Haven't seen this much red in a while...

Don’t know about you all, but at the moment, of about 15-20 stocks in a couple different accounts, all but one or two are in the red for the day. Haven’t seen that happen in a bit… ¯_(?)_/¯

Seems like FB’s earnings are all but keeping me out of a shutout today!

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What gives?

I think there was likely a bunch of algorithm trading that got a bit out of hand there before the humans grabbed the controls back.

I bought a Sierra Wireless $30 August call just as it seemed that the NASDAQ was pulling up from the bottom.

NVDA was down 5% for a bit there, up to only being down about 4% now, just before 2 pm.

FB is up for me, as well as a couple of calls I sold recently. Hard to say why the market (which was in positive territory earlier today) has suddenly taken a rather steep dive. I write it off to algorithmic trading, but it’s hard to identify a trigger that set things off.

I’ve scanned a couple of news services, there doesn’t seem to be anything too out of the ordinary, except maybe some political stuff, but that’s been out of the ordinary for quite a while, I didn’t see anything in particular about today. In general, earnings season has not been bad, even some pretty good quarterly reports have come in, especially in the tech sector (except TWTR, which took a well deserved beating).

Color me puzzled, looking forward to folks going bargain hunting within a few days and driving stock prices back up.

Possibly the article in Barrons by Howard Marks of Oaktree Capital. Well worth reading.

Possibly the article in Barrons by Howard Marks of Oaktree Capital. Well worth reading.

I think this is it:

http://www.barrons.com/articles/oaktrees-howard-marks-survey…
Oaktree’s Howard Marks Surveys a Pricey Market
In a lengthy missive, the famed investor navigates a market in which “risk is high and prospective return is low.”
By HOWARD MARKS
July 26, 2017 2:40 p.m. ET

That article came out 22 hours ago or so, while the drop was primarily from about 12:20 pm to 1:40 pm eastern time today.

I don’t see a correlation.

The drop today looked to me to have characteristics extremely similar to the drop on Friday June 9th in downward trend and duration. However, for that one, I think it may have been precipitated by a Citron Research (Andrew Left’s “firm”) tweet/report about NVDA, suggesting a drop to a price of $130/share. That tweet came out at 10:22 am on June 9th. I don’t know of a similar precipitating event for today’s drop, but the stocks that reacted today seemed to match very closely that June 9th drop.

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… per article, it’s JP Morgan strategist

The decline in the market appears to have coincided with the publishing and circulation of a research note from JP Morgan strategist Marko Kolanovic, who among other things noted that the recent decline in stock correlations we’ve seen mirrors action investors saw before big sell-offs in 194 and 2001.

https://finance.yahoo.com/news/jp-morgans-marko-kolanovic-pu…

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Yes,

That seems about it. Except the report indicates a lack of volatility is the issue, and yet the article itself created volatility.

There also appears to be no correlation between the dates cited in the report and the dates of actual market crashes. I could just as accurately say that the the “market will fall” and be as close to accurate as the dates and circumstances this analyst cites in the interview.

The lack of volatility is something we have noticed before. What it may indicate is that with lack of worry, most new money has already been put in the market already. And this would correlate with the Fed indicating that it will begun stopping its money printing ways. This wold indicate a top, at least temporarily, and relatively less money chasing the same supply of stocks, at least temporarily.

Outside of that I don’t see anything in that report to cause a sell off, but you know what, if people want to sell, any excuse in a storm.

Tinker

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…the recent decline in stock correlations we’ve seen mirrors action investors saw before big sell-offs in 194 and 2001.

Yeah, I remember the big one of 194…!!!

Teflon Amazon

“earnings of $0.40 a share, missing the Wall Street consensus of $1.42 by a wide margin.”

Any other company would have been punished way more than the 4% loss AMZN has seen so far
Yet more evidence that few really care about Amazon earnings thus rendering any earnings related valuation meaningless. At least for now, in this Bull Market.They even suggested a loss is possible soon. Which spooked no one.

Count me among the faithful, I picked up a few shares today Why?
Mostly this graph.
http://www.businessinsider.com/amazon-accounts-for-43-of-us-…

Considering how much I buy from Amazon , e commerce having less than 10% of retail market share seems remarkably low, it really has not fully caught on yet, main street use is just getting started.
But does “retail” include car sales? Will car dealers follow Tesla here?

Though the U.S. retail average growth rate in the first half of 2016 was just 2% for total retail, it was 16% for e-commerce.
I see no reason why these trends should not remain intact for a decade or more
Think of it like the trend toward supermarkets, I can remember the first one in my home city. Prior to that all groceries were mom and pop small stores.

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The fact that Amazon does not need to make money in retail is exactly the anti-trust concerns. AMZN can undercut anyone for years, supported by its ability to raise money on Wall Street and its technology businesses, most particularly the cloud.

Then, when Amazon has dominated sector after sector after sector, with scale the likes of which even Walmart has never seen (or perhaps it is only Walmart and Amazon left) it will of course raise its prices and reap decades of superior market returns.

At least that is what the antitrust prosecutors will allege. Amazon will of course say the contrary, that it is only investing in its future in a proconsumer manner, in a business littered with competitors, and the trial will make the O.J. trial seem like an hour long recess, and in the end…

Those who say Amazon needs to make a profit now are very short sighted indeed. It is wealth that Amazon is creating. Value for its shareholders. Profits…you want profits, look at Ford or GM and own them. They are not building much value for their shareholders, although they are rolling the profits.

Tinker

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Amazon prices do not usually undercut other e-commerce vendors. In fact they are often higher than Wal Mart online or e Bay. Amazon Prime members don’t shop around much and it is hard to beat Amazon fulfillment. I have noted fewer super good prices at Amazon over the last year and I now pay the nearly 10% Tennessee sales tax too… But I still order from them.

Where the undercutting often comes in is with their own third party vendors.

Mauser, Amazon starting this year to charge sales tax in all 50 states is a negative factor for some, but not all, potential shoppers. I know that it has been for me, as I now order less from them (particularly high ticket items), after being a dedicated customer for the past 20 years.

For all but the last of these 20 years their competitive advantage was built on four main ingredients: 1) low prices, 2) vast assortment, 3) free shipping for prime and 4) NO State taxes in most states (due to no physical presence there). Their competitors through these years were primarily brick and mortar stores that had to charge taxes and also for shipping. So, for 19 years, until 2017, I knew without doubt that I could buy from AMZN at nearly the lowest price, no tax, and have it delivered in 2 days.

But, now the playing field is levelled with respect to state sales taxes. Along with this, their b&m competitors have started getting their online acts together, offering free shipping, free same day pick-up, vast assortment, slick on-line interfaces and prices that meet or beat AMZN.

Big players with deep pockets are starting to elbow their way into AMZN’s green pastures. There are of course the traditional b&m stores with growing online presence such as WMT, Target Best Buy and Costco. There are also online specialty stores such as Wayfair, B&M Photo, and Newegg that don’t have to assess state taxes even for their big ticket items.

Although it will take time to sort out the winners, one thing that is already clear (at least to me) is that AMZN is no longer the automatic winner by default.

ZuZu3

You raise some interesting points but I think logistics mostly trumps them.

I live in WA so have always paid tax with them. Years ago I used to order off buy.com instead of Amazon to avoid tax.

But then I realized that if an item doesn’t cost hundreds of dollars, I typically value having the item in 1-2 days over the tax. When I order from Newegg, while I like them, it takes a week plus.

Also with the Amazon card you get 5% off so I sort of rationalize that it makes up for half of the tax.

I think until the competition really improves their logistics, it’s hard to beat getting it in 1 day. Once you get used to having your items arrive in one day, it’s hard to accept getting them in a semi-random 5-10 days.

I think this increasingly fast delivery is also accelerating the demise of brick & mortar. It used to be “do I order online for cheaper, and get it in a few days or do I get in my car and get it today?” Increasingly that time difference is disappearing. I get in my car less and less.

I’m not too worried about Amazon’s retail market share.

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For all the wailing and gnashing of teeth that people had about yesterday, I am net up for the week … not much, to be sure, but it does seem that seeing these things in a slightly larger perspective gives one a different point of view.

People buy Amazon stock in the hope that it will eventually be the only store left, and they will become trillionaires and finally able to afford the stuff that Amazon sells at monopoly prices.

p.s. I ended up buying a PCV valve at Amazon, because Rockauto.com let me down big time and refused to make good on their database software error that sent me a PCV valve with the wrong thread. Their customer service does not allow you to go up the chain of command at all. Calling their well-hidden phone number directs you to their website with no option to talk to a human.

Some customer service. When companies don’t realize the only reason they are in business is to service their customers, they don’t deserve to exist.

Some customer service. When companies don’t realize the only reason they are in business is to service their customers, they don’t deserve to exist.

Don’t even know what company you’re talking about Kingran.

Don’t even know what company you’re talking about Kingran.
Neither do I but I could imagine it’s a bank or a utility company. If we were in Europe - my money would be on some French state run monopoly like France Telecom.
A