Simply because the stock market has, for the past 20+ years, been fundamentally divorced from the state of the broader economy. The vast majority of stock is owned by the wealthiest earners, and the economy is overwhelmingly controlled by just a few players in each sector. The result is that as long as you invest in 2-3 companies, you are guaranteed to capture the vast majority of the profits in that industry, and you have no reason to ever sell since you can just take loans out against your stock.

Result is that large permanent downturns are basically never going to happen except in very very over-bought stocks, and never in the broader market.

I am overweight Disney but not playing options with earnings.

I bought in big during pandemic, sold a bunch at 150. When it went to 200 I was cursing myself but it’s come back now. I have a sizable position now in low 90s

Pros:
-Subscribers growing faster than anticipated
-multiple sources of revenue with parks + merch + movies /streaming
-MCU, Star Wars, Pixar et all will be cash kings for the entirety of our lives

Cons:
-even at current valuation, still expensive compared to other tech/growth names
-?China exposure , they said they have limited the damage but we will see if this is true

If it drops big with earnings, I will just add.

Options chain is not predicting a >5% move for whatever that is worth

Bull Argument:
Issue is none of this is new news. Market, investors have been hearing and pricing these events for 6-12 months now. In that time you have major stocks that received 80% haircuts, with 20% pull downs in the major indices. This is not “no effect”. Many are still near the bottom of their trading range despite recent market rally. It’s an important time to distinguish from profitable and non profitable companies if stock picking

The jobs report indicated the US economy is very strong despite GDP misses, which were expected. It may not bode well for individual tech stocks (with new ammunition for increased rates to come) but bodes well for the general US economy and the indices that they can weather the storm. It’s all % based but the chance of a soft landing increased with that jobs report

Bear Argument:
Recession not truly priced in. By definition you have your 2 negative GDP quarters however this is met simultaneously with a very strong job market which is not classic. You also have the possibility that because of world events which are not yielding inflation will be around longer than anticipated. Ergo fed will need to be more hawkish than priced in if inflation truly doesn’t let up. Hiking rates into a recession does not bode well and uncharted territory.

Stay hedged

This post was edited by Bazi on Aug 8 2022 07:00am

Hope $DIS earning is good

So far so good.

Can DIS go back to 190+ now please.

It’s good boys

what a quarter

What a beast quarter!!! Damnn woooo

$WMT earnings was a lot better than expected

Finally a down day lol. Been feeling guilty taking profits

Not putting any cash to work today though

Disney+ increasing their prices is gonna substantially hurt their growth model which is also what justifies their extended PE ratios. $3 rise with nothing gained will turn off a lot of people.

This post was edited by Bazi on Aug 22 2022 08:06am