’s not all. The Uber Visa card also grants drivers 3–6% cash-back on fuel purchases.
If you recall, earlier this year Uber issued up to ~US$10,000 to millions of drivers around the world before its IPO. If they put it into the stock that $10,000 is now worth approximately US$8,800 as Uber (UBER) has slid 22% since listing.
.
What your generation was trading in October
18–24s: Tesla (TSLA)
25–34: Tesla (TSLA)
35–44: Tesla (TSLA)
45–54: Tesla (TSLA)
55–64: Facebook (FB)
65+: Saia (SAIA)
With a few days left this month, Tesla has been on a tear to close October and our traders have been buying and selling their way up our leaderboards.
To the moon | Virgin Galactic (SPCE)
Richard Branson has always aimed high and his most recent company takes it one step further with his commuter space company, Virgin Galactic (SPCE) taking to the clouds and also the stock market. Focusing on taking everyday people (with money) to space, the company on Monday and is the first consumer space enterprise to hit the US stock market.
At US$250,000 a ride, 600 keen wannabe astronauts have already booked their place on a rocket.
Call it a date
According to MarketWatch, over the past 7 decades, no single date has delivered a higher return than the 301st day of the year (October 28) which is averaging a 0.52% return. The trend was upheld this year as the market broke into record highs on Monday. The worst day? October 19 which historically has pushed portfolios down -0.51%.
Want to know what the average return is for any given day over that period? Check out this tweet and bring some binoculars.
Top 5 most bought in October
- Tesla (TSLA) +29.2%
- Apple (AAPL) +8.3%
- Microsoft (MSFT) +4,2%
- Amazon (AMZN) +1.5%
- Advanced Micro Devices (AMD) +14.9%
What we’re using | Atom Finance
Fundamentalists and value investors have a new best friend. Balance sheets are no longer bland, income statements now interesting. Check out atom.finance. Their super slick platform is built around providing institutional quality resources to the masses. It’s like a lite Bloomberg Terminal accessible right from your laptop. I’m a big fan of the X-Ray feature which lets you search for any key word across millions of company filings and transcripts.
I’ve already snagged the username @warrenbuffett ;)
To be clear, this isn’t a sponsored post. We don’t work like that. We just share what we think you’ll find value in.
Trader teaser
If it took 6 people working at 50% efficiency 9 hours to build a barn, how long would it take 8 people working at 75% efficiency to build the same barn?.
First 3 to reply with the correct response get a 50% FX rebate on their next AUD to USD funding.
Last week’s answer: 888+88+8+8+8
Best Buy | Tesla (TSLA) +40%
One reader got in touch last week to say our best buy is too focused on the short term! Fair call. So I did some extra digging and found a trader who has shown the value of buy and hold. This trader got into Tesla right after it hit new lows and has strapped himself in as the stock went from 0–100 in a few months. A tidy 40% gain.
