r/stocks

What happened this 3-day market weekend so far?

First, in line with their strategy of counter-escalations and widening, Iran continued attacks on regional refineries and desalination plants, hitting some in Kuwait. These types of attacks bring us from a short-term supply shock driven by logistics constraints (Hormuz), to a long-term supply shock driven by diminished production.

Second, Iran has rejected a 48-hour ceasefire proposal by the US. "But ub3r, a 48-hour ceasefire is bullish! It shows the US wants a ceasefire". Nope. The US just wants to find their missing aircraft crewmember (one of the two is still missing) to deny Iran a propaganda victory. The US is therefore constrained in their ability to attack areas where the crewmember might be (without the risk of killing the crewmember), and seem to have sought to prevent Iran from gaining any strategic advantage during the S&R operation.

Third, President Trump has said the quiet part out loud...again. This is an oil grab. This isn't about regime change. This isn't about nuclear weapons. The U.S. wants control over Iran's oil, or at the least control over a client government that controls Iran's oil.

Not only that, but Trump seems to be soft launching pushing his (already pushed out) 3 week deadline (which, by the way, would be 3 weeks from his speech, April 22nd). If the 22nd is the most hopeful timeline for a cessation of hostilities, and it will take months to reopen Hormuz and normalize oil flows after that, we are looking at the end of June under the most hopeful scenario, and his language about needing "a little more time" pushes that out further.

Forth, Hegseth is cleaning house. I see this as removing anyone who is an obstacle to his push to put boots on the ground. He doesn't want Generals who challenge his desire to escalate. He wants Generals who are going to support him in his push to escalate.

As I have said, oil is traded on the margins, is inelastic, and a shortage of oil leads to a daisy chain of price increases throughout the entire supply and manufacturing chain, magnifying prices to wholesalers, end users and consumers.

Given all this (and especially on the back of the first point), oil futures are likely to continue to rise, and the S&P is likely to continue to slide as we see an increased likelihood of a medium to long term supply disruption (which can no longer be cushioned by floating reserves or the SPR releases). I also expect to see a shift from headline-driven price action to physical supply shortage price action, where the floor can only be so low based on "good" (see also: less catatrophic) news. In other words, hope will likely give way to macro reality.

Disclosure: I hold mainly cash and OXY April/June call options (plus some LEAPS and long term stocks bought before or early in the conflict). If history (see 1970s oil embargo and 2022 Russia/Ukraine War) is any guide, a 10% drawdown in the S&P was just the beginning.

Facing the largest supply shock in history, I find it very peculiar that people are reluctant to allocate to oil and gas companies.

I see a common theme where people see that the price of the stock has gone up and thus the move must already be over, or close to over, or too late.

In prior energy bull markets, the pure play oil and gas stocks had moves of 500-1500% The current move on most stocks is about 100% or less from the recent lows.

At the height of an energy bull market, the FCF ratio on the stocks condenses to around 4-5. While at the beginning it is usually higher 12-15. we are currently seeing the higher ratios.

When looking at the total energy market, the price has gone sideways for almost 20 years. it is just starting to break out of that range.

Last time it broke out of that range, there were structural changes to the oil price, moving the floor much higher.

If this conflict ended today which is unlikely, there will be some interesting shifts in the way the world views energy. Every country will start a SPR, and there will be a built in premium to the price after the strait has proven to be a flashpoint.

If this war were to continue for some time, and the strait remain closed for longer, or more damage to oil and gas infrastructure in the area, then were looking at an even larger energy bull market than the prior one. Meaning stocks like OXY will not simply go up 500-1500% but more likely 1000-3000%

I guess my point is, that regardless of the length of war, almost all of these oil and gas companies are undervalued, especially if located in geopolitically safe regions (USA,CANADA)

when given the choice between an historically expensive stock market, vs a historically cheap energy company... the only real options are going cash or going oil and gas.

thanks. bye.

This week, I spoke to an “investor” friend of mine who had supposedly made several “long-term” investments earlier this year. However, as soon as the war started, he liquidated most of those “long-term” investments, telling me that he thinks this war will be a disaster that sinks the world economy. He even bought puts to double down on the thesis.

I obviously have no idea how the Iran war will play out. It may conclude this Monday, or it may drag on for another year. And obviously, if it is the latter scenario, stocks are likely to suffer, and my friend may be vindicated.

I, on the other hand, have followed a different strategy. I have been using the relative weakness in certain sectors since late February to add to my long-term positions, several of which have lost value during this conflict. These are investments I made after exhaustive research many quarters ago, and I intend to hold them into the 2030s.

All my portfolio companies have rock-solid balance sheets, mostly no debt, and I can see them weathering a severe recession without long-term damage. Of course, these stocks will likely suffer if my friend’s thesis plays out. Nonetheless, I do not intend to trade out of them because I have a deeper conviction in their long-term future than in my ability to predict how long the war will last or how the market will react.

Today, I am 47. I bought my first stock when I was 17, 30 years ago. Over those years, I have tried to time the market many times. At times, I was right and made a bundle; at other times, I was wrong and missed out on massive gains. On balance, when I look back, I believe the best trade, or investment, I could have made was to stick to my high-conviction positions, as I would have earned much more over the last three decades and spared myself the stress and agony of trying to time the market.

Buffett, the most successful investor of all time, has always argued that he buys companies with the intention of holding them forever. There is indeed much wisdom in this. Holding the likes of Microsoft, Apple, Google, and Amazon through the cycle would have been far more rewarding than trading around them. The same applies to many non-tech names like Lotus Bakeries, which has returned 15,000% since 2000, or Games Workshop, which has returned 14,000% since 1994.

In the end, long-term investing is not about predicting every shock correctly. It is about owning strong businesses, tuning out the noise, and letting time do the heavy lifting.

Honestly, the market reaction to the war so far feels way too mild. It’s like everyone is just betting on this being a short-term thing, but I think we’re ignoring the real cliff: the exhaustion of reserves.

Right now, we’re basically coasting on whatever was already in the pipes. But those buffers aren’t infinite. If this drags on for another 3 or 4 months, the real problems start because the reserves (oil, gas, components) will be gone. At that point, companies and countries are going to be forced to buy at these insane spot prices just to keep going, and that’s when the margins will truly collapse, most of these strategic reserves are only meant to last maybe 90 days. Same goes for the "just-in-time" manufacturing. I’m looking at large companies and they don't keep massive warehouses of every single part. They have maybe a few months of buffer for things like neon or specific metals. Once that one small link in the chain is empty, the whole production line stops.

I feel like we’re in that "calm before the storm" phase where the S&P 500 is just waiting to see if it ends quickly. If it doesn't, and we hit that 90-day mark without a resolution, the depletion of these stocks is going to hit way harder than the initial news did.

I'm 53 and want to retire soon. I've been stockpiling cash the past few years, just don't want it all in the market as I get older. The other day, once people are running for the door, we're at war, market is in correction territory, oil is insane, AI stocks have been crushed, I think to myself NOW is the time. Let's get some money in there. Just an insanely busy week and I didn't have a chance. Of course, now I'm second guessing. Just curious if folks are making moves or waiting it out. I'm def worried about all these things and more, but these are the times to buy, when everything looks so bleak....

Hey, i’ve been pretty simple with my contributions - every new chunk of money usually goes straight into S&P 500 (VOO or VFIAX) It’s worked well for me the last few years.
But lately with the market near highs and some volatility, I’m starting to question if I should spread it out a bit (more VTI, some international, or even a small bond allocation)
How are you guys handling fresh cash right now? Still all-in on broad US indexes or changing your approach this year? Appreciate any thoughts.

Trump has been really obvious with his plans with Iran. Right before the war started, there were so many military personnel; it was obvious that he would launch an air strike. That's when I bought GUSH, XLE, and a small ($1k) position on USO.

Market for the past week was thinking this war would end soon but doesn't realize both parties are far apart, so when we saw word that a ceasefire would be made, man, I loaded the boat even more. Media was hyping the fact Trump will announce a ceasefire when he addresses the nation.

It was obvious it was a lie if you saw the flow: large OTM calls were being purchased, specifically $60–65 calls expiring next month for XLE and $50 for GUSH. Once Trump takes Kharg Island, all hell will break loose.

Gas fields will be hit in Saudi Arabia, Bahrain, and maybe Qatar. And many US troops will suffer casualties.

Now, how can we make money from this? If you're in oil, just hold; we could see it at 150 a barrel in 2 weeks. If not, wait till Trump speaks; he will say some bullish news, like negotiations working well and oil stocks might dip. I say buy the dip at that point.

Now once Kharg Island is taken, I will be watching SCO; it's an oil short ETF. When oil drops, it goes up. Pre-war, it was trading at $25-30 a share; it's at $8 now and might drop to $4. That's when I load the boat with 2027-2028 calls.

I did that back when GUSH was trading at $12. When GAAS's price hit its peak, the stock was at $250 a share. This is pretty much a repeat.

I don't think the price will drop right away for oil, but I do believe Trump might pump it in a way that oil will drop a lot quicker, maybe releasing more reserves, offering more permits, etc.

So to summarize, hold oil if you're still holding; if not, buy on the dip. Once Kharg Island is taken and oil hits above $150 a barrel, look at calls for SCO 2027-2028 hopefully when the stock is below 5$.

current position gush 50c jan 2027

xle 60c 2027

uso 135 april 17

Not financial advice, as always.

If current US government plan was all along to increase their oil capacity by securing more oil from South America and we know that they have been increasing their country’s oil production for many years now. (They have aligned the two goals with great timing)

They just seem to be indirectly taxing countries that depend on oil from the Middle East, mostly Europe and Asian countries. Maybe this is their way of bullying NATO and other countries by making them pay more so it slows their economic growth and the competition even further so that US can keep “wining”.

Maybe Iran charging a toll/ causing blockage is what US wanted all along in this War?

What does this mean for energy stocks? Will oil prices keep going go up? Maybe $180 a barrel will be the new normal? And how would that impact stock prices of non American oil companies?

I wasn’t someone who was interested in reading the hottest headlines about finance and investments because I have always done my investing based on my own domestic portfolio and wealth expectancy. However with the recent turmoil going on in the world I want to develop my literacy about the news. These finance journals any good? Are they worth subscribing to or can I access their so-called “latest hottest news” from any social media content? The websites give me special offers like 4€/month for a year which seems reasonable for something that can potentially increase my finance literacy. What would you say?

For those of you on E-Trade, have you ever had a stock mysteriously appear in your account? That happened to me when I logged on this week. One stock, of a company I never heard of, was there. Worth about $27. I wasn't charged anything for it. Why would they do that? Is it a way to get the company noticed? Yes, I should probably ask someone there. At night, when I have time, you can only access the AI chat.

I started adding to PATH after the recent pullback. The stock has come down a lot from previous highs, and at current levels it feels like expectations have been reset quite a bit.

Revenue growth is still there, but it’s clearly not the hyper-growth story it once was. I think last year growth was closer to the mid-teens % range, which is solid, but not something the market gives premium multiples to anymore.

That’s kind of why I’m interested though. When a stock goes from “must own growth” to “nobody cares,” sometimes that’s where better entries show up.

I’m not expecting this to double anytime soon. This feels more like a slow rebuild story if execution improves.

Position is small and I’ll probably scale in over time rather than go all-in.

Anyone else looking at PATH here, or still avoiding it after the slowdown?

Not financial advice.

$WVE: Wave Life Sciences

This is a clinical stage biotech company developing RNA-based medicines.

They developed an obesity drug (WVE-007) that showed fat loss comparable to GLP-1s like Ozempic but with once or twice a year dosing without any muscle loss.

Why did $WVE crash?

Stock dropped 50% in a single session on March 26.

They just had a "miss"

WVE-007 at a higher dosage showed just 0.9% weight loss over placebo. FDA wants to see 5% at least.

RA Capital started buying $54 million on that exact same day.

Four consecutive days accumulating. $30M, then $2.2M, then $16M, then $6.3M.

My Thesis:

RA Capital is one of the most respected specialist healthcare funds in the industry. They read clinical data for a living.

The lower 240mg dose actually worked. 14% visceral fat reduction at six months, with patients gaining lean muscle. That's a profile no GLP-1 can match at the moment.

Ozempic melts fat but it also melts muscle. WVE-007 appears to do one without the other.

Consensus price target $28 vs $7.28 current price

The "miss" had some issues.

--> the trial enrolled people with BMIs around 32. That's barely obese.

--> The Phase 2a starting next quarter recruits patients with BMIs of 35 to 50 with actual obesity-related conditions. More fat to lose, better numbers to show.

Disclaimer: Not Financial Advice. Please Do your own Due Diligence.

Date Posted: *Friday, April 3rd 2:57 PM EST. $WVE Price: $*7.28

EDIT#1: There is no guarantee that the phase 2a trial would be a success.

This is the daily discussion, so anything stocks related is fine, but the theme for today is on fundamentals, but if fundamentals aren't your thing then just ignore the theme.

Some helpful day to day links, including news:

• Finviz for charts, fundamentals, and aggregated news on individual stocks
• Bloomberg market news
• StreetInsider news:
  • Market Check - Possibly why the market is doing what it's doing including sudden spikes/dips
  • Reuters aggregated - Global news

---

Most fundamentals are updated every 3 months due to the fact that corporations release earnings reports every quarter, so traders are always speculating at what those earnings will say, and investors may change the size of their holdings based on those reports.

Expect a lot of volatility around earnings, but it usually doesn't matter if you're holding long term, but keep in mind the importance of earnings reports because a trend of declining earnings or a decline in some other fundamental will drive the stock down over the long term as well.

But growth stocks don't rely so much on EPS or revenue as long as they beat some other metric like subscriber count: Going from 1 million to 10 million subscribers means more revenue in the future.

Value stocks do rely on earnings reports, investors look for wall street expectations to be beaten on both EPS & revenue. You'll also find value stocks pay dividends, but never invest in a company solely for its dividend.

See the following word cloud and click through for the wiki:

Market Cap - Shares Outstanding - Volume - Dividend - EPS - P/E Ratio - EPS Q/Q - PEG - Sales Q/Q - Return on Assets (ROA) - Return on Equity (ROE) - BETA - SMA - quarterly earnings

If you have a basic question, for example "what is EBITDA," then google "investopedia EBITDA" and click the Investopedia article on it; do this for everything until you have a more in depth question or just want to share what you learned.

Useful links:

• Investopedia page on fundamental analysis including Discounted Cash Flow analysis; see definition here and read their PDF on the topic.
• FINVIZ for fundamental data, charts, and aggregated news
• Earnings Whisper for earnings details

See our past daily discussions here. Also links for: Technicals Tuesday, Options Trading Thursday, and Fundamentals Friday.

Is there a way for option prices to consider inflation over time? For example if you sell an option for $200 back in 2013 compared to now that same $200 is worth significantly less than that date was in the past. If valuations increase then yes the option price will increase but then companies just do stock splits to make the price back to what it was before therefore the option prices decrease as well. What are your thoughts?

I’ve been waiting for relatively “stable” market conditions to buy stuff with 50k that’s been waiting around after I sold everything I was in a few weeks ago. That’s probably not gonna be a thing for a while.

So I figured instead of buying shares, I’d sell puts on stuff I’d be happy to take the ride with if I get assigned, and until then, keep rolling out of the money puts.

These are the ones I’m strongly considering:

XLE $58

PM $152.5

C $110

IBKR $64

HOOD $62

The plan is to generate an average of $320 a week on those, which works out to 0.64% a week. That annualizes to 39.3%.

For you guys who feel like staying in cash without getting left out of the action, something to consider perhaps.

So At&t which I will be referring to as T in my opinion is a good play. They have a high yield of about four precent. It is spending 250B to expand its fiber internet. Which is faster and more power than conventional internet. It has strong upside of 7-9 precent with an its high yield it could gain 15 precent. That why I think it is another coke type warren buffet play. (not financial advice)

Seeing a lot of “buy the dip?” posts lately and honestly… I don’t think this is a clean setup either way.

The pullback is real - S&P is down 9-10% from highs, VIX is still above 20, and oil hanging around $105 isn't doing anyone any favors. We're also still sitting below the 200 day MA, which historically isn't where clean rallies kick off. 10Y yield at 4.3% means financing conditions are still tight.

But it's not all bad. Jobs came in strong, unemployment is still low, and there's no actual recession signal yet. So it's this annoying middle ground where the risk is real but the economy isn't falling apart.

My plan for now: starting small. Maybe 20-25% of what I'd normally put in, keeping the rest in cash in case there's another leg down.

Things I want to see before adding more:

• Oil back under $100
• S&P reclaiming the 200 day and actually holding it
• VIX cooling off for real, not just a one day bounce
• Earnings not being a disaster

Positioning-wise I'm leaning into energy, utilities, and defense. Staying away from airlines/cruise lines (fuel costs are brutal) and anything high multiple that bleeds out when rates stay elevated.

Feels like one of those setups where going all in is dumb but waiting for perfect clarity means you miss it. So I'm stuck in the middle like everyone else.

Curious where others are landing- buying, waiting, or hedging?

So many stocks are down 50-75 percent in the last 1 year.... SAAS stocks, Stocks like Robinhood, Sofi, Elf, Nike etc,, EVEN a stock like American Express is down almost 30 percent from all time highs. I think market is waiting for a reason to go up. Look at how much market has gone up just from rumours of things getting better in Iran.

Where do you think S AND P is at years end? Do you think 6300 was the bottom?

Based on the news currently circulating in the market, it appears the conflict has entered a phase of mere verbal sparring. This suggests that a resumption of active hostilities is unlikely,unless, of course, Trump decides to launch another surprise attack. The various nations in the Middle East are also buckling under the pressure; given that oil constitutes their primary source of revenue.and considering Europe's critical need for that oil,external pressure is mounting. Ultimately, the weight of international public opinion will compel the reopening of the Strait of Hormuz to restore normal shipping traffic. Oil prices are virtually certain to revert to normal levels this month, and the market is expected to regain its bullish outlook on the advancement of AI technology. My apologies if my thoughts seemed a bit disjointed. I’d love to hear your take,do you believe the market consensus will realign this month?

I think the worries about the impact that the Iran war will have on the USD is overblown.

I think there are two interconnected reasons why:

First, the world doesn’t use USD as a favor to the US, they use those dollars because they are the best medium of exchange for international settlements. In the past countries have tried using hard currencies, like gold, but shipping commodities to settle payments is impractical. It always evolves into paper money that is backed by gold, and then more paper money than gold reserves. There’s really no way around fiat currency. When we look at different fiat currencies, there are few competitors to the USD. The word doesn’t trust currencies like the yuan and the rubble, because they lack stability (granted, for different reasons). The real competitors to the USD are Yen and the euro. The problem with the Euro is it isn’t a single country’s currency, so the entire eurozone would have to agree to serve as a reserve currency. Over in Japan, their currency is stable but they don’t have the gdp growth to sustain the debt that comes along with being a reserve currency.

Well, you might ask, why wouldn’t Europe or Japan want to be reserve currencies (more so than they already are)? It’s a privilege that the US enjoys, right?

That brings me to my second point: it’s hard to be a reserve currency. In order for counties to use a currency for trade, they’re need to have access to that currency. You can buy oil with yen, if you don’t have any yen. That means that whatever country is the reserve currency has to print a lot of that currency to make sure there’s enough to clear trade. Countries have two forms of currency: current currency (think cash in a checking account), and treasury bonds (think cash in a savings account). Most central banks want some sort of yield on their reserves, so they prefer to take treasury bonds over current currency. That means that the reserve country has to issue a lot of debt to meet that demand. That’s why the US has the massive debt that it does. It needs enough currency in the market to satisfy the demand for oil, and gold, and silver etc. There are few countries in the world that have the productive capacity to be able to service that much debt. Japan can’t. The eurozone can’t. So the only real competitor is hard currency, and we already covered the problems with hard currency.

Overall, the US economy would grow if we could shed debt at the federal level, and that would be the outcome of dedollarization globally. Other countries want the dollar as the world reserve currency just as much as the US wants to serve as the reserve currency. That’s how the current system came to be. Saudi Arabia didn’t decide to do the US a favor by creating the petrodollar recycling system we have today. They agreed because it’s better for them as well.

Also, as an honorable mention, the USD is seen as a safe haven asset, so people buy dollars when there is uncertainty in the world, but that’s because of its reserve status, so this is more of a sub point.