, vvargiu

vvargiu
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Italy
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Wesley Warren Nolte
Wesley Warren Nolte @Wesl3y
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$MSFT (Microsoft) is making noise despite not even being a FAANG. Microsoft is successfully shifting its image from the company it's been for the past few decades. It loves open source, their dev tools are the tools of choice in many circles, enterprises are moving to their cloud and the company is highly... innovative! Ten years ago I don&#x27;t think I ever would have said that but things have changed. This week Microsoft made waves by announcing an increase in dividends and a monster stock buy-back. Now in the increase in dividends is great, although the level of tax on them is lame. But the buybacks are what should prick your ears up. So what is a buyback, and why does the market love them? A buyback is literally the company buying back its own stock from other investors. &quot;K, cool. So wut?&quot; you may ask. Well here&#x27;s the skinny: 1. Buybacks often signal that the company is confident in its own future. They are in a way saying to the market, &quot;I&#x27;m repaying this debt now&quot;. 2. Companies can buy stock back and then cancel that stock i.e. the number of stocks decreases, so each individual stock becomes worth more 3. Tax on capital gains (stock) is lower than on dividends, so you make more money after tax on a buyback 4. Instead of just increasing the dividend (which effectively is money that does nothing for the business issuing the dividend because it&#x27;s given away), the company is getting something for its money You can probably guess my opinion on this stock 😉 <a href="https://www.forbes.com/sites/sergeiklebnikov/2019/09/19/microsoft-stock-has-rallied-37-this-year-now-it-could-reach-new-highs/" class="e-link" target="_blank" rel="noopener noreferrer nofollow ugc">www.forbes.com/sites/sergeiklebnikov/2019/09/19/microsoft-stock-has-rallied-37-this-year-now-it-could-reach-new-highs/</a> ... Show More
Wesley Warren Nolte
Wesley Warren Nolte @Wesl3y
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$NSDQ100 $SPX500 and $DJ30 are up-and-down on a daily basis as sentiment fluctuates but in reality haven't really gone anywhere over the past few weeks (if you discount the first week of Aug). The northern hemisphere will have a large portion of workers and traders on holiday, and those still at work are in wait-and-see mode when it comes to economic stimulus packages and some form of reliable news on the US-China trade war. I would say that a recession is now obviously on the cards but you should remember that the signals today are usually very early warning signs, and a global slide could be more than 2 years away. This could happen earlier in the UK as we look ready to crash out of the EU later this year - <a href="/markets/uk100" class="e-link">$UK100</a> is reflecting sentiment should this happen but remember that the top 100 companies in the UK are usually global businesses so I am looking to pick up a few companies from that index over the next week. The hardest thing to do in trading is to sometimes do very little, or even nothing if the market conditions aren&#x27;t right. A lot of people would rather lose money than be bored, but be patient because the bull isn&#x27;t done just yet :) <a href="https://uk.reuters.com/article/us-usa-stocks/financials-help-wall-street-bounce-back-idUKKCN1VI1FP" class="e-link" target="_blank" rel="noopener noreferrer nofollow ugc">uk.reuters.com/article/us-usa-stocks/financials-help-wall-street-bounce-back-idUKKCN1VI1FP</a> ... Show More
Wesley Warren Nolte
Wesley Warren Nolte @Wesl3y
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Copiers, the portfolio is a touch down over the past few days as we hold about 3% as $BTC and 2% as $XRP and both have taken a beating the past few days. The influence on my portfolio is quite small but it is apparent so I wanted to provide an update. For now I will continue holding as this feels like a shakeout of inexperienced investors looking to make a quick buck. However, I will start closing positions if BTC makes strong moves south of $9,000 - I won&#x27;t close them all out but I will reduce exposure until things look more positive. 🖖🏼 ... Show More
Wesley Warren Nolte
Wesley Warren Nolte @Wesl3y
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Thank you @YoniAssia and the @eToroTeam for the gifts and recognition as one of the top 10 most copied stock traders on eToro! When I joined eToro in 2015 I had no idea what awaited me: once in a lifetime experiences, meeting amazing people, and a helluva lot of learning (not to mention the 300% profit I&#x27;ve made). Here&#x27;s to many more years on the world&#x27;s largest social trading platform! Cheers 🍸 ... Show More
Wesley Warren Nolte
Wesley Warren Nolte @Wesl3y
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It took me a few years to understand the dynamics of how the various asset types influence one another, and I wanted to share a summary. For a moment we need to ignore politics and news, simplify the world so that we can understand it better. First, some of the key asset types: $GOLD (and other precious metals) <a href="/markets/oil" class="e-link">$OIL</a> Interest rates Inflation <a href="/markets/usdollar" class="e-link">$USDOLLAR</a> Bonds Stocks Cryptos These all interact in a complex dance, but we have to start somewhere, so let’s start with oil. The price of oil (usually quoted in US Dollars) has a broad effect on the world economy. Oil is consumed directly but it is also used to make plastic, petrol, grease and many other things key to how we live. When the price of oil increases it becomes more expensive to deliver your milk, to ship things by boat, to fly to your meeting, to make your lunchbox, and service your car. If the price stays high for a while this cost is passed through the economy e.g. the price of your milk increases. If this happens enough it means the value of your money has decreased i.e. inflation has occurred. Now at certain points in economic growth governments don’t mind &quot;acceptable&quot; levels of inflation, but if it’s too high everyone in your country is getting poorer a little too quickly. One way to control this is to stop the open market spending as much money, and you do this by increasing a country’s interest rate. The interest rate is the base level used to determine interest on loaned money, if it costs more to borrow money fewer people/companies will do it and if they have less money they’ll spend less. And if they spend less inflation growth slows down. However, if companies aren’t borrowing as much then they have less capital for growth and investors won’t make as much when buying stocks so they look for other options. So: Oil increases in price -&gt; inflation increases -&gt; interest rates are increased -&gt; stock prices drop Experienced investors know this chain of events, and so fairly early on will start hedging. They will buy <a href="/markets/gold" class="e-link">$GOLD</a> which is a safe haven and the price of gold will increase. They are also likely to start buying government bonds e.g. <a href="/markets/shy" class="e-link">$SHY</a> which are low-reward but also low-risk, and this typically drives the price up and the bond yields down - which in turn can make stocks more attractive and so this dance continues as investors try to decide what risk and rewards they’re willing to accept. One thing to note is that when bond yields are high (prices are low) this can signal that the market has taken on too much risk, and if key yield values are hit (based on history) this will spook the stock market. The interaction between stocks, bonds and interest rates are incredibly complex but with a basic understanding, you’ll have great insight into how economies work. (more on treasury bonds here: <a href="https://www.investopedia.com/terms/t/treasurybond.asp)" class="e-link" target="_blank" rel="noopener noreferrer nofollow ugc">www.investopedia.com/terms/t/treasurybond.asp)</a> What about the Yankee Dollar? Well, oil, gold and some of the best-performing stocks and indices e.g. $SPX in the world are priced in USD. If the value of the dollar falls all of these things become cheaper if you trade in a currency that has maintained (or increased) its value. So now you can buy American things for a discount increasing the size of your reward. Depending on where we are in the economic cycle, this would increase demand for American stocks, which would then increase in value which over a long enough period (along with a million other things) correct the value of the US Dollar, and swing the discount to a premium. This, in turn, would make investors look at assets not priced in US dollars driving up value elsewhere e.g. emerging markets as represented by <a href="/markets/iemg" class="e-link">$IEMG</a> And lastly, how does <a href="/markets/btc" class="e-link">$BTC</a> and the gang factor into this? From the people I hang around, it seems the thinking is that cryptos will be a safe haven for the stock market, although from what I’ve actually seen in the market this might be hopeful thinking. Cryptos seem to align more with stock performance than safe haven performance, although this isn’t always the case. Honestly, I think the market itself doesn’t know how it wants to treat crypto (except as a ride to the moon) and this new kid on the block is still learning how it works in the global economy. I’ve tried to keep this post short (and failed) so there are many other interesting examples missing, but hopefully that’ll get you interested enough to explore on your own 🖖🏼 ... Show More