This time period may last for "some time" however this is when companies improve & differentiate, grow market share, expand into new industries, acquire, & new leaders emerge.
During these contractive, compressed times, the most adaptable & innovative rise.
Strategic tough decisions
Consolidation through M&A - vertical & horizontal integration
Redistribution
"Healthy" corrections...forces businesses to be their "best".
We all eventually benefit!
Many businesses will undergo these tough critical decisions which can provide massive opportunities.
Our international manufacturing e-commerce business transformed & grew significantly during the 2008 economic contraction & became a leader in many industries.
Planning to BUY 100 shares of your favorite stock?
Before you do, read this thread on Writing Options. 👇
For educational purposes, I will use $SNOW as an example and @Barchart
for the options data which is an excellent website for options! #Optionselling#Options
Selling OTM (Out of The Money) Puts (Bullish)
• Receive Premium Today
• If you are "put" the shares your cost basis will be much LOWER
• Expiration depends on your strategy, for me, I generally prefer selling 2-5 wks out for higher premiums so we will look at Dec 16 monthly
On choosing the "strike" price
• Choose a "strike" price you don't mind buying shares at
AND/OR
• Use delta as a gauge - the delta tells you the % that strike will be ITM at exp
• The lower the delta, the lower the probability
How do Interest Rates Affect the Market?
(Simple version)
1. Rising #interest#rates slow growth. Cost of capital higher!
Slowed growth & lower profits. Some are more sensitive than others depending on their debt, bus models, etc.
Diminished future valuations.
Margins compressed
2. When gov bonds (safer) offer higher yields, why take on more risk (stocks) unless equities offer higher returns?
💫Bonds are more attractive until stock valuations fall!💫
*This is key! Think P/E has to come down for earnings yields to go UP!
3. Real Interest Rates affects stock valuation estimates. When rates rise, it diminishes the value of future earnings & reduces stock value.
💫Catalyst in selloff of growth tech & other high growth companies whose value is dependent on future earnings growth💫