170 170 correctly predicted forecasts
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Chris Lau

After that Dip, Post Your Strongest Picks with Least Risk

Remember, Value Stock Members (Join if you're not a member yet).

We are all here to make money. 

Name some stocks. 

Post some names that are strongest and have the least amount of risk going forward.

The environment ahead: inflation, higher interest rates, money supply reduction, low unemployment.

Square, maybe?

My picks:

$BAC, BANK OF AMERICA CORP / H1


$SQ and $PYPL are not like Visa $V but could be.

  • 122 122 correctly predicted forecasts
    Long/Short Investments
    I'm overly concentrated in stocks so want swap out for short-duration bonds as stocks go up. Terminal fed funds rate is estimated at 3.2% by the bond market, 3.1% by swap rates, and now 2.8% by FOMC, which means another six or so rate hikes over the next 2-3 years. At that point, reduce stock exposure and switch stocks/bonds mix into mid- and longer-duration bonds. Stocks will peak before the economy, though impossible to timestamp at this point.

    Fed's job has gotten harder than it's been in a long time due to tax cuts and possibly infrastructure adding stimulus to the economy while going into what's a nearly closed output gap, with deficits funded by more Treasury supply coming on the market.
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  • 170 170 correctly predicted forecasts
    Chris Lau
    Long/Short Investments, won't bonds keep dropping as rates go up?
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  • 122 122 correctly predicted forecasts
    Long/Short Investments
    Chris Lau, Will depend on foreign demand for US debt and whether the dollar's exchange rate stabilizes. Investment-grade long-duration debt doesn't look very good right now but will perform best in the next downcycle. High-yield has done reasonably well since price is more a function of credit risk rather than rates.

    I moved almost all of my bond holdings into short-duration in mid-January and haven't been hit too bad. Can just use the rule of thumb that for every 1% parallel shift in the yield curve, bonds prices will decrease by 1% for each year in duration.
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  • 31 31 correctly predicted forecasts
    Abhijit Ray
    I have SQ
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  • Frank
    I have SQ and PYPL
    Thinking about also adding BAC
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