Profit selling – Stormbirds http://stormbirds.net/ Mon, 26 Sep 2022 14:28:32 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://stormbirds.net/wp-content/uploads/2021/07/icon-2021-07-05T151758.466-150x150.png Profit selling – Stormbirds http://stormbirds.net/ 32 32 S&P 500: Brutal bear market hits 7 major stocks below $3 per share https://stormbirds.net/sp-500-brutal-bear-market-hits-7-major-stocks-below-3-per-share/ Mon, 26 Sep 2022 12:00:00 +0000 https://stormbirds.net/sp-500-brutal-bear-market-hits-7-major-stocks-below-3-per-share/ There’s nothing like a bear market to remind S&P 500 investors just how low stocks can go. And that’s a surprisingly low number per share in some cases. X Seven stocks in the broad S&P 1500 Index, which includes small and mid-sized companies in addition to the S&P 500, have now plunged below 3 per […]]]>

There’s nothing like a bear market to remind S&P 500 investors just how low stocks can go. And that’s a surprisingly low number per share in some cases.




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Seven stocks in the broad S&P 1500 Index, which includes small and mid-sized companies in addition to the S&P 500, have now plunged below 3 per share each as the market falls into a bear market, according to an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. Some of the hardest hit stocks include the real estate company Diversified health care Trust (DHC), manufacturer of cash dispensers Diebold Nixdorf (DBD) and office logistics company pitney-bowes (PBI).

Such massive declines in stock values ​​to such low levels indicate the kind of strain some poorly positioned companies find themselves in now that the Fed and the economy are turning more hostile.

“We are now in another phase of the ongoing bear market downturn,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. But that masks a lot of the worst evils of this market.

S&P 500: Share prices fall

If you’re wondering how much the S&P 500 is under stress, consider the depth of the declines this month. The average S&P 500 stock is now down 19% this year.

Since the S&P 500 is overweight the big companies that have fallen the most, the S&P 500 itself is down more than 22% this year. This puts the market in bearish territory. And you’re also starting to see the per-share prices of some large-cap S&P 500 companies getting uncomfortably low. Communication equipment manufacturer Lumen Technologies (LUMN) is now the lowest stock in the S&P 500, trading at 8.09 per share. This is a drop of almost 36% this year.

But you see much more dramatic implosions within the S&P 1500.

Close to Penny Stocks now

Selling is happening so quickly in the markets that some old big companies are on the verge of being penny stocks.

Take the example of the Diversified Healthcare Trust. The real estate company which owns properties for the elderly now trades at just 1.14 per share. That’s a crushing drop of 63% this year. Why are investors selling these stocks so hard? It’s all about fundamentals. This year, adjusted earnings are expected to drop nearly 90%. But it’s getting worse. The company is expected to lose 75 cents per share in 2023. And investors have little patience for losses in this market.

And ironically, a company that makes machines that dispense dollar bills is now trading for just a few dollars. Shares of Diebold Nixdorf are down more than 70% this year to 2.68 per share. The company’s business is affected by the increase in non-cash digital payments. And we also see it tipping towards a loss of 32 cents per share this year.

Don’t forget Pitney Bowes, once a formidable player in the shipping and office supply industry. Stocks are down more than 60% this year. This drops its value per share to just 2.46. The business is in steady decline. Adjusted earnings per share are expected to fall nearly 38% this year.

More S&P 500 sub-$3 companies to come?

If the S&P 500 continues to tumble, it’s only a matter of time before you see more low-priced stocks in the index. And the ones you see in the S&P 500 are just the start.

“Troubling market volatility is going to be here for a while as Wall Street significantly lowers its year-end S&P 500 targets,” said Edward Moya of Oanda. “A hard landing is becoming the base case for many, which means more economic hardship and a much weaker stock market are ahead.”

S&P 1500 stocks are trading at less than $3 per share

Company Symbol Index Closing price on September 23 Stock YTD % ch. Sector
Diversified health care (DHC) S&P600 1.15 -63.1% Immovable
Gannet (GCI) S&P600 1.99 -62.7 Communication Services
New York Mortgage Trust (NYMT) S&P600 2.37 -34.7 Finance
Community health systems (CYH) S&P600 2.38 -81.6 Health care
pitney-bowes (PBI) S&P600 2.65 -62.9 Industrial
Diebold Nixdorf (DBD) S&P600 2.75 -70.4 Computer science
Franklin Street Properties (PSF) S&P600 2.84 -52.4 Immovable
Sources: IBD, S&P Global Market Intelligence
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Renewables investors face uncertainty due to EU profit cap https://stormbirds.net/renewables-investors-face-uncertainty-due-to-eu-profit-cap/ Sat, 24 Sep 2022 06:29:07 +0000 https://stormbirds.net/renewables-investors-face-uncertainty-due-to-eu-profit-cap/ As a European cap on renewable energy revenues aims to redirect excess profits from low-cost power generation to consumers, analysts and industry groups now say such moves are both risky and coming. at the wrong time. As part of its emergency plan to tackle high energy prices, the European Commission has proposed a temporary cap […]]]>

As a European cap on renewable energy revenues aims to redirect excess profits from low-cost power generation to consumers, analysts and industry groups now say such moves are both risky and coming. at the wrong time.

As part of its emergency plan to tackle high energy prices, the European Commission has proposed a temporary cap of €180 per megawatt hour (MWh) on the price at which low-carbon electricity companies sell electricity. electricity.

  • What complicates matters is that not all renewable energy plants actually benefit from soaring prices (Picture: PressReleaseFinder)

This cap would apply to wind, solar, biomass, nuclear, lignite and some hydroelectric plants, but it would effectively operate as a tax. EU member states could raise up to €117 billion a year from power producers to help vulnerable consumers, according to the commission’s own estimates.

While the EU has pledged to increase adoption of renewables (to reduce its addition of Russian fossil fuels), such a temporary revenue cap has been criticized by industry groups for ignoring the specifics of the renewables market. and create uncertainty for investors.

But some experts disagree.

Daniel Gros, a German economist at the Center for European Policy Studies think tank, said the cap should not have a negative impact on investments in renewable energy. “A price cap would only increase the tendency of renewable energy producers to sell their production forward, thus protecting themselves both against future price caps or against a sudden drop in prices,” he said. he declares.

Uncertainty for investors?

Under EU projects, member states could go beyond the 180 MWh cap in national legislation if they want to capture a larger share of windfall profits.

But industry groups have warned that allowing countries to deviate from the EU cap creates confusion and uncertainty for investors, as well as risks to the integrity of the energy market.

“A lower cap on revenues at the national level creates great uncertainty for investors and puts the integrity and unity of the EU market at risk,” Naomi Chevillard of SolarPower Europe told EUobserver.

Echoing this, Simon Dekeyrel, climate and energy policy analyst at the European Policy Center think tank, said different revenue caps between member states could disrupt cross-border trade and fragment the internal energy market.

“A higher income tax in one member state can, for example, incentivize electricity generators to sell their electricity in neighboring markets with lower income taxes,” he said.

The Commission, for its part, has also acknowledged that different caps could lead to “significant distortions between EU producers”, who compete in an integrated European energy market.

Nevertheless, they point out that more ambitious national caps can be allowed, as long as they do not distort the functioning of electricity markets and do not undermine investment signals.

Governments are now “making a profit”

Complicating matters further is the fact that not all renewable energy plants actually benefit from the price spike. According to an analysis by Rystad Energy, only 40% are making windfall profits from the current energy crisis.

Revenues from most renewable energy capacity installed in the EU come from fixed rate contracts entered into before the energy crisis, on average below current prices.

These long-term contracts (normally awarded through subsidy or auction mechanisms) represent 60% of the installed capacity in the EU and are mainly located in Germany, France and Spain.

Victor Signes, renewable energy analyst at Rystad, argues that these producers cannot make windfall profits because they have to redistribute additional revenue with the quid pro quo to the deal.

With regard to subsidy mechanisms, such as feed-in tariffs and bilateral contracts, Signes explains that governments and national utility companies are the ones who purchase the electricity produced by renewables at the defined fixed rate, and then sell it on the spot. market.

“After 20 years of governments having to pay a fixed above-market price to renewable energy developers, governments are now making a profit,” he says.

Some authorities have recognized the benefits thus granted. For example, the French Energy Regulatory Commission said the system could generate around €8.6 billion for the French state in 2022 and 2023.

Wind Europe called on EU countries to only apply the cap to actual earned income, arguing that most wind farms in Europe earn a fixed income.

According to a leaked document prepared by the Czech EU Presidency, power producers subject to state measures such as feed-in tariffs and bilateral contracts should be excluded from the application of the revenue cap.

EU energy ministers are expected to decide on the revenue cap for renewables and other emergency measures at their next energy council next week (September 30).

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Guyana calls for tenders for a new agent to sell its crude exports https://stormbirds.net/guyana-calls-for-tenders-for-a-new-agent-to-sell-its-crude-exports/ Thu, 22 Sep 2022 17:17:00 +0000 https://stormbirds.net/guyana-calls-for-tenders-for-a-new-agent-to-sell-its-crude-exports/ Ships carrying supplies for an offshore oil rig operated by Exxon Mobil are seen at the Guyana Shore Base Inc wharf on the Demerara River, south of Georgetown, Guyana January 23, 2020. REUTERS/Luc Cohen Join now for FREE unlimited access to Reuters.com Register Sept 22 (Reuters) – Guyana has launched a tender to choose a […]]]>

Ships carrying supplies for an offshore oil rig operated by Exxon Mobil are seen at the Guyana Shore Base Inc wharf on the Demerara River, south of Georgetown, Guyana January 23, 2020. REUTERS/Luc Cohen

Join now for FREE unlimited access to Reuters.com

Sept 22 (Reuters) – Guyana has launched a tender to choose a marketing agent for its share of Liza crude oil exports, the Ministry of Natural Resources said on Thursday, following the expiry of a a contract with a unit of Saudi Aramco (2222.SE) .

A consortium made up of the American companies Exxon Mobil Corp (XOM.N) and Hess Corp (HES.N) and the Chinese CNOOC (0883.HK) is in charge of all the production of Guyanese crude Liza and Unity Gold and the companies market their own barrels, while the Guyanese government separately receives and exports its share of profit oil.

Companies interested in becoming the marketing agent must submit bids on Oct. 11 for a 12-month contract that will start in the last quarter of the year, the ministry said in a statement.

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Guyana expects to cash in around $1.25 billion this year from the sale of its oil share and royalties, up 30% from a previous estimate. By mid-year, the government exported shipments worth $307 million and also received $37 million in royalties, he said earlier this month.

Almost half of Guyana’s total oil exports have gone to Europe so far this year, up from 16% in 2021, as buyers there seek alternatives to Russian crude, Refinitiv data shows. Eicon.

On August 10, joint production from the two floating facilities operating on the Liza I and II projects reached a record 390,000 barrels of oil equivalent per day (boepd). The Exxon-led consortium aims to end the year producing about 380,000 boepd, about 40,000 more boepd than its original 2022 target.

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Reporting by Neil Marks, writing by Marianna Parraga Editing by Marguerita Choy

Our standards: The Thomson Reuters Trust Principles.

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Why are so many North Carolina businessmen listing their multi-million dollar homes right now? https://stormbirds.net/why-are-so-many-north-carolina-businessmen-listing-their-multi-million-dollar-homes-right-now/ Sun, 18 Sep 2022 16:11:03 +0000 https://stormbirds.net/why-are-so-many-north-carolina-businessmen-listing-their-multi-million-dollar-homes-right-now/ The mansion of a former US Department of Defense contractor is the latest luxury home to hit the market. Tony Moraco’s home on Blue Violet Way in Durham is listed at $5.5million. Moraco is the former CEO of Reston, Virginia-based contractor AirForce SAIC. Blue Violet Way, Dominique Sinibaldi with First Impressions Real Estate Photography The […]]]>

The mansion of a former US Department of Defense contractor is the latest luxury home to hit the market.

Tony Moraco’s home on Blue Violet Way in Durham is listed at $5.5million. Moraco is the former CEO of Reston, Virginia-based contractor AirForce SAIC.

Blue Violet Way, Dominique Sinibaldi with First Impressions Real Estate Photography

The reason for the exorbitant price of his house? It’s size and privacy, according to its Triangle MLS listing.

The house is described by Hodge & Kittrell Sotheby’s International Realty as “Combining old-world elegance with today’s revered ambience of casual luxury, it is a legacy estate, built and recently significantly upgraded by master craftsmen”.

Moraco joins other businessmen in putting their huge Triangle properties up for sale. Angel investor David Gardner’s Cary Lake home has been on the market since May for more than $8 million.

The home of Gregg Lowe – the CEO of chipmaker Wolfspeed that just announced a major investment in Chatham County – has been on the market for two years. This listing on Rosemont Drive in Durham costs $6.1 million.

Sentiments around the luxury real estate market are complicated and tumultuous, according to Taylor Marr, deputy chief economist at RedFin.

Blue Violet Way, Dominique Sinibaldi with First Impressions Real Estate Photography

Rosemont Drive, Durham, Dominique Sinibaldi, First Impression Real Estate Photography

Unlike the average real estate market, sales of luxury homes can be unpredictable and affected by small swings in interest rates or the stock market, Marr said.

“It’s not about affordability. It’s a question of, is it the right priority for them to park their money in real estate versus other assets,” he said. “Ultra-rich people tend not to invest all their money in cash when the market gets riskier, as well as when you could get the same return on investment in a much safer asset like treasury bills.”

Homes can stay on the market for years or sell instantly. They can sell for millions above or below the asking price.

Although the Triangle has seen an increase in these luxury home listings, that doesn’t necessarily mean the luxury market is doing well, Marr said.

“If you see an increase in luxury listings, some people may just want to cash in,” he said.

Rosemont Drive, Durham, Dominique Sinibaldi, First Impression Real Estate Photography

It’s hard to find patterns in how the ultra-rich buy and sell their homes. They are good at covering their tracks and listings may not provide a full picture of how the market is doing.

Maybe a wealthy person who was planning to list their home doesn’t because they fear a recession. Or maybe a homeowner lists his house on the market for millions of dollars and it doesn’t sell, so he delists.

Across the Triangle area, home prices have risen nearly 30% over the past six months, according to TMLS data. This same increase is also affecting luxury homes, according to Marr.

“It’s a pretty massive increase just in overall demand, higher incomes, people wanting to buy real estate in the Raleigh area compared to other places,” Marr said. “A lot of wealthy people were able to profit from growth in the stock market or growth in other assets until this year when the markets performed poorly.”

Rosemont Drive, Durham, Dominique Sinibaldi, First Impression Real Estate Photography

A large portion of the stock market’s cash flow has been invested in these properties. Homes have received upgrades that increase their value, like bigger pools or better security systems.

“It’s not just a pure demand for land. It is also a lot of money that is important for the real estate development of these existing structures,” he said.

So why sell now?

Some luxury home owners say they have an eye on economic developments in the region and hope to make a profit by selling their homes to businessmen who come from other states to the RTP.

But for David Gardner, he wanted a change of scenery.

“We loved living where we are, we loved living in Cary,” Gardner told WRAL Techwire in June. “I’ve sat on the Cary Chamber, invested in a lot of local businesses here.”

He said it was time to downsize and simplify by having no yard or private road to maintain.

Gardner told WRAL Techwire he will be moving to downtown Durham, close enough to where he can walk to his office or work in one of the city’s coworking spaces.

Ruth Williams and Jeff Bruner just listed their Greensboro mansion for $5.7 million, one of North Carolina’s most expensive recent listings. The power couple is known for their textile business in the High Point area, The Quantum Group.

Now that the two are retiring, Williams said they have their eye on a new home in Florida.

Williams said she doesn’t think they’ll have any trouble selling their home.

She sees Greensboro as North Carolina’s next innovation hub, with Toyota bringing a battery manufacturing plant to the area and Boom Supersonic jets selecting the Triad as one of its first locations.

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5 Warren Buffett stocks to buy and never sell https://stormbirds.net/5-warren-buffett-stocks-to-buy-and-never-sell/ Fri, 16 Sep 2022 09:06:00 +0000 https://stormbirds.net/5-warren-buffett-stocks-to-buy-and-never-sell/ When Berkshire Hathaway (BRK.A -0.81%) (BRK.B -0.62%) CEO Warren Buffett buys or sells shares of a company, investors wisely pay attention. That’s because the Oracle of Omaha has generated an eye-popping 3,641,613% total return for its Class A (BRK.A) shareholders since taking over the reins of Berkshire Hathaway more than 57 years ago. year. Given […]]]>

When Berkshire Hathaway (BRK.A -0.81%) (BRK.B -0.62%) CEO Warren Buffett buys or sells shares of a company, investors wisely pay attention. That’s because the Oracle of Omaha has generated an eye-popping 3,641,613% total return for its Class A (BRK.A) shareholders since taking over the reins of Berkshire Hathaway more than 57 years ago. year.

Given Buffett’s penchant for buying high-quality stocks and sticking to them for the long term, riding in the wake of the Oracle of Omaha has proven to be quite profitable for decades. It’s a particularly good time for investors to buy Buffett shares, with the S&P500 and Nasdaq Compound plunge into a bear market.

Here are five Warren Buffett stocks that investors can buy with confidence now and never have to sell.

Warren Buffett, CEO of Berkshire Hathaway. Image source: The Motley Fool.

Amazon

The first Buffett stock that can be bought without investors losing sleep is the e-commerce leader Amazon (AMZN -1.77%). Although Amazon’s main online marketplace is likely to experience weakness during recessions, this revenue segment is not key to the company potentially tripling its operating cash flow over the next four years. .

Even though Amazon is estimated to bring nearly 40% of all U.S. online retail sales in 2022, it’s the company’s higher-margin ancillary operating segments that are driving its profitability and flows. cash. For example, Amazon’s marketplace popularity has helped the company recruit more than 200 million Prime members globally. Amazon generates about $35 billion in annual sales from subscription services, allowing it to reinvest in its extensive logistics network and other high-growth initiatives.

The other heavyweight is the Amazon Web Services (AWS) cloud infrastructure services segment. According to a recent Canalys report, AWS reported around 31% of cloud service spend during the second quarter. Even though AWS accounts for just one-sixth of Amazon’s net sales, it has still produced more than half of the company’s operating profit. With cloud growth still in its infancy and AWS accounting for a larger percentage of total Amazon sales, the company looks cheaper than ever, relative to its future cash flow generation potential.

Visa

The second Warren Buffett stock investors can buy and never have to consider selling is the payment processor Visa (V -2.03%). Despite being cyclical, Visa’s enduring competitive advantages make it an easy stock to hold over the long term.

For starters, Visa accounted for 54% of the U.S. credit card network’s purchase volume in 2020. The U.S. is the world’s largest consumer market and Visa holds a 31 percentage point lead over its closest competitor. . To boot, it’s the only payment processor that significantly expanded its share of the US processing market after the Great Recession (2007-2009).

To add to the above, the vast majority of global transactions are still conducted in cash. This should give Visa ample opportunity to grow organically in underbanked markets, such as the Middle East, Africa and Southeast Asia, and make acquisitions to expand its reach. .

It should also be noted that Visa does not act as a lender. By focusing solely on payment processing, Visa does not have to worry about potential loan payment delays and therefore is not required to set aside capital to cover potential loan losses. This is one of the main reasons Visa’s profit margin is typically at or above 50%.

An all-electric GMC Hummer EV crossing a small river.

The GMC Hummer EV is one of 30 electric vehicles that GM will release by the end of 2025. Image source: General Motors.

General Engines

A third Warren Buffett stock to buy and never sell is the Detroit auto giant General Engines (GM 0.10%). Although economic weakness and historically high inflation threaten to undermine auto sales in the near term, the long-awaited growth catalyst for General Motors has arrived.

The electrification of automobiles for individuals and corporate fleets is the decades-long opportunity the automotive industry has been waiting for. As most developed countries seek to reduce their carbon footprint, electric vehicles (EVs) are seen as a sustainable growth story.

General Motors plans to spend $35 billion on electric vehicle, self-driving vehicle and battery research by mid-decade. According to CEO Mary Barra, GM is expected to roll out 30 new electric vehicles by the end of 2025. The company is expected to have two fully dedicated and operational battery factories by the end of next year. , with more than one million electric vehicles produced every year. in North America in 2025.

Additionally, GM has a significant presence in China, the world’s largest automotive market. General Motors has sold 2.9 million vehicles in consecutive years in China and should have a chance to gobble up market share in China’s still nascent electric vehicle industry.

Bank of America

Warren Buffett’s fourth stock that can be bought on the fist and never sold is a financial juggernaut Bank of America (BAC 1.89%). To stay within the dominant theme of this list, short-term recession concerns should trump BofA’s many long-term benefits.

The beauty of bank stocks is that they benefit from the natural expansion of the US economy. The disproportionate amount of time the economy spends expanding, relative to contracting, allows Bank of America to grow its loan portfolio and deposits, which increases its long-term net interest income.

Another thing to note about Bank of America is that it is the most interest rate sensitive monetary central bank. With the Federal Reserve aggressively raising interest rates to keep inflation under control, ongoing variable rate loans are becoming more profitable for banks and credit unions without them having to lift a proverbial finger. Given that the target federal funds rate has just experienced an extended period where it was effectively at 0%, the implication is that BofA can expect a significant increase in net interest income in the years to come.

It is also a company that has done a phenomenal job of encouraging its customers to do digital banking. By the end of June, 43 million active users were banking online or via mobile, with 48% of all sales occurring digitally. Since digital transactions are considerably cheaper than in-person and telephone interactions for banks, this digital push has allowed BofA to consolidate some of its physical branches and reduce its non-interest expenses.

Berkshire Hathaway

The fifth and final Warren Buffett stock you can buy and never sell is (tongue-in-cheek music)… Berkshire Hathaway. In the past four years, there is no action that Warren Buffett has spent more money buying than his own company.

What makes Berkshire Hathaway such a strong performer is Buffett’s affinity for cyclical businesses and his love of dividend-paying stocks.

As I’ve emphasized throughout this list, cyclical companies benefit from the considerably longer time the US and global economy spends developing. Instead of trying to guess when these economic downturns will occur, Buffett has filled Berkshire Hathaway’s investment portfolio with companies that thrive on the natural growth of US and global gross domestic product over time. Technology stocks, financial stocks (banks, insurers and payment processors) and energy stocks (oil companies) all benefit enormously from prolonged bull markets.

Additionally, Berkshire Hathaway is on track to collect approximately $6.07 billion in dividend income over the next 12 months. Income stocks are generally profitable, have weathered previous recessions, and offer a long history of outperforming their non-paying peers.

With Warren Buffett overseeing an average annual return of 20.1% for his company’s Class A shares over the past 57 years (ending Dec. 31, 2021), investors probably can’t go wrong adding Berkshire Hathaway to their own wallets.

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Take profits when a stock exceeds 20% to 25% gain; Exxon is a good example https://stormbirds.net/take-profits-when-a-stock-exceeds-20-to-25-gain-exxon-is-a-good-example/ Wed, 14 Sep 2022 17:39:00 +0000 https://stormbirds.net/take-profits-when-a-stock-exceeds-20-to-25-gain-exxon-is-a-good-example/ When is the right time to sell stocks? Many new investors make the mistake of not selling when a stock is rising. In fact, taking profits on the upside is a smart move, which preserves wealth and reduces the risk of the stock falling. X You don’t need to hit home runs to win the […]]]>

When is the right time to sell stocks? Many new investors make the mistake of not selling when a stock is rising. In fact, taking profits on the upside is a smart move, which preserves wealth and reduces the risk of the stock falling.




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You don’t need to hit home runs to win the investment game. Focus on getting basic hits. Although contrary to human nature, the best way to sell a stock is often while it is making progress and looking strong to everyone. To grow your portfolio significantly, realize most gains when the stock rises 20% to 25% from its last buying point.

As IBD founder William J. O’Neil says, “The secret is to get off the elevator on one of the floors on the way up and not come back down.”

So after a significant lead of 20% to 25%, sell hard. This way, you won’t get caught up in heartbreaking 20-40% corrections that can hit market leaders.

The 20% to 25% take profit rule

IBD has long encouraged investors to limit their risk in every transaction. Cut the losses of each investment when it reaches the sell rule from 7% to 8% and move on to the next trade. The golden rule of selling is as simple as that.

When a headline is heading in the right direction, your decision making isn’t as easy. If market conditions are choppy and decent gains are hard to come by, then you can exit the entire position.

But if the market winds are favorable and your stock still seems to be in the early stages of its run, then go ahead and sell at least part of the position, like a third or a half, to lock in the gains. Keep watching the behavior of the stock to decide how to handle the rest.

The exception to this sales rule? When a stock goes up 20% within three weeks of leaving a strong base and the market is doing well, try to hold it for at least eight weeks. These rapid rises in breakouts could be big winners in the long run, so they deserve some leeway.

Take profits on the rise

It was a good year for Exxon Mobil (XOM). It came out of a cup base on January 5 after a buy point of 66.48 (1). As of Feb. 1, it was up 20% from that entry as the company reported fourth-quarter earnings that beat Wall Street analysts’ estimates. (2).

Should investors have sold the stock on Feb. 1 when the stock hit a short-term high of 81.51? Our portfolio management rule says yes, at least some stocks.

Over the next few weeks, the stock plunged for a few weeks. Investors would have been comfortable selling at least some of their Exxon Mobil stock on Feb. 1.

Then Russia attacked Ukraine, sending oil prices skyrocketing and taking oil stocks with them. Another sell opportunity to take profit? Probably, at least for investors who missed the previous opportunity to sell stocks.

After peaking on March 8, Exxon shares consolidated for many weeks in what would become a cup-and-handle base with a buy point of 89.90. (3). It crossed this buy point on May 4th. XOM never quite hit the 20% profit target thereafter. The title began to fade as oil prices fell.

Once again, however, XOM stock is cupping with a handle and attempting to return to a buy point of 101.66.

Benefits of taking profits

Not all of your stocks will be huge winners like Exxon in 2022. Most stocks you buy in a bull market will be profitable, but not among the best of the decade. With profit taking, you can lose twice and win once and still be ahead.

And taking a profit feels good. This builds confidence when you transfer money into the realized capital gains column of your brokerage account. Additionally, that money could be applied to another rising stock that is even stronger than the one you just sold.

Finally, you can always buy back a stock if it has another valid buy point.

Follow Michael Molinski on Twitter @IMmolinski

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Sell ​​gold for cash? Know your short-term and long-term tax obligations https://stormbirds.net/sell-gold-for-cash-know-your-short-term-and-long-term-tax-obligations/ Mon, 12 Sep 2022 15:01:00 +0000 https://stormbirds.net/sell-gold-for-cash-know-your-short-term-and-long-term-tax-obligations/ By CNBCTV18.com Sep 12, 2022, 8:32 PM STI (Update) mini If the gold has been held for less than three years before being sold, the short-term capital gains tax kicks in. Find out more about this and also about the tax benefits of keeping your asset longer. India is one of the biggest consumers of […]]]>

By CNBCTV18.com STI (Update)

mini

If the gold has been held for less than three years before being sold, the short-term capital gains tax kicks in. Find out more about this and also about the tax benefits of keeping your asset longer.

India is one of the biggest consumers of gold in the world. In the last year alone, Indians bought Rs 340,860 crore worth of gold. Gold is bought on birthdays, weddings, parties and especially during the end of year celebrations. With so much investment in gold, there are occasions when one may want to trade in their old jewelry to obtain funds for certain expenses. You can either sell your gold or pledge it to receive a loan.

The amount of money you receive for your gold depends on two things: the quality of the gold and the prevailing gold price for that quality. While 24k gold is 100% pure, 18k gold is only 75% gold.

However, exchanging your gold for silver should only be done with reputable companies. People should keep in mind that they still have to pay capital gains taxes when they sell their gold. Depending on how long they have held their gold, they may be subject to Short Term Capital Gains Tax (STCG) or Long Term Capital Gains Tax (LTCG).

Short term capital gains tax

If the gold has been held for less than three years before being sold, then the STCG comes into force, which is then applied only to the profit made and taxed according to the rate of the income tax slab under which the gold falls. particular.

For example, if the short term capital gain is Rs 6 lakh and the person falls in the 30% tax bracket, then he has to pay 31.20% tax on Rs 6 lakh, i.e. Rs 1 ,87,200. The gain or loss resulting from the sale of the asset is calculated by deducting the cost of purchase, the cost incurred for the improvement of the asset and the expenses incurred exclusively in connection with the sale from the proceeds of the sale. of the asset.

Long term capital gains tax

LTCG is calculated in a similar way, but purchase and upgrade costs are applied on an indexed basis instead. Long-term capital gains are taxed at the rate of 20.8% (this rate includes the 4% health and education contribution) with indexation.

Indexing is a technique used to calculate the cost of an asset based on the inflation index. This will increase the cost of the asset and reduce your earnings and therefore the tax payable. Also, the person who falls into the 30% tax bracket will pay a lower tax rate of 20%.

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The net worth of King Charles III. What did he inherit and how much tax will he have to pay? https://stormbirds.net/the-net-worth-of-king-charles-iii-what-did-he-inherit-and-how-much-tax-will-he-have-to-pay/ Sat, 10 Sep 2022 18:12:00 +0000 https://stormbirds.net/the-net-worth-of-king-charles-iii-what-did-he-inherit-and-how-much-tax-will-he-have-to-pay/ King Charles III with Queen Consort Camilla (Source: @RoyalFamily) Photo: Twitter The new King Charles III inherited more than just a crown from his mother, Queen Elizabeth II. Charles also inherited a huge portfolio of assets ranging from real estate to jewelry, but there are restrictions on how most of that wealth will be managed […]]]>

King Charles III with Queen Consort Camilla (Source: @RoyalFamily)

Photo: Twitter

The new King Charles III inherited more than just a crown from his mother, Queen Elizabeth II. Charles also inherited a huge portfolio of assets ranging from real estate to jewelry, but there are restrictions on how most of that wealth will be managed and what will be pocketed by the monarch.

Elizabeth II was one of the wealthiest people in the world, with prime real estate from central London, such as Buckingham Palace, to stretches of farmland in Scotland. But unlike other wealthy people, his ability to sell or profit from these assets was very limited.

The brand value of the British monarchy was estimated at $78 billion by Brand Finance in 2017.

The domain of the Crown

The Queen’s largest real estate was managed by Crown Estate, which is owned by the reigning monarch – the one who holds the crown, and will now pass to King Charles III. The Crown Estate’s property portfolio, comprising large swathes of central London such as Regent Street and St James’s, as well as retail parks and countryside outside London, is worth $15.6 billion, according to the Financial Times . This portfolio also includes seabed up to 12 miles off the UK coast. Excess revenue from these lands is directed to the Treasury, which makes a fixed annual payment to the monarch in the form of a “sovereign grant”. In 2016, this subsidy was increased from 15% to 25%, which at the time stood at £396m.

Fortune of King Charles III

Queen Elizabeth’s personal net worth has been estimated at $500 million by Forbes. This wealth is linked to art, jewellery, investments and castles like Balmoral Castle in Scotland and the house of Sandringham in England. Collectively, these assets are worth $500 million. Most of this personal wealth will be transferred to King Charles III.

A direct source of income for the king will come from the Duchy of Lancaster, a private estate of 18,248 hectares which has belonged to the reigning monarch since 1399; the net worth of the property is estimated at £653 million.

Management of Dutchy of Cornwall, a private estate estimated at £1.05billion, formerly held by Charles III, will pass to Prince William as it is given to the heir.

Will King Charles III pay taxes?

Among other privileges granted to the monarch, King Charles III is exempt from inheritance tax, a 40% wealth tax otherwise levied on inheritance under British law.

According to the Royal Family’s website, “The British monarchy is known as a constitutional monarchy. This means that although the sovereign is the head of state, the ability to make and pass laws belongs to a parliament elected. Although the sovereign no longer has a political or executive role, he continues to play an important role in the life of the nation”.

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The government finally stepped in – to protect the profits of energy companies | Sandy Hager https://stormbirds.net/the-government-finally-stepped-in-to-protect-the-profits-of-energy-companies-sandy-hager/ Fri, 09 Sep 2022 00:51:00 +0000 https://stormbirds.net/the-government-finally-stepped-in-to-protect-the-profits-of-energy-companies-sandy-hager/ In her political career, Liz Truss has earned a reputation for turning around. But even cynics have been caught off guard by the new prime minister’s latest ideological twist. The avowed libertarian from the small state has just unveiled a massive energy relief package which will see the government intervene in the markets to cap […]]]>

In her political career, Liz Truss has earned a reputation for turning around. But even cynics have been caught off guard by the new prime minister’s latest ideological twist. The avowed libertarian from the small state has just unveiled a massive energy relief package which will see the government intervene in the markets to cap household energy bills at £2,500 a year until 2024. Coupled with further relief of six months for businesses and the public sector, the estimated cost of the intervention could reach up to £200 billion.

With the household price cap set to rise by 80% on October 1, massive intervention was needed. But not all large-scale interventions are created equal. The problem with this one is not how much is spent, but where it is targeted and how it will be funded. Basically, it’s massive aid to companies that have profited from the energy crisis, leaving workers to foot the bill. To make matters worse, it encourages the expensive production of fossil fuels, while only cheap renewables will help tackle the twin energy and climate crises.

To unpack the shortcomings of the plan, we must begin with a brief detour into the rather murky way in which energy prices are determined. On the wholesale market, producers sell energy to suppliers who, in turn, resell it to households and businesses. The wholesale price is determined competitively, but the retail price is subject to a cap set by the Office for Gas and Electricity Markets (Ofgem).

The reason so many energy suppliers went bankrupt at the start of this crisis is that Ofgem’s cap prevented them from passing on spiraling wholesale energy costs to retail customers. Under the new plan, instead of letting suppliers take a loss every time wholesale prices exceed the retail cap, the government will compensate them for the difference. No matter how much wholesale prices climb above the ceiling – and they could climb much higher given the geopolitical uncertainty – the government will cash the check.

Truss’ plan effectively means that the government will guarantee revenues for energy suppliers. The concern here is that the companies that dominate the industry don’t need this support, nor do they deserve it. As Joseph Baines, Miriam Brett and I show in research for the Common Wealth think tank, energy providers have made exorbitant profits, and the amount they pay in taxes pales in comparison to the dividends they pay to shareholders, many of whom are foreign governments. . Subsidizing their income on this scale without attaching any conditions, such as a ban on dividends, is beyond recklessness.

The new Prime Minister has ruled out financing the relief plan through an exceptional tax on the energy producers who have benefited the most from the energy crisis. And since Truss’ tax policies are expected to be highly regressive, that means workers will end up bearing the cost.

Perhaps the most disappointing aspect of the package is that it does little to tackle the root cause of high energy prices. The government wants to double down on natural gas by lifting the ban on hydraulic fracturing and increasing offshore production in the North Sea. Not only does this mark a huge step backwards for the environment, but it also doesn’t make sense economically. The climate change commission has already warned that tapping dwindling national gas reserves will have a negligible impact on energy prices.

‘Which side are you on?’: Keir Starmer criticizes Liz Truss’ plan for energy bills – video

So how do you fight high energy prices? By rapidly increasing investment in renewable energy. With the sharp drop in prices over the past decade, renewables are now nine times cheaper than petrol. Only by committing to colossal efforts to build wind and solar capacity can we respond meaningfully to the twin energy and climate crises.

The government has a plan for renewable energy: it wants to encourage private producers to switch to cheaper contracts that are not linked to the current wholesale price of energy. In effect, it involves subsidizing renewable energy producers to accept lower energy prices today in exchange for more stable revenue streams in the future. But these technical fixes will be voluntary and slow to take effect, and estimates suggest they will have a modest impact on energy bills at best.

While subsidies to private renewable energy companies are welcome, what we really need is a public energy company, which will produce and produce cheap and abundant renewable energy directly. The main advantage of a public alternative is that it would be better placed to circumvent the absurdities of private wholesale markets where energy prices are determined by the last, most expensive unit of energy needed to meet demand. . In the current system, the “marginal price” paid to a high-cost gas generator dictates the price of all energy, including cheaper renewables. Unlike private renewable energy companies, a public supplier would not be pressured to accept the marginal price determined in the private wholesale markets.

A public energy company would also avoid other costly and inefficient elements of the current system. First, it would avoid costly and haphazard measures to induce private renewable energy companies to increase their capacity. Second, it could increase investment by borrowing at government rates well below those in private markets. And third, it wouldn’t feel obligated to pay out dividends, which funnel billions to shareholders.

Truss has shown that even the most fervent market ideologues can embrace big government. But there are better ways to intervene. Rather than throwing money at a failing private system, it’s time to invest in a public energy company that can power the country not only more safely and efficiently, but more equitably and sustainably.

Do you have an opinion on the issues raised in this article? If you would like to submit a letter of up to 300 words to be considered for publication, email it to us at guardian.letters@theguardian.com

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Peyto Stock: Slinging in the Mud (TSX:PEY:CA) https://stormbirds.net/peyto-stock-slinging-in-the-mud-tsxpeyca/ Sun, 04 Sep 2022 15:40:00 +0000 https://stormbirds.net/peyto-stock-slinging-in-the-mud-tsxpeyca/ peshkov (Note: This article originally appeared in the July 16, 2022 newsletter and has been updated as needed.) (Note: This is a Canadian company and reports in Canadian dollars unless otherwise specified.) Peyto’s Presidential Report (OTCPK:PEYUF) for July is over and the first thing that mattered was all the mud that kept activity at a […]]]>

peshkov

(Note: This article originally appeared in the July 16, 2022 newsletter and has been updated as needed.)

(Note: This is a Canadian company and reports in Canadian dollars unless otherwise specified.)

Peyto’s Presidential Report (OTCPK:PEYUF) for July is over and the first thing that mattered was all the mud that kept activity at a creeping level. The spring breakup was exceptionally muddy and long. Thank you June rains. The equipment obviously has problems when the roads are muddy because that mud flies everywhere while the equipment sinks. Thus, the second half of the fiscal year will start slowly. Any possible low volume comparison will be due to weather conditions that hampered completion activities.

Sure enough, by the time the August presidential report came out, management was facing bottlenecks as it tried to get things back on track for the all-important winter heating season.

Management is concerned as they try to bring as many wells online as possible in time for the important heating season. Good prices achieved when wells initially have such high (and rapidly declining) production can add a significant percentage or two (sometimes more) to the ROI of the well. In an industry where every extra penny typically hits the bottom line with minimal deductions, such considerations are very important.

After all, industry profits are a relatively small percentage of revenue (usually). So that extra penny or so often makes a decent difference between a good quarter and a great quarter.

The net effect of the weather will be to transfer some starting volumes from the third quarter to the fourth quarter. Now, it remains to be seen whether the company can completely overcome the mud problem. Mother Nature obviously does not have the same timetable as management. So the mud problem could (and did) last longer than desired. Then came even more challenges. This is not new to the Canadian industry. But it helps to understand the unpredictability of challenges on the way to profits.

Peyto Cost History

The advantage of the Canadian dollar gives this company one of the lowest costs in North America of any basin.

Peyto margin history before impairments

Peyto Margin HIstory Before Impairments (Peyto August 2022, corporate presentation)

The company had its best margin year in 2021 since 2015. This was accomplished with a lower average selling price. Any commodity business must continually cut costs to stay competitive. Peyto has maintained some of the highest costs in the industry despite a cautious business in producing high liquids.

This dry gas producer was squeezed in fiscal 2019 and 2020 when gas prices were extremely low in Canada. The venture into liquids production has not been very quick as costs are so low that the coming industry recovery has brought cash flow back to robust levels that have lasted until the present time. .

Moreover, this management is playing the same “game” or strategy as many dry gas producers who have ventured into more liquids. This objective is to keep the costs at the level of dry gas to take advantage of the advantages of liquids in the margins. As noted above, management is largely successful in cutting costs.

ROI direction

A quick review of the areas of operations is certainly encouraging.

Peyto Well Profitability at Different Locations

Peyto Well Profitability At Different Location (Peyto August 2022, presentation to corporate investors)

Many companies like this are experiencing unusual profitability. As export capacity increases in the United States, the natural gas price cycle will likely join the global price cycle in the future. This global price cycle is much higher than it is in North America.

In the meantime, the current environment has paying wells in record time. Many of these companies can report satisfactory minimum well profitability with all costs recovered in less than a year.

Today, the industry is emphasizing shareholder returns and reducing debt levels. But the growing emphasis on cost reduction means that more wells can be drilled with the same capital. Peyto management has signaled in the past, from time to time, the possibility of adding wells to the capital budget because the cost savings were significant enough.

As debt levels decline, less cash will be needed to service the remaining debt. This reduction in debt service costs will also free up more money to potentially spend on increasing production. The industry could never resist high prices for long. On the other hand, fiscal year 2020 caused quite a bit of damage to many balance sheets and also made the debt market more conservative. Therefore, a first financial adjustment should be expected by investors (and consumers). But if the past is any guide, robust growth will resume at some point to cause the next cyclical downturn.

Probably one of the biggest discussions brought to the presidential bulletin is that the industry discussion should be about maximizing return”ON“the capital does not return”OfThis is because a lot of professional investors don’t want their capital back. Instead, they want it to continue creating wealth. That’s why they invested in the first place.

Many investors have lost money in past business cycles because they failed to do their due diligence or properly monitor their investments in this very low profile industry (which is also rapidly moving). The result is that they want their money back before they fear losing it. However, building wealth in the industry is a very different ball game where you accept abortive cycles like the latest as part of the risks of this industry. Planning for it to happen again like Mr. Market tends to do is counterproductive even if it’s predictable. Simply put, you can’t move forward in this industry constantly fearing the ghosts of the past. All you can do is do your best as the future unfolds.

Benefits

Bottom line is that this company is an earnings leader that generally (but not always) avoids impairment charges. There are plenty of companies in the industry reporting decent profits during the good times because they wrote off as much as possible during the recession (while largely blaming lower cost or market reckoning) .

Here in Canada, accounting rules allow these write-downs to reverse as the industry recovers. This is not the case in the United States. Therefore, in the United States, the “accounting game” is to write off as much as possible so that the coming recovery will make the business as profitable as possible. Canada has largely eliminated this game through reversals of impairment charges.

History of Peyto profitability and history of ROCE

Peyto profitability history and ROCE history (Peyto August 2022, company presentation)

The first thing I look for in any cyclical industry is average profitability. This company has a hard-to-beat average profitability by any measure.

Profitability comes from a consistent focus on cost as well as considerable midstream integration. This company owns most of its gasworks and the corresponding pipelines up to the connection to the long-distance pipelines that bring the product to market.

Ownership of midstream assets helps shield the business from some of the upstream volatility. The focus on costs “every step of the way” also protects the company’s combined profitability. Often diversification fails because management does not keep all parts of the diversification sufficiently profitable. This is usually when fallout occurs.

The future

Management will continue to focus on reducing costs while increasing average revenue through a slow and continuous transition to more liquids. Management purchased some liquid-rich land some time ago. But many areas in Canada already had liquid-rich intervals that just weren’t profitable to produce until recently.

There is talk of tier one acreage depletion. But investors should remember that tier one acreage when I grew up was a 3,000 foot vertical well that flowed at least 200 BOD (and never not dried up unexpectedly). We have come a long way since then. It is very reasonable to assume that improving technology will continue to unlock previously non-commercial intervals and leases while moving locations to Tier 1.

Most oil and gas companies report an increase in reserves and drilling locations each year. It can be lumpy because innovations are not predictable. But the long-term outlook still looks favorable for reserve growth.

Similarly, the long-term outlook for petroleum products remains very positive. Many are used to produce products used in the Green Revolution. Natural gas itself is the preferred source of hydrogen (currently).

This makes a business like this a very good long-term consideration. Note that Canadian companies tend to be much less committed to a level of dividend. Thus, the dividend should definitely be considered variable.

But as a profitable natural gas producer, it is one of the best companies to consider for investment.

Editor’s Note: This article discusses one or more securities that do not trade on a major US exchange. Please be aware of the risks associated with these actions.

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