Tuesday, May 17, 2022

CAR LEASE FORMULA

 To determine you have got the good lease deal or not, use following formula. 


--> (Real Monthly Payment / MSRP) * 10000 < 125 --> Good Lease

--> (Real Monthly Payment / MSRP) * 10000 = 100 to 105 --> Excellent Lease


Real Monthly Payment = Monthly Payment + (Down Payment / 36 months lease) 

*Down payment includes tax and registration etc) 

For BMW Lease in 2017, I paid 4000$ down payment and my monthly payment was 403$, so my real monthly payment = 403 + 111 = 514 $

Applying above formula : 514 / 48400 (MSRP) * 10000 = 106.19

Thursday, May 12, 2022

SQ or PYPL - Which one is better longer term?

Short Answer: PYPL 

Long Answer: 

Although SQ and PYPL are in the credit services business, fundamentally, they are different. PYPL has more concentration on "Online" transactions while "SQ" would prefer people to go offline from internet and rely on small businesses. 

SQ has been put under the bracket of "Software - Infrastructure" as it provides necessary infrastructure for small business to collect money from customers. 

But if we compare their valuation, revenue and profit - it shows completely different picture. 

Paypal is valued as of now as 90 Billion dollar company - slightly rich in PE as their profit is 3.5 Billion but forward PE comes out to be roughly 15 (which is more than reasonable PE). 3.5*20 = 70 Billion is roughly a good valuation for Paypal on current income, however, with the growth it is posting on year on year basis - 90 Billion (today's valuation) is reasonable. 

Paypal's 2017 Revenue was 13 Billion and 2022 Revenue was 26 Billion. They roughly doubled their revenue in 5 years and that is phenomenal growth. (20% on year on year basis). Same is true for their income. Now, there is a fear in market that many of these "online" companies saw their TOP during COVID and their growth will slow down. In my opinion, for Paypal, that will not be the case. Dollar is at high and transfer of money will remain consistent even if people go out and spend money elsewhere. There are no indications yet that their growth will slow down, Plus they have started credit card business to help with their growth scheme. 

SQ on the other hand had phenomenal 2021 year and perhaps it could be due to Crypto Boom. Their income though is shrinking year after year. From 0.88 EPS in 2019 to 0.36 EPS in 2021. SQ is valued at 41 Billion and they dont make money even in billions - its more like 166 Million. 

Both of them could be good investment, but if given a choice, I would prefer PYPL (because of the #'s that they have). Growing Revenue and Growing Profit and reasonable valuation. SQ can also outperform but that remain to be seen, it needs to be reflected in their balance sheet. 









Sunday, May 8, 2022

RONALD READ ROBINHOOD PORTFOLIO

There are bunch of ways to create and manage stock portfolios but the one which is guaranteed to make money in the long run is a simple advice of "Buy and Hold it" for long term. Long term could be 10, 20, 30 years or more. One of the example that has been given multiple times are about AAPL (Apple) stock. If you bought Apple shares in 1982 and kept it for 20 years and wanted to sell them in 2002 - you would have lost more than 10% money in it. However, same apple stocks if you bought in 2002 and hold it for 2022 (next twenty years), you would have had millions of dollars in profit. (10,000$ worth of Apple stocks bought in 2002 now worth more than 5 million in 2022). So, it is difficult to determine which 20 years belong to that stock, but there is no denying the fact that Stock Market will give you the greatest return of all time - provided you are disciplined enough to hold those stocks forever. 

Please read through: https://en.wikipedia.org/wiki/Ronald_Read_(philanthropist) about Ronald Read and how he created mind blowing amount of wealth for himself by investing in good company stocks. I am building one of my Robinhood stock portfolio with the similar intent. "Buy and Hold" it forever. 

I buy stocks in that portfolio on daily and weekly basis. First method in this madness is following my own advice on buying 25$ worth of stocks on daily basis in five major ETF's as described in this blog: https://viralpatel15.blogspot.com/2021/03/stock-market-beginner-advice.html

Apart from that there there are recurring buy set up in some of my favorite stocks. Some of them are listed in this blog: https://viralpatel15.blogspot.com/2022/04/my-favorites-stock-compilation-list.html ; There are more than that - but majority of stocks listed in that blog,  I buy 2$ worth of each stock on daily basis. Some of them not listed - there is a recurring buy of 3$ per week and so on. 

Apart from that, I buy 5$ worth of each stock that I pick on weekly basis. I pick 20 stocks each week and I buy 5$ worth of each stock listed plus I pick 5 stocks out of that for long term and I buy 10$ extra in it. For eg: This week's picks are: https://twitter.com/viralpatel15/status/1523393048604209152

Apart from that, I also buy some stocks on the weekly basis based on their weekly performance. Theory behind this is that "Winners will keep on winning" - So, I buy 2$ worth of top 3 stocks from Mega Cap, 4$ worth of each top 3 stock from Large Cap, 6$ worth of each stock in Mid Cap, 8$ worth of each stock from small cap and 10$ worth of each stock in Micro Cap. For eg: last week's picks are: https://twitter.com/viralpatel15/status/1523003771030499329

Last but not the least, similar way, I buy small portion on daily basis. That is: 1$ in top 3 mega cap stocks, 2$ in each top 3 large cap stocks and so on. For Eg: https://twitter.com/viralpatel15/status/1522670928915836929

Besides all this, while scanning through some of the stocks during trading hours, if I do find a stock at a good correction level, I buy them randomly for 5$. 

Although - it may seem like a lot - it is within the boundary mentioned in my overall financial blog - which means, at any given point of time, I make sure that my total exposure to stock market does not exceed more than 20% of total value. Details are here: https://viralpatel15.blogspot.com/2022/01/ideal-allocation-of-money.html

P.S: These are details of my just one portfolio. I manage other portfolio's in M1 Finance for different reasons (majority of them are for trading purposes and I change those portfolio's on monthly basis) and there is another one in e-Trade -which I also use for trading purposes. There are other small portfolio's for growth stocks allocation, trading options etc. 




Wednesday, May 4, 2022

Fed raised interest rate by another 50 basis point

Fed chairman Jerome Powell announced today that they are increasing fed interest rate by another 50 basis point. Stock market went up by 2% - as direction was clear for next two fed meetings. Fed indicated that in June and July meetings they will be raising rate by 50 basis point. Powell also indicated that next two month's data - better or worse will most likely not impact their judgement of 50 basis point hike. 

In my opinion though, if inflation numbers continue to climb and increase by over 9% in year over year basis for April and May data - we may see 75 basis point hike talks back. Powell may not do 75 basis point hike in June, but there are high chances that he may have to do 75 basis point hike for July. 

25, 50, 50 and 75 would put us around 2% interest rate by end of July and then Fed will be data dependent. There are very high chances that April CPI Data will be higher than anticipated increase. It could be as high as 9.2% when we compare year over year increase. Please see below table which describes consumer price index data month over month since last decade. 



Inflation has always risen but it went from overall 2% increase on annual basis to 4.69% increase in 2021. Fed initially thought that it will be "Transitory" but later data indicated otherwise. Inflation is most likely going to stay high for next couple of months at least but peak some time in Summer 2022. That does not mean inflation will come down drastically however it does mean it will flat it out at the top. When we start comparing data from 2022 to 2023 - it will not grow to such high numbers such as 8% or 10% but it will return to normal growth of 2 to 3%. 

Fed expects that inflation will return to 2% but in my opinion it will take a lot longer time and perhaps Summer of 2023 might be realistic target. That means - there is more pain ahead for high growth stocks and we are probably not even half way there. Generally, Bear market does not last that long but inflation will make sure it lasts for full 18 months and Summer of 2023 will be a great buying opportunity for many of beaten down tech stocks. 

This does not mean that other stocks will not perform well for next one year. Energy stocks are still not owned by majority of big investors, specially alternate energy, solar energy stocks. Financial stocks are going to do well, in rising rate environment, specially regional banks, plus companies which are paying high dividends and have good balance sheet will continue to rise. 

Wednesday, April 27, 2022

MY FAVORITES STOCK COMPILATION LIST

 VIRA: Mega Cap: (Top 30)


SAFE BETS. TO OUTPERFORM SPY IN EVERY 3 YEAR DURATION. 


  1. AAPL
  2. MSFT
  3. GOOGL
  4. AMZN
  5. TSLA
  6. FB
  7. NVDA
  8. V
  9. HD
  10. BAC
  11. COST
  12. BABA
  13. AVGO
  14. DIS
  15. ABT


  1. NKE
  2. ADBE
  3. CRM
  4. BMY
  5. TMUS
  6. QCOM
  7. MS
  8. MDT
  9. AMD
  10. AXP
  11. HON
  12. TGT
  13. PYPL
  14. ABNB
  15. BA



VIRB: LARGE CAP (Next 30)


TO OUTPERFORM SPY BY 1.5 TIMES IN 5 YEAR DURATION. 



  1. NFLX
  2. SBUX
  3. REGN
  4. LRCX
  5. UBER
  6. SQ
  7. SHOP
  8. MAR
  9. COF
  10. MELI
  11. FDX
  12. CRWD
  13. LULU
  14. CMG
  15. DASH
  16. NET
  17. EXPE
  18. DAL
  19. NIO
  20. MDB
  21. HZNP
  22. MTCH
  23. PLTR
  24. ENPH
  25. GRMN
  26. PARA
  27. OKTA
  28. BILL
  29. MOH
  30. HUBS


VIRC: SMALL-CAP (High Risk High Reward 30) 


TO OUTPERFORM SPY BY 2.0 TIMES IN 10 YEAR DURATION. 


  1. TTWO
  2. ROKU
  3. DPZ
  4. ETSY
  5. PINS
  6. CVNA
  7. LYFT
  8. TOST
  9. TDOC
  10. AFRM
  11. FND
  12. DBX
  13. Z
  14. CYBR
  15. ZIM
  16. UPST
  17. PTON
  18. SRPT
  19. DKNG
  20. ASAN
  21. BMBL
  22. FOUR
  23. CELH
  24. CROX
  25. INMD
  26. BYND
  27. ERJ
  28. SPCE
  29. FSLY
  30. CGC



Saturday, April 23, 2022

Politics

India or Indians? America or Americans? 



My answer: I always choose a country ...Government represents a country, selected by the people. Government or Kings in earlier era's had to decide what is good for the "REALM" - taking a word out of GOT...Tougher decisions needs to be taken at some point which may not be good for the "People" at that time, but good for the "Country" and its future. Besides, people change countries but country remains same forever...For eg: We left India, but remained Indians…Indian government does not have to make decisions for us (NRI’s). 

For eg: 

Trump administration put a tariff on Chinese goods, that is not good for American people (as things become expensive), but it is good for America (as more businesses would prefer to make things in USA and also for short term Government will get extra money due to Tariff). 

Biden administration decides to give free money to support child - that is good for American people (they get much needed assistance) but that is bad for America (or Government of America) as they have to spend that money which means less money to spend elsewhere


Majority of time - decision taken by Left will be in favor of people of their country while decisions taken by the Right wing will be in favor of the country. Debates in the congress usually is to find a way to benefit both - people and the country. 



What do you want from your Government? 


Short Answer: “Anything that people can do, people should do. Anything that people can not do, Government should do.” 


Long Answer: People can earn their money, people can take care of their family with their earned money, people can buy food, clothes, place to live etc with their earned money. Anything that people can do themselves - they should do it themselves and not rely upon Government to do it for them. 

However, people can not protect themselves from other nation’s invasion - people can not build roads by themselves, people can not build hospitals, libraries by themselves - so things which are beyond people’s capabilities, Government should do it for them. 


Government’s three primary jobs are: 

  • Protection (security) 
  •       Maintaining law & order
  • Build Infrastructure

Note: Job creation is one gray area - whether that should be considered as primary job of Government or not. Left would also like taking care of health of people as primary job of Government - it is not. Now it is debatable whether “Climate Change” should be considered as part of “Protection” or not OR Job creation is helpful in maintaining law and order (people have jobs, they less likely to commit crime or steal). Right wing generally evaluate any new bill or proposal by looking at first three bullet points - if it is not - then most likely Government does not need to get involved. 



How do you choose your Leader? 

Saturday, April 16, 2022

APRIL-MAY M1 FINANCE PORTFOLIO UPDATE

 TOP 10 STOCKS FOR NEXT ONE MONTH ARE: (APRIL 18 2022, MAY 20, 2022):

  1. AXP
  2. CRWD
  3. HLT
  4. HON
  5. LULU
  6. REGN
  7. TECK
  8. TGT
  9. ULTA
  10. ZEN
TOP 50 STOCKS FOR NEXT ONE MONTH ARE: 

  1. AAPL
  2. ABBV
  3. ABNB
  4. AKAM
  5. ALK
  6. AXP
  7. CACC
  8. CAT
  9. CHD
  10. CINF
  11. COST
  12. CRWD
  13. CYBR
  14. DLTR
  15. ENPH
  16. EW
  17. FTNT
  18. GOLD
  19. GPC
  20. HLT
  21. HON
  22. HZNP
  23. J
  24. JNPR
  25. LHX
  26. LMT
  27. LULU
  28. LYB
  29. MDB
  30. MOH
  31. MT
  32. NKE
  33. ORLY
  34. PANW
  35. PAYX
  36. REGN
  37. RS
  38. RTX
  39. SEAS
  40. SLB
  41. STE
  42. TAP
  43. TECK
  44. TENB
  45. TGT
  46. TMUS
  47. TSLA
  48. TSN
  49. ULTA
  50. ZEN

TREND STOCK PORTFOLIO HAS NEXT BEST 50 STOCKS AND THEY ARE: 

  1. ABC
  2. AJRD
  3. ALKS
  4. APD
  5. ASO
  6. ATI
  7. BBWI
  8. BDX
  9. BG
  10. BOX
  11. BURL
  12. CHKP
  13. CPB
  14. CVI
  15. DE
  16. DOW
  17. DOX
  18. EEFT
  19. FLT
  20. GD
  21. HCP
  22. HSIC
  23. HWM
  24. INVH
  25. JAZZ
  26. JNJ
  27. JWN
  28. LDOS
  29. LZ
  30. MDT
  31. MOS
  32. MPC
  33. MRO
  34. MTDR
  35. NBR
  36. NTR
  37. PRGS
  38. PWR
  39. QLYS
  40. RARE
  41. ROL
  42. RPD
  43. SABR
  44. SKX
  45. SPLK
  46. UHS
  47. UI
  48. VRNS
  49. WEX
  50. ZIP
FAVORITE STOCK PORTFOLIO HAS FOLLOWING 50 STOCKS: 

  1. BMBL
  2. BROS
  3. BYD
  4. CCJ
  5. CCL
  6. CHWY
  7. CMG
  8. CPE
  9. CRL
  10. CROX
  11. DAL
  12. DASH
  13. DBX
  14. DKNG
  15. DKS
  16. EPAM
  17. ETSY
  18. EXPE
  19. FB
  20. FBHS
  21. FND
  22. FOUR
  23. GDRX
  24. GLPI
  25. GRMN
  26. IQV
  27. MAR
  28. MELI
  29. NET
  30. NFLX
  31. OPEN
  32. PARA
  33. PLUG
  34. PTON
  35. RACE
  36. RH
  37. S
  38. SAGE
  39. SE
  40. SHW
  41. SQ
  42. T
  43. TMO
  44. TOST
  45. TSCO
  46. UBER
  47. UPST
  48. Z
  49. ZIM
  50. ZION
LAST BUT NOT THE LEAST - RISKY PORTFOLIO HAS FOLLOWING 100 STOCKS:

  1. ADM
  2. ADP
  3. AGCO
  4. AMGN
  5. ANET
  6. ARE
  7. AVGO
  8. BIIB
  9. BJ
  10. BKNG
  11. BMY
  12. BOOT
  13. CAH
  14. CF
  15. CFLT
  16. CNC
  17. COP
  18. CTAS
  19. CTVA
  20. CTXS
  21. DOCU
  22. DXCM
  23. EMN
  24. ESTC
  25. EXAS
  26. FANG
  27. FIVE
  28. FIVN
  29. FROG
  30. FSLY
  31. FWONA
  32. GDDY
  33. GLW
  34. GME
  35. GTLB
  36. GTLS
  37. H
  38. HII
  39. HOLX
  40. HPQ
  41. INTU
  42. IQ
  43. ISRG
  44. KHC
  45. KR
  46. LAZR
  47. LILM
  48. LLY
  49. LSPD
  50. LYV
  51. MKC
  52. MMM
  53. MQ
  54. MSTR
  55. NCR
  56. NIO
  57. NOC
  58. NTES
  59. NWL
  60. OLN
  61. ON
  62. ONON
  63. OXY
  64. PAGS
  65. PEP
  66. PFGC
  67. PII
  68. PLAY
  69. PLTK
  70. PSTG
  71. PUBM
  72. QS
  73. SCI
  74. SEDG
  75. SGEN
  76. SHOP
  77. SMAR
  78. SNAP
  79. SRPT
  80. STZ
  81. TAK
  82. TDOC
  83. TDY
  84. TJX
  85. TLRY
  86. TNDM
  87. TPR
  88. TV
  89. TWTR
  90. VIRT
  91. VMW
  92. VRSK
  93. VRTX
  94. WM
  95. WOLF
  96. WOOF
  97. WWD
  98. YOU
  99. YUM
  100. ZS